Not every top salary is a scandal

Two ‘salary rows’ made headlines in the Western Mail this week (24 March 2010). Both of deserve rather more considered comment than they got, and both raised questions about the current journalistic obsession with any sum of money that runs into six figures. The two stories concerned the existence and salaries of the senior tier of Assembly civil servants and the proposed salary for a new Chief Executive of Cardiff City Council, yet to be appointed.

The first story ran under the heading ‘Growing anger as Welsh Civil Service hires more bosses as £120k-plus’. The first thing to say is that if there is ‘growing anger’ it is not much in evidence and it has been a long time coming, This tier of posts was announced soon after the arrival of Dame Gill Morgan as Permanent Secretary in May 2008. The eight directors involved have been in post for a whole year.

The ‘growing anger’ referred to was based on quoted criticism from a single source, Professor Brian Morgan of UWIC. It is true that the story was filled out with other quotations from Professor Kevin Morgan, of Cardiff University,v although none of what he said referred to either the posts or the salaries.

When the appointments were made most people regarded the decision to create the tier as a sensible rationalisation that would avoid the creation of narrow silos at the top. It was said to have the added advantage of saving £500,000. As Dame Gill told the IWA in an interview in November last year (Agenda No 39, Winter 2009), she inherited a management board of more than 20 people. “That’s a conference, not a management group,” she said. She cut the management group to eight. “We needed people whose job it was joining up policy and thinking across portfolios. I was determined to attack the silo culture. Now everyone is urged to think of joining up policy.”

A fair debate might be had about how much progress has been made in creating joined up policy, but in principle such a rationalisation would normally be applauded by both journalists and academics. Yesterday’s Hargreaves report on the Creative Industries criticised past practice, but the fact that it was sponsored and accepted by two Welsh Government Ministers may be a positive sign.

The Government’s problem in this sphere is not this particular structure but the perception created by the no-redundancy deal for officials affected by the recent reorganisation of the health service. There was also a failure to achieve claimed savings when the WDA, the Wales Tourist Board and Elwa were absorbed into the civil service. At the IWAs recent National Economy conference on Making Wales Business Friendly, the new First Minister, Carwyn Jones, suggested that life is going to be different from now on.

The second story attacked the proposed £175,000 salary referred to in the advertisement for a new Chief Executive for Cardiff City Council. The story was replete with the usual public sector bashing from the Taxpayers Alliance with clichéd references to ‘gold plated deals’ and ‘fat cats’.

Admittedly there is more room for genuine debate on this issue. Chief Executive salaries have risen across England and Wales and there has been some justified criticism in England of local authority severance packages. However, knee jerk responses do not help. Salary levels may be approaching the popular but unhelpful benchmark of the Prime Minister’s salary – currently £188,000 – but they are still well below the level of chief executive salaries for comparably sized organisations in the private sector.

A year ago the average salary for a chief executive in an English shire was £169,271, and for one of the London boroughs £166,391. By now that figure will have moved up slightly. In that context is it really outlandish to think that £175,000 is an appropriate salary for the chief executive of Wales’s largest local authority and capital city? The truth is that Cardiff desperately needs to attract a chief executive of the highest calibre, someone who can turn the council into a truly exemplar authority, something which no-one would claim for it at present.

Cardiff is far and away the largest Welsh local authority, with a population of 325,000 – that’s 40 per cent more than the second largest, Rhondda Cynon Taf. As such it should be a true leader in the field. But it is an authority that has suffered from swings between over-strong and uncertain political leadership. Moreover, it has had an officer class that has been too often characterised by conservatism and a deal making mentality that played fast and loose with concepts of quality and best practice. The council has more of a reputation for bludgeoning than persuading. Cardiff will need a more imaginative, innovative and subtle touch in the difficult climate head.

Geraint Talfan Davies is Chair of the IWA

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