Remuneration Committee Reports 9 May 2012

8/2/2019 Remuneration Committee Reports 9 May 2012

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MEETINGREMUNERATION COMMITTEE

DATE AND TIMEWEDNESDAY 9TH MAY, 2012

AT 7.30 PMor on the rise of Special Committee (Constitution Review), whichever is later

VENUEHENDON TOWN HALL, THE BURROUGHS, NW4 4BG

Dear Councillors,

Please find enclosed the papers relating to the following items for the above mentioned meetingwhich were not available at the time of collation of the agenda.

Item No Title of Report Pages6. Committee Set Up - Initial Items of Business 1 - 147. Senior Posts and Council Re-Organisation 15 - 22

Chidilim Agada 020 8359 [email protected]


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Meeting Remuneration Committee

Date 9 May 2012

Subject Committee Set Up and Terms ofReference

Report of Assistant Director Human Resources

Summary This report sets out the initial items of business thatthis first meeting of the Remuneration Committee willneed to consider.

Officer Contributors Sarah Murphy-Brookman, Assistant Director HumanResources

Status (public or exempt) Public

Wards Affected -

Key Decision Remuneration Committee

Reason for urgency /exemption from call-in

Not applicable

Function of Council

Enclosures Appendix A - Terms of Reference for the CommitteeAppendix B - Councils Pay Policy statement for2012/13

Contact for FurtherInformation:

Sarah Murphy-Brookman 020 8359 7912

AGENDA ITEM 6

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1. RECOMMENDATIONS

1.1 To note the Terms of Reference for the Committee Appendix A.

1.2 To note the Councils Pay Policy statement for 2012/13 Appendix B.

1.3 To endorse the need for a second set up meeting and to agree theagenda for this meeting as described at Section 9.

2. RELEVANT PREVIOUS DECISIONS

2.1 A meeting of Special Committee (Constitution Review) on 13 March 2012agreed:

o That the Committee agrees the establishment of a RemunerationCommittee would represent robust and transparent management of theCouncils Reward Strategy for all employees.

o That the Committee agree in principle to recommend to Council to changethe governance framework for the management of senior officer reward inresponse to the Localism Act 2011 by establishing a RemunerationCommittee.

o That the Committee recommends to Council the attached proposed Terms

of Reference for the proposed Remuneration Committee, and instructsofficers 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 recommendations1.1 to 1.3 above, that officers be instructed to provide a report to theGeneral Functions Committee of 29 March 2012 containing the HumanResources implications of the establishment of a RemunerationCommittee.

o That the proposed Remuneration Committee absorbs the current ad hoccommittees which deal with Chief Officer Appointments and Disciplinematters.

2.2 General Functions Committee met on the 29 March 2012 and noted the

establishment of a Remuneration Committee and its Terms of Reference.

2.3 Council on 17 April 2012 endorsed the Remuneration Committee membersand Terms of Reference. The Council Constitution has now been amended toincorporate the Committee and Terms of Reference at Part 3 - Responsibilityfor Functions, Section 2.

3. CORPORATE PRIORITIES AND POLICY CONSIDERATIONS

3.1 The Remuneration Committee plays a key role in ensuring that the corporatevision of Better Services with Less Money is supported by the RewardStrategy. The pay bill is the largest cost for the London Borough of Barnet

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and this committee will underpin the aim of pay control in order to deliver theMid Term Financial Plan.

4. RISK MANAGEMENT ISSUES

4.1 The establishment of this committee forms part of the Councils discharge ofits responsibilities under the Localism Act 2011, in particular the issues oftransparency for Chief Officer pay.

4.2 The terms of reference will include ensuring that; pay levels are set in thecorrect contexts e.g. the Councils full reward strategy and national and localmarkets and the Council is compliant with the Equality Act 2010.

5. EQUALITIES AND DIVERSITY ISSUES

5.1 The functions undertaken by the Remuneration Committee support theCouncil in its compliance of the Public Sector Equality Duty as set out inEquality Act 2010.

