Moving to mayors 'could cost £3.3m'

England’s 12 core cities could have to pay more than £3m in redundancy costs if executive mayors are created, LGC analysis suggests.

 Localism Bill proposals requiring the new mayors to become the council’s most senior officer will make the existing chief executive post redundant and lead to expensive pay-outs, lawyers have warned.

Nine of the 12 city council leaders have stated they will oppose the move to mayors, while all but two have expressed serious disquiet about the blurring of political and advisory roles.

The imposition of the controversial policy could also cost the councils hundreds of thousands of pounds each just as the budget cuts hit. Denis Cooper, senior associate at law firm Eversheds, predicted outgoing chiefs would receive between a year and 18 months’ salary in compensation.

According to that estimate, with the salaries of the 12 chief executives in Birmingham, Bradford, Bristol, Coventry, Leeds, Leicester, Liverpool, Manchester, Newcastle-upon-Tyne, Nottingham, Sheffield and Wakefield ranging from £163,000 to £200,000, the redundancy bill could top £3.3m.

Trowers & Hamlins solicitor Helen Cookson pointed out that councils with chief executives aged over 55 have to pay “very expensive” pension costs, which can run into six figures. “That will add on a lot of hidden costs to the cost of elected mayors”, she said.

While nine council leaders have been vocal in their opposition, Leicester City Council is set to adopt a mayoral system voluntarily. Due to the Localism Bill’s wording, the city will have a choice over the adoption of executive powers, as first reported by LGC last week. But leader Veejay Patel (Lab) said the legal loop-hole had nothing to do with Leicester’s decision to move early and the council is yet to discuss its options.

The leadership of Birmingham City Council, the only Conservative-controlled council amongst the 12 councils, is reviewing its previous opposition to the mayoral model following the announcement of the new powers.

Coventry City Council leader John Mutton (Lab) said he “would take on those powers that were necessary to deliver change” but would still work closely with councillors and a chief executive or head of paid service. “I do not believe that any one person has a monopoly on ability or brain power,” he said.
 

www.lgcplus.com 20/01/2011