Pay for public sector bosses rises by 12.8 per cent

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Gordon Brown is facing a major row about the salaries of public sector executives after a report from the Taxpayer's Alliance highlighted pay rises that were six times the rate of inflation.

The highest-earning 300 bosses in the public sector saw their salaries increase by 12.8 per cent last year, raising their average to £237,564. Seventeen of the top bosses earned more than £500,000, according to the pressure group's second annual Public Sector Rich List.

The pay rises, more than three times the national average, threaten to undermine the Prime Minister's pledge to keep pay rises for public sector workers within the Government's 2 per cent inflation target.

"We have a bizarre situation in which the Government is offering huge salaries to people who are clearly failing in their jobs", said Matthew Elliot, chief executive of the pressure group. "Given what Gordon Brown has said about pay rises in the public sector, this smacks of nothing less than hypocrisy".

The report understates the full extent of the Government's spending on top-end public sector pay because it only details the earnings of workers whose pay is declared in published accounts. Many of the BBC's top executives and presenters and several thousand GPs earn the £150,000 to qualify for the list, but are left off.

The top 10 earn an average salary of £799,000 – more than 40 times the basic pay of a nurse or soldier. Ten civil servants, each from either the Cabinet Office or the Ministry of Defence, feature on the list.

Top of the league is Adam Crozier, chief executive of the Royal Mail. The only person on the list with a seven-figure salary, Crozier has presided over the cancellation of the second mail delivery and an increase in the price of stamps. He saw his pay package swell by 21 per cent last year, taking his salary to £1,256,000. The report shows that it equates to earning £1,000 every1 hour and 27 minutes.

Ofcom, the telecoms and broadcasting regulator, will come under particular scrutiny following revelations that 11 of its employees are in the top 100 of the list. The most highly paid, Stephen Carter, former chief executive, recieved more than £250,000 to stay at home on "gardening leave" for eight months, during a year in which phone-in scandals have dogged the industry.

The Prime Minister, who earns £188,849 a year, is down at 143rd on the list, lower than Tony Blair's position of 88th last year.

In last week's Queen's Speech, Mr Brown announced the creation of seven new quangos in the new parliamentary session. Tony Blair had promised in 1996 to consign such government bodies to the "dustbin of history", but their total cost has increased by 60 per cent since 2003, according to the Taxpayers' Alliance report.