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D R A F T

VIEWS: 17 PAGES: 16

									                 Report of the Independent Remuneration Panel
                     on Shrewsbury and Atcham Borough
                         Council Members’ Allowances

                                           March 2003

Members of the Independent Remuneration Panel:
Ian Somervaille CBE (Chairman). Retired Royal Naval Officer; also
retired Bursar of Shrewsbury School
June Jones DipEd CertEd. Retired Teacher
James Parker BA. Management Consultant

1.       The Independent Remuneration Panel has been commissioned by
         the Chief Executive of the Shrewsbury and Atcham Borough
         Council to review the scheme of allowances that has been in force
         since 2000, following the October 1999 report of a previous panel.
         The Terms of Reference for our work were:

1.1      To prepare a report for the Council making recommendations

1.1.1 As to the amount of Basic Allowance which should be payable to
      Members of the Council

1.1.2 As to the duties in respect of which such Members should receive
      a Special Responsibility Allowance and as to the amount of such
      an allowance

1.1.3 As to whether the allowance scheme should include allowances in
      respect of the expenses of arranging for the care of children or
      dependants of such Members, and as to the amount of such
      allowances and the means by which they are determined

1.2      We were in addition asked to make recommendations

1.2.1 As to whether elected Members’ remuneration should be
      pensionable;

1.2.2 As to whether the present allowances for the Mayor and Deputy
      Mayor are sufficient and appropriate;

1.2.3 As to whether new arrangements should be introduced to defray
      the cost of IT consumables for use by Members in connection with
      the computers that have been made available to them;

1.2.4 As to whether there should be a means of regular assessment of
      Members’ performance in their Council duties and the extent, if


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         any, to which the results of such assessment could be applied to
         Members’ allowances.

2.       In approaching our task we have considered various additional
         documents, including:

              The Report of the Independent Review of Elected Members’
               Allowances for Shrewsbury and Atcham Borough Council
               dated October 1999
              Guidance on Members’ Allowances for Local Authorities in
               England, issued by the Office of the Deputy Prime Minister
              Statutory Instrument 2001 No 1280: The Local Authorities
               (Members’ Allowances) (England) Regulations 2001
              Local Government Pensions Committee Circular No 126
               (December 2002), together with relevant extracts from the
               Government’s response to the Transport, Local Government
               and Regional Affairs Select Committee’s Report on How the
               Local Government Act 2000 is Working.
              Reports by comparable Panels, prepared for North Shropshire
               District Council in April 2002; for the City of Stoke-on-Trent in
               November 1999; for Staffordshire County Council in February
               2002; and for Bridgnorth District Council in November 2001.
               These reports were illustrative of alternative approaches to the
               same problems, rather than templates that we felt constrained
               to follow.
              Responses by Members of the Council to a questionnaire
               circulated on our behalf in January 2003 by Mr Croston. A
               summary of these responses is at Appendix 1 to this report.
               We are very grateful to those Members who took the time and
               trouble to complete and return the questionnaire.

Our Philosophy

3.       We started our review with no desire to propose changes in the
         present structure of remuneration unless and until it was proven to
         us that significant deficiencies existed requiring change. Such an
         approach (“if it ain’t broke, don’t fix it”) would, we reasoned,
         contribute to desirable consistency and clarity. However we have
         identified a number of aspects of the present package that we
         consider no longer satisfactory, and our proposals will reflect this.
         In addition, we have been invited to consider aspects (such as
         pensions) that are not part of present arrangements.

The Basic Allowance

4.       Paragraphs 13 and 14 of the Deputy Prime Minister’s Guidance on
         Members’ Allowances explains that the Basic Allowance is:
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         “payable to all Members. (It) must be the same for each
         Councillor. (It) is intended to recognise the time commitment of all
         Councillors, including such inevitable calls on their time as
         meetings with officers and constituents and attendance at political
         group meetings. It is also intended to cover incidental costs such
         as the use of their homes.”

5.       The Basic Allowance for SABC Members is at present calculated
         from a formula devised by the Independent Panel in October 1999.
         This formula starts from the current average gross weekly earnings
         for full-time employees (male, female, manual and non-manual) in
         the Shrewsbury and Atcham area, as published by the Office for
         National Statistics in the annual New Earnings Survey. It then
         assumes that Councillors work, on average, for two days per week
         (derived from a survey of Councillors); over 48 weeks per year
         (that is, excluding four weeks’ holiday); and that 25% of their time
         is voluntarily given and not remunerated.

