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.