Let's Hear It for Public Sector Fat Cats...?

Within Britain's public sector, the typical tale is one of waste and inefficiency — that "fat cat" pay is a drain on the taxpayer. But as The Times' Paul Johnson argues, maybe it's time to turn things around. Maybe the real problem isn't that our public servants are overpaid, but that we actually underpay them.

The Case for Better Pay

A case in poin is with the Office for National Statistics...

The government wishes to recruit a fresh UK Statistics Authority chair, who runs the ONS, on a three-day week for between £71,250 and £85,500 a year. Not a bad deal by ordinary standards, but arguably underwhelming for a role that involves strategic oversight of a £400 million department.

Seventeen years ago, the first UKSA chair was paid £150,000. Adjusted for inflation, that’s equivalent to roughly £250,000 today. So in real terms, the pay has dropped by nearly two-thirds for a job that has arguably grown more complex.

Similarly the treasury's top economic adviser earns only £125K a year, that's basically the leading public sector economist, and that figure is 3-4 times below what lead economists working in the private sector are earning.

Pay Peanuts, Get Monkeys?

Johnson's central point is simple but easily dismissed: if we want the best people leading key public institutions, we have to be prepared to pay for them. The only alternative is to accept second-rate. The pool of talent shrinks when the most talented candidates know they can earn much more — and face less public scrutiny — in the private sector.

This is not merely a matter of being fair to individuals. It is a matter of the public sector's long-term health. A properly working statistical office, for example, supports everything from medicine and schools to economic policy. If it is in the control of underpaid, stretched employees, the impact filters through society.

As Johnson declares, "If that means headlines about public sector fat cats … so be it." Tabloid shame may be a trifling price to pay for ensuring that the individuals running billion-pound organizations are the best available.

Final Thoughts

The obsession with clipping off the cost of trimming in the public sector has fostered a race to the bottom in leadership pay — and, perhaps, leadership ability. No wonder that top-flight economists, scientists, and analysts find themselves being drawn to the private sector or international institutions where their abilities are better valued.

As The Institute for Government has consistently argued, Britain's public institutions don't need reform but investment — and that means paying their leaders decently. Otherwise, "fat cats" will continue to be a convenient political scapegoat, but Britain will simply keep on getting the underperformance paid for.

Sources:

Paul Johnson, The Times (2025) "Let's Hear It for Public Sector Fat Cats."

Institute for Government (2024), Pay and Performance in the Civil Service.