Review of Members’ allowances

Report: 13
Date: 26 May 2005
By: the Chief Executive & Clerk

Summary

This report reviews the current scheme for the payment of members’ allowances and presents options for increasing these to reflect the complexity and demands of the role.

A. Recommendation

1. The Standards Committee is asked to consider this report; its views will be reported to the full Authority.

The Authority is asked to:

1. Take account of the Standards Committee’s comments
2. Agree any revisions to the Scheme of Members’ Allowances, to take effect from 1 June 2005
3. Decide whether to introduce a form of member assessment / reporting

B. Supporting information

Background

1. Up to 2002 the Home Office set the level of members’ allowances, which at that time was an attendance allowance based on an hourly rate. In 2002 members’ allowances were deregulated, enabling police authorities to agree their own schemes.

2. The Association of Police Authorities commissioned an Independent Panel to come up with recommendations that could be applied across police authorities. This came up with proposals:

• To move away from an hourly rate to annual allowances
• for a range for basic allowances of between £3,500 and £10,500 a year (£7,000 to £14,000 for the MPA)
• and Special Responsibility Allowances (SRAs) for committee chairs of between £10,500 and £14,000, or in the case of the MPA between £10,500 and £17,500.

3. The current MPA allowances are as follows (they are increased annually in line with Police Support Staff Council pay award):

Basic Allowance: £14,295

SRA (for Committee Chairs and the MPA’s Deputy Chairs), including basic allowance: £16,494

Chair of the Authority (including basic allowance): £27,491

4. Only the 11 Independent and Magistrate Members of the Authority can be paid allowances as the Greater London Assembly remunerates the 12 London Assembly Members appointed to the MPA.

5. The agreed job profiles for MPA members assume that:

• The basic allowance represents payment for a commitment of between 1 and 2 days a week
• An SRA is for 1.5 to 2.5 days a week
• The allowance for the Authority’s Chair is for 2.5 to 3.5 days a week.

6. Currently, 7 of the 11 independent / magistrate members receive SRAs.

7. Attached as Appendix 1 are comparisons with some other police authorities and with London Functional Bodies.

Issues

8. The current scheme has run for three years, so a review is timely. There are perhaps four issues to consider:

1. Is there a degree of complexity in the MPA member’s role that makes it significantly different to other police authorities and which is not already reflected in the differentials?
2. Do the assumptions on which the current payment is based understate the time commitment?
3. Is the rate is set too low (compared to similar bodies)?
4. Does the current scheme distinguish sufficiently between the varied time commitments that different members can/do make?

9. The APA’s Independent Panel recognised that the MPA is different to other police authorities in proposing higher ranges for MPA allowances. Whether these ranges adequately reflect the complexity of the role is a matter of opinion. However, the sheer scale of the Metropolitan Police Service in comparison to other police forces, the multiplicity of its services and the range of issues this generates makes the member’s role demanding.

10. An added factor is the MPA’s expectation that individual members will perform a borough link role with local police, partner organisations and the community. This role has increased in importance and responsibility since the last review of the scheme of allowances as the MPA is now a statutory partner on the 32 borough crime and disorder reduction partnerships. The potential time commitment of this role cannot be understated.

11. As part of the review process some Independent and Magistrate members have kept a diary for a month as an indication of the time spent on MPA business. The seven members who completed the exercise reported an average weekly time commitment of 9, 19, 21, 23, 25, 31 and 41 hours. This may or may not chime with the experience of the other Independent and Magistrate Members but it does appear to show a level of time commitment beyond the expectations of the current scheme.

12. Broadly speaking, the MPA pays higher allowances than other police authorities. In London, Transport for London has an overall higher level of allowances. The London Development Agency has a lower basic but some of the special responsibilities attract a higher payment than the MPA.

13. Another factor to consider is whether the level or remuneration is sufficient to attract the kinds of people that the MPA needs as its members. By the nature of the role the time demands are irregular and much activity takes place during the working day. Some meetings are scheduled up to a year ahead and others can be managed to fit in with individual members’ availability. However, someone in regular 9 to 5 employment will find it difficult to juggle the demands of being an MPA member and the role is certainly better suited to people with more flexibility in their working life. Whether this is reasonable is an issue that is outside the scope of this review.