6.       The current survey suggests that Councillors now work on average
         nearly 32 hours per week on Council business, or about 4 “normal
         working days” per week. This is a substantial increase on the
         equivalent figures in 1999; see page 1 of Appendix 1 to this paper.

7.       Current employment legislation requires employers to pay all
         workers for at least four weeks holiday per year. We accept that
         Councillors are not employees of the Council, and hence that this
         legislation does not strictly apply to their situation. Nevertheless
         the abatement of 4 weeks’ pay for holidays seems, perhaps, less
         easily sustainable than it may have been in 1999.

8.       The percentage abatement for the voluntary, or “Public Service”
         ethos of Councillors’ work is a very subjective matter. In the 1999
         survey, the average of responses received suggested that
         Councillors thought 44% of their time could reasonably be deemed
         to be voluntary.      The Independent Panel recommended an
         abatement of 40%. The Council decided that the abatement
         should be 25%, which has resulted in a substantial increase in the
         Basic Allowance paid in the three years 2000/01 to 2002/03, over
         that envisaged by the 1999 Independent Panel. We have enquired
         about the reasons for this Council decision, and have been told
         that it followed an exercise in benchmarking against other
         Councils. We have also been told that in 2000 Members felt,
         notwithstanding the recommendations of their Independent Panel,
         that their Basic Allowance should be “about £5,000 pa”.
         Responses to a question in the current survey on the amount of
         time Councillors now think should be deemed voluntary range

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         widely, between 0% and 100%; they average out at some 28%.
         Subjectively, taking account of discussions during our interviews,
         we believe a respectable case could be made for increasing the
         abatement to, say, 30%.

9.       Each of these points might lead to an adjustment in the formula for
         the Basic Allowance. However we have been concerned to note
         that faithful application of the formula has given rise to inconsistent
         “inflation” increases since 1999, as follows:

         Oct 1999 Panel Recommendation       £3,802 pa
         April 2000 Council decision         £4,752 pa
         May 2000 “inflation” increase £5,191 pa (9.2%)
         May 2001 “inflation” increase £5,326 pa (2.6%)
         May 2002 “inflation” increase £5,828 pa (9.4%)

10.      In other words, the Basic Allowance is now 22.6% greater than the
         rate introduced three years ago. We offer no comment on the April
         2000 decision, since we do not know with certainty the factors that
         were taken into account by the Council. However the increases
         since then are wholly the result of applying the formula. It is of
         interest, if not necessarily significant, that over the same period the
         salaries of Council officials have risen by less than 10.5% (3%,
         3.5% and 3.5%).

11.      The annual New Earnings Surveys, upon which the formula is
         based, have a note against many of the earnings columns for
         Shrewsbury and Atcham stating that no figures were published
         because the “sample (was) less than 10 people and/or the
         standard error of average gross weekly earnings (was) greater
         than 5% of the average”. It is probable, therefore, that the “total”
         figure (used in the formula) is of questionable statistical
         significance; clearly it has resulted in inconsistent increases in the
         Basic Allowance over the three years in question. We conclude
         that the formula for the Basic Allowance, based as it
         obviously is on a statistically small sample, is flawed and
         should be changed.

12.      We have considered what the constituent parts of a new formula
         might be. The baseline figure might perhaps be the average gross
         weekly earnings of all full-time employees in the West Midlands
         Region (currently £419.10 against £404.70 in the SABC area); or
         in Great Britain (currently £444.30). Both would probably be more
         statistically consistent; both would also result in a further
         substantial increase in the Basic Allowance.         Moreover the
         “current” figures quoted above are actually for 2001 (published in
         2002); the 2002 statistics, which will surely be higher still, are not

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         yet to hand. Any such formula would need to take account of the
         greater number of average hours worked on Council business and,
         perhaps, of 52 rather than 48 weeks in a year.

13.      A very significant majority of Councillors who responded to our
         survey thought that the present formula for the Basic Allowance
         “remains appropriate and adequate”. Generally speaking, those
         Councillors we interviewed confirmed its “adequacy”. However we
         have demonstrated, above, why we believe that it is no longer
         “appropriate”. We accept that there has been an increase in the
         amount of work Councillors undertake, on average, in recent
         years. Some of this increase results from the introduction of the
         new Cabinet system, which requires Cabinet members to involve
         themselves more deeply in aspects of Council business. Some of
         it results from the reduction in the number of Councillors, some of
         it reflects Central Government legislation, and some of it follows
         the issue of personal computers to Members. Against this,
         however, is the fact that Members’ Basic Allowance has increased
         by over 22% since April 2000, and that the majority of Councillors
         are generally content with the current level of Basic Allowance.
         We conclude, therefore, that a further large increase in 2003
         would not be justified.

