New rules to
compel local authorities to fully disclose the pay and perks of
top posts and name those earning more than £150,000 were set in
law today, announced Communities Secretary John Denham.
Around 475 local authority bodies will now legally be required to
publish pay information covering salary, bonuses, pensions, perks
and severance pay outs in their next annual statement of accounts.
The rules now include a requirement for councils to publish named
individuals earning more than £150,000 in £5,000 bands bringing
them in line with the Prime Minister’s public sector pay
commitment in Putting the Frontline First.
John Denham sees the 2010 changes as the first step towards
making council wage bills fairer to meet the legitimate
expectations of taxpayers.
The new regulations, laid in Parliament today, put councils at
the high transparency standards the Prime Minister set recently
for public servants and members of government. It also extends
them to senior police officers.
Last week, John Denham confirmed that local government would be
included in the senior public sector pay review. It will report
ahead of Budget 2010 and include recommendations on pay and bonus
caps. Councils are already expected to deliver the agreed public
sector pay cap of 1 per cent.
John Denham has also asked the Audit Commission to carry out an
urgent probe into so called 'Boomerang Bosses' -
Chief Executives who walk off with big severance pay-outs after
fall outs with the council's political leaders – to see
if practices are robust and value for money. It is expected in the
New Year.
John Denham said:
"As we bear down on the national debt we must protect
frontline services the public need like support for the elderly
and vulnerable, social housing and rubbish collection without
breaking family budgets.
"The average pay of a local government worker has only
gone up by £6,000 in seven years while the average for a chief
executive has gone up by £40,000. I know most of these people have
given a lifetime of public service. But in some cases this has
just gone too far.
"Next year councils will have to publish the pay bill
for their top people in an open and transparent way. The taxpayer
- the real pay boss - has a legitimate right to see this
information and decide whether or not it is fair."
Notes to Editors
1. Last week the Prime Minister announced three challenges for
public sector pay:
New scrutiny levels above £150,000 and bonuses over £50,000 with
the Chief Secretary to the Treasury approving pay above that
level;A review of senior pay across the public sector to be led by
Bill Cockburn;Publish full remuneration of named individuals paid
more than £150,000 in bands of £5,000.
2. The new regulations amend the Accounts and Audit Regulations
2003 (Si 2003/533) ('the principle
regulations'). Regulation 7 amendment constitutes that a
statement of accounts should include reference to remuneration
reporting for senior officers. The amendment establishes
comparable remuneration disclosure for all senior staff within
organisations that will fulfil the same degree openness and
transparency as the civil service and listed companies in the
private sector (under the Companies Act 2006). The principle
regulations apply in relation to England only.
i. The regulations make it a requirement for
'remuneration disclosure' to include:
(a) salary;
(b) bonuses;
(c) additional payments;
(d)
compensation or ex gratia payments;
(e) benefits in kind
and
(f) pensions;
ii. imposes a new requirement for the disclosure of individual
remuneration details for all officers earning over £150,000 by
name, and for all other ‘senior’ employees and ‘chief officers’ of
police for each financial year by post title, within the
authority’s annual statement of accounts under the following
categories: salary, fees and allowances; bonuses; expenses
allowance; compensation for loss of employment; pension
contribution (employer’s contribution); any other emoluments; and
in the case of senior police officers, any other payments made to them.
iii. In addition it also sets a definition of ‘senior officers’
as individuals whose remuneration is more than £50,000 per year
(pro-rata) and hold defined ‘senior’ positions. In the case of
local government this will comprise Chief Executives Officers and
their direct (senior) reports and can be considered to be
equivalent to ‘Board’ level.
3. The local authority bodies covered include London borough
councils, county and district councils in England; joint
authorities; the Greater London Authority; National Park
authorities; Waste authorities; TfL; Police and Fire Authorities.
4. The regulations are a negative Statutory Instrument which
become law after passing through a 40 day period when they can be
preyed upon. It then comes into force on 31 March 2009.
5. The regulations bring pay disclosure in line with the
recommendations of the Information Commissioner's Office:
www.ico.gov.uk/upload/documents/library/freedom_of_information/practical_application/salaries_v1.pdf.
Contacts:
Communities and Local Government Out of hours
Phone: 0303 444 1201
press.office@communities.gsi.gov.uk