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Complaint no. LA/R/369 concerning an alleged contravention of the Councillors' Code of Conduct by Provost Ronald Burns of Renfrewshire Council

1. Complaint number LA/R/369 alleged a contravention of the Councillors' Code of Conduct ("the Code") by Provost Ronald Burns ("the respondent").

2. It was alleged that the respondent had contravened the Code, and, in particular, had failed to comply with the rules for the payment to councillors of remuneration, allowances and expenses.

3. The person complaining, ("the complainant") alleged that the respondent in submitting his claim forms for Members' Expenses and Allowances had failed to declare a vast number of expenses as taxable, claiming on occasions for the same day twice, claiming for a number of Subsistence Allowances when in fact a lunch was provided at Council Headquarters for Councillors and also in respect of other occasions when food would have been provided.

4. The respondent alleged that he had not mishandled the matter of his claims for Members' Allowances and Expenses, and he had operated within the terms of the Scheme. He refuted any allegations of impropriety and indicated that, contrary to suggestions of over-claiming, his review of the matter has found only one possible Subsistence Allowance over-claim, with other expenses not claimed for Council business telephone calls and also various weekend duties as Provost.

5. The payment of Councillor's Allowances and Rates for Travelling and Subsistence derived from the Local Government (Scotland) Act 1973 and the Local Government and Housing Act 1989. Under these two Acts, regulations had been made, periodically, to set out the framework for levels and payment of Members' expenses. In terms of the regulations each Council must have a formal Scheme setting out the details of the payments to which members of the Council are entitled ("the Scheme"). Following the last Local Government Elections, Renfrewshire Council formally adopted a Scheme in May 2003. This complaint had to be considered in the light of the specific terms of that Scheme.

6. The complainant's various area of concern had been categorised for examination as follows:

1. Taxable and non-taxable expenses;

2. Subsistence Allowance Claims for attending Council meetings and other events when food was provided;

3. Pattern of mileage claims;

4. Level of mileage claims;

5. Over-claims of Subsistence Allowance (Convener maximum 7 per month);

6. Pattern of claims for Subsistence Allowance;

7. Claims made for Public Holidays;

8. No claims made for certain days when performing duties;

9. No accounting on Claim Forms for cash advances for Civic Hospitality;

10. Double claims;

11. Example of wrong addition on form;

12. Example of no duty detailed on claim form.

7. I found that my powers and that of the Standards Commission were in respect of the Councillors' Code of Conduct which came into effect on 1 May 2003. It was not possible for me, or the Commission, to consider allegations predating the introduction of the Code to assess the question of possible breach thereof. What had to be considered was whether or not the respondent had pursued the course of conduct alleged by the complainant since 1 May 2003 and whether or not the actings of the respondent then amounted to a breach of the Code. The instances alleged by the complainant I considered fell within the period commencing on 1 May 2003.

8. This complaint had to be considered within the national context. Recent consideration had been given to the remuneration of local councillors. The independent Scottish Local Authorities Remuneration Committee had recently conducted an in-depth review of the system of allowances for councillors. They in-gathered evidence and conducted research on current arrangements and made a number of recommendations for change. Several of the Committee's findings were of direct relevance to consideration of this complaint.

9. The Committee published its report entitled "Review of Remuneration Arrangements for Local Authority Councillors" in January 2006. The Committee referred to Subsistence Allowances and Meal Allowances generally being claimed for set periods of time away from a councillor's home and recommended the current system of Subsistence Allowances and Reimbursement of Costs Incurred be changed. The following paragraphs of the report were of particular relevance:

"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 rate regardless of what expenditure, if any, has actually been incurred.

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

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

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 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 the councillors are carrying out council business in their own ward........"

10. In summary, the Committee recommended a move away from an allowance-based remuneration system for councillors to a salary-based system. The Scottish Minister for Finance and Public Service Reform had responded to the recommendations:

"……There is no doubt that the system of remuneration for councillors is in need of modernisation. The current arrangements are an obscure muddle and that is exactly why the Executive is committed to modernising the whole system….."

11. It was clear that Renfrewshire Council, in common with a significant number, if not all, local authorities approved a Scheme for Members' Allowances and Expenses based on a "self certification" process by the individual councillors submitting claims. This relied not only on councillors acting in good faith, but also on the local authority, as an organisation, having the appropriate processes in place to operate the systems for checking, payment and tax deductions. It was self evident that the whole purpose of such systems was to check not only that arithmetical calculations on the face of the claim forms were verified but that appropriate claims were made and these were in respect of approved duties. The Renfrewshire system, in common with a number of other local authorities, permitted flat rate allowances to be paid regardless of what expenditure, if any, had actually been incurred. In common also with other local authorities, the manner in which the Scheme of Allowances had been interpreted and operated by Renfrewshire Council, through the Finance and IT Department, had permitted councillors to claim allowances on a time related basis only. The requirement in the Scheme that expenses had been necessarily incurred was not the subject of detailed verification as staff relied, in the main, on the information given by councillors on the claim form.

