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Waverley Borough Council Committee System - Committee Document

Meeting of the Executive held on 02/12/2003
Independent Remuneration Panel



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ANNEXE A
INDEPENDENT REMUNERATION PANEL

The report of the Independent Remuneration
Panel appointed to review the allowances paid to
Councillors of Waverley Borough Council

1. Introduction

1.1 This is the report to Waverley Borough Council by the Independent Remuneration Panel commissioned, in accordance with the Local Government Act 2000, to undertake a review of its Members' Allowances Scheme. The Panel comprised:

Michael Clark (Chairman)
David Clay
Deborah Pepper
Jim Rattray
Peter Williams

1.2 The Panel wishes to thank Jean Radley, Emma McQuillan, Robin Pellow and Graeme Clark for their advice and support.

2. Terms of Reference for Panel

The terms of reference for this review are as follows:

To review the Council's Members' Allowances Scheme and make recommendations to the Council on an appropriate Scheme of Allowances which reflects the roles and responsibilities of Members, both in the Council and in serving their constituencies, particularly having regard to:

(i) the new political management structure approved by the Council in February 2000;

(ii) data on the allowances paid by other similar local authorities.

3. Background Information

3.1 The review was undertaken in the light of the July 1998 White Paper "Modern Local Government – In Touch with the People" and subsequent Local Government Act 2000, which includes provisions that, although appointment as a Councillor is essentially a voluntary service to the local community:

(i) those considering offering themselves for election should not be deterred from doing so through the costs they may have to bear or earnings they may have to forgo;

(ii) a Basic Allowance must be paid to all Councillors; this allowance is intended to recognise the time devoted by Councillors to their work and to cover incidental costs, such as the use of their homes and other disbursements;

(iii) Special Responsibility Allowances may be paid to those Councillors who have significant additional responsibilities over and above the generally accepted duties of a Councillor;

(iv) Childcare and Dependent Carers' Allowance may be paid to those Councillors who incur such costs whilst undertaking "approved duties";

(v) in certain circumstances, some of the allowances may be made pensionable;

(vi) Councillors may also claim the cost of travelling expenses incurred on "approved duties", as well as subsistence allowances in certain circumstances;

(vii) the amounts payable to Councillors are matters for local determination, taking account of particular circumstances, as well as the constitution of the Council.

3.2 The Regulations provide that attendance allowances can no longer be paid.

4. Current Scheme

4.1 Waverley Councillors are not paid a salary, but are entitled to a basic allowance, currently 1,938 per annum. In addition, some Councillors receive special responsibility allowances for undertaking certain additional duties.

4.2 Councillors may also claim the cost of travelling and subsistence expenses incurred on duties approved by the Council and an allowance for the costs of caring for children and adult dependents.

4.3 Councillors are offered certain equipment and materials, including a computer at home for Council business at the Council's expense, as set out in Annexe A attached.

4.4 The current expenditure for Councillor allowances in Waverley is 144,000. An increase in budget for Members Allowances of 56,000 would equate approximately to either a 1% increase in the Council Tax or a % increase to the Council's net revenue budget.

4.5 There are 57 Councillors at Waverley, more per head of population than any other Surrey District with a population over 85,000. It should therefore be borne in mind the higher number of Councillors at Waverley would always make the total cost of allowances relatively high.

5. Initial Considerations

5.1 We were supplied with a copy of the report of the previous Independent Panel presented in January 2000, before the current political management structure was introduced. We were already in possession of details of allowances paid by many other councils including the other Surrey Districts (Annexe B attached). In addition, we were supplied with papers outlining the current organisation of the Council.

5.2 Following our appointment on 26th March, 2002 a meeting was held with Council Officers which explained the relevance of the documents provided to us, the current Scheme of Allowances and possible approaches to the review.

5.3 Following the above meeting, we concluded that we should undertake the review from first principles, starting with a clean sheet of paper. To begin with, a questionnaire was designed and sent to all Councillors. The questionnaire asked for information, including the amounts of time spent on meetings and ward work and details of costs incurred as a result of being a Councillor.

5.4 Initially, we had a poor response from Councillors to our questionnaire. At the closing date of 17th May only 25% had been returned. We judged that a two thirds return rate was necessary to provide a valid input to our considerations. A month after the closing date and after several reminders, the return rate was 70%.

6. Principles

6.1 The following principles have underpinned our review:

(i) the work of a Councillor continues to be primarily voluntary in nature. This principle is recognised in the legislation and supported strongly by the majority of Councillors interviewed;

(ii) any scheme of allowances should be equitable, transparent and logical;

(iii) allowances should apply to roles within the Council, not individual Councillors;

(iv) allowances cannot be used to recognise individual performance. The legislation does not provide for 'performance related' allowances;

(v) allowances should represent reasonable compensation to Councillors for expenses they incur, and time they commit, in relation to their role, not remuneration for their work. Councillors are not paid employees of the Council and their allowances should not be regarded as salary;

(vi) special responsibility allowances are used to recognise the significant additional responsibilities which attach to some roles, not just the extra time required.

