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National politics

You’re worth it

Today the papers are reporting on Eric Pickles’ plans for reform of local government, see FT, Times, Guardian and Evening Standard. Pickles is the Shadow Communities Secretary. A lot of the reporting has talked about town hall “fat cats”, ie highly paid council staff, in particular chief execs.

The reported comments from the LGA in the Times really need challenging, namely:

The Local Government Association argues that its chief executives are paid modestly compared with private and public organisations with comparable turnovers and staffing levels. Paul Coen, the head of the association, has pointed out that a chief executive at a big council could earn on average more than twice as much in a public or private organisation of a similar size.

It seems (see The Red Box blog in the Times) that Coen is on the way out. No wonder as he is really talking crap here.

As capable as many local authority chief execs are they don’t have to create and sell stuff. They just work out their costs, find out what the government grant will be and ask council tax payers for the difference. Ideally they will be of a mind to keep those costs under control. Sure you want good people doing this but you don’t need the really expensive, talented people who can create and sell.

You shouldn’t compare council chief execs to corporate chief execs. More properly you might compare them to operations directors of equivalent sized commercial organisations in very mature industries where there is little or no growth.

I don’t always agree with the TaxPayer’s Alliance but their Town Hall Rich List published in March is a useful read. It put Ealing’s own Darra Singh at number 7 in the country.

Update: A reader points out this article in the Sunday Times 4th January which highlights up the rather dubious role that Solace Enterprises plays in the the setting of chief executives pay in local authorities. Solace is the Society of Local Authority Chief Executives.

4 replies on “You’re worth it”

Phil, why is it that

Ealing’s chief exec – 195k
Hillingdon chief exec – 100k
Hounslow chief exec – 135k

larger boroughs pay less for their chief execs. doesnt this show that Ealing is paying too much. “Value for money” was this administrations priority, surely it can extend to the Chief execs office.

Tom,

2001 Census figures for these three boroughs are:

Ealing – 300,948
Hillingdon – 243,006
Hounslow – 212,341

so I don’t think these support your argument.

Phil,
Theres no doubt that Ealing council officer salaries and pensions are pitched too high and the “chief exec” heads what is becoming an untenable pyramid at higher levels.
Although we all recognise there are many factors a people per £ ratio (2001 census) shows:
Hillingdon 2.43

Hounslow 1.57

Ealing 1.50

My own rough calculation is that Ealing is running 35% too high at the higher levels, mistakenly allowed to mushroom over the last few years, and no coincidence that service delivery to residents and infrastructure was in decline or stagnating until the change from Labour. It isn`t only the “chief execs” salary and pension which in itself may not make too much difference, but the top half of an expensive pyramid following on behind.
Another factor is to make sure, as far as possible, that council officers live locally and have empathy and local knowledge, as well as experiencing borough facilities and services firsthand.

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