The report's key recommendation is for an increase in basic pay for all grades of £425 or 1.6 per cent, whichever is the greater. This, combined with some other changes for operational managers, two additional rates of locality pay, and a 1.6 per cent increase in all allowances except specialist, will lead to an increase in the pay bill of £27 million or 2.5 per cent. The Review Body has long considered the current pay system as outmoded and in urgent need of reform, and has identified particular aspects that require attention: the length of pay ranges; performance or competence based pay progression; rationalization of the middle management grading structure; and pay arrangements for governing governors (in charge of establishments) and senior operational managers. So it welcomes some progress towards pay reform, linked to a multi-year deal between the Prison Service Agency and the Prison Officers' Association, but regrets that the negotiations had stalled at the end of 2005. It is vital that the negotiations resume, and that proposals for a new pay and grading structure, underpinned by a robust job evaluation system, are available in time for the 2007 report.