Pay Policy Statement for Chief Officers

The policy will be kept under review.

Please also be advised that no officer of the Council receives any payments from the Council 'off-payroll' as a self-employed contractor or consultant.

Purpose and Scope of the Policy

1. Section 38 of the Localism Act 2011 (the Act) requires local authorities in England and Wales to produce a statutory pay policy statement for 2012/2013 and each financial year following.

2. The pay policy statement must be approved by a resolution of the Council before it comes into force. Each subsequent statement must be prepared and approved before the end of the preceding financial year to which it relates.

3. The Council may, by resolution, amend this pay policy statement at any time during the year, subject to the amended statement being published as soon as is reasonably practicable.

4. The Act requires local authorities to have regard to the guidance issued by the Secretary of State. The guidance draws upon the Code of Recommended Practice for Local Authorities on Data Transparency published by the Secretary of State on 29 September 2011. It also draws on the commitment in the Coalition Agreement to strengthen councillors' powers to vote on large salary packages for council officers. Finally it draws on the recommendations made by the Hutton Report published in March 2011 for promoting fairness in the public sector by tacking disparities between the lowest and highest paid in public sector organisations.

5. The pay policy statement brings together these strands of increasing accountability, transparency and fairness in the setting of chief officer pay.

6. The pay policy must set out the authority's policies for the financial year relating to

6.1. The remuneration of its chief officers,

6.2. The remuneration of its lowest-paid employees, and

6.3. The relationship between

6.3.1. (i) The remuneration of its chief officers, and

6.3.2. (ii) The remuneration of its employees who are not chief officers.

7. For the purposes of this pay policy, and in accordance with section 43 (2) of the Act, the following officers are considered to be relevant chief officers and deputy chief officers within scope of the Councils' statutory obligation:

• Chief Executive
• Directors
• Section 151 Officer
• Monitoring Officer

8. The above officers are collectively known as Chief Officers for the purpose of this pay policy statement.

9. In addition, the pay policy sets out the council's overall pay strategy that is applicable to all employees.

Shared Services

10. For the purposes of this pay policy statement, it should be noted that all of the identified chief officers operate under a shared service agreement with West Devon Borough Council. Their salary costs are shared on an agreed basis. For the purpose of this pay policy statement, all shared chief officers are shown, notwithstanding the identity of their employing authority.

Current Senior Leadership Arrangements

11. With effect from 1 January 2014, South Hams District Council and West Devon Borough Council agreed to adopt interim arrangements for an Executive Director model following the retirement of the Shared Chief Executive on 31 March 2014.

12. As part of the Councils' T18 Transformation Programme, a new senior management structure was approved by Full Council. This consisted of 2 Executive Directors and 4 Group Managers. This was reduced to 3 Group Managers from 31 January 2016

13. Following the resignation of the Executive Director for Strategy and Commissioning and Head of Paid Service with effect from 18 February 2018, further interim arrangements were approved by Council. These arrangements were in place until the election of a new administration in May 2019. The Council resolved to jointly set aside £53,000 pa with West Devon Borough Council (£26,500 per Council) of the interim savings to finance interim senior management arrangements.

14. Following a review of the interim arrangements by the Review Panel, Council appointed the Executive Director for Service Delivery as the Chief Executive with effect from 21 February 2019. This also builds on the recommendations of the Local Government Association Peer Review, The post of Executive Director for Strategy and Commissioning remained vacant.

15. The Chief Executive implemented a new senior leadership structure with effect from September 2019. This comprised of a Chief Executive plus Directors of Customer Service and Delivery, Place and Enterprise, Governance and Assurance, and Strategic Finance. The role of Executive Director for Strategy and Commissioning was deleted.

16. The substantive salaries of the Senior Leadership Team were agreed by the Council on the recommendation of the Leader after taking advice on comparable salary levels in other organisations.

17. The salary of the Monitoring Officer includes an additional responsibility allowance, set at 20% of their substantive salary, in recognition of carrying out the duties of the Monitoring Officer.

18. In April 2020, Full Council approved the appointment of a new Chief Executive.

Remuneration for Chief Officers

19. The council has chosen to introduce local arrangements for the Senior Leadership Team pay because it believes that this delivers a better outcome in terms of managing performance and flexibility.

20. The Leader of the Council may recommend to Full Council changes to the remuneration package following a review and after taking independent pay advice from South West Councils or a similar body. Any changes to the remuneration packages will be subject to Full Council approval.

21. Salary increases in relation to cost of living will be made in line with the relevant recommendation of the National Joint Council for Local Government Services (the NJC), the Joint Negotiating Committee for Chief Executives (the JNC) or other relevant national negotiating body for each chief officer.

