14 November 2006

Profiting from performance?

Last month Oldham MBC announced a pay rise of £26k to its chief executive. Last week Cumbria CC hired an interim chief on the same salary as his predecessor. What links these two councils is that both had ‘weak’ categories in December’s CPA and both are now paying about the same salary, £130-134k to their respective chiefs. Both cases reflect the upward pressure on top salaries rather than CPA categories. Oldham’s four yearly pay review coincided with its ‘weak’ result which was ill timing. Cumbria however had initiated its own salary review a year before when the county was in a higher category, ‘fair’. One of the dire warnings made about the CPA when it launched was its impact on top salaries, both for high and low performing authorities. Chief executives and chief officers of high performers would be poached for telephone number salaries by the weak and the poor performers. In reverse the latter would find it so hard trying to recruit senior managers that they would have to hike up their top officer salaries to compensate. Increased salaries There is no question that top salaries have risen since the CPA was introduced, fuelled by the increased demands of the job which includes handling the CPA process as well. But it is the mounting pressure of the chief executive’s post coupled with a limited pool of talent from which to draw that has been the catalyst for big rises, especially in the mets. And as increases occur in one authority so neighbours feel obliged to raise their top salaries to prevent an exodus of staff. As one county leader recently told me: ‘We’ve got to give our chief executive a rise because he’s underpaid compared to his peers. It would be unfair to wait until he leaves before upping his salary.’ But a direct connection between salary and a CPA result is difficult to make. By the time it appears the CPA is already historic, any weaknesses either having been identified earlier by managers and members with the aid, perhaps, of peer review. And CPA – in theory at least – should only be a snapshot of strengths and weaknesses already identified by the authority, not a revelation. Management changes and rises therefore tend to precede publication of results. Salary rises have happened often irrespective of CPA results. At Oldham MBC, chief executive Andrew Kilburn’s rise was the first review of his package since he joined four years ago, though the council’s CPA is ‘weak’, and was ‘weak’ in 2002. At Doncaster City Council, graded ‘fair’ in both CPAs, a review has seen rises for the mayor and a salary of £115k to £145k for the new post of managing director, advertised this week. East Riding’s chief hit the headlines in 2002 over his £36k rise; the council was ‘good’ in 2002 and ‘excellent’ in 2003. Kent CC, an ‘excellent’ council, pays its chief £180k, about the same as Birmingham City (‘weak’). Other top payers are Sheffield (‘good’), Newcastle (‘good’), Hampshire (‘excellent’) and Hertfordshire (‘excellent’). Hull City (‘poor’) was paying its (since departed) chief £140k though his departure was nothing to do with the CPA result. The district effect Counties tend to be the highest payers and most are categorised as ‘fair’ and ‘above’. A survey by the Municipal Year Book last autumn showed that the average salary for a chief executive was £95k, about £10k higher than the previous year’s average, reflecting the lower pay at district level. Post-CPA movement among the upper tiers has also been less than expected, any changes tending to occur before results are published. Among the poor performers in 2002, virtually all the chief executives had either just recently been appointed or in post a year or two. And virtually all are still in post today even though their grading remains unchanged. And the two councils, Windsor & Maidenhead and East Sussex, which jumped from ‘weak’ to 2002 to ‘good’ in 2003 mainly because of social services improvements both did so under the same chief executive. Of the councils which dropped from ‘fair’ to ‘weak’, only Cumbria has seen a resignation at the top. What happens at the districts, however, is another story…
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