Friday, December 16, 2011

Public Sector Salaries

On a previous post, I commented on the salaries paid in the private sector.  My view is that it is not the business of Government to tell a private company what it can pay an employee.  That is the job of the owners of the company.

However, the Government can and indeed must set the tone for Public Sector salaries.

Using my previous example, I would set the maximum compensation payable to a public sector official be capped at 6 times the UK National Average, so, £150K.  Again 'compensation' covers, base salary and allowances and pension contributions.

  • Any public body, local authority etc., that pays compensation to individuals, in excess of this amount, would be fined £10 for every single pound that they pay, over and above the £150K limit.  
  • This fine to be in the form of reduced funding.  
  • This fine to rise to £20 for every single pound, if the offence extends into a second year.  
  • Again, this fine to rise to £50 for every single pound, if the offence extends into a third year.  
  • The public body would be required to notify its constituent audience of the total reduction in funding that it is seeing as a result of its over-paying of staff.
  • The monetary value of the 'fine' can be mitigated or eliminated  if, in the same year, the cost of a Local Authority's Community Charge is reduced by 5% or more
  •  
Allied to the foregoing:
  • All new public sector employees are to be hired on the basis of the only pension package being available being that of a Money Purchase Agreement - that is, no further Final Salary Scheme entrants.
  • I am not advocating the abolition of the Final Salary schemes, just no new entrants.

Public Sector seems to include so much these days.  For me this includes, Civil Servants or any employee of a UK Government ministry, Local Authority employees, All NHS employees (Doctors, Nurses, Managers and ancillary staff, all employees of a QUANGO, the police, fire and ambulance service and anyone else that gets paid directly by funds that derive from UK Taxation or National Insurance Contributions.  For me, it does not include active members of the Armed Services

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