Shadow minister for civil society Lisa Nandy has warned that charity leadership needs to tackle the problem of unfair pay ratios in charities, saying she has found a gulf between what people at the top and those on the frontline in charities say about pay.
Nandy was speaking at an all party parliamentary group on civil society and volunteering meeting organised by NCVO.
The topic was looking to the future for charities.
Nandy, who has a background in youth homelessness organisations, said during her time in the charity sector she had seen colleagues not treated well or paid properly.
She also criticised charities for increasingly taking on unpaid interns, sometimes “with connections to established staff”.
“Pay ratios matter,” she said. “The voluntary sector is a champion for equality and campaigns for a more equal society. So it matters that charities embody those values.
“If you don’t embody those values with staff and beneficiaries then you start to lose your moral compass.”
She said that on the whole the charity sector treated its staff very well, and had much better pay ratios when compared with the public and private sector. “But there are problems,” she warned.
“I’ve found a gulf between what people at the top are saying about pay, and what frontline staff say. Charity leadership needs to take this on.”
Last year, NCVO, which has set up a group to publish guidance on setting executive pay, revealed that its pay ratio was 8:1 in a blog on its pay inquiry, leading to criticism.
Catherine Bavage, chief executive of Volunteer Centre Tower Hamlets, said at the time: “NCVO sounds pleased with itself that its own ratio of senior executive to lowest-paid staff member is 8:1. What this means is that NCVO’s chief executive is earning at the very least £124,488 to manage a moderately-sized infrastructure organisation. Is its chief executive really worth eight times more than an administrator? Does he work hard? Yes, probably. Does he work eight times harder, or does he have eight times more impact? I very much doubt it.
"Why isn’t NCVO arguing for flatter pay structures and a more even distribution of wages in the voluntary sector? Surely a ratio of 2:1 or 3:1 would be a far better thing in charities with limited funds? It would help reassure donors that their money is being spent prudently and would better reward frontline staff who often work in emotionally demanding jobs. "
David Hoghton-Carter, founder of Minerva Pathway, agreed with Bavage, saying: “I’m really quite surprised and dismayed that NCVO seems so damnably pleased with itself for operating at a 8:1 ratio."
In response, Karl Wilding, director of public policy at NCVO and author of the blog disclosing the pay ratio, said the inquiry was not about “justifying the salaries paid to senior staff”.
“There are some strong comments here about my mention of NCVO’s ratio: this was mentioned as a matter of fact, with no comment appended," he said. "It’s for the inquiry to judge whether this is appropriate or not.”
In 2011 Charity Finance did an in-depth study into pay ratios in the charity sector
