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Future excessive pay rises for senior council staff must stop

12 September 2014

Councils must act to stop future excessive pay rises for senior council staff, says the Communities and Local Government Committee.

After dramatic 75% pay rises for senior council staff in the first decade of this century, the vast majority of councils have kept pay down for senior staff in recent tough economic years. In a report published today, Local government Chief Officers' remuneration, the Communities and Local Government (CLG) Committee urges councils to act to ensure there is no return to these inflation-busting increases as economic conditions improve.

Councils must also seek better market information to make sure they are not paying over the odds and develop more robust appraisal systems to get value for money from their top staff. The Committee recommends local councillors closely scrutinise decisions on senior pay, since it is action by local communities that has often been effective in halting proposed excessive pay rises.

Committee Chair

Commenting, Clive Betts MP, Chair of the Communities and Local Government Committee, said:

"It is unacceptable for senior figures to be handed significant increases simply for doing their jobs and we welcome the pay restraint the vast majority of councils are now demonstrating. However, as economic conditions improve, councils need to strengthen local control of pay by developing more robust powers for democratic scrutiny."

The CLG Committee condemns pay-offs to failing senior council staff, calling  on councils to respond to public concern by publishing information promptly about pay-offs made to departing top officers.

Mr Betts added:

"We've all seen cases where an underperforming council chief appears to be pocketing a substantial pay-off as an incentive to leave – the public are rightly concerned at senior council staff being rewarded for failure. We call on Government to require councils to publish details of any redundancy or ex-gratia payments made to departing senior staff within a month of the decision to award it".

Local authorities need accurate data to help inform their decisions on the pay level needed to attract good candidates. The CLG Committee recommends the Local Government Association (LGA) works with local employers' bodies to fill an information gap on regional pay and recruitment trends. The Committee is concerned that many councils do not have in place robust appraisal systems for senior staff, thereby lacking an established link between senior officer pay and performance.

Mr Betts said:

"There is no 'one size fits all' formula and it is right that councils set pay within the context of their own local needs and priorities. But some councils have made pay decisions insensitive to local circumstances. Councils need to look more critically at the pay packages suggested by external consultants and job evaluation schemes to ensure it isn't possible to secure a good officer on lower pay.

From our inquiry, it is also clear that many local authorities do not carry out rigorous appraisals of senior staff performance. Further, although rare in the council sector, bonuses shouldn't be paid at all where someone is simply doing their job. The LGA needs to publish new guidance to help local authorities better appraise senior officers. To strengthen their accountability to the communities they serve, councils should also publish information on the appraisal method they use."

The report acknowledges that innovative approaches such as sharing a Chief Executive with other local councils can reduce overall salary bills and that councils should consider measures which can deliver best value for their communities. However, the Committee does not support merging the posts of Leader of the Council and Chief Executive since each has a distinct role, with the robust challenge between the two posts helping to safeguard effective services for local communities.

Further information