A new report headed by Work Foundation executive vice-chairman Will Hutton has recommended that public sector bosses should have their salaries linked to the wages of junior employees.
Commissioned by the government in May, Mr Hutton's independent review advised that those working at the top of state-funded bodies should receive no more than 20 times what their lowest-paid colleagues earn.
"There is a strong case for public sector organisations having to comply with, or explain why they do not comply with, a maximum pay multiple," he explained. "This would demonstrate fairness by reassuring public opinion."
Mr Hutton added that there had been several "eye-catching settlements" among more autonomous publicly-owned groups before the government imposed a pay freeze and criticised what he saw as the "arms race" of soaring remuneration.
Recent research from the Chartered Institute of Personnel Development revealed that public sector staff are more satisfied than those in the private sector, although one-quarter of those polled felt they were likely to lose their jobs.
Posted by Hayley Edwards
