Public sector pay

So Panorama has a database of top people’s pay.

I’m not a natural defender of high pay – except where negotiated by a trade union, obviously – but I’m a little puzzled by two things:

1. a private sector where executive pay has long spiralled out of control is evidently going to have knock-on effects on the public sector, which is competing for similar talent. Those that live by the market die by it, surely?

2. we ought not to be surprised when a public sector which has been commercialised, contractorised and privatised beyond all recognition of the term ‘public service’ becomes influenced by private sector practices, including on pay. Not only is it playing catch-up with the private sector on pay, it has also, in terms of ethos, become dominated by private sector approaches and, in the current environment, it is looking for private sector expertise.

In these circumstances, appealing to some ‘old fashioned’ public service ethos, as Francis Maude is doing, looks rather quaint in itself.

Union leaders who argue that this is another attack on the public sector may well have a point. More than that, however, if we want to start sorting out the pressures on pay which lead to what people are arguing are inflated salaries in the public sector, it makes no sense to start within the public sector – which is the symptom of the problems, not the cause. As superficially ‘attractive’ as it might seem, in a time of budget cutbacks, to have another bash at the public sector, solving the problems of out of control senior pay means tackling it first, and above all, in the private sector. Motion 27A, carried at last week’s TUC, has a lot to commend in this direction, seeking a ‘shadow’ high pay commission to investigate high pay across the economy, not least in FTSE100 companies.

In the meantime, a government that recognised that, which recognised the nature of the links between the two, and which therefore was prepared to adopt a holistic approach to the issue, might command a bit more respect when talking about the need for restraint in the public sphere.

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