Council chiefs’ pay cut in real terms last year

9 Mar 12
Local government chief executives’ pay has stopped rising, research by Incomes Data Services has shown.

By Vivienne Russell | 12 March 2012

Local government chief executives’ pay has stopped rising, research by Incomes Data Services has shown.

Payslip

The average salary increase was 0.8% in the past year, with the median 0%, the employment researchers found. With inflation running at 4%, that means chief executives had a pay cut in real terms.

With widespread pay freezes across the public sector, many council chiefs have frozen or cut their own salary or have forgone bonuses, while in some authorities senior vacancies are being advertised at lower rates of pay.

Jessica Matthews, senior researcher at IDS, said the costs of running councils had started to come down in the past year.

‘Pressure over senior level pay in the public sector meant that there were very few pay increases, with a handful of chief executives even taking pay cuts as public scrutiny intensified,’ she said.

‘Similarly, the voluntary waiving of bonuses by a minority of chief executives reflects a broader trend of restraint over the past year, as it seems that receiving incentives while freezing or cutting the salaries of more junior staff has become unacceptable.’

The growing practice of sharing chief executives between boroughs was also affecting senior pay in local government, IDS said.

Although this will cut the senior payroll in the short term, the researchers say, over time it could push average pay up as fewer executives are paid more to take on extra responsibilities.

The IDS report also revealed that the top-earning council chiefs tended to work in London and the Southeast, with the lowest paid found in small, rural district councils.

Responding to the report, a Department for Communities and Local Government spokesman said that it was ‘encouraged to see the brakes are being applied to chief executive pay’.

Ministers have previously called for council chiefs to cut their pay, and the spokesman said that ‘in the current economic climate any excessive rises would be indefensible to the public’.

He added: ‘The transparency code and Localism Act are opening up pay practices and senior salary arrangements to public scrutiny so that taxpayers know with certainty that local pay is fair, fit for purpose and fully “democracy proofed”.’

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