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Thursday, April 13, 2017

Wage inflation in local councils

The Western Mail and other Welsh media have recently been focussing on the amount of money local councils on this side of Offas Dyke pay to their senior executives.

They say that 107 people in Wales enjoyed remuneration in excess of £100,000 in 2015-16, compared to 105 a year earlier. Across the UK, more than 2,300 council employees earned above this threshold.

Thirty people in Welsh councils had remuneration packages of more than £150,000, including four in Cardiff, three in Caerphilly and Wrexham, and two in Anglesey and Swansea.

It is of course absolutely right that councils are scrutinised to ensure that they provide value for money and that as public bodies they set a good example on remuneration rates. What nobody seems to be asking though is why it is that over 100 people in Wales are paid so much.

I think all councils in Wales have carried out massive money-saving measures in recent years. That almost invariably involves slimming down management in an effort to preserve front line services.

Whole tiers of management have disappeared in councils across Wales placing much more responsibility on the few that remain. Those surviving managers also have a much greater strategic role than previously.

Councils have to compete in the market place for high quality staff, which means paying an attractive rate of pay for what are now significant jobs. The key here though is to look at the total cost.

Despite having so many managers on high salaries, wage bills have shrunk significantly in real terms. Councils may be paying a premium but they are doing so for fewer managers who are carrying out work that was previously done by a much larger cohort.
Is it time to change the system? Employing more people on lower wages when jobs are in demand could boost the economy for more people will have the money to buy things, plus be experienced in certain areas which can then move to other jobs and bring in fresh blood . Some UNI or college could do the training.
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