Local Government (Pay Accountability) Bill

Committee stage
Wednesday 22nd May 2024 Public Bill Committees

The Committee consisted of the following Members:

Chair: Carolyn Harris

Brereton, Jack (Stoke-on-Trent South) (Con)

† Bristow, Paul (Peterborough) (Con)

† Clarke-Smith, Brendan (Bassetlaw) (Con)

† Everitt, Ben (Milton Keynes North) (Con)

Gardiner, Barry (Brent North) (Lab)

† Grundy, James (Leigh) (Con)

† Hoare, Simon (Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities)

Hopkins, Rachel (Luton South) (Lab)

† Hunt, Tom (Ipswich) (Con)

Lockhart, Carla (Upper Bann) (DUP)

Mahmood, Mr Khalid (Birmingham, Perry Barr) (Lab)

† Millar, Robin (Aberconwy) (Con)

Rimmer, Ms Marie (St Helens South and Whiston) (Lab)

† Shah, Naz (Bradford West) (Lab)

Shannon, Jim (Strangford) (DUP)

Smith, Henry (Crawley) (Con)

† Stafford, Alexander (Rother Valley) (Con)

Chris Watson, Committee Clerk

† attended the Committee

Public Bill Committee

Wednesday 22 May 2024

[Carolyn Harris in the Chair]

Local Government (Pay Accountability) Bill

10:00

[The Chair]

Before we begin, I have a preliminary reminder for Members. Please make sure that your phones are switched off or silenced. Thank you. My selection and grouping for today’s sitting is available online and in the room. One amendment has been tabled. We will have a single debate on the amendment and both clauses in the Bill.

Clause 1

Approval of certain remuneration of local government employees

[Paul Bristow (Peterborough) (Con)]

I beg to move amendment 1, in clause 1, page 2, line 23, at end insert—

“(8) In Schedule 12A to the Local Government Act 1972 (exempt information for the purposes of access to meetings and documents under Part 5A of that Act), in Part 2—

(a) after paragraph 9 insert—

‘9A Information is not exempt information if it relates to a resolution of the authority to approve a salary for the purposes of section 39A(1) or (2) of the Localism Act 2011.’

(b) in paragraph 10(b), for ‘or 9’ substitute ‘, 9 or 9A’.”

This amendment will prevent a relevant authority from excluding the public from a meeting whilst it considers a resolution for the purposes of section 39A(1) or (2) of the Localism Act 2011 (see clause 1(2)) and will prevent information relating to the resolution from being excluded from documents which can be accessed in connection with the meeting.

[The Chair]

With this it will be convenient to consider the following:

Clause stand part.

Clause 2 stand part.

[Paul Bristow]

The Bill seeks to increase the transparency and democratic oversight of senior pay and reward across relevant authorities in local government. Local authorities are independent employers; however, the Government consider that the highest salaries in local Government should be subject to greater democratic scrutiny. The Bill requires relevant authorities to gain approval by resolution before advertising a role, or appointing a person to a role, with an annual salary that exceeds £100,000. This will apply only to new appointments.

Hon. Members will be aware that in places such as Peterborough and, I am sure, Ipswich, Bassetlaw, Leigh, Rother Valley, Milton Keynes and north Wales—[Interruption.] Oh, and Dorset! In such places, someone who earns more than £100,000 is probably one of the highest-paid people living in that area. There is already statutory guidance that states that local authorities should be doing what the Bill requires, but the Bill seeks to make what is currently only guidance into a legal requirement.

Before I come to the clauses, which are of course what we are here to discuss, I want to thank everyone who has helped to bring the Bill forward so far. I thank all the relevant people, offices and officials at the Department for the work they have done, and I thank everyone who is here today to support and scrutinise the Bill. I also thank my researcher, Rhys Evans, who probably knows far more about the Bill than I do and has been instrumental in helping me to bring it forward. That comes from the very bottom of my heart: thank you all very much indeed for all your support.

Clause 1 updates the legislation relating to local government pay policy statements, by inserting a new clause into the Localism Act 2011 to create a new requirement in the process for the approval of certain remuneration paid to local government employees. It outlines how relevant authorities will be required to gain approval by resolution before advertising employment or appointing a person to a role with an annual salary of £100,000 or more, for new appointments only. The Bill will be relevant to places like Bradford; I note the attendance of the hon. Member for Bradford West.

The Bill will also apply to individuals employed by the relevant authorities on a part-time or temporary basis if the pro rata salary would meet the £100,000 full-time threshold. Clause 1 further sets out the conditions under which the Bill’s provision will take effect.

