25 July 2008
An increase in the number of local authorities recruiting existing chief executives from other councils is driving up costs and restricting the recruitment pool, the Audit Commission has said.
In its report, Tougher at the top? Changes in the labour market for single-tier and county council chief executives, published on July 22, the commission said councils saw existing chief executives as a safe option, as the role has become more demanding.
The report found that in the past three years the number of vacancies at single-tier and county councils filled by a chief executive from elsewhere more than doubled. This meant two authorities incurred recruitment costs for a single post. Compounded by a lack of succession planning, this led to salary increases as councils sought to recruit and retain chief executives.
Steve Bundred, chief executive of the Audit Commission, said: 'Our research found that the talent pool that authorities use is shrinking, while the demands of the role are increasing.'
This trend was increasing recruitment costs and wages, he added. But recruiting the 'tried and tested' did not automatically boost performance. The proportion of councils achieving higher Comprehensive Performance Assessment scores after three years was the same whether they had changed their chief executive or not.
Local Government Association chief executive Paul Coen defended chief executive salaries. He said it was natural for councils to recruit people with an excellent track record, while town hall performance was improving.
'Research clearly shows that chief executives in local government are the lowest paid [compared with those in] private and public organisations with comparable turnover and staffing levels,' he added.
The LGA believes that the average salary figure of £150,000 for the top post, quoted in the Audit Commission report, is misleading as it is calculated from only the largest third of authorities. It says the average across all councils is £106,000.
Local government minister John Healey supported the Audit Commission's calls for the 'pool of talent' to be widened.
'We need… to bring in top managers from beyond local government and bring on good managers from within local government,' he said.
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