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Public Sector Bonuses To Face Crackdown After RBS Payouts Row

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Civil Servants and other public sector workers face a crack down on the bonus payments
Civil Servants and other public sector workers face a crack down on the bonus payments

Ministers have ordered a crackdown on public sector bonuses following the uproar over six figure sums awarded to senior bankers.

According to the Daily Telegraph, cabinet office minister Francis Maude and chief secretary to the Treasury Danny Alexander have written to all Whitehall departments telling them to reassess how they award bonuses to senior mandarins.

"This is not about getting rid of performance pay. It is about making sure that performance pay is there for genuine excellence and not just run-of-the-mill performance," Alexander told the paper.

The paper reports that the change could also affect executives at organisations that are partially publicly owned such as the Royal Mail and the BBC, which will soon appoint a new director general.

The letter states: "The departments will need to apply their own judgment on which bodies to include in the audit but where in doubt, will need to include bodies that are likely to attract public comment."

Whitehall civil servants secured bonuses worth more than £105m in 2010-11 the Independent reported last week.

Jeremy Beeton, the director general for the Government Olympic Executive, pocketed at least £130,000 on top of his £225,000 salary, it said.

The move comes as public sector workers, including civil servants, face a pay freeze and a squeeze on their pensions.

Stephen Hester, the chief executive of taxpayer-backed RBS, recently turned down a near £1m bonus in the face of political and media pressure.

But other executives at the bank are inline to receive substantial bonuses after the Treasury said it would not micro-manage payments at the bank.

Labour leader Ed Miliband has said bonus restraint should extend beyond publicly backed institutions and be applied across the private sector.

While Downing Street has warned that too heavy an attack on bonus culture in the City risks driving crucial financial service industry companies out of the UK.

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