Civil servants scoop record bonuses for Bank debacle

#1
HERE

The Scotsman said:
Fury as civil servants scoop record bonuses

Published Date: 23 November 2008
By Eddie Barnes Political Editor
TREASURY officials who oversaw the Northern Rock debacle and the onset of the credit crunch have been rewarded with record bonuses, Scotland on Sunday can reveal.
New figures show that civil servants at the UK Exchequer pocketed £1.2m on top of their basic pay last year, with one senior figure getting a bonus of £18,000.

The sum is nearly double that given to Treasury officials three years ago, when bonuses amounted to £700,000.

The bonuses were earned during the 2007-08 financial year, when the Treasury was accused of failing to move quickly enough to prevent the disaster of the Northern Rock crash.

One in four members of the Treasury's in-house staff was given a "performance bonus" – a lump sum on top of civil servants' salaries which rewards high achievement.

The average sum given to each member of staff who qualified for the reward amounted to £2,349.

On top of that, a third of the Treasury's staff got a "special bonus", in recognition of their response to "particularly demanding tasks or situations". Average payments were £463.

The revelation of the payments will be embarrassing for ministers as they have urged bank chiefs to suspend their own bonus culture during the credit crunch. RBS and Lloyds TSB have issued a bar on bonuses this year after they were forced to go to the Government for emergency funding.

Far from bonuses in the Treasury being scrapped, they have now grown for four successive years.

For senior staff, the rewards are particularly high, with top bonuses last year £4,000 higher than in 2006-07.

Ministers insist that bonuses are an important way of rewarding civil servants who perform well under often difficult circumstances.

Whitehall sources also pointed out that the overall pay bill at the Treasury was falling by 5% as part of a wider bid to cut administration costs across government.

Nevertheless, critics say that for officials to be accepting hefty bonuses at a time when households are having to tighten their belts is unacceptable.

Matthew Elliott, chief executive of the TaxPayers' Alliance, said: "Giving Treasury officials record bonuses for a year in which the economy has gone into serious decline is totally unreasonable.

"With ordinary families struggling to make ends meet in the recession it's an insult to dish out prizes for all in the department which has overseen such serious economic problems. Bonuses are meant to reward success, not failure."

The bonuses were awarded in a year in which the Treasury, along with the Financial Services Authority and the Bank of England, were sharply criticised for their response to the Northern Rock affair – the first run on a British bank in more than 100 years.

A report by the Treasury Select Committee found that the three bodies had ended up "with the worst of both worlds" by failing to react quickly enough.

The figures refer to the 2007-8 financial year so do not take into account the Treasury's performance in handling the recent economic turmoil.

Meanwhile, the Cabinet Office has pointed out that the Government is on course to have the lowest number of civil service staff since the Second World War.

A spokesman for HM Treasury said: "Over the current spending review period, covering the years to 2010-11, the Treasury has committed to a 5% year-on-year real terms reduction in its administration budgets, which includes all pay costs."

The Treasury figures are just the tip of the iceberg across government, which is thought to pay bonuses in excess of £100m a year across all departments.

Staff at the Ministry of Defence and the Department for Work and Pensions take the lion's share of the extra payments.

But there were also large payments to staff at HM Revenue and Customs, which last year lost disks containing the personal data of more than 25 million people.
 
#2
All bonus payments, to all public employees, should be suspended whilst the current crisis exists. It is immoral that, at a time when the private sector is shedding staff, and cash is drying up, public services are running on as if nothing had happened. No pay rise, no bonuses, until we get back to 'normality', however that may be defined.

On the subject of bonus payments I have, in the past, sat on one or two of the panels that consider awards. I always chuckle over the recommendation for a bonus that included a supported statement about 'managing significant resources' - these included a PC, a fax machine and a photocopier. The majority of recommendations are for completely unexceptional events, that in other sectors would simply be regarded as a fair day's work.
 