6.2 In making our recommendations, we have sought to maintain a balance between:

(i) the essentially voluntary nature of a Councillor's role;

(ii) the need for allowances to provide appropriate financial recognition for the expenses incurred and time spent by Councillors in fulfilling their roles;

(iii) the need to ensure that the level of allowances is sufficient so as not to discourage anyone considering becoming a Councillor or to deter existing Councillors from fulfilling their role;

(iv) the need for the allowance system to be administratively as simple as possible, without this consideration becoming an undue constraint on the design of the scheme.

7. Member Consultation

7.1 We received replies to our questionnaire from 40 Councillors.

7.2 We interviewed 13 Councillors who represented a reasonable cross-section and included all those who wished to be interviewed. We also interviewed the Chief Executive and the Assistant Director of Finance.

7.3 All Councillors interviewed accepted that much of their work was voluntary in nature and this was reflected in their and other written returns. However, some said that many new Councillors were not aware of the heavy workload involved until they had been elected. All accepted that the sacrifices made to be a Councillor were an individual decision. The majority agreed that whilst loss of earnings should not be made good, there should be a reasonable basic allowance to recognise the time commitment in normal *backbench Council work, and to ensure that essential out of pocket expenses were reimbursed.
*[Those Councillors without significant additional responsibilities]

7.4 Councillors were, nevertheless, concerned that the level of allowances, together with the time commitment required, acted as a disincentive for younger people to become councillors.

7.5 Councillors said that the new political management structure resulted in a comparatively small number of Councillors taking on significant additional responsibility, involving a heavy time commitment. They felt that it was often hard for backbenchers to know how they could contribute effectively. Some Councillors felt that a small number of their colleagues spent little time on their council work and did not attend meetings regularly.

7.6 We noted the allowances paid by other Councils and the very wide variations in levels of payments (see Annexe C attached, showing recent amendments).

8. Compensation for Time and Responsibility

8.1 Questionnaire responses showed that individuals spend widely varying amounts of time on activities related to their being a Councillor. Returns submitted by backbenchers showed hours ranging from 10 to 70 a month but averaging around 30 hours. Time spent by Executive Members and the Chairmen of Overview and Scrutiny and Development Control Committees were somewhat higher, averaging 60 hours a month on the various duties associated with their roles. In relation to external evidence from the Improvement and Development Agency (an agency committed to promoting the highest standards in local government), Waverley backbench Councillors spend below the average of 57 hours per month on council work. Several Councillors' returns in 2002 suggested they had little 'Council work' and few meetings to attend.

8.2 The responses and interviews showed that the Leader and Executive members had significant responsibilities and committed a considerable number of hours each month to the Council. There was also additional significant responsibility in the work of the Chairmen and Vice-Chairmen of committees. Equally, although not a recognised office, the Leader of the main opposition party spent many hours per month keeping up to date and ensuring that his party was well briefed.

9. Out of Pocket Expenses

9.1 Questionnaire responses showed that out of pocket expenses vary greatly between Councillors, both as regards heads of cost and amount. There are post and telephone expenses, transport costs above those specifically reimbursed, proportionate costs of room in the house, costs of hiring someone to do work about the house and garden that individuals would normally do themselves and so on. It is well nigh impossible to quantify these costs or to establish a sensible 'average'. We understand that the Inland Revenue allows Waverley Councillors 500 per annum as a deduction for 'unvouched expenses' but will allow more if claimed and justified.

9.2 We noted that all Councillors have been offered a computer and access to the Internet with a telephone line into their homes at the Council's expense, but that some Councillors have still declined this facility. The Panel's recommendations envisage all Councillors taking advantage of this offer.


10. Travel Allowances and Subsistence

10.1 Some Councillors do not claim their travel and subsistence allowances in full. There were no comments by Councillors as to the mileage rate paid at present, but several considered the current list of 'Approved Duties' qualifying for reimbursement (Annexe D attached) to be too restrictive, and thought it should be reviewed.

10.2 We requested comments on the relative merits of a lump sum or mileage allowance towards travel expenses. The principle of a lump sum was overwhelmingly rejected by Councillors.

11. Childcare and Dependent Carers' Allowance

The Council already have a Childcare and Dependent Carers' Allowance scheme and Councillors generally supported the payment of both these allowances. It was felt that to know such costs could be claimed at least in part, might be an encouragement to potential candidates. Equally, it might assist present Councillors to continue in office in spite of a change in their personal circumstances.

12. Conclusions

Basic Allowances

12.1 In reaching our conclusions, the Panel felt it was more important to reflect local conditions in Waverley, the views of Councillors, and to develop a fair and straightforward system, rather than simply being reliant on history or what is done by others.

