There's no doubt about last week’s domestic conversation topic: pension pots. For many councillors, though, it must have felt like being kicked when already down.
Not for them the tricky choice between a Lamborghini and Bugatti. Their April Fools’ Day gift from ministers is having their Local Government Pension Scheme policies terminated at the end of their current term of office, and barred to their successors.
To put it in context, only a minority are affected, they’ve had fair warning, and it’s unlikely their constituents, should they hear of it, will be overly distressed on their behalf.
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There is another perspective, though: the democratic one – which, by chance, is being debated in Strasbourg this very week by the Congress of Regional and Local Authorities of the Council of Europe (CoE).
The Congress of the Council of Europe (not to be confused with the wholly different Council of the EU) is a pan-European political assembly, the 630 members of which represent over 200,000 local and regional authorities in the 47 CoE member states.
Its function is to promote local and regional democracy, which it does in myriad ways, including writing expert monitoring and advisory reports – and it’s one of these that’s being presented in Strasbourg, on the state of local democracy in the 海角视频.
Disappointing and worsening would fairly summarise the report’s assessment, which is particularly critical of our councils’ highly centralised grant funding, their very limited local tax base and financial discretion, and the severity of the budget cuts imposed on them through the Government’s debt reduction programme.
The resulting lack of financial resources, the report asserts, restricts the ability of elected councillors – “the backbone of the local government system” – to exercise properly their political choice of weighing the benefit of services provided against the cost to the local taxpayer or user.
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The backbone phrase is interesting. Labour ministers used it occasionally, if unconvincingly, but this lot are more honest. They don’t even pretend to believe it.
To them, councillors should see themselves not as paid elected representatives, but as volunteers – like scout troop leaders, the comparison suggested last year by Conservative chairman, Grant Shapps.
European observers’ basic difficulty with this view is a linguistic one. They’re used to the ‘local’ in local government meaning, well, local – as in local pub, or shops, or school, or bus stop; stuff in one’s locality or neighbourhood.
They accept the French are a bit extreme, electing as they were last weekend the mayors and roughly half-million councillors of their 36,000 communes, all of which have constitutionally more powers and service responsibilities than our district councils.
But, even excluding France, their Europe is one in which the bigger countries’ most local tier of government comprises several thousand local councils, with an average population of 8,000.
England, by contrast, has 325 equivalent councils with an average population of 160,000, and consisting – in cases like Shropshire, Cornwall (population bigger than Luxembourg), and Northumberland (area the size of Trinidad and Tobago) – of what even we until recently called ‘county’, rather than ‘local’, government.
And that’s our councillor problem. Successive national governments have taken a kind of Tesco approach to local authorities and their elected members. Instead of “pile’ em high, flog ‘em cheap”, it’s been “make ‘em huge, and pay ‘em peanuts”.
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It’s a logic that bewilders advocates of local democracy like the CoE, who would prefer local government on a recognisably local scale, but also accept that there is a choice.
If you want councillors to be genuinely part-time volunteers, then the size of councils, of councillor workloads and their ward electorates has to be kept manageable by sufficiently large numbers of such volunteers.
But if, in the interests of what you consider to be efficiency, you want enormous councils, huge budgets, large wards and the smallest number of councillors you can get away with, then you should acknowledge the time commitment that’s inevitably involved and allow them to be paid accordingly.
Trying to have it both ways – humungous local authorities run by overstretched, parsimoniously paid part-timers – is a recipe for poor quality government and a betrayal of local democracy. For many councillors, the apparent choice is: get out and leave it to those who don’t need the money, or grab what financial compensation you legitimately can through other means, like pensions.
Ministers should recognise the phenomenon, because it’s essentially the same as their parliamentary colleagues do: making up what they consider their inadequate salaries by ‘stretching’ their expenses.
The difference, of course, is that MPs do get salaries, of £66,400, while the average councillor’s basic annual allowance – before PAYE and National Insurance deductions – is around £7,000 and already incorporates a public service discount of between 25 and 50 per cent, in explicit recognition of the principle of council work as voluntary service.
Small councils pay considerably less, and the biggest more. Birmingham, whose councillors represent wards the size of several French communes, is biggest of all, and their basic allowance is £16,267. Cabinet members get a Special Responsibility Allowance (SRA) of £28,000 and the Leader £50,000 – full-time roles on most major council nowadays.
The Labour Government’s intention, when it first proposed extending council employees’ Local Government Pension Scheme (LGPS) to councillors, was to restrict eligibility to those qualifying for an SRA.
Not surprisingly, the Local Government Association wanted the LGPS open to all councillors, but it was the Occupational Pensions Regulatory Authority who ruled that, for pension law purposes, all councillors should indeed be treated as employees, and therefore entitled to join the LGPS – which is what happened.
Ministers invariably label them ‘gold-plated’ or ‘taxpayer-funded’ pensions – as if councillors themselves make no contribution. They most certainly do, but the package is undeniably attractive.
It’s a career-average scheme with retirement and death benefits based on years in the scheme and average allowances received over those years. Councillors contribute a flat-rate six per cent of their current allowances, with the council paying the employer’s contribution, at a fluctuating rate averaging, according to the Government, around 22 per cent.
The TaxPayers’ Alliance found that in 2010/11 over 4,500 or one in five councillors were enrolled on the LGPS – at an estimated annual cost, now quoted authoritatively by ministers, of £7 million.
The 4,500 were actually drawn from only about 240 participating councils – some, of all types and sizes, having chosen not to extend their LGP schemes to councillors, including Coventry and, almost completely, Worcestershire.
By contrast, nearly 90 per cent of Warwickshire members were signed up, 54 in Birmingham, 28 in Sandwell, 22 in Solihull, 19 in Dudley, and 12 each in Walsall and Wolverhampton – although these numbers may well since have changed.
Numbers, though, aren’t really the issue. Nor, apparently, is making any coherent case for change – the best the Government can manage being that allowances look a bit like a salary (a mini-salary, presumably), which could blur the distinction with paid employees, compromise councillors’ independence to represent their communities, and so have a negative effect on local democracy.
Really? A more negative effect than gratuitously insulting and financially punishing your local democratic representatives? It’s an intriguing argument.
* Chris Game, Institute of Local Government Studies at the University of Birmingham