Top People's Pay

I heard a bit of a radio phone-in on BBC Scotland the other day in which the callers were discussing the news that Ally McCoist, the manager of Rangers Football Club, was being placed on 'gardening leave' for the 12 twelve months after giving formal notice of his intention to resign from his post.

Now the debate was about the 'rights and wrongs' of the manager accepting a year's salary, worth a least £750,000, for just being at home and not doing his job for the next 12 months, especially when the football club is in such a parlous financial state.   

Views were mixed with some people suggesting it was a 'disgrace' while others said that the manager was perfectly entitled to hold his employer to the terms of his contract of employment.

Now I don't bear any ill will to Ally McCoist, but if you ask me this is looking at the question the wrong way round, through the working end of the telescope, because the real issue is how people in senior positions (in the public sector as well) are entitled to such generous terms when their employment comes to an end.

In other words who negotiates such fabulous deals for those at the top because they always end up being so much more favourable than what's on offer to the foot soldiers at the bottom of the pay ladder.

As a private company, the is obviously a matter for Rangers FC and its board of directors, but the ordinary fans are the ones who are picking up the bill in the end, in much the same way as taxpayers who are left with the bill when senior officials in the public sector are handed extremely generous financial settlements, sometimes in highly controversial and unusual circumstances.  

In other words, it's very easy to be generous with other people's money and having run Rangers into the ground, financially speaking, those in charge of the club are apparently going to ask for the fans to dig deep again by trying to raise more money through another share issue.

Yet some folk made lots of money out of Rangers FC after the club went into liquidation, by buying up shares for a tiny fraction of the price at which they were subsequently offered to fans.

In the Money (6 January 2013)

The latest edition of Private Eye has a very interesting article about the complex financial affairs of Rangers Football Club - here's what the Eye had to say.

PLANET FOOTBALL

Rangers

"The Glasgow club is due to return to the stock market this week. Shares in a brand-new parent company, Rangers International FC, have been sold to fans and institutional investors at 70p and will be listed in the AIM market.

Football clubs are rarely stellar investments, whatever their success on the pitch. But some lucky Rangers shareholders are guaranteed to make money. These are the present investors in the new Rangers FC that acquired the old bankrupt club earlier this year from its administrators. Between May and August, some paid just 1p a share for shares in Rangers FC, which were swapped for shares in the listed company ahead of the flotation. Just over 19m shares were issued at 1p and another 2m at 50p (including 1m issued in October), compared with around 12m shares issued at a riskier 99p or 100p.

So who were the lucky investors? They seem to include mainly the inside group around Charles Green, who led the takeover, and his backers, including three mysterious offshore backers who held more than 23 per cent of the club immediately before the flotation: Blue Pitch Holding Trust (4m shares), Margarita Funds Holding Trust (2.6m) and Norne Anstalt (1.2m). Only with the last of these is it known where the entity is registered (Vadux, Liechtenstein). But the prospectus is completely silent on the beneficial owners.

There is a lock-in of at least six months for some investors and 12 months for Green and other directors. But the shares would have to perform very, very badly for those who paid 1p not to have a big result."

Now I'm no expect on share prices, but am I correct in thinking that some investors  have paid up to 100 times more than others - for the price of acquiring just one, single share?

If so, does this mean that the people paying through the nose are the ordinary Rangers fans - while those who have scooped up a real bargain are these mysterious  offshire backers - and certain 'big cheeses' on the inside track?

Whatever the truth of the matter I think that ordinary Rangers fans deserve to know what's going on - after all they are the real backbone of the club. 

Glasgow's Shame (20 April 2014)

The Daily Record has a reputation as a very partisan pro-Labour newspaper - but last weekend it ran a very strong story and editorial about the GERA scandal - in which three experienced Glasgow councillors 'gifted' £232,708.00 to a highly paid official. 

Well I've been writing about what went on at GERA for some time - see previous post dated 20 February 2013 on 'Charitable Giving' - but for what's it's worth I absolutely agree with the Record on this occasion.

The charity regulator (OSCR) had every reason for pursuing the matter - in exactly the same way as bankers have been put under the spotlight for accepting large sums of taxpayers' cash - which their performance did not merit or deserve.

To my mind both OSCR and the Public Standards Commissioner had a duty to call a spade a spade - which meant condemning the behaviour of the three councillors involved, and taking  whatever action was possible in the circumstances.

And by calling for the public money involved to be returned - so that it could be spent on the purpose for which it was really intended.  

Obscene waste of public money
We revealed today how three councillors have escaped sanctions after they topped up an official's pay-off with more than £200,000 of charity cash.

