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Birmingham wages row is perfect opportunity to introduce performance-related pay for councillors

Birmingham wages row is perfect opportunity to introduce performance-related pay for councillors

🕔03.Sep 2014

Chief blogger Paul Dale suggests the Council wages row is the perfect opportunity to sort out how many professional councillors we need – and resolve questions of pay and performance management.

When Labour regained control of Birmingham city council in 2012 one of the new administration’s first decisions was to order a review of the system for paying salaries to councillors.

It was felt that a web of special responsibility allowances distributed to getting on for a third of council members was complex and far too expensive.

Labour, when in opposition, noted with disapproval the distribution of SRAs approved by the 2006-2012 Tory-Lib Dem coalition which, naturally, had to satisfy the demands of two political groups

The more cynical among us imagined that the instruction by council leader Sir Albert Bore for a “root and branch review” was akin to kicking a thorny issue deep into the long grass and not very much would be heard of this ever again.

We could not have been more mistaken. Certainly, it has taken the Independent Remuneration Panel ages to come up with its recommendations, but talk about lighting the blue touch paper and retiring to a safe distance.

What’s being proposed is a radical change to the way SRAs are calculated. Rather than simply taking a job, say chair of the planning committee, and asking ‘what’s it worth?’ the panel decided first to work out the appropriate salary for Sir Albert and then base all other payments on a proportion of the leader’s SRA.

There are to be four payment bands. The first, from 100 per cent to 75 per cent of the leader’s £50,000 SRA is for councillors whose jobs entail strategic leadership with overall responsibility for decision making for the direction and running of council services.

Band two, 50 per cent to 74 per cent of the leader’s SRA, is for councillors whose jobs involve strategic shared responsibility within cabinet and also individual responsibility with chief officers.

Band three, 15 per cent to 49 per cent, is for councillors with responsibility for chairing scrutiny committees.

Band four, five per cent to 14 per cent, is for all other councillors with special responsibilities.

The panel had to take a view about the amount of responsibility shouldered by cabinet members and committee chairs, and the real workload placed upon them. This was decided following a series of interviews with councillors and council officials about the precise roles being carried out.

There are precious few winners and lots of losers from the proposed new system, which will cut the overall councillors’ wage bill by 18 per cent, or £100,000.

Having ordered the review Sir Albert now finds himself in a tricky political position. Employment committee chair Mohammed Afzal is in line for a 60 per cent pay cut after the panel concluded the responsibility attached to his job wasn’t very great at all. Cllr Afzal, it should be noted, is one of Sir Albert’s oldest and closest political allies.

The ten district committee chairs face a reduction of almost 50 per cent, again because the panel didn’t buy the argument about huge responsibilities attached to the job.

Cabinet members will be £3,000 out of pocket because the panel reasoned that Sir Albert’s new cross-cutting departmental structure for the top team replaced overall individual responsibility for a portfolio with a more collective responsibility.

It seems highly unlikely that the panel’s recommendations will be approved in their current form. My money is on the panel being asked to think again. And don’t bank on the panel’s independent chair Sandra Cooper remaining in post for too much longer.

Sir Albert is reported to be challenging the basis upon which the pay cuts were worked out. The council’s chief legal officer, David Tatlow, has helped his case by warning that some of the recommendations are unfair and could be open to challenge in the courts.

This, though, puts the council leader in the unenviable position of challenging decisions of a panel set up precisely to remove elected members from taking any part in setting wage levels.

The argument for paying elected councillors a reasonable wage to run our towns and cities was put to bed a long time ago, thank goodness.

Otherwise we’d still be a country where elected representatives consisted largely of the landed gentry, retired colonels, and anyone wealthy enough not to worry about doing an important job without financial reward.

But, and here’s the rub, who decides how much councillors should be paid, and who monitors performance to make sure those that are entrusted to run town halls are value for money?

Obviously councillors can’t be seen to set their own wages, as much as some would like to.

Almost all councils follow the example of business best practice by using independent remuneration panels to come up with evidence-based recommendations for appropriate salaries.

As for setting targets and monitoring what the councillors are actually achieving, I’m not aware of any council that is doing this. Surely, if councillors are to be paid the appropriate rate for the job they should be required to meet key performance indicators, as happens in the private sector?

There’s also the matter of cabinet members and committee chairs with second jobs. A blind eye has been turned over the years to councillors continuing with their often well paid occupations outside of politics while claiming special responsibility allowances for the apparently onerous task of chairing a committee or occupying a cabinet seat.

Sir Albert, until fairly recently, combined his council leadership role with that of chair of Birmingham University Hospitals NHS Trust, a role requiring considerable work input. There are members of his cabinet and committee chairs with second jobs.

The Birmingham wages row hits at the heart of a far bigger debate about the future of local government. Do we want or need ‘professional’ councillors and if we do, are we prepared to treat them as paid employees rather than gifted amateurs? Is there really any necessity for Birmingham to be run by 120 councillors, when less than half that number could do the job just as well?

These are questions that have been kicking around for a long time. There are always plenty of reasons put forward for maintaining the status quo, unfortunately.

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