#3
You've got to laugh, £1.2 million for an entire department, the Royal Bank of Scotland are paying out £1.79 billion in bonuses to its staff, in the very same year that they had to be bailed out and are now practically owned by the government. Also the RBS are spending more than £1.2 million on Christmas parties for their staff this year!
 
#4
pombsen-armchair-warrior said:
All bonus payments, to all public employees, should be suspended whilst the current crisis exists. It is immoral that, at a time when the private sector is shedding staff, and cash is drying up, public services are running on as if nothing had happened. No pay rise, no bonuses, until we get back to 'normality', however that may be defined.

On the subject of bonus payments I have, in the past, sat on one or two of the panels that consider awards. I always chuckle over the recommendation for a bonus that included a supported statement about 'managing significant resources' - these included a PC, a fax machine and a photocopier. The majority of recommendations are for completely unexceptional events, that in other sectors would simply be regarded as a fair day's work.

So we will just suspend the TA bounty then? You'll be popular!
 
#5
brettarider said:
pombsen-armchair-warrior said:
All bonus payments, to all public employees, should be suspended whilst the current crisis exists. It is immoral that, at a time when the private sector is shedding staff, and cash is drying up, public services are running on as if nothing had happened. No pay rise, no bonuses, until we get back to 'normality', however that may be defined.

On the subject of bonus payments I have, in the past, sat on one or two of the panels that consider awards. I always chuckle over the recommendation for a bonus that included a supported statement about 'managing significant resources' - these included a PC, a fax machine and a photocopier. The majority of recommendations are for completely unexceptional events, that in other sectors would simply be regarded as a fair day's work.

So we will just suspend the TA bounty then? You'll be popular!
Fair point.
 
#6
brettarider said:
pombsen-armchair-warrior said:
All bonus payments, to all public employees, should be suspended whilst the current crisis exists. It is immoral that, at a time when the private sector is shedding staff, and cash is drying up, public services are running on as if nothing had happened. No pay rise, no bonuses, until we get back to 'normality', however that may be defined.

On the subject of bonus payments I have, in the past, sat on one or two of the panels that consider awards. I always chuckle over the recommendation for a bonus that included a supported statement about 'managing significant resources' - these included a PC, a fax machine and a photocopier. The majority of recommendations are for completely unexceptional events, that in other sectors would simply be regarded as a fair day's work.

So we will just suspend the TA bounty then? You'll be popular!
The heading seems to point to stopping bonuses for civil servants. Luckily for the TA they're not civil servants and they have been known to do a fair day's work. :wink: So crack on with stopping all bonuses.
 
#7
The Scotsman said:
On top of that, a third of the Treasury's staff got a "special bonus", in recognition of their response to "particularly demanding tasks or situations". Average payments were £463.

...

Ministers insist that bonuses are an important way of rewarding civil servants who perform well under often difficult circumstances.
Hmmm. Servicemen and women seem to make do with medals to recognise their "response to "particularly demanding tasks or situations"".

Can the Forces be classed as CS for bonus purposes? :D
 
#8
A few years ago when I was transferred to the ministries the new pay agreement included "performance related pay", the reason being that the govt could give the pay rise the union wanted whilst at the same time saying
"WE HAVE AWARDED A BELOW INFLATION RISE, AREN'T WE WONDERFUL?"
Of course the rest of the award was PRP to actually fail to get the average was nigh on impossible, to get the top rate was likewise. Since the difference was about £100 pa it was academic. Now it seems as if the govt is hoist with it's own petard as if they refuse the bonuses the unions will raise hell, and if they don't then the public are annoyed. If only Blair was alive to see this, oh, he is, b gger!
 
#9
Argee2007 said:
You've got to laugh, £1.2 million for an entire department, the Royal Bank of Scotland are paying out £1.79 billion in bonuses to its staff, in the very same year that they had to be bailed out and are now practically owned by the government. Also the RBS are spending more than £1.2 million on Christmas parties for their staff this year!
The Scotsman said:
...RBS and Lloyds TSB have issued a bar on bonuses this year after they were forced to go to the Government for emergency funding.
 
