The penalty of failure

Last November, just after HM Revenue and Customs came under the spotlight for losing 25 million personal records on CDs, members of staff started receiving their annual performance bonuses, in fact by the end £19 million was paid to them, averaging £8,000 each for 220 senior staff and about £453 for 38,000 of the remaining 90,000 staff. The total paid represented an increase of 70% on the previous year's £11 million! (It should be added that about 80 passports a month are still going missing!)

Their record of seven data breaches since April 2005 should surely have raised questions, even if the recent major loss of child benefit records was too recent to enter calculations. It raises the question what exactly they have to do to miss their bonus in a particular year.

In August 2007, it was announced that the CEO of the Learning and Skills Council was to receive a bonus of £36,000 because "he and the organisation had exceeded their targets." The Council is widely regarded as a complete and utter waste of money. Companies who make use of personnel trained by the Council or one of its contractors, regularly have to retrain the personnel, and many firms are now having nothing to do with the Council. This seems another organisation in the public sector with such low or vague targets that they cannot fail to meet them.

BBC staff recently received bonuses totalling £20 million, despite severe criticisms from many directions, complaints about programmes and criticisms of waste.

The most outrageous example may be DEFRA. The number of staff earning more than £100,00 has trebled in the last five years to 25. When in November 2007 it was announced that senior staff had received £7 million in performance bonuses over the years 2006/07, some people were shocked. The Department, in effect us, has already been fined £63 million by the EU for the shambles it made in paying out Farm Payments from the EU, in not meeting deadlines, and the Government is clearly expecting further fines, as it has set aside £292 million to cover possible fines. The money will almost certainly be cut from the DEFRA budget, so there will be further costs on us. (One cost may already be the Foot and Mouth epidemic at Pirbright last summer, when it was revealed that routine maintenance at the very important site had been reduced in an effort to save money!

The senior official behind the payments debacle was removed from his post, although for at last six months continued to receive his salary and even received a £21,000 bonus to drawing up the appalling scheme originally. The minister who shares responsibility for the shambles, Margaret Beckett, was removed from the Department and rewarded by being made Foreign Secretary, - a promotion! She and the Department had been warned at least six months before it started that the payments scheme would not work!

The Department is also responsible for the environment, including waste, recycling, floods and coastal erosion. We have had ample evidence to see gross failures in these other areas also. There is no need to remind you of skimped maintenance on drains and brooks which led to flooding of people's homes, nor to the fact that DEFRA had cut the budget of the Environment Agency.

Bonuses in the private sector are paid to those who make decisions or show commitment, and whose incomes could slump if the organisation performs badly. In the public sector there is no such risk. Indeed, it seems that mediocre performance can trigger generous bonuses.

A BBC spokesman, defending the bonuses, admitted, "...bonuses are part of staff's contractual entitlement". In other words they are not performance bonuses, or incentives, but merely extra salary. The term "performance bonus" is to deceive, but we are no longer deceived.