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The government has signalled it could step in to curb the high levels of pay being awarded to local authority chief executives and other senior management, writes Derren Hayes.

Speaking at the Local Government Association annual conference in Harrogate this morning, deputy prime minister John Prescott said pay for senior staff was an issue that “we need to think through before it gets out of hand…and the justifiable exception becomes the unjustified norm”.

Prescott said exceptional circumstances might require exceptional pay in individual cases but asked: “How can it be right for a local authority chief executive to be paid more than the prime minister?

“If there is a big award for a chief executive, what is the effect on salaries for other staff? What happens when authorities start to offer bigger and bigger packages to fill senior posts,” he asked.

Bradford Council is currently advertising for a chief executive, offering an annual salary of £200,000 per annum, while it is not uncommon for social services directors to be paid £80,000 a year.

LGA chairperson Sir Jeremy Beecham said he did not “necessarily agree” that chief executives should not be paid more than the prime minister, but admitted councils had to be aware of the “sensitivities” around pay.

“You could argue the prime minister is underpaid. The question is what is the right level of pay for responsibilities,” he asked.

Prescott also said the government was considering putting local authority representatives on the boards of foundation hospital trusts, and was committed to reducing the amount of money that was ring-fenced for particular purposes.