Hutton: Fair pay will increase public trust

Tuesday, 15 March 2011 12:00 AM

Will Hutton commented on the publication of his report into fair pay:

"High quality public services are essential to our society and economy and high quality public services require high calibre leaders to deliver them, especially in difficult fiscal conditions. How we pay our public service leaders will have a crucial influence on the sort of public services this country will get.

"It is essential that senior public servants are adequately rewarded for their contributions, and that the public service ethos - that sense of mission and public duty that motivates many to work in public services - is preserved and respected. But public trust in public services can only be maintained if senior public servants' pay is fair and seen to be fair.

"In this final report, I am therefore presenting a series of recommendations for a new deal on public service leadership, in which senior public servants' pay is set to reflect their due desert. No pay system can be fair if it fails to reflect individual performance: so I am recommending that all public service executives are required to place an element of their basic pay at risk, to be earned back each year through good performance. So that pay is seen to be fair, I am recommending a huge advance in transparency and public accountability.

"Organisations delivering public services should publish their pay multiples each year, and disclose and explain executive pay and how it relates to job responsibilities and individual performance. This information should then be brought together in annual fair pay reports from the Senior Salaries Review Body. This will allow an informed public debate on senior pay: citizens will be able to hold organisations to account on how senior pay reflects individuals' due desert.

"The principles of fairness are not exclusive to public services. Citizens are rightly concerned about wider inequalities in society, and question whether the pay of the highest earners is deserved. Discussing top pay in the language of due desert, and by reference to the pay of ordinary employees should be the norm across the whole economy: that is why I am recommending that PLCs should also be required to publish their pay multiples each year, to allow citizens and shareholders to hold them to account."

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