Financial News
- 14 February 2012, 9:20
Crackdown On Taxpayer-Funded Bonuses Ordered
Public sector bonuses will be reviewed by the Government after the scale of payouts expected at the taxpayer-owned Royal Bank of Scotland sparked anger.
All Government departments have been asked to look again at their reward structures in letters from Treasury Chief Secretary Danny Alexander and Francis Maude, the Cabinet Office minister.
They want to make sure only "genuine excellence" deserves a payout and there is no "reward for failure" in publicly-funded bodies.
A quarter of officials are believed to automatically qualify for payments, something ministers wish to re-examine.
The move could affect the remuneration offered by Channel Four, Royal Mail and the Met Office, all of which have some element of public ownership.
It could also prompt change at the BBC, which is currently recruiting its next director-general. Although the corportation is formally independent, the letter could give the Department for Culture, Media and Sport scope to investigate.
The letter explains: "The departments will need to apply their own judgment on which bodies to include in the audit but where in doubt, will need to include bodies that are likely to attract public comment."
Ministers are preparing to sign off on payments for bankers at RBS, which is 82% state-owned. The total bonus package could be in the region of £500m.
Chief executive Stephen Hester waived his £963,000 payout after a stream of negative headlines and pressure from politicians.
Bosses at Network Rail - which receives a public subsidy - also agreed any bonuses they are entitled to should be donated to a level crossing safety fund.
Mr Alexander told the Telegraph: "The idea is to look at the levers government has, to make sure that the remuneration rules are fit for purpose and command public confidence.
"This is not about getting rid of performance pay. It is about making sure that performance pay is there for genuine excellence and not just run-of-the-mill performance," he added.
The issue of excessive pay has also been a theme for the Labour party with Ed Miliband using a recent speech to urge "responsibility and restraint" by banks in particular.
what do you think?
stewgwyn
''Public sector bonuses will be reviewed by the government''. The same government whose ministers have been caught fiddling their expenses? I'm not holding my breath!
Mikel roi
I object most strongly to the Government plan to "sign off" on £500Million of bonuses at RBS - except for the lower paid staff who have earnt their reward. In future though, surely the public sector and the taxpayer supported and nationalised (85% ownership is natiunalised!) banks should be given agreed pay levels without bonuses. That extra money (be it private or public sector) is a tax on us all and should go toward re-investment to improve the business performance and pricies, paying ALL investors a sensible, affordable sum and ensuring that the bulk of staff have decent wages/salaries and a reliable employee pension at the end of service. This eletist overpaying has to stop now!"
stevie may
Nothing will change. . Never does. Greedy capitalists look after their own, whilst sucking the life out of the poor, dispossessed, disabled and underclass. . . . If ever we needed the spirit of Robin Hood, Wat Tyler, John Ball, Percy Toplis to remerge ITS NOW !
Irene Montgomery
regardless of what kind of job we do , why should these people get a bonus, us ordinary folk don't because, our business can't afford to pay it, or the employer can't afford to pay one, this country would be in a better position, if all the banks politians stopped being so greedy, these people are employed by all of us, but we ain't getting much in return for what we are paying out
Grant Berry
9:49am on 13/2/2012
They should also do checks on all public sector jobs, so we know we are getting best value from our taxes. I dare say they could save billions if they did, which would then help to lower taxes
Mikel roi
10:02am on 13/2/2012
Yes and the same applies to private enterprise businesses! I have been helping to dig us out of the recession created by Labour's ludicrous public spendingl policies by using some of my savings on essential home maintenance and replacements for worn out equipment. See the tax I have paid on that! But some of those businesses have not lived up to their promises and cost me extra in chasing up and phoning useless and casually patronising call centre franchised staff! It cuts both ways today - private & public!
Gordon Wright
10:05am on 13/2/2012
Mr Berry makes an excellent point, may I suggest that we start with the Ministry of Defence??.
John Henderson
5:10pm on 13/2/2012
Could it just be that Mr. Berry does not like the public sector. Of course there are no rip-off merchants in the private sector, not to mention bonuses, share options, company cars, jollies, rewards for failure etc etc.