Dec 2009 03

New Research: Public Sector Rich List 200923

As politicians call for a pay freeze, public sector executives get a 5.4% pay rise

• In 2008-09 at least 806 people received remuneration packages of £150,000 or more a year 

• 8 people in the public sector earned more than £1 million a year, compared with 4 people in 2007-08

• Gordon Brown is the 324th highest paid person in the public sector

All political parties are now publicly committed to tackling the problem of excessive pay for senior public sector staff, responding to taxpayers' anger at public sector fat cats. In November 2006 the TaxPayers’ Alliance produced the first ever list of the most highly paid executives in the public sector. Now in its fourth edition, the Public Sector Rich List is not only more detailed and comprehensive, it also feeds into a public debate that has changed markedly over the past eighteen months. 

Harriet Harman recently blocked a £185,000 salary for the new Chief Executive of the Equality and Human Rights Commission. George Osborne has said that “anyone who wishes to pay a public servant more than the Prime Minister will have to put it before the Chancellor”.  Vince Cable has said that “pay restraint should start at the top”. It is important that this rhetoric is matched with a serious crack down on inflated pay at the top of the public sector and rewards for failure, and that taxpayers can look forward to a new era of transparency, accountability and restraint.

Read the full report here (PDF).  

Key findings

•    At least 806 people receiving remuneration packages of £150,000 or more a year in 2008-09 across 358 government departments, quangos, public corporations, other public bodies and nationalised industries. For reference, there were 124 people earning more than £150,000 in this year’s Town Hall Rich List which covered 2007-08. 

•    A key difference with this year’s Rich List is that it includes the top employees from the state controlled banks. The most highly paid person in the public sector this year is therefore Mark Fisher of the Royal Bank of Scotland, whose remuneration was £1,388,000.

•    Of the 806 people on this year's list, 30 are bank employees.

•    Adam Crozier of Royal Mail is the highest paid non-bank employee in the public sector, earning £1,309,000.

•    Gordon Brown is the 324th highest paid person in the public sector.

•    The average total remuneration of the 806 people on the list is almost £225,990 per annum.  This works out at over £4,700 per week.

•    By comparison, according to the Institute of Directors, a managing director of a private organisation with a turnover of between £50 million and £500 million could expect to earn £141,440 and an executive director £87,000.

•    Even without the bankers, the average remuneration package on our list is £209,151.

•    The BBC has at least 53 people on £150,000 or over. Transport for London has 50 members of staff on or above £150,000. In comparison, the Treasury, the main Government department responsible for tackling the recession, has a modest 3 people in the Rich List.

•    There are 8 people in the public sector who earn more than £1 million a year, compared with 4 people last year.

•    There are 35 people in the public sector earning above £500,000 a year compared with 21 last year.

•    There are 120 people earning above £250,000 a year compared with 88 last year.

•    The average pay rise of the people with remuneration for 2007-08 and 2008-09 is 5.4 per cent. This is compared to a pay rise of 2.7 per cent for a nurse and 2.3 per cent for a teacher.

•    Because of extensive work in other areas of the public sector, the total number of people on the Public Sector Rich List 2009 is not comparable with previous editions. For a full explanation, please see key findings in the main report.  

Download the full report here (PDF).

John O’Connell, Policy Analyst at the TaxPayers’ Alliance, said:

“Executive pay in the public sector is completely divorced from the reality of Britain’s fiscal crisis. Ordinary families, struggling to make ends meet in the recession, don’t pay their taxes to fund gold-plated deals for public sector fat cats. All parties now agree that excessive pay packages must be tackled but the time for action is now, not next year. Taxpayers want genuine transparency, accountability and restraint in setting top public sector pay.”

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  • JD

    Ironic that Luke Johnson, forever writing about the need for tough, lean, entrepreneurial management in the public sector, presided over one of the most over rewarded and over rated Boards whilst chair of
    of Channel 4.

  • M.L.

    Greed. Nothing else, greed pure and simple.

  • Steve Robson

    Interesting of course that most of the really high earners are actually in reality your mates from the private sector. Perhaps we should nationalise all the banks, then you could rant on about the 5000 bankers earning over £1million, who you don’t mention (I think most of them back you, don’t they – not that we’d know given you are as transparant as mud).
    You don’t think its a tad unfair to rant about more high earners in the public sector, when its purely driven by the failure of the private sector and the transfer of their ultra high earners into the public sector.

