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Councils leading on fair pay, says pressure group

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Councils are leading the way on fairer pay, a pressure group has found.

One Society, which promotes greater equality, said chief executives’ pay was static in the year to March 2012 and at least 21 councils cut the post’s salary level.

That was among findings from its survey of 174 local authority pay policy statements. The government imposed the pay statements on councils following a series of rows about senior pay.

At the other end of the pay scale, One Society said councils were “leading the way on fairer pay”, with more than 20% having committed to paying staff at least the living wage of £8.30 per hour in London, and £7.20 elsewhere.

According the One Society: “Local authorities have, overall, been exemplars of moderation in respect to chief executive pay and wider workforce pay.

“Remuneration levels are typically much lower than for comparable roles in the private sector – including private providers of public services.”

But it criticised the quality of pay statements, saying they were often almost impossible for anyone but specialists to find on council websites, were not clearly signposted and in many cases buried in other documents beyond the reach of search engines.

One Society director Duncan Exley said: “The government needs to take steps to ensure that public sector pay policy reporting is more comprehensive and comparable if their objectives of accountability and fairness are to be achieved. 

“Local authorities are large employers and procurers of services, consequently their pay policies will have a significant effect on the wellbeing of local people and the local economy.”

One Society also said a number of councils had misunderstood recommendations from the Hutton Review on Fair Pay, and had chosen to set a top pay level of not more than 20 times the lowest pay.

It said this could become a target, leading to “perverse incentives” to increase the pay of senior staff whose salary did not exceed that of their lowest paid colleague by 20%.

The report found that few councils applied living wage policies to their contractors, a step it said was concerning as services were contracted out.

One Society called for councils to use their contractual powers to influence contractors’ pay rates where they could, since otherwise “taxpayers were unable assess whether their money was being used in a way which was compatible with good standards of value and fairness”.

It said low pay by contractors might in effect be subsidised through benefit payments to their employees.

A spokesman for the LGA said: “This report confirms that councils are tackling unprecedented financial challenges in a way which is fair to local taxpayers and the workforce.

“We agree that the government’s reporting guidance is confusing, which is why we have worked jointly with the Association of Local Authority Chief Executives to set out best practice on formulating pay policies which includes direction on how to make the policies transparent and easily accessible to the public and employees.”

The Department for Communities & Local Government declined to comment on the criticism of its guidance.

In a statement, local government minister Brandon Lewis said: “The door to council pay practices has been unlocked by this government’s Localism Act - local authorities must now publicly justify their pay policies; senior salaries above £100,000 a year; big bonuses or pay rises; or if they hire someone already getting retirement or severance money from the public purse.

“Every local taxpayer has a right to know and challenge how their hard earned cash is being spent and whether local pay is fair, fit for purpose and fully democracy proofed.”

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Readers' comments (2)

  • Much needed report to counter balance the seemingly inexorable race to the bottom in the pay and T&C's of the least well off in the community - both public and private. Local government is not a machine to provide minimum services at the lowest possible labour cost - should provide services according to need and employment according to opportunity.

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  • Shame then that we are outsourcing back office services and privatising the rest to companies that see profit as the goal not fair pay.

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