Agenda Item No.
HERTFORDSHIRE COUNTY COUNCIL
COUNTY COUNCIL
TUESDAY 27 MARCH 2012 AT 10.30 A.M.
6(b)
PAY POLICY 2012
Report of the Director Resources and Performance
Author:
Emily Austin (Tel 01707 292751)
1.
Purpose of the report
1.1
To present to County Council the Pay Policy for 2012/13 as per the requirements set
out in the Localism Act 2011.
2.
Summary
2.1
The Localism Act 2011 (the ‘2011 Act’) requires local authorities to publish a Pay
Policy annually from April 2012. The purpose of the Pay Policy is to assist with the
drive for greater transparency and accountability in relation to pay. The policy must
at a minimum cover the level and elements of remuneration of Chief Officers (as
defined by the 2011 Act), but local authorities have the discretion to broaden the
policy to cover other terms and conditions and employee groups. Guidance has also
been issued by the Department of Communities and Local Government concerning
the preparation of pay policies.
2.2
This report sets out the pay policy for the Council for 2012/13 and also the data to
be released as part of the Councils annual publication of senior manager data and
includes new data on pay ratios as required by the 2011 Act and statutory guidance.
The 2011 Act provides that full Council must approve the Pay Policy by 31 March
2012.
2.3
Employment Committee considered report on this item of business at its meeting on
13 March 2012. The Committee endorsed the data release for April 2012 as set out
in the report.
2.4
The Employment Committee recommended certain amendments to the Pay Policy
which have been incorporated in the document attached to this report which requires
approval by full Council.
3.
Recommendation
That the County Council approves the Pay Policy for 2012/13 as attached to this
report.
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4.
Background
4.1
The Localism Act 2011 requires that all local authorities prepare an annual pay
policy statement setting out the council’s policies on the remuneration of both its
highest and lowest paid employees for the following financial year. The first pay
policy must be prepared and published by 31 March 2012 for the year 2012/13 and
then every year thereafter.
4.2
Publication of the pay policy is to assist with the drive for greater transparency and
accountability of senior managers pay, providing information to the public about how
authorities set and manage pay for senior managers and also its lowest paid
employees. The format of the policy is not prescribed. There are some specific
requirements set out in the 2011 Act that the policy must contain but there are also
options to provide further details on areas such as terms and conditions of
employment. The purpose of the 2011 Act is not to change the management of pay,
but ensures transparency about its approach.
4.3
The drive for transparency is in line with the Communities and Local Government
(CLG) Code of Recommended Practice for Local Authorities on Data Transparency,
published in September 2011. The 2011 Act enhances this guidance. The Council
began to adhere to the Code in its draft format in April 2011 via the ‘Open Data’
release that published salary data for all senior managers (in varying levels of detail
dependent upon grade). This data will be refreshed in April 2012 based on the now
finalised code and will require further release of information on senior manager
salary ranges, job outlines for Directors and pay ratios. The principles of the data to
be released are set out within this report.
5.
Requirements of the Pay Policy
5.1
The requirements of the pay policy are set out in Chapter 8 of the 2011 Act and also
the Communities and Local Government guidance on Openness and Accountability
in Local Pay published on 17 February 2012 under section 40 of the 2011 Act.
These state a pay policy statement should cover the level and elements of
remuneration for each chief officer (as defined by the 2011 Act) including;
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Remuneration of chief officers at recruitment
Increases and additions to remuneration for each chief officer
The use of performance related pay for chief officers
The approach to the payment of chief officers on their ceasing to hold office
The publication of and access to information relating to remuneration of chief
officers.
The remuneration of its lowest paid employees (definition of lowest paid to be
determined by each Council with an explanation of why that definition has
been chosen)
The relationships between the highest paid employee/s and the mean/median
salaries of the workforce.
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5.2
The pay policy may also, at the discretion of the council, set out policies
relating to other terms and conditions.
The definition of remuneration for the purpose of the policy is;
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Salary or where there is a contract for services (a consultant) payments made
by the authority for those services;
Any bonuses payable;
Any charges, fees or allowances payable;
Any benefits in kind to which the chief officer is entitled as a result of their
office or employment; i.e. lease car
Any increase in or enhancement of pension entitlement where that is the
result of the resolution of the authority; and
Any amounts payable on ceasing to hold office.
6.
Scope of the Pay Policy
6.1
The 2011 Act requires the pay policy to include information relating to the Head of
Paid Service, Chief Officers (statutory and non-statutory), Deputy Chief Officers and
the Monitoring Officer, as defined in the Local Government and Housing Act 1989.
6.2
The Communities and Local Government guidance states the 2011 Act does not
apply to employees of local authority schools and therefore they are excluded from
the scope of the pay policy as each school is already required to publish their own
pay policy.
7.
Recommendations for content of the Pay Policy
7.1
The 2011 Act sets out the information which must be included in the pay policy.
Guidance from the Communities and Local Government and from the JNC for Local
Authority Chief Executives provides further suggestions about additional information
that could be included.
7.2
Within the parameters of the guidance around the 2011 Act the following definitions
are recommended to be used within the Council’s Pay policy;
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The definition of the Councils lowest paid worker is the lowest national spinal
column point (SCP) 4. As at April 2012 this is a full time value of £12,145.
