Simon Cooke: Local authorities must offer high pay to recruit chief executives who are up to the job

15 Apr

Simon Cooke was a councillor for 24 years and served as a leader of the Conservative Group and Deputy Leader of Bradford Council. He is an activist with the Shipley Conservatives.

A few years ago, Bradford Council needed to appoint a new human resources director and, as leader of the Conservative Group, I sat on the appointment panel. We had a practice, a good one I believe, of using external advisors to help with senior appointments – and we had agreed to a job and person specification that reflected the council’s need for stronger leadership in HR and industrial relations. A lead we needed to help resolve longstanding problems with sickness absence; to face down other senior managers reluctant to make real changes to managing the council’s people; and a person who could put an end to the catalogue of appeals and tribunals brought about by sloppy management of grievance and discipline.

We reviewed a long list of candidates, interviewed a shortlist, and decided on the best candidate. She was offered the job. As we were concluding what we thought was a good process that would result in some real change, our external advisors told us we may need to have a reserve as the candidate may ask for more than £100,000 as a salary. We had already been advised that all the candidates would be taking a substantial pay cut to move from a similar role in the private sector. The candidate duly asked for more than £100,000 and the leader was unwilling to take the appointment to a full council meeting for approval. The same went for the reserve candidate. We didn’t appoint.

The result of this was that HR leadership in the council did not sit at the top table, we did not get our problems resolved, and this cost the council hundreds of thousands in lost productivity, unnecessary tribunal costs, and stalled industrial relations.

Bradford Council’s gross budget is £1,237 million and it employs thousands of people doing a bewildering variety of jobs and delivering everything from emptying your bin every week, through to caring for vulnerable elderly and disabled. Assuming we want councils to run these services well, it is right we ask how we get good management and leadership. While I understand Harry Fone and the Taxpayers Alliance’s concerns about high pay, they do not tell us what we should be paying the chief executive of a billion pound a year public sector organisation? Or the rate for a head of legal services, a finance director, or a human resources lead? Or a consultant in public health?

In every area of their work, councils compete for the best people with the private sector, whether it is lawyers, accountants, IT specialists, or HR experts who the private sector is willing to pay significantly more than councils to get the right skills. By pointing at councils and shouting, “fat cats” and requiring full council meeting approval for roles paying over £100,000, we discourage the best people from staying in local government or those outside the sector seeing working for a council as a good career move.

England’s local councils will spend nearly £50 billion in 2021/22, yet we run headlines based on the relatively minor impact of paying higher salaries to get better senior staff. It is true, as the TPA point out, that Croydon, Liverpool, and Nottingham do not provide a great advertisement for local government leadership. But the problems in these places are problems that stem largely from political choices, not professional incompetence. Similarly, the persistence of employment contracts no private organisation would allow and a preference for paying off failed managers, rather than dismissing them, reflect political weakness as much as poor management.

All we can infer from the TPA argument is that somehow we would get better management in councils if we paid senior managers less? I am not sure how this works, but it does seem odd that, when the average FTSE250 chief executive gets around £1.5million in pay, similar sized public sector organisations are being criticised for paying their chief executives less than £200,000. This is not an argument for paying council bosses as if they were directors of a multinational trading company, but it does point to us needing to bring a bit more realism to what we pay senior leaders and directors in local government.

I agree with those who say too many local councils, and too many Whitehall departments for that matter, are poorly managed, inefficient, and lacking in a service focus. But these failings are as much a consequence of not getting the best people in senior roles as they are about waste or levels of pay. Perhaps, instead of just planning new exciting local government boundaries or assorted semi-devolved new authorities, we should be asking what we want local councils to do, how much those functions will cost, and where the funding will come from.

The TPA do great work exposing government waste – from paying the wages of union officials to dodgy contracts – but their criticism of senior pay does local government a disservice and plays a part in those councils having poor management and leadership.

Harry Fone: Almost 700,000 council staff are paid over £150,000 a year

8 Apr

Harry Fone is the Grassroots Campaign Manager for the TaxPayers’ Alliance.

