The New System
    The new regulations are split into 6 Parts:-
Part 4 deals with Independent Remuneration Panels
Part 5 deals specifically with parish (and town) councils and
Part 6 with transitional provisions and it is these 3 Parts with which we are chiefly concerned and upon which this Legal Topic Note will concentrate.

Part 4 - Independent Remuneration Panels
    An independent remuneration panel has to be established by each authority and for the purposes of Part 4 in Stafford, unless otherwise specified, an authority means a district council. The panel consists of at least 3 members, none of whom is also a member of an authority in respect of which it makes recommendations or a member of a committee or sub committee of such an authority or is disqualified from being or becoming a member of an authority.
    The parish council has to make reference, as will be explained, to a parish remuneration panel. A parish remuneration panel will consist of those persons who are also members of the independent remuneration panel but cannot consist of parish councillors of councils in respect of which recommendations are to be made.

Part 5 - Parish Councils
• Parish Basic Allowance - Regulation 25
    A parish or town council is able to pay a parish basic allowance for each year to its chairman only or to each of its members (regulation 25). The amount payable to the chairman may differ from that of other members (i.e. a higher sum could be paid because of the extra duties that may be required of the chairman) but otherwise the sum shall be the same for each member.
    The allowance is not a salary. It is a figure, which is calculated to cover the expenses, which are normally associated with the basic duties of being a local councillor. Travelling and subsistence allowances are treated separately (see below) There is no set figure and no doubt the figures will differ from region to region for a variety of reasons. This is an entirely new approach to the first tier membership and will be a very new concept to many members, although it does bring first tier councillors into line with their colleagues in other authorities.

• What to do after setting the level of parish basic allowance?
    As soon as reasonably practical after setting the levels at which the allowance is to be paid and to whom, the council must arrange for the publication in a conspicuous place for a period of at least 14 days within the area of the council, a notice containing the following information: -
(a)    any recommendation in respect of parish basic allowance made by the parish remuneration panel;
(b)    the level or levels at which the authority has decided to pay parish basic allowance and to which members it is to be paid; and
(c)    a statement that in reaching the decision, regard was had to the recommendation of the parish remuneration panel.
     The regulations also require a notice to be published when the report of the parish remuneration panel is made to the council (see below). It may be possible for the two separate requirements to be satisfied by the publication of one notice with the proviso that it contains all of the required information and timescales allow it to be dealt with in this manner.
    The council has to keep a copy of the information referred to in the notice available for public inspection on reasonable notice.

•    Parish Travelling and Subsistence Allowance - Regulation 26
     The council may pay to its members allowances in respect of travelling and subsistence, including an allowance in respect of travel by bicycle or other non motorised form of transport, undertaken or incurred in connection with the performance of any duty within the following categories: -
(a)    the attendance at a meeting of the council or of any committee or sub committee of the council, or of any body to which the council makes appointments or nominations or of any committee or sub committee of such a body;
(b)    the attendance at a meeting of any association of authorities of which the council is a member;
(c)    the performance of duties in connection with a tender process;
(d)    the performance of any duty which requires the inspection of any premises;
(e)    the carrying out of any other duty approved by the council, or any duty of a class so approved, or in connection with, the discharge of the functions of the authority or of any of its committees or sub committees.

•    Recommendations
    Where a parish or town council proposes to pay the parish basic allowance, in setting the level of that allowance, it must have regard to the recommendations which have been made in respect of it by the parish remuneration panel in accordance with regulation 28. The same requirement is not specified within regulation 26 and so on face value, it would appear that the council can set the level of travelling and subsistence allowance without reference to the panel. However, the implication must be that, and the regulations do later refer to, the view of the parish remuneration panel being taken into account.

