Following a recent salary review for senior officers at East Riding of Yorkshire Council (ERYC), certain basic salaries were increased by approximately 11 per cent. (or a £12,000 increase on certain salaries to around £123,000) and, in the case of the chief executive Nigel Pearson, almost six per cent. (or an additional £9,000 to his previous salary of £153,000). The leader of ERYC, Councillor Stephen Parnaby, explained that these salaries had apparently not been reviewed since 2002 and that the salaries had fallen behind market rates for comparable positions.
ERYC, doubtless like many other councils, seeks specialist advice to provide direction on senior employee compensation packages. Seeking advice before paying significant remuneration packages is sensible enough. However, there are difficulties with ERYC's approach. First, if external advice is taken, then it usually costs money. This is no bad thing if the subject matter is genuinely recondite, but surely within ERYC there is sufficient expertise and familiarity with council rates of pay, or the ability to obtain this, without needing to pay an external organisation. Second, if this knowledge and understanding really does not exist within ERYC, then who is approached to provide guidance?
ERYC pays for services, and that could well include salary advice and benchmarking, provided by The Society of Local Authority of Chief Executives (SOLACE). This is, in effect, an organisation of senior council employees for senior council employees. SOLACE probably does have its finger on the pulse of current compensation packages for senior officers and chief executives – its members are those very people – but asking SOLACE to advise on appropriate salary rates is hardly independent, dispassionate and objective.
Following a Freedom of Information request, ERYC confirmed that between 2000-09 a total of £15,906.57 was paid to SOLACE entities (see table below). In themselves these amounts paid to SOLACE are not stratospheric, but any saving on non-essential outgoings should be made. ERYC also confirmed that no payments had been made to any organisation other than SOLACE over the same period for the purpose of advising on salary benchmarking, or remuneration and compensation arrangements for ERYC employees, so the only organisation they hired for this review appears to have been the least independent.
The payments to SOLACE probably also include membership subscriptions to SOLACE for the chief executive and any other senior ERYC officer who is also a SOLACE member. This will purportedly be a necessary expense of ERYC business. This is open for discussion, since membership itself perpetuates this upwards-only virtuous circle for senior officer salary reviews – the members no doubt speak to each other, learn of their packages, become aware of the market rate and will have little difficulty in obtaining SOLACE's confirmation of where the market rate has apparently moved (up) to. This ensures that somebody is always moving up to a neighbour's level, playing catch-up. Whether membership of SOLACE, paid for by taxpayers, in any way benefits taxpayers as opposed solely to being for the benefit of the council officers who use its services is questionable. If it does not serve interests of ordinary residents, then membership should be a private cost for the relevant council employee.
Granted, ERYC is on many levels a well-run and well-organised council. But so it should be: it is not a complex metropolitan council with the associated range of issues and difficulties, or at any rate not with the same intensity. ERYC should be seeking to pay as little taxpayers' money as properly possible to ensure that the council functions in an acceptable manner. Salary should not be directed by an abstruse and ill-defined reference to market rates and an associated assessment provided by an organisation of questionable independence.