A better way forward on Councillors allowances

News Shopper headline on Greenwich Council allowances row

There has been some comment on the way in which Councillors in the Royal Borough of Greenwich chose to award themselves a pay rise at the end of last month and the vast majority of it was richly deserved.  The lack of control over the meeting from the Mayor, the failure to publish the report within the timescale required by the Constitution and extremely poorly written report (meaning it was genuinely hard to know what was actually being proposed) all contributed to the feeling that this was a grubby business which all concerned felt slightly ashamed of.  However, looking back with enough time to reflect calmly on the pay of Councillors, I think it is worth discussing whether the Royal Borough of Greenwich Council is indeed following the advice of the London Councils’ Independent Remuneration Panel as required within the Constitution and re-confirmed at the March 2018 Council meeting by unanimous vote.

Before I start, I should make clear that the Conservative Group’s general approach was to oppose any rise which would cost the Council more money – the 2% increase which was pushed through was not in the budget, so other areas will have to be raided to ensure that Councillors get the pay rise that they pushed through.

Basic Allowances

The London Councils’ Report is quite clear that the standard allowance for a Councillor across London should be £11,045 which was substantially more than the £10,210 paid to each Councillor in Greenwich.  However, if you look at the bill for the municipal year 2018-19, you can see that although London Councils’ recommend more than £11,000, there is no consistent picture about the standard amount being paid to Councillors.

Borough Standard Allowance Borough Standard Allowance
Barking and Dagenham 11,000 Lambeth 10,597
Bexley 9,606 Newham (Mayoral system) 11,059
Bromley 10,870 Southwark 11,270
Greenwich 10,210 Tower Hamlets (Mayoral system) 10,938

I can’t find Lewisham’s allowances for Councillors for 2018-19 anywhere on their website, so I haven’t included them, but as the average is £10,693.75 I think it is clear that Greenwich Councillors are not paid an excessive amount compared to our near neighbours (although I am open to the argument that the whole system is wrong and allowances should be much lower).

It is interesting that even with a 2% increase (which is what was agreed last month) a rise to £10,414 in fact leaves us one of the lowest basic allowances among local Councils, with only Bexley remaining lower.  However, I have a strong suspicion that Greenwich residents would not look kindly on any proposal which aimed to raise the basic allowance beyond (or even up to) this point[i].  So just to clarify, it appears that Greenwich’s backbench Councillors (those without Special Responsibility Allowances) are paid 92.4% of the London Council’s allowance, which is lower than most neighbouring Councils.

Special Responsibility Allowances (SRA)

These SRAs are paid to members who take on other roles within the Council like Leader, Cabinet Member or Leader of the Opposition.  There are a couple of points to note here, like the fact that London Councils state that:-

  • No member should receive more than one SRA.
  • No more than 50% of Councillors should receive an SRA.
  • The plan for Leaders of Council to be paid the same as MPs has fallen somewhat behind as MPs gave themselves a substantial pay rise.
  • Councillors should be entitled to claim an allowance for care of dependents at London Living Wage level.

All of these points are acknowledged in the Council’s report from last month and so I do not think are controversial.

For the Leader in Greenwich, the SRA of £52,458 is 92% of the recommended amount, which fits well with the ratio for backbench Councillors, however, once we move beyond this position, the whole system seems to crumble as the need to rally support from Labour Councillors takes precedence over consistency.

Firstly, just to return to the number of Councillors who should get SRAs, London Councils state that:

We reiterate our view that no more than 50% of councillors should receive a special responsibility allowance.”

So in Greenwich (with 51 Councillors) this would mean that only 25 Councillors should receive a SRA, but in fact 31 seem to be in receipt of the Leader’s largesse.  Given how split the Labour Group is, the reasons for this seem obvious but it means that the payroll vote in Greenwich is much larger than it should be.

