Public sector pay: Edinburgh’s key decision-makers

Picture: Phil Wilkinson
Picture: Phil Wilkinson
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WITH our MSPs set to get a 15 per cent pay increase and a new row over the bumper wage packet of the Lothian Buses chief executive, the telephone number salaries of public officials have again been placed under the microscope.

Every time a taxpayer-funded salary is revealed it is inevitably met with criticism at a time when money has never been tighter for many families across Edinburgh and the Lothians and public services are being cut back.

But is the criticism fair, how much should our senior public officials be paid, and do they offer good value for money?

It is never polite to ask how much someone earns, but gain a high-profile public position and you can expect your take-home to be scrutinised.

Such is the case for Ian Craig. The Lothian Buses chief is already on a total package of £208,000 a year, but is rumoured to be in line for a 20 per cent hike. Meanwhile, MSPs could see their pay go up from £58,097 to more than £75,000 in line with Westminster rises.

The critics are circling, but according to Richard Kerley, professor of management at Queen Margaret University, perhaps unfairly. Look to the private sector, Prof Kerley says, and the salaries of Lothian’s senior public sector figures are “not outrageously above the scale for other people in similar occupations”.

Move to the private sector and they could earn more, without the scrutiny, he says.

“Objectively these are all large amounts of money and you can’t get away from that. People will look at the figures and think, ‘I could use that’.

“But if you are making a disinterested assessment and ask, ‘Is this a lot of money to pay these kind of people?’ then no, it’s not.”

He says Edinburgh University principal Professor Sir Tim O’Shea, who earns an eye-watering £227,000, is actually paid less than his opposite numbers at Glasgow and St Andrews.

“You’re talking about the chief executive of the city council or NHS Lothian being paid the salary of a marketing director of a medium-sized supermarket – and you have to set that in the context that everything they do can end up in the papers, every potential error or failure.”

Surely the unions would disagree as their members face pay freezes and the loss of pension benefits. Not really.

Dave Watson, head of bargaining and campaigns at public services union Unison, says: “Top pay is higher than it used to be in proportion to the wages other people receive. We have always argued for a ratio between highest and lowest paid.

“Value for money is a subjective view, but in fairness to top staff, they are still paid way below their counterparts in the private sector. When you look at the number of staff they manage, the size of their budgets and the complexity of some public sector jobs, I don’t think they are overpaid in comparison.”

But how do you judge the relative value of running our public services? Currently the man in charge of the council-owned bus firm earns tens of thousands more than the woman running the whole authority. And then there is the issue of the low salaries of elected members, who have less job security and take the public flak for decisions.

Ross Martin, director of the Centre for Scottish Public Policy, believes it is time for an assessment of top pay rates.

“As public services change, so does the role and remit of officers and members,” he said. “There needs to be a review of pay and conditions and what is appropriate for the job. It’s true that salaries have crept up in the pre-economic crash period and there has not been any readjustment since.

“The argument used in favour of high salaries is, you need to attract the best folk and there will be a flight of high-quality people if you bring salaries down. We’ll never know that until we test it.”

Mr Martin, a one-time Lothian regional councillor, thinks the salaries paid to local politicians should also be reexamined. “We need to ensure the people running the city are paid at an appropriate level. If I remember back to my own time when I was in charge of the police authority, I was paid £6000 a year – which was less than the bicycle, typewriter and stockings allowances which were negotiated away in 1996.”

EDINBURGH UNIVERSITY PRINCIPAL AND VICE-CHANCELLOR

Tim O’Shea

Age: 63

Salary: £227,000

Bonus: no

Employees: 12,357

Turnover: £701 million

In post: October 2002

Key role

He is responsible for the overall operation of the University, providing education for its 31,000 students and making sure it is at the cutting edge of research, which means working closely with industry on technological innovation.

Edinburgh is the third most-popular university in the UK in terms of student applications and has no trouble attracting English students paying £9000 a year to study here. But it is ultimately his job to maintain Edinburgh’s position as one of the world’s top 50 universities.

Verdict

Leading one of Scotland’s four ancient universities is undoubtedly a big responsibility but the salary for the post does look hefty. Judging by Sir Tim’s refusal of a pay rise for the past four years, he probably agrees.

