public sector pay | Roger Gambba-Jones

I’m reposting this following today’s front page story in the Telegraph. Although they are now targeting the £100k+ salaries that some charity bosses now apparently receive, they are also suggesting that this could be a sign of the salary creep that’s supposedly happening in the public sector.

It should hardly come as a surprise, that if you push the often complex and challenging community support work done by local authorities on to the voluntary sector, their executives are going to expect to be rewarded for managing that increased workload. As I say below, good charities are also good businesses and good businesses know that high quality management doesn’t come on the cheap.

It’s tempting to see this as some sort of three card trick by government, where they encourage charities to take over more and more local authority work, thereby easing the burden on the public purse. In the meantime, these charities are working their socks off to find the extra funding needed to supplement the often inadequate funding that has been passed on by already inadequately funded local authorities. The confidence tricks comes, when you realise that much of the extra money required is from the same public that has already paid their taxes to government to provide those same services!

Personally, unlike some, I’ve never laboured under the illusion that all those who work for charities, do it out of the goodness of their hearts – even where that charity has no national profile.

When it comes to the national charities and their modus operandi, they are, first and foremost businesses, with a business plans, financial projections and performance targets. As such, when they need to recruit somebody into one of their senior management positions, the last thing on their minds is likely to be the social conscience of the individuals applying for the vacant position.

Indeed, having somebody who is more concerned about doing ‘the right thing’ at every step of the way, even if it costs the organisation money, is more likely to find themselves receiving a thank you very much for applying letter, than one offering congratulations.

So, I suppose it shouldn’t be too much of a surprise to see that some of the most popular charities are paying big bucks to their top staff.

That said, it stills seem slightly wrong to see £60,000 plus salaries, potentially being paid out of the pennies and pounds donated via high street collections and charity shop donations, sometimes by those who can least afford it.

To be absolutely fair, at least to those charities that deserve it, the key number for me, is the % of their total income spent of their raison d’être, charity. Those that achieve 70% and above should be acknowledged for achieving figures similar to the overheads costs seen in most successful and efficient businesses.

Those returning figures below 70% and especially below 50%, should be questioned as to their effectiveness and as for the Age UK figures, well…..

Charity	Income Millions	% Spent On Charitable Activity	Number Of Staff Earning Over £60,000
Cancer Research	£493	70	160
Oxfam	£386	76	35
Save the Children	£333	89	31
British Heart Foundation	£250	46	36
Banardo’s	£245	80	35
Royal Mencap Society	£201	96	39
British Red Cross	£200	67	32
Action for Children	£198	93	38
RNLI	£173	78	42
Age UK	£168	49	41

All above figures copied, with thanks, from the article by Richard Dyson – Sunday Telegraph, Money Supplement, 21 July 2013

Media outrage about public sector manager salary increases is “unfounded” according to private sector research published this week.

Income figures from Hay Group’s salary database shows senior public sector employees have not received disproportionate pay rises over the last decade and continue to earn 33% less than private sector colleagues.

The data also shows front-line public servants are now better off than employees in the private sector although the management consultant’s pay experts have predicted this will be reversed as the government’s austerity drive takes effect.

However, Hay Group’s reward information consultant David Smith, said: “Our data shows that the media furore over public pay is unfounded, with percentage rises at senior management level largely identical to those in the private sector.

“Public sector managers should arm themselves with reliable and robust figures, particularly around the value of the total package, to help support their decisions about pay in the public domain.”

Communities secretary Eric Pickles has been a particularly vocal critic of “exorbitant” pay deals for town hall chief executives. Last year, he told the Daily Telegraph: “There is widespread public concern about soaring salaries in local government, with chief executives moving from council to council like football managers.”

Hay Group data for senior managers in the private and public sectors shows senior pay in both the private and public sectors has risen in line with each other between 2000 and 2011.

While private sector senior salaries rose by 62% to a current average of £176,498, public sector salaries rose by 61% to the current average of £118,673.

LGC’s Salary Tracker research, published in July, showed the average salary of chief executives appointed in the previous 12 months was 18% lower than their predecessors’ salary.

Hay group’s data shows a different trend for front-line and support staff in the public sector who now earn more than their private sector colleagues after average public sector salaries rose by 13% more than private sector wages

In 2000 average public sector salaries were £12,035 compared to the marginally higher £12,652 private sector average.

After more than a decade of Labour government public sector spending policies and following a drop in private sector wages since the recession hit in 2009, that position has switched with the average public sector salary of £18,027 compared to £17,332 in the private sector.

However, Hay Group predicted private sector salaries would soon be outstripping public sector salaries at all levels.

Mr Smith said: “The public sector was not directly affected by the global economic downturn, unlike the private sector. But with government austerity taking hold, many employees are beginning to feel the impact of cost cutting in their wallets.

“With pay restraint taking hold in the public sector and pensions set to become a less valuable benefit, we predict that the salary gap will start to widen at all levels in the next couple of years.

“In these tough times, the challenge for the public sector will be to contain costs yet still be able to attract and retain key talent.”

Roger Gambba-Jones

Roger's rants and sometimes something useful!

Tag Archives: public sector pay

Charity bosses paid £100k+…. and your point is?

Eric Pickles won’t be issuing any press release on this!