States Members’ Remuneration Review Body: recommendations for 2014.

STATES OF JERSEY

STATES MEMBERS' REMUNERATION REVIEW BODY: RECOMMENDATIONS FOR 2014

Presented to the States on 7th October 2013 by the Privileges and Procedures Committee

STATES GREFFE

2013   Price code: B  R.125

FOREWARD

The Privileges and  Procedures  Committee is pleased  to present to the  States  the recommendations of the States Members' Remuneration Review Body (SMRRB) for 2014. The terms of reference of the SMRRB require the Review Body to present its recommendations  to  PPC  and  the  Committee  is  then  obliged  to  present  the recommendations to the States.

The revised Terms of Reference agreed by the States in June 2012 for SMRRB state – "10.  The  Review  Body's  recommendations  on  the  actual  level  of

remuneration  and  expenses  payable  to  elected  members  shall  be

implemented automatically unless a proposition seeking a debate on the recommendations is lodged au Greffe' within one month of the

date of presentation."

PPC is again grateful to the members of the SMRRB for the work that they do on an honorary basis and for the comprehensive way in which they undertake this difficult task.

STATES MEMBERS REMUNERATION REVIEW BODY

RECOMMENDATIONS FOR 2014

Summary of conclusions and recommendations with regard to remuneration (including expenses)

The  Review  Body  recommends  an  increase  of  £600  in  States members' basic remuneration (currently £42,000) effective from 1st January 2014 to £42,600.

The Review Body recommends no increase in the current expense allowance of £4,000.

Basic remuneration

As in previous recent years the Review Body has found it difficult to strike a balance between the competing requirements in its terms of reference to "have particular regard to, but not be bound by", the principles that the level

of remuneration available to elected members should be sufficient to ensure that no person is precluded from serving as a member of the States by reason of insufficient income and that all elected members should be able to enjoy a reasonable standard of living,  against the requirement for it also to "have particular regard to, but not be bound by" the economic and fiscal situation prevailing in Jersey, any budgetary restraints on the States of Jersey.

For 2013 the Review Body recommended an increase of £818 (just under 2%) in anticipation  of what we considered was likely to  be the  comparative increase in both the private and public sectors. Some months later a public sector pay increase of 1% consolidated + 1% non-consolidated was imposed. The recent publication of the Statistics Unit's surveys in August serves to confirm, we believe, that our recommendation was of an appropriate order of magnitude.

We are aware that some members of the States of Jersey chose not to accept

the award recommended for 2013. It is not for us to comment on that  and we will leave it to them to decide whether the increase may have been justified in retrospect and feel it appropriate to accept it together with the current recommendation for 2014.

Looking  ahead,  we  note  the  public  sector  pay  increase  of  4%  currently proposed for 2014 (subject to agreement on modernisation). The Review Body has noted the percentage increase proposed but it is obliged to take at least as much account of circumstances in the private sector where no such over-arching proposals apply.

We are informed that private sector pay increases proposed for 2014 are likely to be somewhat higher than in the last few years. Historically, the general increase varied depending on the specific industry within the private sector. Current information suggests that pattern will be repeated and it appears that, while some employers may be anticipating an increase of, say, around 4%, others may still be contemplating no increase at all, given the economic factors still constraining some businesses.

The only recommended pay increase recently announced for 2014 is that of 1.5% in the minimum wage which would apply from 1st April 2014.

Expenses

At present, States members receive an annual expenses allowance of £4,000. The first Review Body recommended an annual expense allowance of £3,650 from 1st January 2004 and this  was increased by £350 to £4,000 from  1st January 2012.

States members serve the community as individuals (not as employees) who inevitably incur office and other expenses in doing so. The increase of £350 to £4,000 per annum from 1st January 2012 represented a compound growth of  less  than  half  of  1%  across  the  intervening  8  year  period.  The recommendation  for  2012  was  made  in  the  awareness  that  the  expenses incurred  by  States  members had  taken  no  account  of  an  annual  rate  of inflation then currently estimated at 3.5% by the States of Jersey Statistics department and that, inevitably, States members would have been absorbing these increased costs, and would continue to do so.

The Review Body has received no representation that the current allowance is  insufficient  and  no  further  increase  in  expenses  is  recommended  for January 2014.

