Hail to the Chief?

Should local councils employ Chief Executives? John Redwood thinks not. In a post on his excellent blog a while ago, he wrote:

"Since 1974 we have seen the introduction of the Chief Executive Officer in to the world of local government. They arrived with the hated new counties of Avon and the rest cobbled together out of smaller cities and rural areas with differing senses of loyalty. They were introduced in the naive belief that they would make local government more efficient and better managed, drawing on a false analogy with business. The bogus Counties have now been swept away. It is time to review what the CEOs have achieved and ask if the idea has lived up to expectations?"

Redwood went on to argue that Chief Executives do not face the same challenges as their opposite numbers in the private sector - for instance on budgeting:

"Most Council executives present their Councillors at the beginning of the annual budget process with a long list of demands for extra spending, and claim that crucial and valued services will have to be cut if the higher administrative budget is not agreed to along with extra tax to pay for it. I have never met a Council CEO who thinks they can deliver as good or better service for less money (in the way industry has to to stay in business) and volunteers a cut in the Council Tax for the first budget draft. If cost control breaks down during the year in a particular service or area, the CEO simply presents a demand for revised budget amounts to be spent, raiding the contingencies fund and the Council balances to pay for it."

He concludes by suggesting the alternative that a "Council could dispense with a CEO’s department. The Council’s chief financial or legal officer could be made the chairman of the executive team, taking on the executive leadership role, whilst the Council’s strategy could be very clearly the responsibility of the Leader’s office."

For their part the media savvy Taxpayers Alliance have included Town Hall CEOs as part of their campaign to name and shame public sector fat cats.

On the other hand in Hammersmith and Fulham we have delivered Council Tax cuts while retaining a highly paid Chief Executive  - although we have rationalised Council departments and thus reduced the number of officers on six figure salaries.

When you have a organisation with a budget of hundreds of millions of pounds it is probably sensible to offer a competitive salary to the person in organisational responsibility. Paradoxically this may be more important if you are seeking to bring in radical changes, for instance to achieve lower spending, than if you are content to keep everything ticking over.