REVIEW OF MEMBERS’
ALLOWANCES IN
GATESHEAD COUNCIL
REPORT OF THE
INDEPENDENT
REMUNERATION PANEL
April 2014
CONTENTS
Paragraph
Foreword
Introduction
Page
3
1
4
The Panel
2–4
4
Background
5–7
4
8 – 17
4-5
Basic Allowance and
Special Responsibility Allowances
18 - 24
5-6
Dependent Carers Allowance
25 - 32
6-7
Travel and Subsistence Allowance
33 - 38
7
Index Increase
39 - 44
7-8
Review of Decision Making Structures
45 - 48
8
Other Issues
49 - 58
8-9
59
10
Scope of the Review
Summary of Recommendations
Appendices
Membership of the Panel
11
Representations
12
2
FOREWORD BY MALCOLM SCOTT, CHAIR OF THE PANEL
This is the seventh review of members’ allowances undertaken by the Independent
Remuneration Panel.
We have looked at the allowances scheme in its entirety. We have interviewed a variety of
councillors and considered all comments put forward by them. We are most grateful for
the councillors’ co-operation and input which is invaluable in forming our
recommendations.
In addition, we have considered appropriate allowances to be applied to the proposed
changes to the Council’s decision making structures, following a review by the Chief
Executive.
We have also had regard to the allowances paid in the other Tyne and Wear authorities.
The panel would also like to record thanks to the Council’s officers - Martin Harrison, Keith
Purvis and Emma Armstrong. They have been most helpful in the production of this report
and made our task much easier to undertake.
I would further thank Panel colleagues for their considerable contribution to what I trust will
be an acceptable set of recommendations for Gateshead Council.
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INTRODUCTION
1.
This report presents the findings from our review of Gateshead Council’s current
members’ allowances scheme.
THE PANEL
2.
The Independent Remuneration Panel (‘the Panel’) was first established in
September 2001 and has conducted reviews in 2003, 2005, 2006, 2007 and 2011.
3.
Details of the Panel members are attached at Appendix 1.
4.
We, as a Panel, are required to review the operation of the allowances scheme in
general and to make any recommendations we feel are appropriate.
BACKGROUND
5.
The relevant legislation is still The Local Authorities (Members’ Allowances)
(England) Regulations 2003. The regulations provide that an authority must make a
members’ allowances scheme which must include a basic allowance payable to all
members and may provide for the following:
 Special responsibility allowances;
 Childcare and Dependant Carers’ allowances;
 Travelling and subsistence allowances; and
 Co-optees’ allowances.
6.
The Panel last undertook a full review of the members’ allowances scheme in the
period November 2010 – January 2011 and the revised scheme came into effect on
1 April 2011.
7.
The scheme provided for members’ allowances to be increased annually in
accordance with the Retail Price Index (RPI).
SCOPE OF THE REVIEW
8.
The current members’ allowances scheme is based on the recommendations we
originally made in January 2002 and new elements which became part of the
scheme in subsequent reviews.
9.
As part of the review, the Panel took into account changes to the Council’s structure
since the last review. The main change has been the introduction of a Health and
Wellbeing Board, which arose from public health reforms set out in the Health and
Social Care Act 2012 (‘the Act’).
10.
We noted that the Act confirmed new duties for local authorities to:




Promote the health of their population;
Ensure robust plans are in place to protect the local population;
Provide public health advice to NHS commissioners; and
Lead the development of Joint Strategic Needs Assessments and joint
Health and Wellbeing strategies through a Health and Wellbeing Board.
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11.
The Panel also took into account that Gateshead’s Health and Wellbeing Board has
existed in ‘shadow’ form since October 2011 as it was an ‘early implementer
authority’, and that the Board became a committee of the Council on 1 April 2013.
We noted that the Leader of the Council is the current Chair of the Board.
12.
Other factors to be taken into account were:



