MEETING REMUNERATION COMMITTEE DATE AND TIME WEDNESDAY 9TH MAY, 2012 AT 7.

30 PM or on the rise of Special Committee (Constitution Review), whichever is later VENUE HENDON TOWN HALL, THE BURROUGHS, NW4 4BG Dear Councillors, Please find enclosed the papers relating to the following items for the above mentioned meeting which were not available at the time of collation of the agenda.

Item No 6. 7.

Title of Report Committee Set Up - Initial Items of Business Senior Posts and Council Re-Organisation

Pages 1 - 14 15 - 22

Chidilim Agada 020 8359 2037 chidilim.agada@barnet.gov.uk

This page is intentionally left blank

AGENDA ITEM 6

Meeting Date Subject Report of Summary

Remuneration Committee 9 May 2012 Committee Set Up and Terms of Reference Assistant Director Human Resources
This report sets out the initial items of business that this first meeting of the Remuneration Committee will need to consider.

Officer Contributors Status (public or exempt) Wards Affected Key Decision Reason for urgency / exemption from call-in Function of Enclosures

Sarah Murphy-Brookman, Assistant Director Human Resources Public Remuneration Committee Not applicable Council Appendix A - Terms of Reference for the Committee Appendix B - Councils Pay Policy statement for 2012/13 Sarah Murphy-Brookman 020 8359 7912

Contact for Further Information:

1. 1.1 1.2 1.3

RECOMMENDATIONS To note the Terms of Reference for the Committee Appendix A. To note the Councils Pay Policy statement for 2012/13 Appendix B. To endorse the need for a second set up meeting and to agree the agenda for this meeting as described at Section 9. RELEVANT PREVIOUS DECISIONS A meeting of Special Committee (Constitution Review) on 13 March 2012 agreed: o That the Committee agrees the establishment of a Remuneration Committee would represent robust and transparent management of the Councils Reward Strategy for all employees. o That the Committee agree in principle to recommend to Council to change the governance framework for the management of senior officer reward in response to the Localism Act 2011 by establishing a Remuneration Committee. o That the Committee recommends to Council the attached proposed Terms of Reference for the proposed Remuneration Committee, and instructs officers to bring forward the consequential constitutional changes to Part 2 Responsibility for Functions of the Constitution to Council for agreement. o That, subsequent to the agreement of the Committee to recommendations 1.1 to 1.3 above, that officers be instructed to provide a report to the General Functions Committee of 29 March 2012 containing the Human Resources implications of the establishment of a Remuneration Committee. o That the proposed Remuneration Committee absorbs the current ad hoc committees which deal with Chief Officer Appointments and Discipline matters.

2. 2.1

2.2

General Functions Committee met on the 29 March 2012 and noted the establishment of a Remuneration Committee and its Terms of Reference. Council on 17 April 2012 endorsed the Remuneration Committee members and Terms of Reference. The Council Constitution has now been amended to incorporate the Committee and Terms of Reference at Part 3 - Responsibility for Functions, Section 2. CORPORATE PRIORITIES AND POLICY CONSIDERATIONS The Remuneration Committee plays a key role in ensuring that the corporate vision of Better Services with Less Money is supported by the Reward Strategy. The pay bill is the largest cost for the London Borough of Barnet

2.3

3. 3.1

and this committee will underpin the aim of pay control in order to deliver the Mid Term Financial Plan. 4. 4.1 RISK MANAGEMENT ISSUES The establishment of this committee forms part of the Councils discharge of its responsibilities under the Localism Act 2011, in particular the issues of transparency for Chief Officer pay. The terms of reference will include ensuring that; pay levels are set in the correct contexts e.g. the Councils full reward strategy and national and local markets and the Council is compliant with the Equality Act 2010. EQUALITIES AND DIVERSITY ISSUES The functions undertaken by the Remuneration Committee support the Council in its compliance of the Public Sector Equality Duty as set out in Equality Act 2010. The Remuneration Committee will need to demonstrate that its functions and decisions have taken due regard of the need to: 5.3 Eliminate discrimination, harassment, victimisation and any other conduct prohibited under the Act; Support equality of opportunity between those with a protected characteristic and those without; Promote good relations between those with a protected characteristic and those without

4.2

5. 5.1

5.2

The decision makers who serve on the Remuneration Committee are required to take a rigorous and open-minded approach to these decisions and will draw on fact specific evidence to assist. USE OF RESOURCES IMPLICATIONS (Finance, Procurement, Performance & Value for Money, Staffing, IT, Property, Sustainability) Value for Money - External Advice about Market Factors

6.