•    Parish Remuneration Panel - Regulation 27
    Regulation 27 states that a parish remuneration panel may be established by a responsible authority which is defined as a district or unitary authority. It is therefore feasible that in some areas parish panels will not be set up as there is no duty to do
so, rather a power. Of course, the implication is that the panel is established when a request to do so is made by an appropriate parish council. The process of making such a request is not specified within the regulations and again, how this is achieved in practice will differ around the country.
    The expenses of the parish panel are to be met equally by those parish and town councils in respect of which recommendations are made (regulation 27(4). Although the regulations are again less than specific on this, it may be assumed that the cost is spread between those local councils that actually make a request.
    When convened, a parish remuneration panel will produce a report making recommendations as to: -
(a)   the amount of basic allowance payable to members of the parish or town council (the council must take this into account in setting the agreed level);
(b)   the amount of travelling and subsistence allowance payable ;
(c)  whether the basic allowance should be payable only to the chairman of the council or to all of the members;
(d)    if to be paid to all members whether the level to be paid to the chairman should be higher and if so, what that higher figure should be;
(f)   the responsibilities or duties in respect of which members should receive the travelling and subsistence allowance.
    A copy of this report is sent to each council about which recommendations have been made.

•    Levels of Allowances - Regulation 29
    In making its recommendations, the parish remuneration panel can apply the same level to all the local councils for which it was established or else recommend different levels for different councils. The parish panel shall express its recommendation as to the level of parish basic allowance both as a percentage of the sum that the independent remuneration panel has recommended for the tier above (this figure can be 100 %) and as a monetary figure. 

•    What to do after receiving the recommendation? - Regulations 30 & 31
    As soon as is reasonably practicable after receiving the report from the parish remuneration panel, the council must: -
(a)    ensure that copies are available for public inspection on reasonable notice;
(b)    publish a notice in a conspicuous place for a period of at least 14 days which:-
i.    states that it has received the recommendation
ii.    describes the main recommendations and specifies the recommended amounts of each allowance and
iii.    states that copies of the panel's report are available for inspection upon giving reasonable notice and give details of how a request to inspect should be given.

     A reasonable fee can be charged for the provision of a copy of the report.
     The council is required to maintain records of payments made in respect of the allowances specifying the name of the recipient and the nature of the allowance. These records can be inspected by any local government elector for the parish or town without payment of a fee upon giving reasonable notice. Copies must be provided if so requested and a reasonable fee can again be charged.
    At the end of a year (which means 1 May 2003 to 31 March 2004 and thereafter any period of 12 months ending on 31 March in any year), the council must publish a notice in a conspicuous place for a period of at least 14 days stating the total amount that it has paid for the parish basic allowance and for the parish travelling and subsistence allowance.

•    Election to Forgo an Allowance - Regulation 32
    A member is able to elect in writing to the clerk that he or she wishes to forgo all or any part of their entitlement to the above allowances.

•    Recovery of Payments Made
    The regulations provide for the recovery of allowances already paid to a member where for example, that member has been disqualified for a period of time following a complaint being made to the Standards Board for England.

•    Chairman's Allowance (section 15(5) LGA 1972)
    This section has not been repealed by the new regulations and can still be used to make the customary payment to meet the costs associated with the position of chairman. This may be particularly useful to councils who simply wish to continue with the practice of making the payment without the need to refer to the parish remuneration panel.

•    Dependants' Carer's Allowance
     Parish councillors are not entitled to claim this allowance under the regulations and yet it is available under the new regulations, for example, to those district councillors with dependant children.
    The case of Grubb v Price Waterhouse Coopers and Notts CC (28 July 2000, The Times) tested the previous regulations. In that case, the council paid hotel expenses greater than those permitted under the regulations to councillors attending a conference, direct to the hotel. The court held that this was lawful under section 111 Local Government Act 1972 and that the allowances regulations did not constitute an exclusive code.
    It would follow that the cost of a child carer could be paid direct to the carer (not to the councillor to pass on) if the council had agreed that it was in respect of approved duties.
    The decision was made before the arrival of the new regulations but I do not see why it cannot still be relied upon and would in any event, help to balance what appears to be an unfortunate discrepancy between, for example, a parent serving a unitary authority and a parent, in the same area, serving on the parish council.

•    Tax implications
    When paying participation allowances to elected members, local councils are obliged by law to deduct income tax. The Inland Revenue treats all councillors of all tiers equally and so local councillors will be subject to tax provisions in the same way as tiers above. There may also be similar considerations with regard to travel and subsistence allowance in certain circumstances. A guide to the PAYE implications is attached as an appendix to this Legal Topic Note and further training on this can be obtained through County Associations.
 
Return to Annual Parish Council Minutes