Headlines: March 17th, 2011

The failure of the Hutton report to put a cap on the pay of senior public servants is in direct conflict with a poll taken before the report was published which showed strong support for limiting top pay. There is also union anger that no attempt has been made to narrow the gap between those at the bottom and the top of the pay scales.

The poll commissioned by the Institute for Public Policy Research found that the majority of people favoured a cap on top public sector salaries, with 61 per cent favouring a ratio between top and bottom pay of 1:10. Hutton’s interim report suggested a pay ratio in the public sector of 1:20, meaning a maximum salary of £246,000 for organisations that have staff on the minimum wage.

The poll revealed that just one in ten believed Hutton’s 1:20 ratio is the right limit, with more than one in five wanting a 1:10 ratio, with a £123,000 maximum salary and more than a third saying it should be lower. Less than one in ten believed there should be no limit.

The Unite union said that the Hutton review on fair pay in the public sector was ‘hugely disappointing’ and would allow the ‘fat cat’ pay bonanza to continue, while thousands of low-paid public sector workers were losing their jobs and having their retirement pensions slashed.

The FDA, the top civil servants union, has criticised the proposal to make 10 percent of top pay subject to a claw back for failing to meet targets. It described the measure as ‘ill conceived’ with a potential to create conflict with ministers.

The report has been welcomed by the Chartered Institute of Personnel and Development which described it as ‘intelligent and thoughtful’. The Institutes has welcomed recommendations that top public sector pay should be better aligned to an assessment of individual and organisational performance.

The Institute also welcomed the absence from the report of any reference to the misleading use of the Prime Minister’s salary as a benchmark for other public sector jobs.