Local Government (Pay Accountability) Bill, Committee Stage, House of Commons, 22 May 2024

• The Local Government (Pay Accountability) Bill purports to “ensure transparency and accountability on council salaries” by requiring Full Council to meet and approve by resolution the salary for any roles advertised or appointed at or over £100,000 a year (a figure that is not indexed in any way). This is unnecessary and unhelpful and we urge the Government to withdraw support for this Bill.
• Workforce challenges are already hampering councils’ ability to provide valued services, with more than 9 in 10 experiencing staff recruitment and retention difficulties. The more professional and skilled the role, the harder it is for councils to compete with other areas of the public sector let alone the private sector. It is crucial that councils can attract people with the right skills and experience to deliver the most complex services to local communities. Instead, the Bill’s cumbersome and bureaucratic measures risks additional delay in the recruitment of key roles; further discouragement to people considering a career in local government; and a growth in alternative employment arrangements that will reduce transparency and accountability.
• Councils are committed to providing value for money to taxpayers. Currently, the pay of senior council staff is set by elected councillors and is open to a high level of scrutiny as a result. This legislation risks watering down that scrutiny and its un-indexed £100,000 threshold risks overwhelming a council meeting agenda in years to come as an ever-increasing volume of roles are swept up. Encouraging the politicisation of appointments for roles managing key council services can only be a disincentive to many qualified, professional individuals who would reasonably see other employers as more attractive as a result.
• When local government needs central government to cut bureaucracy so councils can focus on the delivery of services, new legislation to add to it is a definite step in the wrong direction.

• Sections 38 to 43 of the Localism Act (which the Pay Accountability Bill if passed will amend) set out pay accountability requirements for local authorities, including that they must approve and publish pay policy statements for each financial year. The policy must cover the remuneration of the authority’s chief officers, including pay on appointment, subsequent increases and the use of any performance or bonus pay. 2012 statutory guidance further provides, at paragraph 14, that full council should be offered the opportunity to vote before salary packages of £100,000 or more are offered on a new appointment.
• That requirement was set out again in 2013 supplementary guidance, alongside a statement that pay policies should set out whether this is being done. The 2012 statutory guidance also recommends that authorities publish their pay multiples (the ratio between the highest paid employee and median average earnings).
• Two separate Joint Negotiating Committees (JNCs) are the bodies responsible for national collective bargaining on the pay and conditions of service of the overwhelming majority of local authority Chief Executives and Chief Officers in England and Wales. The JNCs agree annual uplifts to the individual salaries of both groups, the details of which are determined locally by each council.
• The JNCs’ Conditions of Service Handbooks set out terms and conditions that are basic provisions which constitute a standard throughout England and Wales, all of which can be improved by local negotiation. The Conditions of Service Handbooks for both groups contain joint guidance for English councils on the establishment and remit of council Remuneration Committees. Such committees are responsible for providing advice and have delegated authority for making decisions or recommendations to the full council (or another committee) on pay and remuneration issues within its agreed remit in relation to the Chief Executive and Chief Officers.
• The JNC guidance provides that the Remuneration Committee should meet at least annually to “determine any requirement for a formal review of the relevant pay market; where determined necessary, to commission relevant research and analysis and make recommendations thereon; and review any remuneration issues arising from established performance / contribution-related pay assessment.” This legislation is likely to result in these provisions being reviewed, potentially removing existing scrutiny of senior salaries.

• The position of appointments in local authority schools is not clear from the current text of the proposed Bill.
• The current pay accountability statutory Guidance states, “The provisions in the [Localism] Act do not apply to the staff of local authority schools and therefore teaching staff need not be brought within the scope of a pay policy statement.”
• The LGA is unable to find anything in the Localism Act or elsewhere that expressly provides for the exclusion of those staff from the relevant provisions in Act and so it may be that these staff are in fact included in scope despite the differences in governance applicable to schools and other local authority staff.

• The £100,000 figure (as required by the Localism Act 2011) is not indexed – this can only be changed by regulation. Instead of requiring a Secretary of State to review the level, it would seem much more efficient to have it indexed so it retains the relevant value.
• The original discussion of this policy in 2011 was more than a decade ago and the £100,000 figure was used then. It is therefore worth considering the justification for the use of £100,000 as the starting point for this legislation given the passage of time. To illustrate, had it been increased in line with the Consumer Price Index, it would now be £138,490. If the figure had increased with average earnings since 2011, it would now be £150,600. Another approach would be to link it to the starting salary of Senior Civil Service Band 3. This was around £100,000 in 2011 and now stands at £127,000. Using the annual pay awards for local government chief executives would be another appropriate index; using £100,000 in 2011 as the baseline, this would now be around £118,000. Indexing to any of these metrics would save parliamentary time and limit the risk of an ever-increasing volume of roles falling within scope.

Arian Nemati, Public Affairs and Campaigns Adviser 

Email: [email protected]