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Hundreds of town halls would no longer pay six-figure salaries to chief executives under Conservative plans for the biggest shake-up of councils for a generation, The Times can reveal.
Dozens of council chiefs who earn more than Cabinet ministers would lose their jobs as clusters of councils merged their frontline services and backroom operations to provide better value for money.
Many chief executive posts would disappear, with the remainder being forced to run larger “economic areas” covering several local authorities or take on additional functions such as running primary care trusts.
Eric Pickles, the Shadow Communities Secretary, said that the Conservatives would retain the current political structure and a similar number of councillors.
However, local authorities would be expected to follow the example of Brentwood Borough Council, which removed its chief executive in March and now pays £30,000 a year to Essex County Council to share its chief executive, Joanna Killian.
The number of council employees whose remuneration packages exceed £100,000 has jumped in recent years, according to research by the TaxPayers’ Alliance. In 2006-07, the most recent year for which figures are available, the figure was 818, up from 645 in 2005-06.
The highest-paid local government chief executive is believed to be Joe Duckworth, chief executive of the London Borough of Newham, who earns a basic salary of £240,000. Andrea Hill, the chief executive of Suffolk County Council, is in second place with a basic salary of £218,592. Suffolk justifies Ms Hill’s salary by saying that the authority is a “£1 billion business”.
Mr Pickles has called the salaries a symptom of the “Premiership manager syndrome”.
John Healey, the Local Government Minister, wrote to council chiefs this year to warn them that pay packets for senior officials were out of control.
A Conservative source said: “There is super-inflation of chief executive pay that bears no correlation to the level of services they provide. There is a bureaucracy and self-feeding hierarchy of senior officials that are completely unaccountable to the local community. You have councillors who take the fall, and staff who bear no responsibility. This urgently needs to be addressed.”
The Local Government Association argues that its chief executives are paid modestly compared with private and public organisations with comparable turnovers and staffing levels. Paul Coen, the head of the association, has pointed out that a chief executive at a big council could earn on average more than twice as much in a public or private organisation of a similar size.
The Tories would abolish rules preventing councils outside the same region from working together, such as those around the M25 that have similar economies and demands.
In a major change to the way that councils are funded, those which agreed to pool functions would be allowed to keep more of the money raised through council tax. Under the present system, council tax revenue is handed to central government and redistributed on the basis of population and need, as part of a “resource equali-sation” across the country.
A new commission would determine how much extra authorities would be allowed to keep.
The Conservative source said: “Good behaviour will be rewarded. Britain is possibly the only country in the world where local politicians have no influence over their tax base. This must change.”
Other proposals in the Tories’ decen-tralisation consultation paper, to be released next month, include: the power for councils to raise funds in the money markets by selling their own bonds; a requirement for authorities to hold referendums if they propose “excessive rises” in council tax; scrapping the Standards Board, the local government watchdog, and shrinking the council inspection regimes; establishing a more equitable relationship between local authorities and central government.
Mr Pickles emphasised that no city or county would be forced to change its status and that larger cities would be given the option of having a directly elected mayor.
Local government analysts said that to make the proposals work there had to be strong incentives for councils to merge services. They would be unlikely to be proactive about cutting their staff, and had been slow to take up mergers proposed in 2004.
Tony Travers, of the London School of Economics, said: “There is the potential for big savings. But getting authorities to work jointly is always a bit of a struggle. The political question is making authorities do something that you might have thought was in their best interests anyway.”
Much of the local government reform carried out under Labour in the past decade has focused on setting tight performance targets.
The structural changes have mainly been to create unitary authorities from two-tier councils, which often faced local opposition because of fears that the new council would be less accountable.
Top local government earners
£240,000* Joe Duckworth, chief executive, Newham (appointed 2008)
£220,000* Andrea Hill, chief executive, Suffolk County Council (appointed 2008)
£213,162 Kim Ryley, chief executive, Kingston upon Hull
£205,000 Derek Myers, town clerk and chief executive, Kensington & Chelsea
£203,000 Nick Johnson, chief executive, Bexley (since retired)
£201,485 Caroline Tapster, chief executive, Hertfordshire
£195,456 Darra Singh, chief executive, Ealing
£195,330 Richard Shaw, chief executive, Surrey
Figures represent complete remuneration figure, including all benefits except figures marked *, which represent basic salary. Most recent figures avaliable for 2006-07, compiled by the TaxPayers’ Alliance annual report, released in March

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There should be no raising of local taxes, it creates too many opportunities for fraud, it is grossly unfair ,and penalises the poor, funding should come from Central Government and be AUDITED !
Clive, Lancing, England
"The most revealing part of this article is that Council Tax is handed to Central Government for re-distribution."
Business Rates and council housing rents are also redistriibuted nationally - but how many businesses and tenants realise this?
