BBC and Royal Mail left out of public sector pay inquiry

A government-commissioned review into disparities in public sector pay being led by the centre-left writer and economist Will Hutton is to be barred from looking at pay levels at the BBC and Royal Mail.

Some of the largest salaries are to be found in those two public sector institutions but the Treasury has ruled they cannot be reviewed since they both have independent revenue streams apart from the taxpayer, the Guardian has reported.

Although the BBC has made efforts to be open about its top salaries, there is still outrage in some circles at the level of payments. Terms of reference due to be published this week by the Treasury are likely to give Hutton scope to look at pay in the private sector, if only to see if the alleged explosion of private sector wage levels in recent years has had an impact on salaries at the top of the public sector, the Guardian said.

Hutton has been involved in negotiations over his terms of reference over the past fortnight, and has been privately arguing that it is not possible for him to do his work without looking at comparisons with private sector pay.

The review will include staff covered by the senior salaries review body, non-departmental bodies and managers in local government and the NHS.

Prime minister David Cameron has asked Hutton to examine how to prevent disparities of pay that lead to top-paid employees in the public sector earning 20 times as much as the lowest paid or more. In practice, there are only 100 or so public servants, according to some estimates, who fall into that range, mainly in the NHS, but Hutton is expected to examine whether a maximum pay ratio is workable in principle.

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