Jobcentre boss's pension rockets as dole queue grows

The big rise in a civil servant's provision after a year in the job adds to the row over public sector pay

A career civil servant's pension was boosted by 25 per cent after seeing out his final working year as the stand-in head of Britain's employment centres. Mel Groves retired with a pension pot worth £1.75m, after a 12-month spell as acting chief executive of Jobcentre Plus during which there was a 50 per cent increase in the number of people on the dole.

Critics attacked the rise, saying it appeared "completely out of proportion" for someone in the post temporarily. The row threatens to reopen debate over public sector pay and perks.

In March 2008, the cash equivalent transfer value of Mr Groves' pension was £1.4m while he was chief operating officer for the agency. But completing his civil service career as acting chief executive saw the value of his fund rocket. He retired in November 2009 aged 63. In March this year his fund was valued at £1.75m. Details of the package emerged in the Jobcentre Plus annual report.

The Department for Work and Pensions admitted the £1.75m pot "looks large" but insisted it was because Mr Groves "has worked for a long time". "There is absolutely nothing unusual about it. It is in line with the pension scheme that he is on and the salary jump he took," said a spokesman. Mr Groves earned £175,000-£179,000 per annum in his swansong role.

About one million people were claiming jobseeker's allowance when Mr Groves took over Jobcentre Plus in November 2008. By the time he retired a year later, another 500,000 had joined the dole queue, with 190,000 claimants signing on for the entirety of his tenure. During his year in charge, half of the network's offices faced a "capacity challenge" as queues grew, a situation exacerbated by an earlier decision to close hundreds of branches. Mr Groves was replaced last year by Darra Singh, former chief executive at Ealing Council.

"This steep increase in Mr Groves' pension pot seems completely out of proportion considering he took on these additional duties for a mere 12 months," said Fiona McEvoy from the TaxPayers' Alliance. "This is just an extreme case of the broader problem of gold-plated public sector pensions, which put a considerable strain on government finances and represent a huge liability for taxpayers who will be paying out for many years to come."

The Conservative MP Ian Liddell-Grainger said the size of the retirement fund was at odds with the experience of people attending Jobcentres. "On the base level they are doing their best, but the bosses are so bad at the very top level; the whole situation is out of control. They shouldn't be getting gold-plated pensions – they should be apologising." MPs were giving up their lucrative pension provision, he said, and senior civil servants should do the same.

A former Labour cabinet minister, Lord Hutton, is heading a review of public sector pensions, ordered by the Chancellor, George Osborne. The pension schemes enjoyed by senior civil servants at Jobcentre Plus are unfunded, with the cost met by monies voted by Parliament each year.

The Paymaster General, Francis Maude, has complained that there are too many people in the Civil Service "treading water" and being paid to do nothing. Whitehall departments admitted having 2,400 staff in "redeployment pools" who are being paid but have no role. In January, the Ministry of Defence had 1,525 officials with no role, including about 60 who had, in effect, been jobless for at least two years.