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Chapter 5 - Expenses

Introduction

5.1 In addition to basic and special responsibility allowances discussed in chapter 3, we have considered the other allowances and expenses that are paid to councillors.

5.2 Our view is that expenses should be paid to re-imburse expenditure actually incurred. This would represent a significant move away from the flat-rate allowances that are currently paid. This principle is a common theme that runs through many of our recommendations outlined below.

Eligibility: present position

5.3 Travelling and subsistence allowances may at present be claimed for approved duties set out in Section 49 of the Local Government (Scotland) Act 1973. Approved duties are defined as:

• Attendance at a meeting of the local authority or any of its committees or sub-committees;
• The carrying out of any other duty approved by the local authority, or anything of a class so approved for the purposes of, or in connection with, the discharge of functions of the local authority or any of its committees or sub-committees;
• The performing of any duty as a member of any other body, prescribed by the Scottish Ministers for the purpose, to which the councillor has been nominated or appointed by the local authority;

5.4 In effect this means that travelling and subsistence allowances may be claimed for

• Attending council meetings including committees, sub-committees, working groups etc
• Attending meetings in the councillor's ward e.g. community councils, school boards etc
• Carrying out councillors' surgeries
• Consultation with officers based in the council headquarters
• Consultation with officers based at other council offices
• Functions in the councillor's ward to which the councillor has been invited
• Attending, on behalf of the council, meetings with other bodies, e.g. Local Enterprise Companies, Voluntary organisations, etc.

5.5 For the purposes of calculating claims, a councillor's normal place of residence is regarded as his or her place of work, so expenses associated with travel from home to the council headquarters, and other locations to conduct council business, may be claimed. We do not consider it necessary to amend this particular criteria.

Travel by private transport

5.6 Current arrangements allow for travel by private car or motorcycle where a set mileage allowance may be claimed. The current mileage allowances for use of private car or motorcycle differs, depending on engine size. We consider that these bandings are very outdated and should be replaced with one rate, in the interests of simplicity. We have also noted that there is no allowance for travel by bicycle and recommend that one should be introduced.

Recommendation 12: We recommend that allowances for travel by private car, motorcycle, and bicycle should be introduced in line with current HM Revenue and Customs rates. The rates should keep pace with any changes made by HMRC. Current HMRC rates are detailed in table 4.

Table 4 - Mileage allowances

Provision of leased cars

5.7 At present there is no express provision which allows councils to provide leased cars to councillors. In discussion with the Committee, Highland Council noted that some councillors travel very long distances on council business which results in significant mileage claims. In some cases providing a leased car to a councillor would be more cost-effective than paying mileage allowances for use of a private car. This would be a sensible measure, albeit one that may be necessary and appropriate for only for a small number of councillors in large rural authorities.

Recommendation 13: We recommend that councils should be able to provide leased cars for councillors if it is more cost-effective than reimbursing mileage allowance that would be claimed where a councillor used a private car instead.

Any councillor provided with a leased car may claim a mileage allowance for travel on council business, set at a level which covers the cost of fuel and other expenses which the employee may be required to pay for, e.g. top-up oil. We recommend that HM Revenue and Customs' advisory fuel rates should apply, and rates should keep pace with any changes made by HMRC. The rates as at 1 July 2005 are detailed in table 5.

Any councillors provided with a leased car would be required to pay for private use and meet any taxable benefit arising.

Table 5 - Mileage allowances for leased cars

Other expenses associated with travel by private car, motorcycle, or leased car

5.8 Councillors may claim costs incurred when travelling by private car, motorcycle, or leased car. Arrangements in each council tend to be similar but in the interests of clarity, and to ensure consistency, we would make the following recommendation:

Recommendation 14: We recommend that councillors should be able to claim other costs incurred when travelling on council business by private car, motorcycle or leased car as follows:

Parking charges - receipted costs of expenses incurred

Road tolls - costs of expenses incurred

Road pricing/congestion charges - receipted costs of expenses incurred

Ferry fares for car, motorcycle, or bicycle - receipted costs of expenses incurred.

Parking fines or tow-away costs will not be reimbursed.

Travel by public transport

5.9 Councillors who use public transport to allow them to carry out their duties are generally able to claim the costs incurred. Again, in the interests of clarity, and to ensure consistency, we would make the following recommendation:

Recommendation 15: We recommend that the following expenses should be reimbursed:

Buses and trams - expenses incurred, including season tickets/passes where this is considered more cost effective than purchasing tickets for individual journeys.

Taxis - receipted cost of fare.

Trains - receipted cost of fare. We do not consider it necessary to specify class of travel but would expect that standard class travel would be used for the vast majority of journeys.

Air travel - receipted cost of fare. We do not consider it necessary to specify class of travel but would expect that economy class travel would be used for the vast majority of journeys.

Ferry travel - receipted cost of fare.

We would further recommend that councillors and local authorities consider cost-effectiveness and value for money when choosing the mode and class of transport for a journey on council business.

