Public spending balancing act

There used to be a phrase in my school Maths book which noted that ‘statistics can be used much like a drunk uses a lamp post – for support rather than illumination.’

I was reminded of the advice this week when studying the Audit Commission’s report into so-called ‘boomerang bosses’ the ex-chief executives who exit councils with bags of cash after a fall-out with their leaders, only to walk immediately into another job. The report was ordered by John Denham last summer as a smokescreen to head off Opposition attacks on public sector ‘fatcats’ and judging by the publicity at the time the public could be forgiven for believing most of local government was involved. It was no accident that the report was commissioned at the height of the Commons expenses scandal and provided a convenient hare for the media to chase.

In fact the Audit Commission report this week notes that of the 122 chiefs who left their jobs in 2007/09 just 37 left with severance packages, or 30% of the total. Of them only six took up other council jobs within a year and over 80% have yet to return to local government. This does not suggest a major problem though this did not prevent the CLG heading a press release ‘boomerang bosses in councils must return pay-offs’. The national media dutifully covered the ‘boomerang racket’ angle.

The real problem is the tendency among a minority of councils to dismiss chief executives on spurious grounds and grant them severance payments and/or enhanced pensions in return for foregoing the employment rights any other employee expects. Too often employers in these cases know they have no legal case which could stack up in an employment tribunal and effectively have to make it worth their chiefs’ while to leave. Nor is it exactly helpful for a chief executive’s reputation and future career to depart in such circumstances. It suggests they are unable to get on with members and severance is often therefore compensation for damage to reputation.

But the subject of severance is a matter for employers and their professional associations to address, not ministers and MPs whose own stables have required a monumental clean-out after the fiddled expenses scandal.