One in 12 local authority chief executives is considering taking a pay cut as an example of restraint in the face of pressure on public sector finances, an exclusive LGC survey suggests.
But respondents also indicated that imposed salary caps would make chiefs reticent about taking on new challenges and more likely to retire or leave the sector, suggesting ministers should think twice before imposing such measures.
For example, eight per cent of the 49 chief executives who responded to the survey said they had thought about following the example of Devon CC chief executive Phil Norrey, who announced his decision last month to take a 5% cut on his £157,000 salary to “demonstrate restraint”.
Meanwhile, 49% of chief executives said they expected to change jobs within the next two years and many indicated that moves to cap or reduce their pay after the upcoming general election could lead to them leaving local government altogether.
Twenty-seven per cent of chief executives said they would consider retiring early if pay levels were capped or reduced, while 24% said they would be more likely to look for a job outside of local government, with other jobs in the public sector and consultancy work being top choices.
In contrast, 16% said they would be more likely to stay in their job longer than they had planned if new restrictions on senior officer pay were introduced.
David Clark, director general of the Society of Local Authority Chief Executives & Senior Managers said there was a recognition in the sector that restraint on pay was in order, but that decisions were a matter for councils.
“There are a large number of people who feel that a freeze may be the right thing to do, but the people best placed to make that decision are in councils,” he said.
He added that national politicians seemed to want councils to take responsibility for difficult decisions about local cost-cutting, but take the credit for restrictions on senior officer pay.
Jobs in the wider public sector (37%) were the top choice for chief executives who thought restriction on their current earnings could prompt a move away from local government and 27% believed some form of consultancy work would be a suitable alternative.
One newly-appointed chief executive warned that constant media-bashing would have a detrimental effect.
“In the longer term the lack of recognition and cynicism about what we actually do as public sector managers may make me think about whether the job is worth the constant criticism - this is not about the money as such but about reputation of the role,” the respondent said.
Another added: “The failure to pay reasonable levels of remuneration to senior managers during times when pressures on them are going to increase will have a negative impact on those aspiring to the top. This in turn will reduce the number of able candidates for senior jobs.”
Of the 112 who responded to the survey, including senior officers, 74% said they believed chiefs’ pay was about right. That figure rose to 76% when answered by chief executives alone.
Eighty-six per cent of chiefs said they felt “fairly remunerated”, contrasting with 74% of the wider set.