Archived decisions

HAMPSHIRE COUNTY COUNCIL

Decision Report :

EXECUTIVE SUMMARY

1) Summary of Decision Area:

1.1. The need to respond to this report.

2) Issues Covered in Report:

2.1. .This report confines itself to those aspects of the Panel's report which are considered to be outside its statutory remit and terms of reference.

3) Recommendations:

3.1. That the views expressed in the report of the Chief Executive be endorsed, and the Committee consider what action needs to be taken or recommended to the Council.

MAIN REPORT

1) Purpose of the Report:

1.1. To respond to those aspects of the Panel's report which are considered to be outside its statutory remit and terms of reference.

2) Contextual Information:

2.1. The Panel's report is considered to go beyond the remit of the Panel and it is considered necessary, for the purposes of clarification and correction, that the Governance Committee should respond.

2.2. The Panel's recommendations which are considered to fall within its remit are considered in the next agenda item.

3) Key Issues:

.

Background

3.1 Before the County Council can make or amend a scheme of members allowances, it must have regard to recommendations made by an Independent Remuneration Panel. This statutory requirement for the Council to constitute an Independent Remuneration Panel and a framework within which the allowances scheme now operates was first brought about by the Local Authority's (Members Allowances) (England) Regulations 2001 which came into effect from 4 May 2001. Members will note from the Report of the Independent Remuneration Panel that there is reference to an earlier report submitted by Professor now Sir Malcolm Grant, Sir Leonard Peach and Mr Rodney Brook CBE in July 2000. However, it needs to be recognised that this was an informal non-statutory panel which the Council commissioned to give an independent view on proposals for their allowances scheme which was shortly to be introduced under the new Constitutional arrangements.

3.2 Since 2001, the Independent Remuneration Panel has been statutorily constituted with statutory terms of reference. The first Chair of the Independent Remuneration Panel was Professor Sir Malcolm Grant and this continued until he resigned in August 2003. The current Chairman of the Panel is Mr Peter Humphreys. He has been Chairman of the Panel since November 2007.

3.3 Statutory provisions relating to the members allowances scheme and the responsibilities of Independent Remuneration Panels are now governed by the Local Authority's (Members Allowances) (England) Regulations 2003. These came into force on 1 May 2003. Within these Regulations, the statutory terms of reference for Independent Remuneration Panels are given as making recommendations -

a) As to the responsibilities or duties in respect of which the following should be payable -

(i) special responsibility allowances;

(ii) travelling and subsistence allowance; and

(iii) co-optees' allowance;

b) As to the amount of such allowances and as to the amount of basic allowance;

c) As to whether dependents' carers allowance should be payable to Members of an Authority and as to the amount of such an allowance;

d) As to whether in the event that the scheme is amended at any time so as to affect an allowance payable for the year in which the amendment is made, payment of allowances may be backdated in accordance with Regulation 10 (6);

e) As to whether adjustments to the level of allowances may be determined according to an index and if so, which index and how long that index should apply, subject to a maximum of four years, before its application is reviewed;

f) As to which Members of an Authority are to be entitled to pensions in accordance with the scheme made under Section 7 of the Superannuation Act 1972; and

g) As to treating basic allowance or special responsibility allowance, or both, as amounts in respect of which such pensions are payable in accordance with a scheme made under Section 7 of the Superannuation Act 1972.

3.4 There is then a requirement for a copy of the report made by an Independent Remuneration Panel to be sent to the Authority in respect of which recommendations have been made. There are also publicity requirements in respect of recommendations of Independent Remuneration Panels. It should be noted that the terms of reference are specific and exclude many of the issues raised in the current report.

3.5 This requires an Authority which receives a report made to it by an Independent Remuneration Panel as soon as reasonably practicable to ensure that copies of that report are available for inspection by members of the public. There is also a requirement to publish in one or more local newspapers a notice stating that the Council has received recommendations from an Independent Remuneration Panel. The notice must describe the main features of the Panel's recommendations and recommended amounts in respect of each allowance. Copies of the Panel's report must also be supplied to any person who requests a copy and pays an appropriate reasonable fee.

