Agenda item

The Head of Finance and Investment presented a report, the purpose of which was to provide further information in respect of an area of concern that was raised by Members at the Audit Committee meetings of 3 October 2024 and 3 February 2025 when the 2023/24 Statement of Accounts were presented.

The area of concern raised by Members was the increase in officers that received remuneration (salary and employee benefits) over £50,000.  This was part of the disclosure arrangements required in the accounts as part of the Transparency Act but had subsequently been incorporated into the CIPFA Accounting Code of Practice.

The parameters for this disclosure did not change each year (numbers of officers paid over £50,000 in bands of £5,000). However, the council’s pay grades, and spinal points, did increase each year by the national pay award. Also, officers who were not at the top spinal point for their current grade also received an increment from 1st April each year. As a result, there was a gradual drift of numbers upwards on an annual basis as nominal salary levels increase.

Members were presented with tables that showed employee remuneration for 2022/23 and 2023/24, with further data which compared the number of employees disclosed in the £5,000 bandings for the last six years, between 2017/18 to 2023/24, as well as a Tees Valley comparison. 

During the 2023/24 Financial Year for the Council, two of the grades with a significant number of officers attached: (Grade O – team manager) rose above a salary of £50,000 for the first time and Grade Q – senior manager) rose above a salary of £60,000. As a result of the distribution of employees across these pay scales, an additional 99 employees on these grades had to be disclosed under the regulations, solely due to the impact of the pay award. This was a vast majority of the overall increase of 114 between the two years.

For the financial year 2023/24, the Council held total salary budgets (including agency staff) of £120.3m covering just over 2,800 full time employees. Due to issues around recruitment to specific posts and the need to offset other budget pressures on non-pay budgets or savings non-delivery, only around 2,500 staff were employed, with agency staff covering some of the vacancies. The actual total spend on pay (including agency staff) was £114.6m, leading to a saving of £5.7m, which was used to alleviate the significant overspend which occurred at the start of the financial year on non-pay budgets and put the Council into a difficult financial position with critically low reserves.

The main driver for the increased staff numbers between the two financial years was the pay award and additional oncosts, which was only a small proportion of total cost for an employee (around 3%) for the grades in question. In total these increases were around £0.7m on a budget of £120.3m. Any impact of these increased numbers on the Council’s overall financial position during 2023/24 were minor and were managed by an overall staffing underspend of £5.7m. This was part of the financial control measures implemented by the Director of Finance to manage the overall budget position.

During consideration of the report, the following points were raised:

·        Members discussed issues around the difficulty in recruiting to some positions such as mechanics and roles in the Planning and Legal Services.

·        A Member suggested that the overall recruitment package required consideration to ensure Middlesbrough Council is a destination of choice. 

·        Members asked for further clarity on the headcount and FTE of Council staff.  The Chief Executive provided further assurance that there had not been an increase in the headcount of managers and a senior management review would commence in June 2025.  It was agreed that an updated Staffing Costs report should be provided to the Audit Committee, after conclusion and implementation of the review. 

AGREED that an updated report in respect of staffing costs 2024/25, would be presented at the Audit Committee meeting in April 2026.