The 2003 Regulations provide for the following allowances to be available for duty undertaken outside community boundaries:-

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1 Community and Town Councils in Wales Welsh Local Government Association Chief Executives of County & County Boroughs Chief Executive - One Voice Wales Society of Local Council Clerks Chair of the Independent Remuneration Panel for Wales Political Parties National Association of councillors Wales Council for Voluntary Action Wales Audit Office Llywodraeth Cynulliad Cymru Welsh Assembly Government Eich cyfl Our Ref: qa February 2010 Dear Colleague REVIEW OF COUNCILLORS' ALLOWANCES REGULATIONS This policy consultation seeks your views on the need to review the regulations on allowances for members of community and town councils and the possible content of any revised regulations. Background Part VII of the Local Government Act 1972 ("the 1972 Act") and Part V of the Local Government Act 2000 ("the 2000 Act") include provisions relating to allowances for members of community and town councils. The Local Authorities (Allowances for Members of Community Councils) (Wales) Regulations 2003 SI No 895 (W.115) ("the 2003 Regulations") were made by the National Assembly for Wales, in March 2003, under sections 173, 175, 177 and 178 of the 1972 Act and sections.,100 and 105 of the 2000 Act. A non-statutory guidance note, providing general guidance on the 2003 Regulations, was issued in April The 2003 Regulations provide for the following allowances to be available for duty undertaken outside community boundaries:- Attendance Allowance - entitlement of members. The maximum payable is for a 24 hour period. (This rate is frozen as the index stipulated in the Regulations for calculating the percentage annual increase, "the Average Male Non-Manual Wage for Wales" has become obsolete. A replacement index can only be introduced through amending the 2003 Regulations.) Pare Cathays. Cathays Park Caerdydd. Cardiff CF103NQ Ffon Tel Ffaes Fax Christine. Rees@wales.gsi.gov.uk

2 Financial Loss Allowance - entitlement of members of the community council (i.e. may be payable to eo-opted members) for the performance of approved duties outside the council boundary, if they have not claimed attendance allowance for the duty undertaken. The maximum payable is stipulated in the Regulations as for up to 4 hours, and for up to 24 hours. (These rates frozen as the index, which determines the percentage annual increase, is now obsolete.) An allowance for attending Conferences/Meetings - this discretionary allowance is only available to members if they have not claimed either attendance or financial loss allowance for the duty undertaken. The maximum payable is stipulated in the Regulations as Travel allowance - entitlement of all members (elected and eo-opted) payable in respect of the performance of approved duties outside the council boundary. The maximum rates payable are linked to the travel rates of Members of the National Assembly for Wales. Subsistence allowance - entitlement of all members. Receipts are required. An authority may set limits on the amounts payable. Research Study into the Role, Functions and Future Potential of Community and Town Councils in Wales (lithe Aberystwyth Report") This Study, undertaken by the University of Wales, Aberystwyth, and funded by the Welsh Assembly Government, was a comprehensive review of the work of community and town councils in Wales. Of the recommendations made in the Aberystwyth Report, published in August 2003, three concern councillors' remuneration. They are:- Recommendation R8.5: "We recommend that the Welsh Assembly Government amend the Local Authorities (Allowances for Members of Community Councils) (Wales) Regulations 2003 to permit community and town councils to pay an annual "basic allowance" to members in respect of time spent on council duties outside of meetings and costs incurred (e.g. telephone and postage expenses). The "basic allowance" might be payable to the chair of the council, or to all members, within a nationally agreed framework, and should be met from locally-generated revenue income (e.g. the precept). We recommend that the introduction of a "basic allowance" scheme by a council should require the support of a majority of members of the council". Recommendation R8.6: "We recommend that community and town councils should also be permitted to choose to reimburse costs of childcare and relief care for dependent adults incurred by members for the duration of attendance at council and council committee meetings,or participation in other appropriate council business". Recommendation R8.7: "Consideration should be given by the Welsh Assembly Government to permitting local groupings of community and town councils, and area committees of One Voice Wales, to reimburse the expenses of councillors representing a group of councils on an external body for which remuneration is not otherwise available. Funds for this could be obtained through a levy on all participating community and town councils." In its response to the recommendations of the Aberystwyth Report, the Welsh Assembly Government gave an undertaking to consult on proposals to give community and town councils the discretion to pay a "basic allowance" to their members and to enable councils to reimburse childcare and relief care costs for dependant adults. 2

