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Localism Bill gives Pickles say on pay

  • 3 Comments

The secretary of state will be able to issue guidance on senior officers’ remuneration – but councils will be under no legal obligation to take the advice.

The Localism Bill’s proposals on pay accountability require local authorities to agree and publish remuneration policies for its most senior officers.

Councils must then stick to that policy when determining the pay of chief executives, directors and all second-tier officers.

The bill also states that councils must “have regard to any guidance issued or approved by the secretary of state”.

Communities secretary Eric Pickles has repeatedly criticised “excessive” pay deals for senior council staff and has argued that the prime minister’s £142,500 salary should provide an upper limit.

However, Winckworth Sherwood consultant Simon Randall said the Localism Bill did not give the secretary of state any power to insist that his guidance be followed.

“The secretary of state will be issuing guidance as to what he wants to see as salary bands for different authorities,” Mr Randall suggested. “If a local authority decided to ignore that, the secretary of state’s powers are probably very limited.”

However, the mechanism within the Localism Bill would highlight what councils paid their officers.

Mr Randall said: “It does mean the salary being paid above the guidance would then become a matter of public knowledge and debate,”

If passed, the requirements will come into force in March 2012.

Remuneration details that would have to be published are salary, pension, pay-off arrangements, benefits-in-kind, allowances and bonuses.

  • 3 Comments

Readers' comments (3)

  • The principle of transparency on this is no bad thing, but I wonder how the detail will play out.

    It is not uncommon for organisations to express their pay policy in relation to the market by saying that they will (for example) pay at the upper quartile point - so not at the very highest level, but also paying a bit more than the average in order to attract the best. I could see authorities going for that sort of formulation as it's quite defensible. The problem of course is that if that is rolled out across the country then we see a curious form of leapfrog as everyone wants their senior office to be paid above average. Arguably this is what we have seen so far when the TPA's publication of data revealed the salaries. Good information injected into a liquid and relatively free market in a context of demand exceeding supply for proven chief executives.

    I'm not reading in the Bill anything which demands that the policy is cast in terms of precise figures, so it could be cast in terms of "advice based upon prevailing market conditions" for example.

    The really interesting bit is at 23 (1) which states

    A relevant authority in England must, in performing its functions undersection 21 or 22 (senior pay policy), have regard to any guidance issued or approved by the Secretary of State.

    I'm not sure of the force of "have regard to" in this sort of context.

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  • My comment above related to an earlier version of the article, and appears to be have been influential in its re-writing!

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  • Ruth Keeling

    To clarify, Winckworth Sherwood's Mr Randall did not believe the "have regard to" had no force at all.

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