12. As regards the respondent's alleged failure to treat a number of expenses as taxable, this had to be considered in the context of the manner in which the Finance Department operated this aspect of the Scheme during the relevant period. In terms of the Scheme, it was for an individual councillor to decide whether or not to submit subsistence receipts in respect of any claim. The Director of Finance and IT had confirmed that it was then for her staff to deal with making payments on a gross basis, with no tax deducted, or on a net basis, with tax deducted depending on the circumstances. The original claim form provided two separate figures columns for these two categories of payment. The respondent indicated that his usual practice was to submit receipts. As then constituted, the operation of the Scheme allowed for the respondent to act as he indicated he had done.

13. As regards the allegation that the respondent claimed, on occasions, for Subsistence Allowances when in fact a lunch was provided at Council Headquarters, the Director of Finance and IT, as the Proper Officer responsible for the administration of the Scheme, had stated that no abatements in Subsistence Allowances had been made in the situation where lunch was available at Council Headquarters. No register was kept by the Council of those Councillors taking lunch at the end of Council meetings. As regards Subsistence Allowances being claimed for other duties which may, or may not, have involved the availability of food as part of an event attended by the respondent, it was also clear that the Scheme as operated involved no abatement being deducted by the financial administrators responsible for payments being made. As then constituted, the operation of the Scheme allowed for the respondent to act as he indicated he had done.

14. Two matters were raised by the complainant in relation to the respondent's claims for mileage allowance. Firstly, the respondent had a pattern of claiming the same amount of mileage each day, despite what was assumed to be a varied itinerary of Council business. In response, the respondent referred to his use of the official Council car for civic duties, his pattern of use of his own car and his habit of calculating his business and private mileage on filling his car with fuel and "averaging out" his business mileage calculation over the claim form period in question. I considered this was an unusual approach to take to setting out a mileage record, which would not have served to achieve transparency. I noted that this method of operation was accepted by the administrators of the scheme and payments made on that basis. I further noted that since the introduction of the new claims form, involving the need for more information to be provided, it would appear that the respondent was taking steps to be more "event-specific" about mileage.

15. Secondly, the complainant referred to the claims forms for the respondent's current car which described it in the engine capacity part of the form as a "1.2". The complainant stated he had checked the DVLA website which indicated that the cylinder capacity for this specific vehicle was 1199cc. The respondent described his vehicle as a "1.2" in the claims forms. This is not a correct description of cylinder capacity as was specified in the Scheme and, it could readily be said, should not have been accepted as a properly completed claim form by the Finance Department. Clearly, there was a well recognised pattern of motor car manufacturers marketing vehicles with a "rounded-up" cylinder size description and for car owners, in turn, to describe their cars in the same terms. Unfortunately for the respondent however, the threshold for a difference in mileage rates in the scheme was at this specific point of cylinder capacity. I had no evidence of bad faith or deliberate intent on the part of the respondent on this point, but the matter required to be checked and rectified, as necessary.

16. In relation to the proposition by the complainant that the respondent, as Convener, could only submit a maximum number of 7 claims per month for such category of Approved Duty, I considered that any additional duties required by virtue of the approved Provost's Remit would have been permissible in terms of the Scheme. That could readily have been deemed as "prior approval" for additional permitted duties which was allowable in terms of the Scheme. Turning to the pattern of Subsistence Claims, these generally, if not invariably, were submitted by the respondent for the maximum daily level. The respondent referred to the extent of duties involved in being the Convener/Civic Head of a local authority the size of Renfrewshire. I considered it could reasonably be argued that the extent of such duties could, on many occasions, have amounted to the equivalent of a full time job and for which there could therefore be stated to be an entitlement to claim maximum permitted allowances. I found that based on the manner in which the Scheme had been interpreted and operated, historically by the Council, the respondent had not deliberately over-claimed Subsistence Allowance.

17. On the matter of claims submitted for Public Holidays, the respondent had pointed out that on such occasions when the Council Offices were closed for a holiday, events functions, civic work or contacts to councillors on ward inquiries from members of the public requiring attention could be just as frequent, if not more so, than when the offices were open. I had no hesitation in accepting this proposition. It was noted the Scheme contained no prohibition on claims being submitted for Public Holidays, presumably for that very reason.

18. On the matter of no claims being submitted by the respondent for attending some events or functions, the complainant's view of this matter seemed to be that a failure to claim was just as indicative of alleged wrongdoing on the part of the respondent as his examples of claiming for allowances. I was unable to agree with such a particular interpretation. It was a very well-established principle that it was entirely a matter for each individual councillor to submit claims, or not, as they saw fit. In addition, the extent of those claims which were less than the entitlement was entirely at a councillor's individual discretion.

