Councils should publish details of any payments made to encourage underperforming senior staff to leave within a month, MPs have recommended.
A report by the communities and local government select committee also said senior pay in local government was not excessive, citing LGC’s Salary Tracker as showing that many current officers were earning less than their predecessors.
The report, Local Government Chief Officers’ Remuneration, said many councils lacked robust appraisal systems to link performance to pay. It called on councils to publish details of appraisal processes “so that the public can understand the basis on which reward decisions are made”.
There has been “much public concern at a lack of clarity when payments have been made to underperforming staff to incentivise them to leave a council”, the report said.
“Councils should publish information on the rationale for, and amount of, such a payment within a month of the decision being made to award it.”
Speaking to LGC, committee chair Clive Betts said claims about excessive pay were no longer justified.
The Labour MP said: “It’s fair to say the high increases in salaries seen in the early years of the century have levelled off and we welcome that.
“The answer to public concern about high pay in local government is for councils to be open and transparent about what they do.”
The report said that during the 2000s salaries for senior council staff increased by some 75%, “far greater than salaries increased for most people”.
That had caused “justifiable public concern” but the report cited research from LGC’s Salary Tracker in June, which showed many new chief executives were taking salaries lower than their predecessor’s.
“The Local Government Chronicle’s findings that salary decreases have now plateaued may also suggest that a floor could now have been reached below which it may be difficult to recruit good people”, it said.
Bonuses were rare in councils but should be paid only “when there is clear evidence of personal additional contribution”, the report said.
The committee came down against merging the posts of leader and chief executive, as has happened as an economy measure at Kent CC and Wiltshire Council.
“It’s clear they are two very different jobs and blurring them has significant disadvantages,” Mr Betts said.
Solace director Graeme McDonald said he was “pleased to see the committee has recognised local government’s ability to manage pay locally”.
“In particular, it correctly identifies that local action has proved more effective than centrally imposed dictate,” he added.
Mr McDonald said Solace would welcome “a drive to ensure that all senior staff are properly and appropriately appraised”.
He also applauded the committee for opposing merging the roles of leader and chief executive.
“The distinction between political and non-political roles should be clear and unambiguous,” he said.
Local government minister Kris Hopkins said: “As this report shows, the focus on excessive pay by this government has grounded pay rises received by senior council staff that soared out of control during the noughties.
“We have already acted on pay transparency by opening up middle management and senior pay to greater public scrutiny and giving councillors the power to bring excessive salaries back under control.
“The whole of the public sector is currently showing pay restraint, including council employees who work tirelessly to deliver frontline local services, so it is only right that senior management follow suit.”
An LGA statement said it was pleased the committee had recognised the importance of a local approach to pay, and that it would refresh its guidance on performance pay.