16 March 2010
Council chief executives are calling for Communities Secretary John Denham to apologise after a government-commissioned investigation into chief executives’ severance deals found few examples of ‘boomerang bosses’.
Denham ordered the review last year, citing a ‘spate of cases’ of chief executives who receive payoffs on their departure but then find another top job in local government.
The Audit Commission study, By mutual agreement, published today, found that 122 chief executives left their positions between January 2007 and September 2009. Thirty-seven of these received a severance package, but only six were re-employed in local government within a year.
David Clark, director general of the Society of Local Authority Chief Executives and Senior Managers, told Public Finance: ‘Denham should apologise – he was looking for all these chief executives leaving one local authority with a payoff and becoming chief exec of another. He’s commissioned this report and they can’t find them.’
He said there was only one example of a chief executive who left one authority with severance pay only to take another top job elsewhere, with the rest taking lower-ranking executive positions.
The report says the average deal was worth 1.8 times the chief executive’s basic salary, and many payouts came about because of a breakdown in the working relationship between council leaders and senior officers. Clark added: ‘We do agree that this is a stupid system and political whim should not be a reason for ending someone’s career.’
The Audit Commission recommends that councils should treat severance packages only as a last resort, and avoid using them as a ‘reward for poor performance’.
It calls on the government to force councils to publish the details of each package, adopt a formal appraisal process, and review all proposed payoffs via a cross-party committee.
Denham has accepted the recommendations.
