Thursday, 9 December 2010


Salaries are of such great interest. Our own and, of course, other people's!

Will Hutton's recent interim report on fair pay in the public sector makes fascinating reading. He makes a crucial point about the public sector which applies in spades and buckets to the third sector.

He warns that super salaries in the private sector are in danger of strangling our public services. Britain "following the US, has created a super class of manager share - owners who are being offered unparalleled scale of compensation to do what used to be considered their job". It has led to a "pay arms race where collectively CEO pay has become increasingly detached from performance".

Attention is being focused on what are supposedly outrageous salaries in the public sector. Yet apparently no one in Government seems to find the really outrageous salaries in the private sector a matter of as much as a moment's notice.

I have strong sympathy with Eric Pickles MP on local Council CEO pay levels. Certainly there seems to have been a bit of a merry-go-round for some and he is right to be critical. But it is difficult not to conclude that localism means just that; local people and their councillors decide?

If there is a strong case and pay needs to be attractive to tempt someone from the commercial sector then salaries will sometimes be high.

I know in our own sector some of our top CEOs have come in from private or public sector jobs on what seem high salaries, but are much less than they were earning previously.

And we should heed the warning of Will Hutton who argues to beware a race to the bottom in public sector pay.

"Britain could follow the US and have a public sector locked in a downward vortex of under performance, poor pay and a falling talent pool, which becomes a depressant on the entire economy and society."

As Hutton points out, in spite of howls about fat cat salaries in the public sector pay, only £1 in every £100 taken by the top 1% of Britain's earners goes to public sector people.

So what of our sector? I guess the figure might be 0.1% of 1%! We have to be vigilant that all this "no more than the PM salary" stuff does not halt the progress we have made on professional pay rates for top managers.

And as for the 20:1 pay multiple between top and bottom pay that is being suggested for the public sector I doubt our own sector will be shy in comparison. Why, in ACEVO it is 6:1 and I suspect a similar pattern in other member organisations. So let's beware the hair shirt brigade. Our sector must also be able to recruit top talent. We should be out and proud at the way pay has advanced in our sector. We cannot return to the days when people on retirement took a charity CEO job on small salaries as a boost to their pension.

ACEVO has prepared a briefing for members on how to respond to questions about pay which can be found here:

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