14.      Council officers expect to see their salaries increased by an
         inflation factor of 3.5% in 2003. 3.5% on top of the present Basic
         Allowance for Councillors would be £6,032. However, other public
         servants have recently been awarded a more modest increase
         with effect from April 2003. We recommend that the Basic
         Allowance should be set at £6,000 pa from May 2003, an
         increase of 2.95%. We further recommend that increases in
         the intervening years before the next Independent Panel is
         commissioned, should be at the rate applied each year to
         Council officers’ salaries.

Special Allowances

15.      Special Allowances are paid to Councillors having specific
         additional responsibilities. They are paid instead of, rather than in
         addition to, the Basic Allowance, and each Member (except the
         Mayor and Deputy Mayor) may only draw one such Allowance,
         notwithstanding that he or she may have more than one
         “qualifying” responsibility. Special Allowances are derived from the
         Basic Allowance, as follows:




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         Leader of the Council                     (Basic Allowance x 2) plus 10%
         Group Leaders; Deputy Leader of                      Basic Allowance x 2
         the Council; Portfolio Holders
         Chairs of Overview and Scrutiny;          (Basic Allowance x 2) less 35%
         Chairs of Development Control and
         Environmental Protection;
         Licensing and Safety; Standards

16.      We have not detected any consistent dissatisfaction with the rates
         of Special Allowances. However points represented to us have
         included:

16.1 That the commitment on Deputy Group Leaders should be
     recognised financially, so that the Group Leader feels better able
     to delegate functions

16.2 That there should be an Allowance for Shadow Portfolio Holders

16.3 That the difference between the Basic Allowance and the Special
     Allowances is too great; and conversely

16.4 That the commitment now required in some posts having a Special
     Allowance is very significantly increased, or is expected to be very
     significantly increased as a result of anticipated legislation, which
     would suggest a higher Special Allowance.

17.      A fairly consistent pattern emerged in our interviews that those
         Councillors having posts of significant additional responsibility are
         now working harder, and for longer hours, than they did before the
         Cabinet structure was introduced. There was also, incidentally, a
         consistent view among those to whom we spoke that Members
         without significant additional responsibility should now be working
         less hard; but (unsurprisingly) we have not proved that impression
         by empirical evidence. Our deliberations have led us to the
         following broad conclusions:

17.1 The Leader of the Council bears a heavy responsibility, both in
     the direction of policy and in leading the largest party. We are
     persuaded that his allowance should be increased, relative to other
     Special Allowances, in light of the size of the task and the weight
     of responsibility. Even so, this allowance (and indeed other
     Special Allowances) is substantially lower than the cost of
     employing someone with a comparable level of commitment and
     accountability for an equivalent time.



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17.2 Portfolio Holders may not all yet be contributing to the
     development of policy in their subjects in the way envisaged when
     the Cabinet structure was introduced; but experience may correct
     this. For the present we have concluded that there should be only
     a small increase in their allowance, although a future Independent
     Panel may wish to be more generous if the desired development of
     Portfolio Holders’ role continues.

17.3 The task of the Deputy Leader of the Council will depend to a
     large extent on the amount of responsibility delegated by the
     Leader. But the Deputy must be prepared to take over from the
     Leader in the event of sudden unavailability, through illness or for
     other reasons, and must therefore be conversant with all
     developing policy issues. We agree that the Deputy’s allowance
     should remain calculated as it is at present.

17.4 The task of Group Leaders (other than of the largest party) varies
     with the number of Members in their parties, although each party
     must develop its own policy on every major issue, so the variation
     is not directly proportional. We had some difficulty in convincing
     ourselves of the correctness of the decision to award a full Group
     Leader’s Allowance to the Leader of the “Independent Group”, with
     only two Members including the Leader. We recognise that this
     gives the Leader a place at the Cabinet (but without a Portfolio),
     and that there may thus be a benefit in the ability constructively to
     oppose emerging policy. But it seems to us that the relative level
     of responsibility does not justify the same rate of allowance for all
     of the Group Leaders.

