Friday, 1 May 2009

Executive Pay In The Public Sector

On Thursday last the House of Commons Public Administration Committee held a hearing into executive pay in the public sector.

The 'witnesses' were: Polly Toynbee (Guardian), Tony Travers (London School of Economics - LSE), David Clarke (Society of Local Authority Chief Executives - SOLACE) and Ben Ferrugia (Taxpayers Alliance).

In an hour and a half session, the hearing took in issues such as top salaries in local government, the lack of accountability among national quangos and the problem with excessive ‘rewards for failure’.

While David Clark and Polly Toynbee insisted throughout that the true problem lay in the excesses of the private sector, Ben stressed to the Committee that excessive public sector remuneration was a serious concern and could not be justified by any perceived problems in the private sector. He also repeatedly called for the public sector to become fully transparent so taxpayers could see how their money is being spent.

Suggestions on how to deal with this varied from David Clark’s idea that the public simply needed to be better informed as to the difficult work carried out by top executives, to Polly Toynbee’s programme for mandatory wage restraint in both the private and public sectors. Ben Ferrugia insisted that the first step must be more openness and public scrutiny of these salaries, which would constrain pay to appropriate levels through public pressure.

One can see the point of the Taxpayers Alliance being called as a witness in view of their incisive work on public sector pay - but Polly Toynbee? By what stretch of the imagination does that witch qualify as an 'expert' on public/private sector pay? David Clarke's 'protestations' can hardly be taken at face value considering that SOLACE is an organisation set up by serving council officials and operates as a recruitment/consujltancy company to advise on and recruit senior local authority staff.

What is obvious from viewing the hearing proceedings is that the likes of Toynbee and Clarke just do not realise and accept that to compare private sector pay and public sector pay is like comparing chalk and cheese! Terry Leah's (Tesco CEO) salary came into the 'comparison'. Ben Ferrugia made the point that his pay was Tesco's problem and that if we, the public, felt strongly on this we had the choice to boycott Tesco and shop elsewhere whilst as taxpayers we have no 'alternative' on offer in respect of local authorities and public sector bodies. Ferrugia also made the telling point that public sector bosses who get fired for poor performance very often moved on to further public sector jobs at an even larger salary!

Interesting fact which surfaced was the Toynbee admitted to earning, in the last tax year, £106,000 - seems rather high for an incompetent hack?

1 comment:

Mark Wadsworth said...

Yes, but we the public don't give a shit about Terry Leahy's pay*, it's up to the shareholders to complain if he's being too greedy. However high his pay is, it does not lead to higher store prices, because if it did, we'd shop elsewhere. Unlike rampant public sector pay and quangoes, for which we are forced to pay.

* I have no idea what his salary is or whether it is excessive, he probably deserves every penny. As a Land Value Taxer, I am dubious about the way that Tesco play the planning system, different topic, but I am still happy to shop there.