Despite everything the pandemic has thrown at taxpayers in the last year, they’ve still had to suffer yet another round of inflation-busting council tax rises. Analysis by the TaxPayers’ Alliance has shown that more than a third of local authorities in England are now charging over £2,000 for a Band D property. Over one hundred councils have now crossed the Rubicon, with many more surely planning to follow.

This is the latest development in a long-running tale of tax hikes. In less than 20 years, bills in England have increased on average by 111 per cent in cash terms. This year, out of 147 authorities who could increase council tax by the maximum amount of 4.99 per cent, 89 councils (61 per cent) did so. Consequently, the average bill is £1,898 – more than £300 higher than it was in 2018-19.

In Wales, the double-digit rises we’ve previously seen seem to be on hold, but bills are still climbing. Scottish ratepayers enjoyed a council tax freeze this year. This was only possible, however, thanks to a significant cash injection from the Scottish government. One way or another, the public will be footing the bill. That’s why it’s so important that local authorities do everything possible to keep rises to an absolute minimum.

A common defence from councils is that there is no more waste to find and they are focussing every penny on essential services despite years of central funding cuts. I’d have some sympathy for this argument, were it not for the fact that I continue to see example after example of taxpayers’ cash going down the drain. No sooner do they plead poverty and claim there are no more savings to make, than councils set up an energy company, set up a new pet project, or splash on pay rises.

That’s what we see in this year’s edition of the TPA’s Town Hall Rich List. Our list details all council employees in the UK who receive remuneration in excess of £100,000. The figures show that in 2019-20 at least 2,802 local authority employees did so. That’s an increase of 135 compared to the previous. 693 staff enjoyed pay packets of £150,000 or more – another increase.

Every region of the country – with the exception of the North East – has experienced an increase in the number of council bosses receiving over £100,000. Essex County Council topped the charts for the third year in the row, for the most employees taking home more than six figures.

Now at this point, councils argue that they have to pay these salaries to attract the best people for the job. In principle, I would agree with that. If council bosses are working hard, eradicating wasteful spending, ramping up efficiency, providing good frontline services, and keeping council tax bills under control, then residents have no complaints. But as I’ve seen first-hand, many authorities are simply not up to scratch.

Take Nottingham City Council. It employed nine members of senior staff receiving over £100,000 in total remuneration. What did local taxpayers get for their money? A failed council-owned energy company that suffered losses of nearly £40 million. In 2021-22 residents will endure the highest Band D council tax bill in the whole of the UK, at a staggering £2,226.

And consider the shambles we’ve seen at Liverpool City Council in recent weeks. The Town Hall Rich List revealed 14 staff got more than £100,000, 5 of whom enjoyed more than £150,000. The total cost of these wage packets came in at over £2 million. Liverpudlians pay the highest council tax (Band D) bills in the North West at £2,129, yet their council has let them down terribly. Residents are paying top dollar and not getting bang for their buck.

Wherever we live in the country, we can all think of a council like that. Look at the top 20 list of highest remunerated employees and some familiar names pop out. Nathan Elvery, former chief executive of West Sussex County Council, took home £427,653 which included a loss of office payment of £170,000. He left the job following a report which documented “systemic and prolonged” failures in children’s services. But this was nothing compared to the £395,110 golden goodbye that Coventry’s deputy chief executive, Martin Yardley enjoyed. His total remuneration was over £570,000. During his four years in the top job, Band D council tax bills increased by £312.

Examples like this are exactly why we fought so hard for a cap on exit payments. Despite the short-lived life span of the legislation – which was introduced last year only to be revoked in March – it’s reassuring to hear that the chief secretary to the Treasury, Steve Barclay, is keen to reinstate a cap as soon as possible. Based on what we see in this latest Town Hall Rich List, I urge him to act quickly.

As I’ve written previously, the examples above are just the tip of the iceberg. Undoubtedly many more will be uncovered in the coming weeks and months. The TPA’s inbox is flooded daily with tip-offs from angry residents complaining about their council’s wasteful practices. Residents expect their councillors to be holding town hall bosses to account and putting an end to these wasteful practices. Instead, we’ve seen multiple instances of councillors voting to increase their own allowances during the pandemic.

It’s quite possible that in 2022-23, nearly two-thirds of English councils will be charging over £2,000. This can’t go on. Getting spending under control and reining in overly generous salaries is one of the surest ways to keep bills as low as possible. Otherwise, well-paid bosses should be spending time finding savings elsewhere. Taxpayers expect nothing less.

