Priti Patel, the Conservative MP who helped compile the figures for the news story which sparked the NCVO pay inquiry, has welcomed new guidance for trustees on setting charity executive pay, saying it should trigger a “transformation” in charities' accountability.
The Report of the Inquiry into Charity Senior Executive Pay is published today along with guidance for trustees on setting remuneration.
It follows a nine-month inquiry led by NCVO, involving charity chairs and others, into charity executive pay. The inquiry was set up after a number of critical news stories about high salaries in the charity sector. The first of these heavily involved Patel, who is a member of the Public Administration Select Committee. She helped compile figures on the salaries of senior directors at international development charities, and criticised them for being too high.
Speaking to Civil Society News, Patel said the new guidance for charity trustees on setting pay levels should “trigger a transformation in the way charities are held to account by their trustees, members and donors”.
“Charities are spending £39bn a year and taxpayers and donors should know how much senior directors are getting paid. These recommendations and the transparent system advocated should be adopted by charities and trustees should undertake training to ensure they get a grip on high salaries and secure public confidence in their pay decisions.”
The guidance recommends that charities prominently publish the salaries and names of highly-paid staff on their websites, and consider also publishing pay ratios.
Nandy: More attention on fair pay for frontline
Shadow charities minister Lisa Nandy also welcomed the NCVO report, calling it a “a sensible and proportionate response to an issue that threatened to undermine public confidence in charities”.
"Asking charities to publish top pay and pay ratios in a prominent place is hugely welcome. It will give donors, staff and trustees the information they need to hold charities to account.
"Ensuring frontline charity workers have fair pay and good working conditions is a challenge that deserves more attention. Publishing pay ratios will help to ensure that charity leaders focus on it."
Caron Bradshaw, chief executive of CFG, also said charities should consider the recommendations seriously, but warned that the sector needed to “guard against perpetuating a focus on arbitrary figures, such as administrative costs, fundraising ratios and chief executive pay, in isolation”.
“Whether such disclosures will of themselves stem the tide of negative stories and support public trust remains to be seen.
"We risk missing an opportunity to carefully communicate a realistic and holistic narrative about charity finances to the public, in order to engender their trust and support. This means looking more broadly at disclosure of information, and the transparency and accountability of the sector as a whole. More data won't necessarily equal greater transparency.”
Joe Saxton, driver of ideas at nfpSynergy, raised similar concerns. Speaking to Civil Society News, he said: “It’s not just about chief executive salary. There is a wealth of data and key stats that people might come looking for and find useful to find in just two clicks.
“Salary levels should be seen in the context of how big a charity is, what impact it makes, how many beneficiaries it has, its approach to first-class travel and so on. It’d be good to have a key info section with a range of information to help people make informed decisions.”
International development charities react
International development charities, which have been the focus of criticism for large salaries, also welcomed the report.
Christian Aid said it had implemented much of the guidance already, such as details of senior staff earning over £60,000, and the publication of its remuneration policy in its annual report, which can be found within two clicks of its website.
Cafod said its trustees would be discussing the report at their next meeting, and that it had a lot of the information that the report advocates disclosure of, on its homepage.
A spokesman said this was done in response to the media interest in the issues last summer.
CFG said it will be considering its response to the recommendation in the guidance to publish names and salaries of staff earning above £60,000.
Last year, CFG rejected a proposal in the Sorp consultation to publish the salaries and job titles of staff earning over £60,000.
Bradshaw said that the CFG would consider carefully the content of the report before deciding a position on further disclosures.