Pension

The Review Body remains committed to its previous recommendation (see R.62/2009) that the matched-contributions pension scheme as there outlined should be introduced for the reasons stated. The Review Body believes that

the matter remains worthy of further consideration by the Privileges and Procedures Committee and by States members as a whole with a view to the introduction of such scheme at some point in the future.

Social Security

States members are classed as self-employed but,  by concession, they are effectively treated  as employed' for Social Security purposes only. Those members who would pay self- employed contributions for both  themselves and  a  notional  employer  can,  if  they  apply,  receive  a  taxable  refund equivalent to  the  amount that  an  employer  would  pay  in  respect  of  an employee earning the same amount as a States member.

Further considerations

In  its recommendations  for  2013  the  Review  Body  reported  that it  had submitted  written  evidence  to  both  the  Electoral  Commission  and  the Machinery of Government sub-committee of the Privileges and Procedures Committee.  In  doing  so  the  Review  Body  expressed  the  hope  that  the opportunity  would  be  taken  to  address  the  issue  of  an  appropriate  and modern remuneration structure for States members.

The  Review  Body  noted  in  previous  reports  that  there  is  a  growing recognition, both from the public and among  States members, that some form of special responsibility increment might apply within the States to Ministers and to the Chairmen of scrutiny panels and other committees.

Citizens might anticipate that the funding for such increments might be more easily  forthcoming if there was a reduction in the number of States members, but for any such change to take place the States would need to repeal Article 44(1) of the States of Jersey Law 2005 that currently requires all elected members to receive the same remuneration.

The Review Body notes that elections are scheduled to take place in October 2014 and it therefore intends to institute a public consultation in 2014 before making recommendations that will apply to members of the new States for 2015 and beyond.

Thanks

Thanks are due to the Greffier of the States, Michael de la Haye for his own substantial administrative help and that of his department in supporting the activities of the Review Body.

States Members Remuneration Review Body

TERMS OF REFERENCE

1. The Review Body will make recommendations to the States, through the Privileges and Procedures Committee, on any matters relating to the remuneration and expenses of elected members as it considers appropriate.
2. The Review Body shall take any steps it considers necessary to gauge public opinion on the matters within its purview. Equally the Review Body shall seek the opinions of members of the States from time to time as it considers appropriate.
3. In forming its recommendations the Review Bodywill take account of any matters that it considers to be relevant and will have particular regard to, but not be bound by, the following matters –

1. the  principles that  the  level of remuneration  available toelected members  should  be  sufficient to  ensure that  no person is precluded from serving as a member of  the States by  reason of  insufficient income  and that all elected members should  be  able to  enjoy a  reasonable standard ofliving, so that the broadest spectrum of personsare able to serve as members of the Assembly;
2. the  economic  and fiscal situation  prevailing in  Jersey,  anybudgetary restraints on  the  States of  Jersey  and the  States' inflation target, if any, for the period under review.

Membership

4. The Review Body shall consist of 5 members, none of whom shall be a member of the States.
5. The members shall be appointed for a period of 5 years and shall be eligible for re- appointment for one additional 5 year term.
6. The members shall be appointed by the Privileges and Procedures Committee  following  requisite  consultation  with  the  Jersey Appointments  Commission.  Before  making  any  appointments  the Committee shall nevertheless be required to present a report to the States  setting  out  the  names  of  the  proposed  appointees  and  the

appointments shall not be confirmed by the Committee until at least 15 days after the presentation of this report.

7. The Review Body shall appoint one of its members as Chairman.
8. The quorum of the Review Body is 3.

Recommendations

9. The Review Body shall report its recommendations to the Privileges and Procedures Committee which shall present them to the States forthwith.
10. The  Review  Body's  recommendations  on  the  actual  level  of remuneration  and  expenses  payable  to  elected  members  shall  be implemented automatically unless a proposition seeking a debate on the recommendations is lodged au Greffe' within one month of the date of presentation.
11. The  Review  Body  may  make  recommendations  on  other  matters within  its  terms  of  reference  to  the  Privileges  and  Procedures Committee but any such recommendations shall not be implemented until they have been agreed by the States.

Membership of the SMRRB

Mr. Julian Rogers (Chairman) Mr. Brian Bullock

Mr. Maurice Dubras

Mr. John Mills C.B.E.