19. The complainant's interpretation and expectation of the Scheme of Members' Allowances, included a perceived individual responsibility on each councillor to have provided detailed background records (eg diaries, travel logs, receipts etc) in vouching for claims submitted. The Scheme did not set out such requirements to justify claim form details. I was unable to uphold his particular interpretation. The Scheme placed no such specific responsibilities or obligations on Elected Members of the type he wanted. The respondent also referred to the several cash advances given to the respondent for Civic Hospitality purposes and queried the accounting for same. I had no information before me to suggest that the respondent had acted other than in terms of the practices of Renfrewshire Council. In any event, that was not a matter regulated by the Scheme.

20. In relation to the points raised by the complainant on double claims, example of wrong addition in form and example of no duty being stated on the claim form, I took the view that these categories fell within the responsibilities of the Scheme administrators as confirmed by the Director of Finance and IT of the Council on the steps to be followed in processing claims. Even in the best administered Schemes, it was not unknown for oversights or miscalculations of the correct amounts of members' expenses to occur. These could be overpayments or underpayments. When noted, a corrective adjustment was made by the Scheme administrators. It was a mechanism with which a number of councillors across Scotland were familiar.

21. The question to be considered was whether or not the actions of the respondent amounted to a breach of the Code in relation to his specific obligations for making claims under the Scheme. The exact obligation on the respondent in terms of the Code of Conduct was:

"You must comply with the rules for the payment to councillors of remuneration, allowances and expenses."

Having considered all the information provided, within the context of how the Scheme was interpreted and administered during the relevant period, I did not consider that, in all the circumstances, there had been non-compliance on the part of the respondent.

22. To his credit, the respondent had attempted to review the claim forms and indicated that one individual item appeared to be for the wrong amount. He also indicated that there were items he had not claimed for. I considered that the respondent operated within the boundaries of the Scheme for Members' Allowances and rates for Travelling and Subsistence as administered by Renfrewshire Council at the relevant time of the complaint. I did not find, on the balance of probabilities, that there was any wilful attempt on the part of the respondent to obtain payments to which he was not entitled. I recommended that a final check be made of the respondent's claim forms, with any necessary adjustment being made so that a calculation could be made of the amounts due to the respondent in terms of the Scheme, and the appropriate deduction for any miscalculated sums which were found to have arisen. Particular attention should be paid to the question of whether or not an over-payment had been made in respect of the cylinder capacity of the respondent's current vehicle. It was ultimately for the respondent to decide whether or not he submitted a full retrospective claim for any or all sums to which he was entitled and a matter for the Council as to whether or not those sums were paid in view of the time which had elapsed since any entitlement arose.

23. Renfrewshire Council as a Local Authority had a fundamental obligation of "good stewardship" in relation to expenditure of public monies under its control. This included the operation, administration and audit of an appropriate Scheme of Members' Allowances and Rates for Travelling and Subsistence. It was clear from the recent investigation by the Scottish Local Authorities Remuneration Committee that the Council's provisions for the system of Members' Allowances were not unique. The Renfrewshire Scheme was the subject of investigation by the Council's independent external Auditors, Audit Scotland, for the financial year 2003/04 and recommendations were made for changes to be made with a number of suggestions being made by them for enhancing existing controls which were implemented. This included a redesigned claim form, effective from May 2005 with more space to include details of the specific Approved Duty being claimed. The clear aim was to support and verify an effective system of paying allowances. The Council recently obtained further specialist advice on the matter and made further improvements to assist the proper administration of the Scheme. This advice was accepted by the Council at its meeting on 16 March 2006. This would involve an additional responsibility on members to provide further information to support claims made, which I considered should prove a reassurance to the Council Tax-payers of Renfrewshire that the Council placed a very particular priority on good stewardship. As part of that process, which should have been a continuing one, I (again, having made the same recommendation in another and recent case) recommended, mindful that the current statutory processes were likely to be changed in the near future:

1. The Council should implement a full training scheme for all Members on the Claims System to assist the understanding of all concerned, with, in particular, further practical advice and guidance on the level of detail expected in claims forms.

2. Once the training process was complete, the Council should consider what sanctions should be placed on any Councillor who was not complying with the claims process.

3. The Council should allocate appropriate Internal Audit resources to support the operation of the current Scheme.

4. The Council should consider, consulting as necessary with Audit Scotland, what further steps, if any, it should take in relation to my findings and the recommendations.

D Stuart Allan,
Chief Investigating Officer.
Forsyth House
Innova Campus
Rosyth Europarc
Rosyth
Fife
KY11 2UU
19 May 2006