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2015: New council chiefs see pay drop for sixth consecutive year

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The salaries awarded to newly appointed council chief executives have plunged for the sixth consecutive year, amid strong indications that the apparently interminable decline is levelling out, LGC research reveals.

Our analysis of 29 appointments over the past 12 months found an average fall of 3.3% in salaries agreed for new appointees compared with their predecessors, renewing fears that posts will remain difficult to fill.

However, the single-digit drop is the smallest average decrease since 2010, when LGC began monitoring pay levels. Following a 6% drop recorded last year, there is now some indication that the big fall in salaries recorded between 2010 and 2012 is levelling out.

More than one in three of new appointees accepted the same salary as the previous incumbent.

According to our tracker, the largest drop came in the first half of 2011, when the average salaries of new appointees were 19% less than the final salaries of their predecessors.

The tracker also found a slight rise in the proportion of appointees awarded the top job for the first time.

Seventy-six per cent of the 29 appointees were first-timers compared with 71% in 2014. The proportion of internal promotions was 41%, the lowest since 2010.

The council chiefs’ trade union saw the findings as a further sign of  the “arbitrary and unjustified” freeze on salaries in excess of £100,000, a restriction that risked deterring the next generation of senior staff.

“I do not think that we should be complacent in reading these figures given the real fall in chief executive take-home pay and the six-year freeze on pay, ” Rob Tinlin, chair of the Association of Local Authority Chief Executives, told LGC.

Mr Tinlin, who is also chief executive at Southend-on-Sea BC, added that the levelling off of pay decreases reflected “the significant reduction in salaries since 2010, a position sadly not accepted or recognised by either government or the local government employers”.

Jon Houlihan, sector lead for local government at recruiter Gatenby Sanderson, shared Mr Tinlin’s concern about the recruitment of future chief executives.

“With the clear exception of district chief executives looking to take a unitary role, [chief executives] tell us that there is less appetite to move on to another chief executive role.

“A real positive for the sector, however, is the quality of people operating at second tier.”

When such officers wished to move on to a chief’s role, “they make for a very strong candidate pool in a competitive environment”, he added.

Society of Local Authority Chief Executives & Senior Managers director Graeme McDonald said the era of falling salaries now appeared to have come to a close.

“Top salaries have [also] plateaued,” Mr McDonald added.

“The wage differential between chief executives and other senior staff is now extremely tight. Councils recognise that if they are asking individuals to take on the additional responsibilities then salaries do need to reflect that.

“Any further fall would lead to the relatively small number of individuals willing to take on those responsibilities becoming even smaller.”

Mr McDonald said that employers recognised that “highly skilled, motivated and accomplished leaders” were required to run effective organisations as well as the need for salary controls.

The survey took figures supplied by the councils concerned, using a mid-point where a range was given. It omitted posts where no final decision has been made on filling a vacancy.

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