BELEAGURED Islington Council chief executive, John Foster, faced a new wave of criticism this week after a survey by the local government spending watchdog condemned huge severance payouts for “boomerang bosses” who are then reemployed by another council.The review by the Audit Commission argues that executives who move to another council after receiving severance pay should be made to pay back a portion of the cash. It also raises concerns about some councils’ financial know-how, and questions how well-informed their decision making has been.
Mr Foster, whose salary is greater than Gordon Brown’s, took his £200,000 job with Islington Council after receiving more than half a million pounds in his final year with Wakefield Council, including a substantial payoff.
Investigation
The Audit Commission survey was instigated by local government secretary John Denham. He said:
“The Audit Commission report shows that too many chief executives are being dismissed because they have fallen out with council leaders – this can cost as much as £500,000, and is all too often seen as a quick-fix solution. Taxpayers’ money should not be used to resolve personal differences.”
The pay of council executives is already a controversial issue, with a record 18 earning more than £100,000 in Islington compared to 10 in neighbouring Hackney.
Cut backs
The revelations about executive pay come at a particularly sensitive time given Islington Council’s recent admission that it would be cutting 114 jobs in the coming financial year.
Mr Foster’s salary has recently attracted censure from several sections of the British media. Writing on his Daily Telegraph blog, commentator Ed West said:
“People’s Republic of Islington”
“The President of the United States is paid £260,000 a year, while the Prime Minister of Great Britain receives only £130,000. How can the leader of the People’s Republic of Islington, which so far as I know has no great power to influence the world economy or bring about world peace, be half way between these two?”
Cllr John Gilbert, Islington Council’s treasury executive member, earlier defended the pay of the council’s most senior executives, saying it was necessary to attract people of a sufficient calibre.
He said: “”The council is a large, complex organisation with 3,100 employees, an annual turnover of more than £1.5 billion and assets valued at more than £3 billion – much larger than many private sector companies employing staff
who earn many times more than the highest paid council employees.”
Tim Newark of the Islington Taxpayers’ Alliance wrote in a letter to a newspaper: “I used to think that working for the council was all about public service. Now it’s more about how much money you can squeeze out of the public purse.”
