A consultation paper issued last week sets out two options:
To give councils more flexibility over the amounts they pay by allocating the existing allowances budget among a reduced number of members after reorganisation
To allow councils to pay what they wish so they could top up allowances from their current overall budget.
Scottish secretary Ian Lang said the government had rejected the idea of fixed salaries as contrary to the principle of voluntary local government service. 'Either of the options would allow councils better to reflect the varying workloads between councillors,' Mr Lang said.
The consultation paper also sets out options for distributing the allowances budget among authorities and discusses ways of setting the basic allowance. Under the current system, introduced in 1991, Scottish councils have discretion to pay between 25% and 95% as basic allowances and the government is not keen to move back to the previous system which relied heavily on attendance allowances.
The Convention of Scottish Local Authorities welcomed the consultation paper. It has argued for maximum discretion for councils in setting allowances.
COSLA senior vice-president Keith Geddes said: 'The present levels of allowance are inadequate and represent a serious disincentive to many people who might otherwise be prepared to stand for election.'
The Scottish Office wants new arrangements to be in place for members elected to the shadow authorities in April 1995.