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Osborne to ‘rein in’ councils with new guidance on hefty wages and payoffs

Chancellor George Osborne will issue guidance to local authorities on wages and press on with payoff caps after an investigation revealed that almost 600 council chiefs earned more than the prime minister in 2013-14.

The Daily Mail analysis, in association with the Taxpayers’ Alliance, looked at almost 6,000 FoI responses to pinpoint the highest-earning local authority managers in the country – 10 of whom earned more than £300,000 last year. Almost 3,500 council staff took home more than £100,000.

The highest-earning officer, Cumbria’s chief executive Jill Stannard, pocketed nearly three times as much as David Cameron last year, and 16 times the average wage of her county.

Similarly, the chief executive at South Tees Hospitals NHS Foundation Trust earned around £225,000 – a £35,000 rise on the previous year – but had her salary package lifted to £1.26m after bulky pension benefits.

A considerable slice of these earnings also comes from massive redundancy payoffs, pensions and bonuses – a part of which was found to be invested in private medical insurance and to silence council staff after scandals or blunders.

Responding to the figures, the chancellor said: “Taxpayers’ money shouldn’t be used to pay for private medical insurance, gagging orders to cover up bad practice aren’t justified, and salaries above a certain level should be approved through a formal process and published to the public who foot the bill know what’s going on.

“I intend to issue new guidance sending a clear signal to public sector employers on pay and terms – setting out what I, and I suspect most taxpayers, see as unacceptable.

“What this shows is the scope that remains for savings at a time when budgets need to be trimmed. We’re determined to do all we can to rein in excess where we find it.

“So we will claw back redundancy payments for high earners who leave and then return to the public sector within a year – and change the law so that public sector payoffs are capped at £95,000 even for the highest-paid public servants.”

Consultation on the public sector exit payment cap finished last week (3 November). Although the investigation draws up a case for the cap, the Society of Authority Chief Executive and Senior Managers (Solace) recently warned that it will actually hinder the transformation of local government – as well as penalise councils and make younger staff redundant.

It strongly opposed the regulations outlined in Whitehall’s consultation, believing the cap will create “unnecessary regulatory barriers” when combined with the cumulative impact of previous measures to “constrain the pay and pensions of senior staff”.

(Top image c. Richard Stonehouse, PA Wire)


Kate   09/11/2015 at 13:58

George Osborne needs to take his blinkers off. His inherent suspicion of the public sector manifests itself an a never ending stream of penalties and punitive measures such to the extent that he is overreaching himself now to put a cap on salaries simply for the sake of it. How about looking at it as a value for money exercise. What do those top earners do for their salaries? Are they responsible for leading an efficient and effective local government authority which saves the tax payers money? If so, do they not deserve their salaries? George Osborne's fiscal fist has lost all sense of balance and simply serves to undermine local government and cast scrutiny on the basis of salary rather than performance and leadership.

Annette Simpson   09/11/2015 at 14:31

As a District Councillor I am constantly being advised by my Council that, I and others who are locally elected by the public are the ones who should, sorry do, actually run the Council. The Officers, at any level, should be there to advise and support. The level of pay for support and advice seems extraordinarily high in some instances.

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