Whether it’s university vice chancellors, the chief execs of FTSE 100 companies, MPs or financial traders, there always seems to be a justification for huge pay rises while most staff get little extra. Now that is happening at Shropshire Council. The chief executive is in line for a whopping £47,000 pay rise in basic pay, while staff are expected to get just six percent. I think they should both get the same.
There is no doubt that Shropshire Council pay rates are lower than other councils. There is also no doubt that the council is having trouble in recruiting and retaining key staff. If the council hadn’t cut pay rates in 2011, we wouldn’t be in this mess.
The pay rises will cost £5.3 million a year. The plan is to pay for that from savings in the budget for adult and children’s social care and the public health budget. These have yet to be finalised or their impact assessed. Meanwhile, the council is to cut its workforce by around 200. A voluntary redundancy programme is underway.
We are where we are now because of what happened in 2011.
It was one of the darkest hours in the history of local government. It even made headlines in the Daily Mail. On 30 September 2011, Shropshire Council sacked all its staff. They were given a choice. They could sign a new contract that would cut their pay by 5.4% and impose reduced terms and conditions. Or they could join the queue at the Job Centre.
The move was typical of the callous attitude by council leaders at the time. The pay cuts and mismanaged redundancy programmes left Shropshire Council in a demoralised state. The council failed to invest in updating its archaic computer systems. Shirehall began to fall apart.
All councils have faced exceptional cuts to their budgets. A couple have been brought to the brink of ruin. But few have engaged in acts of brutalism and neglect like Shropshire Council in its early years.
No wonder then that the council has struggled to attract staff and failed to keep them.
Why be a social worker in Shropshire and get lower wages than elsewhere?
The result is a high dependence on agency workers. It costs twice as much to engage an agency social worker as it does to employ someone directly. Last financial year, Shropshire Council was expected to spend £4.1 million on agency staff. We need to bring that down.
Things had to change and they are changing. Shirehall is being repaired and computer systems are being upgraded. Redundancies haven’t stopped but the approach is more rationale, with a greater awareness by political leaders that staff are human beings.
Which brings us back to wages.
I have no difficulty in agreeing to an increase the pay of council staff. We must pay the market rate to attract and retain staff.
Nationally, the Treasury blocked annual pay awards from 2010 to 2014. Increases have been capped at 1% since 2016. Shropshire Council cut pay and allowances on 2011 and 2012. This was a real term cut of 4.4%. Since 2012 the gap between Shropshire and from the nationally negotiated rates has increased to 5.71%. That’s why we struggle to recruit and retain the right people, not just in social work but finance, IT and several other areas.
Nationally, a pay increase of 2% has been negotiated, with higher increases for the lower paid. On Thursday, councillors will be asked to approve this and approve a return to national pay rates from October 2018. That will remove the 6% gaps between what we pay and what other councils pay.
Importantly, this will help close the gender pay gap at Shropshire Council because the council employs more women at lower grades.
The pay of the chief executive and senior managers is a more difficult issue.
After the previous chief executive Kim Ryley left the council overnight in July 2012, the then leader Keith Barrow said the council didn’t need a chief executive. Clive Wright was promoted to the role of Operations Director in November 2012. Ryley had earnt £180,000 a year, Clive Wright was paid £97,760. His role quietly became one of chief executive. He was paid less than other chief executives, so council leader Malcolm Pate pushed through a 20% pay increase in February 2016. This was packaged as a performance related bonus. Pate said that without the increase, Clive Wright would go elsewhere.
Shropshire councillors will decide at full council on Thursday whether to increase the basic salary of the chief executive by £47,000 to £150,000 a year. The salaries of directors below him will also increase, from around £100,000 to £120,000-£130,000.
This proposal follows a review by the Local Government Association which looked at the pay of chief executives in similar local authorities. The thesis is that because they pay more, we should do so also.
These are large sums. The proposed basic pay increase for the chief executive is twice the average annual wage for people working in Shropshire (£24,200 in 2017). That’s a 46% riser. Clive Wright earns about £125,000 if the bonus awarded in 2016 is included, so the real increase is lower, around £25,000 (20%).
We should not increase the pay gap between the council’s highest and lowest earners. We have no evidence that we won’t be able to recruit at the current level of pay for directors and the chief executive. And I don’t like the principle of paying someone already in post much more just because they could get more if they moved elsewhere.
I would be happy for the senior directors and the chief executive to get a 6% increase in line with the rise proposed for the staff they employ.