Sedgemoor’s under fire Chief Executive Kerry Rickards, lambasted in the press as ‘two job chief exec’ and ‘paid more than the Prime Minister’ had his chance to redeem himself today at the Corporate Scrutiny committee chaired by Westover Councillor Brian Smedley.
“The concern has been that the Chief Exec had received a large pay rise that had been agreed behind closed doors and that this wasn’t setting a good example at a time of austerity, not just for staff but also amongst the general public when the council was facing stark choices in it’s budget set and at the same time seeking joint working with other councils.” Cllr Smedley explained “It was therefore important that this was all fully explained and in the public eye so that Sedgemoor could be seen to be open and transparent and to have acted correctly and that due process and policies had been followed. The meeting today agreed that it had.”
The Background
Following press coverage in January 2016 of the pay awards given to Senior officers at Sedgemoor, specifically the Chief Executive , Sedgemoor’s Corporate Scrutiny Committee agreed to an urgent special meeting so that Sedgemoor Members can be fully informed as to this decision, the background and the process that led to this in the interests of transparency and open government..
The actual decision was delegated by the Exec on 18 Nov 2015 to the Leader, the Deputy Leader and the Leader of the Opposition. These were the people invited to explain the rationale behind that decision.
The background to the decision stemmed from a period of difficulties with Homes in Sedgemoor (HiS) -the ALMO, which led to the proposal and subsequent enactment of a rescue plan by SDC involving Kerry Rickards assuming the CEO role with additional roles for other SDC officers .This decision also included increased remunerations.
The delegated decision was made on 14th December 2015 and a story was aired in the Press during the first weeks of 2016 initially by the Bridgwater Mercury (“CEO gets second job to save council money -It’s been a good year for one Bridgwater worker with two salaries from two jobs and a hefty 20 percent increase in wages.””) and later reaching the Municipal Journal (“Two Job Chief has role reviewed”) .
A Scrutiny role
The Scrutiny committee meeting unanimously approved a motion from the Chair, Cllr Smedley, to look openly at the issue including ‘why such a decision was made’ , ‘who made the decision’, ‘had it followed council policies and procedures’ and ‘was it value for money’ with ‘in these times of austerity’ being referenced on both sides of the debate.
To establish the facts and to find the reasons behind the decision the actual decision makers were in attendance – Leader of council Duncan McGinty (Con,East Polden) , Deputy Leader Dawn Hill (Con, Cheddar) and Leader of the Opposition Mick Lerry (Lab,Bridgwater Victoria).
Cllr Smedley told the meeting “We have been advised and have chosen not to ask members of staff to attend but instead have asked CEO Kerry Rickards to answer himself as their senior officer and as the committee specifically mentioned the CEO in it’s outline brief . Scrutiny committee may within its terms of reference consider any matter that affects the district of sedgemoor and I have taken advice that this issue is an appropriate one – but we need to be aware of what might take us into areas of exempt report which would of course close down access to information and therefore the open discussion we need. “
Lines of Enquiry
Three ‘Lines of Enquiry’ were established to focus members attention on the matter in hand
1 What is the background which led to the decision being taken? (The decision being ‘to remunerate the Sedgemoor District Council Chief Executive for fulfilling the role of Chief executive of Homes in Sedgemoor)
2. What was the basis for the level of remuneration given?
3. What is the justification for this decision in value for money terms?
The floor was opened first to members of the Public. Bridgwater Town Councillor Cllr Pat Morley (Lab Westover) was present to sum up the public concerns with a series of questions.“How come the Chief Executive didn’t have a pay cut when the ALMO was created yet instead now gets a pay rise for going back to the same hours?” “What do the workers think about this when they’re all being asked to tighten their belts due to austerity and see their boss getting a pay increase, and how does this effect staff morale?” “How did the decision makers come to this option and did they consider any others?” “What is the future of the ALMO when you consider that in 2007 there were 70 ALMOs nationally and now that’s down to 47?” “Is there maybe a need to go back to in house provision after all?” and finally “Who watches the Watchmen?”
The Leader
Council Leader Duncan McGinty openly and clearly explained the need for the decision and his thought process that led to him accepting this was the right one. He explained that “.. the root cause stemmed from problems with the ALMO Homes In Sedgemoor which had been set up in 2007. They had a responsibility to 65 members of staff 4,200 tenants and had to manage a £14m turnover. In June 2015 there was a crisis following a vote of no confidence and a spate of resignations”. He had invited the Chief Executive to step in to find a solution. “This was achieved by forming a new top team from SDC staff and managing a restructuring which saved almost £300,000. Since the new management had been introduced the performance was a lot better”.
