Public sector pay – the last taboo

GO ON, how much does the Bailiff earn? I’m not allowed to tell you that because, although it’s your money, you’re not entitled to know. Best guess, however, it’s rather more than £250,000 – excluding expenses, which really are secret – plus a further £50,000 or so in pension contributions because Crown Officers get specially enhanced retirement benefits. Lucky things.

(Picture by Shutterstock)
(Picture by Shutterstock)

What I can say with certainty is that States chief executive Paul Whitfield received just over £158,000 in 2019 plus a bit more than £22,000 towards his retirement, because he told me so.

Well, you too, as it’s in the annual accounts and a welcome and small step towards greater States pay transparency, embraced by his senior team, whose salaries are similarly outlined. Who knew that the strategic lead for supporting government was on only £32,000 while deputies are on more than £40,000?

I mention this because I had a good reaction to the last column highlighting the savage cost looming for paying for all the shiny new initiatives this outgoing Assembly has foisted on taxpayers – excluding pandemic payments.

In turn, that puts the spotlight on more than 50% of all government spending: public sector pay.

Yet what’s the one thing you don’t hear being dissected or scrutinised by your elected representatives?

Correct, around £677,000 A DAY pours into the back pockets of the 17% of the island’s workforce who happen to be employed by @govgg and no one* says a peep about it.

If you raise this with deputies, there’s generally a pretty defensive response. Not easy, responsibility of Policy & Resources, we’re only individuals, what can we do? I’d put money, however, on most deputies agreeing that pay isn’t adequately – or at all – scrutinised.

Look at the States accounts for 2019 and you’ll see 325 (up 27 on the previous year) States employees cost us more than £80,000 a year.

There are 12 bands, each increasing by £20k and the top, with one recipient, is £300,000 and above.

Hence my opening comments about the Bailiff.

There are a couple of other things to highlight here. Firstly, there are 153 employees on £100,000+ and, if you talk to financial services professionals, these are high salaries. Hang on, you mean even by Guernsey fat cat banker standards?

Indeed so.

Secondly, whatever folk might try to persuade you, civil service pay does not trail other sectors. It is, one very senior union official told me, industry competitive, but not necessarily producing the outcomes needed.

A telling comment indeed.

So what does all this mean? Broad brush, some of the lower pay rates are too low. That’s why some States employees receive income support.

Yes, really.

Similarly, some of the ‘top’ civil service salaries are also too low – a hundred and sixty grand with no profit share isn’t much for looking after assets of around £5bn, 4,500 employees and maintaining a community’s essential services. To that extent, Guernsey plc isn’t much different from a FTSE 100 company, where average CEO pay is around £3.5m., and even Jersey pays its chief exec as much as our Bailiff.

Equally – and this is where I make myself unpopular – there is an entire middle management swathe of the public sector that is overpaid. Which, I believe, is historic. When finance was booming back in the early days, there was a recruitment issue for the civil service and it had to compete for the talent it required. Rates were raised across the board, not just where they were needed.

Since then, and despite the value gap in public v. private pensions, those inflated salaries have simply been indexed annually (give or take, let it pass) without review and without any regard for how well or badly individuals do their job.

It’s why the States was urged by its then Audit Commission in 2003 to introduce performance-related pay, but didn’t. And is also why the average cost of a public sector employee was £53,000 last year.

Don’t get me wrong, there are many effective, diligent and committed public servants at all levels and we’re lucky to have them.

But that’s despite, not because of, the system.

So half of all States’ expenditure whips out of the door with scarcely a backwards glance and no public review of whether it represents value for money for taxpayers, how salary levels are determined or whether they’re contributing to government recruitment and retention policies – or even to operational outcomes.

Sadly, it’s not surprising because the States is poor at big ticket items, also confirmed by the latest Professor Catherine Staite governance review.

Hence her rather despairing observation that: ‘It would be helpful to begin honest and open conversations within the States about the extent to which the current structures are fit for purpose and ways in which they could be made more effective.’

It’s unfashionable these days to appear critical of government given its sure-footed response to Covid-19 so we will put any negativity to one side. Instead, let’s applaud the way we’ve been led during the pandemic: ‘Here’s the expert evidence; this is what’s going to happen…’

Contrast that with the last four years of States flip-flopping and this telling observation from Prof. Staite: ‘The way in which groups of deputies can achieve abrupt changes of strategy by issuing a requête or an amendment, can cause significant challenges and generate unnecessary costs.

‘It would be better to ensure that all major policies are subjected to rigorous debate, supported by sufficient information, evidence and independent evaluation, where appropriate, than for deputies to seek to change direction or cause delay some considerable time after those policy decisions were made.’

Many of us have been saying since before the 2004 governmental reforms that the system wasn’t working and – barring the current emergency – it still isn’t.

States pay is another example of that and we can only pray that building back better after the election leads to meaningful change – or at least an Assembly pulling together to make consensus work. And to end on a positive note, hearing some of the names considering standing, I’m a bit more hopeful.

*Actually, Deputy Laurie Queripel has.

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