Restricted recruitment pool for town hall chief executives is driving up costs

A discussion paper published today (22 July) by the Audit Commission examines a number of factors influencing the jobs market for local authority chief executives.

The findings from Tougher at the top? identify an increasing tendency for local authorities to recruit existing chief executives from other authorities. Over a three-year period, the number of vacancies at single tier authorities and county councils filled by a chief executive from another authority more than doubled: from nine in 1999-2001 to 21 in 2005-2007.

The research found that reliance on recruiting existing chief executives to an increasingly demanding and insecure role creates a domino effect across the sector. This results in several local authorities incurring the costs of recruitment when a single vacancy occurs. Compounded by a general lack of succession planning, this leads to salary increases as authorities compete to recruit or retain the chief executives of the most successful councils.

However, the report found that councils that appointed a chief executive from another authority were not necessarily any more effective at achieving higher Comprehensive Performance Assessment (CPA) scores in the medium term than those that recruited candidates without chief executive backgrounds. While CPA is only one measure of success, it is the most visible upon which performance can be assessed.

Steve Bundred, Chief Executive of the Audit Commission said:
'There has been a lot of debate about chief executive salaries and turnover rates, but little real information until now. Our research found that the talent pool that authorities use is shrinking, while the demands of the role are increasing. The current trend towards recruiting existing chief executives, particularly by poorer performing authorities, has meant that recruitment costs and wages have risen. However, recruiting the tried and tested doesnt automatically produce a boost in performance or encourage innovation.

'While an experienced pair of hands can be seen as a safe option for individual councils there are risks if this continues across all local authorities. Unintentionally they will discourage ambitious and able in-house and external talent, who may well be more representative of the communities they serve.'