Memorandum by Sheffield City Council (DEC
68)
REMUNERATION FOR CHAIRS OF BOARDS OF ARMS
LENGTH ORGANISATIONS
As you know, Sheffield will be establishing
an Arms Length Management Organisation; Sheffield Homes to manage
Sheffield's Council Housing from 1 April this year.
The organisation will be governed by Sheffield
Homes Board and up to 10 Local boards, which will be created following
positive ballots of tenants across the city.
The Sheffield Homes Board comprises seven Tenants,
three Council nominees and five Independents. In the first instance,
the Chair of the Board will be part of the Independent constituency.
When the Council considered the role and the
responsibilities of the Chair of the Board the position it was
immediately identified that having a strongly governed organisation
led by a Chair of some considerable experience and standing was
on the critical path to success.
In Sheffield the turnover of Sheffield Homes
will be circa £200 million, which compares with some of the
largest RSLs in the country. RSLs are now of course able to remunerate
Board members up to £10,000 per annum and Chairs of boards
up to £20,000 per annum.
From discussions with other similar organisations,
we believe that the role of the Chair will demand an equivalent
time commitment of between one and two days per week particularly
within the first year. The Council therefore considered that the
approach adopted by RSLs ie to remunerate Chairs of boards was
an important component in attracting and retaining high caliber
people with the experience of managing large complex organisations.
We are proposing to offer up to £9,000
per annum to the Chair of the Board but not to extend payment
to any other board members.
Currently however, Government Guidance in respect
of Arms Length Management Organisations does not support our proposal
to remunerate the Chair of the board.
When the model constitution for ALMOs was drafted,
the new pay regime for RSLs was anticipated and consequently provision
within the ALMO template documentation was made to incorporate
this development.
Our legal advisers both within the Council and
from Ian Doolittle at Trowers and Hamlin's, who prepared the ALMO
template documentation, confirm that no legal difficulty exists
with the proposal to remunerate members of ALMO boards.
Given that no such difficulty exists, it is
the Councils view that ALMOs should be free to determine remuneration
arrangements for Chairs of Boards quite independently subject
to these arrangements being consistent with those established
for RSLs.
Karl Tupling
Head of Housing Strategy
Neighbourhoods, Sheffield City Council
6 February 2004
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