EXECUTIVE
SUMMARY AND RECOMMENDATIONS OF 5TH REPORT OF INDEPENDENT
REMUNERATION PANEL AUGUST 2006
1.
The Panel recommends that the current structure of
Basic Allowances and Special Responsibility Allowances is retained by the Council.
2.
The Panel recommends that all allowances should be
up-rated by the CPI index every 1 April for the next four years.
3.
The Panel recommends that the Council dispenses with
the requirement for Members to submit monthly travel claims for on Island travel
and disperses the amount previously spent on Island travel and subsistence
amongst all Members on a formula based on miles from home to County Hall and
post held by the Member.
4.
The Panel recommends that the Council introduces a
“Performance Related” element in allowances around the corporate performance of
the Council, as determined externally.
5.
The Panel recommends that the Council introduces an
individual “Performance Monitoring” element to replace the existing one.
The
Panel makes 12 recommendations deriving out of its Terms of Reference as set
out in Appendix 1. Most importantly,
its work has been conducted within the requirement to reduce the total cost of
Members’ allowances and expenses in real terms to the public purse against a
base line of the cost in 2009/10. These
recommendations are aimed at ensuring that the average reduction on a
year-to-year basis amounts to a yearly reduction of 2.5 percent per annum and
does not result in a general increase to the authority. In monetary terms, this is a reduction from
£606,582 in 2004/05 to £530,759 for 2009/10, although this sum will be up-rated
for inflation.
These
recommendations have also taken account of the Council’s request to achieve the
following objectives in concluding the Panel’s Report:
·
to incentivise Members to reduce non-cash costs of
facilitating Member activity such as printing, word processing, etc
·
to incentivise a reduction in the environmental impact
of Member activity, for example, travel, paper and IT consumables
·
to incentivise Members to concentrate on the strategic
improvement of the performance of the Council
·
to enable and encourage the role of elected Members as
community leaders
·
to ensure the retention of existing Members in their
elected role and to attract a diversity of Members in the future
·
to include the independent chairman and members of the
Standards Committee and co-opted members of the Scrutiny Committee and one of
the Policy Commissions within the scheme.
This
evidence-based investigation has lead the Panel to conclude that a
modernisation of the expenses paid to Members is a key to providing greater
efficiency within the Council, benefit to Members and allowing a more rational
and simplified system of allowances and expenses to be paid to Members.
The
rationale for this is that the current system of “claim as you go” for expenses
is expensive and inefficient to the Council.
This is due to the bureaucratic activity required in making, authorising
and paying monthly claims.
Given
the current political and financial contexts of the Council, any new system of
allowances and expenses should in the Panel’s view satisfy four criteria:
·
be simple to understand, so that there will be clarity
at the beginning of the term of office what is to be paid to Members and what
it is to cover
·
be justifiable, so that it will meet standards of
equity and fairness
·
be transparent, so that it will be open and everyone
will know what is being paid to Members
·
be affordable, so that it will be efficient and
cost-effective to the Council
THAT
the Council takes a radical step away from the “claim as you go” basis for
“on-Island” expenses and moves the money used to an annual lump sum for
expenses to be paid to all Members.
This will increase the amount of total allowances paid to Members but
reduce the overall cost to the authority.
This incentivises a reduction in the environmental impact of Member
activity by discouraging unnecessary car use for Council business.
THAT
there is no longer provision for the payment of mileage or subsistence for any
Member conducting on-Island Council business.
The removal of administering this task is estimated to save 588 “Member
hours” a year and 96 “officer hours” a year.
Using the “nominal” hourly rate for Members of £15.61 per hour. This is based on the assumption that of the
two days work generally required one is provided as part of the public service
element. Therefore the hourly rate is
£6,090 divided by 52 divided by 7.5 hours and the true officer charge-out
rate. This gives an ongoing opportunity
of efficiency savings of £11,962 pa, enabling this sum to be used for other
purposes by Members and officers. As
this is an efficiency saving, we further recommend that the amount realised is
used in meeting the Panel’s overall target cost reductions for the 2009/10
financial year.
THAT
all off-Island Expenses for Members on Council business are paid in line with
existing arrangements, with the proviso that all such claims are supported by
written evidence of the expenditure incurred.
THAT
the “lump sum” expenses, which Members may choose to receive, is calculated as
follows:
Factor A – distance from Members home to County Hall –
3 bands: Band 1 – less than 3 miles; Band 2 – between 3 and 8 miles and Band 3
– more than 8 miles.
Factor B – type of office held – 4 bands: Band 1 –
frontline member (without an SRA); Band 2 – Leader of group with 4 or more
members, Vice Chairman of the Council; Band 3 – Chairman of Council, Regulatory
Committee Chair and Vice Chairs, Chair of Audit and Performance Committee; Band
4 – other SRA holders.
The two factors are added together to give a
“Factor” for each member. All the factors are added together and this is then
divided by the money spent on mileage and subsistence (on Island) in 2005/06
(first year of current administration less an amount for the employers NI
contributions) – this gives an “Amount Factor”. The “Factor” and “Amount
Factor” are multiplied together to give the total “Expenses Sum”.
Detailed working and the amount for each member is
at Appendix 10.
Recommendation 2
THAT on the basis of recommendation 1, the benchmarking data, feedback from Members and the public, and the Council’s objective of financial frugality, the basic allowance is increased in line with inflation during the current financial year and backdated to 1 April 2006.
THAT the expenses “lump sum” (as set out in recommendation 1) is added to the Basic Allowance and paid (pro rata) with effect from 1 October 2006, since current expenses claims will have been made for the period April-September 2006.
