Name and shame public sector top earners, say MPs

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The public sector would have to justify the ‘ever-growing gulf’ between top pay deals and average earnings under proposals published today by MPs.

In its report, the public administration select committee calls for a Top Pay Commission to ‘name and shame’ public sector organisations that pay officials ‘excessive salaries’ and instead set them in the contexts of lower level earnings and the state of the public finances.

The committee acknowledges the public sector has offered ‘excellent value’ in comparison with the private sector’s ‘stratospheric pay increases’, but says it has suffered from what the committee calls a ‘contagion effect’ - where the highest salaries in both sectors have increased much faster than average earnings.

The report, Top pay in the public sector, calls for a commission to help ensure greater coherence to pay settings across top levels of the public sector as well as produce principles and benchmarks for pay setters, with accompanying powers to investigate if these were breached.

Committee chair, Tony Wright, said: ‘Set against the stratospheric pay increases seen at the top of the private sector over the last ten years, the public sector has got excellent value from many of its top people.

‘However, we do not believe that the ever-growing gulf between average earnings and top pay is sustainable or desirable – especially in a time of recession.’

The report recommended the publication of all public sector salaries above £100,000,but stopped short of an absolute cap on senior salaries.

A number of weaknesses within current arrangements were also identified such as variable levels of transparency and a tendency for some parts of the public sector to compete against others for a small number of experienced candidates, rather than growing talent internally.

Key recommendations include:

• Better human resource management.
• Publication of salaries and bonuses more in line with the requirements placed on listed companies.
• All executive reward packages drawn up either by independent bodies or remuneration committees with a majority of independent members.