The creation, by Statutory Instrument, of a Combined Authority covering the
administrative areas of the Tyne and Wear Councils along with Northumberland
and Durham County Councils;
The commencement of the Police and Crime Commissioner regime and, in
particular the Police and Crime Panel, and
The new legislation regarding councillor access to the Local Government
Pension scheme.
We have dealt with these issues later in the report.
13.
As part of the review, we were also asked to consider whether we felt it appropriate
to recommend any changes to the current Special Responsibility Allowances
(SRAs), travel and subsistence allowances and dependants carers’ allowances,
following the outcome of the Council’s recent review of decision making structures.
14.
As part of our evidence gathering process, we invited all councillors to make written
or oral representations to the Panel. As a result of this request, five councillors
asked to speak to the Panel and two written representations were made. A list of
the councillors who made representations is attached at Appendix 2.
15.
We asked councillors how they felt about the level of basic allowance, and where
appropriate, the level of SRA; whether councillors felt the scheme was fair
compared with other local authorities; whether they felt it was appropriate to have
the allowance increased and for their views on the scheme being index linked. We
also asked for their views on travel, subsistence and dependent carers’ allowances.
16.
We also made a comparison of the current members’ allowances schemes across
the Tyne and Wear local authorities.
17.
At the outset, the Panel recognised the extremely difficult financial context in which
the review was being undertaken. All those who made representations were aware
that many citizens of the Borough had suffered greatly because of the economic
climate and this should be reflected in the Panel’s considerations. The Panel were
also mindful that Council employees had been subject to a pay freeze for three
years, although there had been a 1% pay increase in 2013.
BASIC ALLOWANCE AND SPECIAL RESPONSIBILITY ALLOWANCES
18.
The current basic allowance for all members of the Council is £10,120 per annum.
The majority of councillors we spoke to felt that that the basic allowance as it stands
is fair.
19.
Generally, it was felt that the allowance neither attracted nor deterred anyone from
standing as a councillor with the general opinion being that no-one stands for
election because of the allowance they will be paid.
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20.
We recommend that the basic allowance remains the same.
21.
The current members’ allowances scheme in Gateshead includes 35 special
responsibility allowances (SRAs). The posts which attract SRAs are the Leader,
Deputy Leader, Cabinet members, Leader and Deputy Leader of the Main
Opposition Group and Chairs and Vice-Chairs of Overview and Scrutiny, Planning
and Development, Regulatory, Licensing and Appeals Committees. The scheme
also provides that no councillor should receive more than one SRA which means
that the total number of councillors actually receiving SRAs is 32.
22.
We asked the councillors we interviewed about their views on the level of SRAs.
There were some minor discrepancies on the detail but generally all felt that the
levels of SRAs were fair and properly reflected the responsibility which each
position involved.
23.
The Panel did consider the relative level of responsibilities between positions,
particularly as between OSC Chairs and Vice-Chairs and Cabinet members. We
concluded that, on balance and at this stage, the rationale for the relative level of
allowances still stood but that these could be further reviewed in the future.
24.
We recommend that the levels of Special Responsibility Allowances available
within the current scheme remain the same.
CHILDCARE AND DEPENDENT CARERS’ ALLOWANCES
25.
As part of the general discussion in our interviews with councillors, we asked
whether they were aware of any reasons why there is very little take up for the
childcare and dependent carers’ allowance.
26.
The general view from the councillors we spoke to was that the majority of
councillors are unaware of this allowance and it was suggested that councillors
should be reminded of it.
27.
In addition, one of the councillors we spoke to who was aware of the allowance, felt
that currently the rate of allowance was too low in comparison with the fees charged
by registered agencies, and that that the system for claiming the allowance was too
complicated.
28.
We were provided with information from officers which showed that the initial level
of the allowance was set in 2002 at a rate of £5.50, which equated to the national
minimum wage at the time. At that time it was felt prudent to only pay the allowance
for support undertaken by a ‘registered person’.
29.
The Council’s general approach to care and support has moved on. The current
Home Care rate is £11.91 per hour. In addition, a personal budget rate of £7.50 is
in place, which can be used by the recipient to buy personal care. We think that it is
appropriate that these rates are applied to childcare and dependent carers
allowances so that the higher level is paid when qualified registered carers are
employed, and the lower rate where care is provided by a non-registered person.
6
30.
We are assured that the claim form can be updated to make claiming the allowance
easier. Claims for the higher allowance would need to be supported by an invoice
either from an agency or registered carer. Claims could not be made where care
was provided by an immediate family member (ie parents, children or siblings),
unless the individual was a registered carer, who would then be paid at the higher
rate.
31.
Officers will ensure that councillors are informed of the changes by a briefing and
information will be circulated in the induction programme for new councillors. The
Panel endorsed the proposals set out above.
32.
We recommend that Childcare and Dependent Carers Allowances are set at
£11.91 per hour for qualified carers and £7.50 per hour for non-registered
persons and that the rates be increased in line with any increase in the
Council’s Home Care and Personal Budget rates.
TRAVEL AND SUBSISTENCE ALLOWANCES
33.
During the interview, the Panel asked councillors for their views on the current
travel and subsistence allowances scheme.
34.
The majority of councillors who were interviewed told the Panel that they did not
claim travel and subsistence allowances for a variety of reasons. However, the
councillors interviewed did think that the scheme was generally fair.
35.
The issue of claiming travel and subsistence as a separate allowance was raised
with us again during the interviews, with a suggestion that consideration could be
given to combining it with the basic allowance.
36.
This suggestion had been made during the last review carried out by the Panel and
it was agreed that the matter should be investigated further.
37.
While the Panel understood aspirations to have these allowances consolidated into
one payment, we did not feel able to recommend such a course of action. The
Panel were advised that should the travel and subsistence allowance be included
within the basic allowance payment, this would change the nature of the allowance
from a reimbursement of expenditure to a taxable benefit. Transparency would also
be lost which was achieved with the current approach where there was a direct link
to defrayed expenditure.
38.
We recommend that the current travel and subsistence framework should
remain in place and at the current HMRC approved rates.
INDEX INCREASE
39.
The Panel considered whether it was appropriate to continue to have an annual
index linked increase included within the scheme.
40.
The majority of councillors we interviewed felt that it was appropriate to have an
indexed increase included within the scheme but that the scheme had been frozen
for the last three financial years, due to the economic climate. The Panel noted that
this had delivered a substantial saving to the Council.
7
41.
The Panel also noted that employees pay had been frozen for three years, but that
they had received a 1% increase in 2013/14.
42.
After noting the comments made by councillors, the Panel agreed it was appropriate
to have an index linked increase available within the scheme, but felt it was worth
exploring an index more clearly linked to staff pay.
43.
The Panel is of the view that an appropriate index to link allowances to would be the
National Joint Council (NJC) pay scales. We felt that the NJC rate is much more
reflective of public finances and had little fluctuation unlike RPI, which could vary
markedly from any public sector wage increases.
44.
We recommend that the NJC pay award should be the appropriate index and
that the award should apply in the current financial year (2014/15) when
negotiations are concluded.
REVIEW OF DECISION MAKING STRUCTURES
45.
The Panel considered the Chief Executive’s report on proposed changes to the
Council’s decision making structures. We noted that formal consultation has been
taking place with councillors and that a final report is due to be taken to Council on
15 May.
46.
The Panel received detailed information on the functions of and responsibilities
attached to the re-shaped council committees.
47.
During the interviews, the Panel asked councillors for their views on the proposals
within the report, and whether they felt the allocation of SRAs would be appropriate.
We also noted the comments made in the written representations. All of the
councillors were supportive of the proposals.
48.
We recommend that should the proposals be agreed by the Council, that
Special Responsibility Allowances at the same level as that of Planning and
Development Committee should be allocated to the following roles:



