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By Jennifer Taylor ...
By Jennifer Taylor

Conflict between chief executives and their employers is becoming increasingly common, but there is division over how such disputes should be resolved.

The cases of Jim Brooks at Kingston upon Hull City Council, Christine Laird at Cheltenham BC and David Bowles at Lincolnshire CC are the most high profile of a growing trend.

As we report in this week's LGC, the Association of Local Authority Chief Executives has taken on a third consultant to cope with its increasing caseload, and is discussing with the Employers' Organisation ways to streamline procedures for terminating chief executives' contracts.

Both sides agree the current system of statutory protection from dismissals for chief executives is flawed.

ALACE honorary secretary Alastair Robertson says: 'The current code for statutory protection was never meant to be used. It prevented councils acting in an overly political way to remove a chief executive because they didn't like the message [the chief was giving].'

But he adds: 'Recently, some employers and some chief executives have become more litigious and it has exposed weaknesses in the procedures.'

According to EO executive director Rob Pinkham: 'We get involved in disputes that have been extremely difficult to bring to a conclusion because local government law, employment law and the national agreement are contradictory.'

The common ground extends to specific proposals for reform. For instance, both broadly support building severance pay into chief executives' contracts for agreed terminations, to bring about quicker and cheaper resolutions.

Such terminal bonuses have fallen foul of external auditors, keen to avoid rewarding failure or misconduct with public money. Mr Robertson says: 'There are times when ALACE and an employer agree a deal and both sides are satisfied it is legal but the external auditor objects.'

He adds: 'There can be inconsistency about what external auditors find acceptable.'

The Audit Commission is preparing guidelines for its auditors to iron out inconsistencies.

EO and ALACE are also agreed on changes to dispute procedures, particularly the selection of the so-called designated independent person.

Chief executives can be suspended for a maximum of two months, after which an independent person must be appointed to decide whether there is a case to answer.

If the council and chief executive fail to agree on an independent person, the deputy prime minister is asked to appoint someone.

Both ALACE and the EO would like to see the process streamlined, for instance by having an agreed rolling list of independent persons.

This would avoid conflict between councils and their chief executives because the person at the top of the list would be appointed without question.

But there are numerous hoops to jump through before this list could become a reality, including changes to legislation.

The Local Authority (Standing Orders, England) Regulations 2001 have strict guidelines for these procedures. And there are questions around who would hold the list, with the Office of the Deputy Prime Minister being suggested as one possibility.

However, relations between employers and chief executive representatives are not all rosy.

The Welsh Assembly has proposed encouraging chief executives to waive their statutory protections in exchange for higher salaries (LGC, 21 May).

It has also suggested separate procedures for disciplinary and capability cases, ditching the independent person in the latter.

ALACE was incensed by the proposals, particularly as it had not been consulted.

In an angry letter to the assembly, ALACE warned that the protection was there to allow chief executives to perform conscientiously 'without fear of threat from politicians who might find [them] an inconvenient impediment to the way they wish to run the authority'.

It warned that creating a division between 'capability' and 'disciplinary' cases would allow councils to invent allegations about a chief executive's capability, where the real issue was personal or political.

The EO has promised that it has no intention of removing statutory protection (LGC, 9 July). But some of its rhetoric has led chief executive representatives to argue that it is looking to make senior sackings easier (LGC, 2 July), for instance by playing off fair procedures against efficient delivery of services to the public.

Mr Pinkham argues: 'In some cases, these procedures have taken more than a year to come to fruition. It is simply not acceptable for local communities to have their local authorities paralysed for that sort of period.'

He adds: 'It should be seen to be done fairly but it should also be done effectively.'

However, David Clark, director general of the Society of Local Authority Chief Executives & Senior Managers, is adamant there should be no moves to make removing chief executives easier, given their role as bulwarks against corruption.

He says chief executives 'have to maintain probity of everything. While 99.9% of all known councillors are completely straight and honest, it's unfortunate that from time to time chief executives have to be part of putting them in jail'.

He cites the case of Mr Bowles, whose evidence in the trial of Jim Speechley (Con) was crucial in putting the former leader of Lincolnshire CC behind bars for abuse of public office.

Mr Clark adds: 'I would therefore be very cautious of any system to get rid of the person doing that.'

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