Pay and Consultants (Public Sector)

Jim Sheridan Excerpts

Tuesday 13th March 2012 Westminster Hall

[Mr Slaughter]

That is disappointing. I wish that both local government and councillors were covered. The leader of Kensington and Chelsea is paid a six-figure salary. The days of councillors being volunteers or being paid small amounts have gone. The review should also cover health trusts, non-executive directors of health trusts, the whole panoply of organisations that surround the public sector bodies, the Local Government Association and the Local Government Improvement and Development board, because those are the organisations in which abuses are likely to take place. We are talking about bodies that recruit people who have retired from the public sector and who, because of restrictions on their earnings thereafter—such earnings affect pension rights—will be prone to adopt these devices to avoid being classed as employees.

The figures for high pay in the public sector speak for themselves. The Chief Secretary conceded that he had cognisance of more than 180 civil servants on packages in excess of £142,500. I commend the work of the TaxPayers Alliance—I have been doing that quite often recently—in publishing the “Town Hall Rich List”, which shows that the highest paid chief executives, who are, I think, in Wandsworth, are on around £350,000 a year. That list of shame, which is regularly updated and published, is a great public service.

Let me just say, though, that as someone who has spent 20 years in local government, I have worked with some very fine public servants who did not do the job primarily for money. I even had a chief executive who capped his own salary, which is not something that we see much of at the moment. However, I have also had the unedifying experience of seeing the last chief executive of Hammersmith and Fulham, which is one of the smallest unitary local authorities in the country, retire on a salary of £281,000 a year. That salary had been increased by £11,000 in the last year of service—the salaries of everyone else in the organisation had been frozen—in order, I suspect, to enable him to retire on the maximum pension. The authority would not divulge the details of that pension but the House of Commons Library calculated that it would be substantially in excess of £100,000 a year. In addition, he received a lump sum payment of a sum much larger than £250,000 a year. To my mind, that is not where local government should be.

I will return to the issue of consultants. I say again that I am grateful to a number of organisations for their help, particularly the PCS union, which takes an interest in this subject.

[Jim Sheridan (Paisley and Renfrewshire North) (Lab)]

I want to make a point before my hon. Friend moves on from consultants. Before I do so, Mr Howarth, I give early apologies that I have to leave Westminster Hall early as I am on Select Committee business with the Culture, Media and Sport Committee this morning. Coincidentally, the Committee will be taking evidence from the Under-Secretary of State for Culture, Olympics, Media and Sport, the hon. Member for Wantage (Mr Vaizey), who is the Minister at the Department for Culture, Media and Sport who is closing libraries up and down the country. Can my hon. Friend just clarify his earlier comments about chief executives being awarded something like a 17% pay increase? Is that accurate?

[Mr Slaughter]

It must be accurate—it is in The Daily Telegraph.

The PCS union quantifies the amount spent by Government on consultants at more than £1 billion; I think that that amount is based on figures from the National Audit Office. Before Government Members jump up and down, I accept that the figure paid to consultants has been too high for too long, but that is not any reason for not addressing the issue.

The PCS union says that, when hundreds of thousands of jobs are being cut in the public sector and its members on low pay are being forced to take pay cuts, it is not right that, for example, the Ministry of Justice—an organisation with which I am reasonably familiar—spent £43 million on consultants between May and November 2011. The Legal Aid, Sentencing and Punishment of Offenders Bill, or LASPO, is currently being mauled in the House of Lords, particularly about the issue of social welfare legal aid. If that figure of £43 million were annualised, the cost of consultants to the MOJ would effectively pay for the entire cuts in social welfare legal aid. So, all the agonising about cuts to citizens advice bureaux, law centres and to the funding for disabled people seeking advice on welfare benefits, housing or whatever would be unnecessary, if only the Lord Chancellor and Secretary of State for Justice could address his habit for consultants.