Public sector pay review ‘too narrow’

17 May 10
Prime Minister David Cameron’s pledges on public sector pay have little significance, unions have warned

By Jaimie Kaffash

17 May 2010

Prime Minister David Cameron’s pledges on 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, the 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.

The FDA union of senior civil servants welcomed the review. General secretary Jonathan Baume said: ‘The FDA repeatedly called on the previous government to address concerns about the extent to which market failures in the private sector create pay pressure in the public sector, which we hope Hutton will examine. Despite promises and reviews, no meaningful reform has been delivered for senior pay in the civil and public services.’

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. He added that the 20 times figure ‘was not much of a cap. 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’.

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