A commentary on LGC’s latest research into senior salaries
Today’s money news #1: Plug financial gap with £5bn extra business rates, LGA says
Today’s money news #2: Analysis: What’s happening to council reserves?
There’s no doubt that comparisons between council chief executives and what the prime minister earns make entertaining, and enraging, copy for the average reader.
Such stories, which usually fail to acknowledge the vast responsibilities of council chief executives, have had a profound impact on the local government sector during austerity.
In the week which has seen one of the most respected chief executives of recent years announce his retirement after almost 20 years, LGC’s salary tracker has found remuneration is continuing to decline, albeit at a slower rate than in previous years.
The tracker, which has been comparing the salaries of newly appointed top officers with that of their predecessors since 2010, has found some startling salary slashing over the years.
The most dramatic drops came in the first halves of 2011 and 2012 when the average salaries of new appointees compared with their predecessors were 19% and 11% less respectively.
That was, of course, at a time when Sir Eric Pickles – a critic of councils paying chief executives “mega salaries” – was communities secretary (on not exactly the slimmest salary of about £134,000, we might add).
LGC’s latest research has revealed the average salaries paid to newly appointed chief executives has declined for the seventh consecutive year. However, at a fall of 2.1% it is the smallest average decrease since 2010. Full data on all 35 moves between July 2015 and August 2016 are available here.
Mark Rogers, president of the Society of Local Authority Chief Executives & Senior Managers, said local authorities felt they were “unhelpfully being put under the spotlight” on senior staff pay during “Pickles mania” but added he believed the sector was now “getting its confidence back”.
“The reality of austerity is it lasts a long time and that the leadership through austerity is as challenging a job as it is through plenty,” said Mr Rogers.
“I’m hopeful we’ve got to the point that local authorities can set the salary for their chief officer at whatever level best meets their local circumstances and affordability rather than being responsive to national views about what local government should be paying.”
Association of Local Authority Chief Executives deputy vice chairman Tracey Lee said she was “very concerned” about the sector being able to “attract and retain good talent” and added that was “even more important given the complexity of the world”.
Councils are cutting services, as well as staff numbers at all levels, and some local authorities are really starting to struggle to set balanced budgets.
The sector is on the road to dealing with £6.75bn cuts to core funding this parliament, following on from the £20bn savings made since 2010.
As Mr Rogers told LGC, the coming years of austerity are going to be the “hardest” and councils will “need the very best people to go that final distance and still keep services functioning to a high quality”.