3.6 Appointments to the Independent Remuneration Panel were made after public advert and interview by Members of the County Council. The current membership of the Independent Remuneration Panel is as follows with the expiry date of each appointment given against their respective names:

Mr Peter Humphreys (Chairman) - 21 February 2010

Mr Mitch Quick - 21 February 2010

Mr Bob Humble - 21 February 2010

The Report of the Independent Remuneration Panel

3.7 This report is a substantial document extending to 82 pages and purports to be a thorough and comprehensive review of the Members Allowances Scheme. As indicated above, the terms of reference of the Independent Remuneration Panel is simply to report to the County Council on the responsibilities or duties in respect of which allowances should be made and then as to the amount of such allowances. This includes the basic allowance, special responsibility allowances, travelling and subsistence allowances and co-optees' allowances. However, there are numerous comments and recommendations in the Panel's report which clearly go beyond their remit and terms of reference as an Independent Remuneration Panel. There are other areas where if the County Council adhered to the recommendations of the Independent Remuneration Panel, it would be acting unlawfully. A detailed response to these out of remit recommendations will be made later in the report but, to give a flavour of what is being referred to, it is clear that the IRP is not entitled to comment or make recommendations upon which Cabinet positions should be filled (this is a Leader function), the allowances paid to County Councillors also involved with other Public Authorities and that no allowances should be paid to Councillors living out of County.

3.8 Whilst this report will look at the specific recommendations and give a response to those which are out of remit, it is worth commenting on several issues which are raised and highlighted in the summary to the IRP's report. These are as follows:

3.9 At paragraph 7, there is a comment that there has been a major breach of public trust by Councillors. The justification for this is apparently that the non-statutory informal report referred to above in 2000 recommended that an Annual Report should be published giving the contribution of Councillors to the effective operation of the Council. However, what the IRP seem not to recognise is that these were only recommendations from the 2000 Panel chaired by Professor Sir Malcolm Grant to assist the Council with the new allowances Regulations. This informal group had no authority to set down "conditions" as seems to be suggested by the Independent Remuneration Panel. The recommendations of the 2000 report were taken to the Council's Procedures Sub-Committee in July and October 2000. All of the recommendations of the 2000 report were taken into account. As with the statutory IRP, they were not obliged to adhere to every recommendation. However, the October meeting of the Procedures Sub-Committee did agree to record members attendance and this has been done. There was though, no recommendation on the publication point described in the report of 2000. However, it is very significant that Professor Sir Malcolm Grant retained his role as Chairman of the Independent Remuneration Panel for a further two meetings in 2002 and 2003 only resigning in August 2003 to take up a new full-time appointment at London University. The County Council is not aware that Professor Sir Malcolm Grant ever once made the criticism that this Independent Remuneration Panel is making about a breach of trust/faith. If that had been the case, Professor Sir Malcolm Grant would have had every opportunity to make those comments and have been in a far better position to have done so. It must be assumed that Professor Sir Malcolm Grant was therefore content with what the Council had put in place in the context of the overall report and recommendations from 2000. Furthermore, it is also relevant that Mitch Quick, the current member of the IRP, has been a member of it since February 2002 and again, the County Council is not aware that he has ever made this criticism previously. There is no evidence therefore of any breach of trust which in any event has no place in such a report.

3.10 The Panel also say that no measures have been taken to enhance accountability and transparency as to the roles and responsibilities of Members. However, the Panel itself at paragraph 110 of their report, makes the following comments:

"We were fortunate in that the HCC website carries a large amount of data about the roles Councillors are asked to do and the terms of reference and other information about the Committees and other bodies they sit on. The HCC Constitution includes a job description of the Back Benchers Councillors role (see Appendix 4) plus descriptions of many other roles including those for the Cabinet. There are also the minutes, agendas and other papers of every Council Committee, the full Council and the Cabinet on the web."

3.11 It can hardly be reasonably said, as the Panel seems to do at paragraph 8, that no measures have been taken to introduce enhanced accountability and transparency arrangements in respect of the role of Members.

3.12 The IRP also makes the allegation that the County Council has operated in breach of the Statutory Regulations on one occasion since presumably 2001. The County Council would strongly refute this allegation. The IRP seems not to fully recognise that, whereas they make recommendations as to allowances, it is ultimately up to the County Council to determine whether or not they accept or reject them or vary them in any particular way. This, as is referred to in the IRPs report, has happened on several occasions and on some occasions this has resulted in the allowances recommended by the Panel not being increased in the way suggested by them or at all.

