Average salaries for newly appointed chief executives are continuing to decline, with just a quarter of those taking on a new role in the past year earning more than their predecessors, LGC research has found.
New chief pay continues to fall
Analysis of the 28 permanent appointments in the year to August 2017 showed a 1.9% fall in the average amount paid to new appointees compared with those they succeeded.
However, the decline is continuing to slow. LGC research last year showed a 2.1% average decrease on the previous year, which was the smallest average fall since 2010.
The percentage of appointees who will earn less than their predecessor has increased this year. Last year 13 of 35 appointees (37%) were given a lower wage, compared with 12 of 28 (43%) this year.
A quarter will earn more than their predecessor, compared with a third last year. Just over a third of appointees will earn the same salary as those they replaced, which is in line with last year’s findings.
Graeme McDonald, director of the Society of Local Authority Chief Executives & Senior Managers, said the figures demonstrated continuing constraint in local government pay. He added: “Welcome though the sector’s overall prudence is, the long term trend is worrying. Like other parts of the public sector, local government competes for highly skilled employees in an increasingly challenging employment market and councils need to be able to attract the qualified staff into challenging roles.
“The breadth and complexity of working with local communities and managing local services shouldn’t be short-changed.”
Of the 28 appointments, internal candidates made up 39%, down from 43% last year. More than half of roles (17) went to female candidates, an increase on last year, when 13 of the 35 appointments went to women. That makes a net increase of three female chief executives, following a net rise of five last year, the first year LGC looked at gender.
Overall, 60% of roles were awarded to candidates taking on the top role for the first time, a fall on the previous four years (see table).
Ian Miller, honorary secretary of the Association of Local Authority Chief Executives & Senior Managers and Wyre Forest DC chief executive, said those taking on one of the “most demanding and complex jobs in the public sector” deserved “appropriate financial recognition”.
He added: “The downward pressure on senior pay in local government risks getting the balance wrong between reward on the one hand and responsibilities and risk on the other.
“The danger is that fewer and fewer people will be prepared to take on the most senior roles for lower pay than their predecessors when the demands have not reduced. Risk – particularly in social services – has never been higher and virtually all councils face significant financial challenges over the next few years.”
The biggest drop in pay was recorded at Stockport MBC. Pam Smith, who joined from Burnley BC, will earn £144,000 while her predecessor Eamonn Boylan had a salary of £173,469 before becoming the first chief executive of Greater Manchester CA.
Elsewhere in Greater Manchester, new Manchester City Council chief executive Joanne Roney’s £195,000 salary is £19,000 less than her predecessor Sir Howard Bernstein who had been in post for nearly 20 years.
Ms Roney was replaced at Wakefield MDC by Merran McRae, whose £170,000 salary means she will be earning £16,000 less than her predecessor.
The largest increase in salary this year was at Reading BC, where Peter Sloman will earn £156,000 as chief executive, a £21,000 increase on the salary of his predecessor Ian Wardle, who was managing director.
LGC’s research used figures supplied by councils or took them from statements of accounts. Where a salary band was given, the median figure within the range was used.
The research omitted posts where no final decision had been made on filling a vacancy.