It'S a tale of two cities. Glasgow is going to be hit the hardest by the Coalition welfare cuts, losing the equivalent of £650 a year for every adult of working age.

But while some of the poorest people in Scotland sink further below the line, others do very well out of the poverty industry.

Take Ronnie Saez, the charity chief who walked away with a cool £500,000 after being made redundant in 2011 as boss of the now wound-up Glasgow East Regeneration Agency (GERA).

He was given a parting gift of a statutory severance payment of about £40,000, plus pension contributions of about £200,000.

But somehow in the mysterious world that passes for politics at Glasgow City Chambers, he was also handed a discretionary top-up of £232,708, paid directly from GERA, who were set up by the council as a registered charity to fight poverty in the city’s east end.

Independent investigators at the Office of the Scottish Charity Regulator branded the payout as “wholly unacceptable” and “misconduct” by the charity. But they can do nothing about the three councillors who rubber-stamped the pay-off decision.

The councillors must have known it was an obscene payment in a city that cannot spare an extra penny to feed all the hungry mouths, but they went ahead anyway.

There is no explanation of their decision, the charity regulator cannot pursue them for the amount and now, as we reveal today, the Public Standards Commissioner has let them off the hook.

What a depressing example of public life in modern Scotland. What a stain on the name of the Labour Party.

Is it any wonder people have so little faith in their politicians? 

Public Spending Watchdog (18 February 2012)

The Accounts Commission - one of Scotland's public spending watchdogs - has asked for a further report on the retirement arrangements surrounding Strathclyde’s chief fire officer. 

Concerns were expressed late last year over the way the matter was dealt with by Strathclyde Fire and Rescue Service - which is comprised of councillors from 12 different Scottish councils.

So the whole murky business is about to be put under the spotlight - and about time too, if you ask me.

Here's what I wrote about the affair last year.

Pants on Fire (23 December 2011)

I have been banging on for a long time about how final salary pensions in the public sector - operate in favour of senior officials and higher paid groups of staff.

During that time the conservative minds that dominate the trade unions these days - have remained largely silent.

For some reason they find it impossible to come out and speak the truth - that these final salary arrangements are a disgrace - and penalise the lower paid who subsidise their much better paid colleagues.

So the news today that Scotland's most senior fire chief was allowed to retire earlier this year - and is now being invited by his old employer to return to his post on full salary - comes as no surprise.

Strathclyde Fire and Rescue SFR) is responsible for this incredible 'revolving door' decision - which has now been referred to Scotland's public spending watchdog - Audit Scotland.

Apparently SFR allowed their chief fire officer - Brian Sweeney - to retired in the summer with a £500,000 payment - a decision that required special permission fire and rescue board - which is comprised of local councillors.

The Herald newspaper reports today on the views of a well-placed 'fire source' who said:

"It's outrageous he was allowed to retire, take his lump sum pension and walk back into the same job.

We were told he is back on a three-year contract, despite the fact we are moving to a single fire service for the whole country.

He has been allowed to access his pension at a time when our pensions and jobs are at risk."

Now the retired chief fire officer is a distinguished public servant with a long record of service - but what's that got to do with anything?

So are thousands of other council employees who are much less well paid - and who perform demanding and important jobs day in and day out.

The issue is why such a senior official should be allowed to have his cake and eat it - why did he want to and why was he allowed to retire - only to walk back into his job a few weeks later?

The external auditors for SFR - PriceWaterhouseCoopers - commented on the decision - in their annual audit as follows:

"The report comments on the board's governance and control procedures, advising that, in relation to the chief officer arrangements, the level of evidence made available does not readily support a best value decision concerning retirement, re-employment and the potential use of board funds to pay an unauthorised payment charge. However, no action related to this decision is included within the action plan.

The convener, on behalf of the board, has written to the Controller of Audit, disputing this conclusion and providing evidence that seeks to demonstrate the board acted responsibly and reasonably in this matter."

Elsewhere it emerged London Fire Brigade commissioner - Ron Dobson - had been allowed to retire, receiving an estimated £700,000 pay-off, before being re-employed into his old position, albeit on lower pay.

The point is that - on the one hand - the public is being told that certain groups of workers need to be allowed to retire earlier in others - because they work in stressful and dangerous jobs.

Yet on the other - here is evidence that people walk out the door - only to walk back in again a short time later - full of vim, vigour and energy.

Now you can't have it both ways.

And both the employers and trade unions should be ashamed of themselves - for propping up such a ridiculous system for so many years.