Document Sample
					                                     LONDON BOROUGH OF NEWHAM

                                CABINET COMMITTEE – 19 MARCH 2001

                                   NEWHAM ASSEMBLY – 2 APRIL 2001

                                                                               AGENDA ITEM

                                                                         DRN. NO. CC233/00-01

SUBJECT:                              MEMBERS' ALLOWANCES

SOURCE:                               CHIEF FINANCE OFFICER

WARDS AFFECTED:                       ALL


To create Special Responsibility Allowances at Level 2 in respect of the position of the Chair of the
Development Control Committee, and Chair of the Newham Assembly. To amend the Special
Responsible Allowance for Scrutiny Chairs from Level 2 to Level 1.

To comment on the draft Guidance from the DETR in respect of revisions to Regulations covering
Members Allowances.



1.       To agree the payment of a Special Responsibility Allowance at Level 2 in the Members
         Allowance scheme in respect of the Chair of the Development Control Committee and the
         Chair of the Newham Assembly.

2.       To agree the amendment of the Special Responsibility Allowance for Scrutiny Chairs from
         Level 2 to Level 1.

3.       To agree the effective date of the above proposals as 3 April 2001.

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4.        To agree that the Members Allowance Scheme for 2001/02 will be the same as that for
          2000/01 with the inclusion of the amendments referred to above and the deletion of
          Attendance Allowance with effect from 28th July 2001.

5.        To approve the response to DETR as set out in Appendix l.

Newham Assembly

1.        To approve the changes to the Members Allowance Scheme, as set out in recommendation 1
          – 3 to Cabinet.

2.        To approve the Members Allowance Scheme for 2001/02 as set out in recommendation 4 to

                                                                        BOB HEATON
                                                                  CHIEF FINANCE OFFICER

Originator:     J. Hollands
       Head of Financial Support Services

Tel:                  Ext: 23030


Local Government Access to Information Act 1985
Background Papers used in preparing this report
E’mail from J. Mattock – 9th March 2001
Members Allowances Scheme
Letter from DETR – Draft Guidance on Members Allowances

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Executive Summary/Outline of Proposal/Outcomes Sought

This report proposes the setting of a Level 2 Allowance within the Members Allowances Scheme in
respect of the Chair of the Development Control Committee, and Newham Assembly and amending
the Allowance payable to Scrutiny Chairs to Level l from Level 2. The report comments on Draft
Guidance received from DETR and seeks approval to a suggested response regarding Newham
Members views.

Service Delivery/Performance Management Issues

The rewards payable to Members need to reflect levels of responsibility undertaken and ensure that
people with the necessary skills, knowledge and experience are encouraged to seek Election.

Link to Vision and Strategies/Local Area Impact

None identified

Financial and Legal Implications

The additional cost of the proposal is £32,200 in 2001/02 and in a full year and will be met from
within existing budgets. The new posts will be added to the existing Members Allowance Scheme.

Key considerations

The creation of additional and amended Allowances within the Scheme need to be viewed in
connection with other responsibilities defined in the Scheme to ensure that there is a clear
distinction between degrees of responsibility, and parity of responsibility.


None specific.


Amendments to the Scheme of Members Allowances

1.       A review of posts entitled to Special Responsibility Allowances at Levels 1 and 2 within the
         Members Allowances Scheme has recently been undertaken.

2.       At present the positions of Chairs of Development Control Committee and Newham
         Assembly are not separately recognised within the Scheme. The Development Control
         Committee is a Statutory Committee with a quasi-judicial function. The decisions taken by
         the committee have a strategic impact on the built environment and regeneration of the
         Borough, and these decisions carry legal enforcement powers.

3.       The committee meets on a monthly basis (except in August), may make site visits to
         locations where planning applications have been made, and a pre-agenda meeting is held
         with the Chair.

