Asking the right questions?
The accounts do not tell the whole story. The last draft accounts for Taunton Deane Borough Council and West Somerset District Council have been published. The merged council going forwards should be a very different beast.
Mismanaged
Yes it is now clear the process was mismanaged by the last administration. Having paid out £5.661m already, a Somerset West & Taunton spokesperson told us a further £693k is likely to be paid before the redundancy programme is complete. Worse, we were also told that as of today SWT has 55 vacancies unfilled. That will require further recruitment costs to bring the staff up to a full complement. Where recruitment agents are used, that is likely to cost around 15-20% of each employees first year salary.
Costly process
What we can say right now is that 191 members of staff took redundancy. Of those the four highest packages were: £138,000, £152,000. £196,000, £343,000. The latter is clearly for former Chief Executive Penny James.
However when you read the headline “Former council chief executive handed more than £340,000 in redundancy” it is simply not true. The problem is it makes a great headline. But is not only incorrect, it misses the point.
The package Ms James received comprises a range of items, only part of which are strictly speaking redundancy items. For instance £89,000 was shown as compensation for loss of office, £30,000 in pension contributions.
The key question that has yet to be asked, is were all these payments the contractual minimum required. In other words the council had no choice but to pay the amount because the terms were set out in Ms James’s contract of employment. The new CEO, James Hassett tells us they were.
The accounts clearly show the current CEO is on a similar salary to that paid to Ms James,£115,000. So the real question to ask is how do you get from a £115,000 salary to £343,000 as a severance package? Clearly we know pension and loss of office payments. But does the CEO get the same number of weeks pay in redundancy for every year worked as other employees? And if not why not?
The next key question is this. If the package paid to Ms James was exactly in line with her contract, then presumably Mr Hassett will be on a similar contract. In other words the problem is still with us.
Cautious
Which is perhaps why the new Leader of the Council in her comments to us has been cautious and not made large political capital out of it. She told The Leveller “We have lost more staff than the transformation plan set out to do and I’ve asked the Chief Executive to carry out an audit to look at what went wrong and why. We are hoping the auditors will report publicly on this by the end of the summer. I have always been in support of transformation, because I think that residents need an efficient council to deliver its services. We want to get the services back to where they were before and even better. The staff been through a lot, but hopefully they can see where we’re heading. For me it’s not about the past. We need to make sure residents throughout the area have the best services. It’s about looking forward.”
Her approach seems wise. This is a problem that almost certainly has not gone away. The issue around how senior council executives are remunerated has not been addressed at all in this exercise. Mainly because the new administration can do very little. Contracts that have been signed cannot be easily changed.
The question going forward is will the new administration review and challenge the assumptions in standard employment contracts used for senior staff. On the surface these arrangements appear to be far more generous than those available to those on similar salaries in the private sector.