[Alexander Stafford (Rother Valley) (Con)]

My hon. Friend is making an important point about his important Bill. May I seek some clarity? Is the Bill just about job adverts, or will there be an annual update of how many new people are employed on more than £100,000 and who they are? True transparency is not just about gaining employment; it should be about the continuation, so that everyone knows where they stand. That will also help with diversity and inclusion and other such aspects, by raising people’s salaries.

[Paul Bristow]

My hon. Friend makes an interesting point. As I said, the Bill requires the relevant authorities to gain approval by resolution before not just advertising but appointing a person for a role with an annual salary that exceeds £100,000. It will apply to those who are appointed, rather than just to the advertisement element. The Bill will create greater transparency so that people are able to see much more clearly the gap between those in a local authority who are paid the most and those who are paid the least. I think that will help all decision making when it comes to pay and guidance. It will also help trade unions with some of the things they need to do to ensure that their members get a fair deal when it comes to remuneration.

Clause 2 confirms the Bill’s territorial extent as England and Wales, with application in England only, and contains measures in respect of the Bill’s commencement and on transitional and savings provisions. The clause will come into force on the day on which the Bill receives Royal Assent, and it sets out the extent, commencement and short title of the Bill.

The amendment I have tabled will provide that resolutions held for the purposes of the Bill will not qualify as information exempt from public discourse. It will ensure that the Bill’s key objective, which is to increase transparency on senior pay in local government, is met. It will ensure that any votes on salaries are held in view of the public; that transparency is incredibly important. It will prevent relevant authorities from utilising the existing exemption rules to circumnavigate the transparency requirements for salary offers. Transparency is the principle of the Bill and what we are trying to achieve, because with greater transparency and greater accountability comes better decision making.

Ultimately, the Bill seeks to ensure that proper scrutiny and accountability is in place for salary offers for senior officials that are above £100,000 for relevant authorities, in respect of new appointments only, and that openness and transparency are adhered to across the board.

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Simon Hoare)]

I am sure the Committee will be familiar with the dictum of Cecil Rhodes. He is often misquoted, but the direct quotation is:

“Remember that you are an Englishman, and have consequently won first prize in the lottery of life.”

As a Welshman, Mrs Harris, may I say that to serve under your chairmanship is to have won first prize in the lottery of life? If that does not get me some brownie points, I do not know what will. It is a pleasure to serve under my friend and colleague, Mrs Harris.

I am more than grateful to my hon. Friend the Member for Peterborough for his leadership on this issue and for the work that he and his parliamentary staff have put in to furthering this important Bill. I am delighted to say that the Government support the Bill, as they support the amendment tabled by my hon. Friend, so I hope we can avoid a Division on that matter.

[Alexander Stafford]

I am glad that the Government support the Bill, but I am disappointed that they have not tabled an amendment in respect of fire authorities, to increase transparency. I am disappointed that fire authorities are exempted. Will the Minister touch on why they have been exempted and are not treated as the rest of local government is? We are all one, all local servants, and should be treated the same.

[Simon Hoare]

I think the Bill was narrow in scope for a reason—possibly for the reasons that I will touch on in a moment. My hon. Friend makes a strong point, in principle. One could argue for it under the dictum that what is sauce for the goose is sauce for the gander. Of course, it is open to my hon. Friend and others to consider authoring amendments as the Bill progresses through this place and the other place. I will leave that to him.

Let me turn to what the Bill is about—actually, let me touch for a moment on what the Bill is not about, because I think that is almost as important to stress. This is not a Bill that says, as a matter of guiding-star principle, that in the local government sector being paid more than £100,000 is a bad thing. Anybody who works closely with their local councils—irrespective of tier, but particularly although not exclusively with the unitary and/or upper-tier authorities—will know that in many respects senior officers, who in the main are the people who would command that level of remuneration, are in effect running large divisions of a multi-facing business. If we are to expect high-quality public services delivered efficiently and robustly, local government of course needs to be able to attract the brightest and the best.

One could argue, from the point of view a public service ethos, that working for the public good is of itself remuneration enough. But that will not convince the gas board, the water company or the mortgage company: “I can’t pay you this month or this year, but I am working in local government, so there’s a lovely warm and fuzzy feeling around me. Please take that as payment in lieu.” The bills need to be paid.

This is not about castigation. It is not about asserting, as is sometimes erroneously trumpeted, “Oh, everybody is paid far too much in local government.” Far from it. All of us who work closely with local government—I have the privilege to do so as both a Member of Parliament and a Minister, and colleagues on the Committee will do so with their local officers—usually come away entirely impressed by the devotion to duty, the wisdom and the commitment to public service that officers bring.

