Councillors' remuneration and expenses: recommendations

Remuneration

The 2005 SLARC Report recommended that councillors’ remuneration be set at 75% of the Scottish median salary for a full-time worker. This was based on evidence that councillors committed 32 hours per week on average and those in employment committed 28 hours per week on average (28 being 74.67% of the then standard 37.5 hour-week). The recommended salary of £15,452 per annum calculated on that basis was subsequently accepted by the Minister and implemented in full.

However, the use of that proportionate relationship to median salaries was not a specified recommendation; and it was not maintained during the subsequent years when councillors’ remuneration was either frozen or uplifted by less than inflation as was the case for public sector employees.

Since May 2017 the annual uplift in councillors’ salaries has been linked to the median increase in salary for a full-time public sector worker in Scotland (as published by ASHE Table 25.7a). The uplift is applied from the following April, rather than retrospectively as is the case for annual salary awards for public sector employees.

As shown in Section 3 above, serving councillors now report they spend between 21 and 36 hours per week on formal council business. The Committee’s 2023 survey of Scottish councillors has shown that the median hours spent on formal council and ward business equates to 28.75 hours per week, which is 82.14% of the now standard working week of 35 hours as recommended by Scottish Government.

The results of our councillors’ survey and engagement sessions demonstrate that the role of a councillor can be undertaken in less than a standard full-time working week, while Senior Councillor roles require more of a full-time commitment as set out in the Role Profiles in Appendix 5. R1

The Committee was mindful of the fact that Councillors are remunerated for holding public office not for hours worked. R2

Comparisons to average earnings in Scotland

We considered pay data on full and part-time earnings in Scotland as a whole and for employees in the public sector. These are set out in Table 2 below:

Scottish Local Government Living Wage (SLGLW) is based on an hourly rate whereas councillors are remunerated on an annual basis for holding office; nevertheless, the data show councillors' actual remuneration is little different to employees paid at the SLGLW.

In light of our evidence the Committee considers that the salaries of Councillors should more appropriately be set at 80% of the median salary for all public sector employees in Scotland as published in the Annual Survey of Hours and Earnings (ASHE). We consider the data for all employees, rather than full-time employees, to be the more appropriate comparator given the variation in hours worked by councillors. We consider that the data used should be the final version of ASHE Table 25.7a for a full year; and as such we have used the most recent final data for a full year published which is for 2022.

The Committee recommends that this methodology of setting the councillor salary level as a proportion of the median salary in the public sector in Scotland based on the median time commitment required for formal council and ward business, be adopted. This methodology would mean Councillors remuneration being increased to £24,581 with effect from 1 April 2024. R6

Comparison with others in elected office

In both 2006 and 2010, SLARC considered whether the roles of councillors and MSPs were comparable. They concluded that while both are elected and hold similar community representation roles, there were no other factors to justify any comparison as an MSP’s role is different to that of a councillor in two important respects: i) an MSP is a legislator and ii) they have a national role. We have gathered evidence and heard how the scope of responsibilities of Scottish local government has grown since 2010 and how the strategic responsibilities which councils have always carried are now more complex, involving greater focus on inter-agency partnerships and the delivery of shared outcomes across agencies. The scope of these partnerships often takes on local, regional, national, and occasionally, international dimensions.

When considering any similarities between the roles of Councillors and MSPs and MPs, it is noted that all three roles are part of the democratic process. A previous SLARC reported that the role of a councillor is neither a job nor equivalent to a Board member. In the view of this Committee, the responsibility to represent the citizens within a defined area is the role of Councillors, MSPs and MPs, and the roles are comparable in that respect.

In Scotland the average number of electors represented is:

Councillor - 15,500 constituents

Constituency MSP - 55,000 constituents

MP - 67,200 constituents

The proportionate relationships between the numbers of constituents served by councillors and MSPs/MPs are currently broadly similar to the proportionate relationships between the salaries of councillors and MSPs/MPs.

The Committee heard from councils that Senior Councillors and Council Leaders in particular deal with issues affecting the whole population of their Council which ranges from 22,450 in Orkney to 635,130 in Glasgow. Taking this into account alongside our findings on the growing complexity of these roles has led us to recommend a link between the salaries of MSPs and the leaders of Band D Councils.

