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Kent CEO payoff "extremely disturbing"

Wallace new Mark Wallace of the Taxpayers Alliance says an example from Kent shows councillors are being too generous with the contracts they agree for senior staff.

Given the dire financial straits that many councils find themselves in, and the fact that a hefty proportion of all costs in the public sector are related to employing people, redundancies are inevitable to some degree. Whilst many people may understandably tip toe around the issue, it cannot be avoided.

The increase in council staff in some areas has been staggering. For example, TaxPayers’ Alliance research has found that the number of people earning over £50,000 a year in local government has risen 11-fold since 1997.

With the rising cost of salaries, and of course the crippling cost of gold-plated local government pensions, this is simply unsustainable. The Town Hall payroll must be slimmed down.

One thing that is yet to be fully calculated, though, is the potential cost of doing just that.

As pay and perks have risen inexorably in recent years, so have the payouts given to those made redundant – and even to those who step down voluntarily. Indeed, many such payments have reached eye watering degrees.

Take, for example, the Chief Executive of Kent County Council – Peter Gilroy. Mr Gilroy has already been in the headlines a number of times. First, for being England’s best paid local government official in 2005/06. Then, for ordering his council’s Freedom of Information Officer not to release details of his remuneration the next time that we requested it so as to duck further criticism. Unfortunately for taxpayers, Mr Gilroy’s hefty earnings are back in the spotlight again.

Back in 2006, when he was expected to step down in May 2009, Mr Gilroy negotiated a 12-month extension to his contract. It has now emerged that as part of that extension he was promised a jaw-dropping £200,000 lump sum upon leaving – on top of his ordinary remuneration, which was reported to be £244,000 in 2008.

These payments would be worrying at the best of times, representing as they do a large-scale transfer of taxpayers’ cash to officials who are already extremely well paid. In our current financial mess, though, they are extremely disturbing.

If someone can be paid this much when their departure is voluntary and on good terms, how much will it cost when it becomes necessary to abolish many council posts wholesale?

Of course, it will be rare for councils to get rid of the position of Chief Executive (although there is a strong case for doing so where there are directly elected Mayors), but given the bloated middle and senior management tiers, we are still presumably facing a very hefty bill indeed.

So next time that you see your councillors, ask them these two questions: first, how many staff are they going to need to lay off to balance the books? Second, have they checked yet what payments the council is going to be liable for?

It is undeniable and unavoidable that the size of the public sector payroll will have to be reduced – and we must hope that those in charge of our Town Halls have not signed contracts that are so generous as to make the cost of doing so prohibitively expensive.


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