17.5 However, the Chairs of Overview and Scrutiny, Development
     Control and Environmental Protection, Licensing and Safety,
     and Standards are, if anything, undervalued in the present
     structure; and it is anticipated that future changes will exacerbate
     this imbalance. We have concluded that their allowance should
     increase by more than the factor applied to other Special
     Allowances.

18.      On balance, we conclude that:

18.1 The Leader of the Council’s Special Allowance should in
     future be twice the Basic Allowance, plus 25%.

18.2 The Deputy Leader of the Council should continue to draw
     twice the Basic Allowance.

18.3 The Group Leader of the Principal Opposition Group should
     continue to draw twice the Basic Allowance

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18.4 Group Leaders of other Groups should receive the Basic
     Allowance plus 15% for each Councillor in their Group; up to
     a maximum of twice the Basic Allowance.

18.5 Portfolio Holders should in future receive the Basic Allowance
     plus 95%.

18.6 The Chairs of Overview and Scrutiny Committees,
     Development Control and Environmental Protection,
     Licensing and Safety, and Standards should in future receive
     the Basic Allowance plus two-thirds.

19.      We appreciate that our recommendation in paragraph 18.4 above
         will result in two current Group Leaders taking a reduction in their
         Allowance. This is in no way a reflection of any perceived
         shortcoming in their duties as Group Leaders. The Council may
         wish to consider leaving those two individuals (and not any
         successors) to mark time on their current (i.e. 2002/03) rate of
         Special Allowance until they cease to undertake the duties, or until
         the new rate overtakes their current Allowance.

The Care of Children and Dependants

20.      A small majority of Councillors who responded to the
         Questionnaire felt that there should be no formal allowance to
         reimburse the costs of childcare and/or the care of dependant
         relatives, notwithstanding the clear implication in the Deputy Prime
         Minister’s Guidance and the relevant Statutory Instrument that
         such allowances should be included in Councillors’ remuneration
         packages. Such allowances were however recommended by
         Independent Panels in three out of the four comparator Councils
         we considered; the fourth was dated 1999 (as was SABC’s
         previous Panel Report) before the Guidance and Statutory
         Instrument were published.

21.      In our interviews, virtually everyone agreed that widening the
         catchment from which potential Councillors were drawn would be a
         beneficial development; but a narrow majority still rejected direct
         reimbursement of carers’ costs.         Their view was that few
         employers offer direct reimbursement for the cost of such care,
         although an increasing number provide a crèche during normal
         working hours. On the other hand, the voluntary ethos of Council
         work (whether 25% of the whole, or some other percentage), the
         irregular hours, the desire to widen the pool of potential Councillors
         and the fact that Councillors are not employees (nor are they paid


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         a salary equivalent to employees’ emoluments for comparable
         work) might suggest the introduction of a modest allowance.

22.      We have debated this at length amongst ourselves and have
         concluded, on balance, that a “Carers’ Allowance” is
         unnecessary. However if the Council, having weighed up the
         same factors, reaches the opposite conclusion we commend the
         arrangements proposed for Staffordshire County Council in
         February 2002 (Mr Croston has a copy) in which claimants would
         be reimbursed up to £6 per hour for the care of children under 16,
         and/or dependants in respect of whom there is appropriate
         certification from a medical practitioner or social worker. Such
         allowances would not be paid for the services of a member of the
         claimant’s household. We further believe that such payments, if
         introduced, should be capped at a total of £2,000 per claimant per
         annum (that is, an average of about 6.5 hours per week).

Pensions

23.      It is clear that the Government has accepted in principle the
         contention that Councillors’ allowances should be pensionable,
         and that Councillors themselves should decide how that principle
         should be applied, taking the advice of their Independent Panels.
         The Government appears to have considered only membership of
         the Local Government Pension Scheme, which is a Defined
         Benefit (final salary related) Scheme. There are administrative
         problems to be resolved if this proposal is to be accepted, which
         are being considered by Government at present; it is not for us to
         try to resolve them. We understand that the Government aims to
         conclude these further considerations in time for implementation
         with effect from April 2003, but we are not yet convinced that this
         timescale will be achieved.