#10
What a good idea to scrap the bonus's for the civil servants.

Whilst we are talking about saving money in these hard pressed times, lets look at forces pay too. Why don't you ask to be paid for the days you actually work ? Oh maybe not ! ...Its all about the T&C's of the job you or they are employed to do......If your not happy someone gets paid more than you......change your job........As an ex serviceman I understand where you are all coming from but as a civil servant......These are my T&C you are talking about........ Funny enough though we dont all get these fantastic bonus's.
However the higher echelon does have to compete with industry and try to have comparable salaries.
I still have the words of an Armoured Corps Corporal telling me he "wouldnt get out of bed" for my current salary. Still at least you are all upholding one of the British Army's finest traditions.......Wingeing !!!!!!!!
 
#12
The bonus system was introduced by this current government to reduce pensionable pay. Essentially all CS departments are given a pool of money from the annual pay award to give as 'bonuses' as it gives money away, without the long term pensionable commitment. Its caused uproar among many CS who rightly see it as a means of denying us proper pay rises - for example in the MOD our pay scales have not been revalorised since 2001 in part because of this bonus scheme - we're all earning 2001 wages, and supposed to be grateful that X% of us get bonuses awarded rather than all of us earning a decent wage.
 
#14
jim30 said:
The bonus system was introduced by this current government to reduce pensionable pay. Essentially all CS departments are given a pool of money from the annual pay award to give as 'bonuses' as it gives money away, without the long term pensionable commitment. Its caused uproar among many CS who rightly see it as a means of denying us proper pay rises - for example in the MOD our pay scales have not been revalorised since 2001 in part because of this bonus scheme - we're all earning 2001 wages, and supposed to be grateful that X% of us get bonuses awarded rather than all of us earning a decent wage.

Very true jim !!
 
#15
Ministers insist that bonuses are an important way of rewarding civil servants who perform well under often difficult circumstances
How well would they perform under fire?

Do the boys in Afghanistan get a bonus??
 
#16
jim30 said:
The bonus system was introduced by this current government to reduce pensionable pay. Essentially all CS departments are given a pool of money from the annual pay award to give as 'bonuses' as it gives money away, without the long term pensionable commitment. Its caused uproar among many CS who rightly see it as a means of denying us proper pay rises - for example in the MOD our pay scales have not been revalorised since 2001 in part because of this bonus scheme - we're all earning 2001 wages, and supposed to be grateful that X% of us get bonuses awarded rather than all of us earning a decent wage.
Jim,

The way to break the link to pension liabilities is to accept pension parity with the private sector, and to end the system of index-linked, final salary pensions. This would, of course, result in it being replaced with a system that depends on investment returns, themselves dependent on effective national policies, particularly ones that attract inward investment to the UK, and provide a fair framework in which private enterprise can prosper. Now that would really concentrate Whitehall and town hall mindsets on providing essential services only, rather than the plethora of discretionary, and mostly unwanted, services that they currently provide.

Public sector pensions, including that of the military, will not survive indefinitely in their present form. The private sector cannot continue to sustain huge liabilities for huge legions of public servants that, in the main, are able to retire much earlier than their private sector counterparts. For the military, AFPS 05 was the start of this process - I wouldn't be surprised to see further pension scheme changes in the next few years.
 
#17
"How well would they perform under fire? - why don't you ask anyone of the several thousand CS who have served in Afghanistan and Iraq? Not the same as being in the military, but IDF doesn't know the difference between a CS or anyone else in the COB.

Pombsen - quite agree on the pensions front. Major changes are planned and the traditional pension is about to close in the next couple of years. It should take a while to filter through, but its clear to all that the Final Salary scheme is probably going to die within a generation. The challenge is to raise pay to levels that get the best talent, and then make people sort their own pensions out.
 
#18
jim30 said:
. The challenge is to raise pay to levels that get the best talent, and then make people sort their own pensions out.
Agreed.
 

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