It’s all about the Benjamins

Public sector pay. There are fewer more toxic subjects for communicators. The media love to talk about it, politicians love to jump on it, and the public get really, really angry about it.

And what makes Town Hall/NHS/Civil Service Fat Cats even worse? When they reward themselves big pay rises while cutting services in the name of austerity. You can talk about consultations, inflation, independent pay review boards and market rates all you want – you will not come out of this well.

This is the ultimate PR turd. Far too big to roll and there’s probably not enough glitter in Mariah Carey’s wardrobe.FullSizeRender

I’m not going to launch a spirited defence of spiralling executive pay in the public sector – ironically it’s a zero-sum game and as a former council press officer I still bear the scars. Let’s be diplomatic and say we haven’t always helped ourselves.

But you may have heard, there’s now a crackdown, particularly on ‘exit payments’ which will be limited to £95,000. Meanwhile, the PM’s salary of £142,500 has become something of a ‘benchmark’ for fairness.

On the face of it, that sounds sensible. After all, being PM is the biggest job in UK public service. Some of the scarier responsibilities include making the final decision on launching a nuclear strike and deciding whether to shoot down hijacked aircraft.

Surely running a housing association in the East Midlands doesn’t come close?

The trouble is, comparing the PM’s salary to that of other public servants doesn’t really work in practice. This is because it is not really a ‘normal job’.

There’s a really good blog on this from the Kings Fund here, but here are some of my thoughts on why nothing compares to Number 10.

  • Recent occupants haven’t even taken the full amount – mainly because they know that to demand the lot would be political kryptonite. In case you’re wondering, the actual entitlement is almost £200,000.
  • There are substantial ‘extras’ to being PM. Extras that are simply not available in other jobs. You get a rent free central London address and a weekend retreat. Your business travel is free and you also cost a lot to keep – a security detail and a bomb proof car don’t come cheap.
  • Unlike most other jobs there is no market competition. This is a job that is not advertised and is not open to all comers. There is no job description. If we looked for applicants to become, in effect, the Chief Executive of the fifth largest economy in the world, it would probably have to pay an awful lot more to attract qualified candidates.
  • The earning potential when you leave, or are pushed, is huge. Regardless of how you perform in the job. John Major, not the most successful of modern PMs, still pulls in £30,000 a speech, while Tony Blair manages to get an eye-watering quarter of a million.

So if the PM’s salary isn’t really a good example of what to judge fair pay by then what is? We could look at the ratio – comparing the pay of the average with that of the highest.

But the public sector actually does pretty well on this, particularly compared to your average FTSE 100 Company where a Chief Executive is paid a staggering 130 times their average employee. In the Public Sector it’s more like 12 times.

We probably need to move beyond the numbers game and get back to the idea of public service as a vocation rather than a way of making money.

As think tank Respublica points out in its excellent report on virtue in public service, the driving up of salaries in some professions by narrow interest groups has contributed to a drop in trust between some public servants and the people they serve.

What we need to do is return the idea of ‘virtue’ to public service – for example, one Respublica recommendation is that lawyers should do mandatory pro-bono work.

But a culture of defining the worth of jobs by salary could take decades to reverse. In the meantime, hard cash will continue to cause nasty headaches for communicators.

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