Remuneration sub-committee Annual report 2008-09

Report: 5
Date: 26 June 2008
By: the Chief Executive

Summary

The Authority has agreed that each committee, sub committee and Oversight Group should produce an annual report on its activities to provide a summary of the key issues that have been discussed and upon which decisions have been made. This report sets out a brief summary of the activities of the Remuneration Sub Committee (Remco) for 2007-08.

A. Recommendations

That

1. The Remuneration Sub Committee agree the annual report; and

2. Agree the equality and diversity objective set out at section C.

B. Supporting information

1. Remco has continued to carry out its responsibilities in accordance with its terms of reference, attached at Appendix 1. The Committee met five times during the year and its work was overseen by the Co-ordination and Policing Committee (CoP). Members are invited to discuss and agree the annual report.

Association of Chief Police Officer (ACPO) rank bonuses

2. A significant amount of the Sub Committee’s time was taken with the principles and application of the bonus scheme. The Members felt that the current bonus scheme was inappropriate for the police service, that it was divisive, did not motivate and did not improve performance. This was a view shared by other police authorities and chief officers across the country.

3. The MPA believed that basic pay should be sufficient to recruit and retain, and that the Authority should be given a degree of pay flexibility. For example, within any new pay arrangements the MPA should be able to use the funds currently allocated over and above basic pay to address operational and organisational needs.

4. As a first step, the MPA proposed to enter into discussions with the MPS Chief Police Officers Staff Association (CPOSA) to explore other forms of reward to be effective from 1 April 2008.

5. In terms of the current scheme, there was some disappointment that the evaluation of the Management Board’s objectives was insufficiently detailed and it was acknowledged that the process could have been better. Nevertheless the Chief Executive confirmed that she was satisfied that a comprehensive assessment of the objectives had been made by the Commissioner as part of the appraisal process. The Chair of the Authority had taken part in the appraisal of Management Board members and was satisfied to accept the assessments this year. A decision relating to the Assistant Commissioner (Specialist Operations) was deferred and the Committee noted that the Commissioner, Deputy Commissioner and Deputy to ACSO had asked not to be considered.

6. It was agreed the MPA should write to all ACPO ranks setting out the bonus or increment decisions for 2006-07 and explain there would be a more rigorous approach in 2007-08 and a major review for 2008-/09.

Senior Police Staff (SPS) pay

7. The Committee was acutely conscious that for this group of staff, individual awards reflected the individual contribution and efforts of jobholders to secure improvements in the MPS’s overall performance. In other words, in the normal course of events the only means of receiving a pay increase was by direct reference to performance, with the intention that the highest levels of increase were given to the highest performers.

8. There were a number of elements that they needed to consider, but the main proposals were as follows:

• Firstly, to increase pay range maxima and minima to broadly keep pace with the relevant benchmarks. This resulted in a 2% increase in pay range maxima in line with the Government’s pay policy and to increase pay range minima by 4% to reduce overlap and shorten pay ranges.
• Secondly, the proposals in respect of percentage increase for Performance Related Pay (PRP). There was 5% for Box 1 performers (significantly above standard), 3.25% for Box 2 performers (above standard) and 1.5% for Box 3 performers (at required standard). The Authority was looking to attach significantly higher rewards to Box 1 performers than to Box 2 performers, and significantly higher rewards to Box 1 and Box 2 performers, than Box three performers. The overall cost increase in the pay bill for this group of staff was 4.5%.
• There was a very small number of SPS who, having received their PRP increase, remained below the new pay range minima. Whilst it would have been possible to provide an additional increase to all these staff in order to bring them within the new pay ranges, Members needed to consider the performance issue. Consequently those in receipt of a Box 3 marking were not brought to the minimum of their new pay range.

8. The Remuneration Sub Committee also determined that the approach to the MPA Senior Management Team (SMT) pay award should be similar to that taken for MPS senior police staff.