  • http://www.isitfair.co.uk Christine Melsom, Isitfair

    The leader of Hampshire County Council told me that the pay rise for HCC this year was 1% across the board. I suggested that everyone received the same cash amount across the board, which would stop the widening of the gap between high and low earners!
    I was expecting too much it seems

  • Andrew Smith

    Could we at least ask that public sector employees who receive high salaries:
    1 wear a tie if male
    2 have a recent shave and hair cut of either sex
    3 speak normal English – cut out the dropped consonants, the estuary false accents, the jargon
    4 stop retiring in their 50s or even early 60s
    5 acknowledge the advantages of the security and pensions in the public sector
    6 stop telling us what to think and why they are so wonderful

  • Steve Browning

    “• By comparison, according to the Institute of Directors, a managing director of a private organisation with a turnover of between £50 million and £500 million could expect to earn £141,440 and an executive director £87,000.”
    If you believe that, you’ll believe anything. Even if true, this is just basic pay, it excludes benefits like bonuses, which you include for the public sector. Plus these are pretty small companies. What about the 5000 bankers earning £1million plus???? How does that demonstrate lower pay in the private sector?
    Also, you calculation of pay increases are ridiculous. You take no account of new post holders paid less than previous ones, but you include promotions as pay increases and movement up a pay scale. That is normal in the public and private sector and means people are appointed on lower salaries, WHICH SAVES MONEY.
    This also explains the position to Christine of Isitfair about HCC, although they are not in the list, so her post is irrelevant anyway, though shows how Daily Mail readers actually need NO DATA to express an opinion on data.

  • MOLLY Bennett

    ‘So this is Christmas’ perhaps this song was written with these greedy and immoral bankers and politicians in mind.I feel ashamed of my countrymen when i see them drooling over the family silver and scrabbling for the last coppers at the bottom of the trough, I pray for the day when they all finally choke on their greed, nothing else is going to stop them, they have become blind to their country and their fellow countrymen in their addiction to money.The sooner we get these people out of office the better. i believe there are still those out there who retain honour and dignity and would bring back democracy and fair play if we give them the chance. It is time for a clean sweep in Westminster, we must go back to our customery belief in a GREAT BRITAIN and start again .

  • Adam Wissen

    What a shame most of these highly paid public servants would, like their counter parts in the private sector, justify their salaries with the old right wing adage ‘You’re paid your market rate’.
    Of course that phrase was meant to justify the poverty wages of lower paid employees and undermine any collective bargaining they might have to try and improve their wage.

  • tony powell

    have they mentioned anything about GOLDPLATED PENSIONS for civil servants,mps and other government employees? huge costs savings here lets start a campaign NOW

  • http://www.flashpapers.com Term Papers

    A great article indeed and a very detailed, realistic and superb analysis of the current and past scenarios.

  • Tony Rogers

    “Greed. Nothing else, greed pure and simple.” – Posted by: M.L. | December 04, 2009 at 09:41 AM
    Nothing wrong with that as long as it’s an economically-productive voluntary arrangement. Public sector jobs are not and are a product of government plunder and redistribution of wealth.
    As such, the BBC’s decision to withhold data pertaining to the pay of its top earners, which it refers to as “talent”, is a disgrace. I want to know how much Jonathan Ross is syphoning off – when those who refuse to pay for such a super-idiot are given hefty fines under threat of imprisonment.

  • DAve

    I think some of the comments here are ill informed.
    I can only talk about the public sector organisation that I work in (the NHS) and I would defend these salaries to the hilt.
    I would go further and say that a salary of £150,000 for a CEO with responsibility/acountability for a hospital trust with c10,000 members of staff and a turnover in excess of £500m is totally inadequate, and risks dissuading talented people for applying for these jobs.
    Throughout the NHS senior managers and clinicians well above and beyond what is expected in their job descriptions for little (if any) financial reward – they do this out of a sense of duty – so what may look like a high salary to the public may not actually be that high once you learn what the job entails.
    Just to give you an example of the above, I am a director of an NHS trust (salary £85k) and I always work 70+ hours a week. You pay me for 37.5 of these. Additionally I work 2-3 24-hour oncall periods per month for which I get £30 each time. This is the rule, not the exception in the NHS.
    If you can find me someone in the private sector earning a similar salary who would work for 24 hours for £30, I would like to meet him/her!
    My point is not to judge a book by its cover – you need to look beyond the healdline grabbing, TPA twisted stories in the media about high salaries and actually balance risk/responsibility/acountability/effort/job security against the reward.

