Civil servants to have a less prosperous new year

First bankers, now civil servants. There are growing calls for reform of the British civil service today after research revealed that civil servants shared bonuses of nearly £130m over the last year, an increase of more than £20 million over the previous 12 months.

Some mandarins enjoyed payouts of almost £50,000 - twice the threshold of Chancellor Alistair Darling's "bonus tax" on bankers introduced earlier this month. It means nearly £2.5 million a week - or more than £350,000 a day - went on performance-related pay for Government workers.

The highest spending department was the Ministry of Defence, which handed out £53m in 2008/09, followed by the Department for Work and Pensions (£23m), the Department for Transport (£12m) and the Foreign Office (£7.6m).

Whilst these payouts - officially termed "non-consolidated performance payments" - scarcely rise to the level of the bonuses awarded to bankers, performance-related pay in Whitehall has grown significantly despite assurances that senior civil servants would show restraint.

"It is unjustifiable that Whitehall departments which have failed to deliver have still been awarding bonuses," said shadow Cabinet Office minister Francis Maude. "There should be no rewards for failure, either in the private sector or public sector."

Liberal Democrat spokesman Vince Cable chimed: "When the whole bonus culture is being discredited, it's absolutely ridiculous for civil servants to be awarded these kinds of payouts."

But the issue's political mileage could be limited. Gordon Brown has already promised to curb a "culture of excess" in public sector pay, including cutting the cost of the senior civil service by a fifth, and senior mandarins have already agreed to give up bonuses and accept below-inflation pay rises.

A spokesman for the civil service explained bonus pots were increased after a recommendation from the Senior Salaries Review Body that a larger proportion of pay be linked to performance.

"This year civil servants have been working harder than ever, continuing to deliver vital frontline services and ensuring Britain emerges from the recession stronger. The average civil servant earns £22,520 a year - less than the national average wage - and the majority do not receive any performance-related pay award at all. Of those who do, most receive around £700.

"Most senior civil servants will give up bonuses and accept below-inflation pay rises this coming year to show that the Government is tightening its belt in the recession."

This is unlikely to quell criticism that civil service mandarins are prospering while young soldiers die in Afghanistan and, as I reported here yesterday, the country struggles to emerge from recession. Projections for 2009/10 show the bonus pool growing again.

"There's no way that civil servants, or indeed any public sector workers, should receive bonuses this year," says Matthew Elliot of the Taxpayers' Alliance in the Daily Telegraph. "The public sector as a whole has singularly failed to cut back in the economic crisis and it's high time they started to make sacrifices, just like the rest of
us have to." ·