Jan 2008 30

Council Spending Uncovered 2: Middle Management Pay12

  • 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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  • Colin Lamb

    I believe that every Council should be accountable to the people who pay their wages.Every year the hierarchy of local Councils should have to face an appointed group of council-tax payers who would question the unecessary ependitures.
    Similar to the Westminster Accounts Committee meetings.

  • http://www.carramba.net max D

    What I do not get is there is a an obligation on the tax payer to get everything right to the penny otherwise policemen come and knock at your door. On the other hand the government does not publish what they do with our money. They should couple their finances to web servers and ALL info should be available to the public at any time IN REAL TIME.
    When the accounts are there in the open for anyone to see the embarrasment will be too much for most. I personally think in the digital age that the public need to be invloved in public money decisions.

  • Acorn

    Your Council will produce a “Statement of Accounts”, about June time. These vary in quality. Many councils now put their “Management Unit budgets” on-line. These budgets have to line up with Council Portfolios and Committees so they are not that easy to put into context.
    The government auditors will turn up before Christmas to question why it put amount X in column C instead of column D. The Auditors will currently suspect stuff like “adjusted credit ceilings” being out of balance with the “capital financing requirement”. This will mean that the council has not charged enough to the “consolidated revenue account” for loan repayments – stuff like that.
    Your Councillors will spend hours with the officers who will do their best to explain in simple terms, what the f*** it is all about.
    The snag is that there are so many government initiatives, coming from too many ministers, that require the Council to find more officers, with sufficient nous, to understand all these initiatives. Then, work out if your Council qualifies for it and how the hell you apply for the penny packet financing that goes with it.
    Also, never forget that the officers also have their own agenda, it is only natural, you are paying for their talent to run and improve things. If this gets out of hand – due to a duff bunch of Councillors – you end up with inevitable “mission creep”.

  • Eileen

    Had a look at the report. Not very scientific – like comparing councils with their most recent figures which aren’t from the same year, and some including teachers and some not. Anyway, you need danger money for dealing with councillors and the same old members of the public complaining about this and that.

  • Graeme Pirie

    It seems to me, just looking at the general trends in publicity as salaries, that Councils are finding it too easy to spend money. There won’t be many well run private companies that show such above normal growth in salaries or “non contributing” areas.
    The implication of course is that they’re also finding it too easy to GET money and that there’s very little incentive for them to tighten their belts or seek value for taxpayers money.
    This is an inditement on US, clearly they think their role is to keep growing. We need to do a lot of re-education to change the priority to best services for least cost.

  • Ellen

    The difference is….? The difference is that local authorities are NOT businesses. Some might say they should be, but I say that is bunkum. Public service should be accountable, yes – and it is…. every day, to individuals who communicate with us (with Councillors and officers – face to face, by letter, e-mail and text) and every 4 years, to the electorate as a whole. Democracy may be a bloody awful system – but it’s still the best system there is.

  • James Rowling

    Have to agree with Acorn – looks like a half-finished GCSE Maths assignment. No statistical approach, no depth, no insight and a lot wrong. Are you seriously telling us that the Corporate Management Team in, say, South Shropshire are (barring 2) on less than £50,000.
    Also the TPA fail to give what should be a “living wage”. Should public servants do it for the love of it rather than any reward? How many managers ideally make up a multi-faceted billion-pound organisation? And until they start living in the real world they’ll be regarded as little more than an irritating irrelevance.

  • http://www.taxpayersalliance.com Mark Wallace

    Eileen: “you need danger money for dealing with councillors and the same old members of the public complaining about this and that”
    Yes, it’s a pesky thing, democracy, isn’t it? Just think – public employees implementing public policy and spending taxpayers’ money being forced to listen to elected representatives and members of the public!

  • Chris Owens

    I’m one of those awful local authority people paid more than £50k as a head of department. Paid too much? I think the opposite actually, but I’m happy with my lot. If Councils want to attract and retain good performers, they have to pay a reasonably competitive salary, but it will always fall well short of what the private sector pays. Take me as an example – 2 years ago, I was earning £30k a year more for a virtually identical job in a leading UK company, but decided to leave for a role that allowed me more freedom to focus on my passion for customer service improvement, rather than short-term profit maximisation. I work just as hard now as I did before, averaging 2 days a week of unpaid overtime, and with less holiday entitlement too. However, I’m really glad I made the switch, as my job is so much more satisfying now, even though I also have to make do with less staff and operational budget to do the same type of work. By all means keep campaigning to keep a lid on total Council spending as value for money is critical, but remember the old adage – if you pay peanuts, you get monkeys.

  • A. Zastaweckyj

    And it goes on…this pay argument. Notice when you go to the zoo how monkeys are always “grabbing” at things?
    http://www.hexham-courant.co.uk/news/viewarticle.aspx?c=304&id=598260

  • steve

    Well, Mark Wallace, there had to be one exception, I suppose. Who ever heard of a councillor with a conscience?

  • steve latimer

    Could I just answer one of the earlier contributors. I have the misfortune of having to live under Hartlepool Borough Council. It’s the second smallest of 47 Unitary Authorities yet still manages to charge the second highest Council Tax. My point is that our illustrious, elected Mayor receives a salary of £70,000 per annum. This is hardly ‘peanuts’ yet we still managed to get a bloody Monkey!