Councils should set up executive remuneration committees to develop attractive reward policies to lure talented individuals to the public sector, Local Government Employers (LGE) has urged.
The organisation, which represents councils in England, backed a proposal by professional services firm PricewaterhouseCoopers (PwC) to introduce remuneration committees after the furore over MPs’ expenses has put senior public sector pay and benefits under the media spotlight.
PwC warned talented individuals would be put off applying for senior council positions because they feared their reward packages would come under attack from increasing public scrutiny, and said the committees would help to increase transparency on pay.
Steve Beet, head of local government at PwC, told Personnel Today: “An independent committee made up of members of both the public and private sectors would add credibility and transparency to a difficult, volatile area of local government finances.
“Given what’s happening with MPs’ expenses, and the number of potential chief executives who have avoided the public sector due to the intense media coverage, this could be a remedy to several public sector problems,” he added.
John Sutcliffe, strategic adviser at LGE, said: “For staff who have a small pay increase and earn a fraction of the CEO’s salary, their morale would be improved if they could see the executives deserved every penny,” he said. “Recruiting would then be easier for basic roles and executives.”
He was supported by Martin Rayson, HR director at Boston Borough Council.
“If a remuneration committee is necessary to take the heat out of this particular debate around local government executive pay, then I’d say it was worth doing,” he said. “But that’s not to say that pay and bonuses are unfairly distributed currently.”
Research by PwC, out last week, showed local government chief executive reward packages were barely half (51%) those of private sector equivalents, and were still 25% lower even without bonuses.
Last week, Scotland’s finance secretary John Swinney announced a cap on executive pay and bonuses for Scottish councils and quangos after a select committee warned that executives were receiving unmerited bonuses.