By Jaimie Kaffash
20 May 2010
Prime Minister David Cameron’s pledges on low public sector pay have little significance, unions have warned.
The new government has set up a fair pay review, to be headed by Will Hutton, vice chair of the Work Foundation and a former Observer editor.
Cameron said on May 16 that the review would focus on the pay and bonuses of senior civil servants and NHS managers. He added that the salary of the highest earners should not be more than 20 times that of the lowest paid.
But unions have said this promise will not mean much in real terms. Mark Serwotka, general secretary of the Public and Commercial Services union, welcomed the inclusion of Hutton but said: ‘If this represents a Damascene conversion by the Conservatives to the cause of low and unfair pay then it will be very welcome. If not, it will be an opportunity missed and will have minimal impact.
‘Of course, no-one should earn more than 20 times the lowest paid in the organisation – but on a salary of £13,000, that is still £260,000 a year and there are only a handful of very senior civil servants earning this kind of money.’
A Unison spokeswoman told Public Finance that the outcome of the review could lead to recruitment and retention problems as it could deter high-flyers away from public sector careers. ‘The highest earners are in charge of multimillion-pound organisations,’ she added.
Alan Downey, KPMG’s head of public sector, told PF that any problems with recruitment and retention were secondary to the task of bringing public sector costs down. The 20 times figure ‘was not much of a cap’, he added.
‘The most concentrated range of high annual salaries is in the £150,000–£200,000 mark. That is where you would expect the government to concentrate on.’
Business leaders this week called for a two-year freeze on the public sector pay bill. The CBI said the move could save the government £18bn while still allowing for modest pay increases for the lowest earners and frontline staff.
20 May 2010
Prime Minister David Cameron’s pledges on low public sector pay have little significance, unions have warned.
The new government has set up a fair pay review, to be headed by Will Hutton, vice chair of the Work Foundation and a former Observer editor.
Cameron said on May 16 that the review would focus on the pay and bonuses of senior civil servants and NHS managers. He added that the salary of the highest earners should not be more than 20 times that of the lowest paid.
But unions have said this promise will not mean much in real terms. Mark Serwotka, general secretary of the Public and Commercial Services union, welcomed the inclusion of Hutton but said: ‘If this represents a Damascene conversion by the Conservatives to the cause of low and unfair pay then it will be very welcome. If not, it will be an opportunity missed and will have minimal impact.
‘Of course, no-one should earn more than 20 times the lowest paid in the organisation – but on a salary of £13,000, that is still £260,000 a year and there are only a handful of very senior civil servants earning this kind of money.’
A Unison spokeswoman told Public Finance that the outcome of the review could lead to recruitment and retention problems as it could deter high-flyers away from public sector careers. ‘The highest earners are in charge of multimillion-pound organisations,’ she added.
Alan Downey, KPMG’s head of public sector, told PF that any problems with recruitment and retention were secondary to the task of bringing public sector costs down. The 20 times figure ‘was not much of a cap’, he added.
‘The most concentrated range of high annual salaries is in the £150,000–£200,000 mark. That is where you would expect the government to concentrate on.’
Business leaders this week called for a two-year freeze on the public sector pay bill. The CBI said the move could save the government £18bn while still allowing for modest pay increases for the lowest earners and frontline staff.
