Bosses at five councils facing bankruptcy pocketing more pay than PM

Bosses at five councils facing bankruptcy are pocketing more pay than the PM with CEO of cash-strapped Birmingham getting wage rise of nearly a third since last year

•  Council fat cats are taking nearly £100,000 more than Rishi Sunak’s salary

The heads of five councils facing bankruptcy are being paid more than the Prime Minister.

Some council fat cats are taking home nearly £100,000 more than Rishi Sunak’s £167,39 salary – as Kent, Stoke-on-Trent, Southampton and Bradford all pay up despite facing financial chaos.

It comes as debt-ridden Birmingham council, the largest in Europe, faces a huge shortfall of £87million after it saw costs of its troubled Oracle IT system balloon from £13million to up to £100million.

On Tuesday, chiefs were forced to declare the council effectively bankrupt after also being hit by a £760million bill over equal pay claims.

But boss of the cash-strapped authority Deborah Cadman has received a pay-rise in the last year – taking home £244,820 in 2022/23, the Mirror reports.

Birmingham City Council CEO Deborah Cadman has received a pay-rise in the last year – taking home £244,820 in 2022/23

Birmingham City Council has declared itself effectively bankrupt after facing a £760million bill

Birmingham is the latest council to declare bankruptcy, following in the footsteps of Hackney, Northampton, Croydon, Thurrock, Woking and Slough

Former council chief David Cockburn took home a stunning £263,371 in pay and perks before stepping down in July

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This is up nearly a third on her salary in 2021/22 of £186,003.

In total, the five executives are stunningly receiving nearly £1.1million.

It comes just weeks after it was revealed 47 council in the north, the midlands and on the south coast were facing overwhelming strain on finances – with five in the process of deciding whether to issue a section 114 notice of their inability to balance their annual budget in 2023-24. 

Meanwhile, a further nine local authorities which are members of the Special Interest Group of Municipal Authorities (Sigoma) said they may have to declare bankruptcy next year. 

‘It’s fatcat salaries for chief executives but skipped meals and a life struggling to afford the basics for council workers,’ Unite national lead officer Onay Kasab raged to the Mirror. 

Like Birmingham, Kent County Council is also on the brink of financial ruin as they have to find an enormous £86million.

But former council chief David Cockburn took home a stunning £263,371 in pay and perks before stepping down in July. His replacement will still receive £236,000 base pay.

And Southampton Council’s CEO Mike Harris taking home as much as £191,063 despite the administration also being under the stress of financial meltdown.

Southampton Council’s CEO Mike Harris taking home as much as £191,063 despite the administration also being under the stress of financial meltdown

In Bradford, Lorraine O’Donnell (pictured) is set to take the reigns at a council whose finances are at a ‘historic low’ and are now ‘at risk of exhaustion’. She is set to be paid £205,000 a year

In Stoke city director John Rouse (pictured) got a pay-rise of nearly £5,000 to take home £177,269 this year

In Bradford, Lorraine O’Donnell is set to take the reigns at a council whose finances are at a ‘historic low’ and are now ‘at risk of exhaustion’.

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But the incoming boss – who left her job as Chief Executive of Cheshire East Council to join the cash-strapped authority – is set to be paid £205,000 a year.

And in Stoke city director John Rouse got a pay-rise of nearly £5,000 to take home £177,269 this year.

The city – which has a £8.5million financial shortfall – gave him a basic pay of £172,753 last year. 

According to the TaxPayer’s Alliance, at least 2,759 employees on more than £100,000 a year – although the true number is almost certainly hundreds more.

Of those, 721 received more than £150,000 in just a year – including 608 who got more than the £156,163 salary granted to Rishi Sunak in 2021-22. 

Generous pension contributions, bonuses and golden goodbyes were dished out despite town halls insisting that soaring inflation and extra demand for services made council tax rises necessary. 

And now the scandal in Birmingham is echoing similar budget fiascos which have seen authorities in Northampton, Croydon, Thurrock, Woking and Slough declare bankruptcy since 2018. Before that the last one to run out of money was Hackney in 2000.

The city’s financial demise comes after dire warnings that dozens of other English authorities could soon follow suit, with worrying figures suggesting at least 30 per cent of councils in some of the poorest areas of the country are considering declaring effective bankruptcy this year or next.

The first Section 114 notice was issued by London’s Hackney Council in 2000, followed by Northamptonshire County Council in 2018. 

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