Ultra vires

11 Aug

The Local Government Association has weighed in on the subject of pensions for elected councillors.

It has obtained legal advice to clarify whether a council can make contributions to an alternative pension for its elected members following the changes brought about in April 2014 by the last government that specifically excluded them from the existing local government scheme.

In essence, the advice says they can’t (my emphasis added):

Under the Pensions Act 2008, we consider that councillors generally would be excluded from the definition of those entitled to receive pensions, as they are office holders. They are not workers as they do not have a contract of employment nor any other contract by which they undertake to do work or perform services personally for another party to the contract. This means that Councils cannot rely on the general power of competence under the Localism Act 2011 but must rather have a specific power in order to make such a payment…

… The general power of competence under S1 Localism Act 2011 does not permit a Council to do anything which it was specifically prohibited from doing prior to the Act, or which has been specifically prohibited after the legislation was passed. The changes to the pensions legislation were explicit and postdate the Act.

If Councils do chose to make such payments it is likely that they will be acting in a way which is ultra vires.

Councillor John Gray has contacted Newham’s monitoring officer to express his concern about this. He has also requested to see the internal legal advice provided to the mayor and shared with cabinet prior to their deciding to introduce the new scheme.  As he notes on his blog, this has been refused.

Given that Cllr Gray is a member of the Investment and Accounts Committee, which “looks in detail at how the Council’s superannuation (pension) funds are managed,” this is outrageous. Three other members of the committee are full-time councillors who will potentially benefit from the scheme: Forhad Hussain, Andrew Baikie and deputy mayor Lester Hudson. In any future discussion about executive member pensions they will have the advantage of having seen the advice which is being denied to their backbench colleagues. The chances of an informed debate are slim.

But we know from experience what will happen next. 

In the face of legal advice he doesn’t like Sir Robin will simply commission more. At our expense, obviously.

If this turns into a fight with central government he will lawyer up and the bills will run into tens of thousands – if not hundreds of thousands – of pounds They may end up being more than the cost of the pension scheme itself.

So for local taxpayers it’s ‘heads they win; tails we lose.’

2 Responses to “Ultra vires”

  1. Birdman August 11, 2015 at 16:46 #

    Martin. I have to leave a told you so comment. When private pensions for Councillors was first suggested over a year ago, I said they would almost certainly be unlawful. When the latest scheme was announced I repeated this and also said I thought it would end in expensive lawyers earning a lot of money, and it seems to be going that way. Not releasing legal information is standard for the Mayor and he and I fell out some years ago when he tried this refusal tactic over the issue of arming the ill fated Parks Constabulary. In the face of censure by the Information Commissioner, LBN finally handed over the opinions to me which weren’t dated and were contradictory. I have no doubt that the standard of advice LBN has received over pensions is equally as poor or even non existent. I hope Cllr Gray pushes this hard and gains the support of the majority of his colleagues. My respect for John has gone up because of the principled actions he is taking and I hope he is successful in stopping the ludicrous scheme that Sir Robin has agreed. My only regret is that he and others did not take this stand over a year ago when it was first agreed by Newham Council.

  2. Kevin Mansell August 17, 2015 at 09:38 #

    You could ask for the District Auditor’s (PWC) opinion on the legality of the expenditure…

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