Chris Humphris, Cambridge, UK
Please remember not to tar all CEO's/Councils with the same brush, certain counties are blessed with more sensible council leaders who don't pay themselves overly ridiculous salaries, and are among the most successful councils there are in terms of auditable performance. Look where i live... :)
MC, Derbyshire, UK
All OTT wages should be stopped as of right now. That includes all Tory backers and friends of.
J.M, Rye, England
Perhaps the "Tories" would like to begin with the Conservative-run East Riding Council, which only weeks ago (and against the wishes of the taxpaying public) awarded its senior officers salary increases of £12,000?
Robert, Hull, UK
Typical attempted vote winning gross hypocrisy from the tory stink oops think tank...that from a party who considered INSIDER DEALING smart until the Labour Party pointed out how unethical it was.They should have a closer look at the fat cats in their own party claiming fraudulently for public funds
Eric, Southwick, England
'the authority is a £1 billion business.'
It certainly is not: it exists only to provide the services demanded by its residents at the lowest possible price.
The only evidence that gives any weight to their argument is the large number of traffic cameras and parking wardens they employ.
Johan, London,
Absolutely brilliant news. Why should the private sector pay inflation busting salaries, expenses and index linked pensions to jobsworths in government, and the uncivil service? These people are paper shufflers, doing the bidding of 'targets', EU directives etc. No brains required. Just pen pushing
leigh, windsor,berkshire, england
If these top executives in the public sector could receive twice as much in the private sector, then something is surely holding them back? Could it be that their pensions are considerably better, they are virtually unsackable, and the work they are required to do, is much less demanding?
David Cook, Norwich, Norfolk
What a great idea - lets trim the bloated state in the UK, particularly the civil service. Cutting MPs and ministers salaries would be a great start. The unfunded pensions time bomb of the state sector will become a key factor in governance of the UK, when the public finally recognise the problem.
Sam Mccormick, Sandy, Beds
It's not just the fat cats who should be purged but also the legion of employees charged by the councils with fining, controlling & snooping on citizens. These unnecessary employees paid by the taxpayer should be the unemployed and not the citizens in the private sector who have lost their jobs.
Robert Winter, San Sebastian, Spain
The Conservatives seem like Old Labour with their attacks on 'fat cats.' But who appointed a large proportion of the 'fat cats' in Local Government? Look at the published list and see the obvious answer to that obvious question - the Conservatives, of course!
Geoffrey Woollard, Cambridge, England
After immigration and rising crime rates. The appalling level of rising council tax is a big vote winner. For the first time in my life i will vote Tory. Labour have been a miserable failure
David, Brighouse, England
These salaries are crazy. Councils are NOT businesses, they are just overhead: no semblance of innovation, risk or progress, just an ever-decreasing service for an increasing price. Let us vote on council tax levels, mandate service levels (weekly bin emptying!) and make them balance the books.
James Sutherland, Perth, Scotland
What a funny world we live in. Everyone in Welsh local government knows that when Labour regained control of Rhondda Cynon Taf in 2004 Kim Ryley was basically told that his services were no longer required. It was probably the best advice he was ever given looking at his present salary.
Dai, Treherbert, UK
''Suffolk justifies Ms Hills salary by saying that the authority is a £1 billion business. ''
But it is NOT a business. It is a public service. Businesses have to make a profit, Councils are there for the good of the local community. No comparison.
Filey, Scarborough, England
The most revealing part of this article is that Council Tax is handed to Central Government for re-distribution. By definition this makes Council Tax a national tax and not a local one. If Council Tax was a local tax then all the revenue raised should be spent in the area in which it was raised.
Stephen, St. Ives, Cornwall
Capping high salaries is critical to stability.
Councils like Suffolk may well be £1billion operations, but their executives are merely administrators - they do not create wealth!
The managing director or CEO of a private company "drives the business" and drives productivity!!
peterj, aberdeen, uk
The Tories are now gradually becoming electable by attacking Labour's borrow, spend and waste culture. This needs to be extended to get rid of all the 'Diversity Officer' and 'Marketing Consultant' non-jobs which do nothing to improve the efficiency of council services.
Paul, Coventry,
I suggest also introduction of two rules:
1. One tier of local government to implement only services defined by local government (as evidence of last year shows that RDAs have no real economic power - no government has);
2. Top salary to be factor of 5 bottom salary. Sames goes for Civil Service
Richard, UK,
I like it.
Introduce this plan without fear nor affection and you have my vote.
Weaver, China,
At last, the Tories have a meaningful policy.
Council Services deteriorate whilst these overpaid Fat Cats delude themselves they are doing a good job. They have a captive market about which, we the public who pay for their extravagant greed and indulgence, can do nothing about!
Pat, BOURNEMOUTH, United Kingdom
The only thing missing is the admission that Council Tax is another level of taxation like NI payments that rises when the government focusses the populace on the basic rate of income tax.
Other countries don't have an equivalent to Council Tax and so are more transparent in their tax burden.
