Charity chief's £653,000 pay reignites row

Boss of mental healthcare organisation in the spotlight as inquiry launched into high pay

Former newsreader Martyn Lewis will lead the executive pay inquiry (Rex)

The row over the pay packets received by executives running Britain's charities was reignited yesterday after it was revealed that the head of one the UK's largest charities was paid more than £600,000.

Charities have faced increasing scrutiny over the past few months following disclosures in the summer over the rising number of executives with salaries exceeding £100,000 a year, with several MPs condemning pay levels at some of Britain's leading charities. The latest revelation comes just over a week after the National Council for Voluntary Organisations (NCVO) unveiled an inquiry into pay across the sector.

The pay probe will be led by the former newsreader Martyn Lewis, who is now chairman of NCVO. Mr Lewis said that the salary awarded to Professor Philip Sugarman, chief executive at St Andrew's Healthcare, which states it is the biggest mental healthcare charity in Britain, "certainly raised more than an eyebrow" and "was one of the largest in the charity sector".

Professor Sugarman was awarded £653,000 in 2012/13, an increase of more than 18 per cent on his previous year's pay of £552,000, according to the latest accounts filed. St Andrew's Healthcare employs more than 3,000 people and provides mental healthcare and support for those with psychiatric illnesses, disabilities and brain injuries, through residential and community-based care, as well as being involved in training and research at four centres across England.

Jane Appleton, director of communications at St Andrew's, said that Professor Sugarman was being rewarded for performing three roles for the charity, as medical director and chief executive, as well as his work as a clinical practitioner. Since April 2013, Professor Sugarman has been paid only approximately £325,000 for the role of chief executive.

"St Andrew's has doubled in size since being overseen by Professor Sugarman as chief executive. We believe that you have to pay a proportionate salary to get the best talent; and, at this current level, we are not out of kilter with the rest of the sector," she said.

The size of Professor Sugarman's salary, however, is still likely to fuel criticism of high pay in the charity world. Charlie Elphicke, Conservative MP for Dover, has strongly criticised high pay awards in the sector, stating that the "culture of greed needs to change because it brings all charities into disrepute".

Priti Patel, Conservative MP for Witham in Essex, has also been critical. "Taxpayers would be shocked by the number of highly paid executives of charities," she said, adding that donors deserved to know how their money was being spent.

Martyn Lewis says the inquiry panel, which is due to meet for the first time next month, will be looking at every question surrounding pay and will "test the arguments both for and against to destruction". He added that, by the time the panel publishes its recommendations, scheduled for the end of March next year, he hopes to give the public a "transparent understanding" of the process of remuneration – as well as a framework for trustees to use when thinking about salaries for new executives.

"We have to ask charity executives how they justify a high salary to a donor who is giving maybe £5 or £10 a month out of their hard-earned money." While Mr Lewis could not say that a reduction in pay would be among the panel's recommendations, it is one of the major questions that will be examined.

He was at pains to point out that the "vast majority" of executives in the sector were paid "substantially less" than Professor Sugarman. The views of donors and members of the public will also be sought in the "comprehensive and extensive" review, the first with such a large scope to be attempted in the sector.

The NCVO is taking submissions from the public at execpay@ncvo.org.uk, as well as asking for charities to pass on complaints from donors at any level – confirming that a number of "household name" charities have agreed to put them in touch with donors.