14. Since the appointment of the original MPA members, two appointment exercises have been carried out: a mid-term appointment to a casual vacancy and the 2004 appointments for the MPA’s second four-year term. These resulted in the appointment of high-calibre members who have contributed enormously to the work of the MPA. It has to be said however that the Authority was fortunate because there was not strength in depth in the applications received. It is possible that the some potential candidates were deterred by the level of remuneration, particularly given the irregular but significant time demands of the role.

15. The differential between the basic allowance and the SRA is quite small (just over £2,000) and there is an argument for increasing this, because experience suggests that on the whole Committee Chairs and the Authority’s Deputy Chairs must give a greater time commitment than others to carry out their responsibilities adequately.

16. Some members are able to devote more time than others to MPA business. There is an option included below which introduces another level between the basic allowance and the SRA. In informal discussion with members this option was not favoured but is included for the sake of completeness. The current scheme already includes a statement to the effect that a member can only claim part of the allowance if he or she considers that they are unable to fulfil the whole range of duties. The fact that some members cannot contribute to the same extent as the majority is not considered to be an argument for keeping the level of allowances artificially low.

17. Finally, members may want to consider whether to introduce an element of attendance allowance for particular functions. At present an attendance allowance is paid to members of the Independent Member Selection Panel (the panel which draws up the long list of candidates for Independent Member appointments). This payment recognises that this is an intensive exercise over a short period of time which goes beyond a police authority member’s usual responsibilities. Arguably this principle could apply to some similar functions, for instance membership of appointment panels for ACPO rank officers and for MPA senior officers.

18. In conclusion, it is considered that an increase to the level of allowances is both justified and necessary for the variety of reasons given above. Another factor to bear in mind is that membership of the MPA is not pensionable so members have to make their own arrangements, at additional cost. It is for members to consider the options set out later in the report and to decide which to agree.

Budget and spend

19. In 2003/04 the budget for members’ expenses and allowances (including National Insurance contributions) was £199,820 and the spend £193,435. The spend in 2004/05 is forecast to be similarly close to budget.

20. The MPA’s 2005/06 budget includes an additional £55,000 for members’ allowances. This gives a 2005/06 budget for members expenses and allowances (including National Insurance) of £266,965

Options

21. If it is decided that to increase allowances, there are various options, including:

Option 1

Increase allowances across the board by an agreed percentage
Attached as Appendix 2 is a table showing the impact on both allowances and the budget of a range of percentage increases. As an example, a 25% increase would give the following allowances:

Basic allowance: £17,869
SRA: £20,617
Authority Chair: £34,926

The additional cost of this would be £47,002

Option 2

Increase the differential between the basic and the SRA, to recognise the additional (and currently understated) responsibility that Committee Chairs have Appendix 2 can be used to produce various combinations. As an example, a 20% increase to the basic and a 25% increase to the SRA and Authority Chair’s allowances would cost £43,916 and give the following allowances:

Basic allowance: £17,154
SRA: £20,617
Authority Chair: £34,926

Option 3

Introduce another tier between the basic allowance and the SRA
Not all members can give the same degree of time commitment to the MPA. The contribution of those who can could be recognised by having a basic allowance, a ‘basic plus’ and an SRA. For example this could look like this:

Basic: £14,295 (current allowance) for those who can commit up to one day a week to MPA business

Basic Plus: £17,154 (20% increase) for those who can commit in excess of a day a week to MPA business

SRA: £20,617 (25% increase)

Authority Chair: £34,926 (25% increase)

With the current profile of appointments (four basic allowances and seven SRAs) this would cost a maximum of £47,032 if all basic allowances were at the ‘basic plus’ level.

This option would have to be self-regulating – it would be for each individual member to decide (perhaps on an annual basis) whether their commitment to the MPA equated to the basic allowance or ‘basic plus’.

