Arm’s-length Organisations (Paid Directorships)

– in the Scottish Parliament on 16th June 2011.

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Photo of James Dornan James Dornan Scottish National Party

3. To ask the Scottish Executive how much council tax payers in Glasgow will save through the ending of paid director positions on arm’s-length external organisations. (S4O-00034)

Photo of John Swinney John Swinney Scottish National Party

According to the Scottish Local Authorities Remuneration Committee 2010 review report, 40 Glasgow City Council councillors were in receipt of payments totalling approximately £260,000 for serving on arm’s-length external organisations.

Amendment regulations that were laid in Parliament on 2 June will—subject of course to parliamentary approval—stop councils allowing bodies that are within their control, such as arm’s-length external organisations, to pay councillors for serving on their boards. The reallocation of the funding is a matter for those organisations, but the money that is saved could provide additional funds for front-line services.

Photo of James Dornan James Dornan Scottish National Party

Given yesterday’s announcement that some of the council’s ALEOs are being closed down, amalgamated with other ALEOs or possibly brought back into council control, does the cabinet secretary agree that it is clear that the primary purpose for the creation and continuation of those bodies was to reward and control Labour councillors and not to benefit the council tax payers of Glasgow? Does he share my view that the money, possibly running to millions of pounds, would have been much better used to protect Glasgow’s charities and carers, and that a full independent investigation should be carried out into Glasgow’s misuse of public funds to ensure that the people of Glasgow are never ripped off in such a fashion again?

Photo of John Swinney John Swinney Scottish National Party

We must separate the issue of arm’s-length external organisations from the question of remuneration of directors of arm’s-length external organisations. There is a case for such organisations to function. There are good examples throughout the country in which the approach has protected the delivery of elements of public services. However, to get to the nub of Mr Dornan’s question, there must be a proven need and requirement for those arm’s-length external organisations. If Glasgow City Council can operate without that range of organisations, that certainly raises questions about why they were there in the first place.

On remuneration of directors of arm’s-length external organisations, the Scottish Local Authorities Remuneration Committee was crystal clear with me that remuneration for directors of such organisations that was additional to the councillors remuneration framework served to undermine the strength of the local authority remuneration framework. For that reason, I have taken action to close the arrangement and to ensure that there is no additional remuneration beyond the remuneration framework that Parliament put in place and which is clearly appropriate for local authority service.