Public sector organisations need to be able to pay the going market rate to attract top senior talent into the sector, according to Gill Hibberd, strategic director – resources and business transformation at Buckinghamshire County Council.

Hibberd’s comments follow the publication of the Hutton Fair Pay Review.

Key recommendations of the Review include:

·     Earn back pay: Senior public servants’ pay should be more strongly linked to performance through an ‘earn back’ pay system, which sees executives have an element of their basic pay ‘at risk’, to be earned back each year through meeting pre-agreed objectives.

·     Improved transparency: all public service executives’ full pay should be disclosed each year with an explanation of how it relates to job weight and performance.

·     No arbitrary benchmarks:The government should not benchmark senior public servants’ pay against that of the prime minister (PM), and should not impose a fixed limit on pay multiples (such as 20 to 1). The multiple of chief executive to workforce median pay should be published each year, with an explanation of any changes.

·     An informed debate on senior pay:  The people need to understand public service executive pay in the context of job responsibilities so the Senior Salaries Review Body should publish Fair Pay Reports each year, detailing pay multiples across public services.

·     Fair pay across the economy:To ensure tracking pay multiples normal practice across the economy, public limited companies (PLCs) should track and publish their pay multiples, while the government should consider commissioning annual Fair Pay Reports on PLCs, as well as public service organisations.

Hibberd told Recruiter: “The comparisons that have been made previously with the PM’s salary are totally inappropriate. The PM is a political appointment.

“What would we should be doing is comparing chief executives in public sector organisations with their counterparts in the private sector and look at turnover of business. Some big county councils have turnover in excess of £2bn and 40,000 employees - these are massive companies - equivalent to any of the FTSE 100.

“One of the worries we did have was whether there would be an arbitrary cap on pay within the public sector. We have seen this issue of anyone earning over £100,000 having to have full council agreement to appoint somebody. If we start to see arbitrary caps pushing down pay in the public sector, that could have a dramatic impact on our ability to recruit.

“In these big organisations dealing with millions of pounds of public money, people want the best possible talent running those organisations. You have to pay the market rate to get that talent.”

Stephen Moir, corporate director: strategy and democracy at Cambridgeshire County Council, adds: “Comparing the PM’s allowance with the base pay of senior public servants has always been a case of apples with pears. The PM is an elected politician, not an employee.

“The PM receives a range of ‘grace and favour’ perks to enable him to conduct his democratic role, such as the use of Number 10, Chequers, free business travel and a personal security detail.

“Senior public servants, who are employed, generally don’t have to these sorts of benefits and equally can be sacked for poor performance or misconduct. In the case of the PM, he can only be removed by his party after a leadership contest or following an election. It’s therefore senseless to use the PM’s allowance as a comparator for public sector pay levels.”

Richard Crouch director of HR and organisational development at Somerset County Council, told Recruiter: “In terms of attracting talent, the right talent is often not phased by having part of their salary linked to performance and ironically, introducing such a system might attract talented people to the sector. Although we need to make sure the measurements are fair, equitable and appropriate, which is often difficult in our sector.”

Dean Shoesmith, executive head of HR, London Boroughs of Sutton and Merton, says: “I think Hutton is right to put an emphasis on performance and contribution. The public sector has been marked with a time served criteria and the time is right to review that and have a much greater emphasis on contribution and performance.”