12.—(1) Subject to paragraphs (2) and (3), a scheme may make provision for an annual adjustment of allowances.
(2) Subject to paragraph (3), an annual adjustment to an allowance payable by an authority for any year -
(a)must not exceed the amount prescribed by the Panel for —
(i)that allowance;
(ii)that authority; and
(iii)that year,
in an annual report or a supplementary report produced in pursuance of, respectively, regulation 35 or regulation 36; and
(b)may only be made by reference to an index if the Panel has prescribed that such an index be used for that purpose -
(i)in relation to that allowance;
(ii)by that authority; and
(iii)for that year,
in an annual report or a supplementary report produced in pursuance of, respectively, regulation 35 or regulation 36.
(3) In the event that the Panel produces a supplementary report which prescribes matters described in paragraph (2)(a) or (b), an authority to which that report applies may —
(a)for the year to which the supplementary report relates; and
(b)in relation to the matters so prescribed,
make an adjustment of allowances payable by it for that year, notwithstanding that the authority may have made an adjustment of allowances under paragraph (1) in consequence of an earlier annual report produced by the Panel for that year.
(4) A scheme may provide that where payment of any allowance has already been made in respect of any period during which the member concerned —
(a)is suspended or partially suspended from that member’s responsibilities or duties as a member of the authority in accordance with Part III of the Local Government Act 2000 or regulations made under that Part;
(b)ceases to be a member of the authority; or
(c)is in any other way not entitled to receive the allowance in respect of that period,
the authority may require that such part of the allowance as relates to any such period be repaid to the authority.