24.      It will be for Members of the Council to consider what public
         reaction there may be if they decide to vote themselves eligibility
         for a final salary pension scheme. Members will be aware that
         increasing numbers of employers are responding to escalating
         funding costs by closing their final salary schemes to new
         members or, in some cases, winding up their schemes altogether.
         Such schemes are both highly prized and becoming more and
         more scarce; but acceptable alternatives are available.

25.      The strongest arguments in favour of making Council Allowances
         pensionable are that some Councillors accept a considerable
         financial sacrifice in terms of loss of pensionable income
         elsewhere, and that the ability to contribute to a pension scheme
         should help to widen the pool of potential Councillors. A clear

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         majority of respondents to our survey thought that Councillors’
         allowances should be pensionable, and this was borne out in our
         interviews. Those who disagreed thought that arrangements
         would be too administratively complex, that service as a Councillor
         was often too brief to make pension contributions worthwhile, or
         that their age and/or financial circumstances made further
         contributions to a pension scheme pointless.

26.      We conclude that the Council should agree that, if a Member
         contributes at least 5% directly from of his or her Council
         Allowances to a Personal (defined contribution, or “money
         purchase”) Pension Scheme, the Council should make an
         “employer’s” contribution of 5% (but not more) to that
         Scheme. We believe that Councillors should be eligible to join a
         Stakeholder Pension Scheme, although information currently
         available from Central Government suggests that no such
         opportunity is envisaged. The Council may wish to make a
         representation on this matter to Central Government.         If a
         Stakeholder Pension Scheme for Councillors were to be
         introduced by SABC on its own, there would be much
         administrative work involved for what will be a very small number
         of beneficiaries. To avoid this, we recommend that the Council
         should consider establishing a Stakeholder Pension Scheme
         in conjunction with other Councils.

Mayoral Allowances

27.      At present the Mayor is allocated the equivalent of a Group
         Leader’s allowance, in addition to the Basic Allowance, to cover
         necessary costs associated with the Mayoralty. The Deputy Mayor
         is paid a flat rate of £1,000 in addition to the Basic Allowance. The
         cost of Mayoral Allowances is thus currently twice the Basic
         Allowance plus 8.5%. Those with experience of being Mayor have
         generally agreed that the overall rate of the allowances is
         adequate (though some felt it was too high); but that the Deputy
         Mayor’s allowance is too low. As the Mayor and Deputy Mayor
         continue as elected Councillors during their year(s) of office, we
         accept that they should continue to draw their Basic Allowance, in
         addition to appropriate sums to offset the identifiable costs of their
         official duties.

28.      We note that both allowances are currently paid without evidence
         of expenditure, an administratively simple arrangement that counts
         upon the probity of the recipient, and makes it potentially taxable.
         We also understand that difficulties have arisen elsewhere in
         administering an arrangement for requiring receipted expenditure
         to justify the payment of such an allowance. However we are

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         confident that a workable compromise can be devised between the
         demands of public accountability and the risks of potentially critical
         publicity over particular items of Mayoral expenditure.

29.      We have also noted that the Mayor is expected to pay, from the
         Mayor’s Allowance, for hospitality at the Mayor Making and other
         civic events. The Council may consider it preferable to remove
         such predictable costs from this allowance, and to settle them
         direct from the public purse (within an agreed budget).

30.      The Mayoral Allowances are, in part, intended to cover the costs of
         clothes appropriate for official Mayoral commitments, as well as for
         incidental expenses, occasional hospitality, etc. This may prove
         relatively more beneficial for a female Mayor or Deputy and, to a
         lesser extent, for the Mayoress. Moreover we accept that the
         Deputy Mayor, who is virtually certain of being elected Mayor the
         following year unless his or her seat is lost at a Council election,
         will have expenses in preparation for the Mayoral year. We are
         persuaded that

30.1 The Mayor’s Allowance should in future be set at 1.2 times the
     Basic Allowance excluding the costs of predictable Civic
     Functions (and should continue to be paid in addition to the Basic
     Allowance for the Mayor’s Council responsibilities).

30.2 The Deputy Mayor’s Allowance should in future be set at 45%
     of the Basic Allowance (and should continue to be paid in
     addition to the Basic Allowance for the Mayor’s Council
     responsibilities). It should be made clear to the Deputy Mayor that
     this allowance includes an element in preparation for his or her
     commitments as Mayor the following year. We believe that the
     slight risk of the Deputy Mayor not assuming the duties of Mayor
     the following year can be discounted.

30.3 We trust that a fair balance can be struck between administrative
     simplicity and financial regulation in accounting for these
     allowances.

