Every few months, a familiar story appears in the newspapers and across social media. Public-sector workers are enjoying bigger pay rises than their private-sector counterparts. The implication is usually that those employed by the taxpayer are doing rather better than the people whose taxes pay their salaries.
There is some evidence to support the claim. In the spring of 2026, the Office for National Statistics reported annual regular pay growth of 5.5% in the public sector, compared with just 2.9% in the private sector. Although the ONS cautioned that the figures were affected by differences in the timing of pay awards, the headline numbers were clear enough.
But does this really tell us very much about the relationship between public and private-sector pay? And does the same pattern hold true at every level of an organisation?
To investigate, I decided to look at the remuneration of the people running three of the North East’s best-known institutions: Newcastle United Football Club, Fenwick and Newcastle Hospitals NHS Foundation Trust.
All three are substantial organisations, employing large numbers of people and providing services familiar to almost everyone in the region. They operate in very different sectors, but each requires experienced executives to manage substantial budgets, complex operations and large workforces.
I wanted to establish how much their directors are paid, how that remuneration compares with the size of the organisations they manage, and how the relationship has changed over the last thirty years.
Three Newcastle institutions
Let’s begin with the latest available figures.
| Organisation | Turnover / income | Total directors’ remuneration | % of turnover | Highest-paid director |
|---|---|---|---|---|
| Newcastle Hospitals | £1,885.5m | £1.72m | 0.09% | £285,000 |
| Newcastle United | £335.3m | £10.7m | 3.19% | ~£750,000 |
| Fenwick | £177.0m | £2.156m | 1.22% | £751,000 |
The figures cover 2025/26 for Newcastle Hospitals and 2024/25 for Newcastle United and Fenwick. The hospital remuneration total is estimated from published directors’ salary bands. Newcastle United’s £10.7 million total remuneration and its highest-paid director figure are historical estimate rather than a verified current salary. NUFC is not the most financially transparent organisation.
The first thing that stands out is the enormous difference in the size of these organisations. Newcastle Hospitals has an annual income of almost £1.9 billion, more than three times the combined turnover of Newcastle United and Fenwick. It operates 24/7 365 life or death services.
Yet the hospital trust spends considerably less on its directors than either of the other organisations. Its estimated directors’ remuneration amounts to just 0.09% of income, compared with 1.22% at Fenwick and 3.19% for Newcastle United’s wider senior management team.
The differences are striking The highest-paid director at Newcastle Hospitals receives £285,000. At Fenwick, the equivalent figure is £751,000. Our historical estimate for Newcastle United is approximately £750,000.
It is worth remembering that the chief executive of Newcastle Hospitals is responsible for an organisation with a turnover more than ten times that of Fenwick and a workforce providing some of the most complex medical services in the country.
Of course, organisational turnover is not the only measure of executive responsibility, and there are substantial differences between running a hospital, a football club and a department store. Nevertheless, the scale of the differences raises an interesting question about how we value senior management in the public and private sectors.
What has changed in thirty years?
To explore that question, I went back to the mid-1990s. Getting comparable historical information is not straightforward, particularly for the NHS, where the Royal Victoria Infirmary and Freeman Hospital were then separate trusts. However, using historical company accounts, contemporary reporting and published NHS remuneration figures, it is possible to construct a reasonable snapshot of the position thirty years ago.
| Organisation | Turnover / income | Total directors’ remuneration | % of turnover | Highest-paid director |
|---|---|---|---|---|
| Newcastle Hospitals (RVI + Freeman) | ~£200m | ~£670,000 | 0.34% | £65,844 |
| Newcastle United | ~£40m | ~£100,000 | 0.25% | ~£50,000 |
| Fenwick | £210.9m | £1.235m | 0.59% | £635,552 |
These figures need some explanation. Fenwick’s numbers come from its audited accounts. Newcastle Hospitals’ income and total directors’ remuneration are estimates for its two predecessor trusts, based on historical NHS financial information and typical board structures. The £65,844 figure is the national average remuneration of an NHS trust chief executive in 1994/95, rather than the actual salary of either Newcastle chief executive.