Recommendation
3
THAT in line with recommendation 2 the following offices are paid Special Responsibility Allowances as set out below, these having been increased in line with inflation with effect from 1 April 2006 (i.e. two per cent as per para 59).
|
Office
Holder |
Special Responsibility
Allowance £ pa |
Factor of Basic |
|
Leader |
18610 |
See below* |
|
Cabinet Member |
9316 |
1.5 |
|
Cabinet Secretary |
6211** |
1 |
|
Chairman of the Council |
6211 |
1 |
|
Vice Chairman of the
Council |
3105 |
0.5 |
|
Commissioner |
6211 |
1 |
|
Scrutiny Committee
Chairman |
6211** |
1.5 |
|
Regulatory Committee
Chairman |
6211 |
1 |
|
Vice Chairman of
Regulatory (Licensing) |
1552 |
0.25 |
|
Vice Chairman of
Regulatory (HR & Miscellaneous) |
1552 |
0.25 |
|
Audit and Performance
Committee Chairman |
1552 |
0.25 |
|
Leaders of Groups with
four or more members |
1552 |
0.25 |
* With the exception of the Leader, all the above
are based on fractions of the Basic Allowance
** Lower than current payments (see para 36)
THAT the following Co-optees be paid the allowances as set out below,
these having been increased in line with inflation with effect from 1 April
2006.
·
Chairman of the Standards Committee £3105 pa, based on
Chairman of the Regulatory Committee with a 50 per cent reduction, as there is
no “democratic” element
·
full-time Co-optees on the Scrutiny Committee £1552
pa, based on a quarter of the Basic Allowance to reflect no constituency
element and Members usually on more than one Committee
·
Education Co-optees £776 pa, based on that for normal
Co-optees of the Scrutiny Committee but further discounted as they only need to
attend for educational matters
·
Independent Members of the Standards Committee £286,
based on a “nominal” hourly rate for members of £15.61 per hour discounted by
50 per cent for no constituency element and six meetings a year of three hours
each
THAT a dependants’ carers allowance is paid, based upon the Council’s
Dependant Carers’ Allowance scheme which has been designed to enable a wider
range of candidates to stand for and remain on the Council. The Local Government Act 2000 explicitly
clarifies the right of local authorities to pay a Dependant Carers’ Allowance
which Members can claim for care of their dependants, whilst on official
Council business.
THAT the scheme applies where:
·
a Member has a dependant child living with them under
the age of 14
·
Member cares for a dependant elderly or disabled
person
The rate that a Member can claim for child care is the actual
expenditure incurred up to a maximum of £4.81 per hour. This is the rate paid
by the Local Government Association (LGA), which reviews its rates annually and
therefore the amount quoted is subject to change.
The rate that a Member can claim for dependents who are elderly or
disabled is £10.00 per hour, which is the rate paid by the Isle of Wight
Council Social Services Department under their Direct Payment Scheme. Social
Services review their rates annually and therefore the amount quoted is subject
to change.
THAT the CPI is used for increasing allowances on 1 April each year
during the lifetime of the scheme (i.e. to 31 March 2010). This is in accord
with the majority view of respondents and is the same inflationary measure
generally used by the Council for budgeting purposes. For April 2006 the figure
was 2.0 per cent.
THAT there is an additional radical element for adjusting the Basic
Allowance of Members that is related to corporate performance of the Council
and that the measure used is the current Comprehensive Performance Assessment
(CPA) awarded to the Council, taking the base line of two stars. Any increased
star rating will increase the Basic Allowance paid to each Member by £500 per
year per additional star awarded. Conversely, any reduction in star rating will
result in a decrease in the Basic Allowance paid to each member by £500 per
year per star reduced. Any additional expenditure is to be funded from
increases in funds available to the Council as a result of an improved star
rating.
THAT it is acknowledged that individual Member performance is best
measured by the ballot box but that a system of individual accountability is
introduced whereby existing “attendance related” reports for each Member is
replaced by the requirement for each Member to produce an annual report (no
more than 300 words) covering what they have achieved, what they hope to
achieve in the following year, and what they have been unable to achieve in the
current year. This annual report is to be prepared for the period to 30
November in each year.
THAT the Independent Remuneration Panel will receive all such reports
as part of its annual review of the Allowances Scheme in December in each year.
This will enable the Panel to make its annual report to the Council for any
adjustments necessary in time for budget deliberations in February.
THAT all Members who are eligible to join the Local Government Pension
Scheme are enabled to do so and that the Pension Scheme applies to both Basic
Allowance and Special Responsibility Allowance.
Recommendation 11
THAT, since all the above changes produce a spend of £580,590 in
2009/10 (ignoring inflation), which is short of the target set by the Council
of £530,759, the following measures are phased in over the next five years to
achieve this target:
·
removal of the Council funding of all mobile
phone costs for Members, who should still receive Council-provided mobile
phones, and hence benefit from the buying power of the Council, but that all
costs (handset, line rental and call charges) are paid for by Members. This brings the use of Council mobile phones
into line with the use of Members own landline phones
·
SRAs are reduced by a total of 31.68 percent
over the five year period, roughly 6.34 percent per annum reduction. It is noted that the Basic Allowance is
increased because of the Expenses sum and that the element of increased
professionalisation applies to all Members.
THAT all the above recommendations are included in the proposed revised
“Members’ Allowances Scheme” as set out in Appendix 11 and that this replaces
the Scheme as currently set out in the Council’s current constitution.