3.13 The following paragraphs respond to particular recommendations:

Recommendation 1 - We recommend that HCC adheres to the Statutory Regulations concerning the operation of its Members Allowances Scheme.

Response - This allegation is refuted as indicated above. It appears to arise from a misunderstanding or misinterpretation on the part of the Independent Remuneration Panel of their roles and responsibilities under the 2003 Regulations. Accountability and transparency is afforded because the Regulations themselves provide that both the Independent Remuneration Panels recommendations and suggested allowances are made available to the public and the public are notified about this through a statutory notice and also the requirement on the part of the County Council to similarly publicise the decisions that they have actually made regarding their Members Allowances Scheme. This allows the public to draw a very clear and direct comparison between what the Panel recommends and the decisions that are actually made by the County Council.

Recommendation 2 - We recommend in the interests of Council tax payers that with immediate effect, Hampshire County Council and Hampshire Fire and Rescue Authority share an Independent Remuneration Panel and invite all 11 other District/Borough Local Authorities within HCC's boundaries to join it in sharing the same IRP.

Response - This is clearly a recommendation which goes beyond the terms of reference for the Panel contained within the 2003 Regulations. Furthermore, Hampshire Fire and Rescue Authority is one which is not required to have an Independent Remuneration Panel in order to set its Members Allowances. Notwithstanding this, the Hampshire Fire and Rescue Authority does operate an informal non-statutory Panel in order to advise them on their allowances scheme. It appears that the justification for this suggestion arises from a confusion about the separate and distinct roles of the County Council, District and Borough Councils and also the Hampshire Fire and Rescue Authority. It also appears to fundamentally confuse the role of the Panel which, as referred to above, is to specify allowances that merit being paid in respect of the Authority to which the Panel is appointed. The Panel seem to give this duty very little credence in their report and prefer to comment upon the expenditure of Council taxpayers' money per se and not just to the Authority to which they are appointed but presumably also to those other Authorities for which they have not been appointed and have no mandate whatsoever.

Even if there was a joint Panel covering the County Council, the Fire Authority and all District and Borough Councils, recommendations of the Panel would have to be discrete and applicable only to the Authority to which they were reporting taking into account the work and responsibilities undertaken by those Members for those Councils only and not the overall amounts that an individual Member may receive from serving more than one council.

Recommendation 18 - We recommend that the allowances of both the Chairman and Vice Chairman of the Governance Committee be discontinued as soon as possible and not later than the end of April 2009 with the election of a new council. We further recommend that, in the unavoidable absence of the Leader of the Council, this committee be chaired by the Deputy Leader of the Council

Response - The first part of this recommendation is responded to in the next item. The second part of the recommendation of the Panel is that, in the unavoidable absence of the Leader of the Council from chairing the Governance Committee, it be chaired by the Deputy Leader of the County Council. This part of the recommendation is wholly outside the remit of the Panel. It is not for the Panel to recommend who should chair or be the Vice-Chairman of Committees. Chairmanship of the Governance Committee by the Leader of the Council is not a pre-requisite. This is an operational matter for the County Council.

Recommendation 22 - We recommend Special Responsibility Allowances for the Chairman of the Council of £11,165 and for the Vice-Chairman of the Council of £2,233 and that these are implemented with effect from the Annual Meeting of the County Council in May 2009

and

Recommendation 23 - We further recommend that the posts of Chairman and Vice-Chairman of the County Council are included in the application of the County Council's own rule that not more than one special responsibility allowance be paid to an individual Councillor.

Response - it needs to be noted here that allowances paid to the Chairman and Vice-Chairman of the County Council are not contained within the Members Allowances Scheme but are subject to other arrangements. Their entitlement to an allowance is contained in Sections 3 and 5 of the Local Government Act 1972 which authorise the County Council to pay the its Chairman and Vice Chairman such allowance as the Council thinks reasonable to meet the expenses of the respective offices. As agreed by the Procedures Sub-Committee in 1998, these are increased year on year in line with the staff pay award. Not being part of the Members Allowances Scheme which is made under the provisions in the Local Government Act 2000, the Panel is not entitled to make recommendations regarding the offices of Chairman and Vice Chairman of the County Council.

