Others have taken a hit, now inflated salaries in voluntary sector must go

It is strange that it has taken so long for the focus to fall on the inflated salaries paid to some of the leading personalities in the voluntary sector given the squeeze on public spending over the past five years.

Taoiseach Enda Kenny referred during the week to the "nauseating spectacle" of the recent revelations about the salaries of some prominent figures who work for well-known charities.

Serious hardship has been endured by a wide range of people across Irish society since the economic crisis struck. Those in the private sector who have lost their jobs or seen their pensions disappear down a black hole have been the worst hit.

Public servants have taken serious cuts in salary and, while they have retained job security and generous pension entitlements, the pay and conditions applying to new entrants have changed significantly.

Since 2008 the size of the public service has been cut by 31,500 people, roughly 10 per cent, and the pay bill has been reduced from a peak of €17.5 billion in 2009 to some €13.6 billion this year, according to a reply from Minister for Public Expenditure Brendan Howlin to parliamentary questions by Kildare Fine Gael TD Bernard Durkan.

In the same period the amount of State funding provided to the voluntary sector has not changed very much, and in 2012, the last year for which figures are available, it was almost €3.5 billion.

The vast bulk of that money goes to fund vital social services but until now little attention has been paid to the salary scales of those who run the myriad of voluntary organisations who draw down these funds provided by the taxpayer.

Neither is there a clear rationale for why some of those organisations are given taxpayers’ money.

The salary of around €240,000 that was paid to the chief executive of the Central Remedial Clinic, Paul Kiely, and his enormous pension pay-off has focused attention on the entire sector.

Rehab chief executive Angela Kerins is now in the frame for refusing to disclose her salary, which is believed to be the same or even more than that paid to Mr Kiely.

Those salaries were put into perspective by a texter to Shane Coleman's Newstalk radio show last Sunday who pointed out that the new chief executive of the National Health Service (NHS) in the UK, Simon Stevens, will be paid an annual salary of £189,000 when he takes up duty in April.

The NHS is the largest public service employer in the entire EU yet the highly qualified Stevens, who served as adviser on health to Tony Blair between 2001 and 2004, is getting a salary less than that paid to the boss of Rehab.

The time has come for a root and branch examination of salaries paid to senior executives across the voluntary sector where any exchequer funding is involved.

State funding
The issue is complicated by the fact that many of the organisations raise some money of their own as well as drawing heavily on State funding.

In a number of them salaries are linked to grades in the public service but, unlike the public service, there is no requirement for an open competitive process when it comes to appointments.

If rumour is to be believed, some people running tiny voluntary organisations are paid well over €100,000, with no clear criteria being provided for their pay levels.

It is probably no accident that high salaries appear prevalent in the upper echelons of the health sector given that Irish hospital consultants are paid so well. Others in the sector take their lead from that and regard as normal salaries that are extremely high by any standards.

Labour TD Robert Dowds made the point yesterday that the boards of institutions like the CRC and St Vincent's hospital were self-appointing and unrepresentative of the people who availed of their services.

“We need to get to a situation where these voluntary bodies are given governance structures appropriate for today’s world and which provide for accountability and transparency,” said Dowds.

He added that new boards should be established that were fully accountable, in their finances and activities, to higher authority and, ultimately, to the taxpayer.

While they get very little credit for it, politicians have taken significant cuts in their salaries in recent years in an effort to give a lead in a time of austerity.

Back in 2007 the review body on higher remuneration in the public service recommended that the Taoiseach’s salary should be increased from €285,583 to €310,000. There was such an outcry that the award was never implemented and instead it was cut in 2009 as the recession took hold. On taking office Enda Kenny reduced his pay further to €200,000, while the pay of a TD has been cut from €110,000 to €87,000 a year.

Ironically, as the current batch of politicians cut their salaries, perks and pension entitlements, the politicians and senior public servants who presided over the policies that led to the crash have retained their inflated pensions with some minor adjustments.

'Legitimate expectations'
As in the case of the chief executives of voluntary organisations, current and retired, the argument is that contractually binding agreements have to be honoured in full and "legitimate expectations" have to be met. It is interesting that it is only where taxpayers' money is concerned that such agreements or "expectations" appear to be binding.

One of the real dangers about the current spate of revelations is that they could undermine the capacity of voluntary organisations to raise funds from the public. That would damage their capacity to provide much-needed services and in the long run throw an even greater burden on the exchequer.