The Home Office - where bonuses count as regular pay

July 21, 2010 10:16 AM

Yesterday at the Home Affairs Committee meeting, the issue of senior pay came up. Immigration Minister Damian Green said that 8.6 per cent of the entire Home Office pay bill was set aside for bonuses. This is going down to 4.4 per cent this year. Mr Green then went on to say that this means that the average pay for many Home Office officials would be cut. Makes sense - less money means less pay. Surely.

Well, not quite. Cutting the bonus pot is not cutting someone's pay. Bonuses are performance related, and do not constitute part of a worker's regular pay-packet. Keith Vaz, Chairman of the committee, rightly pounced on this straight away. "It's not a pay-cut, is it minister?" Mr Green replied "They'll get less money this year than last year, so it feels like a pay cut to them."

Enlightening. So these officials seem to be given bonuses regardless of performance. They would have got their bonuses this year had there been enough money to pay for them. MP for Cannock Chase Aidan Burley then stepped in to drive the point home to the minister: "Surely a bonus is not compulsory...If you're not performing and therefore not entitled to a bonus, that doesn't count as a pay cut." Quite right.

If we're to really get to grips with public sector pay, it's not just raw numbers that need to be looked at. There's clearly a culture-change required in most bodies and departments. Yesterday's Home Affairs committee session proved that. Just as a side-note, the BBC have reported the story this morning. Although they headline with "Bonuses amid Pay Freeze", they say in response that Damian Green said cutting bonuses was effectively a pay-cut. However, no mention of Mr Vaz and and Mr Burley stepping in to correctly rubbish this assertion.

Yesterday at the Home Affairs Committee meeting, the issue of senior pay came up. Immigration Minister Damian Green said that 8.6 per cent of the entire Home Office pay bill was set aside for bonuses. This is going down to 4.4 per cent this year. Mr Green then went on to say that this means that the average pay for many Home Office officials would be cut. Makes sense - less money means less pay. Surely.

Well, not quite. Cutting the bonus pot is not cutting someone's pay. Bonuses are performance related, and do not constitute part of a worker's regular pay-packet. Keith Vaz, Chairman of the committee, rightly pounced on this straight away. "It's not a pay-cut, is it minister?" Mr Green replied "They'll get less money this year than last year, so it feels like a pay cut to them."

Enlightening. So these officials seem to be given bonuses regardless of performance. They would have got their bonuses this year had there been enough money to pay for them. MP for Cannock Chase Aidan Burley then stepped in to drive the point home to the minister: "Surely a bonus is not compulsory...If you're not performing and therefore not entitled to a bonus, that doesn't count as a pay cut." Quite right.

If we're to really get to grips with public sector pay, it's not just raw numbers that need to be looked at. There's clearly a culture-change required in most bodies and departments. Yesterday's Home Affairs committee session proved that. Just as a side-note, the BBC have reported the story this morning. Although they headline with "Bonuses amid Pay Freeze", they say in response that Damian Green said cutting bonuses was effectively a pay-cut. However, no mention of Mr Vaz and and Mr Burley stepping in to correctly rubbish this assertion.

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