Page last updated at 10:50 GMT, Friday, 27 February 2009

Councils 'to reveal bosses' pay'

Recycling bins in Southwark
Around 20 council heads are believed to earn more than the prime minister

Councils in England will be forced to publish information on how much their chief executives earn under planned legislation, the government has said.

Local Government Minister John Healey said the "spiralling" pay of some council chiefs needed to be countered.

But David Clark of the Society of Local Authority Chief Executives said that his members carried out "big complex jobs requiring people of real talent".

English council tax bills will rise by 3% on average, a BBC survey suggests.

The study by the leading accountancy body CIPFA, based on returns from nearly 75% of councils, indicates that the average band D home bill will rise by just over 40 to 1,414.

'Pay-offs for failure'

Across the country, around 20 council heads are believed to earn more than the prime minister.

While Gordon Brown receives an annual salary of 194,000, the heads of Newham and Wandsworth councils earn more than 240,000 each year.

If that was a private sector job, they would have three times the income
David Clark
Society of Local Authority Chief Executives

But many local authorities raise legal objections to attempts to find out details of some of the top earners, while others require formal Freedom of Information requests.

Mr Healey said the government had decided to legislate to reveal the full picture of what senior councils officers are paid.

"We've seen in some councils' salaries spiralling, we've seen some big pay-offs for failure, and that can't go on," he said.

"I think the public need to know the full picture. That's why I'm going to change the rules."

Philosophy change

Earlier this month the Conservatives, also said councils should be forced to publish detailed information on expenditure, including senior staff's pay and perks, and proposed guidance to stop "rewards for failure" for sacked staff.

But Mr Clark said local authority chief executives were worth their salaries.

"The average shire county, for example, employs 22,000 people," he said.

"If that was a private sector job, they would have three times the income."

It is not only councils which have seen large top-level wage rises - one housing association chief executive took home 327,000 in the last financial year, while the highest-paid official at Transport for London earned 540,000 - including a pay-off.

South East, 1,436 (+3.4%)
London, 1,307 (+1.2%)
East of England, 1,450 (+3.0%)
East Midlands, 1,454 (+3.3%)
North East, 1,479 (+3.5%)
North West, 1,441 (+3.3%)
South West, 1,462 (+3.5%)
West Midlands, 1,388 (+3.3%)
Yorkshire and Humber, 1,380 (+3.3%)
Average figures for band D houses, England, 2009-10. Source: CIPFA

The moves come amid increasing scrutiny of salaries in the private sector, which have been used in recent years as a justification for big increases in the wages of local government chiefs.

Prime Minister Gordon Brown has said he is "very angry" about proposed bonuses for executives at banks bailed out by the taxpayer. And ministers have condemned former Royal Bank of Scotland chief executive Sir Fred Goodwin for keeping his 16m pension pot.

The Chartered Institute of Public Finance and Accountancy (CIPFA) survey found that London is set to see the lowest council tax rises over the next year, of just over 1%, but bills in the South West and North East will rise 3.5%.

Above inflation

Inflation is currently 3% when measured by the official Consumer Price Indexes measure, but is expected to fall further.

And the Retail Prices Index, an inflation measure which includes mortgage costs and is often used in wage negotiations, has already fallen to 0.1%.

The latest research by CIPFA suggests that several councils in London are freezing or even cutting bills in response to the economic climate.

The government has said "excessive" increases in bills will not be tolerated and they urged councils to make further savings to ensure that core services are not affected during the recession.

The Conservatives have said they will freeze council tax for two years if they are elected. The Liberal Democrats say they would scrap council tax altogether and replace it with a new local tax, based on income rather than the value of a person's home.

Graphic showing council tax rises in England and Wales

English council tax 'to rise 3%'
25 Feb 09 |  Politics
'Half' of councils have cut jobs
26 Feb 09 |  Politics

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