Eddie Barnes: Outrage over Scottish Enterprise chief’s bumper pay packet

Published on 13/06/2012 00:00

‘Simple public distaste’ is at the heart of the outrage over Scottish Enterprise chief’s bumper pay packet, writes Eddie Barnes

Lena Wilson, the chief executive of Scottish Enterprise, is to become a non-executive director of Intertek, for which she will be paid £55,000 for one day a month’s work. Cue outrage.

It is insensitive, says Scottish LibDem leader Willie Rennie, and highly questionable. We need an immediate investigation, he and others argue, to ensure there is no conflict of interest, given her day job.

Nothing quite gets the juices flowing than the remuneration of public figures. And in Scotland, there has always been a special place reserved for the SE boss. The basic salary - amounting to around £200,000 - is, it is often noted, one of the highest in the public sector, and well above that of the Prime Minister. Stick an extra £55k on top of that, and a souffle of outrage is guaranteed.

The criticism in the case of Mrs Wilson is scatter-gun. The anger appears to be directed first at the fact that she’s getting well paid for doing not very much. This, it is true, is a common question aimed at businesses which shell out thousands on their boards. Business Secretary Vince Cable is currently drawing up plans to give greater power to shareholders to decide on executive pay, in the hope of correcting this balance.

But quite why people other than these shareholders, investors and employees of the firm should be concerned is not clear. Or there is the contradictory “fear” that Mrs Wilson, as a board member of Intertek, is now in a grave conflict of interest.

Mrs Wilson says she will recuse herself from anything to do with Intertek, just as other business people on the SE board already do when their own interests come up. Are critics saying these SE board members also need investigating? In which case, maybe we should just staff the boards with people who have no business expertise whatsoever.

The counter-argument - that the experience of being plugged into a business may improve Mrs Wilson’s performance - is dismissed.

Why? At heart, it appears to be due to the simple public distaste, at a time of recession and widespread cynicism, for people in public service earning a lot. Doctors are now getting it in the neck, having threatened to strike over their pension deal.

Even in Singapore, the home of the authoritarian public compact, where politicians receive the highest pay in the world, the Prime Minister has recently been forced to agree to a pay cut of 36% - bringing it down to a miserly £1.08m a year.

However, evidence suggests that leadership in the public sector is now at a premium, with a need to focus on trimming the fat from the real area of waste: the over-bearing, middle-management bulge which the years of plenty have left over.

Meanwhile, at SE, Mrs Wilson has set up a business plan for SE to create 19,000 new jobs and generate £7-9bn in extra income for the country. This is the job the public should hold her to.