Newcastle United’s figures are estimates of ordinary annual directors’ remuneration, informed by contemporary reporting and subsequent published salaries. They deliberately exclude the exceptional retrospective payments made to directors in 1996, which would distort the comparison.
Despite these qualifications, the historical figures offer an interesting perspective.
Thirty years ago, Newcastle Hospitals and Fenwick were organisations of broadly similar financial size. Newcastle United was considerably smaller, with turnover of approximately £40 million.
Fenwick’s highest-paid director was already earning more than £600,000, almost ten times the average NHS trust chief executive’s remuneration. Newcastle United’s directors, meanwhile, were receiving much more modest annual salaries than their successors.
Since then, the three organisations have followed very different paths.
Newcastle Hospitals’ income has increased more than ninefold, while its estimated total directors’ remuneration has increased by considerably less. The proportion of income devoted to directors’ pay has consequently fallen from approximately 0.34% to 0.09%. Some of this reflects the merger of two separate hospital trusts into one organisation, eliminating the need for two boards.
Fenwick’s turnover, by contrast, is actually lower in nominal terms than it was thirty years ago, yet its total directors’ remuneration has increased by approximately 75%. As a proportion of turnover, the figure has more than doubled, from 0.59% to 1.22%.
Newcastle United presents a different picture again. Its transformation from a relatively modest football business into a much larger commercial operation has been accompanied by substantial growth in executive remuneration. However, because because of complicated structures and financial opacity I am cautious about making detailed comparisons with the 1990s. The overall picture and the direction of travel is correct however.
What these figures certainly don’t demonstrate is a uniform pattern of public-sector executives enjoying increasingly generous remuneration at the expense of their private-sector counterparts.
Indeed, at Newcastle Hospitals, directors’ remuneration appears to have become a considerably smaller proportion of the organisation’s income over the last thirty years.
What about the people further down the organisation?
Comparing chief executives is interesting, but perhaps the difference is confined to the people at the very top. What happens when we look at people doing broadly similar jobs in the public and private sectors?
Lawyers provide a useful comparison. Whether employed by a government department, a local council or a commercial law firm, they have undergone broadly similar professional training and must meet the same regulatory standards.
The Solicitors Regulation Authority publishes benchmark salaries for lawyers working in the public and private sectors. Outside London, its figures suggest that a newly qualified solicitor in private practice earns around £65,000, compared with £32,000 for an assistant solicitor in the public sector. For more experienced lawyers, the equivalent figures are approximately £77,000 and £39,000.
These are regulatory benchmarks rather than a survey of actual salaries, and the job categories are not perfectly matched. Nevertheless, they illustrate the substantial differences that can exist between the two sectors.
More recent recruitment figures tell a similar, although less dramatic, story. The Government Legal Department advertises experienced Grade 7 lawyers on salaries of approximately £56,000 to £67,000 outside London. Newly qualified solicitors at larger regional commercial firms can earn similar amounts, while those joining London’s most prestigious firms may start on £150,000.
At the top of the profession, the contrast becomes even more pronounced. The Treasury Solicitor, the government’s most senior lawyer, receives a salary of approximately £187,500. Partners in major commercial law firms can earn many times that amount.
Of course, there are differences in pension provision, working hours and the pressures associated with commercial practice. A government lawyer may enjoy a more valuable pension and more predictable working hours than someone employed by a large City firm. Equally, lawyers working in small private practices, particularly those undertaking publicly funded work, may earn much less than the headline salaries suggest.
But the evidence hardly supports the proposition that public-sector lawyers are generally enjoying unusually generous salaries compared with their private-sector counterparts. Indeed, the opposite appears to be true, particularly when comparing government lawyers with those employed by larger commercial firms.
What about the people answering the telephones?
So far, our comparisons have suggested that senior executives and professional staff can earn considerably more in the private sector than in the public sector. But does the same relationship exist further down the pay scale?
For our final comparison, let’s travel a few miles across the North East, from the call centres at Doxford International Business Park in Sunderland to the government offices at Longbenton. Two places I know well.
Both locations employ large numbers of people in administrative and customer service roles. The work is not identical, but there are obvious similarities. Staff answer telephone calls, deal with enquiries and complaints, update records and work within established procedures. Both public and private employers need people who can communicate effectively, work with computer systems and handle difficult customers.
