It’s easy to misrepresent Cameron’s commitments in today’s Guardian – on enforced pay ratios in the public sector – as simply an attack on public servants. It’s not. It is an attack on public sector fat cats who are not only paid well but are paid grossly more than those at the bottom (or even in the middle) of their organisations.
The chief executive of an NHS strategic health authority can earn £204,048 a year. When compared with the pay for an NHS employee at the bottom of the ladder - £13,233 per annum – this represents an extraordinary pay ratio of 15 to 1. In local authorities, this pattern is repeated: the lowest salary paid to a full time employee of Slough local authority, for example, is £12, 994 while the chief executive is paid up to £157,479, a ratio of 11 to 1. These pay gaps are not just enormous but are also damaging to the fabric of our public services. Extensive research has shown that morale, productivity and commitment are all undermined in organisations that have extensive gaps in remuneration – perhaps that’s why in the Army (a service where morale and cohesion aren’t just important but are life-saving) the comparable ratio between their poorest and their richest is just 7 to 1.
We should welcome Cameron’s commitment to reducing these pay-gaps and recognise that it is about a whole lot more than simply saving money – although, it will do that too. This is about making our public services more equitable and more efficient, and really valuing those jobs that are on the frontline and serve the public. The status quo is inefficient and unfair, it rewards managerialism over delivery and bureaucracy over practice. These reforms would make a start at taming the state’s bias for bosses.
But it doesn’t yet go far enough. Cameron’s suggested ratio is still an unjustifiably huge 20 to 1. This ratio begins the work but it wouldn’t solve the disgraceful disparities that are highlighted above. He has also not balanced his case by fully committing the Conservatives to guaranteeing a living wage for all public servants in order to build on the excellent work of London mayor Boris Johnson’s administration. This is an exciting start to the real reforms that will be needed in the public sector, but it is only the start. The taxpayer pays public servants their wages, we deserve to be confident that those wages are distributed fairly, efficiently and justly.
Max Wind Cowie is a researcher at Demos and the author of Everyday Equality http://www.demos.co.uk/publications/everydayequality
