FINANCE

Time to cut the cloth on chief execs' salaries

Pay levels for council chief executives are still set too high comparisons with private sector don’t ring true, argues Rochdale MP Simon Danczuk

I was stunned to learn the leadership of Rochdale Council were proposing to increase the Chief Executive's salary by over 30%, and so were the public.

The leadership were attempting, and as I write still are, to push the rise through with little discussion. They'd have been successful if it wasn't for the Government's insistence on such decisions going before a full council meeting – something we've no choice but to thank Eric Pickles for.

This gave time and space for us to raise concerns and alert local residents to what was happening. People were up in arms, as were all the local political parties, the press and front-line public sector workers. So far we've managed to win a delay.

On raising the issue of chief officer pay both in Parliament and in the media it's quickly become apparent there are concerns nationwide. Eric Pickles said, with regard to my concerns ‘he is almost a lone voice for sanity on this matter'.

‘These clearly considerable sums of money, notwithstanding the increased responsibility, are entirely wrong.'

When I proposed the Communities and Local Government Select Committee, on which I sit, conduct an enquiry into chief officer pay colleagues across the political spectrum were very much in favour. The national and trade press reported on the absurdity of such a large pay increase.

Obviously, cuts to local government, the loss of front-line jobs, people having to take unpaid leave, and wage increases frozen at one percent all make it unpalatable to even suggest such a large pay rise for senior officers.

But I think there is something more at play. People have come to realise that chief officers have often been on an upward pay trajectory which could often not be justified – not even by expensive recruitment consultants, which in Rochdale's case cost £27,000. They've been a bit like ‘upward only rent agreements', which aren't now accepted, and are on reflection considered ridiculous.

This has been set against a backdrop not just of austerity but also fairly radical change in local government in recent years. People just don't accept that the chief officer posts warrant the big pay rises that have been doled out.

Take Rochdale, again, as an example. Not only has the council shed hundreds of jobs because of cuts, so chief officers have fewer people to manage, but over a number of years they've also dispersed employment to other agencies.

Where Eric Pickles was wrong in his answer to me, above, was with regard to extra responsibilities.

We've now got a chief executive of Rochdale Development Agency which does the town's economic development, regeneration, business development, and much more. We've got a chief executive of Link4Life which does leisure, arts and heritage in the town. We've got a chief executive of Rochdale Boroughwide Housing, which does a lot of the town's social housing and homelessness.

And we've even got a chief executive for Town Centre Management. Adult care is currently being spun out into a social enterprise which I have no doubt will bring with it a highly paid chief executive.

The public have caught on and they're not buying into it.

The well-used argument that local government chief officers are akin to senior management in private companies is utter nonsense.

I accept that some chief officers work really hard but many don't. And those that do probably still don't come close to doing the hours that chief executives in large private sector companies do.

There are also differences in responsibility. Senior management in large private firms, perhaps with the exception of banks, carry the real stress of potentially seeing their business fold, making hundreds  or thousands of people redundant.

Although there are other real worries in local government, this anxiety just doesn't exist so there isn't the same burden.

Senior private sector pay rewards are also often linked to performance; this is much less common, as has been the case in Rochdale, in local authorities.

The public are waking up to what's been going on with chief officer pay in their local council and I reckon they're not happy with what they're beginning to find. Leading councillors will do well to take note of public opinion and, as they'd say in Rochdale, cut their cloth accordingly.

Simon Danczuk is Rochdale MP and a member of the Communities & Local Government Select Committee.
 

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