Strings attached to Arts Council bonus waiver

Arts Council England (ACE) Chief Executive Alan Davey has waived his £15k annual bonus for 2012/13 on condition that ACE spends the money on teambuilding events for ACE staff and a grant to the Lottery-funded Momentum Music Fund, managed by PRS for Music Foundation, which supports talent development among pop artists and bands. He placed a similar restriction on the release of his £10k bonus in 2011/12, which was used solely for staff teambuilding, including bringing in guest speakers, visits to museums, and “other cultural teambuilding activities”.

Funds released by waiver would normally be transferred back to ACE’s administration budget, as was the case when Davey waived his bonus in 2010/11. By placing conditions on the waiver this year and last, he has effectively ring-fenced a personal budget to spend on projects of his choice. AP asked ACE why he chose the Momentum Music Fund, but was given no answer. A spokesperson said: “The team award budget and grant to the Momentum Music Fund both followed proper internal approval processes.”

The value of senior management bonuses at ACE is set by a Remuneration Committee comprising five members of ACE’s National Council, four of whom – including the Chair – were involved in setting the rate for 2012/13. Their terms of reference, however, do not cover procedures for the waiver of bonus payments.  Although the Hutton Review of Fair Pay in the public sector calls for public bodies to “open their executive pay processes to public scrutiny”, ACE has refused to release the minutes of the  2012/13 Remuneration Committee meeting, insisting that a Freedom of Information request must be submitted.

The Hutton Review also requires public bodies to publish annually “the multiple of the remuneration of the Chief Executive and the median earnings of the organisation’s whole workforce.” At ACE, the gap between the top salary and the average has widened, rising from a multiple of 5.10 to 5.26: the Chief Executive’s pay rose by £1,530 to a total of £154,530, plus employer pension contributions of £32,000, while average pay fell by £610 to £29,390.