6.1

The committee will have independent advisor(s) to support committee members, responsibilities include: Attendance at committee meetings as required. Preparation of reports as requested by the committee. Provision of external advice and context

6.2 7. 7.1

The resource implications of administering this committee will be met from within the Corporate Governance directorate budget. LEGAL ISSUES Eric Pickles MP, Secretary of State for Communities and Local Government introduced the Localism Bill in 2010, which received Royal Assent on 15th

November 2011. Specific pay matters are set out at Chapter 8 (sections 38 and 39) 7.2 Where any changes to remuneration arise that impact on contractual terms, this would be referred to the General Functions Committee if appropriate and any necessary consultation with employees of the Council will be carried out. CONSTITUTIONAL POWERS (Relevant section from the Constitution, Key/Non-Key Decision) The Remuneration Committees terms of reference are noted in Part 3 of the Councils Constitution Responsibility for Functions BACKGROUND INFORMATION First Meeting of the Remuneration Committee The first meeting of the Remuneration Committee will have dealt with initial set up. It is suggested that there is a second set up meeting to consider specific items about the context in which the committee operates and to give members the opportunity to shape the Agendas and the management of the Committees business going forward. Suggested Agenda items for the second set up meeting are set out below. Committee Set up, Part 2 June 2012 - Suggested Agenda Items 1. To receive a report for discussion and endorsement on the following matters: protocols for the operation of the Committee The steady state meeting schedule Use and operation of an Advisory panel to the Committee drawing on experience from the May meeting Reward policies to support the Councils reward Strategy, these may include: Market Factor Supplement policy; policy on the parameters for the remuneration of Chief Officers on recruitment; pay dispersion policy 2. To receive a report on the Localism Act 2011 and how this applies to the Council 3. To receive a report on the Councils Reward Strategy and unified pay structure as applicable to Senior Posts. 10. 10.1 10.2 LIST OF BACKGROUND PAPERS Special Committee (Constitution Review) Remuneration Committee - 13 March 2012 General Functions Committee- Remuneration Committee -29 March 2012 MC PL

8.

8.1

9. 9.1

9.2

Cleared by Finance (Officers initials) Cleared by Legal (Officers initials)

Appendix A
REMUNERATION COMMITTEE Terms of Reference 1. Constitution a. London Borough Barnet has established a committee known as the Remuneration Committee. 2. Membership (Maximum 5, Quorum of 3) Membership of the Committee will normally consist of: a. Chairman Leader of the Council. b. Deputy Leader of the Council. c. Chairman of General Functions Committee. d. Leader of the Opposition e. Leader of the minority opposition group. f. One substitute from each political group Notes A person that holds sole responsibility for appraising senior officers may not be a member of the committee. 2. Authority a. To recommend and seek approval for Chief Officer (as defined in the CLG Openness and accountability in local pay: Guidance under section 40 of the Localism Act 2011) remuneration via non-executive resolution. The definition of remuneration will include: Pay Charges Fees Allowances. Benefits in Kind Increases or enhancements to pension entitlements Termination payments 3. Responsibilities The Committee will take account of the Reward & Employment strategies of the Council and ensure that it is fully briefed on the prevailing organisational approach. The following list of responsibilities is not intended to be exhaustive: a. To develop and approve the Pay Policy and be responsible for the publication of the annual statement, which will include: The level and elements of remuneration for each Chief Officer Relationship of the remuneration of Chief Officers and other officers A description of the relationship between decisions made on the lowest paid and top paid employees in the organisation Remuneration of the lowest paid (with the definition of the lowest paid and the reasons for adopting that definition)

