Agent151: Removing protection for 151 officers will “end in tears”

The 24th March 2015 saw a written statement by Kris Hopkins, the local government minister, that included a misleading and misconceived proposal entitled, “Calling time on inflated golden goodbyes”.

This disingenuous title disguised an announcement that the existing employment protection for council statutory officers is to be immediately scrapped and replaced with something entirely unsuitable. It is another backward step for good governance in councils.

The conflation of the concept of a golden goodbye, which only happens for a privileged few in the private sector, with a settlement reached between a council and a statutory officer when things have gone badly wrong, at best indicates ministerial confusion on the subject, and at worst a deliberate intention to misrepresent the issue.

Statutory officers (by which I mean the chief executive, finance director, and monitoring officer) may come into conflict with their employer and as a result be under threat of dismissal. Tried and tested employment law deals with this eventuality, so why should such an officer have more protection than any other employee?

The answer to this lies in the nature of the relationship between statutory officers and members. These are the officers that have to stand up to members on important and difficult issues, like setting a balanced budget, accounting for things properly, member conduct, corruption and fraud.

They are therefore at high risk of coming into conflict with members. The temptation for members to sack a senior officer who refuses do what they want, even if that officer is in the right, is strong, because they can then appoint a more malleable officer. The statutory protection is intended to provide senior officers with the confidence to do the right thing, in the knowledge that they cannot be summarily sacked and that members would have to explain themselves to an independent person.

As the Committee on Standards in Public Life observed in 2013, high standards do not occur automatically, nor should they be taken for granted. In other words, things can get pretty nasty sometimes. In an extreme case, an officer trying to uphold the law can find themselves facing trumped up charges. The threat to their livelihood, the pressure, the bullying, the rumour-mongering that they have somehow gone off the rails creates extraordinary stress levels. Anyone who thinks that no additional protection is needed has never thought it through.

However, like many solutions that have found their way into the statute books, the existing protection is far from perfect. SOLACE (the society for chief executives) commented, when Eric Pickles first raised the idea of scrapping protection back in 2013, that the process is “too long, too costly and of limited benefit to all parties involved.” Indeed, the flaws are immediately obvious.

Firstly, once you get into that kind of dispute parting company is the only likely outcome, and so the independent investigation descends into a negotiation in which the ongoing cost is a bargaining chip. Secondly, the investigation is conducted behind closed doors, so members are not deterred from pursuing wrongful dismissal because there is no electoral consequence. Thirdly, the process is expensive because the independent person is normally a QC on an extravagant hourly rate. Finally, members simply do not care about the cost in such cases so long as they get their own way without any adverse publicity.

If this is the case, then why should the protection not be scrapped? The view from the experts is that some kind of extra protection is necessary. Rob Whiteman, chief executive of CIPFA wrote: “The potential for conflict between financial imperatives and political priorities makes it essential that section 151 officers have adequate protection in the exercise of their statutory functions, so that they can carry out their statutory duties without fear or favour.” He went on to say: “CIPFA would argue that any change should be on the basis on ensuring that role can be executed properly, rather than taking a risk to undermine the execution of these duties for an unclear reason that has not been raised by professional bodies or commentators.”

So protection is needed. But the delivery mechanism needs to be improved. Will the solution ministers are imposing tick all the right boxes? Well, I for one am deeply concerned at the prospect of full council being the place where transparent decisions to dismiss are to be made. Can it really be the case that a political forum, in which members can be whipped to a party line, is the right place to hear an employment dispute?

No officer could fail to be intimidated by the prospect of having to face such a kangaroo court. Similarly, no council would want its dirty laundry aired in public. My experience of council behaviour suggests to me that the mechanism proposed would in practice deter both sides from conflict. Not only would this make the entire issue even less transparent than it is now, but it would have further undesirable effects.

Pay-offs would potentially be bigger and shrouded in more secrecy, reflecting a mutual desire for resolving the matter without publicity. More worryingly, the absence of  workable protection would ultimately result in the statutory roles being populated only by the weak and malleable, who are unlikely to find themselves at loggerheads with their political masters.

This government is obsessed by the remuneration of local authority senior officers, for reasons that cannot be explained. Its unwelcome tinkering with local authority management arrangements will have far-reaching negative consequences with high-calibre individuals (who have recently performed the impossible with council budgets) driven away by eroded pay and conditions. This is entirely at odds with the government’s policy of devolving more responsibility to councils. Mark my words: it will end in tears.

Agent151 is a senior local authority finance director and s151 officer.