Tuesday, May 19, 2009

And the winner is ...

It must have been round about 1981 that I received my first (unsolicited) offer of a job outside the civil service – well it was more a kind of casual might-you-be interested thing

It was around that time that computers were really taking off – screen-based, desk-top machines made them so much easier for anyone to use - & before long no news interview or tv drama in an office was complete without one of these sitting on the desk

Some, though not too many, could see the Big Bang coming in banking, along with the increase in privatizations of public services

Anyone who was numerate, especially if they had experience with computers,was presented with many new opportunities

If I am remembering the numbers correctly I was earning about £13k & the offer was £18k. It would be stupid not to at least think about it

Problem 1: part of the ‘salary’ was a free company car but no, I could not have the money (£2k) instead

Problem 2: pension contribution was 6% - civil service pension notionally ‘non-contributory’ except for Widows & Orphans if you were male. And anyway, no portable pensions then, so would just be locked in for some measly return

So the ‘extra’ £5k was really only £2k. Taking into account the job security, hardly anything at all, never mind more sophisticated actuarial calculations


Few jobs outside the civil service - & certainly not this one, which was just a kind of consultancy - then offered the same blend of intellectual challenge, practical & management roles, collegiate working & being able to see the results of your efforts in terms of effects on policy etc & it would take a much larger offer to make me give those up

I do not want to over egg the pudding – there were of course frustrations – but it would be wrong to characterise me as a timid tortoise

Nevertheless I was interested to see the reports at the weekend of a PwC study Public sector tortoises could beat private sector hares in the wealth race which says that “those who ran away from a career in the public sector in 1981 may now regret it” – to quote The Times headline (print version)

It was the helpful graphic provided which first alerted me: the (notional) male civil servant was currently earning barely £30,000 a year at 2009 prices, after 28 years service. That did not sound like an awful lot to me

It was much harder than I thought it would be to check whereabouts in today’s civil service a graduate entrant might be earning £30,000 – since the reforms of 1996 even Whittaker’s Almanac can publish pay rates only for the Senior Civil Service which now covers grades down to the old-fashioned Assistant Secretary level; below that pay is locally negotiated by departments

I eventually went to the on-line civil service jobs site and looked for one offering £30k in London

The results, including this one for the Cabinet Office, confirmed that this is at the old-fashioned HEO grade

In the old days this would have indicated that the PwC tortoise really was slow (for a graduate entrant) – just one promotion - in London! – in nearly 30 years of service. But with all the changes in structure & the introduction of performance related pay etc, this may not now mean what it used to mean (I remember pointing out, when performance pay was first introduced for some grades, that we already had a performance reward system called promotion)

The private sector guy is currently well ahead, despite some ups & downs; the public sector gains in the PwC comparison accrue between now & 2040, when both men expire. It is the loss of his job in the credit crunch & his struggle then to make only £20,000 a year as a self-employed consultant, until he retires on a measly pension of not much more than £10,000 which make the difference – the public servant has his gold plated pension awaiting. (Incidentally I was under the impression that the basic state pension was, effectively, regarded as included in the Civil Service pension, not added on top)

I am not qualified to judge what sort of job the private sector guy might have been doing, but it was clearly no where near the multi-million pound pension honey pots of which we have recently heard so much


So really this modern fable of the Tortoise & the Hare is really just another attack on public sector pensions