Tuesday, February 15, 2011

Council 'Fat Cat' Salaries

Let us get something very clear: some of the top people in Local Government are grossly overpaid. It is impossible to justify salaries of over £200k for the senior staff of any Council, on the basis of the market alone, never mind against the fact that the Prime Minister only earns £142k.

Now, the argument has always been that you need the best people in important jobs, and you do. Further, the number to people who are genuinely talented enough to build and run a complex organisation is quite limited, but it is not that limited. Saving a few tens of thousands of pounds on a salary in order to employ second-best will certainly end up costing you more, maybe much more. However, it is a bit of leap from this to the vast remuneration some Council Chief Executives earn. Then you get people like Richard Kemp, the vice-chairman of the Local Government Association. He was reported as saying:
Running councils is significantly more complicated than running a private company. They may find themselves dealing with cases like Baby P one minute and a £1 billion private investment the next. Most council executives are worth what they are paid.
This is world-class drivel. The idea that a Council is inherently more complex than a private company is rubbish, and the examples given of activities are easily replicated in the Private Sector. Baby P was a particularly unfortunate example. Did he forget that the highly-paid Local Authority staff actually failed completely and the poor child died? An example of Council excellence? Only if you are in a parallel universe.

What we are dealing with is the hangover from huge explosion of public sector costs courtesy of the former Labour government. This needs to be unwound, and good job for the government for facing the issue.

I will say though, the attention paid to this matter seems to me to be at least because it is easily understood. The sums involved are high, but not compared to a typical Council budget. The real financial problems in Local Authority finance are much deeper than high-end salaries.


Anonymous said...

The point that Kemp was trying to make, which you seem incapable of grasping, is that the consequences of failure in the public sector can be massive and devastating. This is a huge responsibility which needs to be recognised in the debate about Chief Executives pay. Comparisons with the private sector are always problematic, but the risk of shareholders missing out on a few quid if the Chief Exec of a major corporation fails to perform are not in the same league as the potential death of a child, for example. Any comparisons to the Prime Minister's pay are meaningless as anyone with an ounce of sense knows that his pay is based on political considerations rather than any objective assessment of the role and responsibilities.

Steve Horgan said...

Are you serious? The consequences of Private Sector failure can be rather more than 'the risk of shareholders missing out on a few quid'. Mismanagement of any large-scale private-sector industrial process can kill people by the dozen, never mind failures in things like air or rail transportation.

Anonymous said...

Yes I am serious. Every organisation has a duty of care towards it's employees and customers. The point I was trying to make is that that the PRIMARY objective of a private corporation is to maximise profits and shareholder value. The primary objective of a public sector organisation is to deliver public services to some of the most vulnerable members of our society and that is a responsibility that we ought to recognise and take into account in the debate about levels of pay.