Agenda Item No
The Vale of Glamorgan Council
Cabinet Meeting: 7 April, 2014
Report of the Leader
Voluntary Cap on Indemnities for Members
Purpose of the Report
1. The report only deals with one aspect relating to members indemnity addressed in the Local Authorities (Indemnities for Members and Officers) (Wales) Order 2006, and concerns the power available to councils to indemnify members when defending alleged breaches of the Members' Code of Conduct.
2. The report informs Members of a request by the Welsh Local Government Association ('WLGA'), the Public Services Ombudsman for Wales ('Ombudsman') and Welsh Government Ministers for Welsh Unitary Authorities to introduce a voluntary cap on legal costs indemnities arising in such circumstances.
3. The report also seeks approval for arrangements to consider and (if appropriate) grant such indemnities.
1. THAT the Council's Section 151 Officer in consultation with the Chair of the Standards Committee considers applications received from Members of this Council for a legal costs indemnity for defending an allegation of breach of the Members' Code of Conduct, and determines whether an indemnity should be provided by the Council;
2. THAT if an indemnity is to be granted the amount is limited up to a maximum of £20,000 subject to the further limitations referred to in paragraph 10 of this report.
3. THAT this report be referred to Standards Committee for information.
Reasons for the Recommendations
1&2 To put in place arrangements for determining applications for the relevant indemnities which is consistent with the majority of Local Authorities in Wales.
3. To brief the Standards Committee.
4. Under the Local Authorities (Indemnities for Members and Officers) (Wales) Order 2006, the Council may but does not have to provide an indemnity for Members in respect of legal costs incurred in relation to misconduct proceedings brought against them under the Local Government Act 2000.
5. To date no relevant indemnities have been sought by Members of this Council.
Relevant Issues and Options
6. Concern has been expressed by the WLGA, the Ombudsman and Welsh Government Ministers of the scale of indemnities provided by some Welsh Councils to Members when defending allegations of breaches of the Members' Code of Conduct; and have all strongly recommended that a cap be introduced by Councils. After some consultation it has been agreed to set the cap up to a maximum sum of £20,000.
7. By adopting this recommendation, the Council will bring its procedure for granting indemnities in line with the majority of Welsh Councils.
8. Whilst insurance has traditionally been available, this is now changing. Due to the significant changes to the standards regime in England, some insurance companies are withdrawing cover for Members' legal fees and it is widely accepted that limited insurance will be available in the longer term. The position in this Council will be kept under review and if appropriate insurance cover explored.
9. The Ombudsman has also agreed that, in each case, his own costs will be set at the same level as the cap imposed by individual Councils.
10. When considering applications for indemnities the following restrictions are (as a minimum) deemed appropriate:
· A Member shall not be granted two or more indemnities if those indemnities would amount to a sum in excess of £30,000 in any one municipal term;
· In the event of an indemnity being given and the Member concerned not being successful in the matter the indemnity must in any event be repaid;
· The indemnity relates only to legal costs reasonably incurred by the Member on or after the date of the application;
· The indemnity extends only to costs reasonably incurred up to and including the hearing before the Adjudication Panel for Wales ('APW'). It does not extend to any appeal against, or to any judicial review of any decision of the APW.
· No payments will be made under this indemnity until the completion of the hearing and of any appeal.
· Payment under this indemnity shall be made only on the submission of a receipted invoice for the costs being claimed.
Resource Implications (Financial and Employment)
11. To date no such indemnities have been sought by Members of this Council. Any indemnity given will have resource implications.
12. Depending upon the number of indemnity applications received, consideration will be given to obtaining insurance cover.
Sustainability and Climate Change Implications
13. None associated with this report.
Legal Implications (to Include Human Rights Implications)
14. Pursuant to the Local Authorities (Indemnities for Members and Officers) (Wales) Order 2006, the Council may but does not have to provide an indemnity for Members as detailed in the report.
Crime and Disorder Implications
15. None directly associated with this report.
Equal Opportunities Implications (to include Welsh Language issues)
16. There are no equality implications directly associated with this report. Each application for indemnity will be considered on a case by case basis having regard to equal opportunities.
17. To ensure that members have recourse to reasonable legal costs indemnity cover; and providing appropriate support for Members in undertaking their Council duties.
Policy Framework and Budget
18. This is a matter for Executive decision by the Cabinet.
Consultation (including Ward Member Consultation)
19. Ward member consultation is not relevant.
20. The Chair of the Standards Committee has been consulted.
Relevant Scrutiny Committee
21. Corporate Resources.
Local Authorities (Indemnities for Members and Officers) (Wales) Order 2006/249.
Head of Legal Services
Clive Teague - Head of Financial Services
Alan Jenkins - Head of Accountancy & Resource Management