The Audit Commission is to review the pay offs available to Council Chief Executives. Hefty examples include John Foster who was paid £545,000 for leaving Wakefield Council in 2008 – within months he was appointed CEO at Islington on a salary of over £200,000. More recently Martin Smith has left Tower Hamlets Council after falling out with the Council leader and was reported to have had a pay off worth £500,000. Tower Hamlets disputes the figure – but won't say what the correct figure is so it's a good bet that it's pretty high. Both Tower Hamlets and Wakefield are Labour councils but this isn't a party political issue.
One problem is that it seems so hard to sack people in the public sector – whether at the top or the bottom – for doing a bad job. Communities Secretary John Denham says a Council leader shouldn't agree an expensive deal with a CEO just because they "don't get on." He has a point. But what if a Council's CEO is doing a poor job but not the level of gross negligence to justify them being sacked without a penny?
There have certainly been abuses of the system. But what rules could the Audit Commission come up with that would improve matters? Perhaps when such posts are recruited in the first place it should be made clear that if he person is asked to leave for whatever reason that any pay off will be modest. There would be the risk of a capable Chief Exec being ousted on the whim of Council leader. But then there are rather higher risks for those working in the private sector.