Q&A on AM Salaries Consultation

The independent Remuneration Board proposes to set the base salary of AMs at the start of the next Assembly in 2016 at £64,000.

This is a new salary, for a new job with a greater level of responsibility. It takes account of comparable jobs elsewhere and conditions in the Welsh economy.

The Board is making the Members’ pension scheme less generous which reduces the additional cost to the taxpayer.

The total remuneration of many office holders is constrained or slightly reduced.

For the years after 2016 salaries would change in line with median earnings in Wales.

This consultation runs until 12 January, and we would encourage people to read our report and respond constructively to our proposals.

 

Who are the Remuneration Board

The Board was established by the National Assembly for Wales Remuneration Measure 2010and is responsible for ensuring that Assembly Members have fair and appropriate resources to carry out their vital job of representing the people of Wales, holding the Welsh Government to account and making laws for Wales.

The current members are:

-         Sandy Blair CBE DL (Chair)

-         Mary Carter

-         Stuart Castledine

-         Professor Monojit Chatterji

-         Professor Laura McAllister

More details including profiles can be seen at: http://www.senedd.assembly.wales/mgCommitteeDetails.aspx?ID=375

Why do you think the role of an AM justifies this salary?

The National Assembly is responsible for £15 billion of taxpayer expenditure to fund public services in Wales; it oversees and challenges the actions of the Welsh Government; it makes laws for Wales; and it represents the interests of our citizens.

The job of an AM is now on a par with that of the other national legislators in the UK and the roles they undertake are identical:

·         all represent their constituents;

·         all propose, amend and approve legislation;

·         all authorise significant sums of public expenditure; and

·         all oversee the activities of national governments.

The role of an AM in 2016 will carry even more responsibility than today – with new authority over taxation and government borrowing and a likely further increase in the breadth of legislative competence.

The National Assembly undertakes its responsibilities with far fewer Members than other parliaments in the UK and overseas and is smaller than many local authorities in Wales. As a result, there is no hiding place in the National Assembly: all Members carry a high degree of either executive authority or responsibility for the oversight of government. In turn, this means that the institution cannot afford to have Members who do not have the competencies to meet these challenges.

How have you come to this decision?

AMs carry great responsibility and the weight of the job is increasing. With new responsibilities come new expectations on AMs.

Ours is an objective assessment of what a role of that significance in the 2016 Assembly warrants in terms of remuneration.

We approached the task from three different angles and combined the evidence from each of these. Our three broad considerations were:

-        to ensure that the salary properly reflects the responsibilities of AMs in the fifth Assembly and the quality of the individuals needed to discharge such a vital role;

-        the value of the total package of remuneration including both salary and pension;

-        remuneration for comparable roles and earnings in the wider economy, particularly Wales.

Our research and analysis in respect of each of these led us to very similar conclusions, giving us assurance that the basis of our proposal is sound.

How is the Members’ pension scheme being changed?

We are changing the Members’ pension scheme to bring it in line with those elsewhere in the public sector. The scheme will be less generous in terms of the benefits that accrue and the cost to the taxpayer of employer contributions will be reduced. In the first year of the next Assembly, the changes we are making will save the taxpayer over £200,000.

How much more will it cost?

The change in the base salary will add around £580,000 to the cost of Members’ salaries in 2016-17. Half of that (£290,000) will be offset by savings from other changes we are making – reduction in the additional salaries paid to office holders and reduction in the taxpayer contribution to the Members’ pension scheme. The net additional cost will be £290,000 in 2016-17.

How does this compare to other legislatures?

The salary of an MP in Westminster will be £74,000 from next year. In Scotland, the current salary of an MSP is £58,678 and will increase each year in line with average earnings in Scotland. The salary of an MLA in Northern Ireland is currently £48,000.

We have consistently argued that the salary of Members needs to be considered alongside the value of the taxpayer contribution made to their pension in order to give a figure for their total remuneration. On this measure, the total remuneration of an MP next year will be around £83,000. The total remuneration of an MSP today (2014) is around £71,000. Under our proposals, total remuneration for an AM in 2016 would be about £75,000.

How does this compare to the private sector/Welsh economy?

The research provided to us by HayGroup suggests that, for a job of comparable weight, a median salary of £82,500 would be expected in the private sector. In the public/not for profit sector, the equivalent figure would be around £69,300.

Data included in our report demonstrate that the proposed figure is consistent with that paid in other senior role in the public sector in Wales. 

Where can I find additional background reading?

All the Board’s previous consultations, and the annual Determination which covers all aspects of pay, pensions, support and allowances for Members are published on the Board’s web pages.

To support their work on remuneration, the Board also tendered for and commissioned two independent reports:

-        Bangor University undertook research into the barriers that face people seeking to become an AM and whether salary is a significant factor in the decision to stand. Their report - Evaluating Barriers to Entering the Assembly: What Prevents Us From Standing? - is available to download. Their work included interviews with 20 people including current and former Members, plus past candidates, and party officials.

-        HayGroup were commissioned to compare the relative job weight and responsibilities of a range of roles undertaken by Assembly Members. Their report - Job Evaluation and Remuneration Benchmarking for Assembly Members - is also available to download on our web pages. Their work included interviews with nine different office holders and a backbench AM.

What happens next?

This consultation exercise will run until 12 January. We will then consider the results and publish our complete package of proposals in February. These will also be open for public consultation and we will agree the final package, covering salary, pension and all other aspects of financial support in place for the next Assembly, in the Spring of 2015.