In defence of Peter

I don’t normally use this column to respond to readers’ letters, since it doesn’t seem very fair to do so. But I cannot allow the email from Andrew Lewis (3 September, page 34) to go unanswered, since I am chairman of CITB-ConstructionSkills.

It is sad that Mr Lewis repeated the misleading story in a national Sunday newspaper more than a month ago relating to the salary of Peter Lobban, chief executive of CITB-ConstructionSkills. The quoted figure was for his total package, not just his salary, and included a well-earned bonus. He is worth every penny of it. It was also very disappointing that Building’s headline called Peter “a portly puss”. Anybody who has met Peter – and the leaders of the industry greatly respect him – know that he is totally committed to the industry’s well being. They also know – and have the right to judge him every year when CITB-ConstructionSkills’ levy proposals are submitted to their federations – that he has been an outstanding chief executive.

Peter is not a civil servant. He does not have accommodation at Chequers or Number 10 Downing Street, or government chauffeurs, so comparing him with the cabinet secretary or the prime minister, as the national newspaper did, is meaningless. Dozens of leaders of construction companies, public and private, are much better paid than the prime minister, the cabinet secretary or Peter.

Peter is running a large construction industry organisation employing 1400 people, with a turnover of £210m. His salary and bonus, which is published in the annual accounts, is fixed by a remuneration committee of the board, consisting of two present or past senior directors of large construction companies, the deputy chairman of CITB-ConstructionSkills, who is a specialist contractor, and myself, whose main job is as deputy chairman of Willmott Dixon.

The committee’s policy, both for the chief executive and other directors, is to offer a package that will recruit and retain staff of the right quality. At our remuneration committee meeting last February, we studied a detailed and impartial report from outside consultants that contained salary surveys, with benchmark comparisons. We followed this report very closely. There is, incidentally, no mutual backscratching between the voluntary remuneration committee and the permanent senior executives of CITB-ConstructionSkills. Two of the committee are unpaid, and the fee of the deputy chairman and myself, currently just over £20,000 a year for several days a week work, is fixed by the government.

There is a growing tendency in Britain for envious carping about the salaries of industry leaders

Mr Lewis also asked about Peter’s accountability.

It is very substantial and demanding and wholly within the public domain. It is also far more extensive than those of most industry chief executives. He is responsible to the board of CITB-ConstructionSkills, and thereby to the federations that nominate its members and committees. But he is also answerable, as accounting officer of a non-departmental public body, to the National Audit Office and the public accounts committee of the House of Commons, despite the fact that CITB-ConstructionSkills does not receive a penny of government funding for itself. Moreover, only 57% of the income comes from the levy, paid by firms such as mine, and it currently pays back to the industry £1.69 for every pound it collects.

Mr Lewis also suggested that Peter experiences “no risk or pressure”. Actually, both are intense. He has a very stressful and highly public position, with great challenges and responsibilities. They have been significantly increased during 2004, because he is now also chief executive of the new sector skills council, Construction Skills. That brings further accountability to the government, the Sector Skills Development Agency and the industry, but no additional salary.

An unattractive aspect of modern Britain is the growing tendency for envious carping about the salaries of industry leaders. I wonder how Peter’s annual package compares with the monthly earnings of television or other media “celebs”, supermodels, film stars or 19-year-old footballers. Nobody calls them portly pusses. We should recognise talent and achievement in our industry and reward it properly. We need to attract the best. We have one of the best in Peter. He has my total confidence and support.