Addendum Items
PAGE
City Corporate Report
CORP 04 Council leading in good governance practices............................................. 171...........
Addendum Items
PAGE
City Corporate Report
CORP 04 Council leading in good governance practices............................................. 171...........
0
Ordinary Meeting
3 February 2021
City Corporate Report
|
CORP 04 |
Council leading in good governance practices |
|
Strategic Direction |
Leading through Collaboration Strive for best practice in all Council processes |
|
File Ref |
001536.2021 |
|
Report By |
Jessica Saliba - Acting Coordinator Governance |
|
Approved By |
George Hampouris - Acting Director City Corporate |
Executive Summary
Council, at its meeting held on 25 November 2020, resolved to seek advice from the Office of Local Government (OLG) to create a policy (including a budget limit), that enables Councilors to access independent professional advice and that the policy be reported to Council.
Advice has been obtained from the OLG. The advice was prepared on the assumption (based on the wording of the resolution) that the policy would provide individual Councillors with a budget which they could each individually spend on seeking their own professional advice, without any further constraint. On that assumption, the advice obtained from the OLG is that any such policy would be an expenses policy for the purposes of s252 of the Local Government Act 1993 (Act). Such a policy is required by s252(5) of the Act to be consistent with the Guidelines for the payment of expenses and the provision of facilities for Mayors and Councillors in NSW 2009, adopted by the Office of Local Government (Guidelines).
The OLG advised that to be permissible under s252(5) and the Guidelines, a policy regarding reimbursement of the expenses of seeking professional advice would need to be subject to strict controls which would create a significant burden for staff to administer. The strict controls would need to govern:
· what advice may be obtained;
· the circumstances in which the advice may be sought;
· who the advice may be sought from;
· the circumstances in which the advice may be sought; and
· what approvals are required prior to seeking the advice and for payment.
As such, the advice of the OLG is that the policy as proposed (with no limit or constraint other than an overall budget) is inconsistent with the Guidelines.
The OLG also advised that if Council was to create the policy, it may then be faced with multiple competing pieces of advice obtained by various Councillors on contentious matters, each supporting their preferred position. The OLG advises that this could create dysfunction and complicate decision-making.
A copy of the advice from the OLG is attached to this report.
That Council accepts the advice of the OLG and does not create a corporate policy for accessing independent professional advice.
REPORT
The OLG Advice
Council sought advice from the Office of Local Government to create a policy (including a budget limit), that enables Councillors to access independent professional advice and that the policy be reported to Council.
The advice provided by the OLG is attached, however for ease of reference a summary of the advice is provided below:
“What is being proposed may be inconsistent with OLG’s Guidelines for the payment of expenses and the provision of facilities for Mayors and Councillors in NSW. These provide that councils may only meet Councillors’ legal expenses in limited circumstances, namely for defending legal proceedings being taken against the councillor or defending an action in defamation or to provide representation in any inquiry, investigation or review arising from the performance of their functions in good faith, provided that the outcome is substantially favourable to the councillor”.
“Section 252(5) provides that councils’ expenses and facilities policies must comply with OLG’s Guidelines, and to the extent that what is being proposed is inconsistent with OLG’s Guidelines, it may be impermissible under section 252(5)”.
The OLG went on to set out what controls a policy would need to contain to be consistent with the Guidelines. Those matters are set out in the executive summary above.
As the policy proposed does not include those controls, the conclusion from the OLG advice must be that it is inconsistent with the Guidelines.
The policy is inconsistent with the Guidelines, particularly as it relates to independent legal advice, as the Guidelines provide for very limited circumstances in which a councillor can be reimbursed for legal expenses which he or she incurs.
The policy is also inconsistent with the Guidelines as it does not require prior approval to the incurring of expenses, and it does not have any controls to ensure that expenses are incurred only in the performance of civic duties by the councillor.
Under the Act a policy for the reimbursement of expenses must be prepared in accordance with s252 and 253 of the Act, and that policy must be consistent with the Guidelines (see s252(5) of the Act).
As the policy is not consistent with the Guidelines, it is in breach of the Act.
Access to External Advice
The Act contemplates councils operating as collegiate decision-making bodies. It is the role of the CEO under the Act (see s335(f)) and under Council’s Code of Conduct (see Part 8) to ensure Councillors are provided with the material and advice they require to properly exercise their civic functions.
An individual councillor cannot under the Code of Conduct direct the CEO to obtain independent professional advice. If Councillors require further externally provided professional advice in relation to matters they are required to make decisions on, then the appropriate course of action which is consistent with the Act and the Code of Conduct is for the Council to seek that advice by resolution.
Council’s Civic Expenses and Facilities Policy contains the following provisions which reflect the Guidelines:
· clause 4.3 provides that a general allowance is not appropriate, and expenses provided for will be for a purpose specific to the functions of holding civic office; and
· clause 4.13 deals with legal expenses and sets out the limited circumstances in which the costs of legal advice or litigation incurred by a councillor will be reimbursed. In particular Council must determine by resolution whether the legal expenses are to be paid in advance.
The Civic Expenses and Facilities Policy does not contain provisions permitting reimbursement of Councillors’ expenses for seeking other professional advice.
Council’s Legal Services Policy also provides for the General Counsel to co-ordinate requests for legal advice from external providers to avoid conflicts, ensure consistency and quality of service, maintain client legal privilege and maximise value from Council’s expenditure on external providers. Only the CEO can directly brief external providers (without going through the General Counsel) in limited sensitive or urgent situations.
The Legal Services Policy further deals with client legal privilege. If individual Councillors sought their own legal advice, the client legal privilege would be that of the individual councillor. However, it is likely that information provided to the lawyer retained by the individual councillor would be confidential information, and the resulting advice would likely contain confidential information and advice that could prejudice Council’s interests if it became public, or was produced in Court.
In order to properly ensure client legal privilege is maintained by Council, over all legal advice provided in respect of Council’s affairs, the Legal Services Policy should be complied with.
The policy proposed would be inconsistent with the Legal Services Policy. Council’s Councillor Access to Information and Interaction with Staff Policy and the Code of Conduct also ensure that Councillors have access to independent advice where appropriate and necessary for the performance of their civic duties.
Administrative and Other Issues
The OLG advice highlights not only the administrative burden of a proposed additional policy, given the controls which such a policy would need to contain, but also the risks of a number of Councillors seeking advice on the same issue and presenting conflicting advice to Council.
There could particularly be a conflict in advice presented to council if the information provided to the external advisors was not consistent with the information provided to advisors retained by Council or other Councillors.
The concerns regarding external legal advice and the protection of confidential information and client legal privilege are also noted above.
In addition, in respect of advice which is not legal advice, again there is a risk that a councillor could reveal confidential council information in seeking external advice, contrary to the Code of Conduct. Coordinating requests for advice through the CEO or General Counsel in respect of legal advice, is the most effective and risk mitigating method for Council to ensure the security of its information, and consistency of the advice it receives.
There is also a concern about receiving value for money, if Council’s funds are being spent on a number of external advisors in respect to the same issue.
The reasons set out in the Legal Services Policy for coordinating advice in respect of legal matters apply similarly to the need for coordination of other professional advice, which should be managed by the CEO.
CONSIDERATIONS
|
Economic |
There are no economic and financial considerations. |
|
Environment |
There are no environmental and sustainability considerations. |
Social |
There are no social and cultural considerations. |
Civic Leadership |
There are no civic leadership and governance considerations. |
|
Legislative |
Include any relevant legislation and section here. There are no legislative considerations relating to this report. |
|
Risk |
The risk is deemed to be Medium. |
ATTACHMENTS
