Tax-row mandarins ‘need more’

Jonathan Baume, general secretary of the First Division Association (FDA) which represents senior civil servants, said pay among the highest-ranking staff needed to be more “transparent”.

The call came after it emerged that salaries totalling more than £4m for 25 Whitehall “contractors” were paid through limited companies, a method permitting tax bills to be cut.

Chief Secretary to the Treasury Danny Alexander launched a review after it was revealed the Department for Business, Innovation and Skills allowed a similar salary deal to go ahead for Ed Lester, chief executive of the Student Loans Company.

Mr Baume claimed the problem stemmed from the Labour government when Ministers wanted to attract top individuals from the private sector but could not offer them comparable salaries.

He said: “In certain cases, because the market rate was so much greater than the salary that would have been offered in the civil service, various deals were being done and some of these are now being exposed.

“So I do think we now need to be very transparent and very clear that this cannot continue but at the same time grasp the very difficult political nettle, which is to address the problem of pay at senior levels of the civil service. Frankly, it’s a shambles... Ministers are going to have to raise the salaries.”