PURPOSE

1. To propose a revised scheme of members’ allowances.

BACKGROUND

2. The Council is required under the Local Authorities (Members’ Allowances) (England) Regulations 2003, as amended, to adopt a scheme of Members’ Allowances each year, and when adopting a new scheme or making amendments, to have regard to the recommendations of an Independent Remuneration Panel.

3. The Council is obliged to convene an Independent Remuneration Panel at least once every four years.

4. The Council has received reports from an Independent Remuneration Panel in 2000, 2002, 2003 and 2004. A fifth report has recently been received. The reports received since 2002 can be accessed at 17 April 2002, 26 November 2003, 24 November 2004 and August 2006 since the adoption of the current scheme. The executive summary and recommendations from the 5 August report are attached as Appendix 1.

5. The report received in November 2004 concerned only Members’ expenses and not the level of basic and special responsibility allowances and is not reproduced as part of this report.

6. There have been periodic amendments to the scheme to reflect changes in the Council’s Constitution but there has been no comprehensive renewal of the scheme to reflect the significant changes in the roles and responsibilities of Members of the Isle of Wight Council.

FINANCIAL/BUDGET IMPLICATIONS

7. The budget for Members’ allowances in 2005/2006 was £718,342. The projected costs of the scheme proposed at Appendix 2 of this report is £700,044.

This can be broken down as follows:

	Budget (£)	Projected (£)
Members Basic Allowances (incl.SRA)	556,372	584,038
Island Travel & Subsistence	45,964	(incl. above)
Other Members Expenses	116,006	116,006
	718,342	700,044

LEGAL IMPLICATIONS

8. There is a general dispensation allowing all Members to speak and vote on the issue of Members’ allowances, even though Members have a direct personal interest in the issue.

9. Full Council can determine to accept or reject any or all of the recommendations it has received from the Independent Remuneration Panel over a period of time, but must have regard to those recommendations in making changes to the, or adopting a new, scheme of allowances.

OPTIONS

10. The Council can:

(i) Maintain the current scheme

(ii) Amend the current scheme

(iii) Revoke the current scheme and adopt a new scheme

11. In the event that the scheme is revoked it must be done with backdated effect to the beginning of the financial year. Amendments may take effect either immediately or be backdated no further and start under the financial year.

12. In determining to change the scheme of allowances Members of the Council will wish to give effect to two important principles reflected in the terms of reference of the successive Independent Remuneration Panel:

· To ensure the retention of existing members in their elected role and to attract a diversity of Members of the future.

· To ensure that the cost of democracy, like all other functions of the Council, becomes continually more cost effective.

13. The draft scheme proposed as Appendix 2 to this report gives regard to the recommendations of the fifth report of the Independent Remuneration Panel (as set out at Appendix 1), and recommendations made by the Panel in its previous report (set out as Appendix 1) and proposes a small number of additional changes not recommended by the Panel, in order to best deliver the two objectives set out in paragraph 12 above. In particular;

(i) For the first time on the Island, and possibly in the country, the remuneration of Members is linked to external assessment of the Council’s performance.

(ii) The scheme proposed anticipates that the outcome of the imminent review of Electoral divisions by the Boundary Committee of the Electoral Commission will lead to a significant reduction in the number of Council seats.

This will improve the cost effectiveness of democratic representation as decision making about local service delivery is increasingly devolved to towns and parishes.

(iii) Cuts the cost of administering allowances by £12,000 by moving to an allowance based approach to expenses and thereby incentivise Members to minimise the amount of travel on the Island in the course of their public business and to increase the amount of time they spend in the communities they represent.

(iv) Uplifts the basic and special responsibility allowances to be paid to Members. Only by occasional increases in Members’ allowances can the objective of attracting a diversity of Members in the future be achieved. The allowances proposed are calculated as a multiple of the basic allowance. Members will wish to note that the allowances proposed in Appendix 2 differ from those proposed by the Panel in Recommendation 3 of their report.

(v) Introduces a dependent’s carers allowance in order to enable those members who have care and responsibilities to participate in public life.

(vi) Index links allowances so that the Independent Remuneration Panel is not required to convene again until 2009 at which time the anticipated reduction in the number of Elected Members will have taken place.

(vii) Simplifies the public accountability of Members into a meaningful annual report, replacing the existing report on attendance at meetings on a 6 monthly basis. Members will wish to note that the simplified scheme proposed differs from the recommendation made by the fifth report of the Independent Remuneration Panel which proposes an annual review, by the Panel, of the reports by members.

14. An additional element of the draft scheme at Appendix 2 not made as a result of a recommendation from the Independent Remuneration Panel is to add allowances for Member Champions. This is a new role within this Council, although with national precedent. The role has the potential to be time consuming and is a potentially very valuable one, dedicated to ensuring that the needs of service users are properly reflected in Council decision making.

15. This review of members’ allowances has taken longer than anticipated. Members took on roles attracting special responsibility allowances in anticipation that their remuneration would be reviewed soon after the Annual Council in May 2006. Full Council may determine to backdate the changes in basic and special responsibility allowance to the date of the Annual Council.

EVALUATION/RISK MANAGEMENT

16. Member Champions were appointed at Annual Council on 24 May, but have not been in receipt of allowances. In order to effect the 24 May decision the allowances to Member Champions should be backdated.

17. The proposed scheme adopts elements of each of the last two Independent Remuneration Panel reports and, substitutes a small number of additional elements into the draft scheme. The major risk associated with the adoption of a scheme of allowances as follows:

· That the scheme fails to provide sufficient compensation for a diverse range of Members to enable them to take on public service through standing for election.

· That the scheme of allowances is seen by members of the public and other Stakeholders to be unjustifiably generous.

18. The role of the Independent Remuneration Panel is to take evidence from around the Country, in the form of benchmarking from other authorities, from Elected Members of other Stakeholders to ensure that the scheme of allowances is the best possible in all circumstances.

RECOMMENDATIONS

19. It is recommended that:

(i) The existing scheme of allowances be revoked and a new scheme, as set out in Appendix 2, be adopted with immediate effect.

(ii) That the payment of remuneration to Member Champions be backdated to their appointment at Annual Council.

(iii) That the changes to the basic and special responsibility allowances be backdated to Annual Council.

(iv) Members of each of the Independent Remuneration Panels are thanked for their contribution to developing local democracy.

BACKGROUND PAPERS AND APPENDICIES

Appendix 1 – Summary and recommendations of the fifth report of the Independent Remuneration Panel

Appendix 2 – Draft scheme of allowances

Contact Point : John Lawson Director of Policy Performance and Partners and Deputy Chief Executive –( 823203 [email protected]