Agenda and minutes

To note the attendance at this meeting of any duly appointed Reserve Members.

Reserve Members may attend meetings:-

(i)                 to take the place of an ordinary Member for whom they are a reserve;

(ii)               where the ordinary Member will be absent for the whole of the meeting; and

(iii)             the meeting notes at the start of the meeting at the item ‘Reserves’ that the Reserve Member is or will be attending as a reserve;

(iv)             if a Reserve Member whose intention to attend has been noted arrives after the commencement of the meeting, then that Reserve Member can only act as a Member from the start of the next item of business on the agenda after his/her arrival.

RESOLVED:  To note the attendance at this meeting of the following duly appointed Reserve Members:-

To receive declarations of personal or prejudicial interests, arising from business to be transacted at this meeting, from:

(a)               all Members of the Committee;

(b)               all other Members present.

RESOLVED:  To note that the following interests were declared:

Agenda Item 4 – Academies - Employer Contribution Rates

Councillor Bill Phillips declared a prejudicial interest in that he was a governor at Harrow High School.  He would leave the room whilst the matter was considered and voted upon.

Councillor John Nickolay declared a personal interest in that he was a member of the Aldgate Homes Association.  He would remain in the room whilst the matter was considered and voted upon.

To receive deputations (if any) under the provisions of Committee Procedure Rule 16 (Part 4B) of the Constitution.

RESOLVED:  To note that no deputations were received.

To consider the implications of the decision on Academies made at the special committee meetings held on the 11^th and 19^th April 2011, concerning the issue of affordability.

The Committee received a report of the Assistant Chief Executive which requested that Members consider the implications of the decision made in respect of Academies at the special Licensing and General Purposes Committees held on 11 and 19 April 2011.  In particular, the Committee was asked to reconsider the decision made in relation to the deficit recovery period and the way in which the deficit would be calculated.

The Chairman informed Members that headteachers had contacted the Council following the meetings in April and had raised concerns that the decision taken by the Committee would limit the ability of schools to achieve academy status.  The headteachers were particularly concerned that the Committee had decided upon a seven year deficit recovery period and the inclusion of deferred and current pensioners, as well as active members, in the calculation of employer contribution rates.

The Council’s Principal Laywer stated that the seven schools seeking academy status had formally requested that the Committee reconsider its decision and that the Chairman had agreed to this request.  She stated that the Committee now had access to new information and that a representative of the Council’s actuary, Hymans Robertson, was in attendance to help Members better understand the financial implications of any potential decision.

The Interim Director of Finance stated that the Committee had previously been concerned that the Secretary of State would only guarantee academy funding for 7 years.  However, it was now understood that the funding agreement with the Department for Education (DfE) was a rolling contract, with a 7 year notice termination clause.

Members agreed that it would be beneficial for the representative of Hymans Robertson to outline the key issues.  The representative outlined the following key points:

·                    the concept of academies had been introduced by the coalition government and subsequently set out in the Academies Act (2010).  Unlike community schools, academies were financially autonomous and not subject to local authority control.  Significantly, academies were responsible for their own pension arrangements;

·                    teaching staff were not covered by the Local Government Pension Scheme (LGPS) and therefore any decision made in relation to the deficit recovery period or calculation of employer contribution rates for academies was only applicable to non-teaching staff;

·                    the DfE briefing note had stated that each academy would have a separate employer contribution rate set by the administrating pension authority and would have responsibility for a share of the LGPS deficit, however it did not state how this share should be calculated;

·                    when calculating employer contribution rates, actuaries had to take into account both accrued benefits and future service rates;

·                    there were two different approaches that could be used to determine the share of the deficit contribution.  The first approach was to make academies only responsible for a share of the deficit that applied to LGPS staff that transferred to the academy.  The second approach was to make the academies responsible for a share of the whole Council deficit and attributable to deferred and pensioner members;

·                    the current officer recommendation was  ...  view the full minutes text for item 53.