Civil service managers have begun to adopt private sector techniques of performance-related pay and short-term contracts while directors of major companies have been negotiating more and more favourable service contracts to isolate themselves from the threat of the sack.
The creation of nearly 60 government agencies has led the campaign for a more businesslike civil service. Most of the new chief executives - including 19 from outside the civil service - are on fixed term contracts of between three and five years.
It is intended that the jobs will be open to competition from all sectors, and the majority offer performance bonus payments of up to 15 per cent of salary.
The civil service unions maintain that open appointments show the difficulties of trying to operate a market system within the public service. John Chisholm, recruited from private industry at a salary of pounds 140,000 to head the Defence Research Agency, is technically on the same grade as John Manthorpe, chief executive of the Land Registry, a career civil servant paid a maximum of pounds 66,100. Both men were appointed after open competition.
'Our conclusion is that the senior grades' position is worse than that of their private sector counterparts, particularly as senior civil servants are now reaping the risks of the market without any of the rewards,' the Council of Civil Service Unions said.
The review body clearly demonstrated the difference in basic salary levels - at the highest levels about pounds 100,000 in the public sector compared with more than pounds 200,000 in private industry.
Bonus payments, cars and the 'perks' of the private sector, such as mortgage assistance and health care are non-existent in the civil service. And executives of large companies have also been successful in negotiating other elements of their contracts, including superior pensions.
The 'fixed' contract seen in the government agencies would be unacceptable. The private norm is for 'rolling' two, three or five year terms where the recipient is guaranteed a severance payment equal to the term of the contract.
Other elements in the private redundancy package are also attractive. According to a survey published yesterday by the Institute of Personnel Management, the majority of senior managers will receive a financial or retirement plan, the services of an outplacement agency to find another job, continued medical care and a 'deal' on the company car.
John Woodger, managing director of Right Associates, which helped carry out the research, said the average executive remained out of work for 20 weeks.
Civil servants complain that their limited experience, with one employer, makes it difficult for them to find other work when they are made redundant or take early retirement.Reuse content