22. The salary for the Chief Executive will be a 'spot salary.' That is to say, the post holder will be paid in accordance with a fixed salary within an agreed range upon appointment. There will be no further incremental progression as a result of seniority, experience or performance. The 'spot salary' also includes remuneration for holding the statutory office of Head of Paid Service.

23. The salary for the Directors will be paid in accordance with an incremental grade as part of the Council's pay and grading structure. The pay band has four incremental points and post holders can progress through the increments each April, subject to satisfactory performance.

24. From time to time, the Chief Executive will designate a Chief Officer to carry out the role of Deputy Chief Executive in addition to their substantive role. The nominated Deputy Chief Executive receives a special responsibility allowance of £8000pa or 6.5% of the Chief Executive's salary, whichever is the greater. The payment will not be consolidated and will not attract an annual cost of living increase.

25. Where possible, salary levels will be consistent with similar organisations. However, the Council will retain the right to have due regard to market forces that may affect its ability to recruit and retain high quality officers, whilst balancing this against the need to ensure value for money for residents.

26. The salaries, including the special responsibility allowances paid to the Deputy Chief Executive and the Monitoring Officer are the only remuneration for work carried out. At present, there are no additional payments made to chief officers relating to performance or any other matters and no bonus is payable.

27. Additional payments are made by Central Government to officers carrying out additional duties at elections. The determination of the allowance is made by the Government and these payments are not within the scope of this policy. There are no payments made by the Council for election duties.

28. In accordance with the provisions of the Council's Travel and Subsistence Policy, that applies equally to all employees, the relevant chief officers may attract an essential car user lump sum allowance. They may be reimbursed with business expenses subject to the submission of a claim with receipts. For 2021/22, all of the Chief Officers are designated as casual car users and will not receive an essential car user lump sum allowance.

29. From 1 April 2013, all business mileage will be reimbursed in accordance with the approved HMRC rates, currently 45p per mile. This replaces the previous policy under which business mileage was reimbursed at the higher rate agreed by the NJC, currently 50.5p per mile for essential users and 65p per mile for casual users.

Severance payments

30. Any termination payments payable to the relevant chief officers will be in accordance with the Council's Redundancy and Interests of Efficiency Policy. All such payments are equally applicable to all employees. No additional payments will be made without the express approval of the Full Council. All severance payments are subject to the provisions of the Local Government (Early Termination of Employment) (Discretionary Compensation) (England and Wales) Regulations 2006, as amended.

31. The Local Government (Early Termination of Employment) (Discretionary Compensation) (England and Wales) Regulations 2006 are due to be amended in 2021. The Council's Redundancy and Interests of Efficiency Policy may need to be changed in line with new statutory provisions.

32. The Government passed into law on 4 November 2020 new legislation (known as the 'Exit Pay Cap Regulations' that amend the Small Business, Enterprise and Employment Act 2015). This limits the amount of compensation that can be paid to a local authority employee to a maximum of £95,000, including any redundancy payment (statutory and contractual) and the cost to the Council of the early release of a pension (known as the Pension Strain cost).

33. The changes to legislation will also require consequential changes to the Local Government Pension Scheme. The Council will update its Discretionary Policy in accordance with the requirements of Regulation 66 of the Local Government Pension Scheme (Administration) Regulations 2008, and Regulation 60 of the Local Government Pension Scheme Regulations 2013.

Relationship with the remuneration of other employees of the Council

34. The Hutton Report identified that the most appropriate way of measuring pay dispersion within an organisation is the multiple of highest earnings to median earnings. Tracking this multiple will ensure that the Council is accountable for the relationship between the pay of its executives and the wider workforce. Through this pay policy statement, the Council will track this multiple on an annual basis and will publish the following information on its website each year (see Appendix A):

• The level and elements of remuneration to each relevant chief officer
• The remuneration of the lowest paid employees
• The relationship between the remuneration of the Head of Paid Service and the median earnings of all employees
• Other specific aspects of relevant chief officer remuneration

35. Each year the published data will be reviewed by the Leader of the Council. If the multiplier between the highest and the lowest paid employee within the Council exceeds a factor of 10, the Leader shall present a report to the Full Council for consideration.

36. For the purposes of this pay policy statement, the 'lowest paid employees' are identified as those employees carrying out a substantive role within the Council's established workforce with the lowest annual full-time equivalent salary.

37. The 'median earnings' have been identified by listing all salaries paid to employees in ascending order and finding the salary paid to the employee ranked in the middle of the list.

