Editorial: The charity health sector has the real mega-salaries

They behave like big businesses, although they don't have shareholders and pay dividends, writes Stephen Cook

Stephen Cook
Stephen Cook

News of the latest pay rise for the chief executive of St Andrew's Healthcare, a charity, brings an extra dimension to the controversy about senior pay in the sector. His 18 per cent increase of £101,000 brought his salary to £653,000 - still considerably less than the more than £840,000 paid to the chief executive of another charity, Nuffield Health.

These examples have not featured highly in the criticism of charity chief executive pay by The Daily Telegraph, some Conservative backbenchers and one member of the Charity Commission board. The Telegraph, which has a political agenda on overseas aid, focused instead on the leaders of charities in the Disasters Emergency Committee, many of whom are paid salaries scarcely larger than the huge rise mentioned above.

Perhaps the critics will turn their attention to the sector's handful of real mega-salaries in due course. They should certainly be a subject for the panel set up recently by the National Council for Voluntary Organisations to establish guidelines for charity trustees on setting senior pay levels; and they inevitably lead to familiar intractable questions about the nature of charity in the modern era.

St Andrew's, which provides mental healthcare services to the NHS, defends the pay of its chief on the grounds that it is set by an independent remuneration committee and is benchmarked against, among others, "similar-sized companies with which it competes for talent". It's a big business, in other words, and it behaves like other big businesses.

Does the fact that it doesn't have shareholders or pay dividends also mean that it should be a charity, sharing the same fiscal status and all the complex cultural associations of that word with kitchen-table community associations run by volunteers, campaigning groups funded entirely by public donations and more complex organisations with a mixture of activities and funding?

The whole situation needs to be rationalised and disentangled. That seems highly unlikely, but a useful step would be for charities of all kinds to be a lot more open with the public about senior pay.

- Visit our Big Issue on charity pay

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