5.2 The Remuneration Committee will need to demonstrate that its functions anddecisions have taken due regard of the need to:

Eliminate discrimination, harassment, victimisation and any other conductprohibited under the Act;

Support equality of opportunity between those with a protectedcharacteristic and those without;

Promote good relations between those with a protected characteristic andthose without

5.3 The decision makers who serve on the Remuneration Committee are requiredto take a rigorous and open-minded approach to these decisions and will drawon fact specific evidence to assist.

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

6.2 The resource implications of administering this committee will be met fromwithin the Corporate Governance directorate budget.

7. LEGAL ISSUES

7.1 Eric Pickles MP, Secretary of State for Communities and Local Governmentintroduced the Localism Bill in 2010, which received Royal Assent on 15th

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November 2011. Specific pay matters are set out at Chapter 8 (sections 38and 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 andany necessary consultation with employees of the Council will be carried out.

8. CONSTITUTIONAL POWERS (Relevant section from the Constitution,Key/Non-Key Decision)

8.1 The Remuneration Committees terms of reference are noted in Part 3 of theCouncils Constitution Responsibility for Functions

9. BACKGROUND INFORMATION

9.1 First Meeting of the Remuneration CommitteeThe first meeting of the Remuneration Committee will have dealt with initialset up. It is suggested that there is a second set up meeting to considerspecific items about the context in which the committee operates and to givemembers the opportunity to shape the Agendas and the management of theCommittees business going forward. Suggested Agenda items for thesecond set up meeting are set out below.

9.2 Committee Set up, Part 2 June 2012 - Suggested Agenda Items

1. To receive a report for discussion and endorsement on the followingmatters:

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 theparameters 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 theCouncil

3. To receive a report on the Councils Reward Strategy and unified pay

structure as applicable to Senior Posts.

10. LIST OF BACKGROUND PAPERS

10.1 Special Committee (Constitution Review) Remuneration Committee - 13March 2012

10.2 General Functions Committee- Remuneration Committee -29 March 2012

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

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Appendix A

REMUNERATION COMMITTEE

Terms of Reference

1. Constitutiona. 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 Oppositione. Leader of the minority opposition group.f. One substitute from each political group

NotesA person that holds sole responsibility for appraising senior officers may notbe a member of the committee.

2. Authoritya. To recommend and seek approval for Chief Officer (as defined in the CLG

Openness and accountability in local pay: Guidance under section 40 ofthe Localism Act 2011) remuneration via non-executive resolution. Thedefinition of remuneration will include:

Pay

Charges

Fees

Allowances.

Benefits in Kind

Increases or enhancements to pension entitlements

Termination payments

3. ResponsibilitiesThe Committee will take account of the Reward & Employment strategies of theCouncil and ensure that it is fully briefed on the prevailing organisationalapproach. The following list of responsibilities is not intended to be exhaustive:

a. To develop and approve the Pay Policy and be responsible for thepublication 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 otherofficers

A description of the relationship between decisions made on thelowest paid and top paid employees in the organisation

Remuneration of the lowest paid (with the definition of the lowestpaid and the reasons for adopting that definition)

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Remuneration on recruitment, increases and additions toremuneration, use of performance-related pay and bonuses,termination payments

Transparency arrangements

Reasons for chosen approach to remuneration levels and how thisis to be implemented

Differences of approach to groups of employees and the reasonsfor 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 ChiefOfficers except those elements determined nationally or pensions.

c. To keep under review the terms & conditions of the Councils Chief Officersthat relate to pay and make recommendations to the General FunctionsCommittee, so that any necessary consultation is carried out.

d. To receive information in the context of reward from organisations thathave a relationship with the Council or arrangements that may influencedecisions 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 areappropriate.

f. To take advice from the Pensions Committee with regard to decisions onpay 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 torevising the pay policy statement between annual reviews.

i. To have oversight of the national pay agenda and consider the implicationsin the local context

j. To commission relevant research and/or comparative information onsalaries 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 paymarket analysis

