Review of the MPA Members' allowances scheme

Report: 11
Date: 24 January 2002
By: Clerk

Summary

This report proposes a new scheme for the payment of Members' Allowances for Independent and Magistrate Members of the MPA. It recommends that the Authority agrees a scheme based on the payment of annual basic and special responsibility allowances to replace the current scheme which remunerates members by way of an hourly rate.

A. Recommendations

That

1. The Authority adopts a new Members' Allowances Scheme based on payment of basic and special responsibility allowances
2. The following categories of special responsibility allowances (SRAs) be included in the scheme: (1) Deputy Chairs of the MPA, main committee chairs and members with specific areas of responsibility; and (2) Chair of the MPA (para 9)
3. SRAs be paid under category (1) above to members with the following 'portfolios': estates matters; audit matters; and Best Value (para 10)
4. the Authority determines the level of basic allowances and the two SRA categories (paras 11 and 12)
5. the Authority endorses the principle that the payment of basic and special responsibility allowances should be linked to the expectation that general or specific responsibilities will be discharged by those Members; and that, to this end, the Clerk be asked to develop job profiles for members of the MPA and to consider the possibility of a review process (paras 13 and 14)
6. the scheme should provide the option for members not to claim an allowance or to claim, for instance, only the basic allowance if they feel unable to fulfil the full range of duties expected of that position (para 15)
7. the recommendations contained in para 16 in respect of carers'/dependants' allowances; external Standards Committee members; Selection Panel members; and Police Appeals Tribunal members be approved
8. the allowance levels should be indexed to Police Support Staff Council cost of living increases and automatically uprated each year (para 17)
9. the Authority decides whether to introduce the new scheme with effect from 1 March 2002 or 1 April 2002 and to delegate to the Clerk authority to draw up a new Scheme of Members' Allowances on the basis of decisions taken at this meeting (para 18)

B. Supporting information

Background

1. Up to last December, under the Police Act 1996, the Home Secretary was responsible for deciding the allowances to be paid to police authority members. That scheme provided for police authority members to be paid £17 an hour for police authority business. Unlike other police authorities, the MPA has been allowed to set its own annual ceiling on these payments, currently a maximum of £22,500 for the MPA Chair (if not a GLA member) and a maximum of £15,000 for its independent and magistrate members. GLA members of the MPA are not eligible to receive allowances for police authority work as they are remunerated for their GLA membership.

2. Following pressure from the APA, the Home Office accepted that police authorities should have autonomy to manage their own business and that central prescription of members' remuneration was inappropriate. Legislative provisions amending the Police Act 1996 were included in the Criminal Justice and Police Act 2001 and these provisions came into force on 1 December 2001. In brief, they: 

• provide for each police authority to decide its own allowances scheme
• require each police authority to publish details of its allowances scheme every year 
• require police authorities to publish any revisions to their scheme before the changes can take effect 
• give the Home Secretary power to issue guidance on local allowances schemes and to set ceilings on the level of payments to be made

3. The APA commissioned an independent panel to produce guidance for all police authorities to help them develop their local schemes and to ensure a fair degree of consistency in the approaches adopted. This self-regulation should be acceptable to the Home Office in terms of minimising the need for the Home Secretary to intervene in respect of individual schemes. The panel reported its recommendations to the APA Plenary on 17 October 2001 and these were accepted and commended to all police authorities. These recommendations and the thinking behind them are set out below. All members of the MPA have previously received a copy of the full panel report.

4. Underlying principles

The panel considered that a fair and realistic system of allowances is essential if members are to fulfil their responsibilities professionally and effectively. They felt that allowances should be set at levels which ensure that no-one is prevented from being a member of a police authority simply because they cannot afford to do so. Police authorities can only effectively represent their communities if their membership reflects the people they serve – a proper allowance system should encourage people with the right skills and qualities from all backgrounds, cultures and walks of life to sit on police authorities.

5. A changed basis for the payment of allowances 

Up to now police authority schemes have been based on payment of an hourly rate (£17) for attendance at meetings or carrying out other approved duties. The panel felt that this system places too much emphasis on time spent in formal authority meetings and does not recognise the changing nature and demands of the role of a police authority member. Indeed, in local government attendance allowances have been largely discredited for some time and the Local Government Act 2000 has abolished such schemes in favour of the payment of basic and special responsibility allowances. The panel, backed up by the overwhelming majority of those they consulted, propose a similar scheme.

