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WORK LIFE - THE PRICE IS RIGHT

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Good leadership is scarce, and chief executives are paid accordingly, says Hamish Davidson...
Good leadership is scarce, and chief executives are paid accordingly, says Hamish Davidson

Eight years ago, a chief executive earning over£100,000 was the exception, and usually kept under wraps. Now it is becoming the norm, with larger councils regularly paying around£130,000.

The average unitary salary has increased by over 40% over the past five years, way outstripping other posts. It would not surprise me to see the first£200,000 post in local government within the next year.

It is not difficult to understand why. The collapse of salary norms that once tried to link top salaries to population never really made sense. There is a growing recognition by leading councillors that leadership rather than just managerial skills are crucial to success, and a growing importance of reputation and the pressure from inspection regimes towards higher quality leadership. There is a shortage of talent and experienced leadership candidates in local government.

If councils want to recruit a chief executive from the executive/corporate director pool, they are looking at having to pay an increase on salaries well into six figures.

But is this not all a self-fulfilling prophecy? How ethical is it for top jobs to be paying well into six figures, when lower-paid jobs in local government are stuck at the bottom of the reward scales?

The simple argument is that supply and demand are operating here and, with a limited number of experienced leaders, the price goes up.

But I believe it goes beyond that. The modernising of public service, the bite of the inspection regimes and the threat of intervention are now reaching parts of local government that were never reached before.

We are amazed at many of the councils we work with who are up for the change. I still remember the times when leaders giving a brief for a new chief executive would baulk at desired qualities such as leadership and inspiration. They would find it hard to acknowledge all was not well with their council and perhaps radical change was needed. This is now the norm.

It is interesting to note, as we start to enter a difficult period, there is a real success story across local government.

I hope we don't lose sight of it.

It really comes down to what value we put on effective, empowering and inspiring leadership. I could cite a lot of examples of where such chief executives have transformed councils now emerging with top comprehensive performance assessment scores.

Councils that can attract the best staff, win new freedoms to serve their communities better and provide those communities with improved services at lower cost. It is in large measure down to the leadership team. That is what councils are paying for -£150,000 for someone to use and direct£800m more effectively.

We were recently involved in the appointment of a chief executive to a northern town, on a six-figure sum. The week after the appointment, his face filled the front page of the local paper with pound signs in each eye and a double page spread of the huge houses in the area he could afford to buy. I can understand that. In areas where average wages are low, how can such salaries be defended?

Are we saying some strange notion of fairness in remuneration should condemn such communities to second-rate leadership? Do such communities not deserve the services and community leadership of a high-performing

council?

The real issue here is the urgent need to encourage, grow and get better at identifying the leaders of tomorrow and enlarge the pool of talent.

Too little is being done here in any

co-ordinated way across public service. The CPA drives home the importance of good leadership. Its scarcity will continue to drive up its price.

Hamish Davidson

Chairman, Veredus Executive Resourcing

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