Despite being close to bankruptcy, Dudley Council is planning to award its top bosses big pay rises.

The authority’s chief executive, Kevin O’Keefe, who has been on sick leave since before Christmas, is in line for £6,460 pay rise. The rise will take his salary before pension contributions to £191,017.

His deputy, Balvinder Heran, will get a pay hike of £5,434 to take her basic wage up to £160,785.

All of the council’s chief officers earning more than £100,000 are set for increases ranging from £5,039 down to £3,585 with the lowest pay in this group going up to £105,991.

The proposed increases come while the council is struggling to avoid declaring itself unable to pay its bills. The budget for 2024/25 is currently being debated and will be voted on by the full council on March 4.

Proposals include spending cuts of £15m, a 4.99% increase in council tax and an increase of 7.7% in council rent. At the other end of the pay scale, the lowest paid among around 5,000 workers at Dudley Council will see an increase of £2,108 to take their pay up to £22,366 in April. Cllr Steve Clark, cabinet member for finance and legal services, said:

“Salaries and increases are negotiated annually at a national level for all local authority staff, and included in our budget setting. The pay rise of 3.5 per cent has been applied to all local authority chief executives.

“It compares to an increase of nearly 10 per cent for our lowest paid members of staff at the authority, and an average across the board of around 6.2 per cent.”

The most common wage band at the council includes around 1,100 workers who can currently earn a maximum of £24,054. If the current plans are approved these workers will get a rise of £1,925 to take their maximum potential earnings up to £25,979.

The ratio between the highest and lowest pay in the public sector is set by law based on the findings of a review on fair pay in the public sector in 2010. The Localism Act 2011 recommends the pay of the chief executive should be no more than nine times the salary of the lowest paid workers in the organisation.