If councils cut the pay of their senior executives to the same level received by the Prime Minister, then authorities would save on average just £42,081 – that is the conclusion of our analysis of the top pay in local government. Expressions of concern by the Government about excessive pay in town halls surfaced this week in the wake of the publication of our new report, Senior executive pay in local government 2011. The report, which showed that 43 per cent of all local authority chief executives were paid more than Prime Minister’s (PM) 2010 salary of £142,500, prompted Communities Secretary, Eric Pickles, to comment on Radio 4 today that: ‘Councils needed to be sure they did not reward chief executives [too much] at a time of spending constraints’. As part of the checks and balances, the Localism Bill, currently being discussed in the Commons, will be amended to require any English local authorities planning to pay employees more than £100,000 to seek the approval of councillors in a vote.
Central to current discussions about cutting top pay in local government is how much would be saved if all those earning more than the PM had their salaries reduced to the same level. To test this, we re-examined our data collected for our latest report and found that over the year to March 2010 a total of 224 senior officers received more than the PM in salaries and fees in England and Wales. These officers worked for some 140 councils and their total wage bill amounted to £37,811,283. If each of these received the same as the PM then that total wage bill would be cut by £5,891,283 to £31,920,000. This amounts to a cost saving of just over £40,000 for each council, which appears to be a drop in the ocean when measured against the average budget of these same councils of £821 million.