PUBLIC SECTOR PAY
Pay relativities in public sector "out of sync", says head of civil service
Sir Gus O'Donnell, the head of the civil service, has admitted that pay relativities in the public sector have got out of “sync”. He told a parliamentary select committee on 29 October 2009: "The relativities within the public sector are very difficult to understand. When you look at, for example, the differing responsibilities of people and you look at their salaries, there just does not seem to be much of a relationship.”
The minutes of the select committee suggest he would favour a single body to examine the pay arrangements for senior roles across the public sector.
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Minutes of evidence taken before public administration select committee - House of Commons
Work of the cabinet office in 2008-09
Thursday, 29 October 2009
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.
Q134 Chairman: Can I just ask you the pay question, which is that we have got the Chancellor saying that all senior civil servants' pay in 2010/11 will be frozen? Is that producing excitement in Whitehall? Is that a good idea?
Sir Gus O'Donnell: We are all aware that public finances are in a difficult state and we all need to make our contribution. That is why I led the way last year by saying perm secs should forgo their bonuses, and I think that is right. I think for the whole of the public sector there is a real case for being careful with pay.
Q135 Chairman: So they are all happy about that?
Sir Gus O'Donnell: I would not say they are happy but I think they understand the context.
Q136 Chairman: The Shadow Chancellor has said that civil servants who get paid more than the Prime Minister will have to ask his permission to be paid such salaries. I think there are ten senior civil servants who are currently getting paid more than the Prime Minister. Do you think it is sensible to have civil servants paid more than the Prime Minister?
Sir Gus O'Donnell: Yes, I do.
Q137 Chairman: You are one of them, of course.
Sir Gus O'Donnell: I am one of them. Yes, I do. I think the proposal was new posts, but there is a really good question to be had about pay within the public sector and I think the relativities at the moment are out of sync and it really does need to be looked at. When you see the massive disparities within the public sector there is something wrong, and I would say probably the Prime Minister's salary in that it is too low.
Q138 Mr Walker: You are arguing that senior public sector pay should go up to reflect more closely what is paid in the private sector?
Sir Gus O'Donnell: No. I was saying that the relativities within the public sector are very difficult to understand. When you look at, for example, the differing responsibilities of people and you look at their salaries, there just does not seem to be much of a relationship.
Q139 Chairman: Why has that not been sorted out then, if that is the case?
Sir Gus O'Donnell: Because there is no one - local authorities sort out their own pay; various independent bodies do. I think it is something that could definitely bear more attention.
Q140 Chairman: We are doing some work on this at the moment. Your analysis of the problem is interesting but if you have a proposal this would be the moment to tell us about it.
Sir Gus O'Donnell: I am just glad you are doing it. I think you need to have someone who is not, as it were, conflicted from any one area. I think you should look across the public sector and take some evidence on why these relativities are as they are because I find it very difficult to understand.
Q141 Chairman: We have discovered what you have discovered, which is that there is no system in it, so we know the problem.
Sir Gus O'Donnell: Unfortunately, I am in charge of the Civil Service, so I can explain within the Civil Service, but I am not in charge of the public sector.
Q142 Chairman: But you would be well disposed towards there being some body that would take a rather larger view of the public sector?
Sir Gus O'Donnell: I am absolutely in favour of that.
--> Public Administration Select Committee: Inquiry - Executive pay in the Public Sector
The Public Administration Select Committee (PASC) has launched an inquiry into executive pay in the public sector. The inquiry will examine the arrangements for determining pay and other benefits at top levels in the public sector.
Scope
PASC's inquiry will focus on civil service posts, and on public appointments made by Ministers and by the Crown, e.g. most regulators and other non-departmental public bodies or quangos.
The inquiry will also take account of practice across the public and quasi-public sector more widely, e.g. local government, NHS, universities, nationalised industries and public sector broadcasters.
You can download a volume of submissions, relevant to the inquiry, which have been reported to the House but not yet approved for publication in final form. Visit the parliament.uk web site to access the PDF report.