30.4 We recommend that the new rate of Allowance for the Deputy
     Mayor should be introduced with effect from 2003/04; and for
     the Mayor with effect from 2004/05. This will avoid penalising
     the current Deputy Mayor.




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IT Consumables

31.      The availability of personal computers, issued by the Council to its
         Members, has had a significant effect on the pattern of Members’
         work. While some complain that their work has increased as a
         result, most accept the development as a positive response to
         technological progress. We can do nothing about the impression
         of extra working hours in front of the computer screen, other than
         to applaud the availability of training to assist the less computer-
         literate Councillors to use their equipment effectively. We note that
         the Basic Allowance is intended to cover incidental costs, which
         might be deemed to include IT consumables, but a majority of
         those to whom we spoke thought that the Council should issue
         consumables to Members when required as is done by, for
         example, the Shropshire County Council.

32.      We believe this is a reasonable request. However the Council
         may wish to place some upper limit on the number of ink cartridges
         issued to each Councillor in the course of a year. We recommend
         that Councillors should be able to draw supplies of paper
         from the Council; together with up to 4 B&W and 4 colour ink
         cartridges per year for those in receipt of the Basic
         Allowance, or 6 + 6 for those in receipt of a Special Allowance.

Assessment of Councillors’ Performance

33.      We are concerned to note that the recommendation of the
         Independent Panel in October 1999, to the effect that “some form
         of regular assessment of a Councillor’s performance should be
         considered” appears not to have been followed up. Certainly there
         is no formal appraisal system.

34.      We acknowledge that all Councillors are “appraised” at regular
         intervals by the electorate, and that those perceived to be doing
         less on behalf of their electors than is thought appropriate stand to
         lose their seats. We also recognise, however, that the electorate
         may well vote on a party political basis or for someone well known
         in the Ward, without being able to judge the effectiveness or
         commitment of that individual in the prosecution of Council
         business and the development of policy. In the past this was, to
         an extent, self-regulating because Councillors’ remuneration
         reflected the frequency of their attendance at meetings. However
         we do believe that, with allowances now being paid at
         predetermined rates, there should be some mechanism for
         assessing the effectiveness of Councillors’ performance both on
         behalf of their constituents and in wider Council business.


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35.      We offer two options for the Council’s consideration:

35.1 The task might be remitted to the Standards Committee, who
     might take advice on an annual basis from Group Leaders. For
     those who are not members of a formal Group, the Committee’s
     own perceptions would have to suffice. We suggest that the
     Standards Committee should report their conclusions annually to
     Council, highlighting in public only the number of those not
     perceived to be pulling their weight. To name them publicly would,
     of course, be invidious; but the Leader of the Council and/or the
     Chief Executive should call in any individuals so identified to
     remind them of their responsibilities. If performance remains less
     than satisfactory thereafter, the Council should have the authority
     to remove a Special Allowance, or to abate (say) half of the Basic
     Allowance until the next election.

35.2 Councillors might be invited to complete a monthly report on what
     they have achieved, covering meetings on Council business
     attended, training undertaken, community and Ward work,
     conferences and seminars, etc. This report should be in the public
     domain so that electors can judge for themselves whether Council
     Allowances are being properly earned.

36.      Whether or not either of the above models is adopted, we repeat
         the recommendation that the Council should introduce a
         regular mechanism for assessing Councillors’ performance.

Social Security Payments

37.      It has been brought to our attention that payment of Councillors’
         allowances can, in some circumstances, result in the loss of social
         security payments; notably those in respect of disability. It is
         beyond our competence to resolve this, which is a matter for
         Central Government, but we would warmly support a submission
         by the Council, perhaps in conjunction with other Councils, seeking
         amelioration of the effect of current regulations that apply a
         financial penalty to persons serving their local community in what
         remains a partially voluntary role.

Travelling and Subsistence Allowances

38.      Our Terms of Reference do not ask us to make recommendations
         on the rates of travelling and subsistence allowances. However,
         we have noted that in the response to the 2002 Report of the
         Select Committee on Transport, Local Government and Regional
         Affairs, the Government has said:


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         "We intend to introduce consolidated regulations on allowances in
         due course, following our consultation of last year. These
         regulations will bring together the existing regulations. In addition
         they will make provision for local authorities to determine their own
         travel and subsistence allowances, having regard to the
         recommendation of their independent remuneration panels.