LOTHIAN BUSES CHIEF EXECUTIVE

Ian Craig

Age: 43

Salary: £160,000

Bonus: £47,200

Employees: 2000

Revenue: £117 million

In post: MAY 2013

Key role

He has 650 buses to run, operating 70 routes in Edinburgh and the Lothians and serving over 100 million passengers a year. Having been managing director of Lothian Buses since 2006, he was recently promoted to chief executive in recognition of extra responsibility coming his way in running the trams. Lothian Buses is one of the UK’s few remaining publicly owned bus companies and as such it pays an annual dividend to the council – though all decisions, including the chief executive’s salary, are made by the company’s own board.

Verdict

Getting the buses to run on time may be a challenge, but it doesn’t seem on quite the same scale as being in charge of the whole city or the health of the region. The trams will no doubt make life more difficult, but a giant pay increase would send the wrong message.

TRANSPORT AND ENVIRONMENT CONVENER

Lesley Hinds

Age: 56

Salary: £31,658

Bonus: NO

Budget: £66 MILLION

In post: MAY 2012

Key role

A councillor since 1984 and a former council leader and Lord Provost, her latest role has put her in charge of some of the council’s most controversial projects – the trams, Mortonhall, bus lane cameras and the move to fortnightly bin collections. She has the political responsibility for the council’s £55m environmental services budget and its £11m roads and transport budget, covering a wide range of services including parking, road maintenance, street cleaning, flood prevention, trading standards and parks.

Verdict

Politicians are not required to have the technical expertise expected of senior officials, but they still have responsibility for big budgets and big decisions affecting lots of people.

Considering all that’s involved, and the public flak this role attracts, it could be argued this role should attract a higher salary.

CHIEF EXECUTIVE EDINBURGH CITY COUNCIL

Sue Bruce

Age: 57

Salary: £158,553

Bonus: no

Employees: 18,617

Budget: £1 billion.

In post: January 2011

Key role

She is in overall charge of the whole council and responsible for delivering the council’s decisions. That includes ensuring all council services work properly – from education to emptying the bins and from social work to sports centres. She also has to cope with all the politicking that inevitably goes on at the City Chambers. She took over at a time when the council was still embroiled in a bitter dispute with contractors over the trams project and the statutory repairs scandal was hitting the headlines; since then she has also had to deal with the Mortonhall ashes scandal.

Verdict

It’s a big job, especially at a time when council finances are under such pressure.

Looking at the scale of the responsibilities and some of the sky-high salaries paid to chief executives in the private sector, the pay for this post might be considered good value for money.

CHIEF EXECUTIVE NHS LOTHIAN

Tim Davison

Age: 51

Salary: £173,840

Bonus: no

Employees: 24,000

Budget: £1.4 billion

In post: August 2012

Key role

He has ultimate responsibility for providing healthcare for 826,000 people across the Lothians. That includes the running of four major acute hospitals as well as a string of smaller centres. He took charge as interim chief executive in April last year after predecessor James Barbour retired under a black cloud in the wake of revelations of a bullying culture and falsification of waiting lists. Appointed permanently to the post four months later, he has to reduce waiting times, deal with the problem of too few beds in the area’s hospitals and sort out the relationship with Consort, the private sector PFI partners for ERI.

Verdict

Looking after the region’s health is a major responsibility and Tim Davison has taken on the role at a difficult time - not just because of cash pressures, but also NHS Lothian’s own troubles. All in all, his reward seems a fair one.

LOTHIAN LIST MSP

Margo macdonald

Age: 70

Salary: £58,097

Bonus: NO

Constituents: 517,110

In post: MAY 1999

Key role

Already a well-kent figure when she was elected as a Lothians list MSP in the first Scottish Parliament in 1999, she has firmly established herself as the champion of all things Edinburgh. Although on the SNP benches for the first four years, she has been an

Independent MSP since 2003 and therefore free to put the city’s interests first and foremost.

Her achievements include the Capital City Supplement, an extra payment from the government in recognition of the additonal costs Edinburgh faces due to its special status.

Verdict

She may not be in charge of a vast staff or massive budgets, but Margo MacDonald is a respected and influential figure and shows how an individual politician can help to make life better for people in their area. Her expenses claims are always among the lowest.

Most people would agree: she’s worth it.