Monday, 20 September 2010

Perverse rewards for public sector fat cats will rebound

Under Labour, the ratio between the pay of a mean admin grade in the public sector and the top dogs has widened from about six times to about twelve times, even in organisations that are not in themselves massive. The boss grades, stimulated and encouraged by both the Audit Commission and the KPMGs and PWCs into pretending to be equivalent to the private sector, have thrust their snouts deeply into the tax trough to create a compliant and politically skewed senior tier increasingly remote from the mass of the organisations they manage. 

This has several effects. During organisational downsizing, this tier will be alien from their own workforces, engendering resentment and IR conflict, bereft of the natural support of the next tier down who earn only half as much. Any public sector body serious about implementing cuts will have to carry out a mass cull of the fat cats first. 

Secondly, from January many public sector bodies are being forced to 'name and shame' all those earning over £58k. Local papers are even now assembling face pics to put together their rogues galleries. The public will be posed with the stark choice; cut twelve nurses or one chief executive? Tough call. Again, a mass cull will be needed. 

Panorama tonight (BBC1, 8.30) will reveal 9,000 fat cats earning more than the PM and 38,000 earning more than £100k. This will start the pressure on the public sector that is set to continue into the new year. 

There's one lesson that needs to be repeated over and over during the next few months; this is what happens when you let the central State and the political class determine how public services are provided; this is what happens when you allow Labour to govern; this is what happens when you lose control of your taxes. 

The nation has little sympathy for the public sector fat cats right now, and any defence of their rewards sounds hollow. They've had their days in the Sun.  


Anonymous said...

How to guarantee that you have willing followers and ready made voters...employ them and pay them well.

Nuff said!

Coney Island

Anonymous said...

"They've had their days in the Sun."

I suspect that they have many days ahead of them in The Sun.

Woodsy42 said...

The other problem with such huge salaries is that they distort statistics and hence distort judgements of what is a fair pay rate.
EG: If you get 20 office staff earning 20K per year and one executive earning 200K you will find there is an average salary of almost 30K per year (600/21) for that group of workers.
Clearly this is counter intuitive because it overestimates the income of most of that group of people by nearly a half.
It means the exec is only paid 6 times the 'average' - whearas in fact they are paid almost 10 times the rate of every other worker in the group.
Of course you then also get inflationary demands from other workers who demand parity with the 'average' salary.
I notice some statistics do use medians rather than means but I don't think most trades unions do! I certainly suspect many people, including politicians, don't understand the difference or its significance.