Alternatives to the ACPO bonus scheme

9. Remco members considered a report outlining a number of alternative options to the ACPO bonus scheme. These included extending medical insurance to their immediate family, i.e. husband, wife or partner and children until they leave full-time education, offering more annual leave (as part of the PNB negotiations on this issue), provide a ‘performance budget’ up to the value of the potential bonus pool, i.e. £470,000 in 2006-07 or, say, 2% of the pay budget for a Business Group that would only be available if certain performance targets were exceeded or convert the bonus pot into a flat rate extra payment of, for example, between £5-10k, dependent solely on the performance of the MPS overall. (It could have been called something like the Capital City factor.) An alternative option would be a low or flat rate bonus payment, up to 50% of which could be consolidated into basic pay. This would not be possible without Police Negotiating Board (PNB) agreement.

10. Turning to the issue of cars, one possible solution would have been to provide ACPO officers with a standard low emissions car for official duties, and a separate car allowance. If these cars were restricted to use on official business, there would be no taxable benefit implications for officers. In addition to the official car, a flat rate car allowance of £10k per annum for ranks up to and including Assistant Commissioner would enable each officer to purchase his or her own vehicle or spend the money in any way he or she saw fit. The benefit of this to the police authority was that it would only be marginally more expensive than the current scheme car scheme, but – as part of a remuneration package - would replace the current bonus scheme. The arrangements for the Deputy Commissioner and Commissioner would remain unchanged.

11. The final ‘car’ option would be to meet the tax liability for home to office travel for all ACPO rank officers. The Sub Committee agreed to pursue the ‘Capital City’ payment with a letter to PNB which the Director of HR (MPS) would draft for the Chief Executive’s agreement.

Relocation and incidental costs

12. Remco considered a report on relocation and removal expenses for officers from other forces transferring to the MPS (on promotion or level transfer) at ACPO rank. The report noted that current limits had not been increased for some time and made some proposals for change. Members felt that relocation expenses should only be paid if officers moved to an appropriate location near London and agreed to increase the allowance limit to £28,000, with the allowance in respect of claims for ‘second homes’ remaining at 75% of the allowance limit (relocation/removal allowance and incidental removals allowance). It was also agreed the same expenses should be paid to senior police staff.

Public speaking

13. The Human Resourcs (HR) Policy Officer had provided a first draft on making public statements, taking into account the advice received from counsel. It was agreed that officers who made inappropriate or inaccurate statements should always be held to account. Members were reminded that written work, such as memoirs were treated as business interests and permission had to be sought prior to publication. A final version of a public speaking protocol was with the Director of HR (MPS) and was due to be considered by the Committee shortly.

Overseas travel

14. Following concerns about organisational resilience, the Director of HR (MPS) reminded members of Management Board that:

• All Management Board overseas travel must be authorised by The Commissioner and Deputy Commissioner;
• All other overseas travel – including that for other ACPO and Senior Police Staff should be authorised by the appropriate Management Board lead; and.
• It was for Management Board to make the detailed administrative arrangements in their business group to ensure that (b) occurs.

ACPO overseas travel will now be reported to Remco every six months.

Extensions to Fixed Term Appointments (FTAs)

15. The PNB agreement on ACPO pay abolished FTAs for Assistant Chief Constables (ACCs) and Commanders and provided that future FTAs for all other ACPO ranks should be for a maximum of five years. It went on to say that such FTAs can be extended by agreement between the Police Authority and the individual concerned. The first extensions could be up to a maximum of 3 years. Any subsequent extension could not exceed a year, but the consent of the Secretary of State would be required if the first extension exceeded one year or in the event of any second or subsequent extension.

16. It was agreed that at least 12 months before the end of the FTA, the Authority should write to the Commissioner seeking his views on the possibility of offering an extension to the FTA for a period of up to three years and that he is asked to include the following in his response:

• Assessment of skills and performance: - Suitability for further service on the basis of operational effectiveness. Previous performance was a key indicator of suitability for retention but should be considered objectively. The competencies and skills were relevant factors, as was information from Performance Development Reviews (PDRs).
• Discipline and Attendance;
• Viability of retaining the officer: - Taking account of the officer's skills and experience; effectively, how their retention would benefit the MPS as a whole. Was this ‘blocking’ a promotion opportunity for better qualified staff (this may need to take account of any proposals arising from the scrutiny of ‘talent management’ within the police service)?

