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Many readers, with slightly longer memories, will recall that the Audit Commission had its own problems when it came to effective succession planning and the marketplace for finding a new chief executive. But for its latest Tougher at the top? study, the local government watchdog has touched on that ever-sensitive subject, the recruitment and salaries of council chief executives which, it says, now average £150,000 a year – a hefty 90% increase between 1998/99 and 2007/08. The salary figures are, of course, a gift to organisations such as the Taxpayers' Alliance, whose broadbrush scepticism – even contempt – about the value of any spending on public services has given it a long history of lambasting councillors and council staff, regardless of any particular evidence. But Unison's head of local government, Heather Wakefield, was also quick to suggest: ‘This report proves there is one rule for chief executives, and another set of rules for the rest of the workforce. While many of our members are expected to stomach pay cut after pay cut, chief executives are getting fat cat increases of 90% in 10 years.' Conservative shadow secretary for communities and local government, Eric Pickles, also weighed in to claim: ‘Local taxpayers will be very concerned that their council tax bills are being pushed up by unjustified rises in town hall pay. A good chief executive should be able to turn around a poor authority, but this new research shows that this is not happening. ‘Chief executives' pay seems to owe more to a virility statement by local authorities than value for money and improved services for the hard-pressed council taxpayer.' Certainly, the Audit Commission's discussion paper raises some important questions about just how effectively councils are managing change at the very top of the management tree, and it is a serious effort to tease out the facts behind the headlines and brouhaha that has accompanied some recent senior appointments. The exercise is not entirely comprehensive, and it concentrates largely on the salary packages being offered to chief executive in single-tier and county councils, with only a passing nod to the smaller budget, but more numerous, district councils, which make up two-thirds of all local authorities. Inevitably, this focus drives up the overall figures, and both the Local Government Association and the Society of Local Authority Chief Executives have pointed out that with districts included, the average salary tumbles to around £106,000 a year. The commission's research examines some 190 appointments made by single-tier and county councils, and finds a marked turnover in chief executives from 11% in 1998 to 17% in 2007, with a 40% increase in the number of chief executives leaving without taking other work, either retiring or losing their jobs. It also found a notable increase in the number of chief executives moving between councils, with a doubling in the rate at which local authorities recruit from each other. The ‘ghost in the machine' shaping the recruitment market is, of course, the Audit Commission's own CPA performance ratings and Tougher at the top? admits that poor scoring authorities are twice as likely to lose their chief executive as good-performing councils, and also much more likely to recruit from another local authority. Since 2002, turnover rates and the appointment of existing chief executives have increased most rapidly in those councils with lower CPA scores. ‘Individuals with experience at chief executive level have become increasingly prized, largely as a response to CPA,' says the Audit Commission – yet its research still admits there is no statistical evidence that this helps improve performance. While clearly there is a premium put on experience in the drive to higher CPA ratings, the increased turnover rate has driven up costs and seen councils taking the most expensive recruitment option of competing with each other from a very limited pool of existing chief executives, rather than promoting other senior staff or broadening the market to bring in new talent. One authority managed to go through three chief executives in less than six years, and its total bill for severance rose to £440,000 – but no clear figure can be put on the cost of disruption and loss of continuity and productivity within the council, not to mention recruitment costs. It is not all bad news, of course, and the study does show there has been a notable improvement in the percentage of women being appointed as chief executives – and it suggests this will continue to increase. Among black and minority ethnic groups, however, the picture is less optimistic, and seems unlikely to improve in the near future, with only ‘slow growth at first tier officer level making the number of future chief executives ‘likely to remain low of some years to come'. The longer-term concerns are clearly that the market for local government's top jobs is shrinking, as the Audit Commission's own chief executive, Steve Bundred, explains: ‘Recruiting tried and tested doesn't automatically produce a boost in performance or encourage innovation. While an experienced pair of hands can be seen as a safe option for individual councils, there are risks. Unintentionally, they will discourage ambitious and able in-house and external talent which may well be more representative of the communities they serve.' Chief executive of the Local Government Association, Paul Coen, has criticised the research for ignoring the experience of districts. He says: ‘It's natural that councils should want to recruit people with experience and an excellent track-record, and the improvement in councils performance speaks for itself.' But there is widespread agreement that the jobs market needs to be more open, and councils should be more ambitious and look outside the constraints of CPA. Says SOLACE director general, David Clarke: ‘The Audit Commission itself can help by extending its data set and giving us a much fuller picture that includes all local authorities. The increase in the number of women chief executives is to be welcomed, but there is clearly much more that can be done to recruit more black and minority ethnic staff to senior positions, and to improve internal promotion prospects.'

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FINANCE

Figuring out the picture

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