16 September 2005
New Cabinet secretary Sir Gus O'Donnell has told local government leaders that he will be urging central government departments to allow local authorities more flexibility in the way they spend their allocated funds.
Speaking at a conference held jointly by the London School of Economics and the Local Government Association on September 14, O'Donnell praised the pilot Local Area Agreements, which enable authorities to merge departmental funding streams into a single pot.
'LAAs provide the framework and the freedom to focus delivery on people and to find local solutions for local issues,' said O'Donnell. He described the pilots as a 'beneficial journey' and said: 'I am committed to working with my permanent secretary colleagues to ensure that all our departments explore the opportunities for more flexible and innovative approaches to deliver further progress.'
O'Donnell also said that although a greater movement of senior staff between central and local government was vital to establishing a better working relationship between the two layers of government, the pay gap between central and local government was a barrier to this happening.
'Local authority salaries are outstripping the senior civil service for certain senior and key roles,' he said. 'Salary differentials are growing, especially for scarce skills such as finance, law, accountancy and procurement. Gaps are greatest for the biggest and most senior posts.'
A spokeswoman from the senior civil servants union, the FDA, welcomed O'Donnell's suggestion that he would tackle what his predecessor Sir Andrew Turnbull called an 'unresolved issue'. 'It's clear something has to be done,' she said. 'It's long overdue.'
The Senior Salaries Review Body is due to report on pay discrepancies across the public and private sectors next year.
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