It was inevitable that the Audit Commission would turn its attention to the issue of rising chief executive pay, especially after the national media coverage earlier in the year around Andrea Hill's appointment at Suffolk. Its end result, a discussion document Tougher at the top? tells us what those in the business already know, namely, that top salaries are totally market-driven, that there is a shortage of skills as the demands of the job increase, and that councils and their head-hunters are all fishing from the same pool, hence, upward pressure on pay, while the CPA has also been a factor. However, despite being short on solutions, the commission has done a service in airing this subject, which deserves serious debate within local government. There are three key points to take forward for this discussion. One is that the pay issue mainly concerns heads of so-called upper-tier councils, and that the gap between them and their district equivalents is becoming a chasm. While turnover of chiefs in the upper-tier councils increased from 11% in 1998-2000 to17% in 2005-08, that among districts was consistently lower. The second is that councils' tendency to recruit other experienced serving chiefs, particularly from high-performing CPA authorities, has been a factor in driving up pay levels. This reflects nervousness among politicians, driven by CPA pressures, about appointing untried chief officers. The third is that on diversity, the picture is not good. While there are more women in top roles, BME groups are largely absent, mainly because there are so few BME chief officers. To the Taxpayers' Alliance and other assorted lobbyists, this issue of top pay is about escalating salaries. Actually, as the three points above reveal, it is about a shortage of experienced managers to run the hugely-complex organisations that larger local authorities have become. The CAA, set to roll out next year, will add a further dimension, creating new demands for different sets of skills. The commission's timely report should encourage local government and the private sector to focus on what is becoming a serious concern, the skills gap at the top. Michael Burton Editor, The MJ
