Former Institute for Fiscal Studies director Paul Johnson has called for a new era of “realistic” attitudes to pay for public sector leaders – and used the recent problems at the Office for National Statistics as an example.
Johnson, who recently took up the post of provost of The Queen’s College, Oxford, said many roles with genuine responsibility that required significant expertise were effectively off limits to the best candidates because of the pay on offer.
Writing in his column in the Times this week, he cited the current recruitment campaign for the next chair of the UK Statistics Authority – who will have oversight for getting the ONS back on track in the wake of Sir Robert Devereux’s devastating report on the organisation’s failings – as one case of a role with remuneration way below the task at hand.
The Cabinet Office is offering the successful applicant for the role a salary of £71,250-£85,500 in return for a “time commitment” of three days a week. Applications close on Friday this week.
Johnson said the responsibilities of the UKSA chair were “daunting, to say the least”.
“In addition to leading the board, the chair is supposed to provide strategic leadership and accountability for an organisation with an annual budget of £400m, oversee delivery and be a key advocate within government and externally,” he said. “Given the current state of the ONS and the support that the new executive leadership is likely to require, I reckon anyone taking on this role should expect to devote at least the advertised three days a week to it. They will not have a lot of time for other things.”
In particular, Johnson questioned the extent to which the responsibilities and advertised rate of pay for the next UKSA chair would limit the field of applicants
He said the salary was “a small fraction” of what a similar role in the private sector would command, and was also much lower than the remuneration offered to the UKSA’s original chair.
“The first UKSA chair, Sir Michael Scholar, was paid £150,000 a year, and that was 20 years ago,” Johnson said. “That was generous, benchmarked as it was against private sector roles but it does mean that taking inflation into account the government’s judgment is that the appropriate pay has fallen by about two thirds.”
Johnson previously held senior roles at HM Treasury and the education department. He said the post of chief economic adviser to the Treasury – the most senior economist in government – was another case study of restricted recruitment.
He said the last time the role had been advertised publicly was in 2023, when it was offered with a salary of £125,000.
“This does not get even close to what the best experienced economists outside of government can command,” Johnson said. “I am not just talking about economists in hedge funds and investment banks either; many senior academics are paid much more. This effectively limits the pool of candidates for this post to current civil servants.”
Johnson added that the last two chief economic advisers to the Treasury had “more than doubled their salary” by moving to the Bank of England.
He acknowledged that pay was not “everything” for candidates, but added that it could not be ignored.
“If the pay offer is set wrong then we will miss out on people who could make a big difference and there is a great deal at stake here,” he said. “As has been so clearly demonstrated in the case of the ONS, leadership really matters. Even small errors in economic decisions emanating from the statistical fog that has resulted from that organisation’s failures can have huge costs, as can small differences in the quality of economic advice.”
Johnson concluded: “With the quality of public policy and the governance of vast budgets and some of our most important institutions on the line, we need to take a realistic view of what we need to pay to get the best outcomes. Some vague coherence in pay relativities would also be nice. If that means headlines about public sector fat cats, and ridiculous moans about a few people being paid more than the prime minister, then so be it.”