[Naz Shah (Bradford West) (Lab)]

It is a pleasure to serve under your chairmanship, Mrs Harris. I thank the hon. Member for Peterborough for bringing this Bill to the House. I am not sure whether this has been touched on. As somebody from a black and minority ethnic background, I welcome increased transparency, because often people in the top tiers of Government, local authorities and organisations do not reflect the local communities they serve. The reason why I support the Bill is that I hope it will add that tier of transparency and accountability for appointments, so that they can be for the best and the brightest. Often, we get accused of nepotism or are told that it is about who knows who. The Bill puts in another tier, so I welcome it and I thank the hon. Member for it.

[Simon Hoare]

I am grateful for the hon. Lady’s observation. She makes the key point that local authorities always do well to take into consideration whether the elected members as well as the officers reflect the broad demographics and composition of their communities. I know the hon. Lady was not suggesting it—I interpret her remarks as saying what I believe to be true, which is that all appointments should be made on merit—but we are not talking here about quotas or positive discrimination. I think—I am sure the Committee would agree—that positive discrimination is actually as bad as negative discrimination. We need the best people doing the best job that they can. I take the point entirely that looking like, sounding like, and resembling the communities that are being served is an important consideration, but it should not be the be-all and end-all of things.

10:15

The Bill is right, and the key word in it is, of course, “accountability”. If one is to be paid more than £100,000, which is more than a Member of Parliament secures—let us put it in context for a moment—it strikes the Government and me as absolutely right that that decision should undergo a transparent and democratic process. It will allow members, whether of a full council or a committee, meeting in public to tease and test the job description, the responsibilities and expectations and the skills and aptitude of relevant candidates, be they internal or external appointments, with regard to the appropriateness and marrying-up of the skillset versus the remuneration set out. That word “accountability” is probably the key word in the Bill.

I hope the Bill reaches the statute book. As I say, it is a valuable tool in ensuring that adequate scrutiny is in place for high-salary officers in local government, while still enabling local authorities to retain flexibility and independence on workforce pay. As my hon. Friend the Member for Peterborough rightly said, such decisions are best taken locally, with an assessment of local circumstance and how best to meet the challenge.

According to research, because this is not a theoretical Bill trying to tilt at a Don Quixote-type non-existent windmill, undertaken by the TaxPayers’ Alliance—I must confess that I have some intellectual differentials with the TaxPayers’ Alliance on some points, but on this I think it is right—more than 2,500 people employed in local authorities in England in the year 2022-23 received total remuneration of at least £100,000. Although, as my hon. Friend said, local authorities are independent employers responsible for workforce pay, the Government expect councils to demonstrate judgment and show restraint with regard to salary offers.

I say that in particular having been the Minister who took the argument from local government to the Treasury for an additional sum of money in the local government funding settlement. We know that service demands are rising as a result of a whole series of pressures arising from demographic shift and change, but it does not augment the argument hugely if one pleads poverty in one speech and starts doling out the cash in another without having that democratic imprimatur of councillors saying, “Yes, we think this is the right thing to do for the communities we seek to serve.”

As my hon. Friend the Member for Peterborough said, the Bill guarantees that there is appropriate oversight and transparency on senior pay by introducing a mandatory approval requirement—not guidance, but a mandatory requirement—for appointments to posts with an annual salary of £100,000 or more. As I say, that is an evolution of the key point. The Bill will place on a mandatory footing the already published Government guidance that we understand is being adhered to in broad terms, thereby making current arrangements more robust, giving additional certainty to head of paid service and council committees and giving confidence to the communities who, month in, month out, pay their council tax, do so in good faith and want to ensure that councils use their money wisely. It will increase transparency and provide something of a check or brake on excessive or escalating pay offers.

As I have said, I support the amendment tabled by my hon. Friend, which makes provision that resolutions held for the purposes of the Bill will not qualify as being exempt from public disclosure. That will make explicit that votes on senior salaries must be held in view of the public, thereby furthering the aims of transparency on such matters. At the heart of the Bill, which I again commend my hon. Friend for, is a reminder that the state, whether central or local, of itself has no money. We are only custodians of that which we raise through taxation, whether local or central, so nobody should recoil from the thrust of the principal proposition made by my hon. Friend with regard to the legitimacy of the Bill in helping councils to deliver value for money demonstrably and transparently for their communities.

The Government support the aim of clause 1 to update the processes for the approval of certain levels of remuneration paid to local government employees. As I have said, introducing the requirement to approve salaries of £100,000 or more is a practical way to limit pay offers. We believe the Bill covers adequately the relevant authorities in local government, and agree with the intention further to include individuals employed in a part-time or temporary basis if their full-time equivalent salary would meet or exceed the £100,000 threshold. That is an important point because we are aware that not everybody will work the traditional work pattern. Senior officers are often shared between authorities—two days here and three days there, and so on—and we think it is important to view it in the round.