Submissions made by the Associations on behalf of their members

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and make recommendations thereon

k. To ensure that the Public Sector Equality Duty, as set out by the EqualityAct 2010, is applied throughout the pay and reward structure.

l. To take cognisance of the CLG Code of Recommended Practice for LocalAuthorities on Data Transparency.

m. To reference back to previous years actual remuneration for Chief Officersand senior employees ( definition of senior employee is consistent with

CLG Code of Recommended Practice for Local Authorities on DataTransparency).

n. To obtain assurance that adequate internal and external moderation andbenchmarking takes place when senior posts are subject to job evaluation.

o. To take account of forward plans and the impact of remuneration onworkforce planning, talent management and succession planning.

p. To review remuneration arising from performance management andensure that any performance-related pay mechanisms are fair andtransparent.

q. To refer such items as necessary to the Council

r. To refer to guidance from the Secretary of State.

4. Recommendationsa. The Committee will, as appropriate, make reasoned recommendations to

the Council.

5. Protocolsa. To maintain confidentially whilst discussions are taking place and until

decisions are published and thereafter in relation to matters where there isan ongoing requirement for confidentiality.

b. Insofar as possible, to ensure that meetings are quorate.c. To declare any conflicts of interest.

6. Frequency & attendancea. 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 thepurpose of the Committee.

Agree a set of protocols for the operation of the Committee

Receive a report and presentation on the Councils Future RewardStrategy.

Take steps to convene a Reward Advisory Panel to provide advice to theCommittee as required

Discuss development of the Councils Pay Policy

Take steps to develop and understanding the local, regional and nationalcontext

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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 ensurecompliance.

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

7. Reporting procedures

Normal Committee arrangements

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Appendix B

London Borough of Barnet Pay Policy Statement 2012/13

1. Background

1.1 Localism Act 2011 - Openness and accountability in local pay

Section 38(1) of the Localism Act requires local authorities to produce an annual paypolicy statement.

The provisions in the Act do not seek to change the right of each local authority to haveautonomy on pay decisions, however it emphasises the need to deliver value for moneyfor local taxpayers.

This statement has been approved by full Council and any further changes during the yearwill 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 ofpay 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 onData Transparency issued by the Department for Communities and Local Government inSeptember 2011.

2. Governance arrangements for pay and conditions of service withinLondon 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 FunctionsCommittee 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 2012/13to set up a Remuneration Committee which will have accountability for remuneration ofchief officers and pay in general.

The Remuneration Committee would also have responsibility for ensuring thatremuneration is set within the wider pay context, including giving due consideration to therelationship between the highest and lowest paid in the organisation. The RemunerationCommittee will produce pay recommendations and pay policy for approval by Council.

Practically this means that General Functions Committee with its remit covering conditionsof service and the Remuneration Committee with its remit of Pay and pay Policy will workclosely together to produce co-ordinated statements for approval by Full Council.

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3. Remuneration arrangements for all employees

3.1 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 ChiefOfficers. These arrangements include:

Base pay negotiated through collective bargaining arrangements administered bythe 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 followingLBBs 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)

3.2 Pay Scales

The council in accordance with its single status agreement currently has five pay bands inoperation as follows:

Pay Band Relevantemployees

Lowest Pay Pointas at 1 Jan 2012

Highest PayPoint as at 1 Jan

2012Chief Executive Chief Executive 200,976 217,861

Directors Directors 120,000 175,000

Barnet Band 5 AssistantDirectors

63,681 117,879

Hayband 4 Senior Managersand someprofessional staff

47,550 62,514

Barnet Broadband All otheremployees

14,697 64,827

The evaluated grade for a role is normally 4 spinal column points. However the SingleStatus Agreement allows for some discretion in the number of spinal column points withina grade ranging from single spot grade through to a career grade; this discretion must bein line with the single status agreement.

The pay point on recruitment is normally at the bottom point of the grade for each postunless there is a justifiable reason for doing otherwise. An example might be that forparticular roles there is difficulty in recruitment and retention and to ensure that thesuccessful candidate accepts the job offer a salary above the bottom of the grade isrequired.

