Key elements of the New Settlement for Public Service Leadership
The principal features of the new settlement that Will Hutton has proposed for senior public service pay are:
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Earn back pay: Senior public servants’ pay should be more strongly linked to their performance through a system of ‘earn back’ pay. Under this system, executives will have an element of their basic pay ‘at risk’, to be earned back each year through meeting pre-agreed objectives. This will allow pay to vary down as well as up with performance, and ensure that public services do not offer rewards for failure;
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Improved Transparency: all public service executives’ full pay should be disclosed each year, along with an explanation of how it relates to job weight and performance;
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No Arbitrary Benchmarks: The Government should not benchmark senior public servants’ pay against that of the Prime Minister, 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, and any changes explained;
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An Informed Debate on Senior Pay: Citizens need to understand public service executive pay in the context of job responsibilities. To support this informed debate, the Senior Salaries Review Body should publish Fair Pay Reports each year, detailing pay multiples across public services;
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Fair Pay Across the Economy: To make tracking pay multiples normal practice across the economy, Will Hutton recommends that Public Limited Companies (PLCS) should also be required to track and publish their pay multiples – and the Government should consider commissioning annual Fair Pay Reports on PLCs as well as public service organisations.
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