We note that the role of MSP or MP is not defined as either full-time or part time and the remuneration paid to those holding these roles is based on the responsibilities they carry. This Committee is of the opinion that a similar approach should be adopted in respect of councillors. R2

Remuneration calculations

The most recent data on the median increase in full-time public sector earnings for Scotland as published annually by ASHE on 1st November. Table 25.7a indicates that an uplift in salary in the order of 6.2% will apply to councillors with effect from 1st April 2024 (as per current arrangements), giving salaries as set out in the Table 3:

Council Leaders and Civic Heads

Council Leaders have a responsibility to improve the day-to-day lives of those within their council areas, not only in leading the delivery of critical local public services, but also in driving economic and social development programmes, that often go beyond the limits of their council boundaries and routinely involve multi-agency partners from across the public and private sectors. We heard a consistent message that the role of a Council Leaders can be as complex and onerous as that of MSPs.

In particular the Committee heard in the Council Engagement Sessions how complex the role of Council Leaders has become, reflecting the changing landscape within which local government now operates. We also heard about the complexity of securing agreement across political groups and non-affiliated members, as well their national responsibilities. As a consequence, the Committee recommends that the Council Leaders in Band D (Glasgow and Edinburgh) are benchmarked at the current salary of an MSP. R8

The salary of the Civic Heads and Leaders of Councils in Band A is currently 55.56% of the salary of the Civic Heads and Leaders of the Councils in Band D which does not reflect the similarities in these roles as undertaken by Civic Heads and Leaders in the different bands even taking account of differences in scale. We consider that the differentials between salaries for Leaders in Bands B and C, and between Bands C and D should be more appropriately set evenly at 15% - a standard size of differential in pay structures. This would provide a minimum salary for the Civic Heads and Leaders of Councils in Bands A & B that is 70% of the maximum salary for the Civic Heads and Leaders of Councils in Band D, with the salary for Civic Heads and Leaders of Councils in Band C being 85% of that for Civic Heads and Leaders of Councils in Band D. R9

We consider that the current differential between the salary of Civic Head and Council Leader should remain at 25%. R10

This would result in a salary structure as set out in Table 4:

Other elements of remuneration

In relation to expenses, regulations have not been updated since 2010 and no longer reflect current costs of travel, accommodation, or subsistence. We consider it would be more appropriate for councillors to be paid travel and subsistence expenses (based on reimbursement of receipted expenditure) in line with those paid to officers in their respective councils, including the HMRC approved mileage rate. R12

This will allow for more regular updates. From our engagement sessions we learned that some councils have already adopted this approach because the current regulations no longer adequately reimburse councillors for authorised expanses. For comparison purposes, we have set out a summary of salary, travel, subsistence, and accommodation provisions for councillors, MSPs, and MPs in Appendix 3.

Since 2007 councillors have been paid a salary, as opposed to receiving either an allowance or more general remuneration, which makes them eligible to join the LGSS pension fund. In relation to pension provisions, elected members are eligible to join the local government pension fund; and we understand that its provisions are applied to them in the same manner as to local government employees, including the legislative requirement to stop contributing to the scheme at age 75. We do not consider that any changes are required.

The Committee heard that the lack of any severance or resettlement payments is not only a barrier to standing but seen as unreasonable, reflecting a period when councillors received an allowance and were generally seen as having access to other means. The comparison was made with MSPs for whom appropriate resettlement payments have been in place since the Parliament was established.

Considering the evidence, the Committee is of the view that a resettlement scheme should be put in place for councillors and should be modelled on the scheme currently in place for MSPs. It is recognised that the costs of these arrangements are not easy to calculate; however, since a scheme for councillors would not be activated until the next election, in 2027, there is time for it to be designed and an accurate estimate of the cost to be established. The Committee recommends the introduction of a resettlement (severance) payments scheme from 2027, modelled on the system applied to MSPs, which would enable councillors losing office to be awarded the equivalent of one month’s salary per year served, up to a maximum of twelve years. R14

Costs

Over the course of the past 10 months, the Committee has considered the time commitment required of elected members and the complexity of the roles. Given the evidence, it is our view that the changes proposed in the remuneration of Councillors, Senior Councillors, Civic Heads and Leaders are proportionate, in light of their roles and the length of time since they were last reassessed. SLARC last reported in 2011 and the Committee is aware the recommendations were not adopted.

Overall, the cost of the recommended salaries across all councils would be £4,685,780 which represents an increase of 14.29% on current salary costs excluding the 6.2% uplift due to take effect from 1st April 2024. As a percentage of the overall 2023-24 local government settlement in Scotland, this would represent an increase of 0.04%. This does not take account of severance payments since these would be calculated on a case-by-case basis.

The cost of the recommended increase in the number of Senior Councillors for councils currently in Band A would be £426,276 which represents a further increase of 1.3% on current costs, taking the total increase in cost to 15.59%.

Table 6: Cost of Recommended Salaries and Additional Senior Councillors in current Band A councils.

Available at: http://www.gov.scot/ISBN/9781835219317/documents