12.2 We therefore followed a structured approach which established a basic allowance, but in two parts:

(i) The first part comprises an allowance to compensate for out of pocket expenses over and above those listed in Annexe A. We consider that 500 per annum should be paid to cover out of pocket expenses including those costs described in Paragraph 9.1 and taking into account the private use of the computer and access to the Internet;

(ii) The second comprises an allowance to recognise the responsibility and time involved in the role of Councillor. The role and structure of the Council is not comparable to a commercial organisation and the number of Councillors involved is dictated by legislation, not commercial efficiency. Taking into account these factors and the balance we have sought to maintain, as described in paragraph 6.2, it is apparent that we cannot determine simple hourly compensation that would relate to going market rates. However we consider an allowance of 1,500 per annum meets our criteria and is reasonable for the time spent and the commitment given.

12.3 We therefore recommend an allowance of 500 per annum to compensate for out of pocket expense, and an allowance of 1,500 per annum to recognise time and commitment.

Special Responsibility Allowances

12.4 We concluded it would be appropriate and most straightforward to apply a multiplier to the time and commitment component of the Basic Allowance to determine the Special Responsibility Allowances paid to those Councillors with significant additional responsibilities.

12.5 We concluded from the evidence we have considered that the following offices bear significant additional responsibilities:

Leader of the Council
Shadow Leader of the Council
Executive Members
Portfolio Holders
Chairmen and Vice-Chairmen of the Overview and Scrutiny, Licensing, Development Control and sub-committees

12.6 We have not included the Chairman and Vice-Chairman of the Standards Committee in paragraph 12.5 above. In the normal course of events, these positions should not involve significant additional responsibility. However, should a situation arise requiring the Committee to undertake substantial work with significant responsibility, then it is suggested some form of payment to its member should be considered. This approach also fits comfortably with the fact that the Committee will include independent members who are not entitled to the Councillors’ basic allowance.

12.7 We then considered how much compensation was appropriate for the extra responsibilities attached to the offices listed in paragraph 12.5.

12.8 We recommend that a multiplier (set out in the table at paragraph 13) should be attached to each role recorded in paragraph 12.5. These multipliers reflect the differing levels of responsibility assumed by the different roles.

Pensions

12.9 We were also invited to consider whether any Allowance as recommended should be pensionable. It is understood Government guidance is awaited and therefore we make no recommendations at the present time.

Childcare and Dependent Carers' Allowance

12.10 The costs to Councillors of providing care for their children or dependants whilst on approved Council business can be considerable.

12.11 To contribute towards these costs, we recommend that the current allowance of 5.38 per hour remains unchanged but should be subject to a maximum of 75 per month. All claims should be supported by documentary evidence to the satisfaction of the Director of Finance.

12.12 These allowances should not be payable for the employment of a member of the claimant's own household.

Travel and Subsistence Allowances

12.13 We recommend that a mileage rate should continue to be paid for all travel on Council business as identified in the list of Approved Duties, (Annexe D). In light of the strong comments made to us, we suggest that the list of Approved Duties be reviewed.



Minimum Attendance

12.14 The evidence we considered raised concerns that some Councillors do not attend a 'reasonable' minimum number of meetings, but may still claim the appropriate allowances in full. We accept that it may not be possible for Councillors to attend every meeting for various reasons such as illness, business and other commitments. However, we consider it is reasonable to expect a Councillor to attend a minimum of 75% of meetings of the Council as well as the Overview and Scrutiny, the Licensing and Development Control Committees or Sub-Committees to which they have been appointed, in order to qualify for the receipt of the full Basic Allowance.

12.15 We were minded to recommend that the Basic Allowance be reduced where Councillors attend less than 75% of meetings. However, it has been argued that this could be construed as introducing a form of attendance allowance. Section 99 of the Local Government Act 2000 deleted Section 18.1(b) of the Local Government and Housing Act 1989, which specified the payment of an attendance allowance, although it is silent on whether the basic allowance maybe reduced for insufficient attendance. Nevertheless, we recommend that the Council gives further consideration to this important issue.


13. Recommendations

13.1 The Independent Remuneration Panel therefore recommends the following scheme. Councillors may qualify and claim for more than one allowance:

Factor
x 1,500
Amount
()
No.
Total
()
Basic
Allowance
Out of pocket expenses
500
57
28,500
Compensation for time
1,500
57
85,500
Total Basic
114,000
Special ResponsibilityLeader of Council
3.5
5,250
1
5,250
Shadow Leader
2.0
3,000
1
3,000
Executive Members
1.0
1,500
10
15,000
Portfolio Holders
1.0
1,500
9
13,500
O&S Chairmen
2.0
3,000
3
9,000
O&S Vice-Chairmen
.75
1,125
3
3,375
Licensing Chairman
.75
1,125
1
1,125
Development Control Chairman
1.0
1,500
1
1,500
Licensing & Development Control Vice-Chairman
.25
375
2
750
Development Control Sub-Cttee Chairman
.75
1,125
4
4,500
Development Control Sub-Cttee Vice-Chairman
.25
375
4
1,500
Total Special
Responsibility
58,500
Total Basic and Special Responsibility
172,500
Signed: …………………………………………..
Michael Clark (Chairman)


Signed: ……………………………………… Signed: ……………………………………..
David Clay Deborah Pepper

Signed: ……………………………………… Signed: ……………………………………..
Jim Rattray Peter Williams