Senior Manager's Pay

Senior managers pay in the public sector cannot be looked at in isolation from the private sector.

Senior managers in the private sector are paid substantially more than those in the public sector.

This includes the former publicly owned utilities which have moved into the private sector.

Some have remained such as water including Welsh Water or Dwr Cymru as monopoly suppliers. The energy industry has moved from a monopoly to an oligopoly. This means that according to game theory, the decisions of one firm therefore influence and are influenced by the decisions of other firms in the industry. Which means senior salaries and senior salaries tend to follow each other.

The investigation by the Public Accounts committee included both public authorities and those who receive the bulk of their money from the public purse.

On recommendation 2 senior management pay in local government used to be easy.

Depending on the type and size of an authority a salary band existed for the chief executive. Following that the other senior staff were paid a percentage of the chief executives salary. This covered directors and assistant directors with staff below that paid on the APT scale.

Like most things that have gone wrong the change can be traced back to the Tory Government of 1979 to 1997.

The government wanted to remove the salary restraint and to bring market forces to bear and to allow local authorities to attract chief executives from the private sector.

What we have seen, certainly in Wales, is almost all the Chief Executive posts going to people already in Local Government, and often working for the same authority.

Salaries have risen substantially above the JNC salary level.

In England over 25 Chief Executives earn over £200,000 per tear with the Councils run by different political parties.

One of the ways that salaries have increased is by the use of consultants who produce comparisons based on the average.

Whilst those chief executives above the average do not generally seek a review those that are below often do.

What happens as the lower paid chief executives increase their salary the average moves up and the chief executives of the larger authorities seek rises to restore their differential. Thus there is an ever increasing average.

These increases are compounded by the advice of consultants on the salary needed to recruit “the best” which again moves the average.

I, whilst I accept I am in a small minority, would like to a reversion back to the JNC scale for chief officers.

The other way chief executives of local authorities have to increase their pay is by payment for additional duties such as returning officer.

Can I commend Swansea Council for including all the chief executives payments within the basic salary?

Turning to senior pay in the education sector.

Again Head-teacher pay used to be graded on the size of school. Another one of the Tory reforms alongside local management of schools was the ability to raise a head teacher who reached the top of one grade on to the next in order to keep outstanding head-teachers at a school and that more than one increment could be given each year for outstanding performance.

It is amazing how many outstanding head teachers we have in Wales.

Further Education Principals, following another Tory folly of moving them out of local authority control have seen their salaries soar.

Again the twin methods of comparison with others and the need for a high salary to attract the best, who often currently or used to work for the organisation and almost exclusively worked in Further Education has led to soaring salaries.

I am not sure that pay committees, I have served on several, however well informed and well meaning will be able to stop the continuing ratcheting up of salaries.

If senior public sector salaries are to be stopped rising and in the future reduced I suggest that as an absolute minimum that recommended salaries for each wholly funded public sector organisation are produced.

It is strange how things change, 25 years ago local authority chief executive salaries and councillors allowances were strictly controlled. Then Councillors payments went to local determination and then returned to strictly controlled by a remuneration panel.

Senior officer and chief executive salaries are now dealt with via local determination but I believe need to be dealt with via a review board.