Alexander orders review into all public sector bonuses

Monday, 13 February 2012 08:55

The coalition government has announced a review over public sector bonuses as it emerged that almost a quarter of public sector officials automatically qualify for a bonus.

The review comes as the government prepares to authorize £500 million worth of bonus to staff employed by the Royal Bank of Scotland, 83 per cent owned by the UK taxpayer.

Treasury Chief Secretary, Danny Alexander said in the Daily Telegraph that he wants to make sure there is no “rewards for failure.” He has asked individual government departments to scrutinize how they issue bonuses.

The chief executive of the Royal Bank of Scotland (RBS) Stephen Hester gave up the bonus he was offered earlier this month after he came under political pressure due to anger from the public. Similarly, chief executive at Network Rail, Sir David Higgins also waived his bonus for the year to head off more criticism.

Mr Alexander and Cabinet Office minister Francis Maude have written to all government departments to ask them to examine their bonus structures.

It would mean that organizations with an element of public ownership such as Channel Four and Royal Mail could see fewer and smaller bonuses awarded to top staff. Any new rules could also affect pay awards at the BBC.

Mr Alexander said in the Telegraph: "The idea is to look at the levers government has, to make sure that the remuneration rules are fit for purpose and command public confidence.

"This is not about getting rid of performance pay. It is about making sure that performance pay is there for genuine excellence and not just run-of-the-mill performance."

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