Council chiefs' pay 'correlates to performance'

22 Sep 10
The more council chiefs are paid, the better their authority performs, latest research has shown
By Jaimie Kaffash

22 September 2010

The more council chiefs are paid, the better their authority performs, latest research has today shown.

In a week when a Panorama investigation revealed that many chief executives of local authorities earn more than £200,000, pollsters Ipsos Mori showed that councils with higher-paid heads improve better than other authorities.

The average top salary at a council judged to be ‘improving strongly’ is around £185,000. This is in comparison with around £162,000 at authorities that are ‘not improving adequately’.

The highest paid chief executive is Gerald Jones at the London Borough of Wandsworth, who earned £299,925 this year. Wandsworth scored the highest resident satisfaction rate in the latest Ipsos Mori place survey.

Ispos Mori chief executive Ben Page told Public Finance that these pay patterns in local government contrasted with those at FTSE 100 companies, where there is little correlation between the company’s performance and the leader’s salary.

‘The salaries might be higher than [Local Government Secretary] Eric Pickles might like, but there is an element that you get what you pay for in the sector,’ Page said.

Work Foundation executive vice chair Will Hutton is currently leading a review into public sector pay, to look into ways of implementing Prime Minister David Cameron’s pledge that no public sector employee can earn 20 times more than the organisation’s lowest paid worker.

James Hulme, director of communications at the New Local Government Network, told PF that there was a contradiction between the government’s promotion of localism and pledges such as this one.

‘I think on the one hand the government has been very happy to set out a framework that allows local authorities to take decisions in lots of different areas, but on pay there is still the temptation to dictate what levels should be,’ he said.

‘The government has said it will allow councils to veto what they deem excessive pay deals for non-political staff, so why not leave it at that? It smacks of the panic-driven initiative that typified a lot of the last government. It doesn’t seem to relate to the localist approach that the coalition government are trying to take to lots of different issues.’

A Treasury spokeswoman said that central government had no direct control over what councils pay their staff. But, she added: ‘We do expect them to follow suit.’

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