Will Hutton’s interim report of December 2010 ‘Hutton review of fair pay in the public sector’ looks to tackle the thorny issue of senior pay and pay ratios in the public sector.
Perhaps like some of you (in the public sector) I anticipated the publication of the report with trepidation and braced myself for the next wave of media frenzy over the so-called ‘town hall fats cats’.
However, after reading the report I was pleasantly relieved to see some of the conclusions (in my opinion) made eminent sense and Will Hutton seeks to lay certain ghosts to rest, such as,
‘There are widespread myths. In general pay at the top of the public sector …is lower than in comparably sized listed companies…yet many public organisations pose no less managerial challenge than their similarly sized private sector counterparts’
Will Hutton also makes the point about the exponential increase in chief executive pay over the last 20 years in the FTSE top 100 companies – something I highlighted in my recent blog post ‘Big Bucks’
Much has been made of pay ratios in the press between the lowest paid employee and the chief executive role. Will Hutton’s report also raises this issue and the ratio of 20:1 is featured.
If you read my article ‘Top Pay Poppycock’ in MJ magazine, September 2010, I covered the fact that most public sector chief executives’ pay would represent a ratio nearer 10:1 than 20:1 – and the highest paid Local Government chief executive has a pay ratio disparity of 1:40 compared with the chief executives of Tesco and Sainsbury.
I’m not convinced a rigid pay ratio cap would be the answer – and in fairness Will Hutton whilst obviously contemplating this approach recognises that, ‘…it would need careful design to avoid harming recruitment and retention’
Why not use the ‘comments’ feature in the blog site and let me have your views?