Remuneration on recruitment, increases and additions to remuneration, use of performance-related pay and bonuses, termination payments Transparency arrangements Reasons for chosen approach to remuneration levels and how this is to be implemented Differences of approach to groups of employees and the reasons for them Pay dispersion Incremental progression factors Use of honoraria and ex-gratia payments Determine remuneration parameters for officers who have returned to work for a local authority Appointment and remuneration terms

b. To review annually remuneration, as defined above, for the Councils Chief Officers except those elements determined nationally or pensions. c. To keep under review the terms & conditions of the Councils Chief Officers that relate to pay and make recommendations to the General Functions Committee, so that any necessary consultation is carried out. d. To receive information in the context of reward from organisations that have a relationship with the Council or arrangements that may influence decisions when determining pay The employees of Barnet Group Contractors Shared management schemes Outplacements Agency and other staff e. To have oversight to ensure that remuneration terms of appointments are appropriate. f. To take advice from the Pensions Committee with regard to decisions on pay that would impact upon pension arrangements or contributions. g. To set parameters for the remuneration of Chief Officers on recruitment. h. To ensure that sufficient flexibility exists within the pay policy to allow responses to unforeseen circumstances without having recourse to revising the pay policy statement between annual reviews. i. To have oversight of the national pay agenda and consider the implications in the local context To commission relevant research and/or comparative information on salaries in the public and private sectors e.g. from: The Councils own HR function National and/or Regional employers organisations Independent consultancy organisations with relevant experience in pay market analysis Submissions made by the Associations on behalf of their members

j.

and make recommendations thereon k. To ensure that the Public Sector Equality Duty, as set out by the Equality Act 2010, is applied throughout the pay and reward structure. l. To take cognisance of the CLG Code of Recommended Practice for Local Authorities on Data Transparency. m. To reference back to previous years actual remuneration for Chief Officers and senior employees ( definition of senior employee is consistent with CLG Code of Recommended Practice for Local Authorities on Data Transparency). n. To obtain assurance that adequate internal and external moderation and benchmarking takes place when senior posts are subject to job evaluation. o. To take account of forward plans and the impact of remuneration on workforce planning, talent management and succession planning. p. To review remuneration arising from performance management and ensure that any performance-related pay mechanisms are fair and transparent. q. To refer such items as necessary to the Council r. To refer to guidance from the Secretary of State. 4. Recommendations a. The Committee will, as appropriate, make reasoned recommendations to the Council. 5. Protocols a. To maintain confidentially whilst discussions are taking place and until decisions are published and thereafter in relation to matters where there is an ongoing requirement for confidentiality. b. Insofar as possible, to ensure that meetings are quorate. c. To declare any conflicts of interest. 6. Frequency & attendance a. The first meeting of the committee will be to Note the Terms of Reference of the Committee. Receive a report on the Localism Act 2011 as the foundation to the purpose of the Committee. Agree a set of protocols for the operation of the Committee Receive a report and presentation on the Councils Future Reward Strategy. Take steps to convene a Reward Advisory Panel to provide advice to the Committee as required Discuss development of the Councils Pay Policy Take steps to develop and understanding the local, regional and national context

Undertake a review of organisational performance Take steps to understand the impact of pay levels on the local economy Take steps to understand the pay bill and the wider pay context To embracing the transparency agenda and agree step to ensure compliance.

b. Meet bi-annually in September and January but with additional special meetings if necessary

7. Reporting procedures Normal Committee arrangements

Appendix B London Borough of Barnet Pay Policy Statement 2012/13 1.