         We plan to consult interested parties on draft regulations shortly,
         with a view to these regulations coming into force in April 2003."

39.      It is our view that travel and subsistence allowances for Council
         Members should be set at, and retained at, the same rates as are
         paid to Council officers. The list of Approved Duties should
         continue to be published annually by the Council, on the advice of
         the Chief Executive.

Summary of Conclusions

40.      For convenience, we repeat here the proposals made above.

40.1 The formula for the Basic Allowance, based as it obviously is on a
     statistically small sample, is flawed and should be changed. A
     further large increase in 2003 would not be justified (paragraphs
     11 and 13).

40.2 We recommend that the Basic Allowance should be set at £6,000
     pa from May 2003, an increase of 2.95%. We further recommend
     that increases in the intervening years before the next Independent
     Panel is commissioned, should be at the rate applied each year to
     Council officers’ salaries (paragraph 14).

40.3 On Special Allowances we recommend (paragraph 18) that:

40.3.1       The Leader of the Council’s Special Allowance should in future
             be twice the Basic Allowance, plus 25%.

40.3.2       The Deputy Leader of the Council and the Group Leader of the
             Principal Opposition Group should each continue to draw twice
             the Basic Allowance.

40.3.3       Group Leaders of other Groups should receive the Basic
             Allowance plus 15% for each Councillor in their Group; up to a
             maximum of twice the Basic Allowance.

40.3.4       Portfolio Holders should in future receive the Basic Allowance
             plus 95%.


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40.3.5       The Chairs of Overview and Scrutiny Committees, Development
             Control and Environmental Protection, Licensing and Safety,
             and Standards should in future receive the Basic Allowance
             plus two-thirds (66.67%).

40.4 We do not believe that a “Carers’ Allowance” is necessary. Should
     the Council disagree, however, we commend the model proposed
     in February 2002 for Staffordshire County Council (paragraph 22).

40.5 If a Member contributes a minimum of 5% directly from of his or
     her Council Allowances to a Personal (defined contribution, or
     “money purchase”) Pension Scheme, the Council should make an
     “employer’s” contribution of 5% (but not more) to that Scheme.
     We do not recommend that the Council should establish its own
     Stakeholder Pension Scheme, but rather that it may wish to
     consider establishing such a Scheme in conjunction with other
     Councils (paragraph 26).

40.6 The Council may consider it desirable to remove predictable costs
     of Civic Functions from the Mayoral Allowances, and to settle them
     direct from the public purse (within an agreed budget). The
     Mayor’s Allowance should in future be set at 1.2 times the Basic
     Allowance (excluding the costs of predictable Civic Functions), and
     the Deputy Mayor’s Allowance should in future be set at 45% of
     the Basic Allowance. Both allowances should be paid against
     actual reasonable expenditure in respect of Mayoral duties
     (paragraphs 29 and 30).

40.7 We recommend that Councillors should be able to draw supplies of
     paper from the Council; together with up to 4 B&W and 4 colour ink
     cartridges per year for those in receipt of the Basic Allowance, or 6
     + 6 for those in receipt of a Special Allowance (paragraph 32).

40.8 We repeat the recommendation that the Council should introduce
     a regular mechanism for assessing Councillors’ performance
     (paragraph 36).

41.      In addition, we believe that the abatement of social security
         payments because of receipt of Council Allowances is invidious,
         and hope that this might be forcefully represented to Central
         Government (paragraph 37).

42.      If Central Government does decide to remit decisions on the rate
         of travel and subsistence allowances to Councils with effect from
         April 2003, we recommend that they should be set at the rate
         currently applicable to Council officers (paragraph 39).


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Acknowledgement

43.      In carrying out our remit we have been greatly assisted by Mr.
         Michael Croston, Democratic Services Manager, and Mr. Philip
         Lloyd Williams, Head of Law and Administration, to both of whom
         we are greatly indebted. They have patiently answered our
         questions, some searching but more often trivial and asked from a
         position of considerable ignorance, without demur. They have
         provided additional information from a variety of sources, and have
         studied the draft of this report to ensure it contains no obvious
         errors of fact, or grossly unacceptable opinions. They have made
         our task much easier than it might otherwise have been.

                                           Ian Somervaille
                                             June Jones
                                            James Parker


March 2003

Appendices:
Summary Report of Questionnaire Responses
Current and Proposed Allowance Structure




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