The Key Ideas

#59 Look at where government 'conditionality' can be used to reduce inequality and explore a 'kite mark' system

One thing the public sector should do is to set the rest of the economy a good example. There has been an expansion of the pay gaps in the public sector just as in the private sector and while these have not been as bad, there have been worrying signs. Alien concepts like a bonus culture have been used by those at the top of the public sector to increase their income. Governance mechanisms in many publicly-funded organisations do not appear to be capable of restraining executive pay which has not only risen well out of step with average pay but—despite public outrage—continues to do so. Democratic governance of institutions will help, but there should be a national 'road map' for the public sector which has the specific aim of narrowing the wage spectrum, restraining the pay of middle and senior management and setting an example of good practice for others.

It would be possible to look at a range of measures such as 'kitemarks' for businesses which have better pay and industrial democracy policies, or even some use of conditionality in public contracts or lending by municipal development banks to encourage better performance.