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Concern at council chief pay-offs Council chief pay-offs criticised
(about 2 hours later)
Almost a third of council chief executives who leave their jobs are receiving pay-offs, a local government spending watchdog report says. Council chief executives leaving their jobs early are pocketing an average pay-off of £256,104, a local government spending watchdog report has found.
The Audit Commission found some had received severance deals worth more than £500,000 and - over 33 months - £9.5m was handed out in total. The Audit Commission said of the 37 given severance deals by English councils since 2007, 13 got more than £300,000 and three more than £500,000.
The government said new ways to "claw back" taxpayers' money had to be found.The government said new ways to "claw back" taxpayers' money had to be found.
The Conservatives said the pay-offs were an "affront" and that councils had to provide "clearer guidance".The Conservatives said the pay-offs were an "affront" and that councils had to provide "clearer guidance".
The commission said the main reason for the deals - which affected almost a third of chief executives - was personal differences with elected council leaders rather than poor performance.
It recommended that, in future, severance deals should be fully disclosed and subjected to tighter scrutiny.
The Audit Commission found that, of 122 chief executives departing between January 2007 and September 2009, 37 had been paid off under mutually-agreed contract terminations.The Audit Commission found that, of 122 chief executives departing between January 2007 and September 2009, 37 had been paid off under mutually-agreed contract terminations.
The average amount was £256,104, but 13 gained more than £300,000 and three received more than £500,000.
'Quick-fix solution''Quick-fix solution'
The commission found competent chief executives had been laid off needlessly, often because of a personality clash with elected leaders, while those that were not up to the job were being paid off when they should simply be sacked. A total of £9.5m was handed out over 33 months.
The commission found competent chief executives had been laid off needlessly and those not up to the job were being paid off when they should have been sacked.
It recommends that consideration be given to advance "pre-nuptial" agreements setting out the specific grounds and terms for severance of contract.It recommends that consideration be given to advance "pre-nuptial" agreements setting out the specific grounds and terms for severance of contract.
Councils need talented people so they can improve on their record as the most efficient part of the public sector Local Government Association Councils need talented people so they can improve on their record as the most efficient part of the public sector Jo MillerLocal Government Association
For the government, Communities and Local Government Secretary John Denham backed the recommendations and wrote to Margaret Eaton, chairman of the Local Government Association, urging their adoption. For the government, Communities and Local Government Secretary John Denham backed the recommendations and wrote to Margaret Eaton, chairman of the Local Government Association (LGA), urging their adoption.
He said: "The Audit Commission report shows that too many chief executives are being dismissed because they have fallen out with council leaders - this can cost as much as £500,000 in some cases and is all too often seen as a quick-fix solution.He said: "The Audit Commission report shows that too many chief executives are being dismissed because they have fallen out with council leaders - this can cost as much as £500,000 in some cases and is all too often seen as a quick-fix solution.
"Taxpayers' money should not be used to resolve personal differences. It is time we find a way to change the rules so taxpayers' money can be clawed back where the system has been exploited..."Taxpayers' money should not be used to resolve personal differences. It is time we find a way to change the rules so taxpayers' money can be clawed back where the system has been exploited...
"Local government, like the rest of the public sector, needs to show that it can take the tough choices to make sure public money is used in a way that protects the frontline services which matter to people most.""Local government, like the rest of the public sector, needs to show that it can take the tough choices to make sure public money is used in a way that protects the frontline services which matter to people most."
Audit Commission chairman Michael O'Higgins said: "There have been a lot of assertions made on this subject, against the backdrop of concerns about public sector pay generally.Audit Commission chairman Michael O'Higgins said: "There have been a lot of assertions made on this subject, against the backdrop of concerns about public sector pay generally.
"Now the Audit Commission is laying out the facts and making recommendations aimed at protecting the public purse, as well as the rights of chief executives and council leaders.""Now the Audit Commission is laying out the facts and making recommendations aimed at protecting the public purse, as well as the rights of chief executives and council leaders."
'Huge organisations''Huge organisations'
For the Conservatives, shadow local government minister Bob Neill said: "Such payments are an outrageous waste of taxpayers' money and an affront to families facing soaring council tax bills.For the Conservatives, shadow local government minister Bob Neill said: "Such payments are an outrageous waste of taxpayers' money and an affront to families facing soaring council tax bills.
"There should be no rewards for failure, either in the public or private sector. There needs to be clearer guidance discouraging such redundancy payments and greater transparency about the pay and perks of senior town hall staff.""There should be no rewards for failure, either in the public or private sector. There needs to be clearer guidance discouraging such redundancy payments and greater transparency about the pay and perks of senior town hall staff."
Jo Miller, deputy chief executive of the Local Government Association, said: "Council chief executives are responsible for huge organisations with budgets of anything up to £1bn a year, running services that are vital to every family in Britain. Jo Miller, deputy chief executive of the LGA, said: "Council chief executives are responsible for huge organisations with budgets of anything up to £1bn a year, running services that are vital to every family in Britain.
"Councils need talented people so they can improve on their record as the most efficient part of the public sector. In deciding salary levels they need to balance that with the need for all salaries to be demonstrably reasonable."Councils need talented people so they can improve on their record as the most efficient part of the public sector. In deciding salary levels they need to balance that with the need for all salaries to be demonstrably reasonable.
"It is right that chief executive pay is subject to public scrutiny. All council senior pay and severance packages are subject to scrutiny by external auditors."It is right that chief executive pay is subject to public scrutiny. All council senior pay and severance packages are subject to scrutiny by external auditors.
"Council leaders are very aware of the impact of decisions about senior staff as they are subject to the voters' judgement through the ballot box.""Council leaders are very aware of the impact of decisions about senior staff as they are subject to the voters' judgement through the ballot box."