9 April 2024

Town hall fat cats are bursting at the seams


Incessant complaints from local authorities from Orkney down to Cornwall and everywhere in between have created an echo chamber of opinion that councils are underfunded and helpless. In other words, it is not their fault that they can’t deliver on their promises. Council tax will have to go up, and services will need to be cut.
But our Town Hall Rich List data shows a different reality.

After 17 years of compiling data on the number of council staff receiving over £100,000, the Taxpayers’ Alliance has demonstrated that many councils’ complaints are not as they seem. Many of us will not be shocked that public sector pay is high, but is it deservedly so? In 2022/23, 3,106 town hall bosses received six-figure remuneration packages, the highest in almost a decade. 829 received over £150,000, the most since we at the Taxpayers’ Alliance started compiling these lists. As the cherry on top of the cake, 175 people received over £200,000. All in the context of inflation-busting council tax rises.

There is no doubt that running a local authority is serious business. It’s hard work, consisting of meticulous planning, constant decision making and a keen awareness of community needs. Council bosses are in charge of huge budgets, often running to hundreds of millions of pounds. But pay should reflect results, and have council bosses truly earned it?

To be clear, what we are talking about is remuneration. This includes salary, but also includes pensions, loss of office payments, expenses, bonuses and more. It’s a more complete picture of the cost of a council boss to local taxpayers. And as stated, these packages are getting steadily more handsome. Indeed, some are running well into the hundreds of thousands of pounds. For the hows and whys, we need to take a look at some individual councils.

Hampshire took the top spot for the highest remunerated council boss. The now former Director of Culture, Community and Business services received £651,158 in total remuneration. Comprising a £120,133 salary, £121,203 loss of office payment and a hefty £409,822 pension payment. This is a council that faces an £82m cash shortfall. There have also been warnings that they may have to issue a section 114 notice after already making significant cuts to public services.

Hambleton paid four senior staff members loss of office payments that reached our top ten table. The grand total was just under £1m, with the highest individual amount paid to the director of environment, £281,865. These came as part of a reorganisation of local government in the area, with seven district councils including Hambleton and the county council abolished and replaced by a unitary authority.

And there are concrete actions that can be taken, at least to deal with the largest and most egregious of these payouts. Firstly, with the largest there’s a clear trend. The most eye-watering comes as a result of huge exit payments, or golden goodbyes. This is an area where policy can really make a difference. We’ve long campaigned for a cap on these payouts, of £95,000. It’s absurd that public sector workers can take home such huge redundancy payments when often, as in the case of the Tower Hamlet chief executive, they often just move on to the next public sector job as part of the local authority merry-go-round.

Secondly, accountability is key, and the proposals of Paul Bristow, MP for Peterborough, are instructive. He’s brought to parliament a Bill which would require council sign-off for all salaries in excess of £100,000, which would tighten up and standardise a pretty messy system for working out senior pay which blends local decision making and national pay bargaining groups. It’s also why ministers need to bring in stricter reporting requirements for councillors and their auditors when it comes to meeting deadlines for publishing accounts. A record 59 local authorities failed to do so this year.

Councils defend generous packages as the price associated with attracting and keeping talented executives. Private sector competition requires the public sector to keep up to ensure that invaluable staff are not poached by outside firms. So they say. But the reality is that on pretty much all measures – pay, pension, job security and flexibility – those in the public sector have it better than their private sector counterparts, much better. Yet councils are still struggling.

Given how much so many of us pay in council tax, residents have a right to know how their money is being spent, and how much their council bosses receive. Councils claim to be constrained by their budgets, but our latest town hall rich list suggests otherwise.

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Joanna Marchong is Investigations Campaign Manager at the Taxpayers’ Alliance.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.