3 Possible Content of Revised Regulations Your views are invited on the preparation of revised regulations which might contain the following proposals for allowances for elected members and/or eo-opted members for approved duty as defined in the regulations: Continuation of the Attendance Allowance for members, for approved duty undertaken outside community boundaries. 2. Continuation of Financial Loss Allowance and its extension, on a discretionary basis to include approved duty undertaken within community boundaries 3. Allowances for Attending Conferences and Meetings - should this allowance be retained as it is, discontinued in the light of the proposed new annual allowance (see point 4), or extended in some way? 4. Community and town councils to be given the discretion to pay an annual allowance, either to all members (including the chairperson) or alternatively to the chairperson only. 5 With reference to point 4 above, if the option to pay the chairperson is taken, the level of the chair's annual allowance to be 50% higher than that of the member allowance. This allowance would be based on the 100 figure recommended in the Aberystwyth Report which dates from Funding for this allowance would be met by way of locally generated income i.e. the precept, as is the case with the funding for the payment of all other allowances. 6. Community and town councils to be given the discretion to reimburse the costs of childcare or relief care for dependant adults to members (with the maximum levels payable being set by the Welsh Ministers). 7. Continuation of the Travel and Subsistence allowances and its extension to become payable at the discretion of the community council for duty undertaken within community boundaries for all members. It would also be extended to cover travel by bicycle. 8. Views are also invited on the maximum level of claims based travel allowance. Should the maximum rates be those set by HM Revenue & Customs (HMRC), and recommended by the Independent Remuneration Panel for county and county borough councils? The payment of subsistence allowances, would continue to require appropriate receipts proving actual expenses, and payment would be subject to any maximum levels. 9. Views are invited on whether the availability of the Attendance and the Financial Loss Allowance should remain restricted - should either allowance be available to both elected and eo-opted members?. 10. Views are.invited on how annual increases to the maximum levels of Annual, Attendance and Financial Loss Allowances should be calculated. Should they be index-linked or should another method be used? If the increases are to be index-linked should the index used be the Annual Survey of Hours and Earnings in Wales (ASHE (Wales» or the Average Earning Index for the UK AEI (UK). Alternatives for consideration would be the Retail Price Index or the Consumer Price Index. The effect of using either one of the indexes mentioned on the current allowances and the suggested new allowance is 3

4 shown below. Currently( ) ASHE (\!Vales) AEI (UK) RPI CPI AttendanceAllowance Financial Loss: Up to 4 hours FinancialLoss: Up to a day Suggestednew Annual 100 pa Allowance 11.Views are also invited on alternative means of calculating these annual increases. The Independent Remuneration Panel for Wales (IRPW) was established to review the range and level of allowance the 22 unitary authorities may pay their councillors. The Panel are able to set maximum limits on the allowances county and county borough councillors receive. Their initial report was published in July Should the Panel be asked to make non-binding recommendations with regard to the maximum levels of increases for members of community and town councils? 12 The introduction of a requirement on community and town councils to specify a time-limit for the submission of claims for travel and subsistence allowances. This would be in line with the requirements on county and county borough councils, introduced under the Local Authorities (Allowances for Members)(Wales) Regulations To extend the publicity requirements, under Regulation 14 of the 2003 Regulations to include the proposed annual allowance for chair/member and the travel and subsistence allowances. 14.For provisions to be included in revised regulations which would require the suspension/partial suspension of all allowances for members suspended/partially suspended from office. This would be in keeping with the comparable regulations in England for members of parish councils (The Local Authorities (Members' Allowances) (England) Regulations 2003 SI No 1021) and the requirement on county and county borough councillors introduced in the 2007 Regulations. 15 Revised regulations would continue to enable a member to elect to forego any part of their entitlement to an allowance. 16Views are also invited in respect of the introduction of Recommendation 8.7 of the Aberystwyth Report - the reimbursement of expenses for councillors who represent a group of councils on an external body, for which remuneration is not otherwise payable, the costof which would be met by a levy on all participating community and town councils. 17 Views are also invited on any other amendments to the Local Authorities (Allowances for Members of Community Councils)(Wales) 2003 Regulations (SI 2003/895). For example, does the definition of "approved duty", in Regulation 9 of the 2003 Regulations, require updating? Yours faithfully Frank Cuthbert Head of Democracy Branch Local Government Policy Division 4

