Rewarding failure in the public sector

YESTERDAY The Herald revealed the anger that greeted the news that the former chief executive of much-criticised NHS Lothian was able to take early retirement and receive a “golden goodbye” of £100,000, on top of an accrued pension of £220,000. Professor James Barbour also enjoyed more than £15,000 in car allowances as he presided over one of the most damaging episodes in recent Scottish health service history.

These stories are beginning to have a rather familiar ring. In the west of Scotland, questions are being asked about how Brian Sweeney was able to pull off an early retirement deal from his job as chief officer of Strathclyde Fire and Rescue Service, only to be re-appointed to the same job, without a report into the business case for such a manoeuvre. The fire service met the tax liability.

Then there was The Herald’s disclosure that 12 police officers had been allowed to take early retirement with their pensions intact, thus avoiding misconduct charges, which could have resulted in losing part of those pensions under certain circumstances. This is against a backdrop in which Scottish police officers have received almost £24m in bonuses on top of their salaries since 2007.

There are two issues here. The first is the apparent generosity of golden goodbyes, paid from the public purse. Employees are entitled to the pensions they have accrued over their years of service, except in the most extreme cases. However, there is something very wrong about the additional payments that many of these packages seem to include, especially when the individual leaves under something of a cloud. It suggests a “jobs for the boys” culture at the top of our public services that is in stark contrast both with the severance terms offered to lowlier employees and with the hardships being imposed on ordinary taxpayers and pensioners.

These payouts are not conjured up by magic. They come from the taxes paid by the rest of the population, many of whom are being forced to endure year-on-year cuts to their living standards. They include an estimated 10 million private-sectors workers who have no pensions of their own. If these extra payments arise from contractual entitlements, the question must be why such contracts exist in the public sector in the current financial climate when extra payments to retiring executives mean cuts in services or jobs elsewhere.

In the case of Mr Sweeney, there is nothing wrong with re-employment in principle but the yardstick must be a demonstrable public benefit, which should include long-term savings.

The second issue is the way that those in positions of responsibility are allowed to disappear and thus avoid facing the music. In the case of Professor Barbour, he was in the top job at NHS Lothian when it was caught massaging its waiting list figures. Meanwhile, a damning Scottish Government report into claims of bullying at the organisation has concluded that the intimidating culture came “from the top level”.

Rewards for failure are wrong at any time. They are completely unacceptable in a period of deep spending and service cuts and when the public purse ends up paying the bill.