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4.       The Chair of Newham Assembly is also not currently recognised within the Scheme. The
         levelof responsibility is equivalent to that of the deputy Cabinet Members and Chair of
         Development Control Committee and it is proposed that a Level 2 allowance be paid to this

5.      The role of the Scrutiny Chairs in the Governance process has developed since its inception
        some years ago. Under the new Governance structure the Scrutiny Chairs have a close
        working relationship with Cabinet and are seen as equal partners in developing and shaping
        policy. There is therefore a comparability of roles and the allowances for the scrutiny Chairs
        should be the same as for Cabinet Members (Level 1).

6.       Amendments to the scheme are regulated by the Local Authorities (Members Allowances)
         Regulations 1991. Where a scheme is amended during a year increases/decreases to
         allowance are only applicable from the date of the amendment, and it is not possible to
         backdate the payments. The effective date of the amendments will therefore be the day
         following approval by the Newham Assembly i.e. 3 April 2001.

Members Allowances – Consultation on Draft Statutory Guidance


7.       A consultation document has recently been issued by the DETR regarding the Statutory
         Guidance for Members Allowances Schemes that will need to be devised under the Local
         Government Act 2000. A copy of the draft guidance is attached at Appendix 2. The relevant
         Regulations have yet to be published. A separate consultation document will be issued
         regarding Pensions for Members. The DETR have requested that comments should be sent
         to them by 20th March 2001. Set out below is a summary of the main features contained in
         the Guidance and areas where Members may wish to send a formal response to DETR. A
         draft of suggested comments is attached as Appendix l to the report.

Basis of the new Allowances

8.       The main features described in the consultation document are as follows.

             Each Local Authority will decide its scheme and the amounts payable.

             An Independent Remuneration Panel must be established to give advice on the scheme;
              amounts to be paid; and which allowances are pensionable.

             Attendance Allowance will be abolished from 28th July 2001.

             A Basic Allowance is payable to all Members.

             Special Responsibility Allowance may be paid.

             A Childcare and Dependent Carers Allowance may be paid

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             Travel and subsistence Allowances and Allowances that may be paid for attendance at
              conferences will be reviewed by the Government, but for the time being Councils may
              ask its Independent Panel for advice on eligibility and amounts of allowances.

             Provision will be made for the payment of Pensions to Members undertaking specified
              duties (Separate Guidance is to be issued)

Comments on the specific proposal

Basic Allowance

9.       The Guidance states that “Basic Allowance is to recognise the time commitment of all
         Councillors, including calls on their time as meetings with offices and constituents and
         attendance at political group meetings. It is also intended to cover incidental costs such as
         use of their homes and private telephones”.

         At present Members (at Newham) receive payments for PC’s, answerphones etc, in addition
         to the Basic Allowance. The DETR needs to clarify whether they see Basic Allowance
         covering all aspects of the support described above. If so then the Independent Panel will
         need to take into account the relevant information in setting the Basic Allowance

Special Responsibility Allowance

10       Special Responsibility Allowance may be paid to those Members who have
         significant responsibilities.

         The categories of SRA appear to remain unchanged.

         When reading the Guidance for Basic Allowance and Special Responsibility Allowance
         together it would seem that the intention is to have a “small” number of duties that would
         attract SRA. The document goes on to say that the electorate might rightly question the
         majority of Members receiving an SRA. The original Green Paper issued in 1998
         concerning the proposals for Governance also envisaged this and linked the eligibility for
         Pensions to those Members who might receive SRA. There may therefore be a change in
         emphasis in the Newham Scheme from the current low level of Basic Allowance with all
         Members receiving one SRA to a higher Basic Allowance and a small number of Members
         receiving SRA.

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         The list of duties described as being eligible for SRA is related to the traditional role of
         Members responsibilities in a hierarchical system of Governance. The emphasis on the role
         of Members is changing from one of fewer formal meetings to that of representing Newham
         in the Community and performing outreach work. It would be preferable if the Local
         authorities were able to have the discretion to define the list of areas eligible for SRA,
         details of which would be subject to public scrutiny through the Independent Panel process
         and publicity requirement.

Childcare and Dependent Carers Allowance

11.      The Guidance specifies “Approved Duties” for which the Allowance will be
         Payable. These are related to the current guidelines for the payment of Travel
         and Subsistence Allowances.