To start with the Cabinet, which is one of the largest I can find with 8 members, according to London Councils the SRA for each Cabinet Member should be £36,917 (£33,963 using the Greenwich ratio) but in fact they are paid only £22,119.  This pattern of substantial underpayment for the SRA awarded compared to the London Councils’ scheme is true for almost every post in Greenwich except the Deputy Leader (91% of London Council’s recommendation), the Chair of the Planning Board (112%), Leader of the Opposition (112%) and the two recently introduced Project (or Cabinet) Assistants (194%).  There are a few others I am not sure about as they don’t seem to fit into the system like the Chair of Pension Fund Investment and Administration Panel but I think this is a fair judgement on where Greenwich is.

Some final thoughts

There is no doubt in my mind that the Members’ Allowances Scheme that we adopted at the last Council meeting cannot accurately be described as following the recommendations of the the London Councils’ Independent Remuneration Panel.  There are simply too many Councillors receiving allowances and they are not at a level which reasonably reflects the responsibility of the post in which they are employed.  To be fair to the current Leader I think this has been the situation for a long time, but his insistence on tinkering and failing to present reports in time for proper, constitutional scrutiny has made the situation appear much worse.  In addition, there is no doubt in my mind that the failure of various people to insist that the constitution was respected meant that the whole debate around raising the pay of Councillors by a relatively small amount damaged the reputation of Councillors across the board, which plays into the anti-politician rhetoric of politicians like Nigel Farage.

So, could it be done to restructure the Council’s allowances to properly follow the London Councils’ Allowances scheme at a 92% level?  I think it could and below is the way I would make it happen assuming that there would still be a 2% increase in allowances this year (just to be clear this is just my personal suggestion and not that of the Conservative Group).  The scheme suggested below would actually save the Council money (only about £3000, but every little helps) and reduce the number of allowances being given out to 23.

Here are my suggestions:

  1. Cut the Cabinet in size to only 5 Cabinet Members, but use the 2 recently appointed Cabinet Assistants to support the Cabinet Members more proactively.
  2. Make the Leader of the Opposition the Chair of Overview and Scrutiny (removing one allowance as each Councillor can only claim one)
  3. Licensing Sub-Committee to be chaired by Cabinet Member for Community Safety, Opposition Chief Whip and one other (so only one allowance)
  4. Combine the duties of the Highways Committee with the Scrutiny Panel which covers Transport. This may require extra meetings.
  5. The Health and Well Being Board continues to be chaired by a member of the Cabinet
  6. The Chair of the Finance Scrutiny Panel also chairs the Audit and Risk Management Panel.
  7. Remove the allowances for the independent members of the standards Committee – these should not be part of the Members allowances scheme.

By my working this breaks down as:

A suggested 2019-20 Level Current Allowance (£)

(2017-18)

Suggested Allowance Number Paid Total Cost
Basic Allowance 10,210 10364.63 51 528596.03
Leader of the Council 52,458 53568.56 1 53568.564
Cabinet Member (x 8) 22,119 34642.91 5 173214.56
Deputy Leader 33,154 34642.91 1 34642.913
Chair of Overview & Scrutiny/Leader of the Opposition 22,119 34642.91 1 34642.913
Scrutiny Panel Chairs (x 6) 9,849 15208.65 5 76043.244
Chair of the Planning Board 18,178 15208.65 1 15208.649
Chief Whip of the Council 10,623 15208.65 1 15208.649
Mayor 9,849 15208.65 1 15208.649
Project (Cabinet) Assistants 5,000 2422.95 2 4845.8976
Chair – Pension Fund Investment and Administration Panel 9,849 2422.95 1 2422.9488
Licensing Sub-Committee Chair 1,522 2422.95 1 2422.9488
Deputy Mayor 1,522 2422.95 1 2422.9488
Minority Party – Whip 2,811 2422.95 1 2422.9488
Minority Party – Deputy Leader 2,811 2422.95 1 2422.9488

I’m not sure how this will be viewed, but the general point that I wanted to make is that Greenwich Council needs to produce a system of allowances which genuinely reflects the recommendations of London Councils’ and this can be done with a little bit of thought.  The last year has made absolutely clear that no one has made an effort to think about how we might structure Councillors’ allowances in a more cost effective way – this needs to change.

[i] London Councils’s Report states: “However we reluctantly accept that, in the current financial climate, it would be inappropriate to recommend a general increase in members’ allowances (beyond the annual updating).” (page 5)