Salary plan ‘good for tram project’

Introducing an “earn-back” scheme for top public-sector salaries could have been used to good effect in the Edinburgh trams project, a leading economist told MSPs.

Will Hutton has proposed that public-sector executives should place an element of their pay, around 10 per cent, “at risk”, to be earned back each year if they achieved pre-arranged objectives. They would not be eligible for a bonus unless they received the part of their pay which had been held back.

The proposal is one of a range of measures outlined by Mr Hutton in his Westminster- commissioned review on fairness in public-sector pay published in March 2011.

Appearing before Holyrood’s finance committee to answer questions on his findings, Mr Hutton said: “Everyone knows about the fiasco over Edinburgh trams.

“If the people involved in that put part of their pay at risk, one immediate consequence would not be the loss of their jobs – because there might be mitigating circumstances to the whole fiasco – but certainly they wouldn’t have earnt that part of their money back which they put at risk.”

Mr Hutton said the scheme would be an immediate way of ensuring “penalties for cock-ups embedded in the system”.