1.1

Background
Localism Act 2011 - Openness and accountability in local pay

Section 38(1) of the Localism Act requires local authorities to produce an annual pay policy statement. The provisions in the Act do not seek to change the right of each local authority to have autonomy on pay decisions, however it emphasises the need to deliver value for money for local taxpayers. This statement has been approved by full Council and any further changes during the year will be brought back to Council for adoption. This statement does not cover schools. 1.2 Related Remuneration and Transparency Context

The Council will continue to meet all of its other obligations with regard to the publication of pay information. The Council has recently adopted and now follows the transparency requirements on remuneration as set out in the Code of Recommended Practice for Local Authorities on Data Transparency issued by the Department for Communities and Local Government in September 2011.

2.

Governance arrangements for pay and conditions of service within London Borough of Barnet

General Functions Committee - as set out in the Councils constitution Part 3, section 2 has responsibility for staff matters and conditions of service. General Functions Committee is a sub committee of Council and all of its decisions will either be called in or are approved by full Council. As part of the transparency and accountability agenda the Council intends during 2012/13 to set up a Remuneration Committee which will have accountability for remuneration of chief officers and pay in general. The Remuneration Committee would also have responsibility for ensuring that remuneration is set within the wider pay context, including giving due consideration to the relationship between the highest and lowest paid in the organisation. The Remuneration Committee will produce pay recommendations and pay policy for approval by Council. Practically this means that General Functions Committee with its remit covering conditions of service and the Remuneration Committee with its remit of Pay and pay Policy will work closely together to produce co-ordinated statements for approval by Full Council. 9

3.
3.1

Remuneration arrangements for all employees

Introduction

This section sets out the remuneration arrangements for all London Borough of Barnet (LBB) employees. LBB operates a single set of pay arrangements which covers all employees including Chief Officers. These arrangements include: 3.2 Base pay negotiated through collective bargaining arrangements administered by the Local Government Association Adoption of the NJC pay spine extended to include Chief Officers. A comprehensive pay banding structure for all employees - put in place following LBBs review of pay in 2000 under the Councils Single Status Agreement. Evaluation of all roles using systematic Job Evaluation. Roles placed on the pay spine using job evaluation Automatic enrolment into Local Government Pension Scheme (LGPS) Pay Scales

The council in accordance with its single status agreement currently has five pay bands in operation as follows: Pay Band Relevant employees Chief Executive Directors Assistant Directors Senior Managers and some professional staff All other employees Lowest Pay Point as at 1 Jan 2012 200,976 120,000 63,681 47,550 Highest Pay Point as at 1 Jan 2012 217,861 175,000 117,879 62,514

Chief Executive Directors Barnet Band 5 Hayband 4

Barnet Broadband

14,697

64,827

The evaluated grade for a role is normally 4 spinal column points. However the Single Status Agreement allows for some discretion in the number of spinal column points within a grade ranging from single spot grade through to a career grade; this discretion must be in line with the single status agreement. The pay point on recruitment is normally at the bottom point of the grade for each post unless there is a justifiable reason for doing otherwise. An example might be that for particular roles there is difficulty in recruitment and retention and to ensure that the successful candidate accepts the job offer a salary above the bottom of the grade is required. Progression through the grade is through annual increments until the top of the pay grade is reached. 10

LBB may pay beyond the evaluated level of the job where there is a clear market reason to do so. Any market payment will need to be supported by clear evidence before it can be brought into payment. New Market Supplements are approved by General Functions Committee. 3.3 Other Elements of Remuneration

LBB does not pay bonuses or performance related pay. LBB does not offer any benefits in kind LBB does not use ex-gratia payments. The Council has an Honoraria Policy which sets out: when Honoraria may be paid; the payment calculation and the period of payment. Any Honoraria payments must be agreed at Assistant Director level or above. 3.4 Payment for election duties

Any employee who undertakes election duties is paid for this through the Returning Officer. The level of Fees & Charges payable for election duties are set by the Cabinet Office & London Councils. 3.5 Pension Arrangements

The percentage rate of contributions is set through national negotiations. Employees of the London Borough of Barnet are automatically enrolled into the LGPS but can opt out if they so wish. Awarding additional pension, payment of pension without reduction on compassionate grounds and immediate payment of pension are matters dealt with by LGPS Scheme Rules. 3.6 Redundancy Terms

The Councils Managing Organisational Change Policy is applicable to all employees and sets out redundancy compensation. 3.7 Appointment and Remuneration Terms

The Council appoints to roles on a variety of terms and the final decision about the appointment and remuneration terms will be a reflection of the requirements of the role; the evaluated level of the role; the longevity of the role; budgetary constraints and broader value for money considerations.

