Councillors in Newcastle have agreed to take a 5% pay rise.
City council members voted on Wednesday night to accept an uplift in their annual allowances for just the third time in the last decade.
The move will see a city councillor’s basic allowance rise from £9,200 to £9,660 per year – with further ‘special responsibility’ allowances, including for the leader of the council, increasing by the same amount.
The total added cost to the council’s finances will be approximately £47,000 annually.
Previous pay rise proposals have been rejected at times when the local authority has been making major spending cuts and when city residents have been faced with a cost of living crisis.
Civic centre leaders recently warned that they face a budget gap of almost £60m over the next three years and announced proposals to cut 40 jobs and reduce funding to services including crisis support and beds for the homeless.
But councillors have reluctantly chosen to accept an uplift for the 2024/25 year, following a report from an independent remuneration panel (IRP) which found that Newcastle’s level of allowances was “significantly lower” than in other areas and “does not reflect the level of responsibility of all councillors and particularly those in senior leadership position”.
The current pay for councillors in Newcastle is the third lowest in the North East, with Northumberland’s £16,479 being the highest, and lower than any of England’s other core cities.
The extra £18,400 allowance currently given to the leader of the council, Nick Kemp, is also by far the smallest in the region – with the next lowest being Northumberland’s £27,000 and Sunderland having the highest on £37,667.
The IRP report stated: “The panel is aware of the broader economic context within which the council operates, with significant budget challenges ahead in the coming years and the continuing cost of living crisis. The overall cost of members allowances (£911,765 in 2022/23) amounted to 0.38% of the council’s revenue budget.
“The panel however feels strongly that the level of Newcastle’s allowances does not reflect the level of responsibility of all councillors and particularly those in senior leadership positions and is at a significantly lower level in comparison with other councils.
“The panel has calculated that, had the level of recommended increases
been implemented over the last decade, the basic allowance would now stand at £10,322 – still the third lowest in the region and still the lowest of the core cities.
“As always, the panel is keen to point out that any recommendation to increase allowances is not made lightly, but unless increases are made to allowances, that gap will never close. ”
Until 2019, the level of the basic allowance in Newcastle had remained unchanged since 2013 – when a 5% reduction had been agreed. Small increases, both less than 3%, were then taken in 2019 and 2020.
The council’s Labour administration and Lib Dem opposition both expressed unease at councillors being in charge of their own allowances.
Opposition leader Colin Ferguson said: “It remains my view that asking councillors to set their own remuneration, albeit on the recommendation of an independent panel, is just not the most useful way to address this topic. MPs’ salaries in Westminster are set independently by the Independent Parliamentary Standards Authority – why it isn’t the same for local government, I don’t know.”
Paul Frew, the council’s cabinet member for finance, added: “I think there is a level of genuine agreement in that we all in this chamber do not want to be the ones to make this decision. However, there is a process set out in statute for local authorities to go through.”
Meanwhile, the council also rejected a motion from independent Marc Donnelly calling for the number of councillors in Newcastle to be cut from 78 to 52.
Coun Donnelly, who represents the Chapel ward, suggested the switch to “reduce the cost of politics” and also proposed moving to hold all-out local elections once every four years.
Coun Frew said that the idea was “quite out of line” with the Local Government Boundary Commission’s previous recommendations for the city, while fellow Labour councillor Charlie Gray suggested that it would reduce political representation.
