Clause 1 - Approval of certain remuneration of local government employees

Part of Local Government (Pay Accountability) Bill – in a Public Bill Committee at 10:00 am on 22 May 2024.

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Photo of Simon Hoare Simon Hoare Chair, Northern Ireland Affairs Committee, Parliamentary Under Secretary of State (Department for Levelling Up, Housing and Communities) 10:00, 22 May 2024

I am grateful for the hon. Lady’s observation. She makes the key point that local authorities always do well to take into consideration whether the elected members as well as the officers reflect the broad demographics and composition of their communities. I know the hon. Lady was not suggesting it—I interpret her remarks as saying what I believe to be true, which is that all appointments should be made on merit—but we are not talking here about quotas or positive discrimination. I think—I am sure the Committee would agree—that positive discrimination is actually as bad as negative discrimination. We need the best people doing the best job that they can. I take the point entirely that looking like, sounding like, and resembling the communities that are being served is an important consideration, but it should not be the be-all and end-all of things.

The Bill is right, and the key word in it is, of course, “accountability”. If one is to be paid more than £100,000, which is more than a Member of Parliament secures—let us put it in context for a moment—it strikes the Government and me as absolutely right that that decision should undergo a transparent and democratic process. It will allow members, whether of a full council or a committee, meeting in public to tease and test the job description, the responsibilities and expectations and the skills and aptitude of relevant candidates, be they internal or external appointments, with regard to the appropriateness and marrying-up of the skillset versus the remuneration set out. That word “accountability” is probably the key word in the Bill.

I hope the Bill reaches the statute book. As I say, it is a valuable tool in ensuring that adequate scrutiny is in place for high-salary officers in local government, while still enabling local authorities to retain flexibility and independence on workforce pay. As my hon. Friend the Member for Peterborough rightly said, such decisions are best taken locally, with an assessment of local circumstance and how best to meet the challenge.

According to research, because this is not a theoretical Bill trying to tilt at a Don Quixote-type non-existent windmill, undertaken by the TaxPayers’ Alliance—I must confess that I have some intellectual differentials with the TaxPayers’ Alliance on some points, but on this I think it is right—more than 2,500 people employed in local authorities in England in the year 2022-23 received total remuneration of at least £100,000. Although, as my hon. Friend said, local authorities are independent employers responsible for workforce pay, the Government expect councils to demonstrate judgment and show restraint with regard to salary offers.

I say that in particular having been the Minister who took the argument from local government to the Treasury for an additional sum of money in the local government funding settlement. We know that service demands are rising as a result of a whole series of pressures arising from demographic shift and change, but it does not augment the argument hugely if one pleads poverty in one speech and starts doling out the cash in another without having that democratic imprimatur of councillors saying, “Yes, we think this is the right thing to do for the communities we seek to serve.”

As my hon. Friend the Member for Peterborough said, the Bill guarantees that there is appropriate oversight and transparency on senior pay by introducing a mandatory approval requirement—not guidance, but a mandatory requirement—for appointments to posts with an annual salary of £100,000 or more. As I say, that is an evolution of the key point. The Bill will place on a mandatory footing the already published Government guidance that we understand is being adhered to in broad terms, thereby making current arrangements more robust, giving additional certainty to head of paid service and council committees and giving confidence to the communities who, month in, month out, pay their council tax, do so in good faith and want to ensure that councils use their money wisely. It will increase transparency and provide something of a check or brake on excessive or escalating pay offers.

As I have said, I support the Amendment tabled by my hon. Friend, which makes provision that resolutions held for the purposes of the Bill will not qualify as being exempt from public disclosure. That will make explicit that votes on senior salaries must be held in view of the public, thereby furthering the aims of transparency on such matters. At the heart of the Bill, which I again commend my hon. Friend for, is a reminder that the state, whether central or local, of itself has no money. We are only custodians of that which we raise through taxation, whether local or central, so nobody should recoil from the thrust of the principal proposition made by my hon. Friend with regard to the legitimacy of the Bill in helping councils to deliver value for money demonstrably and transparently for their communities.

The Government support the aim of Clause 1 to update the processes for the approval of certain levels of remuneration paid to local government employees. As I have said, introducing the requirement to approve salaries of £100,000 or more is a practical way to limit pay offers. We believe the Bill covers adequately the relevant authorities in local government, and agree with the intention further to include individuals employed in a part-time or temporary basis if their full-time equivalent salary would meet or exceed the £100,000 threshold. That is an important point because we are aware that not everybody will work the traditional work pattern. Senior officers are often shared between authorities—two days here and three days there, and so on—and we think it is important to view it in the round.

Clause 1 also future-proofs the legislation by granting my right hon. Friend the Secretary of State delegated power to amend the annual salary of £100,000 as necessary through regulation made by statutory instrument. We cannot freeze the figure into permanent aspic because pressures change, and £100,000 in five years’ time will not be worth what £100,000 is worth today. It is important that there is that slidable bit of the rule to ensure that we seek to attract the brightest and the best into public service.

The Government also support clause 2, which sets out the Bill’s extent, commencement and short title. The Bill will apply to local government in England only, as local government is of course a devolved matter in Scotland, Wales and Northern Ireland. The principles underpinning the Bill proposed by my hon. Friend the Member for Peterborough are so compelling that I would be staggered if friends and colleagues in the devolved nations of the kingdom did not give good thought to what he seeks to do in English local government.

I further support the intention of clause 2 to confer two delegated powers on my right hon. Friend the Secretary of State to set the commencement regulations for the Bill. That provides the Secretary of State with powers to make appropriate regulations for the intertwined purposes set out in clause 1.

In conclusion, I thank you, Ms Harris, for your chairmanship, my colleagues from across the House for joining us in Committee today and my hon. Friend the Member for Peterborough for his incredible hard work and diligence in piloting the Bill to its current place. Piloting a private Member’s Bill through this place is not an easy task—I sometimes think that it is easier to push a feather backwards in twilight, blindfolded, in a blizzard, up Everest. The Government are grateful for the attention to detail and energy that my hon. Friend has given to this issue. I wholeheartedly and warmly acknowledge all his efforts.

My hon. Friend is right to make the current arrangements more robust, to change guidance into regulation and to ensure that all relevant authorities in English local government are subject to the same democratic and transparent processes, with no postcode lottery when hiring to senior salary posts. We believe the Bill further delivers on the Government’s commitment to deliver value for money for the taxpayer and to ensure that the resources of local government are used in the most effective way and to the greatest benefit of local council tax payers.

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clause

A parliamentary bill is divided into sections called clauses.

Printed in the margin next to each clause is a brief explanatory `side-note' giving details of what the effect of the clause will be.

During the committee stage of a bill, MPs examine these clauses in detail and may introduce new clauses of their own or table amendments to the existing clauses.

When a bill becomes an Act of Parliament, clauses become known as sections.