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| Version 2 | Version 3 |
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| Best-to-worst public sector pay link proposed by Hutton | Best-to-worst public sector pay link proposed by Hutton |
| (40 minutes later) | |
| Top pay in the public sector should not normally be more than 20 times that of the lowest paid worker in any public body, the government has been advised. | Top pay in the public sector should not normally be more than 20 times that of the lowest paid worker in any public body, the government has been advised. |
| The idea has been put forward by Will Hutton of the Work Foundation. | The idea has been put forward by Will Hutton of the Work Foundation. |
| In May the government asked him to devise a way of ensuring that the pay of the highest paid executives in the public sector was fair. | In May the government asked him to devise a way of ensuring that the pay of the highest paid executives in the public sector was fair. |
| Mr Hutton's final recommendations will be published in March 2011. | Mr Hutton's final recommendations will be published in March 2011. |
| "There is a strong case for public sector organisations having to comply with, or explain why they do not comply with, a maximum pay multiple, such as 20:1," Mr Hutton said. | "There is a strong case for public sector organisations having to comply with, or explain why they do not comply with, a maximum pay multiple, such as 20:1," Mr Hutton said. |
| "This would demonstrate fairness by reassuring public opinion, address a problem of collective action across remuneration committees, and benefit organisations' productivity. | "This would demonstrate fairness by reassuring public opinion, address a problem of collective action across remuneration committees, and benefit organisations' productivity. |
| "The range of top pay deals across the public sector has little coherence or relationship to the public's priorities in generating genuine public value." | "The range of top pay deals across the public sector has little coherence or relationship to the public's priorities in generating genuine public value." |
| Mr Hutton told the BBC that there had been a "kind of arms race" in private sector pay, and that "there is a risk that the same kind of race could happen in the public sector". | Mr Hutton told the BBC that there had been a "kind of arms race" in private sector pay, and that "there is a risk that the same kind of race could happen in the public sector". |
| 'Arms race' | 'Arms race' |
| The government - which initially suggested the 20:1 ratio - asked Mr Hutton to investigate the issue because of concern that the rise in top executives' pay in the public sector was unfair. | |
| He found that in the past decade their pay had risen faster than that of their average and low earning staff - just as it has in the private sector. | He found that in the past decade their pay had risen faster than that of their average and low earning staff - just as it has in the private sector. |
| There, the pay and remuneration of the most senior executives in the biggest companies has boomed spectacularly in recent years, particularly with the aid of bonuses and lucrative share options. | There, the pay and remuneration of the most senior executives in the biggest companies has boomed spectacularly in recent years, particularly with the aid of bonuses and lucrative share options. |
| As a result the average pay of a chief executive of a FTSE company is now 88 times that of their lowest paid staff. | As a result the average pay of a chief executive of a FTSE company is now 88 times that of their lowest paid staff. |
| Mr Hutton pointed out that this trend inevitably had the effect of driving up the top pay of public bodies which sought to recruit executives from the private sector. | |
| And he pointed out that some of these pay deals might be "irrational" and have no bearing on the ability of the organisations to serve the public. | And he pointed out that some of these pay deals might be "irrational" and have no bearing on the ability of the organisations to serve the public. |
| "In parts of the public sector that have more autonomy - such as universities, foundation trusts and arms length bodies in general - there are significant upward pressures on senior pay and, before the pay freeze, some increasingly eye-catching settlements," Mr Hutton said. | "In parts of the public sector that have more autonomy - such as universities, foundation trusts and arms length bodies in general - there are significant upward pressures on senior pay and, before the pay freeze, some increasingly eye-catching settlements," Mr Hutton said. |
| "The trends are there for all to see," he told the BBC. | |
| 'Fairness' | 'Fairness' |
| Tony Travers, a professor in government at the London School of Economics, said the pay of very few public servants exceeded the 20:1 ratio. | |
| "That would not affect most of the NHS, most of local government, [and] most other organisations that are covered by it." | |
| "There are a small number of highly paid public sector managers who are earning much more than a 20:1 ratio but the numbers in that bracket are tiny," he added. | |
| Dave Prentis, general secretary of Unison, the UK's largest public sector union, said that the review missed the point. | |
| "By concentrating on the 20:1 pay ratio, that affects a miniscule 0.0001% of the public sector workforce, the report misses the elephant in the room, namely the scandal of low pay across the sector. | "By concentrating on the 20:1 pay ratio, that affects a miniscule 0.0001% of the public sector workforce, the report misses the elephant in the room, namely the scandal of low pay across the sector. |
| "The government likes to talk about fairness, but actions speak louder than words," he said. | "The government likes to talk about fairness, but actions speak louder than words," he said. |
| "Public spending cuts, plus the drive to privatise local services, is depressing wages, fragmenting the workforce and undermining moves towards fairness." | "Public spending cuts, plus the drive to privatise local services, is depressing wages, fragmenting the workforce and undermining moves towards fairness." |
| 'Exceptional' | 'Exceptional' |
| Mr Hutton's initial report found that in 2009, the pay of top private sector executives far outstripped that of top public servants. | Mr Hutton's initial report found that in 2009, the pay of top private sector executives far outstripped that of top public servants. |
| Only 20,000 public servants were among the UK's 290,000 highest earners who were paid more than £117,523 a year, which put them in the top 1% of all earners. | Only 20,000 public servants were among the UK's 290,000 highest earners who were paid more than £117,523 a year, which put them in the top 1% of all earners. |
| Of these 20,000, 4,000 were managers and most of the rest were doctors and dentists in the NHS. | Of these 20,000, 4,000 were managers and most of the rest were doctors and dentists in the NHS. |
| The average pay ratio of public sector staff just below the level of a lead executive was less than 12:1. | The average pay ratio of public sector staff just below the level of a lead executive was less than 12:1. |
| Mr Hutton's initial report on public sector fair pay says organisations should be able to pay more than the suggested 20:1 limit, but should have to justify it for those "exceptional" cases. | Mr Hutton's initial report on public sector fair pay says organisations should be able to pay more than the suggested 20:1 limit, but should have to justify it for those "exceptional" cases. |