Over the past few years there have been constant rows over fat cats and rewards for failure in the City. Now the spotlight is on the state sector: official statistics collated by the Taxpayers’ Alliance show that Sir Humphrey is raking it in. Its Public Sector Rich List reveals that the wealthiest 171 civil servants received an average annual salary of £260,000 (41% more than the prime minister) this year. That’s 8.4% – twice the national average pay rise of 4.2% – up on 2005. Three were paid more than £1m and 14 received over £500,000.
The list reveals “a parallel universe where the notion of incentives has been stood on its head”, says The Daily Telegraph. Bob Kiley, the former commissioner at Transport for London, topped the list with £1.14m. He resigned in January, but will receive £737,000 (£3,000 a day) for acting as a part-time transport consultant to the mayor for the next three years. Yet it’s hardly as though he delivered a world-class transport system. Similarly, Richard Granger was paid £285,000, despite being responsible for the NHS’s disastrous IT programme. And the “gravy train” extends to the lower echelons of the public sector, as illustrated by last week’s news that a council traffic lights engineer earned £91,000 last year, despite being on sick leave the whole time.
The “rules of the game have changed”, says David Smith in The Sunday Times. Not so long ago, public sector workers earned less than their private sector counterparts, but got better benefits. The latter endure, but now they get paid more too: the average salary is 13.5% higher. Lavish rewards for top civil servants are justified by the claim that the Government has to entice top talent away from the private sector, but this is nonsense. Apart from the fact that “it’s no business of Government to deprive the wealth-creating sector of talent”, Government administrators are rarely in demand in the private sector; the skills required to run a state agency and a firm are different and generally non-transferable. “Million-pound mandarins” are bad news: China’s economy declined over the past two centuries until about 25 years ago because its administrators were unduly “revered”. “Excessively rewarding public servants is, ultimately, the road to ruin”.