Agenda item

Recommendation to full Council (5 December 2023):

That the Council:

(1)     defers consideration of the report of the Independent Remuneration Panel on the review of councillors’ allowances for a period of 12 months;

(2)     retains the current scheme of allowances without indexation, which effectively freezes councillors’ allowances at their current level for the 2024-25 financial year; and

(3)     thanks the Independent Remuneration Panel for their work.

Reason:

In view of the current situation with regard to the Council’s current financial position and the Council’s determination to resolve those difficulties, now was not the right time to be increasing councillors’ allowances.

The Council appointed an Independent Remuneration Panel (IRP) – jointly with Waverley in October 2022 to review the existing scheme of councillors’ allowances and make recommendations for a new scheme.  On 2 November 2023, the IRP concluded its review and the Executive received its report and recommendations which were attached as Appendix 1. 

The Leader highlighted the correction set out in the Supplementary Information Sheet. On page 20 of the agenda, the figure quoted as the Employers’ National Insurance contribution in the table in paragraph 9.1 (Financial Implications) was incorrect.  It should have read “£18,153”. 

The Chairman of the IRP, Dennis Frost, was in attendance along with Panel member Rodney Bates (in remote attendance) to speak to the report. Mr Frost set out his experience of working on other IRPs and the experience of the other panel members. He had been a member of the Guildford IRP which last reviewed the scheme in 2019. Mr Frost thanked officers for their support to the IRP.

During the course of its review, the IRP had received and considered twenty-five completed questionnaires from members and had interviewed fourteen members to arrive at the final recommendations which included a rise in the Public Service Discount (PSD) from 35% to 40% and a 2.5% increase to the Basic Allowance (BA). If adopted, this would be the highest BA of all of the Surrey districts and boroughs. The IRP argued this was justified when taking in account the latest Annual Survey of Hours and Earnings (ASHE) median hourly rate for Guildford and the average number of hours that Guildford members spent undertaking council business. It was noted that the hourly rate for Guildford had risen by over 12% in the past year.

There were recommended changes to some of the Special Responsibility Allowances (SRAs) awarded to councillors undertaking additional roles such as the Leadership, portfolio holders, chairs and vice chairs of the various committees, notably an increase in the Leader’s Allowance to 250% of the BA and a small reduction for portfolio holders. The IRP had taken a particular interest in how the role of the Mayor was supported through the Allowances Scheme and sought to spend more time looking in depth at this role with a view to reporting back in a year’s time. The Panel recommended the Council adopt a scheme where a councillor could only receive one SRA, as this was described as fair and best practice.

Mr Frost observed the demographic of the membership had changed since 2019 and consequently there was a different recommendation for the Dependent Carers’ Allowance (DCA) than in 2019. The Panel had recommended a new level which was an alternative lump sum of £500 be made available annually to parents of children under 12 years old and to registered carers rather than the submission of a series of claims and small expenses payments throughout the year. This was described as fair and equitable and less bureaucratic.

The Panel judged its recommendations to the council as an overall increase of 3.9% compared to the current budget, significantly less than the rate of inflation.

The Leader took questions for the IRP from non-Executive councillors. Councillor Brothwell, who was a chair of an Executive Advisory Board (EAB), noted that the SRA for this role would be reduced under the IRP’s recommendations. The reason supporting the recommendation was that the EABs had rarely met during recent months. Councillor Brothwell argued that the EABs were scheduled to meet monthly and that cancellations were beyond the influence of the chairs and vice-chairs. The Panel members present replied that should the EAB meetings return to the previous frequency then the matter could be reviewed and that this was set out in the report.

Councillor Young suggested there might be a means by which the vice-chair of a committee might receive a proportion of the chair’s remuneration when the chair was absent. Councillor Young was Chairman of the Licensing Committee and, having noted the recommended reduction in the one-off payments received by Licensing Sub-Committee Chairs, enquired should the one SRA rule be adopted would this include the payments made to the Licensing Sub-Committee Chairs. The Panel members present responded to say that on the occasions when a deputy stepped up to take the Chair this would be a level of detail on which the Panel could not advise but might rather be a matter for the two individuals concerned to resolve between themselves. With regard to the one-off payments made to the Licensing Sub-Committee Chairs the Panel was of the view that the current amount was too generous and should be reduced to be in line with other Surrey councils, it was noted that some councils made no payment at all for this responsibility. It was reiterated that one SRA was fair and best practice.

The matter of the role of the IRP in stimulating diversity on the council was raised and the increase in flexible options for those with caring responsibilities was welcomed. The Chairman of the IRP considered the Panel’s role in increasing a more diverse membership was limited and that the council itself should be leading in this regard. The proposed reductions for certain SRAs were questioned but was upheld by Mr Frost as evidenced through member interviews.

The Lead Councillor for Finance and Property thanked the Panel for its report which was described as clear, well-reasoned and much appreciated. Further appreciation was given to the Panel for taking into account the Council’s current financial position by recommending an increase substantially below the rate of inflation. In addition, there was concern that there should be any increase at all at the current time.

Members of the Executive reflected that the BA was a crucial enabler for residents from diverse backgrounds to assume the role of councillor and consequently to provide representation for all communities. In addition, the report illustrated the elevated levels of public duty and commitment to voluntary service displayed by members of the Council via the recommended increase in the PSD to 40%.

Executive members welcomed the innovative approach to the DCA with the two different levels which sought to support and enable carers to participate in the democratic process and to represent their communities.

Overall, the report was well-received by the Executive, however in consideration of the Council’s financial position, members of the Executive voiced concern about supporting any recommendations to increase the Councillors’ Allowances Scheme at the current time. It was suggested a further review might be undertaken of Panel’s recommendations in 12-months’ time when the financial picture might be clearer. It was further proposed that the current indexation linking the Scheme to officer pay awards be suspended for the same 12-month period resulting in a freeze of allowances expenditure for 2024-25.

The Executive did have reservations concerning some of the recommendations of the IRP, notably the adoption of the One SRA Rule, but overall, it was the financial circumstances of the council that was at the forefront of the debate.

On 5 December 2023, Council was to consider the IRP’s recommendations for a new scheme of allowances, together with any recommendations of the Executive, prior to determining a new scheme of councillors’ allowances to come into effect on 1 April 2024. Consequently, the Executive agreed the following,

Recommendation to full Council (5 December 2023):

That the Council:

(1)     defers consideration of the report of the Independent Remuneration Panel on the review of councillors’ allowances for a period of 12 months;

(2)     retains the current scheme of allowances without indexation, which effectively freezes councillors’ allowances at their current level for the 2024-25 financial year; and

(3)     thanks the Independent Remuneration Panel for its work.

Reason:

In view of the current situation with regard to the Council’s current financial position and the Council’s determination to resolve those difficulties, now was not the right time to be increasing councillors’ allowances.