4.
4.1

Relationship between the remuneration of its chief officers, and the remuneration of its employees who are not chief officers
Remuneration of the Lowest Paid

11

The definition of the lowest paid is based on the spinal point 4 which is the lowest pay point on the NJC scale and is above the National Minimum Wage. 4.2 Pay Dispersion

The highest paid role in the Council is the Chief Executive with earnings of 200,976 the median average paid role is 28,800 and this covers a wide range of roles. The ratio between the highest paid in the authority (Chief Executive Officer) and the median average paid role is 1:6.98. The lowest paid role in the Council is scp 4 earning 14,697 per annum the ratio between the highest and lowest paid roles is 1:13.66. 4.3 Elements of Chief Officer Remuneration

All Chief Officers receive only base pay. In common with all other roles in the Council if there was clear market evidence that the evaluated level of the job did not reflect the market then a market supplement would be considered. Any market supplement would need to be agreed by the Remuneration Committee and ratified by GFC.

5.

Approach to staff moving posts within the public sector

LBB operates a recruitment policy based on merit - in line with discrimination legislation. Should a successful candidate be in receipt of a severance payment or pension the London Borough of Barnet applies the Rules of the Local Government Pension Scheme and Modification Order to manage the following scenarios, should they occur: Where previously employed by the same authority, left with a severance or redundancy payment, and have come back as a Chief Officer Are in receipt of a Local Government Pension Scheme or Firefighter pension (whether their previous service was with the same authority or not)

Where the successful candidate was previously employed by LBB then there would normally be a six month break before LBB would re-employ either as an employee or under a contract for services

6.

Publication of and access to information regarding remuneration of Chief Officers

Remuneration information about Chief Officers is published on the London Borough of Barnets website which is accessible to all members of the public. The Councils Annual Accounts set out actual remuneration including all elements of pay for roles paid above 58,200. These accounts are published on the Councils website.

7.

Amendments to this Pay Policy Statement

It is recognised that the Council is undergoing fundamental change during the period covered by this pay policy statement. Amendments to this pay policy statement in-year 12

will be carried out via the governance framework set out at section 2 with approval as appropriate by Full Council.

London Borough of Barnet March 2012

13

This page is intentionally left blank

14

AGENDA ITEM 7

Meeting Date Subject Report of Summary

Remuneration Committee 9 May 2012 Senior Posts and Council Reorganisation Chief Executive Assistant Director Human Resources
This report provides information to the Committee about a proposed reward structure for the new senior roles which will form part of the Council reorganisation

Officer Contributors Status (public or exempt) Wards Affected Key Decision Reason for urgency / exemption from call-in Function of Enclosures

Sarah Murphy-Brookman, Assistant Director Human Resources Public Remuneration Committee Not applicable Council Appendix A - Proposed Reward Structure for Senior Posts (to follow) Sarah Murphy-Brookman 0208 359 7912

Contact for Further Information:

15

1. 1.1

RECOMMENDATIONS To receive a Reward briefing about broad pay and market pay matters from: Hay as Reward advisers Penna as Recruitment advisers To discuss the Reward Strategy for Senior Posts affected by the Councils reorganisation and as agreed at General Functions Committee on 23 April 2011. To agree the circumstances where a market supplement might be applicable and the possible objective market justification for this. To agree that Member Panels for the appointment of Chief Officers may be arranged as appropriate, via Corporate Governance, to appoint to Chief Officer Posts. That the Head of Paid Service should return to the Committee in June to present a finalised Reward structure proposal for Senior posts.

