There has been coverage in the media recently about the changes to Councillor allowances. The press have reported this as an increase in allowances, but in fact both the overall bill to taxpayers and the individual allowances to most councillors have actually gone down. No councillor will take a rise this year and most will see a substantial cut.
Most London boroughs follow an allowance structure that is fixed centrally by the Independent Panel on the Remuneration of Councillors in London. Croydon did not follow this type of independent approach when the allowances were first introduced, when the council was under Labour control. Instead, they elected then to set the pay levels for different levels of responsibility themselves. We felt that this was not in keeping with public opinion, where the lack of transparency
in how MPs allowances were set was a major factor in the public disquiet over MPs pay last year. As a consequence, in a meeting of the Corporate Services Committee of the council on 28th June, it was agreed that from August 2010 the allowances for Croydon’s councillors will be set by the Independent Panel so we will no longer be awarding our own pay rise or rates of pay. We think this is fairer and more transparent.
We have started the process by aligning all our rates of allowance to the London Councils’ standard ones. The London Councils report makes a series of recommendations about what the rates should be for councillors with different levels of responsibility. This inevitably means that some go down and some go up, on paper at least. We couldn’t move to the London Councils system without taking this first step. On average allowances go down, but there are some areas where what Croydon has traditionally given is now considered to be too low, in the view of the Independent Panel. However, in practice nobody is taking a rise at all. All councillors individually decide what proportion of the total allowance for the job they wish to accept and those who get an ‘on paper’ rise have all elected not to take it. Allowances will now only change if the independent panel changes the basic or special responsibility rates pan-London.
The facts about this pay reduction are:
- The changes to allowances will save Croydon’s Council Tax payers at least £57,000 a year in the first full year of implementation and thereafter.
- Councillors will no longer fix their own rates of allowance for different jobs, nor carry out the annual review
- All Councillors will have a cut in their basic allowance of £1,300, with the reduction introduced in two steps, the first in August 2010 and the second in May 2011. This represents an 11% pay cut compared to last year.
- Many councillors (12) with more responsibility (Deputy Cabinet Members and Committee Chairs) have had an even bigger cut of between 10% and 37% on top of their cut in basic allowance
- Cabinet members and the Leaders have had an increase in maximum claimable allowances but are not claiming the increase. This was done in order to comply with the recommendations of the independent scheme and would bring them in line with Cabinet members in other boroughs. However, no member who, on paper, qualifies for a rise will actually take it in the foreseeable future.
Conservative councillors have agreed to phase in the changes. Those councillors who would have received an 'on paper' increase will not be taking the increase this year. Those councillors who would have had a decrease, will receive half of the cut on 1st August and the rest next year.
Leader of the Council, Councillor Mike Fisher, says "This was never going to be an easy transition but in the long term I believe it is the right thing to do because it reduces the overall cost of allowances and better reflects the responsibilities for each role. It also ensures that we are never again in the position of setting our own allowance rates or increases. I am disappointed that the press have selectively reported the changes to give a wholly misleading picture of what is actually taking place, but I honestly believe that the new system is the right one for Croydon".
Additional notes:
The independent panel is:
Sir Rodney Brook
Ann Watts
Professor Drew Stevenson
Sir Rodney Brooke has a long career in local government, including as chief executive of West Yorkshire County Council, Westminster City Council and the Association of Metropolitan Authorities. He was knighted in 2007 for his contribution to public service.
Anne Watts CBE has an extensive career in equality and diversity that spans the private, voluntary and public sectors with organisations including the Open University, the Commission for Equality and Human Rights and Business in the Community. She has chaired the NHS appointments commission for the past three years.
Professor Drew Stevenson OBE is professor of regeneration at the University of East London and has been involved in London local government at a senior level for more than 20 years, including as chief executive of Newham and as policy advisor to the Mayor of London.
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