6. The essence of the scheme is that all police authority members need to devote a certain amount of time to discharge their basic responsibilities properly. The panel have formed a view on how much time this might be and have arrived at a range for a basic allowance, using the figure of £18 per hour to calculate the annual amount. However some members, by virtue of the roles they have been appointed to within the Authority, must make a greater time commitment and this should be recognised by the payment of special responsibility allowances (SRAs). The panel recommends three levels of SRA: for leading members/committee chairs; for the Vice-Chairs of the Authority; and for the Chair of the Authority. As at present, these allowances would only be payable to Independent and Magistrate Members of the Authority. An SRA would be paid in place of (rather than in addition to) the basic allowance. 

7. In arriving at the proposed allowance ranges shown below, the panel also factored in an additional payment element to take account of the following: 

• that policing by its nature is not 9 am to 5 pm business and members may therefore be called on for police authority business at unsocial hours 
• many members have to use their own homes as offices for police authority purposes including use of their own telephones and IT 
• many members also contribute to the national work of the APA 

The panel recognised that the MPA, because of the size and complexity of its role, is in a unique position. It has therefore proposed higher ranges of allowances specifically for the MPA and these are shown in the table below.

8. An allowance scheme for the MPA 

The first decision for the MPA is whether to adopt a scheme based on basic and special responsibility allowances. This is recommended, recognising the strength of the APA panel's arguments for change and the likelihood that all other police authorities will move to such a scheme. 

9. The Authority then needs to decide whether the categories suggested by the APA panel are appropriate to it. The panel has recommended three categories of SRA each attracting a different payment level. However, particularly bearing in mind the degree of decision-making responsibility given to MPA committees (and the corresponding demands on their Chairs), Members may feel that the difference between the demands on the MPA's Deputy Chairs and those on committee Chairs/leading members is not significant enough to merit different SRAs. It is recommended therefore that these two SRA categories be merged. 

10. Some clarity is needed about the term 'leading member': the APA panel recognises that there are members who, whilst not appointed as chair of the authority or its committees, undertake additional responsibilities over and above those of other members - increasingly individual members may be given 'portfolio' responsibility for certain areas, which may or may not be linked to a formal committee or sub-committee appointment. For the MPA, it is recommended that currently the following 'portfolios' should attract this level of SRA: 

• estates matters, through the chairship of the Estates Sub-Committee 
• audit matters, through the chairship of the Audit Panel 
• Best Value, through the deputy chairship of the Finance, Planning & Best Value Committee with specific responsibility for Best Value matters 

The issue of which portfolios should attract an SRA should be reviewed on at least an annual basis.

11. The decision then is where, within the range the panel proposes for the MPA, to pitch the basic and special responsibility allowances. There are any numbers of options. The following may help Members in deciding: 

• The 'basic' responsibilities of all members of the Authority can be demanding and individual members make valuable contributions on specific issues even if these are not classed as porfolio responsibilities. In addition to the formal meetings of the Authority and its committees, members are expected to keep abreast of and contribute to the many important issues facing the Authority and the police service, through workshops, informal meetings and other means. Members also act as an important interface with local boroughs through their link member role or involvement with local partnerships. It may be felt, therefore, that the basic allowance should be set at the higher end of the range proposed by the APA panel. 
• The budget for members' allowances and expenses is £194,000 at November 2001 prices. In addition to allowances this budget must also cover: 
  • members' earnings related national insurance contributions (ERNIC) which are 8.9% of allowances 
  • travel and other expenses incurred by any member in the course of their duties. These expenses are hard to calculate with precision because the Authority has not yet completed a full financial year, but £15,000 should be adequate 
  • the other allowances referred to in para 16 of this report (carers'/dependants' allowances, external Standards Committee members, Selection Panel members and Police Appeals Tribunal members) - £5,000 should be sufficient cover these 

  These elements reduce the maximum budget available for the payment of members allowances to just under £160,000. Spend on members' allowances in 2000/01 was approximately £90,000. This was, effectively, for nine months so this might equate to a full year spend of roughly £120,000.

12. Appendix A presents four options which span the range recommended by the APA panel. However, option four, at the top of the range, cannot be contained within the existing budget for Members' Allowances, bearing in mind the other expenses that have to be met from this budget, as set out above. A fifth option is also included which sets the basic allowance at a comparatively higher level. The SRAs shown here would be instead of, not as well as, the basic allowance. Appendix A goes on to exemplify what those options would mean in expenditure terms on the basis of current appointments held by Independent or Magistrate Members. Any future changes, at annual meetings of the Authority or by the inclusion of further portfolio responsibilities would change the expenditure level up or down. 

The Authority is asked to agree levels for the payment of basic and special responsibility allowances on the basis of the attached options or some other basis.

