Paying for performance?

I learn today that my colleague Philip Hammond has obtained some figures from the government showing just what huge sums have been paid out in performance pay, including to the accident prone Inland Revenue and others who have lost data.

I had tabled separately a series of questions to find out if these performance awards are easily come by, and if there is any attempt to manage performance well. Looking at the results – the lost data, the falling or slow moving productivity, the error rates, the accounts that have to be qualified and the general delay throughout the public sector in answering letters and queries, management under this government is very lax.

I have asked how many people have lost their jobs for incompetence and worse; how many staff have been disciplined, and how many staff have been awarded no bonus or low bonuses under bonus schemes. If I get an answer – and full answers are rare to Parliamentary questions under this regime, I am expecting it to reveal that bonuses are not used as part of a tight management system, and are too easily granted and payments awarded at the end of the year.

The rows over MPs pay demonstrate the understandable anger of people in private sector jobs where bonuses vanish when performance declines, even if that happens through no fault of the employees and the company thanks to market circumstances, when they see the public sector casualness in its approach to reward and remuneration.

We need to revisit the whole question of public sector reward and its poor linkage to productivity and performance. Bonuses are used effectively in many parts of the private sector to drive ever better personal and company performance. There is no evidence they are well used or properly disciplined in the public sector.

If I get no answers to my questions it will be typical of the malfunctioning government. If I get honest answers I expect it will show one sided bonus schemes which do not deliver as much as they should by way of better performance.

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5 Comments

  1. Matthew Reynolds
    Posted July 6, 2008 at 10:38 am | Permalink

    At a time of economic strife we need US style welfare reform coupled with a major deregulation of small & medium sized businesses via opt outs from most EU red tape . JSA & IB need replacing with one sort of payment designed to slash economic inactivity . As many QUANGO’s as possible need axing , hiving off or merging to fund lowering the PSBR by cutting real terms public expenditure growth in half to 1% p/a . The Bank of England should regain all its lost powers , have its independence strengthened and move to a 2% two year inflation target on the reliable RPI-x measure . That would reduce unemployment by cutting welfare dependency & stimulating small business growth , lower the PSBR by making government smaller and bring inflation down . Fuel duty can be cut by 14p a litre with the money from North Sea Oil taxes caused by the higher price per barrel being used to fund the £6 billion cost . That would cut prices as transport bills would be lower while it would cost less to fill up the car at the pumps thus helping familes . Housing Benefit & Council Tax Benefit should be reformed so that economic inactivity is discouraged while the poverty trap that they cause the over 65’s and working poor is reduced .

    The long term response needs to be a corporate tax flat rate of 10% , the end of stamp duty on shares and the first £500,000 of all property deals being stamp duty free with rates cut to 1%. VED needs to go as a complex poll tax on wheels as does North Sea Oil surcharge taxes while fuel duties rise when oil prices are low or falling and fall when the oil price goes up . Tax credits can be replaced by a bigger basic personal allowance of say £14,000 p/a for all taxpayers . Once public spending has been growing by just 1% p/a in real terms on the back of fewer consultants & civil servants , QUANGO cuts , lower government procurement costs , less welfare dependency and the end of PFI’s & the New Deal then progress can be made towards those tax cuts .

  2. Matthew Reynolds
    Posted July 6, 2008 at 11:38 am | Permalink

    At a time of economic strife we need US style welfare reform coupled with a major deregulation of small & medium sized businesses via opt outs from most EU red tape . JSA & IB need replacing with one sort of payment designed to slash economic inactivity . As many QUANGO's as possible need axing , hiving off or merging to fund lowering the PSBR by cutting real terms public expenditure growth in half to 1% p/a . The Bank of England should regain all its lost powers , have its independence strengthened and move to a 2% two year inflation target on the reliable RPI-x measure . That would reduce unemployment by cutting welfare dependency & stimulating small business growth , lower the PSBR by making government smaller and bring inflation down . Fuel duty can be cut by 14p a litre with the money from North Sea Oil taxes caused by the higher price per barrel being used to fund the £6 billion cost . That would cut prices as transport bills would be lower while it would cost less to fill up the car at the pumps thus helping familes . Housing Benefit & Council Tax Benefit should be reformed so that economic inactivity is discouraged while the poverty trap that they cause the over 65's and working poor is reduced .

    The long term response needs to be a corporate tax flat rate of 10% , the end of stamp duty on shares and the first £500,000 of all property deals being stamp duty free with rates cut to 1%. VED needs to go as a complex poll tax on wheels as does North Sea Oil surcharge taxes while fuel duties rise when oil prices are low or falling and fall when the oil price goes up . Tax credits can be replaced by a bigger basic personal allowance of say £14,000 p/a for all taxpayers . Once public spending has been growing by just 1% p/a in real terms on the back of fewer consultants & civil servants , QUANGO cuts , lower government procurement costs , less welfare dependency and the end of PFI's & the New Deal then progress can be made towards those tax cuts .

  3. Neil Craig
    Posted July 6, 2008 at 3:01 pm | Permalink

    Good idea. I would be very happy to see each MP get more than double their normal salary every year th UK economy outperforms world average growth of 5%.

    I have no doubt that were the will there & the example of Ireland followed it could be done.

  4. mikestallard
    Posted July 6, 2008 at 7:37 pm | Permalink

    Let's wait and see what happens in Glasgow East where the Client State is being asked to vote for "a party in meltdown" (Alex Salmond).
    I don't think that gratitude in politics actually pays any real dividends, but we'll see.

  5. Tony
    Posted July 8, 2008 at 10:24 am | Permalink

    Pull the other, John! To pretend that the Tories were any better at answering written PQs is untrue! The nature of written pqs means that they are designed to give away as little information as possible.

    Reply: Some of us went to great lengths to try to answer the questions!

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    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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