17. Any views he may have on the length of the extension were also invited, although the final decision would rest with the Authority. The views of the individual would also be sought. During the year, one year extensions were agreed for Assistant Commissioner Tarique Ghaffur and Deputy Assistant Commissioner Steve Roberts. The Home Secretary agreed to extend the FTAs of Assistant Commissioner Tim Godwin and Deputy Assistant Commissioner Richard Bryan in order that they completed 30 years’ service.

Sir Clive Booth’s review of police negotiating machinery – implications for ACPO ranks

18. A report was considered by Remco outlining the MPS and MPA’s joint response to Sir Clive Booth. The response argued that if the idea of a salary review body for ACPO ranks were pursued it would be second best to the current arrangements. However, were this route to be adopted for ACPO pay, the MPA and MPS would expect to be represented, given that we are responsible for 40 Chief Officers. The most comparable pay group in this respect would be the senior judiciary rather than, for example, the senior civil service both of whom are subject to these arrangements.

19. It was also thought helpful to add in respect of ACPO ranks that this is one area where differentiation between different parts of the country has already been recognised with some forces attracting higher salaries by virtue of the size of the command. Here again the London experience is different from other parts of the country, with Commanders generally having a different and more specialist type of portfolio responsibility than the majority of more generic Assistant Chief Constables in other forces. There is a strong argument here for local determination of terms and conditions, including pay.

20. In summary the MPA and the MPS have argued that we would like to see an acknowledgement the policing London is different. The MPA considers that this uniqueness now requires a different approach to police pay or failing that, greater local flexibility in terms of pay, pay related budgets (other than basic pay) and terms and conditions, and a different approach for ACPO rank police officers. The Secretary of State asked PNB to negotiate a move towards a Pay Review Body for police pay, including ACPO ranks.
ACPO cars and drivers

21. Remco reaffirmed its intention to reduce the number of ACPO car drivers but acknowledged that this was difficult given the expectations of post holders. It was further acknowledged that the number of designated drivers was now under closer control. A number of decisions were taken during the year in relation to particular roles following security assessments. The ACPO car policy is currently being reviewed, taking account of environmental impact issues.

C. Race and equality impact

1. There are no equality and diversity implications in this factual report.

2.  It is suggested that the equality objective of the Sub Committee for 2008-09 should be:
‘To monitor the levels reward given by way of bonuses and additional increments (for police officers) and performance pay increases (for police staff) by ethnicity and gender for the reporting period 2007-08'

D. Financial implications

There are no financial Implications at this stage.

E. Background papers

None

F. Contact details

Report author: Alan Johnson, HR Policy Officer, MPA

For more information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

Appendix 1

Association of Chief Officer (ACPO) Ranks

1. To consider and agree the terms, conditions and benefits, including early retirement and redundancy, to be offered to ACPO ranks up to and including Commissioner.

2. To oversee the performance assessment and objective setting regime for these posts.

3. To administer, in conjunction with the Metropolitan Police Service (MPS), the pay progression and bonus scheme arrangements for ACPO officers.

4. To make recommendations to the Home Secretary and Police Negotiating Board (PNB) in relation to the terms and conditions to be offered to ACPO ranks.

Senior MPS police staff

5. To determine recommendations from the Commissioner about the pay and terms and conditions, including early retirement or redundancy, for senior police staff in pay band 4 and above.

6. To review on a regular basis the protocol in relation to Metropolitan Police Authority (MPA) involvement with appointments for staff in pay band 4 and above.

7. To agree the pay arrangements for senior police staff in pay band 4 and above.

Senior MPA staff

8. In consultation with the Chair of the Authority, to agree the terms and conditions, including the performance assessment and objective setting regime, for the Chief Executive and Clerk, Deputy Chief Executive and Deputy Clerk, Treasurer and Director of Internal Audit.

Other

9. To consider any relevant matters in respect of PNB, Police Advisory Board (PAB) and other national bodies.

Equality and diversity

10. The Remuneration Sub Committee will have due regard, in exercising its responsibilities to equal opportunities generally, the general duty of the Race Relations (Amendment) Act 2000 and the requirements of any other equalities legislation.

Delegated authority

Authority is delegated to the Chief Executive, in consultation with the Chair of the Authority and the Chair and Deputy Chair of the Remuneration Sub Committee, to agree, in cases of urgency, any HR issues in respect of individual ACPO officers, senior MPS police staff or senior MPA staff.

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