1.2

1.3

1.4

1.5

2. 2.1

RELEVANT PREVIOUS DECISIONS General Functions Committee met on the 23 April 2012 to discuss the Reorganisation of the Senior Officer and Council Structures and agreed the recommendations as set out in that report.

3. 3.1

CORPORATE PRIORITIES AND POLICY CONSIDERATIONS The Remuneration Committee plays a key role in ensuring that the corporate vision of Better Services with Less Money is supported by the Reward Strategy. The pay bill is the largest cost for the London Borough of Barnet and this committee will underpin the aim of pay control in order to deliver the Mid Term Financial Plan. At the meeting of General Functions the Head of Paid Service set out his ambition for the Council to: Become a customer centric organisation by placing the customer at the centre of the councils business and for the Councils structures to be formed around this principle, and in addition to facilitate the use of customer insight more effectively. Make further financial savings - the ongoing reductions in public expenditure necessitates further reductions in the management overhead of the organisation. shift the skills requirements for senior staff - there needs to be greater emphasis on the effective client and commercial management of providers create a more flexible organisation which is able to shift capacity and better manage its resources so that it can respond to shifting priorities and funding uncertainties

3.2

3.3

In order to deliver the ambition for the Council attention now needs to be focussed on creating a Reward Strategy for the Senior Posts which delivers affordability and cost control through: 16

A Unified Reward and Base Pay Structure incorporating o Rationalisation of Variable Pay o Encouraging Productivity o Incorporation of External Factors Directly linking pay affordability to the Councils Medium Term Financial Strategy Development of Guiding Pay Principles 1. Total Reward must be affordable within the Councils budget 2. The level of Base Pay will be guided by market median pay data, with the long term target of a pay range below market median but above lower quartile 3. The ratio of base pay from highest to lower earner will be less than 1:20 4. There will be a analytical and systematic job evaluation scheme for all roles 5. Pay will be transparent and minimise variable pay elements 6. There will be no automatic pay rises.

4. 4.1

RISK MANAGEMENT ISSUES The establishment of this committee forms part of the Councils discharge of its responsibilities under the Localism Act 2011, in particular the issues of transparency for Chief Officer pay. The terms of reference will include ensuring that; pay levels are set in the correct contexts e.g. the Councils full reward strategy and national and local markets and the Council is compliant with the Equality Act 2010. The re-organisation of the Senior Officer and Council Structures focuses upon the senior posts in the organisation, who are collectively known as the Corporate Management Group. The Council needs to consider the implications of this re organisation upon the remaining structures and associated Reward mechanisms for the remaining employees. A further paper will be brought to the Remuneration Committee to discuss a Top to Bottom unified Reward and Base Pay Structure.

4.2

4.3

5. 5.1

EQUALITIES AND DIVERSITY ISSUES The functions undertaken by the Remuneration Committee support the Council in its compliance of the Public Sector Equality Duty as set out in Equality Act 2010. The Remuneration Committee will need to demonstrate that its functions and decisions have taken due regard of the need to: Eliminate discrimination, harassment, victimisation and any other conduct prohibited under the Act; Support equality of opportunity between those with a protected characteristic and those without; Promote good relations between those with a protected characteristic and those without 17

5.2

5.3

The decision makers who serve on the Remuneration Committee are required to take a rigorous and open-minded approach to these decisions and will draw on fact specific evidence to assist. The proposed roles which form part of the re-organisation of the Senior Officer and Council Structures will all be evaluated using the Hay Job Evaluation scheme. This is an analytical systematic job evaluation process which sizes roles using a number of factors Know How; Problem Solving and Accountability. Hay has been commissioned to evaluate these new roles and Barnet HR is fully trained in the application of the scheme so that the evaluations can be maintained on an on-going basis. The use of a systematic job evaluation process is a key tool in ensuring that the Council discharges its statutory Equalities duties having due regard to the requirements set out at paragraph 5.2 above. The job evaluation process is concerned with the post not the person. The paper taken to General Functions on 23 April 2012 set out the selection process for internal and external candidates and discussed the Equalities implications of the recruitment process. The paper set out the design of the selection process and how the Equalities impacts will be discharged. In line with the Councils normal practise an Equalities Impact Assessment is in hand and the data will be reviewed at key milestones.