  • frankos

    I think the point this article is making is that the public sector doesn’t make a profit.
    If public sector employees think they could really earn their bloated salaries in the private sector –move and find out about the real world of competition.
    When employees in the private sector are at best having pay freezes and at worst losing their jobs, we in the private sector have little time for your public sector whining.

  • frankos

    P; please could I have your fat pension –Gordon has ruined my private one?

  • Steve Robson

    This list is useless for finding out information; there are clearly loads of bankers missing. You only have the top ones and I’m interested to know just how many earn over £150K because it will clearly be many more than in the real public sector.
    Why are you so lazy in doing this “research”. Please make more effort next time.

  • frankos

    Whining about bankers pay and the the banking bailout is no excuse for public sector managers being paid sums well above their worth.
    This particular smokescreen of envy is beginning to wear a bit thin.
    We need to look into ALL taxpayers costs!

  • Paul Feild

    “What I don’t understand” said Alice “is how so many highly rewarded public sector managers can work from home whenever it snows?”
    “do you notice any difference when they do or don’t?”
    laughed Humpty-Dumpty
    “not really” Alice shrugged
    She smiled “Hey if I was in the Police top brass I could get the taxpayer to provide a nice flat in London – then I could work from work whenever it snowed”
    “Ata-girl” Cheered Humpty

  • Brian Smith

    Steve
    You know, I know, everybody knows that the bankers – whoever or whatever they are – currently in the public sector are on borrowed time. They will all, sooner or later, go back to the private sector when the government cashes in our investment – for once we can use this word honestly about some public spending (Gordon Brown please take note) – and takes its (our) profits.
    There will be no TUPE protection for these people and they will be going back to very uncertain career prospects. And you can be absolutely certain that their pensions will not have been uprated to public sector standards; they will remain in the defined benefits schemes they were in prior to the nationalisation.
    If any part of the permanent public sector faced this kind of fate there would be total bloody uproar.

  • Steve Robson

    Do people not work at home in the private sector, said Humpty, wouldn’t it help them to be more efficient and drive down office costs.
    No, said Alice, they are already perfectly efficient, unlike the beastly old public sector, where everyone is paid much more. The private sector is perfect.
    Why did they nearly bankrupt us then, said Humpty, you know by loaning money to people without jobs or any chance of repaying it. Did their superior private sector brains not realise that was a little daft. Could they not have asked Tim Aker for some advice.
    Oh silly Humpty, said Alice, that was the public sector who did that. RBS and banks like that are in the public sector.
    But isn’t that just because they failed, said Humpty. Didn’t they get bailed out. Aren’t you getting it the wrong way round.
    Oh Humpty, said Alice, your using that old left wing research methodology of looking at facts and drawing conclusions. The TPA have invented a new methodology which is much more convenient – you start with the conclusions and draw your findings from them. So the banks failed, the public sector is a failure, ergo, the banks are in the public sector. Its simple.
    Is that why the TPA don’t mention the salaries of all their rich backers in the private sector said Humpty, and instead yak on endlessly about people who seem to earn an awlful lot less in the public sector.
    No Humpty, your still getting your methodology wrong and acting like some kind of proper researcher interested in the truth rather than helping to make your mates richer. People in the public sector earn more. Bob Diamond, Head of Barclays, earns £26million pa for example, so he must be in the public sector. He’s only not on this rich list because its incomplete and a very poor piece of work.
    Oh right said Humpty, and people believe all this topsy turvy rubbish do they.
    Oh yes said Alice, they fall for it hook, line and sinker. The TPA have been very successful at diverting attention from the real villians who they were at school with and getting ordinary people to blame each other. They are true spin-masters, they really are.
    Oh well, said Humpty, I still miss Tim though, he so epitimised everything a Right Winger should be!

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