Friday, 4 June 2010

“Uncovering” salaries

Pay of public sector chief executives has been thrust into the headlines again this week thanks to the Cabinet Office’s decision to release the names of 170 civil servants earning more than £150,000 per year.

Much more significant for third sector leaders is the decision of Grant Shapps the new housing minister to highlight the salaries of housing association chief executives, as reported in the Telegraph the following day. The fact that these organizations receive a significant amount of public money is key to the argument in the article.

The report claims that these figures have been “uncovered” by Mr Shapps, suggesting an air of cover-up. It doesn’t, of course, take much uncovering to look through the annual reports of housing associations which, like other charities, publish the salaries of the highest paid. But this language is important as Mr Shapps is clearly suggesting that any salary over than of the prime Minister is unacceptable, and the article goes on to say:

“The housing association salary packages are embarrassing as the executives run non-profit making bodies providing housing to some of Britain’s most disadvantaged citizens.”

The obvious question is how long will it be before salaries of other third sector chief executives are again making the headlines, and how will we respond when they do?

Salaries such as those reported in the Telegraph, even for those running housing associations, are very rare in our sector. (Journalists do like to turn the exception into the rule.) The ACEVO pay survey for 2009-10 shows a median salary of £57,264, and even for organizations with a turnover of more than £25m the median salary is 104,500 (significantly less than David Cameron).

But we know that there is a significant gulf between what the public think we do in the third sector and the reality of our work in the 21st Century. In the still-frenzied media world following the expenses scandals of last year, and the supposed “new politics” of the coalition government, there is a very real risk that the very modest salaries which most third sector CEOs are paid could be conflated yet again with the excesses of the city and alienate many of the public on whose support we depend. Many serious people believe that charity CEOs should do the job for free.

The National Housing Federation are right to point out in their response to the article that housing associations have been open and accountable about senior salaries for many years (unlike the civil service) and match every penny of public money with two pence of their own resources, thus providing excellent value to the tax payer. The same argument is true of other charities.

I am not going to try to make a detailed value-for-money case here. My point is simply that making such a case is the only way for the public to judge whether or not these salaries are acceptable. I have argued many times in this blog that as a sector we need to take charge of the narrative about what makes for a good charity. Measuring and judging inputs is pointless. Describing how our work makes a difference to the world and how we use recourses effectively to achieve that difference must be the priority.

We have nothing to hide about what we pay our chief executives, and nor have we been hiding it. But in this climate we need more than ever to champion how the sector’s leaders bring about change for the most vulnerable and needy in society and how they are worth every penny.


  1. " Describing how our work makes a difference to the world and how we use recourses effectively to achieve that difference must be the priority."

    Do I detect shades of Mandy the feline spin doctor?

  2. Fab, good arguments as ever, but you'll be wanting a higher salary without publicity when those wedding costs start racking up, dear boy.