By David Williams
03 September 2009
The Audit Commission has launched an investigation into severance payments for senior council officers, and is appealing for local government workers to provide evidence.
Communities Secretary John Denham asked the commission to look into how well agreements between councils and chief executives were regulated, particularly when directors left before the end of their contracts.
The regulator has written to organisations asking for views on whether taxpayers’ money is being well spent and for examples of good and bad practice.
The call for evidence was launched on September 3 and will last for a month.
Denham said the action has been prompted by cases where chief executives appeared to have left with six-figure pay-offs after clashes with the council leader.
‘It is not acceptable for town hall chiefs and council leaders to agree expensive deals to part company just because they don’t get on,’ Denham said.
Well-documented cases include John Foster, who was given £340,000 to leave Wakefield council following a row with council leader Peter Box. He took over as chief of Islington council weeks later.
The government introduced rules in 2001 to protect chief executives, monitoring officers and chief financial officers from political interference.
David Clark, director general of the Society of Local Authority Chief Executives, said those regulations needed to be re-examined. ‘The problem is that some officers are dismissed on a political whim,’ he said. ‘We have had circumstances where new leaders have openly said, during their election campaign, that they would “get” the chief executive if elected. We have also had chiefs forced out for exposing member corruption.’
Clark added that the commission should investigate ‘boomerang boss’ cases, where the executive is paid off only to return to a similar job elsewhere in the sector. The inquiry should also examine cases where competent chiefs were pushed out of councils, stigmatised, and never able to work again.
Chris Leslie, director of the New Local Government Network, said councils were becoming aware of the need to rein in excessive pay-offs.
He noted that the tension between officers and elected members served as a check-and-balance system as long as both sides acted responsibly.
Leslie said councils were some of the most transparent bodies in the public sector. ‘I would widen this out to other public agencies like PCTs, police authorities, quangos and the civil service,’ he told Public Finance.
Local Government Association chief executive John Ransford said it was up to councils to decide who they should hire but added: ‘It is right that chief executive pay is subject to public scrutiny.’
03 September 2009
The Audit Commission has launched an investigation into severance payments for senior council officers, and is appealing for local government workers to provide evidence.
Communities Secretary John Denham asked the commission to look into how well agreements between councils and chief executives were regulated, particularly when directors left before the end of their contracts.
The regulator has written to organisations asking for views on whether taxpayers’ money is being well spent and for examples of good and bad practice.
The call for evidence was launched on September 3 and will last for a month.
Denham said the action has been prompted by cases where chief executives appeared to have left with six-figure pay-offs after clashes with the council leader.
‘It is not acceptable for town hall chiefs and council leaders to agree expensive deals to part company just because they don’t get on,’ Denham said.
Well-documented cases include John Foster, who was given £340,000 to leave Wakefield council following a row with council leader Peter Box. He took over as chief of Islington council weeks later.
The government introduced rules in 2001 to protect chief executives, monitoring officers and chief financial officers from political interference.
David Clark, director general of the Society of Local Authority Chief Executives, said those regulations needed to be re-examined. ‘The problem is that some officers are dismissed on a political whim,’ he said. ‘We have had circumstances where new leaders have openly said, during their election campaign, that they would “get” the chief executive if elected. We have also had chiefs forced out for exposing member corruption.’
Clark added that the commission should investigate ‘boomerang boss’ cases, where the executive is paid off only to return to a similar job elsewhere in the sector. The inquiry should also examine cases where competent chiefs were pushed out of councils, stigmatised, and never able to work again.
Chris Leslie, director of the New Local Government Network, said councils were becoming aware of the need to rein in excessive pay-offs.
He noted that the tension between officers and elected members served as a check-and-balance system as long as both sides acted responsibly.
Leslie said councils were some of the most transparent bodies in the public sector. ‘I would widen this out to other public agencies like PCTs, police authorities, quangos and the civil service,’ he told Public Finance.
Local Government Association chief executive John Ransford said it was up to councils to decide who they should hire but added: ‘It is right that chief executive pay is subject to public scrutiny.’