Howard, Nottingham,
Peter Drucker once warned about excessive pay of corporate chiefs. "This is morally and socially unforgivable and we will pay a heavy price for it." His prophecy has now come true thanks to the greed of bankers and boardroom executives. "No CEO is worth more than 20 times the lowest paid employee."
peterfieldman, paris, france
Set realistic national pay scales.
Control/limit all other forms of bonuses, expenses.
Independent body monitors all council budgets.
Punish waste.
Power to sack poor performing officials.
Publish accounts for voters to comment and vote on.
Open competiton for jobs.
Leigh Vernier, Riyadh, Saudi
Democracy is all but driven out in so many areas.
Let the percentage Council Tax change, in a range of 5 to +5%, be voted on every year by the electorate.
Let the Chief Executive and the layer below be elected every four years.
That would change attitude and performance.
Malcolm, Fairford, England
Turnover in the public and private sectors is not comparable. The private sector relies on turnover i.e. sales and wealth creation, whereas the public sector merely imposes charges or tax.
I don't see any local authorities struggling to avoid going the same route as Woolworths.
Ted Taylor, Newbury,
If these individuals were worth these salaries local government should be as efficient as the most successful private enterprise. Would anybody out there bestow such an accolade on there local authority?
Robert, Hartlepool, Cleveland
I left the UK ten years ago and I am very glad I did. The UK is almost bankrupt with a crippling welfare system rewarding the lazy and idle. Its time for a change, but it is sad that not a single politician is strong enough to do what is necessary.
Al, Ashgabat,
in london we should amalgamate local councils on gla set-up. this would remove 16 chief executives and many deputy and assistant chief executives
terry sullivan, Morden, england
...and I agree with those who say that these people could not get jobs in the private sector at half their public sector pay. How long must we put up with the lies of public sector apparatchiks, protected by the Stalinists...err...the State? And protected by media collusion in some places.
leigh, windsor,berkshire, england
absolutely about time. you could get rid of the entire middle management strata in the public sector and it wouldnt make any difference to frontline services. it really is time these people were forced to live in the real world with the rest of us.
jimmy newfound, telford,
Almost no risk at all in these jobs, as there is almost no accountability to voters. Whoever thought up the whole rotten system needs to rethink urgently. We don't need these people at all.
Colin, Shrewsbury,
Hmmm interesting how the public sector sick-days outnumber those by private sector staff. It's not because 'stress' is higher for paper-pushers. There's no accountability when the ratepayers bear the bill, and anyway there is the final salary pension - oh, also funded by the ratepayer.
James, Bristol,
When I ran my own company I never employed Council employees: they are overpaid, unproductive, abuse sick leave, grossly inefficient, no sense of responsibility. Labour have foisted de facto communist apparatchniks into place. The Tories need to institute accountability & productivity & termination
MG, Northleach, UK
Ah! So now I know where my council tax hikes have been going,
whilst I get a poorer service.
Ronald, Kent, UK
The purpose of a local authority is to serve the people in its area. National politics should not be allowed to enter the decision making processes. That is not what people pay council tax for. Look at the make up of the bills. Good management is essential. I see little evidence of that at home.
Robert, Hartlepool, Cleveland
Excellent way of bringing these public sector workers earnings back to reality.
Many of us are tired of cutting back whilst public workers have enjoyed a huge splurge with little or no effort.
Now the next phase is to remove each & everyone of the 500,000+ civil servant jobs invented by Gordon.
Belarmino Vaz, Ispra, Italy
The amount these fat cats earn is a fortune, much more than what they would get in the private sector! No wonder my council tax has increased well over 100% in the last 8 years. It's shocking the pay levels these people can earn and effectively they do not generate any revenue. Jobs for the boys!
Harry, Gravesend, UK
Oh happy days - Dave is getting the message now, isn't he? Lets not forget the £40,000 a year Councillors who would struggle to find real employment on half that salary. Time to go back to expenses only for politicians. There's no shortage of volunteers.
MarkS, Leeds,
They need to start purging the fat-cat MP's in their own party - especially the ones with 2 or 3 different jobs
Keith Price, Luton, UK
Quote: ' a chief executive at a big council could earn on average more than twice as much in a public or private organisation of a similar size.'
So why do we not see any of them moving that way, ever?
Because no successful company would employ them at any level above office boy/girl.
Philip C, Wallingford, Oxon
Getting top posts in local government is like passing the parcel between old mates and cronies from neighbouring rotten boroughs. No one knows where these 'chief executives and 'heads of service' come from. They are vastly overpaid, their works are never open to independent scrutiny and assessment.
J Gibson, Cheshire,
Could we please have the figures for all the Welsh Councils. We never seem to hear anything about them though from the way our council wastes money I can't believe they are not on the same gravy train.
J.J., Mold, Flintshire
Paul Coen, of the Local Government Association, expects us to believe that these people, on their £200,000+ salaries, could get twice as much in the private sector!
They'd struggle to secure any job at all in the private sector........ at half the wage they get now.
And they know it!
LB, Birmingham, West Mids