The Chamberlain News

Stephen Hughes to take early retirement in sweeping Birmingham council management reshuffle

Birmingham City Council chief executive Stephen Hughes is to take early retirement next year ahead of a major restructure of the local authority’s senior management.

Mr Hughes plans to leave in February 2014, when he will be 60.

His departure has been planned to coincide with a radical rationalisation of the council’s structure.

Five existing directorates will be abolished, to be replaced by three new departments.

These will be a People Department, combining schools and children’s social services, a Place Department to oversee localisation and environmental issues, and an Economy Department charged with bringing jobs to Birmingham.

Peter Hay, presently strategic director for children, young people and families, is expected to head the people department with a remit to transform the city’s failing children’s social services.

There is likely to be a tussle to fill top spots in the economy and place departments, with three of the council’s current strategic directors expected to challenge each other for the two roles.

Mark Barrow, strategic director for development and culture, Sharon Lea, strategic director for local services, and Paul Dransfield, strategic director for resources, are likely to bid for the two jobs.

Whoever is appointed director of the economy department will also be head of paid service at the council, effectively chief executive.

Announcing the changes, council leader Sir Albert Bore said he would advertise externally for the director of economy and head of paid service role. A deputy director of economy will also be recruited.

“You can say that this person will be chief executive, although we are not going to use that term,” Sir Albert said.

Sir Albert said the most urgent issue facing the council was the need to establish permanent management arrangements at children’s social services. Mr Hay has been acting strategic director since the departure of Peter Duxbury earlier this year.

The council leader pointed out that Mr Hay is a former head of social services at the council and was responsible for delivering improvement in children’s services. It would be “foolish not to jump at the chance” of giving him the job again.

Sir Albert said it was right during times of austerity that the council kept its senior management under review. The immediate cost saving from the reshuffle is £500,000 a year.

He added: “We intend to create three directorates that align closely with our priorities. This is an evolutionary step from the existing structure.”

Mr Hughes became Chief Executive in May 2006. He had been Interim Head of Paid Service from August 2005, when former Chief Executive, Lin Homer, left the Council to join the Home Office.

Last year, Mr Hughes’s total pay package at Birmingham council was £233,000, raising criticism in some quarters.

He joined the council as Strategic Director of Resources in February 2004. Before coming to Birmingham he worked for the London Borough of Brent as Director of Finance.

Previous roles include a secondment to DETR to lead on council tax and business rates policy, Head of Finance at Islington Council and policy work around local government finance at the AMA and ALA.

Asked what he would like to be remembered for at Birmingham, Mr Hughes said he was proudest of bringing forward the runway extension at Birmingham Airport, “which would not have happened without me”.

Mr Hughes added that he had played a major role behind the scenes putting in place the necessary finance and approvals for the new runway. “I think they should call it the Stephen Hughes runway,” he joked.

He was also a driving force behind the council’s business transformation programme, which was designed to cut costs by £1 billion over 10 years.

Mr Hughes took on a high profile two years ago when he became the public face of the council’s approach to delivering record government spending cuts. With political leaders of the former Conservative-Liberal Democrat coalition unwilling to address public meetings, Mr Hughes found himself in the firing line.

He warned in 2011 that local government would return to its Victorian and Edwardian roots, with only basic public services and a more important role for the voluntary sector.