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Will Hutton’s pay review: the missing questions

Hutton Review of Fair Pay in the Public SectorDespite running such a vast and well-funded organisation, we were shocked to discover we’d missed the deadline for submitting evidence to Will Hutton’s Review of Fair Pay in the Public Sector.

One welcome aspect of the review is that it will probe at least a little into private sector pay too. Nevertheless there seems to be gap in its terms of reference and list of 20 key questions: the issue of pay differentials in private companies providing services to the state.

We’ve sent the following request to the review:

I apologise for having missed the deadline for submissions. However I am concerned that there is an area central to your inquiry which is not covered by the 20 questions listed in your call for evidence.

This is the issue of pay differentials within private sector organisations providing services to the public sector. As more services are outsourced, it becomes meaningless to focus on pay within public sector organisations without looking at private contractors.

In addition, private contractors are not subject to the same rules of transparency, nor covered by the Freedom of Information Act. The review needs to look at this disparity, as basic information about pay is a prerequisite for further action or analysis.

I do hope that it is not too late to consider these important issues.

 

Posted by Other TPA at 10:20am on 13 September 2010
Tags: Inequality,Private sector,Public sector

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From the 20 questions:

“Do you agree with a pay differential between highest and lowest earners of 20:1 as a means of promoting pay fairness?  If not, what is your preferred alternative?”

20:1 is far too high a differential.  I’m a public sector worker who has been hit with a pay freeze.  I earn around £7.50 an hour.  20 times that amount is £150 an hour, and absolutely cannot be justified when we are all being told to “tighten our belts”.  If I tighten mine any more I will cut myself in two.

I have essentially had my pay cut for two years and it will now lag behind where it should have been even if pay rises happen.  My living costs are rising at the same rate as the theoretical higher earner on his/her £150 an hour, but it hits my family harder because we have so little to begin with.

Posted by MelB at 11:08am on 13 September 2010

What does the cost of external suppliers have to do with public sector pay?

You are trying to compare apples and oranges and I will be sorely dissapointed if this is taken at all seriously which I doubt it will.

You may as well try and highlight how much is spent on physical equipment, goods and other services and try and ‘compare’ how much those private enterprises make to civil service salaries/pensions etc.

No one is forcing anyone to work within either sector. If you don’t like what you’re earning then do what entrepreneurs/freelancers/contractors do and invest in some skills and take on some risk

Posted by Peter Webber at 01:51pm on 14 September 2010

Peter,

Of course it is relevant. If private companies are receiving state contracts then they should be subject to general considerations being made about state employees. It is totally unacceptable that we would cut public sector pay (or indeed lose public sector jobs) when state money is being used to fatten the wallet of an owner or manager of some company that runs on the back of public sector contracts (Capita for example).

Posted by Ben at 04:26pm on 29 September 2010

IIRC several of the highest paid NHS employees were GPs - but GPs are not NHS employees. They work under contract just like the outsourced cleaning firms. Also, incidentally, the taxpayer pays the mortgage interest on GP surgeries whilst the surgery itself is owned by the practice in which GPs generally have a share they can sell on retirement.
The fact that GPs are considered as employees - even in a reasonably authoritative survey such as this shows how blurred and artificial the distinction is.

Pete

Posted by Pete B at 07:31am on 30 September 2010

Cliff

What sort of society are you after?

We have had a genuine? proposal from HMRC that all salaries and wages should be paid to them and they will then pay employees having first deducted all the taxes, NIC due.

We have your website promoting the idea that the government should fix pay rates through the management of differentials.

And since the last gasp of the Labour government, we have the frankly unsustainable situation where direct tax rates on the higher earners now exceed 50%.

And all this against a background where entire generations of our children are being impoverished by governments buying votes with our money, running deficits so large - half of which is spent on welfare of one form or another - that interest payments now exceed the annual defence budget.

I don’t want to “put words in your mouth” but is it fair to say that you support all of this?

So I finish as I started; what sort of society are you after?

Posted by Brian Smith at 12:01pm on 16 October 2010

That is an extremely strange post if you don’t want to put words in Clifford’s mouth, Brian. I can’t see you doing anything but there.

And I also can’t really be bothered about a 50% tax rate on high earners when its the far lower percentage on low earners that actually makes a difference to our society and 99.9% of people’s lives.

I wonder is it fair to say to you that you support unlimited wages and bonuses for high earners but deep cuts to the wages of low earners just above the subsistence line in the name of ‘tightening belts’?

Not that I want to ‘put words in your mouth’.....

And Mr Webber if you can’t see how public spending on external suppliers is equally, if not more, relevant than spending on public sector workers, then I have to ask what definition of ‘outsourcing’ you are using and how you think that is being paid for….

Posted by William Hobson at 04:19pm on 1 December 2010

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