Friday, 18 December 2015

Outraged - but at what?

Two Tory AMs have taken to the media today to express their outrage at the level of redundancy payments being made by Welsh public bodies.  Given that this follows a report by an Assembly Committee, I can understand why the Committee Chair was given such prominence; what was less obvious to me is why the only other AM quoted was another Tory who isn’t even a member of the committee concerned.  There are eight members of the committee, only two of whom are Tories.  Have the others lost their tongues, or could this just possibly be a bit of deliberate selection by the Western Mail?
What the report left me less than clear about is what exactly the AMs concerned – all of them, not just the Tories – think should change here.  Drawing attention to apparently large figures to attract headlines is easy.  Encouraging others to feel equally outraged is equally easy.  But what is the actual problem, and what solution are they offering?
Presumably, the arrangements for voluntary redundancy were freely negotiated between staff and employees – are the AMs arguing that the Welsh Government, or the Assembly through legislation, should interfere with or in some way constrain the rights of either or both parties to negotiate such a scheme?
The report particularly focuses on the payments being made to higher paid staff, but any scheme which bases the size of redundancy payments on salary and length of service will inevitably favour higher-paid staff.  Are the AMs suggesting that long-serving higher-paid staff should be excluded from the schemes, or made subject to some other, less generous scheme?
Maybe they’re suggesting that there’s nothing wrong with the schemes, or with the selection of the people for redundancy, but that the way in which the schemes have been applied has been over-generous.
Or perhaps they’re suggesting that the staff concerned should not have been made redundant at all.  They might be right on that, in some cases at least, but that would sit strangely with a position where AMs of all parties are also calling for ‘greater efficiency’ and ‘reduced management overheads’.  I’m sure that some of the same people have also criticised public bodies for keeping senior people on the payroll even after their roles had been abolished, although I can’t immediately trace the press reports from the time.
It looks like just another part of a continued overall assault on the public sector and those who work in it.  That wouldn’t be at all unexpected from the Tories; what is rather less expected is that is that all the other parties who’ve signed up to the report are so keen to join in.
Most organisations find from time to time that their requirements have changed and that there is an impact on the numbers and type of staff employed.  The point of redundancy schemes is that they aim to ease the transition and maintain the goodwill of those affected by change.  Under almost any scheme imaginable, those with the highest salary and the longest service are likely to receive the highest pay-outs.  That is a feature, rather than a flaw, in the process.
I’m no fan of the size of the pay differential between the highest and lowest paid staff in organisations, whether in the public or the private sector.  But merely criticising the numbers of pounds attached to the outcome of processes based on that differential looks like simple headline-chasing rather than addressing the underlying unfairness and inequality.


Jonathan said...

The underlying problem is rather that Wales has no separate salary scale for the top salaries in our large bureacratic sector. Yes we could use such a thing to narrow differentials. But more important is to incentivise the private sector. Linking top salaries in Wales to the levels of the Home Counties creates distortion which must be removed.

Jonathan said...

The underlying problem is that we in Wales have no separate salary scale for top bureaucrats in Wales. Yes, we could set narrower differentials. But a bigger benefit would be to remove the present distortion, in favour of the public sector and against the business sector. We cannot get a solid tax base, or self-rule, until we have a much larger business sector. The instinctive dislike of high salaries/redundancy payments is well founded.

John Dixon said...


You say "But more important is to incentivise the private sector." and then "We cannot get a solid tax base, or self-rule, until we have a much larger business sector."

Why? Both these assertions seem to be based on the notion that the private sector produces and the public sector consumes. It's a commonly held view, to be sure, but being commonly-held doesn't make it correct. In economic terms, there is no essential difference between the two sectors; both add to GVA. What matters is what activity happens in the economy, not in which sector it happens.