13 September 2002
After failing to drum up much business interest in vacancies for the e-envoy, NHS chief executive or even the head of the civil service itself, it has persuaded Richard Granger, a high-flying partner with Deloitte Consulting, to sign up as director general of NHS information technology.
But Granger's personal terms were steep. At £250,000 a year, this would disappoint a First Division footballer, but it dwarfs those of his colleagues.
Whitehall's own 'golden balls' will get around £90,000-a-year more than his boss, health permanent secretary Nigel Crisp, and an estimated £70,000 more than the capo di capi, Cabinet secretary Sir Andrew Turnbull.
The Department of Health justified Granger's pay packet by using the 'pay peanuts, get monkeys' argument. The job was 'a Herculean task' that required 'extraordinary talent and experience', and the salary reflected 'the highly competitive IT market'.
So has the penny finally dropped? Has the government realised that if you want top talent, you've got to pay top dollar?
Not really, say Whitehall officials. 'The publicity given to one or two high-profile appointments shows how rare they are. It's paraded as some great coup, but the civil service does not attract many people from the private sector and pay is the main reason for that,' says one insider.
Figures from the Civil Service commissioners show that of the 200 senior posts opened up to competition in 2001/02, only 37 were filled by candidates from the private sector, while 77 went to existing civil servants and 86 to other public servants. The proportion of private sector signings has actually fallen over the past two years, from 28% in 1999/2000 to 18.5% last year.
One senior official likened the situation to that of a struggling First Division football club desperately trying to attract a high-profile star to boost its flagging fortunes. 'We are moving to a football-style system where the club is prepared to bust its wage structure to accommodate what it sees as a star player,' he said.
The top of Whitehall's pay league is dominated by players signed from outside. The three highest earners – Granger, government procurement chief Peter Gershon and Kevin Bond, head of the Home Office police standards unit – all came from the private sector with no previous Whitehall experience.
Some officials believe this influx of star players is leading to a two-tier system where business figures are parachuted into the most high-profile jobs to collect fat salaries and pad out their CVs, leaving Whitehall's home-grown talent languishing in the lower reaches of the pay league.
'Making these ad-hoc arrangements actually puts up more barriers between people from the public and private sectors,' says one official.
While there is little personal resentment towards the top earners, many officials complain that the pay system locks in advantages for those joining on high salaries over those working their way up from the boot-room.
The top half of the pay scales for Whitehall's 3,000 senior mandarins is effectively off-limits for career officials. Band 3, the most senior level below permanent secretary, and where Granger's job would probably be graded if it had gone to a civil servant, starts at £87,125. 'Good' performing career officials can only reach the 'target rate' of £124,025, which may take them more than 20 years. Even 'exceptional' performers find their salaries capped at the 'higher target rate' of £145,550. The rest of the scale, up to £184,500, is effectively reserved for recruiting from outside Whitehall.
'The top of these ranges are to attract people from the private sector but not to keep the best people in the civil service,' says one senior official.
World-class players like Gershon and Granger are a welcome addition to the Whitehall line-up. But if the government continues to treat its career officials like monkeys when it comes to pay, it may find its pool of home-grown talent drying up.
And, as every successful coach knows, no club can afford to let that happen.
PFsep2002
