HERTFORDSHIRE COUNTY COUNCIL
COUNTY COUNCIL
TUESDAY 27 MARCH 2012 AT 10.30 A.M.
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.
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;
· 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.
· The pay policy may also, at the discretion of the council, set out policies relating to other terms and conditions.
5.2 The definition of remuneration for the purpose of the policy is;
· 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;
· 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.
· 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.
· 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.
7.3 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 / RatioChief Executive (£203k) to the median basic salary for all employees non schools (£20,858) / 1:10
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) / 1:8
Table 2 – Ratio’s based on new Chief Executive salary (£170K) from June 2012
Ratio Definition / RatioChief Executive (£170k) to the median basic salary for all employees non schools (£20,858) / 1:8
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) / 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;
· 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.
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;
· 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.
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.
3
120327 Pay Policy