The chief executive officer of Mears Group – which runs local authority and UK Government contacts including one with the Home Office to provide asylum accommodation in Scotland – was paid £838,000 last year.
According to its latest accounts, posted on Companies House, chief executive David Miles increased his total earning from £600,000k in 2020 – when the company posted a loss – to £838,000 including bonuses in 2021. Mears reported profits of over £25m last year.
Mears Group also provides home care and is currently advertising carer positions paid at just £9.50 per hour, which is the minimum wage for anyone 23 or over.
Critics said that awarding public contracts to a company where the CEO earned almost 50 times more than the lowest paid workers was “intolerable” and called for its government and local authority contracts to be “ripped up”.
But Mears Group insisted that its executive pay was “on the lower end of the scale” when compared to similar public companies, which it said was “a conscious decision”. The company said its rates for workers were “competitive”.
Mears’ asylum contracts
In 2019 Mears was awarded its largest ever government contract to provide accommodation and support for asylum seekers in Scotland, Northern Ireland and Yorkshire/North-East. It was worth £1.15billion.
Since then the firm has been consistently criticised by refugees campaigners, who allege it is overseeing “a slum housing system”. The claim has been refuted by Mears who insist the housing it provides meets the Home Office’s contractual requirements.
In response to the hike in the CEO earnings, Robina Qureshi, chief executive of Positive Action in Housing, said: “At a time when the Bank of England is calling for a curb on pay rises due to inflation, this really beggars belief.”
In February the the governor of the Bank of England, Andrew Bailey – who earned over half a million in 2020 – came under fire from unions for suggesting workers should not ask for big pay rises to help control inflation.
Qureshi added: “At the same time I am no longer shocked by the way we see multi-nationals lining their pockets, even while we are in the midst of a cost of living crisis.
“There is such a stark contrast between the extent of the financial rewards on offer and the fact that this is a company that is overseeing a parallel slum housing system. Mears is trying to normalise this but it should never be considered normal.”
Scottish Labour MSP, Paul Sweeney said that a board sanactioned pay rise of over £200,000 “while presiding over an organisation that provides slum-like accommodation to asylum seekers tells you everything you need to know about the priorities and moral compass of this organisation”.
“It’s scandalous that they are allowed to get away with it and the government and local authorities involved should be ripping up the contracts rather than continuing to funnel public money into their bank accounts,” he added. “Asylum seekers are among the most destitute and vulnerable people in society.
“We cannot have a situation in this country where during a cost-of-living crisis, organisations like Mears Group are offering poverty wages and providing inadequate services while being propped up by public money. It’s intolerable and it needs to end.”
The rapidly escalating cost-of-living crisis has put a renewed focus on public sector high pay. Although Mears is a private company, much of its work revolved around providing public services, which have been outsourced by UK authorities.
Last month The Ferret reported that a director of a care home firm in Scotland — which is owned in a tax haven and pays some of its staff just over minimum wage — was paid £2.27m in 2020.
According to Mears annual report only 77 percent of shareholders voted in favour of topping up Miles’ £404,000 salary to £838,000. This, says the report, “was primarily as a result of the dissatisfaction with the performance of the company for a small number of significant shareholders”.
Cat Hobbs, founder and director of campaigning organisation We Own It, claimed that outsourcing and privatisation “results in a lower quality service for those who rely on it, with workers mistreated as companies record rising profits and pay their CEOs huge salaries”.
“Privatisation is failing us all,” she added. “On this occasion it is specifically failing asylum seekers and care workers – but this comes as no surprise, it’s what we have come to expect from private companies receiving public sector contracts.
“Companies with such appalling track records should not be receiving a penny of public money, particularly when so much of this is going straight into the pockets of their CEOs.”
In May it was reported that David Miles, 56, would start to “transition towards retirement” after 26 years with the company. He will be replaced by Lucas Critchley, its current chief operating officer.
A Mears spokesperson said: “Mears is committed to ensuring that pay, terms and conditions are favourable for all employees and we are pleased to have been recognised as one of the best companies to work for in Scotland. Pay for our care workers is above national minimum wage and is competitive within the industry.
“The remuneration of our CEO is decided by the board and is based on the overall performance of Mears, which is a growing and successful company. We are transparent about executive pay and information is fully publicly available in our annual report.
“A comparison with similar public companies shows that Mears is on the lower end of the scale for executive pay which has always been a conscious decision on our part.
“Regarding asylum accommodation and support, we are meeting all Home Office contractual standards and our dedicated staff are providing the best possible support in difficult circumstances, particularly at a time when due to a significant rise in the number of people seeking asylum, and a shortage of suitable accommodation.”
The firm was voted by The Sunday Times last year as one of the ‘Best Companies to work for in Scotland”.
Image thanks to iStock/francescoch