Communities Secretary John Denham today announced a review to examine how Town Hall chief officers are being allowed to walk off with big pay-offs after falling out with the council’s political leadership.
Today’s action has been prompted by a spate of cases where well-paid local authority executives have been dismissed with large severance payments - only to be appointed shortly afterwards to a senior position in another authority. Some executives appear to have parted company on the basis of a fall-out or personality clash with the council leader – not because of any shortcomings in their professional abilities.
Mr Denham has asked the Audit Commission, which is responsible for monitoring Local Authority finances, to look at the specific issue of so-called “boomerang bosses” and to establish whether the practices and procedures that govern this issue are sufficiently robust to protect the taxpayer and offer value for money.
He wants to be reassured that taxpayers’ money is not being used inappropriately.
John Denham said:
"It’s not acceptable for Town Hall chiefs and Council Leaders to agree expensive deals to part company for no justifiable reasons or just because they don't get on or they'd prefer to work with someone else.
“In the current climate every taxpayer’s pound must be made to go further and councils must show they are providing value for money with services, with salaries and with tough decisions about their corporate executives.”
Communities and Local Government has already acted on this wider issue by announcing in April that it would introduce legislation to bring in new remuneration disclosure rules for a range of public bodies including local authorities. This will legally require all councils to set out in their annual accounts from next year detailed information about pay, perks, pensions and pay-offs for senior officers. These new standards would bring councils up to the same high standards that are already required of civil servants and Government Ministers. Mr Denham has made it clear that he is prepared to take further action where necessary to tackle what he sees as the inappropriate use of taxpayers’ money.
Mr Denham is clear councils do not need wait until the new regulations come into force. The starting point for increasing transparency and building trust between individuals and their councils should be now.