Holyrood told to crack down on bonuses

The coalition government has launched a review of public sector bonuses amid anger over payouts at bodies such as Network Rail and the Treasury has written to other government departments asking them to examine their reward structure.

It wants to ensure only “genuine excellence” is recognised, after it emerged that up to a quarter of UK officials automatically qualified for payments.

The Scottish Government has suspended access to bonuses in both 2011-12 and 2012-13, but admits that more than half of non-departmental public bodies (NPDBs) still pay them.

The UK Treasury has said this should now be subject to a similar review.

A Treasury spokeswoman said: “Although this is a devolved matter we would expect the Scottish Government to have a similar regard to the importance of public confidence in top public sector pay and remuneration and to consider a similar review for arms length bodies in Scotland.”

Almost £10 million was paid out by publicly owned bodies in 2010-11, figures obtained by The Scotsman through Freedom of Information legislation revealed last year.

However, there has been a public outcry against bonuses in the current climate, which has seenbosses at taxpayer-subsidised company Network Rail give up their entitlements.

Danny Alexander, who along with Cabinet Office minister Francis Maude triggered the review, said it would ensure there was no suggestion of “rewards for failure” in publicly-funded bodies.

“The idea is to look at the levers government has, to make sure that the remuneration rules are fit for purpose and command public confidence,” he said.

“This is not about getting rid of performance pay. It is about making sure that performance pay is there for genuine excellence and not just run-of-the-mill performance.”

The Scottish Government has defended its stance on bonuses.

A spokeswoman said: “Our pay policy suspended access to bonuses in 2011-12 and they have been suspended again for 2012-13. This is on the back of many chief executives already waiving them in 2009-10 and 2010-11. Some chief executives will have therefore forgone bonuses for four consecutive years.

“As new appointments are made and as part of the regular review of senior salaries, we have reduced or removed the bonus element in NDPB/public corporation chief executive’s contracts so that now nearly half of them have no bonus arrangement. “Our policy tightly constrains overall pay growth while supporting lower paid workers and helps to sustain public sector jobs and protect public services.”