Employers warn against budget plan for director pay ceilings

All directors of children’s and adult services in England face having details of their salaries and bonuses published under proposals set out in the Budget.

Salaries for directors and other senior managers in social care would also be overseen by independent committees linked to individual authorities, while national benchmarks are due to be drawn up for senior managers’ wages.

Local Government Employers (LGE) warned that setting pay ceilings for jobs such as directors of children’s services would restrict local authorities’ ability to recruit the best candidates.

However, LGE backed the need for tighter scrutiny of top earners set out in a draft code of practice for senior public sector pay, published by the Senior Salaries Review Body, which has been accepted by ministers.

Under the plans, independent remuneration committees comprising of two or three representatives, including at least one expert on pay rates, would determine councils’ policies on pay and bonuses and ensure that contracts were not “excessive or inappropriate”.

All senior executives, including directors of children’s and adult services, would have their salaries and bonuses published in an annual report.

The prime minister has already announced that senior public sector managers earning more than £150,000 should be named and proposed salaries exceeding that level approved by the Treasury.

Gordon Brown has also asked the SSRB to “develop sector-specific benchmark ranges for senior pay”.

Jon Sutcliffe, principal strategic adviser for LGE, accepted the need for a more transparent and accountable approach to public sector remuneration but urged caution in setting national benchmarks.

Pay ceilings may sound like a good idea but “would be a nightmare to implement”, he said, adding: “Unless you’re very careful, tighter restrictions will stop local authorities paying enough to recruit to a particular market.”

All public sector organisations have been asked to set out how they will comply with the proposed rules by the end of 2010.

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External information

Public Sector Senior Remuneration: report by the Review Body on Senior Salaries, March 2010