Independent Financial Review Panel Launches Report

14 March 2012

The Independent Financial Review Panel has today published its Report on the Salaries, Office Holder Allowances, Office Costs Expenses and Pensions of Members of the NI Assembly.

The Panel has also presented its Determinations on Salaries Expenses and Pensions to Assembly Commission, for immediate implementation.

In launching the Report and Determination, Chair of the Independent Panel, Pat McCartan, thanked all those who had helped the Panel in its work and said:

“The Assembly should be applauded for having the courage to place these decisions in the hands of an independent Panel totally free of political influence. We have worked hard to deliver an overall package that:-

• fairly rewards MLAs for the work they do;
• ensures the additional allowance paid to each office holder reflects the responsibility and scope of their post;
• imposes on MLA’s Office Cost Expenses a series of cuts similar to those experienced by the wider public sector;
• introduces new regulations for expenses to improve value for money and increase transparency and accountability; and
• requires MLAs to pay 1% more in contributions to their pension scheme.

We encourage everyone to look at this package as a whole – the Independent Financial Review Panel has delivered a real salary increase for MLAs, funded through significant savings elsewhere resulting in a net saving to the public purse of £3.16 million, or £29,000 per MLA, for the period to April 2015.

We believe that our Report is good for politics and good for Northern Ireland“.

The main decisions of the Panel, which will apply until the next Assembly election, are:

• An increase of £4,898 (11%) in the salary of MLAs, with effect from 1 April 2013.

• The post of Speaker will receive an increase in Office Holder Allowance of £6,199 (16.4%) with effect from 1 April 2013.

• The Office Holder Allowance for Chairs of Statutory Committees and Chair of the Public Accounts Committee will be increased from £11,331 to £12,000 with effect from 1 April 2013.

• Forty seven MLAs receive Office Holders Allowances in addition to their salary as an MLA. The salaries and allowances for almost half of these posts will be cut by amounts ranging from £5,331 to £9,738. Limited salary protection will be available for 17 existing post holders for up to three years.

• MLA’s contributions to their Pension Scheme will be increased by 1% to a maximum of 12.5% from 1 July 2012.

• From 1 April 2012 Office Costs Expenses will be reduced progressively by 3% per year from the current level of £75,857 to £69,238 by 1 April 2014.

• Automatic cost of living increases for expenses have been stopped.

• The amount of office consumables that MLAs can obtain free of charge from the Assembly Secretariat stores has been limited to £1,000 per year. There was previously no limit on this.

• MLAs who are also councillors will have 100% of their basic councillor allowance progressively deducted from their MLA salary by 1 April 2013.

• Eight MLAs who are also MPs will have their Assembly Office Costs Expenses progressively reduced from £37,928 per year to £8,655 per year by 1 April 2014.

In addition, controls on the payment of salaries and expenses have been strengthened in order to achieve improved value for money and accountability. Examples of these are:

• In future Members’ salaries and expenses must be paid into accounts in their own names;

• Purchasing goods and services from ‘connected parties’ including family members, political donors and political parties has been banned with immediate effect;

• The employment of family members has been limited to not more than one by the end of the mandate; and

• MLAs who do not lodge contracts of employment for their staff with the Assembly will no longer be eligible to reclaim the salaries of those staff from their Office Cost Expenses.

In summary, the Panel’s decisions have increased the basic salary for MLAs from 2013 but funded this through a range of cuts to allowances and expenses. Despite the pay rise, the package in its entirety will save £3.16m over the remaining 3 years of this Assembly mandate. This represents a significant real cut in the cost of politics.
ENDS
Interview requests should be made to:
Austin Hunter, Media Consultant, 07801 738604, or
Angela Hunter, Birdsong Communications, 07970 294406

Notes to Editors:

The Panel

The Independent Financial Review Panel was established by the Northern Ireland Assembly Members (Independent Financial Review and Standards) Act 2011. The Panel Members, who were appointed through an open competition, began work in July 2011.

The Panel Members are:

Patrick McCartan, CBE, MSc (Dist), FCIPD. (Chair)
Dr Henrietta Campbell CB, MD, FRCP
Alan McQuillan OBE BSc (Hons) MBA

The Panel is completely independent and not subject to any political control. Determinations made by the Panel are not subject to approval by the Assembly or the Assembly Commission.

Secretarial support for the Panel is provided by the Assembly Secretariat.

Report and Determination of the Panel

The Panel prepares a Determination to give legal effect to the decisions contained in its Report. The Determination is communicated to the Assembly Commission for publication and implementation.

Other than in exceptional circumstances the Panel can only issue one Determination for each Mandate of the Assembly. Today’s Determination therefore applies until the end of the current mandate.

The Panel has indicated in its Report that this Determination represents the first stage in reforming the system for payments of Salaries, Allowances, Expenses and Pensions for MLAs.

It is the Panel’s intention to publish its next Determination at least 12 months before elections to the next Assembly to allow prospective MLAs to clearly see the package of remuneration and support which will be available to them.

The Panel’s next Determination will take account of any decisions of the Assembly on the reform of the structure of the Assembly including the numbers of MLAs and numbers and sizes of Departments. In its Report the Panel has indicated that, in the absence of a significant reduction in the numbers of MLAs, it will be difficult for the Panel to justify further increases in the remuneration of MLAs.

The following table sets out the increases/decreases in MLA salaries and Office Holder Allowances as reflected in the Panel’s Report

 Current SalaryFrom April 1, 2013
MLA£43,101£48,000
Vice-chair, Statutory Committee*£48,768£48,000
Member Assembly Commission*£54,432£54,000
Principal/Deputy Speaker£51,600£57,000
Chair, Statutory Committee, PAC£54,432£60,000
Junior Minister *£62,710£60,000
Minister£80,902£86,000
Speaker£80,902£92,000
First, and deputy First Minister£114,535£120,000

*Subject to salary protection for existing Office Holders (see IFRP Report page 38)

The following table sets out the estimated cash savings to 31 March, 2015 as a result of the decisions of the Panel

CategoryCostSavingTotal
Subtotal: Salaries£1,415,000£1,252,000Cost of £163,000
Subtotal: Expenses£126,000£1,992,000Saving of £1,866,000
Estimated Cash Savings£1,703,000
Subtotal: Removal of indexationNIL£1,454,000Saving of £1,454,000
Total Estimated Financial Impact of DeterminationTotal Saving of £3,157,000

For more information, an electronic copy of the Report, and contact details on the Independent Financial Review Panel visit:- www.ifrp.org.uk

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