Out-Law News 1 min. read

Government-wide review of bonus structures could extend to part publicly-funded bodies


Ministers could review the way part-publically-funded organisations issue bonuses as part of a wider investigation of bonus structures within the public sector, media reports have said.

Bonus arrangements at organisations such as the BBC, Channel Four, Royal Mail and the Met Office face scrutiny to ensure they are "fit for purpose" and provide "value for money for taxpayers," according to a report by the BBC.

Cabinet Minister Francis Maude and Treasury Secretary Danny Alexander have already written to every Government department asking them to evaluate their bonus structures, according to the Telegraph.  However, the letter gives the departments an element of choice over whether to extend that review of bonus arrangements to organisations that are part-owned by the state.

“The departments will need to apply their own judgment on which bodies to include in the audit but where in doubt, will need to include bodies that are likely to attract public comment,” the letter said, according to the Telegraph's report.

The review will help stop individuals at publicly-funded bodies being rewarded for failure, Alexander said, according to the newspaper's report.

"The idea is to look at the levers government has, to make sure that the remuneration rules are fit for purpose and command public confidence. This is not about getting rid of performance pay. It is about making sure that performance pay is there for genuine excellence and not just run-of-the-mill performance," Alexander said.

The Government has already been criticised for not preventing Royal Bank of Scotland (RBS) chief executive Stephen Hester receiving a £963,000 bonus. Hester eventually volunteered not to accept the payment after a massive public outcry. RBS is 82% owned by the taxpayer.

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