Are local authority chief executives paid too much? John Wrymouth compares public sector salaries
March 2009
I can get quite worked up about massive salaries and monumental pay-offs, especially when I’ve had a drink or two, or looked at statements from my personal pension provider. The most recent indicated that my fund was substantially less than the money I had contributed over the past God-knows-how-many-years and that if I wanted to look after my family I should do the decent thing and die at my keyboard at the age of 85.
But I find it hard to get cranked up about the revelations that some local authority chief executives get £240,000 a year. Sure, I would like the salary, and the pension benefits that go with it, but getting the best part of quarter of a million for running an organisation that employs around 20,000 people, doesn’t strike me – as some commentators have described it – as ‘obscene’.
Let’s put this into some kind of perspective. Sir Fred Goodwin, former chief executive of the Royal Bank of Scotland, is stepping into retirement at the age of 50 with a fund that guarantees him £703,000 a year. So, 15 years before most men retire, the man who put the bank into bankruptcy is going to get nearly three times as much for doing bugger-all as someone who is running a local authority.
Let’s take some other examples – from the public sector to make it fair. The chief executive of the Qualification and Curriculum Authority, the body responsible for last year’s monumental SATs cock-up in secondary education, gets £329,000 a year. The IT boss of HMRC, the organisation that put the personal details of 25 million people on disc and lost them in the post, takes home a salary of £264,000 a year.
Most local authority chief executives don’t get anything like the £240,000 a year that the bosses of, say, Newham and Wandsworth enjoy. According to the Audit Commission's 2007-08 report into top executive pay, the median local authority CEO salary is around £150,000. Still sounds like a lot until you read that a Chelsea footballer was recently fined over £160,000 for being drunk and abusive. And that was just two weeks’ pay…
It’s absolutely right that local authorities make clear how much their chief executives are paid. There’s no argument that during the current financial crisis the remuneration of senior managers should be closely scrutinised. But when we’re looking for fat cats that should be put on a strict diet, council bosses should be low on the list.