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Wage war

If we want the public sector to be as slick and efficient as the private, we must accept that its top executives should be rewarded accordingly

Adam Crozier ought to be a rightwing pundit's dream. Importing his tough, private-sector working methods into the vast bureaucracy of the Royal Mail, Crozier quickly embroiled himself in a dispute with his own staff, castigating posties for inefficiency and demanding more flexible working practices. This is exactly the kind of tough leadership that pressure groups like the Taxpayers' Alliance (TPA) usually love. The only problem is that they don't want to pay for it.

Yesterday, the TPA unveiled its new public sector "rich list", revealing that Crozier earns over £1m a year. The result was predictable spluttering from all directions. The Sunday Times was outraged at a waste of taxpayers' money, while the Mirror cried foul over the fact that the rest of the public sector is expected to make do with pay rises of 2% this year.

We need to get real about leadership in the public sector. People who call for more efficient government need to recognise that the only way to get it is to appoint excellent chief executives and senior managers to key jobs - and excellent people don't come cheap.

These jobs are more challenging than is commonly accepted - far from cosy sinecures, roles turning around troubled organisations like the Royal Mail, and some NHS trusts are immensely challenging and high-profile. Reputations are frequently staked on a leader's ability to fix the problems of vast, politically sensitive and highly accountable bureaucracies. A frustrated word or two in the wrong place can end up as tomorrow's career-limiting headline.

Having fostered for decades a sense that public servants are self-interested and venal, media pundits can hardly expect the selfless public service ethic to kick in as soon as it comes to pay. The truth is that attracting the best chief executives today means that organisations like Royal Mail need to be as competitive as possible with the private sector, perhaps even with a little extra danger money.

But the TPA report does raise two important issues that deserve a fair hearing. First is the fact that very high salary gaps between the top and bottom of any organisation probably do cause tensions and jealousies that harm performance. Crozier's pay packet would pay for a lot of extra posties, and he needs to be prepared to justify that to the public.

Second is the fact that many of the highest-paid executives work for quangos, which can lack the strong forms of accountability and scrutiny that apply to local government and the NHS. Another timely reminder that public-service reform cannot stop with schools and hospitals, but needs to penetrate the thicket of expensive regulators at the heart of government.

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