Forcing public sector executives to publish their salaries online will not help to curb excessive pay packages, but could instead lead to salaries “spiralling” out of control, experts have warned.
Unveiling their election manifestos last week, the three main political parties pledged policies to crack down on bumper public sector salaries while making pay structures more transparent.
Under a Conservative government, senior officials earning more than £58,200 would be compelled to publish their salaries and expenses online, while anyone paid more than the prime minister’s £198,661 would need their salary signed off by the Treasury.
The Tories also pledged to publish online the job title of every public sector worker.
The Liberal Democrats revealed those earning more than £200,000 would have their remunerations published online, while Labour promised “new restrictions on senior pay-setting”.
But Charles Cotton, reward adviser at the Chartered Institute of Personnel and Development, warned the proposals could have the opposite effect to that sought by politicians – in the form of higher wages.
He told Personnel Today: “It could lead to a pay spiral as executives point to salaries of similar roles in other organisations. They will need to show that the pay is related to performance.”
According to the Taxpayers Alliance, there are at least 805 people earning more than £150,000 a year across the public sector.
Business academics predicted that revealing public sector senior salaries would not work unless the private and third sectors were also forced to report the same data.
Chris Bones, dean of Henley Business School, said publishing public sector salaries “won’t change anything”, as they had increased in response to a rise in private sector pay.
“While I applaud any move towards transparency, it should be equally applied because of the power of the private sector to influence economic outcomes for everyone.”
He added that forcing private sector companies to report their salaries would “change a lot of pressures in remuneration across the rest of the economy”.
Nigel Meager, director of the Institute of Employment Studies, agreed it was “lop-sided” to only require the public sector to report executive salaries.
He added the Tory pledge to publish public sector job titles was a “populist measure” that was “grandstanding rather than a real policy”. “It will create work for HR – it’s difficult to see what the obvious and immediate benefits are,” he said.
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Kate Lawton, research fellow at the Institute of Public Policy Research, said: “I’m not sure what publishing job titles will achieve. The bureaucracy would be immense.”
Helen Giles, HR director at homelessness charity Broadway, added the pledges were a “red herring”. “It would be far more revealing and powerful if public sector organisations were required to declare in full their annual sickness absence rates and the costs to the taxpayer,” she said.