Civic allowances

5.10 In a small number of councils a 'civic allowance' is paid to Provosts/Lord Provosts, and in at least one case to the council leader. This is generally intended to allow these councillors to meet expenses incurred on items necessary to allow them to carry out their role in an appropriate manner, e.g. formal dress. In other councils the cost of such items is met centrally by the local authority, or reimbursed on an ad hoc basis.

5.11 We recognise that some councils may wish to meet the costs of such items but we do not consider flat-rate allowances are appropriate. In particular, we do not think significant flat-rate allowances are compatible with the new salary arrangements that we are recommending. Instead, councillors who necessarily incur such costs - which we would expect to be limited to Provosts or Lord Provosts and their deputies - should be able to claim receipted costs for any items the council considers essential and reasonable to enable these councillors to carry out their roles.

Recommendation 16: The Civic Allowance should be abolished.

Recommendation 17: Provosts or Lord Provosts and their deputies may claim the receipted costs of items the council considers essential and reasonable for them to carry out their roles. In councils with no Provost/Lord Provost positions, these arrangements may apply to the Convener or Leader of the council. Councils should publish details of any such expenditure alongside information published routinely about councillors' remuneration.

Subsistence allowances and reimbursement of costs incurred

5.12 At present, subsistence allowances and meal allowances can generally be claimed for set periods of time away from a councillor's home. For example, the current arrangements allow:

• Breakfast allowance of £5.08 for 3 hours away from home before 10:00.
• Lunch allowance of £6.99 for 3 hours away from home, including all or part of the period between 12:00 and 14:00.
• Tea allowance of £2.75 for 3 hours away from home, including all or part of the period between 15:00 and 18:00.
• Dinner allowance of £8.70 for 3 hours away from home ending after 20:00.
• A rate of £82.53 is payable for an overnight absence from home.
• That rate is increased to £94.11 for an overnight stay in London.
• Some councils pay the London rate for councillors' attendance at the CoSLA annual conference.

5.13 Some councils use these figures as the maximum amounts which can be claimed, but the Committee has heard during its visits that other councils pay the flat rates regardless of what expenditure, if any, has actually been incurred.

5.14 We do not see any justification for paying flat rate allowances, especially daily meal allowances which can be claimed while attending meetings at the council headquarters or on other council business.

Recommendation 18: We recommend that all daily subsistence allowances and the overnight subsistence allowances should be abolished.

Expenses incurred for meals and overnight accommodation

5.15 Instead of flat-rate subsistence allowances, councillors should be able to claim the actual costs incurred for meals and overnight accommodation when they are carrying out council business away from their home or away from council offices. We do not consider it necessary to allow reimbursement for meals where a councillor is attending meetings in the council headquarters or chambers. We do not consider it necessary to allow reimbursement of expenditure on meals when councillors are carrying out council business in their own ward. In relation to overnight accommodation, we recommend that there should be a ceiling on the cost that may be incurred for bed and breakfast. Current rates for councillors are £82.53 for accommodation in Scotland and £94.11 for accommodation in London or at an 'approved conference'. These rates are consistent with those in place in other organisations and we do not see any need to change them. In the interests of simplicity, we wish to remove the anomaly that the London limit can apply to events and conferences held in Scotland.

Recommendation 19: Where a councillor is required to carry out council business outwith their own ward, or outwith council offices the actual cost of reasonable expenses incurred for meals may be reimbursed upon production of a receipt. We are content that individual councils should consider what amount would be considered reasonable and apply an upper limit should they choose to do so in the interests of value for money.

Recommendation 20: Where a councillor has an overnight absence from home, the actual receipted cost incurred for bed and breakfast may be reimbursed upon production of a receipt. Costs up to £82.53 for overnight absences in Scotland, and up to £94.11 for overnight absences in London will be reimbursed.

Telephone and associated expenses

5.16 Councils generally provide equipment necessary to allow councillors to carry out their role. In the main, councils can provide councillors with mobile phones, PC equipment and fax machines. There is clearly a benefit in councils continuing to provide equipment to take advantage of bulk buying power, and to ensure compatibility with the council's systems and networks. We therefore do not consider it necessary to allow councillors to be reimbursed for purchasing such equipment.

5.17 Many councils reimburse the cost of line rental for telephone and PC equipment at councillors' homes and the cost of business calls made. We do not consider that there continues to be a justification for councils meeting the costs of line rental as this is a cost which would generally be incurred by an individual whether or not they were a councillor. We do accept that councillors should be reimbursed for the cost of business calls made, whether on their home telephone, networked PC, fax machine, or on a personal mobile phone.

Recommendation 21: Councillors may be reimbursed for the cost of business calls made on their home telephone, networked PC, fax machine, or on a personal mobile phone. Rental costs of a single telephone line at a councillor's home may not be reimbursed, but any additional telephone costs necessarily incurred to allow councillors to carry out their role effectively, e.g. provision and rental of a second telephone line, may be reimbursed.

Scrutinising claims

5.18 We do not consider it necessary to recommend specific arrangements for scrutiny of expenses claims. Instead we would recommend that councils treat councillors' claims in the same way as those from staff, and that they satisfy themselves that the checks and balances built into their systems are sufficiently robust.

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