Bonus Culture

Bonus Culture

It is sometimes said that the bonus culture within parts of the financial services sector distracts attention away from the more fundamental economic errors made by government.  There is some truth in this but that should not prevent some public scrutiny of what is happening.  Currently the huge American insurer, AIG, is under fire for making bonus payments of £116 million while accepting US government bail-out money.  It is possible that this sum will be deducted from the public funds it is due to receive.

The whole situation raises a number of questions.  How can the financial institutions be so thick-skinned as to not see the offence that their actions cause?  Do they not realise how their bail-out money could be put to alternative public service use if they had not been so careless in the first place?  In a recession, how many times and with how many methods do their supposed high-flying employees need to be paid?  It is common for major financial corporations to cut travel, entertainment and marketing as they move away from business-as-usual in a downturn.  They need to think of another area of expenditure.  Cut out the greed.

The surreal world of bonus land is in stark contrast to the realities in important economic centres like Crawley.  We thrive in the good times with really high employment levels but we can take quite a shock during a recession.  The South East England Development Agency (SEEDA) produces monthly economic snapshots and takes in data including the number of redundancies.  Sadly during February, more than one in five redundancy notifications in the south-east came from West Sussex despite the county providing just one tenth of the employment in the region.  This is one example of the stark reality that might be improved if we could see a resumption of responsible lending but the evidence suggests this is not happening in a consistent way.

It is an important time for local government and I am proud of how our employees are   trying to help.  We continue our efforts to boost the take-up of benefits recognising that this puts money into pockets and the local economy.  Local authorities are also increasing the availability of and access to advice services and promoting credit unions.  In Crawley, we are improving invoice payment times, promoting SBRR (Small Business Rate Relief) and pursuing regeneration projects amongst a number of other initiatives.

We cannot make the whole difference on our own but we are fortunate to have the support of all West Sussex local authorities and a strong voluntary sector in Crawley.  It is a time for local government to emphasise a part of its culture – that of community support.

 

Councillor Bob Lanzer, Leader of Crawley Borough Council

18th March 2009