5.4

5.5

6.

USE OF RESOURCES IMPLICATIONS (Finance, Procurement, Performance & Value for Money, Staffing, IT, Property, Sustainability)

Value for Money - External Advice about Market Factors 6.1 The committee will have independent advisor(s) to support committee members, responsibilities include: Attendance at committee meetings as required. Preparation of reports as requested by the committee. Provision of external advice and context

Staffing Matters 6.2 The Reward Structure for the roles created as part of the re-organisation of the Senior Officer and Council Structures will be sized by Hay using the Hay job evaluation scheme. For each job size it is proposed that there will be a target pay range which is in the region of market median and above lower quartile within the Hay Industrial & Services sector (London) pay database. Appendix A gives a representation of the pay levels for each job size. For convenience this will use established spinal column points to anchor each evaluated pay level. The evaluated job size reflects a fully competent performer. There will be no automatic increments above this; however there will be a recruitment range below the evaluated level of the job.

6.3

6.4

18

6.5

There will be 3 recruitment levels: entry - where the role represents a step up; developing where the candidate brings previous relevant experience; competent where the candidate has undertaken an equivalent role. Where particular market factors mean that roles are attracting a pay rate in the broader market which is beyond the Councils pay range and there is a proven recruitment and retention issue then consideration should be given to payment of a market factor supplement. Any market factor supplement will need to be objectively justified with robust market data. The roles which will be created as part of the re-organisation of the Senior Officer and Council structure will be outside NJC pay negotiation and Chief Officer JNC. Practically this will mean that the Remuneration Committee will be able to provide input annually into the market positioning of Senior Pay. Member Panels for the appointment of Chief Officers will be arranged as appropriate, via Corporate Governance, to appoint to Chief Officer Posts Roles have been 90% described however it is recognised that as part of the role development process that there needs to be the opportunity to provide a degree of flex within these job descriptions. It is expected that the job descriptions will be finalised and sized by the beginning of June. At this point the structure will be finally costed.

6.6

6.7

6.8

6.9

Finance 6.10 The proposed structure will need to be within the target pay bill of 6,274k, which enables the Council to deliver its budgeted total Medium Term Financial Strategy (MTFS) savings from 2012/13 and up to and including 2014/15 of 1,115k (table 1). In year 2012/13 if there any further savings over and above the 582k this will be re-invested in skills training and OD.

Table 1 2012/13 MTFS Savings (582k) 2013/14 (263k) 2014/15 (270k) Total (1,115k)

7. 7.1

LEGAL ISSUES The Localism Bill in 2010, which received Royal Assent on 15th November 2011. Specific pay matters are set out at Chapter 8 (sections 38 and 39) Where any changes to remuneration arise that impact on contractual terms, this would be referred to the General Functions Committee if appropriate and any necessary consultation with employees of the Council will be carried out.

7.2

19

8.

CONSTITUTIONAL POWERS (Relevant section from the Constitution, Key/Non-Key Decision) The Remuneration Committees terms of reference are noted in Part 3 of the Councils Constitution Responsibility for Functions.

8.1

9.

BACKGROUND INFORMATION

Reward Strategy for Senior Posts impacted by the Councils re-organisation 9.1. The Ambition The Head of Paid Service within his paper to General Functions Committee has set out his ambition for the Council to: Become a customer centric organisation by placing the customer is at the centre of the councils business and for the Councils structures to be formed around this principle, and to facilitate the use of customer insight more effectively. Make further financial savings - the ongoing reductions in public expenditure necessitate further reductions in the management overhead of the organisation. shift the skills requirements for senior staff, there needs to be greater emphasis on the effective client and commercial management of providers create a more flexible organisation able to shift capacity and better manage its resources so that it can respond to shifting priorities and funding uncertainties.