Progression through the grade is through annual increments until the top of the pay gradeis reached.

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LBB may pay beyond the evaluated level of the job where there is a clear market reason todo so. Any market payment will need to be supported by clear evidence before it can bebrought into payment. New Market Supplements are approved by General FunctionsCommittee.

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; thepayment calculation and the period of payment. Any Honoraria payments must be agreedat Assistant Director level or above.

3.4 Payment for election duties

Any employee who undertakes election duties is paid for this through the ReturningOfficer. The level of Fees & Charges payable for election duties are set by the CabinetOffice & 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 butcan opt out if they so wish.

Awarding additional pension, payment of pension without reduction on compassionategrounds and immediate payment of pension are matters dealt with by LGPS SchemeRules.

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 theappointment 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 andbroader value for money considerations.

4. Relationship between the remuneration of its chief officers, andthe remuneration of its employees who are not chief officers

4.1 Remuneration of the Lowest Paid

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The definition of the lowest paid is based on the spinal point 4 which is the lowest paypoint 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 ratiobetween the highest paid in the authority (Chief Executive Officer) and the median averagepaid role is 1:6.98. The lowest paid role in the Council is scp 4 earning 14,697 perannum 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 ifthere was clear market evidence that the evaluated level of the job did not reflect themarket then a market supplement would be considered. Any market supplement wouldneed 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 theLondon Borough of Barnet applies the Rules of the Local Government Pension Schemeand Modification Order to manage the following scenarios, should they occur:

Where previously employed by the same authority, left with a severance orredundancy 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 wouldnormally be a six month break before LBB would re-employ either as an employee orunder 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 ofBarnets website which is accessible to all members of the public.

The Councils Annual Accounts set out actual remuneration including all elements of payfor 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 periodcovered by this pay policy statement. Amendments to this pay policy statement in-year

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

London Borough of BarnetMarch 2012

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Meeting Remuneration Committee

Date 9 May 2012

Subject Senior Posts and Council Re-organisation

Report of Chief Executive

Assistant Director Human Resources

Summary This report provides information to the Committeeabout a proposed reward structure for the new seniorroles which will form part of the Council re-organisation

Officer Contributors Sarah Murphy-Brookman, Assistant Director Human

Resources

Status (public or exempt) Public

Wards Affected -

Key Decision Remuneration Committee

Reason for urgency /exemption from call-in

Not applicable

Function of Council

Enclosures Appendix A - Proposed Reward Structure for SeniorPosts (to follow)

Contact for FurtherInformation:

Sarah Murphy-Brookman 0208 359 7912

AGENDA ITEM 7

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1. RECOMMENDATIONS

1.1 To receive a Reward briefing about broad pay and market pay matters from:

Hay as Reward advisers

Penna as Recruitment advisers

1.2 To discuss the Reward Strategy for Senior Posts affected by the Councils re-organisation and as agreed at General Functions Committee on 23 April 2011.

1.3 To agree the circumstances where a market supplement might be applicableand the possible objective market justification for this.

1.4 To agree that Member Panels for the appointment of Chief Officers may bearranged as appropriate, via Corporate Governance, to appoint to ChiefOfficer Posts.

1.5 That the Head of Paid Service should return to the Committee in June to

present a finalised Reward structure proposal for Senior posts.

2. RELEVANT PREVIOUS DECISIONS

2.1 General Functions Committee met on the 23 April 2012 to discuss the Re-organisation of the Senior Officer and Council Structures and agreed therecommendations as set out in that report.

3. CORPORATE PRIORITIES AND POLICY CONSIDERATIONS

3.1 The Remuneration Committee plays a key role in ensuring that the corporate visionof Better Services with Less Money is supported by the Reward Strategy. The paybill is the largest cost for the London Borough of Barnet and this committee willunderpin the aim of pay control in order to deliver the Mid Term Financial Plan.

