Scottish Government
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Arms length payments stopped

Councillors will no longer be paid to serve on the boards of arms length organisations under new regulations published recently.

Finance Secretary John Swinney has amended regulations to stop councils allowing a body within its control, such as arms length organisations, to pay councillors. The regulations come into force on July 1 2011 subject to Parliamentary approval. Councillors will still be able to claim for associated expenses.

The move implements one of the recommendations of the Scottish Local Authorities Remuneration Committee (SLARC) report, published earlier this year.

Mr Swinney said:

"It can't be right that a limited number of councillors can receive additional payments to help deliver broadly the same services as delivered by their own councils. In effect, some councilors are being paid twice.

"The Scottish Local Authorities Remuneration Committee report highlighted that only Glasgow City Council had a policy to pay additional monies and confirmed that 40 councillors were sharing £260,000 in additional payments for serving with boards of arms length bodies. I agree with SLARC that this completely undermines the principles of the existing Councillor remuneration scheme, and that's why I have today laid regulations to stop the practice."

A number of councils have set up Arms Length External Organisations (ALEOs) to provide a function or service usually undertaken by the council itself, for example the provision of leisure services. Council staff transfer to the ALEO which is legally separate from the council, but the council retains control by having councillors and/or council officials in a governance role.

Regulation 3 of the Local Governance (Scotland) Act 2004 (Remuneration) Regulations 2007 ('the 2007 Regulations') has been amended to prohibit a local authority to allow a body controlled by it to make any payments to its councillors by way of remuneration, other than allowances for reimbursement of receipted expenses.

The SLARC Committee's fourth report was published in March 2011 and made 32 recommendations. Ministers will respond to the other recommendations of the Committee in due course.

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