Harry Fone: Councillors in Walsall give themselves a big increase in allowances

9 Mar

Harry Fone is the Grassroots Campaign Manager for the TaxPayers’ Alliance.

As I’ve argued from day one, many local authorities simply don’t have their priorities right. This seems particularly clear in Walsall where councillors have awarded themselves a pay rise – although opposition members voted against it.

The basic allowance for members will now be set at £11,938 – an increase of over £500. But since 2017-18, remuneration will have risen by over £1,000. When it came to pay for special responsibility allowances (SRAs), there were huge hikes. Four options were proferred by an independent remuneration panel – the least expensive costing taxpayers just shy of £65,000 and nearly £110,000 at the high end. Councillors opted for the most expensive option. The council leader will see his SRA rise from £22,841 to £33,325 – a 45.9 per cent increase. The deputy leader also enjoys a significant bump of £5,698 and cabinet members receive a £5,356 boost to their allowances.

At the same time, a council tax rise of 4.99 per cent has been approved. If you include parish precepts, residents of Walsall have seen their bills shoot up from £1,600 (Band D) in 2015-16 to £2,007 in 2020-21. Bills are likely to exceed £2,100 for the coming year.

This double-whammy of councillor pay rises and tax hikes isn’t fair. Many households have suffered profound economic hardship in the last year. Councillors should consider their plight before awarding themselves lavish allowances.

Saving for a rainy day

With many local authorities increasing tax by the maximum permissible amount, it’s often interesting to read their justifications for doing so. A statement released by Tunbridge Wells Borough Council (TWBC) mentioned it will have to “bear a quarter of the expected £3 million loss of income for 2020/21”. They could have covered the loss easily had they not wasted cash on a vanity project that never left the drawing board.

Back in July 2019, the TaxPayers’ Alliance campaigned against plans by TWBC to spend £108 million on a controversial development. Calverley Square was an ambitious plan to relocate the council headquarters – and build a theatre, office block, and underground car park with plenty of public space. There was a vociferous backlash from the local community even before it was revealed that a loan of £77 million would be required. Worse still, it would take half a century to pay back with yearly interest payments of £2.4 million.

As the TPA pointed out at the time this would have to be paid for by council tax increases and very likely cuts to public services. All the while the TWBC had a perfectly usable town hall that just needed refurbishing. Indeed this is exactly what happened. After cancelling the Calverley Square project, the existing HQ is being re-modernised for a fraction of the cost at £625,000.

Unfortunately, despite a spade never going in the ground, the doomed project still cost the taxpayer £10.6 million in legal fees and compulsory purchases. Things could have been far worse of course had the project gone ahead. But this is why it is so important that councils are careful with every pound of taxpayers’ money. They can’t afford to waste it, otherwise it will come back to bite them in future.

A place to call home

On the subject of council offices, Shropshire County Council has approved plans to build new premises at a cost of £12.5 million. On the face of it, the decision seems very sensible. The current Shirehall building is uneconomical to run and refurbishments are estimated at £24 million, although nearly £400,000 was spent on consultants to establish that.

It already owns the site it plans to develop – Pride Hill shopping centre was bought for £51 million in 2018. At the time it was argued that it would bring returns of £2.7 million of annual income. So the council seems to have given up on that now. Even before the pandemic, many organisations including the TaxPayers’ Alliance, have argued that commercial property is far from a safe investment.

You can’t change history though, the decision has been made and it makes a lot of sense to repurpose the site. But I have to question if the council has fully thought things through. Given the uncertainty around the economy, wouldn’t it be better to wait and see how the cards fall? After all, it is very possible that a glut of cheap office space could come onto the market, following more staff working from home and businesses going bust.

And who knows if £12.5 million will be the final bill. This is the council that splurged £130,000 of taxpayers’ cash to hire a ‘pothole expert’. As I’ve seen across the country, local authorities have a far from perfect record when it comes to big projects. Shropshire council must get it right; otherwise, it’s taxpayers who are left to pick up the tab.

