Excessive payoffs for local government chief executives set to end

http://www.guardian.co.uk/society/2012/nov/09/payoffs-local-government-chief-executives

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Measures to make it easier to dismiss highly paid but incompetent local government chief executives without excessive payoffs are to be introduced by the communities secretary, Eric Pickles. He will also urge more councils to consider abolishing the role of chief executive altogether or to try to merge the post across councils.

Pickles says slow and costly bureaucracy, unique to the role of a local council chief executive, requires councils to appoint an independent person, usually a QC, to review dismissal and disciplinary cases involving chief executives. He claims the costs of these cases can be so big that councils often prefer to give chief executives generous payoffs rather than go through an expensive legal process.

The Isles of Scilly council has recently suspended its chief executive pending one such investigation. The review process can cost between £100,000 and £250,000 excluding investigation costs and salary for the suspended officer. One case cost £420,000 and took 16 months to adjudicate, ministers say.

There have been repeated complaints in recent years over the size of some council chief executive payoffs.

Ironically, the rules were originally introduced by the Conservatives in the late 1980s to protect chief executives from being dismissed by a political party for political reasons, particularly if there had been a change in political control of the council after an election.

Pickles believes dismissal decisions taken by full council would ensure sufficient democratic accountability, so dispensing with the need for an automatic legal review.

Allies of Pickles pointed out that the post of chief executive is not set in statute, which means there are no central barriers to removing the role altogether. It only takes a democratic decision by the council. Four councils have dispensed with a chief executive in the past year.

Pickles said: "A town hall chief executive costs a lot of money, but if they are simply not up to the job, councillors must be able to get rid of them quick-smart without having to throw away thousands in parachute payoffs.

"It is ridiculous that councils feel forced to give bumper payoffs to dismiss inadequate chief executives simply to avoid these unnecessary golden goodbye reviews from expensive lawyers.

"Scrapping this bizarre bureaucratic ritual will save taxpayers money and put the decision firmly back in democratically elected hands."

The move was welcomed by Matthew Sinclair, chief executive of the TaxPayers' Alliance.

"Chief executives at successful councils have nothing to fear from this change but it will stop any complacency among those who aren't doing what they can to deliver value for money," he said. "Elected councillors need to be able to change a chief executive without paying a reward for failure at the expense of local residents."

The Localism Act requires councils to publish their pay policies so that local remuneration arrangements – particularly for chief officers – are out in the open. The associated guidance states councils should vote on pay deals over £100,000.

Recent analysis by the trade press showed that salaries for newly appointed chief executives between January and June 2012 were, on average, 11% lower than before.