13. Members' commitment 

The APA panel noted that not all police authority members can contribute to the work of authorities to the same extent as others, for a variety of reasons, and this would appear to be reflected in the wide variation in attendance allowances the panel found currently being claimed, as is also the case in the MPA. Whilst beyond their remit, the panel suggested that police authorities consider a performance management framework for members to ensure that all members are carrying out their duties in full. Part of this would be the development of job profiles – attached as Appendix B are those drafted by the panel after consultation. 

14. The panel suggested, for instance, that it might be appropriate for the Authority's Chair or Clerk to certify annually whether members were fulfilling their responsibilities and for payment of allowances to be dependent on this. Such a process could be fraught with difficulties and would need careful thought before being introduced. However, the Authority is invited to endorse the principle that the level of allowances should be linked to the expectation that general or specific responsibilities will be discharged and that, to this end the Clerk be asked to develop job profiles for members of the MPA and to consider the possibility of a review process, possibly involving members of the Standards Committee.

15. Choosing not to claim 

It is open to police authority members not to claim any allowances and it is recommended that provision be made in the MPA's scheme for this. It may be, for instance, that a member feels unable to fulfil the full range of duties expected of their position – in this case they could choose to claim only part of their allowance or to claim only the basic allowance if they are entitled to an SRA.

16. Other proposals 

The APA panel's report contained several other recommendations which the Authority is invited to adopt, as follows: 

Carers'/dependants' allowances: it is important that no-one is prevented from serving on a police authority because they have young children or other caring responsibilities. The Authority is recommended to agree the payment of allowances subject to the following conditions: 

• the maximum allowance payable to be £6 per hour
• payment should be claimable in respect of children aged 16 or under and in respect of other dependants where there is medical or social work evidence that care is required 
• that allowances should be paid against actual expenditure evidenced by receipts 
• that the allowance should not be payable to a member of the claimant's household 
• that no ceiling be put on the total amount that could be claimed by a member in a year, but that this position be reviewed in the light of experience 

External Standards Committee members: all police authorities are required to appoint people independent of the Authority to serve on their Standards Committees. The MPA appointed two such members at its December meeting. It is not yet clear the extent to which there will be a substantial ongoing role for Standards Committees once they have drawn up local codes of members' conduct. For this reason, the APA panel proposes the payment of a daily rate rather than a flat rate allowance for these members. The Authority is recommended to agree a daily rate of £130 (£65 per half day). (The panel's recommended range was between £130 and £150) 

Selection Panel members: each police authority has a Selection Panel which is responsible for the first stage of the process of selecting independent members to serve on the police authority. The MPA is currently carrying out an exercise to recruit a new Independent Member following the resignation of Angela Slaven. Again, a daily rate of £130 (£65 per half day) is recommended for members of this panel, including any magistrate members of the Authority appointed to the panel. The APA panel argued that the Authority member on a Selection Panel should be paid this allowance in addition to their other basic allowance or SRA because these panels involve additional and intensive work over a short period of time. 

Police Appeals Tribunal Members: all police authorities are required to nominate members to serve on Police Appeals Tribunals. The frequency and nature of this work is unpredictable and can be intensive. For this reason, the APA panel do not consider that it should be incorporated in the basic allowance paid to members. Other members of these tribunals are currently paid £187 per day or £93.50 per half day (the rate set by the Home Secretary) and it is recommended that MPA Independent or Magistrate members receive the same payment and that in future this payment is increased in line with any increases determined by the Home Office.

17. Index linking 

It is recommended that allowance levels should be indexed to Police Support Staff Council cost of living increases and automatically uprated each year.

18. Introduction of the new scheme 

The Authority is asked to indicate when it would wish a new scheme to come into effect. The options would appear to be either 1 March or from the start of the new financial year, 1 April 2002. The Authority is required to publish details of its new scheme before starting to make payments, but publication on the website should be sufficient for these purposes. Unless otherwise requested, payment of allowances will be by way of 12 monthly payments a year. The Authority is asked to delegate to the Clerk the authority to draw up a new scheme of Members' Allowances on the basis of decisions taken at this meeting.

19. Changes at Authority Annual Meetings 

Appointments made at the Authority's Annual Meetings in June of each year may change an individual members' entitlement to receive an SRA. In these circumstances payments will be adjusted with effect from the Annual Meeting.

20. Travel and subsistence allowances 

The current provisions for these allowances and their levels will continue to be determined by the Home Secretary.

C. Financial implications

21. The financial implications are addressed in the body of the report.

D. Background papers

Present MPA Members' Allowances Scheme
APA report of the Independent Panel on Police Authority Members' Allowances

E. Contact details

Report authors: Simon Vile, Secretariat, MPA.

For information contact:

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

Appendix A

On the basis of positions currently held by Independent or Magistrate Members these four options would result in the following expenditure:

Appendix B

Appendix B is available in hard copy only from the MPA.

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