Chris Whitehouse: Councillor allowances should go up, not down

1 Jan

Chris Whitehouse leads the team at his public affairs agency, The Whitehouse Consultancy, and previously served on South Bucks District Council and the Isle of Wight Council.

As an instinctive supporter of the initiatives of the Taxpayer’s Alliance, I was perturbed by the argument put forward by Harry Fone, the Alliance’s Grassroots Campaign Manager, that councillors’ allowances should be cut to reduce their annual cost of £255 million. This is short-sighted and would be completely counter-productive.

First, I am staggered that the total cost of such allowances is as low as £255 million to fund the thousands of individuals who give up their time to serve their local communities. If the sums in question were broken down over hours served, the rate for most councillors would be demonstrably insulting.

Second, Fone is identifying a problem correctly, namely that despite the generally altruistic desire to serve in public office, the current arrangements, in some areas, are not attracting candidates of the right calibre properly to set strategic objectives and to hold senior management to account for producing and implementing strategies to achieve them.

Third, for all local government’s moans about government interference and control, the reality is that councillors today, particularly during the pandemic, are in some cases taking decisions which impact directly on the life chances and the quality of life of thousands of their residents. Nothing has impressed me more than the way in which some of our councillor colleagues have stepped up to provide real leadership to their communities, to drive forward new school, public health, and social care strategies; to think outside the box about practical changes to policies that will help local economies and reconfigure services rapidly to meet their local need.

Even in good times, the relevant cabinet portfolio holders may have to make individual decisions of huge impact and importance: to close a school, to reorganise a service, to set budgets, to recruit senior officers, to close a care home and rehouse the residents. The responsibility is huge, and I have seen it weigh heavily on colleagues under pressure, and indeed on me when, for example, I found myself Children’s Services Portfolio Holder as an Academy Trust announced the closure of one of our local high schools on the morning of the elections to the council.

Very few councillors will ever have had to take such important decisions in their personal or professional lives – and council Cabinet Members certainly shoulder more responsibility than any backbench Member of Parliament – and I should know having worked in Westminster for nearly 40 years. Put simply, MPs have influence on government and law (a little) but local government makes decisions, day in, day out.

Let me be clear, I also served in local government for many years as both a district councillor in South Bucks and, more recently, as a member of the Isle Wight Council, which is similar to a unitary authority, but with a few shared arrangements with Hampshire. During my service on both councils, I never claimed any expenses, declined special responsibility allowances, and each year donated my basic allowance to local charities and voluntary organisations. I was happy to do so, because I could afford to at the time. But in most cases, the allowances really are paltry and are not the motivation of most councillors – of all political parties and none.

Take that allowance away and the practical consequence is the disbarring from public office of whole sections of the population, particularly carers and single parents, and those whose income ties them to a business or job with no flexibility. In short, the role starts to make sense only for those who no longer have to work, draw a pension, and have no caring or home-making responsibilities.

Do the Taxpayer’s Alliance really want councillors to be a self-selecting bunch of largely retired, white men? Because that’s what they will get if allowances do not attract individuals of calibre, of motivation, and of decision-making experience.

Tinkering with already modest, in some cases derisory, allowances will merely exacerbate the situation that in some areas we are already missing the input of younger talented individuals from a wider range of backgrounds, who can be trusted with their hands on the levers of power – for there really is power in local government.

No, we need to approach this from the other end. Given the huge, and growing, responsibilities of local government, and the pressure on and accountability of its cabinet members, what do we as a party need to do to ensure we are attracting and fielding the right candidates who can deliver effective and efficient services to our local communities? Local Government Secretary, Robert Jenrick, needs to set local government free to reinvent itself for its local communities after the pandemic, and encourage them to make their own decisions, for which they are accountable to their local electorate, about how best to recruit, retain, and motivate candidates of the highest possible calibre.

Harry Fone: £255 million a year is spent on councillor allowances. That is where the economy drive should begin.

30 Dec

Harry Fone is the Grassroots Campaign Manager for the TaxPayers’ Alliance.

The TaxPayers’ Alliance is well-known for scrutinising the pay of council bosses but our latest research has focused attention on allowances for elected representatives. In 2018-19 alone, the cost of councillors was at least £255 million. As witnessed across numerous local authorities, members vote through an increase in their allowances whilst often claiming they don’t have enough money for statutory services.

