DCLG publishes guidance on Localism Act pay accountability provisions
The government has published draft guidance on the content and application of statements required by the pay accountability provisions of the Localism Act, under which senior pay will be subject to a full council vote.
The provisions require councils and other relevant authorities to prepare pay policy statements, articulating their policies on workforce pay issues – particularly in relation to senior staff and the lowest paid employees.
The statements will have to be prepared for each financial year, beginning with 2012/13. They will also have to be approved by full council, or a meeting of members in the case of a fire and rescue authority, and be published on the organisation’s website.
The guidance, to which authorities must have regard when exercising their functions under the pay accountability provisions, sets out what the statements should cover.
These include the authority’s policies in relation to:
- the level and elements of remuneration for each chief officer
- remuneration of chief officers on recruitment
- increases and additions to remuneration for each chief officer
- the use of performance related pay for chief officers
- the use of bonuses for chief officers
- the approach to the payment of chief officers on their ceasing to hold office under or to be employed by the authority, and
- the publication of and access to information relating to remuneration of chief officers.
The guidance also sets out what 'remuneration' for these purposes covers:
- the chief officer's salary or, in the case of a chief officer engaged by the authority under a contract for services, payments made by the authority to the chief officer for those services
- any bonuses payable by the authority to the chief officer
- any charges, fees or allowances payable by the authority to the chief officer
- any benefits in kind to which the chief officer is entitled as a result of the chief officer's office or employment
- any increase in or enhancement of the chief officer's pension entitlement where the increase or enhancement is as a result of a resolution of the authority, and
- any amounts payable by the authority to the chief officer on the chief officer ceasing to hold office under or be employed by the authority, other than amounts that may be payable by virtue of any enactment.
On the pay vote ceiling being set at £100,000, the Department for Communities and Local Government said: “This includes publicly justifying any big bonuses, and above inflation annual pay rises, or hiring a person already in receipt of retirement or severance money. Authorities should have an explicit policy in their pay statement on whether or not they permit such practices.”
The DCLG said the measures would come into force in two months' time, with pay policy statements having to be in place by 31 March 2012.
Ministers urged councils to schedule a full council meeting “as soon as possible so pay policy is ready in time for the law change”.
Junior government minister Bob Neill said: "The Localism Act opens up council pay rules so that salaries for senior posts get 'democracy proofed'. Local authorities will now publicly vote on these practices at full council.
"Taxpayers have the right to expect that their interests are being protected including when senior staff move from post to post. Any responsible locally elected councillor will want to use their pay vote to secure value for money."
Where councils want to depart from their pay policy, this would need to be referred back to the full council for a vote.
The draft guidance – under section 40 of the Localism Act – can be viewed here.
