Tuesday 26 October 2010

Just Wages - The Fairest Cut Of All

Someone asked me today whether I am opposed to all cuts and the answer is of course: no. Cutting Trident would undoubtedly cost jobs in the defence industry but the £20 billion cost of its replacement is indefensible when the alternative is making the poorest and most vulnerable pay for the biggest part of the deficit, the cost of bailing out the banking sector - unless your real reason for spending cuts is an ideological desire to destroy the welfare state. But at a local level, the one cut I would welcome is to the salaries of senior council staff.

The practice of massive salaries at senior levels of local government is the result of introducing private sector values into public sector management, with pay pressure at the top of the public sector originating completely from the inexorable increase in pay at the top of the private sector. The outcome has been the abandonment of any notion of 'public service', with 'boomerang bosses' leaping from one local authority to another, the delivery of decent services secondary to securing the latest rung upwards on the career ladder, all fuelled by the ludicrous notion that a huge salary is necessary to recruit "the best people". If Trident's costs are indefensible, so too is paying £240,000 for a chief executive in one of the poorest boroughs in the country like Newham, or many hundreds of thousands more for its senior management team (the exact figures have mysteriously been removed from Newham council's website).

In opposing cuts, we always need to argue for a more democratic, more accountable local state rather than simply defending the status quo. One simple first step would be to support the introduction of a system of just wages.

Currently around 80% of us earn less than £35,000 a year, well below the sums paid to senior council staff. As the Equality Trust as shown, wide income gaps lead to more unequal societies and worse outcomes for every member of society, contributing to social problems from crime to mental illness. A local government 'just wage' system would mean that the gap between the highest and lowest paid workers should be no more than a ratio of 1:5. This would act as a brake on excessive senior pay in local government, as a salary of £100,000 at the top would require the lowest paid to receive £20,000, but it would also increase wages at the lowest levels by creating a more equitable pay structure.

Moreover, if local authorities were to take a lead in introducing just wages, it would provide ammunition to start pressing the private sector, where the fat cat mentality was born, to explain its own executive excess.

Those who oppose cuts understand that the public sector we defend is far from perfect - importing private sector practices has, over the years and under Labour's 'reforms', distanced services from the people they are intended to serve. But the scale of the cuts are so great that their impact will be felt by everyone and that means the worst elements of private sector entryism, like massive income inequality within local government, must end immediately.

It's time to make the 'boomerang boss' with a fat wage seem like an embarrassing anachronism.

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