Option 4

To introduce an element of attendance allowance for taking part in:

• selection panels for ACPO and senior police staff posts and for MPA unit heads and above
• sitting on MPA internal Stage 3 Grievance Panels

This would recognise the fact that these represent a considerable time commitment over a short period of time. This option can be in addition to another option. It is suggested that this allowance should be the same as for the Independent Member Selection Panel (currently £143 a day with pro rata half day and hourly rates)

Proposal

22. There is any number of possible permutations. However, following discussion with the Chair of the Authority, the following proposal is put forward for members’ consideration:

1. increase the basic allowance by 20% to £17,154
2. increase the SRA by 25% to £20,617
3. increase the Authority Chair’s allowance (if an Independent or Magistrate Member) by 25% to £34,926
4. pay an attendance allowance to Independent and Magistrate Members sitting on appointment panels for ACPO rank officers, senior police staff and senior MPA staff (unit head and above) and MPA Stage 3 Grievance Panels. Attendance allowance to be at the same rate as for members of the Independent Members Selection Panel (currently £143 a day).

Assessment

23. If allowances are to be reviewed this may be an appropriate time to consider again whether to introduce some form of regular assessment or reporting of individual members’ contributions to the MPA, as a way of demonstrating that public money is being well spent.

24. The Standards Committee is invited to discuss this with a view to making a recommendation to the full Authority. It may be felt that a formal appraisal system which sets personal objectives etc, such as applies to MPA staff, does not fit with the member role. There may, however, be scope to make a link with committee work plan objectives, particularly in the case of Committee Chairs. As a minimum, it is suggested that Independent and Magistrate Members should be required to produce a written report on their activities on a regular basis, say every six months. This report could be structured around the three main areas of the member role:

• Membership of formal MPA committees
• Borough link work including crime and disorder reduction partnerships
• Work around specific interests, lead roles or in connection with an MPA scrutiny

Members could be asked to comment both on what they consider they have achieved and also provide some quantitative information, such as the number of CDRPs attended in the period.

25. These reports could be submitted to the Standards Committee. The main purpose would be positive - to demonstrate publicly the extent of the contribution made by MPA members. However, if the Standards Committee had any concerns they could ask the Authority’s Chair to discuss these with the member concerned.

26. The MPA’s London Assembly Members could also be invited to participate in this process.

C. Race and equality impact

An initial equality impact assessment screening has been carried out which indicates that there is no negative equality impact in these proposals and, therefore, that a full impact assessment is not necessary.

The key point is that allowances should adequately recompense members for their time commitment so that no-one is prevented from becoming a member on financial grounds. It has to be recognised, however, that members with a flexible lifestyle or employment will find it easier to juggle the demands of the role with their other commitments.

D. Financial implications

27. Paras 19 and 20 refer to the available budget and previous spending patterns. Whatever members decide upon, the aim must be to keep expenditure within the budget. This covers both members’ allowances and their expenses. The latter can fluctuate, so it would not be prudent to commit all the available budget to increased allowances and an increase beyond the additional £55,000 added to the 2005/06 budget cannot be recommended.

28. All of the cost projections in this report are based on:

• the Authority Chair being an Assembly Member. Should this position change at some stage in the future this would add between £29,000 and £41,000 to the costs, on the basis of the example increases in Appendix 2.
• the current allowances profile of seven SRAs and four basic allowances.

29. The proposal in para 22 entails additional expenditure of £44,000 on the basis of the current allowances profile, plus additional expenditure on the attendance allowance element for selection panels etc.

D. Legal implications

The Office of the Deputy Prime Minister has granted a general dispensation in relation to the Model Code of Conduct, to enable police authority independent and magistrate members (like local authority Councillors) to discuss and vote upon the level of their remuneration. This does not, therefore, represent a prejudicial interest.

The Criminal Justice and Police Act 2001 provides that “a police authority may from time to time revise any arrangements made for the purposes of this paragraph; but no revisions shall take effect until published by the authority.” It is not possible, therefore, to backdate payments and it is proposed that the Authority’s decisions should take effect from 1 June 2005.

E. Background papers

• current allowance scheme

F. Contact details

Report author: Simon Vile, MPA.

For information contact:

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

Appendix 1

Members’ Allowances Schemes

Appendix 2

Impact of percentage increases

# The additional cost has been calculated on the current profile of 4 members receiving the basic allowance, 7 members receiving SRAs and the Authority Chair being an Assembly Member and therefore receiving no payment. It also includes National Insurance contributions

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