Pickles calls payments to interim DCS an “outrageous use of public money”

A furore over the pay levels for directors of children’s services (DCSs) has reached the national stage after communities secretary Eric Pickles branded the amount paid to Somerset interim DCS Peter Lewis “outrageous”.

The comment follows ongoing local anger at the £318,500 cost of employing him over 14 months, which has forced Lewis to issue a letter to all staff in children’s services justifying it.

Lewis, who was appointed by the previous government in 2008 to turn services around in Haringey following the Baby P case, has been at Somerset since April last year following the council’s inadequate Ofsted rating.

Somerset council employs Mr Lewis through an agency and, according to recent analysis in The Sunday Times, he is the highest earning council executive in the country. He was paid £318,500 between April 2013 and July 2014. Mr Lewis’s deputy, Kate Lovell, was reported to have cost the council £275,00 in pay and agency fees over the same time period.

In a House of Commons question to Pickles on 8 September, Liberal Democrat MP for Somerset and Frome David Heath said “Somerset County Council is reported to be paying one officer £318,500 through a limited company owned by him and his wife…At the same time it says it has not got the money to run our services. Does the secretary of state think that is right?”

Pickles responded “I think that is an absolutely outrageous use of public money. People should pay their taxes in a normal way and it is an abuse of process for that to have happened.”

Previously, the Liberal Democrat MP for Wells, Tessa Munt, had called for Mr Pickles and Chancellor George Osborne to intervene.

In an audit committee meeting on 25 September to discuss Somerset’s accounts for 2013-14, auditor Simon Garlick stated that work on gauging value for money was not complete. He said committee members should question “how they were assuring themselves that the additional funding put into the [child protection] service was delivering value for money”, as in his view “the council had made insufficient progress in addressing the issues raised by Ofsted” in the 2013 inspection.

The controversy has been exacerbated by the fact that Lewis is contracted by an agency, who retain a fee, and pay him through a limited company, meaning he could save thousands of pounds in tax and national insurance.

In his email to all children’s services staff, Lewis insisted the amount was not what was claimed and did not put him “in the bracket of the highest earners in local government”. However, he accepted that “my pay is substantial” but said he was “fully committed to [the] job” and urged staff to maintain their efforts “to try and find another gear to further accelerate our improvement”.

Penna, the agency which employ Lewis on the council’s behalf, stressed that this was not a salary and included agency fees.

A spokesperson for Somerset County Council said it was not for the council to comment on the tax arrangements of a director employed via an agency, and that using such agencies was ‘normal practice’ when recruiting a DCS in these circumstances. The council stated that this was an interim appointment to lead the service to improvement and that it had started the recruitment process for a full-time replacement.

Unite representative for Somerset, Nigel Behan, said: “It seems excessive that senior managers get accelerated pay increases while everyone at the bottom has an 18-20% real terms pay cut over four years.”

Both the Association of Directors of Children’s Services (ADCS) and the Local Government Association said they would not comment on the pay of individual members or cases.