Susie Squire: The rich get richer in the public sector

Susie Squire is Campaign Manager of The TaxPayers' Alliance.

Against the backdrop of recession and job losses, lower incomes, higher outgoings and lack of credit, it would be easy to think that everyone is feeling the pinch in these tough economic times. But not everyone is suffering, some people are doing rather well. Better than ever, in fact.

Today the TaxPayers’ Alliance releases our Public Sector Rich List. This report details everyone in the public sector on over £150,000 per year. It is notable that, against the current trend in every other area of employment, there are more people on more money than ever before. Astoundingly, there are even a few people on the list who receive over £1 million a year.

As a report in the Telegraph showed on Friday, the public sector will have recruited an extra 50,000 workers in the six months to the end of the year.  While other areas of the economy shrink and companies work hard to become leaner and meaner than ever, the public sector continues to bloat ad infinitum. As it has become harder to gain employment in the private sector, the public sector has grown and grown, and these are not just ordinary jobs. Many public sector jobs come with massive perks: there are, for example, more public sector pensioners than ever with million pound pension pots, while private investors have seen their pension contributions reduced out of recognition. The natural consequence of this is that you’ve got less and less people (in the private sector) paying for more and more people (with hefty salary raises and perks to maintain) in the public sector. This is unsustainable, but no one is addressing it.

There is deep institutional rot in the public sector – and the problems persist because they are not being dealt with. Indeed, one of the biggest systemic problems in most publicly funded bodies is reward for failure. Many of the people on this year’s Public Sector Rich List have presided over embarrassing scandals and gross displays of incompetence.

For instance, in the top ten we see Mr Clive Briault from the Financial Services Authority. You’d think, with all the failings of regulation we’ve seen in the last 18 months, that the last thing FSA top brass deserve is a large pay packet – but, after he resigned Mr Briault received half a million pounds as compensation for loss of office. There is much debate over the financial crisis, but one thing that is unanimously agreed upon is the poor performance of the FSA, indeed they have been widely accused of “sleeping on the job”. As hundreds of City workers lose their jobs, take pay cuts and feel jittery about the future, it is mystifying why FSA employees such as Mr Briault, and his colleagues John Tiner and Sir Callum McCarthy (who have both now resigned, too), still received such large sums of taxpayers’ money despite their poor performance. Surely a resignation is as clear a sign as any that you have messed up? The £883,711 remuneration package received this year by Mr Briault will no doubt stick in the throat of those he has failed, and rightly so.

The failings of the FSA undoubtedly will affect not just City workers, but all of us in the long run. Financial systems are complex, and perhaps that complexity allowed FSA officials to escape all the blame that they really deserved. There can be no such excuse with the education scandal we saw earlier this year. Dr Ken Boston was the Chief Executive of the Qualifications and Curriculum Authority during the SATS fiasco that left thousands of students in the lurch waiting for their exam results. This was failure on a massive scale, but did Mr Boston resign? Did he take a pay cut? No, his remuneration package for this year was up on last year by 15%.

The real problem that can be drawn from these and many other examples on the rich list is this: if the public sector continues to reward failure, public services will never improve. Why should they? What possible incentive is there to achieve when you know that you will get looked after regardless of performance? The fact is, we as taxpayers foot the bill for these people, and we deserve better.

We deserve better public services, but we also deserve democratic accountability. What is the best way for the Public Sector to heal the infection of inefficiency that continues to spread through every vein of its hierarchy, the best way to halt the seemingly endless cycle of failure? Transparency, the most effective tool of democracy. All public sector salaries should be voluntarily disclosed to the public. This would in turn create its own accountability as people would then be able to assess for themselves whether or not they are getting value for money.  Everyone on this list is paid for by us. And yet we have no say in their appointment, no ability to scrutinise their rewards, no repercussions when their incompetence profoundly affects our lives. This is fundamentally undemocratic. It needs to be changed, and changed now.