Disgraceful isn’t it, what those public sector managers are paying themselves these days? Who would believe that we have a record public sector deficit forecast to reach almost £200 billion, yet those nice people at the Taxpayers Alliance tell us that there is “an explosion” in the numbers of public servants paid over £100,000, over 1,000 of them in fact. Their Public Sector and Town Halls’ Rich List shows that 12 local authority and NHS trust chief executives are even paid more than the Prime Minister! As we know, his salary of £197,000 is a wonderful benchmark, given how much prime ministers can earn in their subsequent careers.
Scarcely surprising that the politicians are stepping in, with the Treasury imposing a one per cent cap on public sector pay awards, recommending freezes for senior staff and instituting a new star chamber to review any proposals for salaries in excess of £150,000. Shadow Chancellor George Osborne wants to freeze pay for all public sector workers earning over £18,000.
But hang on a minute. Wasn’t it this Government that devolved pay bargaining in the public sector and encouraged the recruitment of talent from the private sector, both of which have driven up pay levels? In fact, a recent PwC study suggested that executive pay levels in central and local government were still only around half of those for equivalent posts in the private sector.
And across the public sector as a whole, 100,000 civil servants still earn less that £15,000 pa and the average payment under one of those famous ‘gold-plated’ defined benefit pension plans is in fact under £5,000pa.
And haven’t we seen significant performance improvements across the public sector in recent years, from a growth in the number of four-star rated local authorities to the significant reductions in NHS waiting lists? I am sure we all look forward to seeing senior public sector pay levels fall and going back to receiving awful council services from disengaged staff and onto long waiting lists for treatment in the NHS.
And didn’t the economic crisis all start anyway in the financial services sector, driven by those excessively incentivised bankers and traders? Here more than 1000 employees are forecast to earn bonuses of more than £1 million this year, 22,000 Barclays investment banking staff just earned bonuses averaging £190,000 each, and retail banking staff in the UK received average pay awards of over three per cent over the past twelve months.
So just why do we want to cut public sector pay levels again?
Duncan Brown is Director of Reward Services at the Institute for Employment Studies, www.employment-studies.co.uk