The Council's overall pay strategy

38. In determining the pay and remuneration of its employees, the council will comply with all relevant employment legislation. This includes

• the Equality Act 2010,
• the Part Time Employment (Prevention of Less Favourable Treatment) Regulations 2000,
• the Agency Worker Regulations 2010,
• the Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 and,
• the Transfer of Undertakings (Protection of Earnings) Regulations (where relevant)

With regard to the Equal Pay requirements contained in the Equality Act, the council ensures that all pay arrangements are fair and transparent. This is done through the use of a Senior Office Job Evaluation Scheme (for Levels 1 - 3) and the Job Assessment Tool for all other employees.

39. The council takes the following approach to assessing individual and overall pay levels:

• Defining the role - a job description is produced that describes the activities, responsibilities and accountabilities which relate to each job within the council. This helps to ensure that the role and its requirements are fully understood by the individual and the manager. It also enables the council to assess the performance of its staff and so improve efficiency and effectiveness.
• Determining the job size - the council has developed its own Senior Officer Job Evaluation Scheme and a Job Level Assessment technique that enables the direct comparison of jobs across the council in a fair, transparent and consistent way.

40. The council's pay structure is based on the pay spine agreed by the NJC. Employees receive 'cost of living' increases in pay in line with NJC Agreements. The headline cost of living increase awarded in April 2020 was 2.75% on all spinal column points. The national pay settlement for 2021/2022 has not yet been agreed.

41. The terms and conditions of employment for the Chief Executive is in accordance with the Joint Negotiating Committee (JNC) for Chief Executives of Local Authorities. There was a 2.75% increase payable from April 2020. The settlement for 2021/2022 has not yet been agreed.

42. Using the nationally agreed NJC pay spine, the council determines locally the appropriate grading structure. They take into account the need to ensure value for money in respect of the use of public finances balanced against the need to recruit, retain and motivate employees who are able to provide high quality and efficient services to the community.

43. To encourage employees to develop in their role and to improve their performance, the council has arranged its pay levels within a series of pay grades. Each grade typically contains between 4 and 5 pay levels or increments. Progression through the pay grade is dependent on meeting identified performance targets. This is assessed through the council's staff appraisal scheme.

44. The council uses fixed spot salary pay rates for some groups of workers where there is no opportunity for significant improvement in performance related to length of service.

45. From time to time, the council may pay special allowances to an employee in specific circumstances and in accordance with its policy. For example, to reward an employee who temporarily takes on additional responsibilities.

46. From time to time, the council may make a one-off merit pay award to an employee in specific circumstances and in accordance with its policy. For example, to reward exceptional performance.

47. Subject to qualifying conditions, employees have a right to belong to the Local Government Pension Scheme. The employee contribution rates, which are defined by statute, currently range between 5.5% for those on the lowest incomes to 12.5% for the highest income earners. The Employer contribution rates are set by Actuaries and are reviewed on a triennial basis to ensure the scheme is appropriately funded.

48. The Council's Pay and Reward Strategy contains further information relating to the overall approach to rewarding employees.

Appendix A - The levels and elements of remuneration for each Chief Officer

Please note: All chief officers operate under a shared service agreement with West Devon Borough Council and all salary and associated costs are shared on an agreed basis between the two councils.

The Senior Leadership Team (SLT) consists of the Chief Executive and the four Directors, but excludes the Monitoring Officer.

The total annual salary cost of the SLT at 31 March 2021 is £427,234.52 per annum. The increase from last year is attributed to both the annual cost of living increase agreed nationally and the Directors progressing up through the relevant pay scale. This cost is shared with West Devon Borough Council.

The cost of the SLT at 31 March 2019 was £398,170pa, and at 31 March 2020 was £408,000 per annum. The post of Executive Director (Strategy and Commissioning) and Head of Paid Service was deleted in September 2019.

In April 2017, the comparative cost of the SLT was £451,720 (adjusted to include the salary of the S151 Officer, previously not a part of SLT).

For comparison purposes, the total salary cost of the shared management structure in 2010/11 across the two councils in 2010/11 was £1,277,812 per annum. 

This was reduced following major organisational change in April 2011 and the adoption of the interim Executive Director model in January 2014 to £612,340 per annum. This salary cost included the Executive Directors and Heads of Service (including s151 Officer) but excluded the Monitoring Officer.

2. The lowest paid employee is a Case Manager, paid in accordance with spinal column point 6 of the National Joint Council for Local Government Services pay spine, currently £19,698pa.

3. The annual median salary of all employees £26, 511

4. The Chief Executive's salary is a pay multiple of 4.65 times the median earnings.

5. The Chief Executive's salary is a pay multiple of 6.26 times the lowest paid employee.