         The list of Approved Duties does not refer to Political meetings, whereas the Guidance for
         Basic Allowance does. The DETR need to clarify the position, preferably by allowing the
         payment of allowance for specified political meetings e.g. Labour Group, although there will
         have to be equality for all political Group. It would also be desirable to retain the existing
         system for payment to Carers directly, which is regarded as keeping administration for
         Members to a minimum. Members are receiving a service from the Carer to enable them to
         undertake their duties and consequently payment should be from the Authority.

Independent Remuneration Panel

12.      The Guidance panel refers to Panels being established by Local Authorities (or a
         Joint Basis), and the ALG. The ALG may act on behalf of two or more London
         Boroughs. The Council must have regard to the recommendations of the Panel.

         From 4 May 2001 Local Authorities must establish a Panel. After this date any decision by
         the Council to amend, revoke or replace its new scheme must have regard to the
         recommendations of their Panel. A new scheme may be established at the time new
         executive arrangements are introduced a new constitution is adopted or when Attendance
         Allowance is no longer payable.

         Appointment of the Panel

         The Panel must have at least 3 members. The Members of the Panel cannot be Elected
         Members of any Authority, or those disqualified from being an Elected Member. An
         Independent Panel will need to be truly independent, qualified and representative of the local
         community. An Appointment process will need to be devised, and candidates sought via the
         local press, voluntary sector, business community etc.


         There will be a considerable amount of effort required to set up the Panel. There are
         advantages in utilising the ability of the ALG to establish a Panel as set out in the previous

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         The ALG have been contacted and would be prepared to act on our behalf.

         Using the ALG panel would have the advantages of:-

              Working towards consistency across boroughs
              Economies of scale in the support to the Panel
              Economies of scale is identifying and Appointing Panel Members
              Access to a wider pool of Panel Members

Making a Scheme of Allowances

13.      Local Authorities will receive recommendations regarding eligibility and the value of
          Allowances from an Independent Panel; they must have regard to these
         recommendations but are not bound by them.

         The timing of the establishment of an Independent Panel is very important to this Council.

         The Guidance is structured around Members Allowance schemes being in existence for
         Financial Years, when in reality Schemes are usually related to Municipal years (i.e. May to
         May). The DETR should be asked to consider allowing schemes to be implemented from a
         date in May.

         If LBN has to work to the Guidance as drafted then the following options for introducing a
         new scheme exist.

         1)        Adopt a new scheme before 4 May 2001, deleting Attendance Allowance from 27th
                   July 2001, leaving the remainder of the scheme unchanged. (Subject to Legal
                   Advice and further Statutory Guidance). This will allow more time to establish the
                   Panel and give some certainty of the Governance arrangement that a new Members
                   Allowance scheme would need to represent.

         2)        If (1) is proved not to be viable (and the DETR do not amend the Guidance), then it
                   would be necessary to set up a Panel to adopt a new scheme before 31st March 2002
                   to reflect the current Governance arrangements. (i.e. deleting Attendance Allowance)


         3)        The Panel may also need to consider an alternative scheme to reflect the Governance
                   arrangements that will be operative from the new Municipal year commencing in


1)       Request DETR to give flexibility to allow existing schemes to run up to May 2002 where
         LA considers necessary. (Draft attached)

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2)       Adopt a Members Allowance Scheme for 2001/02 at the Newham Assembly on 2nd April
         2001 as outlined in Option 1.


14.      Local Authorities will be required to:-

             Publicise the recommendations of the Independent Panel
             Publicise the Scheme of Allowances
             Publicise actual Allowances paid to Members each year
             Make copies of the report of the Independent Panel available for inspection
             Enable the public to make copies of the report or payment of a fee
             Make copies of the Members Allowance Scheme available for inspection
             Enable the public to make copies of the Scheme at a Fee.

         At Newham, all reports on Members Allowances are accessible to the public. There is likely
         therefore to be little impact of the publicity proposals.

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