Pickles issues extra guidance on pay and accountability in local government
All pay-offs worth more than £100,000 for senior officers in local government should be presented to full council for approval, the Communities Secretary has recommended.
Eric Pickles said the move would mean that elected councillors had the opportunity to vote and give their democratic consent to the pay-off package.
The recommendation is contained in new supplementary guidance under s. 40 of the Localism Act 2011, amid concerns that not enough councils had used the original guidance from February 2012 to review their arrangements.
The Communities Secretary also confirmed that he would be pressing ahead with plans for changes to dismissal and disciplinary proceedings.
Amendments to the Local Authorities (Standing Orders) (England) Regulations 2001 will mean local authorities are no longer required to appoint an independent investigator to review misconduct by senior officers before they can be dismissed.
The proposed changes are currently the subject of consultation with the Local Government Association.
In a letter to leaders of local authorities in England and chairs of fire and rescue authorities, the Communities highlighted a number of aspects of the supplementary guidance.
He wrote in particular:
- “Members should ensure that pay policy statements are set out clearly, that they fully address all of the requirements of the Localism Act 2011 and accompanying guidance, and are accessible. While all authorities prepared a pay policy statement for 2012-13, not all could be found easily, for example from a simple search of the authority’s website. This should change.
- “Full Council should be given the opportunity to vote on salary packages of £100,000 or more. I was disappointed that, for 2012-13, not all authorities chose to articulate in their statement if this was being done. This should be made absolutely clear. In addition, those authorities who may not have senior posts over £100,000 should seek to achieve the same degree of openness and accountability by adopting a lower threshold for votes, appropriate to their local circumstances.
- “Full Council should also be given the opportunity to vote on severance payments over £100,000. Many believe that pay-offs to senior local government staff are excessive and too frequent. The Localism Act brings out into the open the approach taken to severance across the sector. There is a clear case for going further and ensuring that, as well as approving their authority’s policy on severance, Members are able to consider each time it is proposed to spend local taxpayers’ money on a large pay-off. This follows on from my announcement in November 2012 where I said that I intend to remove the costly and bureaucratic requirement for a designated independent person to investigate allegations of misconduct by senior officers from the Local Authorities (Standing Orders) (England) Regulations 2001. I am currently consulting with the Local Government Association and others on the draft regulations to give effect to these changes.
- “Finally, our expectation would be that where councils have directly elected mayors, they would involve the directly elected mayor and have regard to any proposals the mayor may have before the statement is considered and approved.”
Pickles continued: “In considering and approving their council’s pay policy statement, members have an opportunity to demonstrate that they are seeking to protect the interests of local taxpayers. Ensuring that their authority follows the principles set out in this guidance will help members to do so.”
The Communities Secretary said he would review how authorities had addressed these issues in their pay policy statements for 2013/14.
“If it appears that authorities are not following specific aspects of this guidance - and are therefore not achieving appropriate levels of openness and accountability in the setting of policies on pay and reward - I may take steps to require authorities to adopt particular policies,” he concluded.
On the changes to the 2001 regulations and the removal of the designated independent person role, the Department for Communities and Local Government stressed that if councils wished to dismiss an ineffective chief executive they would still be required to gain a resolution from the full council. The council would also still have to approve the dismissal of a monitoring officer or chief financial officer before any dismissal proceedings could occur.
It added that the designated independent person process had been intended to protect officers with senior corporate functions from dismissal motivated by political or relationship issues. “However, there were significant concerns about how the process operated in practice,” it said. “The process has become onerous and expensive.”
In response, Cllr Steve Bullock, Chairman of the Local Government Association''s Workforce Board, said: "Local government already has a high level of democratic oversight and accountability for decisions on senior pay and severance packages. In local government we have embraced transparency to a degree not matched in other parts of the public sector. Councils already publish details of all posts paying more than £58,200 per year. Overall we are seeing a downward trend in senior pay as councillors tighten spending, with a reduction in the number of middle and senior managers providing a 12.5 per cent cut in overall management costs between 2011 and 2012.
"Councils have to operate within the laws and guidance set out by central government. Previous termination proceedings reflect that and the need for the process to be legally robust, fair to both sides and flexible enough to meet the demands of specific circumstances."
Cllr Bullock added: "Councils are the most democratically accountable part of the public sector and they are very much alive to these issues. The LGA's national pay policy guide already covers most of the points raised in this guidance. It is important that all parts of the public sector adopt a similarly rigorous approach."