Clause 1 also future-proofs the legislation by granting my right hon. Friend the Secretary of State delegated power to amend the annual salary of £100,000 as necessary through regulation made by statutory instrument. We cannot freeze the figure into permanent aspic because pressures change, and £100,000 in five years’ time will not be worth what £100,000 is worth today. It is important that there is that slidable bit of the rule to ensure that we seek to attract the brightest and the best into public service.

The Government also support clause 2, which sets out the Bill’s extent, commencement and short title. The Bill will apply to local government in England only, as local government is of course a devolved matter in Scotland, Wales and Northern Ireland. The principles underpinning the Bill proposed by my hon. Friend the Member for Peterborough are so compelling that I would be staggered if friends and colleagues in the devolved nations of the kingdom did not give good thought to what he seeks to do in English local government.

I further support the intention of clause 2 to confer two delegated powers on my right hon. Friend the Secretary of State to set the commencement regulations for the Bill. That provides the Secretary of State with powers to make appropriate regulations for the intertwined purposes set out in clause 1.

In conclusion, I thank you, Ms Harris, for your chairmanship, my colleagues from across the House for joining us in Committee today and my hon. Friend the Member for Peterborough for his incredible hard work and diligence in piloting the Bill to its current place. Piloting a private Member’s Bill through this place is not an easy task—I sometimes think that it is easier to push a feather backwards in twilight, blindfolded, in a blizzard, up Everest. The Government are grateful for the attention to detail and energy that my hon. Friend has given to this issue. I wholeheartedly and warmly acknowledge all his efforts.

My hon. Friend is right to make the current arrangements more robust, to change guidance into regulation and to ensure that all relevant authorities in English local government are subject to the same democratic and transparent processes, with no postcode lottery when hiring to senior salary posts. We believe the Bill further delivers on the Government’s commitment to deliver value for money for the taxpayer and to ensure that the resources of local government are used in the most effective way and to the greatest benefit of local council tax payers.

[Paul Bristow]

I rise again to thank everybody who has contributed to get us to where we are today. I thank the officials in the Department and Committee members from across the House for what they have done. I once again thank my researcher, Rhys Evans, for all his work and, of course, I thank you, Ms Harris, for chairing this debate so skilfully.

[Alexander Stafford]

As we are giving thanks, I also thank my hon. Friend for leading this Bill. He is an assiduous Member of Parliament for Peterborough; in fact, he is the Member of Parliament for my mother and father-in-law. He is a great MP and the people of Peterborough are lucky to have him.

[Paul Bristow]

I am not sure I could be thanked any more, but there is always an opportunity for one more round of thanks if anyone wishes to do that.

[Simon Hoare]

I am a little hurt that nobody has thanked me.

[Paul Bristow]

I was just coming to that. I thank the Minister for his remarks, his advice and the skilful way he has managed this debate and responded to my speech.

I want to thank some of the senior officers at Peterborough City Council. The Minister was quite right when he said that there was not, in any way, a suggestion that senior officers in local government are not worth salaries of more than £100,000. Anyone who interprets the Bill in that way is being unhelpful. The officers at Peterborough City Council do an excellent job in the main. I particularly mention the chief executive Matthew Gladstone, and Adrian Chapman, another senior officer I deal with, along with Rob Hill and James Collingridge. They do fantastic work, and the excellent relationship I have with them as Peterborough’s Member of Parliament is testament to their professionalism. It has been six months since we had a Conservative majority in Peterborough—the council was previously run by the independents, and as of Monday is run by the Labour party—yet the openness and responsibility that I experience as the Conservative Member of Parliament show that it is not party political. The professionalism of those officials is to be admired and I thank them for everything they do.

I reiterate the point made by the hon. Member for Bradford West when she said that transparency allows for a diverse mix. It is absolutely right that we should seek to ensure that a council and its employees are representative of the community they represent. In diverse cities such as Peterborough and Bradford, that is particularly important. Allowing accountability and transparency—opening the windows and allowing air to come in—leads to better decision making and better spending of taxpayers’ money. That is something we should all seek to emulate in local and central Government. Transparency and accountability are key, and lead to better decision making when it comes to public service or the private sector. We have seen that in the House in recent scandals. When we have transparency and accountability of decision making, it leads to better government. I will now sit down, thanking everyone again for everything they have done. Let us hope that the Bill progresses further through the House.

Amendment 1 agreed to.

Clauses 1 and 2 ordered to stand part of the Bill.

Bill, as amended, to be reported.

10:26

Committee rose.