3.2 At the meeting of General Functions the Head of Paid Service set out his ambitionfor 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 thisprinciple, and in addition to facilitate the use of customer insight more effectively.

Make further financial savings - the ongoing reductions in public expenditurenecessitates further reductions in the management overhead of theorganisation.

shift the skills requirements for senior staff - there needs to be greater emphasison the effective client and commercial management of providers

create a more flexible organisation which is able to shift capacity and bettermanage its resources so that it can respond to shifting priorities and fundinguncertainties

3.3 In order to deliver the ambition for the Council attention now needs to be focussedon creating a Reward Strategy for the Senior Posts which delivers affordability andcost control through:

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A Unified Reward and Base Pay Structure incorporatingo Rationalisation of Variable Payo Encouraging Productivityo 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 budget2. 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 lowerquartile

3. The ratio of base pay from highest to lower earner will be less than 1:204. There will be a analytical and systematic job evaluation scheme for all roles5. Pay will be transparent and minimise variable pay elements

6. There will be no automatic pay rises.

4. RISK MANAGEMENT ISSUES

4.1 The establishment of this committee forms part of the Councils discharge of itsresponsibilities under the Localism Act 2011, in particular the issues oftransparency for Chief Officer pay.

4.2 The terms of reference will include ensuring that; pay levels are set in the correctcontexts e.g. the Councils full reward strategy and national and local markets andthe Council is compliant with the Equality Act 2010.

4.3 The re-organisation of the Senior Officer and Council Structures focuses upon thesenior posts in the organisation, who are collectively known as the CorporateManagement Group. The Council needs to consider the implications of this reorganisation upon the remaining structures and associated Reward mechanisms forthe remaining employees. A further paper will be brought to the RemunerationCommittee to discuss a Top to Bottom unified Reward and Base Pay Structure.

5. EQUALITIES AND DIVERSITY ISSUES

5.1 The functions undertaken by the Remuneration Committee support the Council inits compliance of the Public Sector Equality Duty as set out in Equality Act 2010.

5.2 The Remuneration Committee will need to demonstrate that its functions anddecisions have taken due regard of the need to:

Eliminate discrimination, harassment, victimisation and any other conductprohibited 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

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5.3 The decision makers who serve on the Remuneration Committee are required totake a rigorous and open-minded approach to these decisions and will draw on factspecific evidence to assist.

5.4 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. Thisis an analytical systematic job evaluation process which sizes roles using a numberof factors Know How; Problem Solving and Accountability. Hay has beencommissioned to evaluate these new roles and Barnet HR is fully trained in theapplication of the scheme so that the evaluations can be maintained on an on-goingbasis. The use of a systematic job evaluation process is a key tool in ensuring thatthe Council discharges its statutory Equalities duties having due regard to therequirements set out at paragraph 5.2 above.

5.5 The job evaluation process is concerned with the post not the person. The papertaken to General Functions on 23 April 2012 set out the selection process for

internal and external candidates and discussed the Equalities implications of therecruitment process. The paper set out the design of the selection process andhow the Equalities impacts will be discharged. In line with the Councils normalpractise an Equalities Impact Assessment is in hand and the data will be reviewedat key milestones.

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 theSenior Officer and Council Structures will be sized by Hay using the Hay jobevaluation scheme.

6.3 For each job size it is proposed that there will be a target pay range which is inthe region of market median and above lower quartile within the Hay Industrial &Services sector (London) pay database. Appendix A gives a representation of thepay levels for each job size. For convenience this will use established spinalcolumn points to anchor each evaluated pay level.

6.4 The evaluated job size reflects a fully competent performer. There will be no

automatic increments above this; however there will be a recruitment range belowthe evaluated level of the job.

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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.

6.6 Where particular market factors mean that roles are attracting a pay rate in thebroader 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 amarket factor supplement. Any market factor supplement will need to be objectively

justified with robust market data.

6.7 The roles which will be created as part of the re-organisation of the Senior Officerand Council structure will be outside NJC pay negotiation and Chief Officer JNC.Practically this will mean that the Remuneration Committee will be able to provideinput annually into the market positioning of Senior Pay.

