Written Statement - The Cost of Senior Management in Local Government

As Members will be aware, I published a White Paper, Reforming Local Government: Power to Local People, on 3 February 2015. The title of section 3.15 is The Cost of Senior Management in Local Government. 

I have received some queries in relation to this section. For the avoidance of doubt, the figures in this section are those which have been published by the local authorities themselves in their statements of account for 2013/14. In accordance with the requirements of the Accounts and Audit Regulations (Wales) 2005 and the CIPFA Code of Practice on Local Authority Accounting, local authorities are required to publish details of their senior managers, including job titles and salaries. The same definition of senior management was used by the Wales Audit Office in their February 2014 report, ‘Senior management pay across the Welsh public sector’. 

The purpose of this section of the White Paper is to illustrate the wide variation in the number of senior managers in local government in a way which does not appear to be related to the size or gross revenue expenditure of the local authority. My intention is to stimulate a debate about the number and remuneration of senior management in local government which I consider excessive. On the basis of the CIPFA Code, the Wales Audit Office defines senior managers as all persons whose salary is more than £150,000 a year, and any person whose salary is at least £60,000 a year, including the head of paid service, any statutory or non-statutory chief officer, along with any person having responsibility for the management of the local government body to the extent that the person has the power to direct or control the major activities of the body.
 
The White Paper uses the shorthand term ‘director’ to include all those in senior management positions. To clarify the text of the White Paper, I will amend section 3.15 to make clear that the use of the word ‘director’ is meant to include all senior managers in local government, not only those whose specific job title includes the word director.  The Assembly’s Public Accounts Committee’s report of November 2014, ‘Senior Management Pay’, recommended that a clear definition of what is meant by a senior post is produced and disseminated. I will write to the Auditor General for Wales to seek his views on the matter.

I have no doubt that the public and Assembly Members would concur that these are the senior managers in local government. Their total cost from public funds in 2013/14 was £25.7 million.