The Golden Goodbye culture must stop

Mark Wallace of the Taxpayers Alliance says local government offers huge rewards for failure.

The debate over pay and other benefits for senior council staff is always hotly contested – and is set to become more so, given the recession we are now in. At least in part as a result of the TPA's now regular surveys of the number of top town hall earners, the public are increasingly aware of the generosity of local government executive wages, bonuses, pensions and other benefits. There is one area which remains hard to survey but has incurred an increasing cost for taxpayers in recent years, though – the so-called "golden goodbye".

It was traditionally argued that public servants were given more generous pensions than the private sector because their salaries were less generous than those of their private sector counterparts. The picture in 2009, though, is very different. Not only have the salaries of local government managers soared in recent years, and not only are their pensions more generous than those most of the rest of us can afford, but a culture has arisen of enormous lump sum pay-offs when they come to retire.

This was starkly illustrated last week at Brighton and Hove City Council. The Chief Executive, Alan McCarthy, reportedly enjoyed a salary of £170,000 a year, but decided to retire early at the age of 54. The Brighton Argus reports that despite allegations that his departure is due to a falling out with leading councillors, his retirement package will total a cool £500,000.

The report specifies that he will get a "discretionary" lump sum of £130,000, with the remaining £370,000 being made up top-up contributions to his pension pot, paying his legal fees and allowing him to keep his laptop and mobile phone. Assuming that the laptop and phone aren't diamond encrusted, and given that fact that the lawyers were apparently only briefly involved, that is a pretty hefty pension pot he's stacked up, too.

Irrespective of how much they may or may not have disliked him, or how much he may have wanted to leave their employ, this is clearly a council who have short changed their local taxpayers. This man was paid an extremely high salary while he was working, so to choose to give him £130,000, add a small fortune to his generously framed Local Government Pension and pay his legal fees for him is frankly a cavalier way to spend taxpayers' money. In a recession, with local residents facing redundancy and a further rise in council tax, it is obscene profligacy that councillors should never have agreed to.

The days when public servants perhaps lost out on salary but gained a bit back in retirement are dead and gone – now it seems to be win, win, win at every stage, all at taxpayers' expense.

At least in Brighton & Hove, some of the details of this deal have been published. Northumberland County Council, for example, are still refusing to reveal any information about the reportedly six-figure pay-off given to their outgoing Chief Executive, despite repeated requests from the public and local media.

By their nature, the timings of retirements, sackings and other departures are fairly haphazard, so they can be difficult to monitor. At the moment, most of them are simply bundled up into the opaque remuneration reports in council's accounts, leaving the public to guess at the details.

This is unacceptable. With a lot of councils being abolished in the move to unitary authorities that is currently afoot, the number of council managers set to leave with large sacks of taxpayers' cash is set to rise. The full terms of each and every one of those deals must be made public for all to see.