Gold plated

15 Jul

At their meeting on 25th June the mayor and his cabinet colleagues took two important decisions. The first was to permanently close the Upton Centre, on the grounds that works required to re-open it are ‘unaffordable’. The second was to award himself and his advisors new, taxpayer-funded pensions.

In April 2014 the coalition government decided that councillors and elected mayors shouldn’t continue to be members the Local Government Pension Scheme (LGPS). The reasoning being that councillors and mayors are not employees, but volunteers. The law was changed to freeze current membership at the end of each elected member’s term of office and stop new joiners. For sitting Newham councillors that meant that from the end of May 2014 they became deferred members of the LGPS with all rights frozen at that point. Councillors elected for the first time in May 2014 were ineligible to join.

Never ones to let the grass grow under their feet where personal remuneration is concerned, our councillors decided at their very first meeting after the election

That the Council should provide a pension scheme for elected members, which provides benefits as close as possible to those available under LGPS

They delegated authority to the heads of Legal and Finance to take the necessary steps to make this happen.

But what the mayor and his chums finally agreed last month is subtly different:

That the pension scheme would be made available to all Members in receipt of Special Responsibility Allowances (SRAs)

So only the mayor himself and those councillors he handpicks to be his advisors will be members of the new scheme. Ordinary backbench members will have no pension.

And they will have no say over this decision either. In an unstrange twist of fate it turns out that under an elected executive mayoral system this kind of decision is one for the mayor himself in consultation with his cabinet. This is not a matter for full council.

And happily the monitoring officer was also able to use Section 33 of Localism Act 2011 to relieve the mayor and cabinet from the restrictions of pecuniary interest by granting dispensation to them to participate in the discussion and then vote themselves flipping great wedges of cash.

The chosen scheme will be a

…Defined Contribution Pension with medium employers contribution rate of 13.4%

That 13.4% employers contribution is more than double the 6% that ordinary council staff now get. The self-serving greed is breath-taking. Sir Robin already receives an allowance of £81,029 per year. This new scheme will mean council taxpayers forking over an extra £10,858 per year in pension contributions to him alone. Add in the payments for his coterie of advisors and the bill balloons to hundreds of thousands of pounds between now and the next local election.

The justification being put forward for doing this is laughable.

This will act as an inducement to attract a wider range of economically diverse and younger (than the average age of 55) candidates, as stated in the 2014 report of the Independent Panel for Remuneration of London Councillors. That would improve representation across the borough and enhance democracy. It would also make it easier for existing councillors to take on more responsible posts that will require them to spend less time working outside the council.

This supports the Council’s resilience agenda through helping to promote a Strong and Cohesive Community and also to promote the Council as an Efficient and Trusted Organisation.

The lack of a Council pension didn’t stop Newham residents standing for election in 2014 – there were at least nine candidates in each of the 20 wards. Nor did it prevent new councillors becoming mayoral advisors or accepting SRAs. For example, Francis Clarke and Ken Clark went into Sir Robin’s cabinet immediately after the election and Hanif Abdulmuhit took an SRA as lead councillor for Green Street

Given that the mayor personally gets to decide who joins the cabinet and who gets an SRA it is bizarre to suggest pensions are needed as an incentive for people to stand for council. Even if elected there’s no guarantee they’ll ever join the gilded circle.

It’s also unclear that this is even legal. The Local Government Association has advised that it’s not and no other council in the country is planning to do the same thing.

At a time when community centres are closing and the council is looking for ways to save a further £50 million a year this is – at best – an extraordinarily tactless decision. At worst it’s a massive ‘fuck you’ to those that depend on council services.

Perhaps that’s why the Overview and Scrutiny committee has decided to ‘call in’ the decision. There will be an emergency meeting to discuss it next Wednesday (22 July) at East Ham Town Hall, starting at 5 p.m. It is open to the public.

2 Responses to “Gold plated”

  1. Birdman July 15, 2015 at 16:49 #

    I commented on this proposal when it was first announced after the election, and the Chief Executive was tasked with going away and coming up with a scheme for all councillors. At the very least the report he must have had printed should be made available. The London wide independent remuneration committee has never recommended that London Boroughs set up their own scheme but merely recorded its disagreement with the Governments endingt the right of councillors to belong to the Local Government Pension Scheme. I sit on an independent renumeration committee in one of the Shires and I can tell you that there is absolutely no evidence to support the idea that access to a pension scheme increases the diversity in age and gender balance of councillors. That is much more a matter for Political Party selection process and reasonable expenses for such things as child care etc. The O&S committee must bring the Mayor to task over this and if possible haver the lawyers declare whether it is legal or not. Even if it is, which I doubt, it should cost no more than the LGPS.

  2. d July 15, 2015 at 20:02 #

    And another reason not to vote for the labour party, wales and co. at the trough.

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