Waste Not Want Not

by Quinn

Last week the TaxPayers’ Alliance announced its “Public Sector Rich List”, a roll call of the highest earning workers employed in the state sector. In announcing the list they stated that

Taxpayers will be shocked at the scale of these massive pay awards. Large numbers of people in the public sector are effectively being paid City salaries. It is not surprising that taxes keep going up when the salaries for the public sector’s top executives keep rocketing.

For me the two standout statistics from the report are that the average salary of these government fat-cats, including bonuses, is £259,701 per annum, and that on average they have enjoyed a pay rise of 8.4% over the previous year, compared with a 4.2% rise in the economy as a whole. The full list can be viewed here (pdf).

Look a bit deeper, however (and not very deep at that) and I begin to doubt the point of this list, other than to play to the gallery. In the first place the TaxPayers’ Alliance has chosen to feature only those earning over £150,000 a year. Now, my maths is pretty shaky, but even I know that this means that the average pay of the people on the list is therefore going to be over £150,000 per annum. If you cherry pick the stats in such a way it isn’t that surprising that the overall average wage is going to be as high as it is.

So how many people make up this sample; how many out of the millions employed in the public sector are earning such extravagant figures? Well according to the report the grand total is a whopping 170 people. Are you shocked at that figure? I am; shocked that it is so small. I may be going out on a limb here, but can I suggest that the only reason the TaxPayers’ Alliance are so shocked – and feel that this figure can be considered high – is because they have a mordant hatred of the public sector for its own sake?

As a fair comparison you could ask how many people in the private sector earn a comparative figure? The answer, I think, would be “a lot”, certainly more than 170; only the other week it was announced that 4000 city workers have this year earned £1m in bonuses alone. Now, if I were to criticise such city bonuses there is every chance that I would be accused of the politics of envy; that I don’t is because quite frankly I have only the vaguest idea of the pressures and problems associated with such professions. Is it really any different to criticise high earners in other sectors of the economy?

For the TaxPayers’ Alliance it seems people in the public sector simply shouldn’t be awarded such sums. But why not? How much should they earn? Presumably just less. One argument often voiced is that the public sector doesn’t face the same scrutiny from shareholders that private companies do; but this assumes private companies are listed on the stock market in the first place, which in these boom times for private equity is less likely than ever. Private companies, of course, can go bankrupt, a pressure theoretically absent from the public sector; but does that mean that an equivalent job in the public sector gets an entirely free ride?

Let’s take television as an example. You could argue that the chairman of ITV faces far greater pressures than does the director general of the BBC thanks to the existence of his shareholders; but for one thing to make up for this the chairman of ITV already does earn more money than the loaded BBC chief (source), and for another you could plausibly argue that at the BBC that lack of shareholder power is more than made up for in the form of the far greater political pressure and scrutiny the corporation faces. Other broadcasters of course have different problems again; if you are the head of BSkyB your pay still dwarfs that of your BBC equivalent but your main concern is to keep your old dad happy. For me, though, the inclusion of Channel Four executives on the rich list seems particularly odd; while being nominally government-owned the channel is not publicly funded and has to compete for advertising revenue like most other broadcasters.

Certainly some of the pay awards listed seem pretty large – I will leave it to London’s public transport users to decide whether the £1m+ paid for Bob Kiley’s services amounts to value for money – but as with the city workers I mentioned earlier, I find it difficult to say they aren’t justified without knowing fully what such jobs entail; certainly let’s say that I think running London transport could be quite taxing, and that it is a big job with or without shareholder pressure. The argument for paying such high wages is surely the same one a private sector company would make – that you have to pay these wages to attract the top talent – and public sector organisations often have to compete with private sector firms for the same managers, with the salary (in theory) set in the the same marketplace. You can disagree with this principle, you can argue against high executive pay, but why just in the public sector? You can point out where the public sector fails in comparison with the private sector, but can you really criticise it when all it is doing is aping the private sector? And if you think some of these positions are overpaid best not seek to privatise them, as history suggests that their compensation payments will shoot up even higher as a consequence.

Now, if you are still with me, then I know what you are thinking; here he goes again, he works in the public sector himself so he is bound to defend it. But why should I? I pay my taxes too and I have no interest in my money being frittered away. I am pretty confident that if the public sector were reduced to its bare bones then my job would still exist, so I have no vested interest in any proliferation of non-jobs in and around where I work; if anything I should be more pissed off about them than anyone. While my colleagues and I are facing an enforced 2.2% pay rise I’m hardly eager to defend executive pay rises nearly 4 times that level.

But I’m not defending these levels of pay, I am just questioning their use as a criticism of the public sector itself. What irritates me here is the blinkered and biased nature of the debate. What especially grieves me is that I do think the TaxPayers’ Alliance has a valuable role to play. I agree that the public sector it spending our money, that these executives are our employees and they should be answerable to us. When the TA argue that the public sector should face greater scrutiny and accountability I wholeheartedly concur; when they attack some of my own bete-noires such as the cosy, meaningless quangos and the huge sums wasted on management consultants I couldn’t agree more. However, in apparently objecting to anyone in the public sector earning over £150,000, and to get worked up about even 170 public sector staff receiving such a salary, this report seems motivated purely by spite and disdain, as part of a one sided argument the sees the public sector as only ever bad. It detracts from the very justified points the TA may make, in the same way that the occasional valid criticism one reads on Biased BBC loses its weight because that blog is such a bolthole for Islamophobic fuckwits.

Along these lines I was less than impressed with the TaxPayers’ Alliance’s spokesman Blair Gibbs when he appeared on Victoria Derbyshire’s show on Radio 5 last week. Quite apart from stating that people in the public sector should earn less than their private sector counterparts, and then admitting that many executives had moved into the public sector for “public service” reasons when they could have earned more had they stayed put in the private sector (to which I thought “so what’s your problem, do you just want them to earn even less again”) he then went on to criticise people on the rich list who “we had never heard of in organisations we had never heard of”. As an example of one of these mysterious quangos they had “uncovered” he cited British Waterways, and sneered that all they do is to manage Britain’s canals of which “there are hardly any anymore”; a statement that on a number of levels betrays a quite astonishing level of ignorance.

But I haven’t given up on the Taxpayers Alliance just yet; I will give them one last go. The other day I picked up their Bumper Book of Government Waste. I brief flick through its pages does show up some bizarre examples of the sort of profligacy and empire building you feel would be difficult to get away with in the private sector; on the other hand there appears much that seems endemic to any bureaucracy or large organisation, or which wouldn’t be seen as waste in the private sector, but would for example be seen rather as a mark of a caring and generous employer that enjoyed good staff relations. It is interesting to note that according to the authors’ biographies they themselves have no experience of working in the private sector (that is if you don’t count think tanks, which of course I don’t); as such, unlike me, they have nothing against which to compare their public sector experiences. But we’ll see where the book takes me, and I may report back in time. I can’t help finding it ironic, though, that I picked up a book complaining about waste in a bookshop’s remaindered bin.

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