Recommendation 26 - We also recommend that the cost of the HCC Pension Contributions in respect of elected Councillors in total should be published each year and that the contributions made by Councillors to the scheme in total are published annually at the same time.

Response - These requirements are beyond the terms of reference of the Panel.

Recommendation 35 - We recommend that a comprehensive spreadsheet is maintained by HCC of all HCC Councillors' Income from public sources. This should be on Hants web made available to other public bodies of whom HCC Councillors are also members to have on their own websites.

Response - Again this goes beyond the remit of the Panel. It is not the role of the County Council to co-ordinate income from all public sources obtained by County Councillors and neither is it appropriate. Again, fundamentally, this recommendation seems to confuse the role of the Panel itself. Its terms of reference are limited to recommending allowances in respect of various roles and duties performed by Members and their value to that particular organisation, not some arbitrary assessment of total allowances paid to members serving on various bodies and the impact that that has on the public purse. If the electorate does not consider that a member is performing his or her duty for that particular Council, then the remedy is very clearly through the ballot box.

Recommendation 37 - "We recommend that if a Councillor other than through illness fails to attend a minimum of 70% of meetings they are scheduled to attend, then any HCC allowances they are entitled to receive should be reduced by 50%.

Response - This recommendation appears to go against the reasons for the statutory abolition of attendance allowances. Government policy for doing this was to move away from a Member attendance culture which was seen as the main raison d'etre of Members' role and existence. This proposal is also potentially unlawful as the Regulations provide that a basic allowance should be paid to each Member of the Authority and that the amount of the allowance should be the same for each Member. The recommendation also overlooks the reality that occasions do arise where a member of the County Council cannot attend a meeting because they are otherwise committed on County Council business elsewhere, for example a meeting of the Hampshire Police Authority or working with a voluntary organisation on which they are the County Council's representative. In the interests of openness and transparency it is the County Council's policy to have the reason for such absences formally recorded in the minutes of the meeting when they arise.

Recommendation 38 - If a HCC Councillor does not live in the County, their allowances should be suspended completely.

Response - It would be unlawful for the County Council to implement this recommendation. There is no prohibition on a County Councillor living outside either their division or the County that they represent. Doing so does not necessarily inhibit or restrict the ability of the Member to perform all the roles of a Councillor including their constituency role.

Recommendation 39 - "We recommend that the vacant cabinet post remains unfilled, saving £16,747 in 2009/10.

Response - It is clearly outside the remit of the Panel to suggest which Cabinet posts, if any, should be filled or otherwise. This is the constitutional responsibility of the Leader of the Council alone.

Recommendation 42 - We recommend, if it has the opportunity, that HCC considers not taking the increase for 2008/09 already agreed but not implemented. This would save an additional £32,000.

Response - Last year the Independent Remuneration Panel recommended that allowances for 2008/09 should be increased in line with the Local Government Pay Award so it is difficult to comprehend why the Panel has reversed its position on this.

4) Outline of Options:

4.1 Option 1:

a) Not to respond to the Panel's actions

4.2 Option 2:

b) To respond to these proposals so as to make the position clear and avoid any misunderstanding.

4 Option Analysis / Comparison:

4.1 A response is considered to be essential.

5 Conclusions:

6.1 The Panel was advised by the Chief Executive of the process which should be followed in relation to the report's publication. While this may have been at odds with earlier discussion it was given in good time to avoid the document being in the public domain prior to the Governance Committee meeting.

It is also regrettable that the Panel chose to comment on matters beyond their remit and on issues on which they were not competent to advise.

The Council has since attempted to explain its position and that of the Panel to the public. Once the report had been received a letter was dispatched by return to alert the Chairman of the Panel to the issues in the report which would have avoided the embarrassment of having a misleading and ill-judged Panel report in the public domain that was incorrect in matters of fact and interpretation, but more worryingly, seems to be raising issues on which the Panel is neither competent or knowledgeable to act.

6 Recommendations:

Please see Executive Summary for recommendations

CORPORATE OR LEGAL INFORMATION: