Chief executive salary rises ‘far outstrip’ other staff

Executive pay rises across the public sector – including those enjoyed by council chief executives – far outstrip rates for other staff and may soon be curtailed, according to a new report.

A study by the independent Incomes Data Services warns that government attempts to hold annual public pay rises to 2% could be undermined by deals that have seen salaries for many local authority chief executives soar above £200,000.

While the IDS report focuses on a range of senior public sector salaries – highlighting annual pay rises of 7.6% across NHS foundation trusts – the growing gap between senior salaries and other staff could soon become a sticking point as local government seeks to restrain costs.

Executive remuneration has a minimal impact on issues such as annual council tax rises, but is politically sensitive. As the recession bites this year, local residents and trade unions will not look kindly on a widening gap between average incomes and senior pay.

Steve Tatton, editor of IDS public sector pay reports, said senior public staff justify their rises by pointing to the increased responsibility of managing hundreds of staff and being held to account by government targets and a raft of inspections.

But Mr Tatton also warned: ‘Unease about the widening gap between senior executives and the rest of the workforce is growing in both the public and private sectors.’