Council Rich List - Why it matters
Whatever you think about the Taxpayers' Alliance it is hard to deny the importance of highlighting just how excessive pay in the public sector has become.I spent an evening in the company of the HR director of the firm I work for. We are a medium sized British company who are quite successful and have weathered the recession well. He told me that the main problem the company faces is staff retention in the face of recruitment from the public sector. We have lost three relatively senior executives over the last year to local authorities. All of them were relatively well paid but they moved because they were increasing their salaries, would get a non-contributory pension, would have longer holidays and shorter working hours. He expects more staff to leave in the coming year. On the other hand he never sees a CV that has been submitted from someone wanting to work with us from the public sector.It is pointless raising salaries because we would never be able to compete with what is on offer. He estimates that our profits are hit by about 20% due to the costs associated with retraining replacements and lost revenues from losing good people. This is a significant stealth tax which is strangling our economy.Before Labour came to power in 1997 public sector pay was significantly below the private sector average but people chose it because of increased job security and a sense of public service. Public sector pay increased dramatically because it was argued it was necessary to improve the quality of staff. Now it exceeds the private sector even without allowing for fringe benefits.People in the public sector should never get paid six figure sums - they simply can never be worth it especially when you remember the cost of their pensions to the taxpayer will run into millions of pounds. Private sector staff earn large salaries because the company owners think it is in the shareholders interest because of the revenues the person brings in. This doesn't apply in the public sector.The biggest problem with all of this according to our HR director is that in a few decades half the revenues that local government get will be going towards funding the deficit in the staff pension fund and services will have to be cut significantly. The next Government of whatever hue will have to grasp this nettle or the country is in serious trouble.
Ellen Kearney ● 5498d1 Comments