6.8 Member Panels for the appointment of Chief Officers will be arranged asappropriate, via Corporate Governance, to appoint to Chief Officer Posts

6.9 Roles have been 90% described however it is recognised that as part of the roledevelopment process that there needs to be the opportunity to provide a degree offlex within these job descriptions. It is expected that the job descriptions will befinalised and sized by the beginning of June. At this point the structure will befinally costed.

Finance

6.10 The proposed structure will need to be within the target pay bill of 6,274k, whichenables 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 bere-invested in skills training and OD.

Table 1

2012/13 2013/14 2014/15 Total

MTFS Savings (582k) (263k) (270k) (1,115k)

7. LEGAL ISSUES

7.1 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, thiswould be referred to the General Functions Committee if appropriate and anynecessary consultation with employees of the Council will be carried out.

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8. CONSTITUTIONAL POWERS (Relevant section from the Constitution,Key/Non-Key Decision)

8.1 The Remuneration Committees terms of reference are noted in Part 3 of theCouncils Constitution Responsibility for Functions.

9. BACKGROUND INFORMATION

Reward Strategy for Senior Posts impacted by the Councils re-organisation

9.1. The AmbitionThe Head of Paid Service within his paper to General Functions Committee has setout his ambition for the Council to:

Become a customer centric organisation by placing the customer is at the centreof 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 emphasison the effective client and commercial management of providers

create a more flexible organisation able to shift capacity and better manage itsresources 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 oncreating a Reward Strategy and Structure for the Senior Posts which deliversaffordability and cost control through:

9.2.1 A Unified Reward and Base Pay Structure incorporatingo Rationalisation of Variable Payo Encouraging Productivityo Incorporation of External Factors

9.2.2 Directly linking pay affordability to the Councils Medium Term FinancialStrategy

9.2.3 Development of Guiding Pay Principles

o Total Reward must be affordable within the Councils budgeto 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 lowerquartile

o The ratio of base pay from highest to lower earner will be less than 1:20o There will be an analytical systematic job evaluation scheme for all roleso Pay will be transparent and minimise variable pay elementso There will be no automatic pay rises.

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9.3 Systematic Job evaluation

The roles will all be evaluated using the Hay Job Evaluation scheme. This is ananalytical systematic job evaluation process which sizes roles using a number offactors Know How; Problem Solving and Accountability. Hay has beencommissioned 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-goingbasis.

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 paydata to guide the level of pay for a particular job size. The Council is proposing touse the Hay Industrial & Services (London) sector pay database to guide its paylevels. 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 55public sector organisations. This market database specifically excludes FinancialServices 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 remainwithin the range which falls below market median but above lower quartile. Thismarket 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 ratherthan 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 marketmedian and above lower quartile. The rationale being

- the Council will need to attract candidates away from established and stableemployers- 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 LeadCommissioners- 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 itrecognises that on entry candidates will have a variety of experience. There will be3 recruitment levels: entry - where the role represents a step up; developing

where the candidate brings previous relevant experience; competent where thecandidate 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 authorisedat AD level or higher. The expectation is that someone starting at entry should beat competent within two years.

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9.4.7 Where particular market factors mean that roles are attracting a pay rate which isbeyond the Councils pay range then there will be a need to pay a Marketsupplement. This must be objectively justified through market data and the Haydata base will be able to provide evidence of particular market pay issues. Wherethe 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 roledevelopment process that there needs to be the opportunity to provide a degree offlex within these job descriptions. It is expected that the job descriptions will befinalised and sized by the beginning of June. This means that roles will beadvertised 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. LIST OF BACKGROUND PAPERS

10.1 Re-organisation of the Senior Officer and Council Structures GFC 23 April 2012.

Cleared by Finance (Officers initials) MC

Cleared by Legal (Officers initials) SC

Remuneration Committee Reports 9 May 2012

Documents

Transcript of Remuneration Committee Reports 9 May 2012