Anger at £130m civil service bonuses

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Indy Politics

Opposition parties demanded reform of Whitehall's bonus culture today after research revealed civil servants shared payouts of almost £130m last year.



The Tories said bonuses should be paid to civil servants who save taxpayers money, while the Liberal Democrats described the figures as "insensitive" and said Government workers should not be immune from the effects of the recession.

Analysis of parliamentary questions and departmental accounts by the Press Association found the Whitehall bonus pot for 2008/09 added up to £129,393,139.50 - around £2 for every man, woman and child in the UK.

It means nearly £2.5 million a week - or more than £350,000 a day - went on performance-related pay for Government workers in 2008/09.

Some mandarins enjoyed payouts of almost £50,000 - twice the threshold of Chancellor Alistair Darling's "bonus tax" on bankers introduced earlier this month.

This year's figure is more than the £108 million paid last year or £128 million the year before.

It comprises end-of-year payments and rewards for performance on projects throughout the year.

Highest spending department was the Ministry of Defence, which has already been heavily criticised for handing out £53 million in 2008/09, while the Department for Work and Pensions paid more than £23 million at an average of £216 with a further £6 million allocated for in-year rewards.

The Department for Transport set aside more than £12 million for bonus payments, while the Foreign Office spent £7.6 million rewarding 4,712 staff - an average of £1,612.

One senior civil servant at the Department of Health received a payment of £49,004. The biggest Foreign Office bonus was £30,000 and several other departments handed out lump sums worth more than £20,000.

The bonuses are officially termed "non-consolidated performance payments" and several ministers sought to justify them by saying they were to reward "exceptional" performance and link pay to delivery across the year.

But the Conservatives said some departments, such as the MoD and now-obsolete Department for Innovation, Universities and Skills, had underperformed and should not have paid out rewards.

Shadow Cabinet Office minister Francis Maude said: "It is unjustifiable that Whitehall departments which have failed to deliver have still been awarding bonuses.

"There should be no rewards for failure, either in the private sector or public sector.

"Performance-related pay in Whitehall should be linked to increasing efficiency and rewarding civil servants who save taxpayers' money.

"Those who deliver great results for the taxpayer should be well rewarded but no one can defend bonuses indiscriminately handed out."

Gordon Brown pledged to curb a "culture of excess" in public sector pay earlier this month, including cutting the cost of the senior civil service by a fifth, as part of moves to tackle Britain's £178 billion deficit.

Top mandarins have already agreed to give up bonuses and accept below-inflation pay rises this year to show that the Government is tightening its belt in the recession, and public sector pay settlements have been capped at 1 per cent from 2011.

But figures from several departments show their bonus pots for 2009/10 are bigger than last year.

The Foreign Office has allocated £8.2 million compared to £7.6 million in 2008/09, the Department for International Development's spending could rise from £640,000 to £800,000, and the MoD is planning an increase of almost £6 million.

Anger around big bank bonuses led Mr Darling to introduce a 50 per cent tax on rewards over £25,000 as part of his Pre-Budget Report.

Lib Dem Treasury spokesman Vince Cable, who submitted many of the parliamentary questions, said: "When the whole bonus culture is being discredited, it's absolutely ridiculous for civil servants to be awarded these kinds of payouts.

"What kind of message does it send when the Government talks tough on bonuses for the City whilst allowing Whitehall these bonus pots?

"At a time when people up and down the country are tightening their belts, it is insensitive in the extreme."

A civil service spokesman said bonus pots were increasing after a recommendation from the Senior Salaries Review Body that a larger proportion of senior civil service pay be linked to performance and only paid out if objectives are exceeded.

"This year civil servants have been working harder than ever, continuing to deliver vital frontline services and ensuring Britain emerges from the recession stronger," the spokesman said.

"The average civil servant earns £22,520 a year - less than the national average wage - and the majority do not receive any performance-related pay award at all. Of those who do, most receive around £700.

"For senior civil servants, who make up the top 1 per cent of the organisation, 8.6 per cent of their salary is set aside and only paid if they exceed tough, pre-agreed and delivery-based objectives.

"It is less of a bonus for doing well and more of a pay cut if targets are not met."

But Taxpayer's Alliance chief executive Matthew Elliot said: "There's no way that civil servants, or indeed any public sector workers, should receive bonuses this year.

"With politicians of all stripes talking about the need for drastic spending cuts and taxpayers facing reduced public services, the civil service looks out of touch and lacking in empathy when they award these payments.

"The public sector as a whole has singularly failed to cut back in the economic crisis and it's high time they started to make sacrifices, just like the rest of us have to."

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