New rules to compel local authorities to fully disclose the pay and perks of top posts and name those earning more than £150,000 were set in law today, announced Communities Secretary John Denham.
Around 475 local authority bodies will now legally be required to publish pay information covering salary, bonuses, pensions, perks and severance pay outs in their next annual statement of accounts.
The rules now include a requirement for councils to publish named individuals earning more than £150,000 in £5,000 bands bringing them in line with the Prime Minister’s public sector pay commitment in Putting the Frontline First.
John Denham sees the 2010 changes as the first step towards making council wage bills fairer to meet the legitimate expectations of taxpayers.
The new regulations, laid in Parliament today, put councils at the high transparency standards the Prime Minister set recently for public servants and members of government. It also extends them to senior police officers.
Last week, John Denham confirmed that local government would be included in the senior public sector pay review. It will report ahead of Budget 2010 and include recommendations on pay and bonus caps. Councils are already expected to deliver the agreed public sector pay cap of 1 per cent.
John Denham has also asked the Audit Commission to carry out an urgent probe into so called 'Boomerang Bosses' - Chief Executives who walk off with big severance pay-outs after fall outs with the council's political leaders – to see if practices are robust and value for money. It is expected in the New Year.
John Denham said:
"As we bear down on the national debt we must protect frontline services the public need like support for the elderly and vulnerable, social housing and rubbish collection without breaking family budgets.
"The average pay of a local government worker has only gone up by £6,000 in seven years while the average for a chief executive has gone up by £40,000. I know most of these people have given a lifetime of public service. But in some cases this has just gone too far.
"Next year councils will have to publish the pay bill for their top people in an open and transparent way. The taxpayer - the real pay boss - has a legitimate right to see this information and decide whether or not it is fair."
Notes to editors
1. Last week the Prime Minister announced three challenges for public sector pay:
- New scrutiny levels above £150,000 and bonuses over £50,000 with the Chief Secretary to the Treasury approving pay above that level;
- A review of senior pay across the public sector to be led by Bill Cockburn;
- Publish full remuneration of named individuals paid more than £150,000 in bands of £5,000.
2. The new regulations amend the Accounts and Audit Regulations 2003 (Si 2003/533) ('the principle regulations'). Regulation 7 amendment constitutes that a statement of accounts should include reference to remuneration reporting for senior officers. The amendment establishes comparable remuneration disclosure for all senior staff within organisations that will fulfil the same degree openness and transparency as the civil service and listed companies in the private sector (under the Companies Act 2006). The principle regulations apply in relation to England only.
i. The regulations make it a requirement for 'remuneration disclosure' to include:
(c) additional payments;
(d) compensation or ex gratia payments;
(e) benefits in kind and
ii. imposes a new requirement for the disclosure of individual remuneration details for all officers earning over £150,000 by name, and for all other ‘senior’ employees and ‘chief officers’ of police for each financial year by post title, within the authority’s annual statement of accounts under the following categories: salary, fees and allowances; bonuses; expenses allowance; compensation for loss of employment; pension contribution (employer’s contribution); any other emoluments; and in the case of senior police officers, any other payments made to them.
iii. In addition it also sets a definition of ‘senior officers’ as individuals whose remuneration is more than £50,000 per year (pro-rata) and hold defined ‘senior’ positions. In the case of local government this will comprise Chief Executives Officers and their direct (senior) reports and can be considered to be equivalent to ‘Board’ level.
3. The local authority bodies covered include London borough councils, county and district councils in England; joint authorities; the Greater London Authority; National Park authorities; Waste authorities; TfL; Police and Fire Authorities.
4. The regulations are a negative Statutory Instrument which become law after passing through a 40 day period when they can be preyed upon. It then comes into force on 31 March 2009.
5. The regulations bring pay disclosure in line with the recommendations of the Information Commissioner's Office: www.ico.gov.uk/upload/documents/library/freedom_of_information/practical_application/salaries_v1.pdf.
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