Inflation busting pay rises of public sector “fat ‘crats”

Hundreds of public sector fat cats received inflation-busting pay increases, according to data prepared by the TaxPayers’ Alliance.

News coverage this morning focused on the levels of pay with The Sun showing that “800 fat ‘crats earn £150k” and the Telegraph headlining that “300 public sector workers earn more than Prime Minister”. But the increases may come as a greater surprise, particularly against a backdrop of calls – from groups like the TPA – for a pay freeze on public sector workers and for restraint from bankers in setting bonuses.

Nearly two-thirds of the 648 high paid public sector employees for whom year-on-year data is available received pay increases above 3 per cent. Meanwhile, only 16 per cent of staff saw their pay decrease. Retail prices rose by 4 per cent in 2008 but are expected to fall in 2009. Consumer prices rose by 3.6 per cent last year and have averaged 2.2 per cent so far this year.

Many public sector pay increases have been inflating busting

John O’Connell of the TaxPayers’ Alliance told Left Foot Forward:

“An average increase of 5.4 per cent would be very generous even when things are going well, and many of these rises are obscene. Given the state of the economy and the huge deficit, public sector workers in general should face pay freezes but the bosses at the top should be taking sizeable cuts. Whether you’re a banker or a quangocrat, taxpayers cannot afford to pay these massive sums, and it would be wrong to demand restraint from ordinary workers while those at the top get fatter and fatter.”

NB: Proportions are indicative because pro rate data for 2007/08 was not available in all cases.

http://twitter.com/wdjstraw/status/6337945126 Will Straw

Would you believe it? TPA and @leftfootfwd agree! Pay increases of "fat 'crats" as well as level are eye watering http://bit.ly/4Zdzpx
http://twitter.com/manmaun/status/6338036969 dr nick

RT @leftfootfwd: Inflation busting pay rises of public sector "fat 'crats" to accompany their high salaries http://bit.ly/4Zdzpx
http://www.johnband.org/blog john b

I wonder if Conservative Home runs with made-up non-stories based on press releases from left-wing lobby groups?
http://twitter.com/stef_w/status/6338390442 Stef_W

http://j.mp/54VVqp yet more easy-way out wrong-headed bollocks on public sector fat 'crats this time from @leftfootfwd ffs. Will blog later
http://thelocalgovernmentofficer.wordpress.com/ thelocalgovernmentofficer

This would be a nice bit of reporting were it not for the date on the graph. The pay increase from 2007/8 to 2008/9 will, for almost all organisations, have begun from April 2008. That means each pay rise in question was probably negotiated around budget-setting time, the turn of the year 2007/8. At the time RPI was over 4%, so what the graph is telling us is that around half of these people got a below-inflation pay increase, and about half got an above-inflation pay increase.

I am surprised by the number getting in excess of 10%, and wondering if a specific thing is causing that. There’s also selection bias here. If you use the highest paid people, and include things like pension payments on early retirement, or share incentives for those in the ‘mixed economy’ part of the public sector, then obviously the people who have had a raise are more likely to make it into your list of the highest paid, making the average look higher. If you see what I mean.

You also can’t really work out an average salary increase by including the redundancy payments of people who lost the jobs in the course of the year, and calling that a part of annual salary, to my mind.

Other puzzling things, the Chief Exec of Scottish Water’s salary in 2007-8 was apparently £7000, meaning he got a 5000% pay rise. Really? The report itself acknowledges that in some cases the figures are not for a full year in each case as people started jobs late. Again that produces bizarre percentages, more likely up than down for the reasons above.
http://www.taxpayersalliance.org Clifford Singer

The TPA also says that eight people in the public sector earned more than £1m (up from 4 people the previous year). But six of those are execs in the nationalised banks. Remove those, and the number of public sector “millionaires” has halved. There’s more on the figures here:
http://taxpayersalliance.org/news/massaging-the-figures-the-public-sector-rich-list
Roger

Will – amazed that you publish stories from such a tainted source without any analysis.
willstraw

Thanks for the comments. I thought this one would surprise people and get a debate going.

I don’t think this is a non-story and I don’t think progressives should be afraid of being concerned about the level and increase in public sector pay, especially in the midst of a recession.

thelocalgovernmentofficer may be right about the timing of the pay settlements but the graph clearly shows that over 60% got above 4%, which raises some serious questions.

If we want to win the argument about spending cuts then we need to ensure that we do not defend the indefensible including waste in the public sector.

Roger – our added value analysis was on the pay increases. The morning press had focused on the level.
Ned

I agree with Will – this story should be talked about. Millionaire public sector chiefs need to be justified (if that is possible). Having said that seeing the Taxpayer’s Alliance on LFF was an unpleasant shock – they get everywhere as it is.
http://twitter.com/timmontgomerie/status/6346158211 Tim Montgomerie 

Good to see @LeftFootFwd agreeing with the TPA on fat cat pay in the public sector http://is.gd/5cu1e