CAMBRIDGESHIRE: ‘very high’ salaries for metro company board
Councillors have questioned the “very high” salaries proposed for board members of a company set up to deliver the Cambridgeshire metro, a project they say may never actually happen.
The Cambridgeshire and Peterborough Combined Authority has set up a company to help deliver its plans for a Cambridge-centred metro system, for which it plans to pay £225,000 a year to the new chief executive.
It has also proposed paying the five non-executive directors £40,000 for a “minimum” of 15 days work a year, which would equate to around £2,667 a day if they worked the minimum amount required.
A draft document of the Combined Authority’s medium-term financial strategy shows £2 million has been suggested in funding for the company next year. In addition, a potential £5 million, and £6.5 million the following two years, has also been included in the draft financial strategy for work on the metro’s “business case development”.
Those spending plans, including the proposed salaries for the metro company’s board, are still subject to approval by the Combined Authority board, which is made up of council leaders from across Cambridgeshire and Peterborough.
Councillors on the Combined Authority’s overview and scrutiny committee questioned on Monday (November 23) the wisdom of committing large sums of money for a “speculative” project, and questioned the “very high” proposed salaries.
Chairman of the committee, Lorna Dupre, a Liberal Democrat councillor for East Cambridgeshire, said: “There’s quite considerable spending proposed on the CAM, and on the [company], for something which is by no means certain in the expectation that it will be implemented.”
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She said “we don’t know a number of key fundamentals,” such as what technology will be used, when the outline business case will be completed, and what the next milestones are for the project.
“We don’t know whether the government will commit funding to this in any serious way,” she said.
Cllr Dupre received support from the committee to ask the board how it can justify the costs for the metro, saying the project at this stage is “very largely speculative”.
The lowest estimate for the Cambridgeshire Autonomous Metro (CAM) project provided publicly by the Combined Authority so far has been over £1.5 billion. The delivery timeline for the project has been given as between 2023 and 2029.
Liberal Democrat Markus Gehring said the overview and scrutiny committee needs to be “expressing some concern about the process, and how we make these high level hiring decisions, and the attached salary” of the metro company’s chief executive and directors.
He said: “£40,000 per year strikes me as perhaps low in private company settings, but strikes me as very high for a few days of work for each of the board members.”
He added: “Given that there probably is going to be a public sector pay freeze, is it appropriate for a few days of work to basically award an annual salary equal to that of a nurse or a junior medical practitioner? I don’t think so.
“So either we find non-executive directors with the necessary skill-set that are willing to put in some pro bono time, or we massively reduce the amount of money.
“Splashing out £40,000 per year, for a few days of work, is in this day and age wholly inappropriate.”
Ed Murphy, a Labour councillor for Peterborough, asked: “Why are they committing so much money to something that may never actually happen?”
He suggested the Combined Authority needs to consider changes in technology, such as driverless cars, which could reduce the need for a metro project.
“This is a massive financial commitment, the Combined Authority perhaps should be focusing on the here and now, so yes I do think [questions over the cost] need to be raised,” he said.
Mike Davey, a Labour councillor for Cambridge city, said: “It seems like the wrong way round, spending a lot of money on the posts and the board for something that we don’t know is actually going to happen, it doesn’t make sense.”
The Combined Authority has proposed five non-executive directors for the metro company, called One CAM: Godric Smith CBE, Baroness McGregor-Smith CBE, Pam Alexander OBE, Terry Hill CBE, and Jim Cohen, a member of the investment committee of DIF Capital Partners.
David Hughes, who is currently strategy and programme director for Transport for the North, has been proposed as the first chief executive of the company.
The Combined Authority has said the salaries are “relative to the experience, expertise and skills of proposed non-executive directors and is in line with appointments for similar projects of the size and scale of the CAM”.
In a statement, the leader of the Combined Authority, the Conservative mayor, James Palmer, said that similar large-scale projects such as Crossrail and East West Rail use similar companies, and that “to build this game-changing public transport, we need the best people”.
He added: “These candidates have a wealth of experience in building major projects, managing big budgets and with a record of exceptional leadership across business and the public sector. Securing funding and financing for the CAM is precisely one of the key areas where they will be able to support in the scheme’s delivery.
“It is perfectly normal for projects at a phase of delivery similar to CAM to not have every pound needed for delivery secured. What the Combined Authority is here to do is make things happen.”
He said the “calibre” of the appointments proposed “proves just what a draw the CAM is”.