There was little surprise when an opposition councillor at West Sussex County Council (WSCC) met with fierce resistance after suggesting that cabinet members have their special responsibility allowances (SRAs) cut by 25 per cent. SRAs are typically paid to chairs of committees, cabinet members, and opposition leaders in addition to a basic allowance.

At the heart of the dispute were plans to cut the SRAs of the opposition leaders whilst cabinet members and committee chairs saw no decrease. It’s always welcome when councils make savings but some will question why the cuts fell almost solely on the opposition.

This spurred one opposition leader to propose an amendment calling for a cut in all SRAs. Even if this was an act of retribution, savings of around £90,000 a year would no doubt be well received by ratepayers. Councillors should be compensated for their efforts but the role should not be treated as a full-time job with a decent salary. Civic duty should be put above all else.

Given WSCC’s recent poor performance – notably “systemic and prolonged” failures in children’s services and the £265,000 golden goodbye to controversial former chief executive Nathan Elvery – you would think councillors would want to do everything possible to make amends with constituents.

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Across the border in East Sussex, Brighton and Hove City Council is forecasting a budget shortfall of around £15 million next year. With residents facing a rate rise of five per cent, it has to be asked if better decision-making might have mitigated such a large increase.

The ongoing saga that is the i360 observation tower is failing to deliver on its promises. Funded by £36.2 million of council loans (via the Public Works Loan Board) to a private management company, the 530 feet “doughnut on a stick” has never really got off the ground. Even before the pandemic, it was plagued with low passenger numbers and frequent breakdowns.

Adding insult to injury, loan repayments have regularly been deferred due to financial difficulties. To date, only £5.9 million has been repaid, with £33 million now outstanding.

One of the key players behind the project, former leader of Brighton council, Jason Kitcat, claimed back in 2014:

 “The project will provide a new source of income to help shore up vital frontline services.”

It seems there’s a long way to go before the council will see the estimated “£1 million a year” profit from its investment.

While residents are still shouldering the burden of this white elephant, Kitcat, a self-described “recovering politician” has fared rather better financially. After being asked to stand down as council leader by his own party, he became the Executive Director of Corporate Development at Essex County Council. A role that remunerated him to the tune of £190,000 in 2018-19 and gifted him a payout of nearly £164,000 when he left shortly after.

Let’s hope for a change in the i360’s fortunes so that local ratepayers see a ‘recovery’ in the council’s balance sheet.

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Following a recent government review, fears are mounting that Nottingham City Council (NCC) could fall foul of bankruptcy. As residents of Croydon and Northamptonshire know all too well, a Section 114 notice is far from desirable.

The similarities between Croydon and Nottingham are disconcerting. Both authorities engaged in ambitious commercial investments with well paid council employees lacking the necessary financial expertise, as borrowing exceeded £1 billion – Nottingham has the third highest debt to net budget of all the core cities.

Over recent years, NCC has seen its reserves dwindle mostly due to the collapse of its ill-judged energy company. Formed in 2015, Robin Hood Energy (RHE) tried and failed to compete in the highly competitive and regulated energy sector. Financed with £43 million of public money, RHE failed to make a profit in every single year of operation. Total losses are estimated at £38 million.

The government’s report is particularly scathing of RHE’s directors who are described as “unable to critically appraise the trading position and a forecast profit [£202,000] outturned as a significant loss [£1.6 million]”. Another damning report by auditors Grant Thornton went further saying there was “institutional blindness within the Council.”

Despite warnings from NCC’s Section 151 officer about RHE’s worsening finances, the authority failed to take action. The report doesn’t specifically blame then chief executive, Ian Curryer, for failing to act but does state, “The Council does not appear to have a mechanism for setting targets and goals for its Chief Executive and holding the postholder to account for it.” Local residents may be irked to learn that between 2012 and 2020 Mr Curryer received total taxpayer-funded remuneration of over £1.3 million.

As Robert Jenrick, the Local Government Secretary, put it:

“Taxpayers and residents have been let down by years of disgraceful mismanagement and inept ventures”.

A series of recommendations have been put in place to turn the ship around but councils all across the country must learn from Nottingham’s mistakes.