Is the public sector picking up private sector habits?

Kent County Council leader Paul Carter claims the change in title better reflects the new model deployed in local government, with “chief executive” inappropriate when the executive is comprised of a leader and cabinet. And the successful candidate will head up Kent’s four main directorates, which are run by managing directors. But Carter also admits he would actively welcome applications from the private sector, particularly those with experience of dealing with public sector organisations. “I hope the job specification means we will entertain people from all backgrounds,” he says.

The reaction from other HR directors to this approach has been largely positive. “There’s a whole range of issues and challenges around being in the public eye, with the current pressures around public sector pay, pensions and employment issues within the context of the recession, so Kent is absolutely right to try and find someone who can bring the skills and experiences they’re looking for, irrespective of background,” says Stephen Moir (pictured left), corporate director, people, policy and law at Cambridgeshire County Council.

“It’s a logical development; the role of the chief executive or managing director in the public sector is broadly similar to that in the private sector,” adds Gillian Hibberd (pictured below, left), corporate director, people, policy and communications at Buckinghamshire County Council and president of the Public Sector People Managers’ Association (PPMA). “Obviously we’re not answering to shareholders, but we’re answering to the electorate and the local population.

“It’s not about us wanting to attract candidates from the private sector; it’s more about explaining more clearly to candidates from the private sector exactly what the job entails,” she adds. “I don’t think people appreciate that a job at that level in the public sector is the equivalent to a FTSE 100 chief executive in some cases.”

Kent is not the first council to go down this route – Doncaster Metropolitan Borough Council, Dartford Borough Council and the Isle of Anglesey County Council are among those with a managing director rather than a chief executive.

But as the largest county council in the UK, with an annual budget of £2bn, Kent is certainly the most significant to do so, posing questions not only for its own operations, but also the future structure of local government in general.

Regardless of the background of the eventual successful applicant, and irrespective of their exact job title, it’s clear the demands of heading up paid staff and service directorates in local government are changing.

“We want innovators and creative people who can challenge the orthodoxy and develop our services in line with our track record of improvement,” says Carter. “If you stand still you’re not going to deliver the change agenda. Some of the challenges facing the public sector are going to be the biggest for many decades.”

“It is indicative of a general culture shift, across not just the local authority but the wider public sector,” claims Rebecca Beardwell, director at public sector recruiterMorgan Law.

“There’s a need for public sector organisations to be more aligned and business-focused in light of increasing budget pressures and potential decreases in government funding, so there’s a pressure to become more commercial.”

Other councils are likely to be watching what happens should Kent County Council go down the route of appointing someone from the private sector, she adds. Graham White (pictured left), director of HR at Westminster County Council, claims the public sector is looking for a new breed of strategic leader who is a hybrid of public and private sector characteristics.

“The traditional local government structure is already on shaky ground,” he says. “The need to build new unified services and joined-up delivery models for residents is now an imperative, and here the private sector has the advantage.

“Customer-centric service provision is an inherent and natural skill for senior executives from the commercial sector and this will have a very rapid and positive impact on both the structure and employer brand of any local authority under the direction of this type of leader.”

Yet for all the advantages of hiring someone with a more commercial background, appointing someone from outside the public sector is a risk, warns Peter Reilly, director, HR research and consultancy, at the Institute for Employment Studies. “You have to be mindful of the fact that there are a lot of challenges coming in, and the skills they have deployed in one context will not automatically transfer into another,” he says.

“Over the past two years, for almost every successful transition there’s been one that hasn’t been so successful,” adds Beardwell. “Any chief executive or group managing director coming into that type of role is going to have to be extremely astute in terms of political awareness, in dealing with members and the executive team and in the influencing skills they have. If they don’t manage that transition, they won’t be successful.”

Carter, it seems, is also all too aware of the potential problems that could arise. “I personally believe that if candidates come from the private sector they’ve got to have experience in the interface with the public-sector culture, or they’re going to have a massive mountain to climb,” he says.

There could be a further defining issue: that of the £185,000 salary on offer, which is a reduction from the level enjoyed by outgoing chief executive Peter Gilroy.

“It’s quite a low salary compared to what you’d get in the private sector for running a company with a multi-billion pound turnover, but Kent is reflecting the current criticism over the size of salaries in the public sector,” says Hibberd. Those looking at the position from the private sector would need to be motivated by other elements as well, she says, such as wanting to contribute something to society.

In any case, says White, it may be that the strongest candidate for the job emerges from the traditional route of the public sector.

“I doubt any of local government’s leading chief executives are shaking in their shoes at this,” he says. “Many of the chief executives in local government are a match for their private-sector colleagues.”

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