TIMES are tough in the public sector – and nowhere more so than at the Bank of England, where staff are feeling the effects of a pay freeze until 2013.

To raise morale as the cuts hit home, The Capitalist hears the Bank of England has introduced a Better Place to Work scheme, an ongoing consultation with staff to find out how management can make their daily grind more enjoyable.

One suggestion, as outlined in a memo from chief economist Spencer Dale sent to his Monetary Analysis department, is a McDonald’s-style Employee of the Month scheme to reward top performers.

“The management team are unsure whether this would be generally popular,” Dale wrote in the document. “But a mechanism for nominating and agreeing an employee of the month or quarter will be developed and we will seek your views… about whether to implement it.”

Another top-level decision blocking Dale’s in-tray is whether to introduce rewards – either monetary or a gift equivalent – for Note of the Month, to be awarded to the analyst demonstrating “genuinely creative thinking that improves monetary policy debate”.

It’s a tough call – as is the thorny issue of handing out more office BlackBerries, after BoE staff made it clear that smartphones are “not just for managers”.

The incentive scheme is an interesting strategy from the Bank, whose governor Mervyn King only last month criticised the FSA for looking closely at small matters and missing the big picture. “There was a large amount of investigation into small things [at the FSA]. And a failure to look at the big risks inside organisations,” he told the Treasury Select Committee.

But BlackBerry allocation and staff reward schemes are not “small” concerns in the scheme of King’s big picture of bringing down inflation as debate over interest rates rages on… are they?

CRISPIN Odey, the gourmand head of Odey Asset Management (right), missed out on sampling the City’s finest hot sandwiches at the Earl of Sandwich launch this week as he is on holiday.

So it was left to Odey’s colleague the Hon Orlando Montagu, a partner at Odey’s hedge fund and co-founder of The Earl of Sandwich food chain, to wax lyrical about his 13 signature sandwich dishes baked to order on the premises to a secret recipe.

Speaking at the opening of the chain’s first UK shop at 38 Ludgate Hill – alongside his father John, the eleventh Earl of Sandwich and business partner Robert Earl, the founder of the Hard Rock and Planet Hollywood chains – Montagu revealed plans to open further shops across London, including Liverpool Street and Canary Wharf.

The only headache is that hot sandwiches, like the Earl’s, are subject to VAT, while cold are not – a “monstrous” state of affairs, said Montagu, that means one fifth of every sandwich goes straight to the Treasury.

Even the fact that Montagu went to prep school with George Osborne at Colet Court aged six doesn’t exempt him from the 20 per cent tax.

“We are significant supporters of this country’s economic recovery,” Montagu told The Capitalist with resignation. “Just spend it wisely, Mr Osborne.”