PUBLIC SECTOR
Select committee calls for top pay commission for public sector
A House of Commons select committee has called for the government to set up a top pay commission to “name and shame” public sector organisations that pay excessive salaries to their senior officials.
The Commission would “produce principles and benchmarks to be followed by pay setters and would be able to launch investigations where these were breached”. The Public Administration Select Committee (PASC) believes a top pay commission would ensure “greater coherence” to the setting of top pay across the public sector.
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PASC reckons that “massive increases” in private sector executive salaries over the last ten years have fuelled “smaller, but sometimes still very large, increases” at the top of the public sector. This “contagion effect” has meant that the highest salaries in both sectors have outstripped average earnings.
A number of weaknesses with current arrangements for setting pay in the public sector have also been identified. These include:
variable levels of transparency
tensions between devolved and centralised pay setting systems
a perception that some public servants have been rewarded for failure
a tendency for some parts of the public sector to compete against others for a small number of experienced candidates, rather than growing talent internally.
Other key recommendations
Some of the committee’s other key recommendations include:
a call for better human resource management across the public sector, to ensure talent is promoted from within and failure is not rewarded
better performance management across the public sector, to ensure that failure is not rewarded
greater transparency so that taxpayers know who is being paid how much - salaries and bonuses - for doing what, more in line with the requirements placed on listed companies
a proposal to ensure all public sector executive reward packages are drawn up either by independent bodies or remuneration committees with a majority of independent members.
A final word
“Set against the stratospheric pay increases seen at the top of the private sector over the last ten years, the public sector has got excellent value from many of its top people. However, we do not believe that the ever-growing gulf between average earnings and top pay is sustainable or desirable - especially in a time of recession. Our top pay commission would ensure that public sector pay setters would have to justify top pay deals and set them in the context of pay at lower levels and the state of the public finances.” - Dr Tony Wright MP, Chairman of the Committee.
Want to know more?
Top Pay in the Public Sector Report: Sixth report of session 2009–10, Volume 1, House of Commons Public Administration Select Committee, December 2009.
Download the PASC’s 72-page PDF report:
www.publications.parliament.uk/pa/cm200910/cmselect/cmpubadm/172/172i.pdf
Executive Pay in the Public Sector: Written evidence, House of Commons Public Administration Select Committee, 2009.
Note: Uncorrected transcript of oral evidence - neither witnesses nor members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings. Download the 112-page PDF report:
www.parliament.uk/documents/upload/Memosforweb271009.pdf
Links to minutes of evidence taken by Public Administration Select Committee, including: Peter Boreham, Head of UK Executive Remuneration, Hay Group; David Evans, Head of Pay and Labour Market Services, Capita Survey and Research Unit; Christopher Johnson, UK Human Capital Leader, Mercer (formerly of the Cabinet Office); Polly Toynbee, The Guardian; Professor Tony Travers, LSE.
www.parliament.uk/parliamentary_committees/public_administration_select_committee/pasc0809executivepay.cfm