Quango chiefs are facing pay squeeze

By Lisa Buckingham
Updated: 05:10 EDT, 10 May 2009

Ministers are taking an axe to the pay of quango chiefs to ensure they share the pain of workers in the rest of the country.

Uner fire: BP chairman Sir Peter Sutherland faced an angry attack from shareholders in April over pay

The Treasury said that as chief executive posts fall vacant, salaries and perks will be squeezed 'to reflect current market conditions'.

Read the full list of Government quangos (launches a PDF - list starts on p.14)

One leading headhunter forecasts that cuts of ten per cent or more could be on the cards for the top positions in quangos.

'We are in a very different place compared with a year or so ago,' he said. 'Employers are making offers that candidates would have rejected out of hand a year ago.'

The Government action comes as private sector companies face their roughest-ever ride over executive pay.

Advisory group Manifest says votes against remuneration policy cast at annual meetings are running at twice the level of last year, which was a record.

'Even if you strip out the huge opposition vote at RBS, we are seeing an astonishing level of shareholder revolt,' said Manifest chief executive Sarah Wilson. Rebellions have marked the meetings of BP, Xstrata, Provident Financial and The Restaurant Group, while substantial votes against proposed executive pay packages are likely at Shell and fashion group Next.

In the near future, five top quango positions with a total salary bill of more than £880,000 will fall vacant, and the new recruits are expected to be offered noticeably more austere pay packets.

The TaxPayers' Alliance, which campaigns for lower taxes, claims 14 top-paid quango chiefs shared pay of £3.8m in 2007-08, although some of the figures, personnel and job descriptions have since changed.

Many of the 790 quangos are small advisory committees that do not require chief executives or other senior officials. Only 198 are executive bodies.

The Treasury said: 'When vacancies for chief executives arise, the Government will undertake a first principles review of remuneration packages to ensure that these reflect the current labour market conditions.'

At present, three top quangos - the tourist promotion agency VisitBritain, the Qualifications and Curriculum Authority and the Security Industry Authority - are seeking chief executives.

The heads of Monitor, the agency that supervises NHS foundation trusts, and the Serious Organised Crime Agency are expected to leave their posts next year.

Some of the better-paid quango jobs are not due to fall vacant for some time. They include that of David Higgins, chief executive of the Olympic Delivery Authority, who enjoyed a £373,000 salary and £205,000 performance-related earnings in 2006-07. He is thought to be the most highly paid quango chief.

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• Average earnings in the UK have fallen for the first time on record, official figures are expected to confirm on Wednesday. Unemployment figures, due to be published on the same day, are likely to show that 85,000 people have been added to the March claimant count of 1.46 million.