9.2

The Reward Strategy In order to deliver the ambition for the Council attention needs to be focussed on creating a Reward Strategy and Structure for the Senior Posts which delivers affordability and cost control through: 9.2.1 o o o A Unified Reward and Base Pay Structure incorporating Rationalisation of Variable Pay Encouraging Productivity Incorporation of External Factors

9.2.2 Directly linking pay affordability to the Councils Medium Term Financial Strategy 9.2.3 Development of Guiding Pay Principles o Total Reward must be affordable within the Councils budget o The level of Base Pay will be guided by market median pay data, with the long term target of a pay range below market median but above lower quartile o The ratio of base pay from highest to lower earner will be less than 1:20 o There will be an analytical systematic job evaluation scheme for all roles o Pay will be transparent and minimise variable pay elements o There will be no automatic pay rises.

20

9.3

Systematic Job evaluation The roles will all be evaluated using the Hay Job Evaluation scheme. This is an analytical systematic job evaluation process which sizes roles using a number of factors Know How; Problem Solving and Accountability. Hay has been commissioned to evaluate these new roles and Barnet HR is fully trained in the application of the scheme so that the evaluations can be maintained on an on-going basis.

9.4

Pay Structure

9.4.1 A representation of the proposed pay structure is set out at Appendix A. 9.4.2 By utilising the Hay job evaluation scheme this allows the Council to use Hay pay data to guide the level of pay for a particular job size. The Council is proposing to use the Hay Industrial & Services (London) sector pay database to guide its pay levels. The rationale is that the Council should be setting its pay in the context of its partner organisations. This pay data base comprises 254 participants including 55 public sector organisations. This market database specifically excludes Financial Services and so is not skewed by this sector. 9.4.3 The long term pay range that the Council is targeting is for each pay level to remain within the range which falls below market median but above lower quartile. This market position takes into account and recognises the following factors: - the labour market for the services the Council provides - the fact that the Council is an established employer in the market place - that the Council provides a range of valued employment benefits such as pension, flexible working and family friendly policies. 9.4.4 It is recognised however that the Council is recruiting into a start up position rather than steady state and that this has implications for the Councils Reward Strategy. 9.4.5 In this start up context it is proposed that the pay range will target around market median and above lower quartile. The rationale being - the Council will need to attract candidates away from established and stable employers - the need to recruit people who are capable of creating a new organisation within a new structure - strong competition for scarce skills in the labour market e.g. NHS Lead Commissioners - inability to grow our internal talent fast enough to meet the Organisational needs 9.4.6 The Council believes that it can attract and retain the appropriate talent. However it recognises that on entry candidates will have a variety of experience. There will be 3 recruitment levels: entry - where the role represents a step up; developing where the candidate brings previous relevant experience; competent where the candidate has undertaken an equivalent role. The evaluated level and pay for the job is at the competent level. There will no automatic progression through the recruitment levels and movement to competent must be justified to and authorised at AD level or higher. The expectation is that someone starting at entry should be at competent within two years. 21

9.4.7 Where particular market factors mean that roles are attracting a pay rate which is beyond the Councils pay range then there will be a need to pay a Market supplement. This must be objectively justified through market data and the Hay data base will be able to provide evidence of particular market pay issues. Where the Hay data base is not able to provide this information then the Council will use other reputable sources for relevant sector pay survey information. 9.5 Actual Role Sizing

9.5.1 Roles have been 90% described however it is recognised that as part of the role development process that there needs to be the opportunity to provide a degree of flex within these job descriptions. It is expected that the job descriptions will be finalised and sized by the beginning of June. This means that roles will be advertised with indicative salaries. 9.5.2 Final job sizing will take place once the role description process is complete. At this point a costed reward structure proposal will be brought back to this committee.

10. 10.1

LIST OF BACKGROUND PAPERS Re-organisation of the Senior Officer and Council Structures GFC 23 April 2012.

Cleared by Finance (Officers initials) Cleared by Legal (Officers initials)

MC SC

22