Chair and Vice-Chair of the Health and Wellbeing Board
Chair and Vice-Chair of Regulatory and Licensing Committee
Chair and Vice Chair of Audit and Standards Committee
We also recommend that these allowances should be reviewed in two years.
OTHER ISSUES
Combined Authority
49.
The Panel received a full briefing on the creation of the new Combined Authority
which has been created by Statute involving the five Tyne and Wear authorities,
along with Durham and Northumberland County Councils, with the aim of better coordinating transport and encouraging regeneration and economic development
across the region.
8
50.
The Panel noted that the Combined Authority would require representation at a
number of levels by councillors from Gateshead Council. This would include the
Leader, who sits on the main Board, along with a number of councillors who will sit
on the Combined Authorities’ committees and sub-committees. We also noted that
there is no provision being made for payment of allowances to councillors directly
by the Combined Authority, but that councils could make their own provision in this
regard.
51.
The Panel have no doubt that the Combined Authority will undertake important work
for the benefit of the whole region but, since the Authority has just come into
existence, we do not feel able to properly assess councillor responsibilities and do
not, therefore feel that it is appropriate to allocate any SRAs in this regard. We do
feel that this would warrant a review after an appropriate time.
52.
We recommend that no Special Responsibility Allowance is allocated to any
members of the Combined Authority or its committees. This should be
reviewed in 12 months.
Police and Crime Panel
53.
The Panel received some information regarding membership of the Police and
Crime Panel. We noted that this is a statutory joint committee which has been set
up to scrutinise the work of the Police and Crime Commissioner. Each local
authority in the Northumbria area is allocated places on the Committee, which is
administered by Gateshead.
54.
The Panel noted that there is no provision for members to be paid centrally, and
that it is the decision of each authority to decide on the appropriateness of provision
to be made within its own remuneration scheme.
55.
We also noted that there are other outside bodies where Gateshead is represented
which do not hold an SRA.
56.
We recommend that no Special Responsibility Allowance is allocated to
members of the Police and Crime Panel at the current time. This should be
reviewed in two years.
Councillor access to the Local Government Pension Scheme
57.
The Government has recently introduced legislation that will terminate councillor
access to the Local Government Pension Scheme. The Panel thinks this is highly
regrettable and a retrograde step but is obviously bound by the legislative
requirements.
58.
We recommend that the scheme of allowances be amended to reflect the new
requirements regarding councillor pensions.
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59.
SUMMARY OF RECOMMENDATIONS
We recommend the following members allowances scheme:
£ per annum
Basic Allowance
10,120
Special Responsibility Allowance
Leader
Deputy Leader
Cabinet Members (8)
30,369
20,242
15,185
Chairs – Overview and Scrutiny Committees
Chair – Audit and Standards Committee
Chair – Health and Wellbeing Board
Chair – Planning and Development Committee
Chair – Regulatory and Licensing Committee
Chair – Appeals Committee
15,185
12,649
12,649
12,649
12,649
10,120
Vice-Chairs – Overview and Scrutiny Committees
Vice-Chair – Audit and Standards Committee
Vice-Chair – Health and Wellbeing Board
Vice-Chair – Planning and Development Committee
Vice-Chair – Regulatory and Licensing Committee
Vice-Chair – Appeals Committee
Leader of the Main Opposition Group
Deputy Leader of the Main Opposition Group
5,057
6,328
6,328
6,328
6,328
5,057
15,185
6,251
Co-opted Members of Council Committees
335