When it came to explaining the honoraria, he was “..aware that the Chief Exec hadn’t had a pay rise since 2009 and that if he had received 2% a year that would have been £126,000.” He further compared the SDC Chief Exec’s salary with other Chief Executives which ranged from £80,000 to £350,000 and said that he was “on the lower side”.
He said it “..wasn’t fair to compare Mr Rickards salary with the Prime Minister who gets 3 houses and £128,000 in expenses on top of his salary”. He also stressed “..the additional responsibilities that the Chief Executives role brings, not least being the landlord of 4,200 properties”. He added that it wasn’t uncommon for the role of Chief executive to be shared across organisations and cited the Principal of Bridgwater College who also had to manage Cannington, West Somerset and SCAT. In conclusion he described the Chief Executive as providing “inspirational leadership” with the results “speaking for themselves.”
Leader of the Opposition
Cllr Mick Lerry, leader of the Labour Group, concurred with much of what the Tory leader said and explained his own rationale for supporting the decision.”I asked whether the HR policies had been followed and whether the Union ahd been consulted and I was assured this was the case. I further noted that the proposed solution did bring savings and protected services particularly in the face of the Governments 1% cut or reduction in the rent which leads to a loss of income of 6.5 million for the next 4 years . I was also concerned at the context of the decision which included possible moves to Joint Working with other authorities including places like South Somerset where they were operating without a Chief Executive, in Mendip where they outsourced one or in South Devon where two districts shared one, I concluded that this new arrange was indeed value for money for Homes in Sedgemoor but I’m not so sure if it was for Sedgemoor District Council. I can’t say what affect this has on staff morale because high pay rises never go down well with the public, but I believe there’s an acceptance that this is a huge saving.”
The Deputy Leader
Cllr Dawn Hill, deputy leader, said “This was the right decision, it was based on what the Tenants wanted us to do and we’re seeing the benefits already”
The Chief Executive
Kerry Rickards said he was “Happy to be here as his pay was already in the public realm and nothing was secret. Sedgemoors performance since 2000 shows how great it is here. It’s not down to one individual but to a fine team. We’ve improved in every area and I challenge anyone to find an area in which we haven’t. We are in the top 10% of Local Authorities and have £11-12m of reserves. Being Chief Exec of HiS isn’t an easy job. If it was they wouldn’t have gone through 5 in 9 years. There are staggering levels of responsibilities. There was an £80m deficit and they needed someone to step forward.”
“My background was in housing and in Walsall I was the principal finance officer looking after a stock of 80,000 homes.. That’s why the Leader asked me to take over.and without meaning to blow my own trumpet we are delivering a damn good service. The plain fact is HiS couldn’t afford another Chief Executive on the salary they were on. In terms of consultation, every report goes to the Union and any comments can be forwarded to the Exec. But there were no comments because it made absolute sense.”
Over to the Members…
Vice Chairman Mark Healey (Con Puriton & Woolavington) asked if they had considered “performance related pay”
Duncan McGinty said “I did, but on balance rejected it as I didn’t want to set a precedent”
Cllr Healey responded “I was mainly concerned about future proofing, I think Kerrys doing a great job- Carry on Kerry”
Cllr Mike Facey (Con Burnham North) said “I believe we have a good leader, a professional Chief Executive and good staff. I say carry on.”
Cllr Moira Brown (Lab,Eastover) said “It seems Kerry is doing much more than ever before and that might set a precedent for future Chief Execs so I wonder if we should maybe bring in an independent review to make sure we’ve got this right.”
Duncan McGinty said “we have a system of annual appraisal which works very well”
Cllr Bob Filmer (Con Brent) said “It seems to me that in addressing the key lines of enquiry we should recognise that the Panel have followed the correct procedures and the due process.”
The Chairman summed up by endorsing Cllr Filmers proposal which the Committee passed unanimously and asking the Leader if he would “..consider taking on board the suggestion of an independent review, possibly through the LGA peer review scheme which was free and was basically a ‘critical friend’.”
The Leader said he would consider this but not in the immediate future. Mr Rickards said he “would not be happy at all if that formed part of the Scrutiny Committees recommendation.”
Mr Rickards remained happy.
Chairman’s conclusion
After the meeting Cllr Smedley said “Getting this issue to Scrutiny was very important. Members and the Public have a right to know what’s being decided in their name and why. Today we went far beyond that and into the minds of the decision makers at great length and in great detail. They’ve clearly and honestly answered the questions , and explained the choices they made as they saw them in the public interest. That’s what elected representatives have to do. And that’s the value of a scrutiny committee and of an open democracy. People can make these decisions – but we’re watching them.”