The chair of the new government's civil service pay review has been urged to consider the impact of private sector ‘market failures' on Whitehall salaries.
The FDA trade union, which represents senior public servants, wants Will Hutton to study the interaction between remuneration in the private sphere and the impact that has on Whitehall departments seeking to recruit staff from large corporations.
Mr Hutton, vice chair of the Work Foundation think-tank and a renowned economic thinker, has agreed to lead an independent review of public sector pay under the new Conservative-Liberal Democrat Government, amid some concern within Whitehall that new ministers want to significantly restrain public sector pay. Prime minister, David Cameron, has said he would like to introduce a system whereby the highest-paid public servants earn no more than 20 times the salary of their lower-paid staff.
But Jonathan Baume, FDA general secretary, urged a sensible review, which took into account the distorting impact of external recruits bringing higher, private sector-linked salaries, into the public realm. Some external recruits to the civil service earn significantly more than peers within the same pay grade who were recruited from within the public realm.
‘The FDA repeatedly called on the previous government to address concerns about the extent to which market failures in the private sector created more pay pressure in the public sector, which we hope Mr Hutton will examine,' he said. ‘Despite promises and reviews, no meaningful reform has been delivered for senior pay in the civil and public services. We hope this announcement will lead to a full examination of the many issues that need to be addressed.'
Mr Baume also welcomed the new prime minister's pledge to honour this year's performance-related rewards for civil servants. While in Opposition, the new Conservative ministers pledged to cut back on bonus payments in the public realm, and Mr Hutton's review could yet pledge to slash future commitments.
