Council Spending Uncovered 2: Middle Management Pay

January 30, 2008 11:46 PM

  • Average local authority employs nine times as many people on £50,000-plus packages as ten years ago, an increase three times larger than growth in the wider economy.
  • Average local authority spends £4 million on employing people earning over £50,000.
  • The total bill is almost £2 billion - almost £1 in every £11 of total council tax revenues.
  • 12,600 local council officials earn as much or more than an MP's salary of £60,277.

The first paper in the Council Spending Uncovered series – which investigates wasteful and frivolous town hall spending – revealed a £450 million town hall publicity machine.  This second paper examines the increase in town hall spending on middle and senior managers – those being paid at least £50,000 per annum. Local authority accounts reveal that over the past decade councils have hired a new class of middle and senior management and then increased their pay and benefits packages much faster than the economy-wide average.

It is of course quite normal that wages should increase above the rate of inflation in a growing economy, and, over time, we would expect more people to earn £50,000 and above.  But the increase in the number of local authority employees being paid more than £50,000 per annum has been phenomenal, far outstripping the rate of increase in the economy as a whole.

Key Findings:

  • The average local authority is employing over nine times as many people on £50,000-plus packages as ten years ago – 66 people in 2006-07 compared with 20 people in 2001-02 and 7 people in 1996-97.
  • By contrast, in the economy as a whole, the number of people earning more than £50,000 has increased by less than three times over the past ten years.
  • The average local authority spent over £4 million employing people on £50,000-plus remuneration packages last year. 
  • The total bill for council middle and senior managers on £50,000-plus remuneration packages was almost £2 billion last year almost £1 in every £11 of total council tax revenues.
  • The remuneration of local authority middle and senior management is racing past that of MPs.  There were 12,600 local authority middle and senior managers being paid at least £60,000 last year – equal to or exceeding the £60,277 salary of MPs in November 2006.

Matthew Elliott, Chief Executive of the TaxPayers’ Alliance, said:

“With council tax doubling in the past decade, it’s extremely disappointing that town halls have chosen to hire a new class of middle managers, many of whom are being paid more than MPs.  Local authorities should study these findings carefully to see where savings can be made, instead of using their half billion pound PR machine to obscure their finances from taxpayers.”

Download Council Spending Uncovered, No. 2: Middle Management Pay (PDF)

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