5 Review of Councillor' Allowances Regulations List of questions for response Your comments should be sent to Christine Rees at the Welsh Assembly Government, Local Government Policy Division, Cathays Park, Cardiff, CF10 3NQ and should be received by no later than 11thJune The Welsh Assembly Government intends to publish the responses to this consultation exercise. Normally the name and address (or part of the address) of its author are published along with the response, as this gives credibility to the consultation exercise. If you do not wish to be identified as the author of your response, please state this expressly in writing to us. Q1. Should Attendance Allowance for an approved duty undertaken outside the community boundary continue for a) elected members? b) and/or eo-opted members? Q2 Should the Financial Loss Allowance and its extension, continue on a discretionary basis to include approved duty undertaken within community boundaries? Q3 Should Allowances for Attending Conferences and Meetings - a) be retained as it is, discontinued in the light of the proposed new annual allowance (see point 4), or b) extended in some way? Q4 Should community and town councils to be given the discretion allowance to a) all members (including the chairperson) b) or to the chairperson only? to pay an annual Q5 If introduced do you agree that a) the member allowance should be 100 per annum? b) the chair allowance be 50% higher than the member allowance? c) funding for any allowance should be met by way of locally generated income? ", Q6 Should Community and town councils to be given the discretion to reimburse the costs of childcare or relief care for dependent adults to members (with the maximum levels payable being set by the Welsh Ministers)? Q7Should payment of Travel and Subsistence allowances be extended to duty undertaken within community boundaries for all members, at the discretion of the community council? 5

6 Q8 Should the maximum level of travel allowance be the levels set by HMRC? Q9 Should either the Attendance and the Financial Loss Allowance a) remain restricted to elected members b) or be available to both elected and co-opted members Q10 Should the annual increases to the maximum levels of Annual, Attendance and Financial Loss Allowances be index linked? a) if so should the ASHE index be used in line with IRPW recommendations for principal authorities? b) if not index linked what uprating method should be used? Q11 Should the Independent Remuneration Panel Wales be asked to make nonbinding recommendations with regard to the maximum levels of increases for members of community and town councils? Q12 Do you agree with the proposal that the time-limit for the submission of claims for travel and subsistence allowances be in line with the requirements on county and county borough councils? Q13 Do you agree with the proposal to extend the publicity requirements, under Regulation 14 of the 2003 Regulations to include the proposed annual allowance for chair/member and the travel and subsistence allowances? Q14 Do you agree with the proposal of suspension/partial suspension of all allowance for members suspended/partially suspended from office? Q15 Do you agree that members may elect to forego any part of their entitlement to an allowance? Q16 Should recommendation 8.7 of the Aberystwyth Report - the reimbursement of expenses for councillors who represent a group of councils on an external body, for which remuneration is not otherwise payable, the cost of which would be met by a levy on all participating community and town councils be introduced? Q17 Do you consider that any other amendments to the 2003 Regulations should be considered? For example, does the definition of "approved duty", in Regulation 9 of the 2003 Regulations, require updating? 6