As the BBC reports, Cumbria County Council is back in business with a new political administration and a new temporary Chief Executive. The issues surrounding the departures of the previous Chief Exec have been well aired in this blog, so I will not repeat them now.
In an email to all Council Members and Staff, the Council claimed:
The new temporary arrangement could deliver net savings of over £97,000 in the first six months
Sadly, as I pointed out in the Council meeting this morning, this is not the case (apologies for the length of this – not very blog-friendly I’m afraid):
I’d like to draw members’ attention to paragraph 6.3, which shows the financial implications of these arrangements, as presented to the Chief Officers’ Panel. The figures show an estimated net saving of around £97k in the first six months.
This is based on the assumption that on handover day, the Council ceases paying the outgoing Chief Exec’s salary of £170k, and instead pays an ‘acting up’ allowance of £15k. £170k versus £15k – bit of a bargain really.
However, this is not what is actually being proposed. The Leader of the previous administration has stated that the outgoing Chief Exec will be paid salary in lieu of notice. This means that on handover day, the Council will start paying the acting Chief Exec an increased salary, but will also continue to pay the outgoing Chief Exec her full salary for the duration of the notice period. The Council will be paying salaries to two people: one to ‘act up’ as Chief Exec, and the other to stay at home.
Chair, the financial figures presented to the Chief Officers’ Panel as given in this report are partial, and do not show the full impact to the Council’s finances of this arrangement. The claimed saving of £97k in the six months following handover will not happen, as the Council will still be paying the outgoing Chief Exec her full salary during her notice period.
Chair, if the report in front of us today is accurate, then the Chief Officers’ Panel’s decision was made on a flawed business case. I would be grateful for clarification on this point.
Needless to say, I did not get any clarification, but a statement that all the figures would be put in the public domain in the statutory accounts – in June 2014! So a useful lesson for councils – if you want to bury bad news, and put it beyond the reach of councillors, do your digging during the interregnum between administrations.
Footnote: in welcoming the new Chair of the Council, reference was made to a time in his life when he worked as an undertaker: “he knows where all the bodies are buried”. Maybe we all will in a year’s time.