Hutton Report on Public Sector Pay

Will Hutton who the Tories brought in as a well respected expert to review public sector pay has released his report, and what a report it is.

Highlights of the report and his interview are:

The fact that the Prime Ministers pay is an arbitrary figure and completely useless as a comparison. Actually he agrees with me that when all benefits are taken into account (free house, free transport, free holiday home. Etc) The PMs salary is in excesses of £500,000 per year. Which is significantly above any public servant.

That a cap on executive pay at 20 times the lowest paid member of an organisation is a good idea in theory but rubbish in practice as “large complex corporations” with low paid staff(councils.) would be capped lower than simple small organisations with only (relatively) high paid staff(Schools).

He also up holds my viewpoint that Chief Officers are paid at market rates. They are paid at what the market says is appropriate, already incurring reductions due to sources of funding and reductions due to political oversight not present in the private sector, leading to them earning considerably less than their private sector compatriots. As he says how much would you want paying to manage child services in Haringey? Would you want someone doing that job that wasn’t up to the task, which is what would happen if pay was reduced. This is a point the right wing press would wrongly appose, saying “There is no direct comparison between Chief officers of private industry and public..” blah blah blah. Of course there is, if these positions where so easy and so overpaid why aren’t there 10s of thousands of highly trained private sector staff gunning for them when they come up, and through that driving the wage down? Don’t say its some strange sector loyalty that only works the other way. If Ms X at Capita is paid £100,000 a year and is more than qualified to run her local council where she would receive £200,000 a year and a decent pension, are you seriously saying they wouldn’t be typing their CV as we speak.

Another interesting suggestion from Hutton is that both public and private sector companies should have to publish executive pay and the multiples of median/lowest. Again right wingers suggest it is no place of government to control CEO pay in the private industry and that this pay is controlled by share holders and market forces, where as public sector has no such control. Rhubarb! Firstly I happen to be a shareholder of several companies, I have never been asked my opinion on executive pay or bonuses. If you’re interested its to much! Pay the workers more or give me higher dividends! Also the checks on local government pay are greater than private sector! Yes a ridiculously large pay settlement will not lead to a council going bankrupt (I’m looking at you Marconi!), but as has been shown these payments are subject to democratic review both locally and nationally, effectively making the general public the shareholders and the Councils their board of directors. They also are subject to market forces in the same way any job in the private sector is you get paid what the market deems appropriate or someone else will take your job and do it better or cheaper.