This is the lowest pay point the Council can appoint to and therefore logically
should be our lowest pay point.
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The ratio between the Council’s highest paid employee (Chief Executive) and
the median salary of the non schools workforce. This will be calculated using
the Chief Executive’s current salary (as at April 2012 and the new Chief
Executive salary from 1st June 2012) and the median full time equivalent
salary of the non schools workforce. This is in line with the Communities and
Local Governments Code of Recommended Practice for Local Authorities on
Data Transparency and the guidance on Openness and accountability in local
pay.
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7.3
The ratio of the mean pay for all Chief Officers (including the Chief Executive)
and the mean pay of all non-school employees (excluding Chief Officers and
the Chief Executive). This is in line with the 2011 Act.
Ratios for Hertfordshire County Council calculated as at 1st February 2012
Table 1 – Ratio’s based on current Chief Executive salary (£203K) as at
February 2012
Ratio Definition
Chief Executive (£203k) to the median basic salary for
all employees non schools (£20,858)
Average (mean) of Chief Officers (inc. Chief Executive
£136,009) and all the average (mean) of all non schools
employees (exc. Chief Officers & Chief Executive
£17,450)
Ratio
1:10
1:8
Table 2 – Ratio’s based on new Chief Executive salary (£170K) from June 2012
Ratio Definition
Chief Executive (£170k) to the median basic salary for
all employees non schools (£20,858)
Average (mean) of Chief Officers (inc. Chief Executive
£128,135) and all the average (mean) of all non schools
employees (exc. Chief Officers & Chief Executive
£17,469)
Ratio
1:8
1:7
7.4
The ratios to be published in the April 2012 Open Data release will be based on
April 2012 data so may vary slightly.
7.5
Additional elements included in the pay policy for 2012 are;
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annual leave entitlements;
pay setting on contracts for services (consultants);
how decisions on senior manager pay are made;
re-employment after redundancy;
pension abatement.
The Pay Policy content will be developed further each year.
7.6
The Communities and Local Government Code suggests that ‘… full council or a
meeting of members, should be offered the opportunity to vote before large salary
packages are offered’. It states £100,000 to be the correct threshold for this. The
frequency of full council meetings and the need to have an efficient recruitment
process means it is not practical for full council to vote prior to each appointment.
The Pay Policy, therefore, provides that the Employment Committee will set and
agree the salary ranges each year for all senior managers, in line with the Council’s
Pay Policy with the decision (for appointments with salaries over £100,000) on the
actual salary offer being made by the Chief Executive in consultation with Group
Leaders and with guidance from the Head of HR and Organisational Development.
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7.7
The Pay Policy for 2012/13 is attached as Appendix 1.
8.
Data Release for 2012
8.1
In order to be transparent and open the Council publishes the details of all senior
managers’ salaries on Herts Direct. This must meet the requirements set out in the
finalised Communities and Local Government Code of Recommended Practice for
Local Authorities on Data Transparency, published in September 2011.
8.2
For April 2012 the following data is to be released;
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Names, job titles and actual salaries for all senior managers paid over
£101,290 (PMA and above). This is the same as the data release in April
2011.
Names, job titles and £5,000 banded salaries for all senior managers paid
between £74,270 and £101,290 (PMB). This is the same as the data release
in April 2011.
Job titles and £5,000 banded salaries for all senior managers paid between
£49,690 and £70,185. This is an extension to the data released in April 2011.
Organisational charts as at April 2012 showing all posts paid above £49,690
containing details as set out above. This is the same as April 2011.
The salary ranges for Chief Officers and PMA/B/C grades. To also include
the spot salary for the Chief Executive. New for April 2012.
From June 2012 the job outlines for each Chief Officer describing their
responsibilities and budget responsibilities. New for 2012.
The ratio between highest paid employee (Chief Executive) and the median
full time equivalent salaries of all non school employees and the ratio of the
average (mean) Chief Officer salaries (inc. the Chief Executive) to the
average (mean) salary of all non schools employees. New for April 2012.
8.3
This data takes a pragmatic view of information requested by the Code and meets
the requirements where practicably possible. For example this does not, as
suggested in the code, release organisation charts for the entire Council.
8.4
This data will be reviewed and refreshed annually and will be published on Herts
Direct.
8.5
All managers will be written to individually prior to the release of information and will
have the opportunity to raise their concerns regarding the publishing of their data as
regulated by the Data Protection Act. These will be considered by the Head of HR
and Organisational Development with the Chief Executive.
9.
Approval of the Pay Policy
9.1
The pay policy must be approved by County Council by 31 March each year. Once
approved the policy may be amended even after the beginning of the financial year
to which it relates. Any revisions must also be approved by County Council.
9.2
After approval or revision the pay policy must be published on Herts Direct in an
easily accessible manner and link to the Open Data release.
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9.3
Once published the Council must comply with the pay policy for the relevant
financial year, and will be constrained by it when making any decisions relating to
roles within scope of the policy.
10.
Financial Implications
10.1
There are no financial implications of the publication of Pay Policy or the data
release.
11.
Equalities Implications
11.1
There are no equality implications of the publication of Pay Policy or the data
release.
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