No member should be eligible for more than one SRA;

The current travel and subsistence framework should remain in place and be
adjusted in line with current HMRC approved rates

Childcare and Dependent Carers Allowances are set at £11.91 per hour for
qualified carers and £7.50 per hour for non-registered persons and that the
rates be increased in line with any increase in the Council’s Home Care and
Personal Budget rates

The NJC pay award should be the appropriate index and that the award
should apply to basic, special responsibility and co-optees allowances in the
current financial year (2014/15) when negotiations are concluded;

There is no new access to the Local Government Pension Scheme for
councillors after 1 April 2014. Councillors currently in the scheme will remain
so until the expiration of their current term of office.
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APPENDIX 1
Membership of the Panel
Malcolm Scott (Chair) is a Deputy Lieutenant of Tyne and Wear.
Alan Baty CPFA IRRV is formerly Chief Executive, Tynedale District Council and formerly
Chair of Gateshead PCT and a resident of Gateshead.
Pauline Dodgson OBE is formerly Chief Executive, Gateshead Voluntary Organisations
Council.
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APPENDIX 2
Representations from councillors
Interviews were held with the following:

Councillor Mick Henry, Leader of the Council

Councillor Frank Hindle, Leader of the Opposition

Councillor Catherine Donovan, Cabinet Member

Councillor Ron Beadle, Ward Councillor, Low Fell

Councillor Allison Chatto, Ward Councillor, Dunston Hill and Whickham East
Written representations were received from:

Councillor Lynne Caffrey, Ward Councillor, Chopwell and Rowlands Gill

Councillor Steve Ronchetti, Ward Councillor, Blaydon
12