The salary figures are surprisingly similar.
A customer service adviser working at Royal Mail’s Doxford Park contact centre was recently offered £13.93 an hour, equivalent to approximately £27,164 a year for a 37.5-hour week. Gentoo advertised customer support positions at £24,025, while Northern Gas Networks offered £28,051 for customer care advisers.
Meanwhile, HMRC advertised customer service positions in Newcastle at £26,770, and Newcastle City Council offered between £26,403 and £27,254 for advisers at its Longbenton contact centre. There is little evidence here of the enormous pay differences we found among senior executives. At this level, public and private-sector basic salaries are broadly comparable.
But salary is only part of the story. Private-sector employees also receive pensions and paid holidays, and some employers offer bonuses and other benefits. But the Civil Service pension remains a potentially significant advantage, particularly for employees who spend much of their working lives in public employment. Of course, the employer’s pension contribution is not the same as additional take-home pay, nor does it represent the precise value of the pension to an individual employee. Nevertheless, it is a substantial part of the overall remuneration package.
So the picture at the bottom of the pay scale looks rather different from the one at the top. Among senior executives, the private sector offers opportunities for remuneration that can greatly exceed those available in public employment. Among lawyers, the differences can also be substantial, particularly in commercial practice.
But among people working in administrative and customer service roles, basic salaries appear much closer together. Once pensions and other benefits are considered, public-sector employment may offer a marginally more attractive overall package.
So who is really doing better?
The recurring headlines about public-sector pay growing faster than private-sector pay are not necessarily wrong. They describe what has happened to average earnings over a particular period. But average earnings growth and the relative rewards available to people doing comparable jobs are two quite different things. Our comparisons suggest that the relationship between public and private-sector remuneration varies considerably depending on where someone sits in the labour market.
At the top, private-sector executives can earn substantially more than the people running much larger public organisations. Among professionals, the private sector can offer considerably greater financial rewards. Further down the pay scale, the differences narrow, and the value of public-sector pensions may become particularly important.
Perhaps the problem with the annual argument about public-sector and private-sector pay is that it treats two enormous and very different groups of workers as though everyone within them has the same experience.
Turning opinion into news
So why do we keep seeing newspaper stories suggesting that public-sector workers are being paid too much? Part of the explanation, I suspect, is that some newspapers have a habit of turning their editorial opinions into news stories. The underlying argument is familiar enough: taxes should be cut, particularly for the better-off, and the money found by reducing benefits and paying supposedly overpaid public servants less. It is, in essence, a return to Liz Truss economics.
The problem with these apparently simple solutions is that the evidence rarely supports them. Successive governments have tried to reduce spending on benefits, only to discover that the bill continues to rise. The Conservatives came to power in 2010 determined to shrink the state they made some initial reductions, but Brexit, followed by the pandemic, reversed the trend, leaving Britain with more civil servants than when they started. Cutting the size of government, it turns out, is rather more difficult than writing newspaper editorials about it.
One of the more substantial attempts to reduce public-sector bureaucracy has come from the NHS, where Sir Jim Mackey has been leading a programme to abolish NHS England, merge its functions with the Department of Health and Social Care, and eliminate thousands of administrative posts. The programme aims to remove up to 18,000 posts across NHS organisations and the department, although the reductions are still being implemented.
And Sir Jim’s day job, before he was seconded to lead NHS England? Chief Executive of Newcastle Hospitals. The organisation with the lowest directors’ remuneration, relative to its income, of the three we started with.
https://find-and-update.company-information.service.gov.uk/company/00052411/filing-history
The historical figures are drawn from a combination of published accounts, contemporary reporting and estimates. Fenwick’s figures come from its audited 1995 accounts. Newcastle Hospitals’ figures are estimates based on the combined income of its two predecessor NHS trusts, typical board structures and published NHS remuneration data. Its highest-paid director figure uses the national average NHS trust chief executive salary in 1994/95.
Newcastle United’s figures are estimates of ordinary annual directors’ remuneration, informed by subsequent published salaries and contemporary reporting. They exclude the exceptional retrospective payments made to directors in 1996 and should not be treated as audited 1995 remuneration. NUFC aren’t always the most transparent organisation.