Businesses are cutting back - but are the town hall high earners? PUBLIC SECTOR PAY: Concerns over rising pay in public sector.

Byline: Dan Warburton

AN army of public sector servants is costing the North East taxpayer more than pounds 42m a year in wages, The Journal can reveal.

Across the region 494 members of staff currently earn more than an MP's annual salary. That means hundreds of public sector workers are pocketing more than pounds 63,291 on an annual basis.

The figures were accessed by The Journal after we submitted a Freedom of In- formatiorequest to every local authority, police force and government quango.

And the staggering cost of employing public sector workers has stirred controversy over the value for money that the taxpayers receive from those organisations.

Last night James Ramsbotham, chief executive of the North East Chamber of Commerce, said local authorities should be making cutbacks in their budgets in order to deal with the current economic crisis.

He said: "We are very concerned that private sector has held their salaries over the last 18 months in response to the current economic situation while public sector pay continues to rise.

"We are very conscious that the scale of public sector debt will lead to cost cutting across public services in the years ahead."

At the time The Journal submitted its Freedom of Information MPs' salaries were pounds 63,291, though now they have edged up to pounds 64,766. That means the 26 MPs in the region earn pounds 1,683,816 between them.

But in the public sector the total wage bill for the 494 members of staff earning more than pounds 63,291 amounts to a staggering pounds 42,573,776. That means each of those public sector workers earns an average annual salary of pounds 86,181.

Last night calls were made to re-assess the salary of MPs and for cutbacks to be made.

Mr Ramsbotham said: "We put huge pressures on MPs and they work incredibly hard. It's often expected that they should do a lot of work for very little return.

"They certainly need to be paid more but we need to do this in such a way that there's total transparency, with no grey areas. We should have addressed MPs' salaries a long time ago."

Durham County Council has the largest wage bill of all the local authorities, with 97 employees earning a combined salary of pounds 8,284,843.

However the council claims that figure has drastically dropped following this year's local government reorganisation (LGR) and that taxpayers are now receiving value for money.

Newcastle City Council has 75 employees pocketing more than pounds 63,291 each year, earning a total of pounds 6,179,729.

Last night Hexham Conservative MP Peter Atkinson said it was reasonable to expect some public sector workers to earn large salaries - but said cutbacks were needed to weather the storm facing local authorities in the current economic climate.

He said: "There are two issues here. If we think about the billions of pounds that are handled each year by these people then we must realise they need to be qualified.

"Accountancy skills, management skills and legal skills are all needed - and they must compete against the private sector. If you don't pay the market rate then you don't fill those jobs. Having said that it is obviously important that public sector organisations are getting the best value for money - these people need to be earning their keep.

"There's obviously suspicion among taxpayers and it's important that there is a scaling down in certain areas. There is a risk that they are too top-heavy and they need to look at what they do and see if that is essential. They local authorities face a cut in incomes over the next few years and therefore they must look at their management structures."

Newcastle Labour group leader Nick Forbes said: "My main concern is that there are actually big inequalities within the organisation and that can lead to resentment and disenchantment from lower paid workers in particular.

"The organisations need good management but the focus should be on quality rather than these large costs.

"To be quite frank, I see councillors offering clearer thinking and longer working hours than many of these middle managers. They offer a better service than many of the highly-paid public sector workers.

"The MPs are the ones who are being held accountable for the decisions taken, but there are these people behind closed doors and they are not being held accountable at all.

"There are these public sector workers who earn far more than our regional MPs.

"We have to question the levels of decision-making powers that both sets of people have, and whether their salaries are justified."

Comment 10

Big jobs - and big salaries to perform them

FROM head teachers to chief ex-ecutivesthe list of public sector workers on high wages is extensive.

One school head working within Northumberland County Council earns as much as pounds 110,000 a year, while the council's 'Executive Director of People' is the top earner, claiming as much as pounds 150,000 every 12 months.

The chief fire officer in the Northumberland service is on a wage that ranges from pounds 100,000 to pounds 110,000 a year.

In Newcastle City Council the biggest salary goes to the chief executive, who earns up to pounds 154,499 each year. In Sunderland City Council the executive director of children's services, the director of development and regeneration and the director of community and cultural services are all on the executive director salary bands.

That means they take home an average annual wage of pounds 125,003.

But last night council chiefs defended the pay packets, saying the cash was used to attract employees who were best suited to carry out the tasks.

Newcastle City Council's director of resources, Paul Woods, said: "Newcastle City Council spends over a billion pounds every year on providing the public with essential services and investing in the city's infrastructure.

"To ensure that we maximise value for money and get the most from every single pound that we spend we employ high calibre senior managers, including technical professionals and headteachers, and pay them at the market rate.

"This total amount - of around pounds 6m - represents a relatively small amount, half of a per cent, of what the council spends in a year.

"The latest national MORI Place Survey on councils, who in the public's opinion provide value for money, puts Newcastle in the top 25% in the country and places us as second best in the North East, however we recognise that more efficiencies can be achieved.

"As part of our transformation programme, which will save pounds 169m over the next five years, we have streamlined our structures and removed 240 managerial posts, saving pounds 10.5m in a full year and making the council leaner and more agile to face the challenges of the future."

Meanwhile Durham County Council claims its wage bill has been slashed since the local government reorganisation (LGR). A spokeswoman said: "We are now the fourth biggest unitary authority in the country and significant savings will be achieved through the LGR, which is not yet completed.

"The council's new structure provides for a total of 40 senior managers, including the chief executive, corporate directors and heads of services, a big reduction on the numbers prior to April 1. "Around 38 of those are now in post and the total salary costs for these will be in the region of pounds 4m.

"The other staff members earning more than pounds 63,291 consists of 56 head teachers, who work to pay scales approved nationally by central Government, and other specialists like the coroner. "There is no doubt that the completed LGR process will lead to better value for council tax payers across the board."

Despite repeated attempts to contact Northumberland County Council no one was available to comment.

Town centre boss let off parking fines

A COUNCIL boss who staged a parking protest has had pounds 2,500 worth of fines wiped from his slate.

Steve McCormick, town centre manager at Bishop Auckland in County Durham, refused to pay and display to park in the town's Bondgate car park.

As a result, his Peugeot has been getting fixed penalty notices on a near-daily basis.

He has clocked up around 50 tickets which bring a fine of pounds 50 each, bringing the total he owes to his own employers to something like pounds 2,500.

The dispute began after his previous employer, Wear Valley District Council, was absorbed into the unitary Durham County Council on April 1. Before then he and other Wear Valley employees had a tacit understanding that they need not pay to use the pay and display car park at Bondgate.

Following the local government shake-up the former Wear Valley employees were told they had to pay and display like anyone else.

All complied apart from Mr McCormick, who is paid more than pounds 30,000 per year to promote the town.

His role is described as "covering a wide range of town centre-related initiatives and issues involved with improving the environment and promoting and marketing the town centre to a wider audience."

Mr McCormick declined to discuss the issue of his parking tickets, simply saying: "I'm sorry, that is an internal matter and I don't have any comment."

One council insider said: "This has caused a lot of bad feeling.

"We don't see why he should consider himself above the law when all other council workers and the general public have to pay and display to park in Bondgate or any other council owned car park."

A spokeswoman for Durham County Council said the problem had been "inherited" after local government reorganisation, and the council had decided that, due to "mitigating circumstances" the fines would be waived.