Local authorities are driving up salary costs by competing with each other to recruit chief executives from a limited pool of talent, according to the Audit Commission. A discussion paper, published by the commission, claims local authorities rely too heavily on existing chief executives to fill vacancies, creating a domino effect as councils recruit from each other. The Tougher at the top? paper suggests this ‘restricted recruitment pool' leads to salary rises as authorities compete to recruit or retain chief executives at the most successful councils, and says the situation is aggravated by a lack of proper succession planning. Analysis of more than 190 appointments made between 1999 and 2007 found the average salary for top-tier chief executives was now £150,000 – up by 37% since 2002. The commission found over a three-year period the number of vacancies at single-tier authorities and county councils filled by a chief executives from another authority more than doubled – from just nine in 1999/01 to 21 in 2005/07. It also claims appointing a chief executive from another local authority does not offer a shortcut to improved performance. Steve Bundred, chief executive of the Audit Commission, said: ‘The talent pool authorities use is shrinking, while the demands of the role are increasing. ‘The current trend towards recruiting existing chief executives, particularly by poorer-performing authorities, has meant recruitment costs and wages have risen. ‘Recruiting the tried-and-tested doesn't automatically produce a boost in performance or encourage innovation.' However, David Clark, director general of the Society of Local Authority Chief Executives, challenged the commission's findings and said the average chief executive salary was around £106,000. He said: ‘The figures just don't add up – I don't know why it chose to concentrate on the experience of just a small number of councils and use only a limited data set. By all means let's widen the pool of talent that is available and recruit more women and black and minority ethnic candidates. But the Audit Commission needs to recognise that its CPA system has made many councils risk-averse, so it is responsible for some of these problems.' Local government minister, John Healey, stressed: ‘We need to widen the pool of talent both to bring in top managers from beyond local government and bring on good managers from within local government. We can't have the current situation where a shrinking pool of candidates means spiralling salaries and other perks.'
