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Hutton review calls for Whitehall to examine Private Sector
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Posted in Candidates, Employers on Mar 15, 2011 by Richard Hayden
The Hutton review of Fair Pay in the Public Sector was released today, potentially sparking controversy in the Public & Private Sectors.
Hutton’s recommendation of “Fair Pay Across the Economy” would see Public Limited Companies (PLC’s) track and publish their pay multiples. Revealing the difference in pay between the chief executive and the average workforce, as well as a continued analysis of Public Sector Pay.
The report found that across nearly all areas, increases in executive pay have outstripped those for people on lower pay grades for a decade. However, it points out that public sector executive salaries pale in comparison with the private sector.
Approximately an astonishing 9,000 executives among the near six million public sector employees earn more than the Prime Minister David Cameron's salary of £142,500.
However, the remuneration of the typical FTSE100 chief executive is over £3m - equivalent to more than 120 times median pay.
Hutton’s Fair Pay recommendation has received support from TUC’s general secretary Brendan Barber; "Making PLCs (publicly limited companies) publish pay multiples and introducing workforce representation on remuneration committees are welcome proposals that should be implemented in the Budget."
Further backed by Unison General Secretary Dave Prentis; “To really tackle income equality and boost fairness, the government must take the blinkers off, and look closely at the private sector”.
However the report fell short of recommending a 20:1 pay multiple limitation for public sector managers. This would have seen an imposed link between the pay of public sector managers and their lowest paid personnel. Preventing a manger from earning more than twenty times the lowest paid person in the organisation.
Hutton does however suggest that ‘Earn back pay’ should be implemented for Senior Public Servants and Executives. Senior public servants’ under this recommendation would have an element of their basic pay ‘at risk’, to be earned back each year through meeting pre-agreed objectives. Allowing pay to vary down as well as up with performance, and “ensure that public services do not offer rewards for failure.”
If this recommendation of holding back pay from executives who did not meet end-of-year objectives was implemented by the Government, it would be the first of its type in the world.
For a comprehensive overview of the Hutton Review of Fair Pay in the Public Sector please follow the link.
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Hutton’s recommendation of “Fair Pay Across the Economy” would see Public Limited Companies (PLC’s) track and publish their pay multiples. Revealing the difference in pay between the chief executive and the average workforce, as well as a continued analysis of Public Sector Pay.
'Increases in executive pay have
outstripped those for people on lower pay grades for a decade'
The report found that across nearly all areas, increases in executive pay have outstripped those for people on lower pay grades for a decade. However, it points out that public sector executive salaries pale in comparison with the private sector.
Approximately an astonishing 9,000 executives among the near six million public sector employees earn more than the Prime Minister David Cameron's salary of £142,500.
However, the remuneration of the typical FTSE100 chief executive is over £3m - equivalent to more than 120 times median pay.
Hutton’s Fair Pay recommendation has received support from TUC’s general secretary Brendan Barber; "Making PLCs (publicly limited companies) publish pay multiples and introducing workforce representation on remuneration committees are welcome proposals that should be implemented in the Budget."
Further backed by Unison General Secretary Dave Prentis; “To really tackle income equality and boost fairness, the government must take the blinkers off, and look closely at the private sector”.
However the report fell short of recommending a 20:1 pay multiple limitation for public sector managers. This would have seen an imposed link between the pay of public sector managers and their lowest paid personnel. Preventing a manger from earning more than twenty times the lowest paid person in the organisation.
Hutton does however suggest that ‘Earn back pay’ should be implemented for Senior Public Servants and Executives. Senior public servants’ under this recommendation would have an element of their basic pay ‘at risk’, to be earned back each year through meeting pre-agreed objectives. Allowing pay to vary down as well as up with performance, and “ensure that public services do not offer rewards for failure.”
If this recommendation of holding back pay from executives who did not meet end-of-year objectives was implemented by the Government, it would be the first of its type in the world.
For a comprehensive overview of the Hutton Review of Fair Pay in the Public Sector please follow the link.
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