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Regeneration Failure

Even while the Government is trying to apply the brakes, the public sector gravy train rolls on for some overpaid executives.

On Tyneside, 1NG (it stands for Newcastle-Gateshead), the regeneration company handed £4m of funds, has been closed down after just three years over concerns about its success rate. Even the Newcastle city councillor who chaired the scrutiny panel during the company’s existence has condemned its failure.

And as a reward for this lack of success, 1NG’s Chief Executive, Jim McIntyre, has been handed an £80,000 pay-off, equivalent to his six-month notice period. And there’s more to come – the rest of the organisation’s 14 staff will receive pay-offs in March, or be re-employed by Newcastle or Gateshead Councils.

This public sector largesse raises (again) some pertinent questions:

  • Why does the boss of a failed organisation deserve a pay-off, as opposed to replacement or dismissal?
  • How many other companies do you know of with only 14 employees where the boss is paid a whopping £160,000 salary?
  • Was it really necessary to put Mr McIntyre on a six-month notice period?

I’m alright, Jackie!

Prepare to enter (not for the first time, I hear you say) the bonkers world of public sector “business” models and remuneration policies.

In 2010, the Chief Executive of Newcastle College Group, Jackie Fisher, received an eye-watering pay package of £293,764 at a time when the College knew it was likely to have its government funding reduced.  This package included a Performance Bonus of £18,698 plus a Retention Award or, to give it its proper title, Even More Bonus, of £54,090. The result of all this was that the Chief Executive’s pay rose by more than 57% in three years.

In addition to Ms Fisher, in 2009 42 employees of Newcastle College Group earned more than £60,000 with an average of £88,528. This might also be a good point to consider the associated pension liabilities for this group who are presumably all on final salary schemes. The College’s Chair of Governors, Jamie Martin, justified Ms Fisher’s mammoth pay by saying: “Retaining committed and able people in the organisation has been crucial to our success at Newcastle College Group”

In early 2011, current financial reality finally caught up with the education sector and Newcastle College duly had its funding cut. It responded by axing 171 jobs, Ms Fisher commenting: “We are very disappointed by the planned reductions to education funding.”

So this “successful” organisation, with a Chief Executive on a salary which would grace the private sector, was completely unable to withstand a cut in government funding without getting rid of large numbers of staff, all paid a hell of a lot less than the fortunate few at the top.

We recently submitted a Freedom of Information request to Newcastle College which included the question: “If Ms Fisher is entitled to a bonus payment under the terms of her contract of employment, has Ms Fisher been asked at any stage by the College’s Directors or Governors to forego any or all of her bonus payment?”

The bizarre answer this question prompted is worth reproducing in full: “Any bonuses awarded to Dame Jackie Fisher are not contractual and recognise Dame Jackie’s exceptional performance. Dame Jackie has not been asked to forgo (sic) a bonus payment as it is not in her power to do so as it is not contractual. “

So, putting aside the fact that the second sentence doesn’t make sense, I think we get their drift . Basically, because the bonus is not in Ms Fisher’s contract, she can’t refuse to take it, although presumably the Governors could have decided that under the current financial circumstances they wouldn’t offer her one?

David Cameron has gone on record as saying “Basically we have a choice. We either have pay restraint or we are going to lose jobs.”

In the case of the top brass at Newcastle College, lack of pay restraint means the loss of other people’s jobs!

 

Town Hall largesse in Hartlepool

Just when you thought that the UK’s legion of self-regarding local authority bosses might have learned some lessons from an avalanche of negative publicity comes evidence that at least some of them have learned no lessons at all!

Paul Walker, the Chief Executive of Hartlepool Borough Council, has managed to alienate almost everybody in the town, including his own otherwise-supportive MP, by his response to the furore surrounding his recent salary increase of nearly £11,000. This took his salary to £168,000 a year or, to put it into context, £26,000 a year more than the Prime Minister in a town with a population of only 100,000 people!

Hartlepool, the 23rd most deprived borough in England, is making 86 council workers redundant, cutting services and slashing £20 million from its budgets over the next four years as it gets to grips with funding cuts. And yet the council’s Cabinet, for reasons best-known to itself, decided to increase Mr Walker’s salary, prompting an outcry from local residents, the town’s newspaper and the Parliamentary Under Secretary for State for Communities and Local Government, Robert Neill.

When Hartlepool’s MP, Iain Wright, wrote to Mr Walker asking him to forego the pay rise, he was so outraged by the “unrepentant and defiant response” he received that he raised the matter in the House of Commons, asking: “What can the Secretary of State do to curb such an arrogant sense of entitlement from some senior executives in local government with regard to pay?”

Hartlepool, you may recall, is the town which elected H’Angus The Monkey as Mayor a few years ago after he ran on a policy of distributing free bananas to local schoolchildren. The aforementioned H’Angus, aka Mayor Stuart Drummond, is still in post, pulling down a salary in excess of £60k a year, with the result that the hard-pressed taxpayers of this small town on the north east coast are shelling out nearly a quarter of a million quid a year for just two of its civic leaders. Apart from count their dosh and distribute free bananas, what on earth do they both do?

And to put it in a wider, and worrying, context, Mr Walker is one of FIVE local authority Chief Executives in the Tees Valley region who all earn more than our Prime Minister. The others are Middlesbrough, (which also has a Mayor), Redcar & Cleveland, Stockton on Tees and Darlington. Perhaps it’s time to revisit the idea of a single unitary authority for this region, as has been done in nearby Northumberland where a number of district councils have been successfully subsumed into one unitary authority, Northumberland County Council?

Credit where credit’s due, though. Hartlepool’s MP, Iain Wright, seems to be one of that small group of clear-sighted Labour MPs who recognise that overpaid and self-aggrandizing public servants do not support, defend or contribute to local services, but instead help to destroy them by having vital public funds diverted into their own pay and pension pots.

However, if there is some good news to come out of all of this, it is that Hartlepool Council appears to have saved some cash by abolishing its own Public Relations department, since clearly no self-respecting PR department would have allowed their Chief Executive to respond to this matter in such a cack-handed and insensitive manner. Would they?

In his letter to MP Iain Wright, Mr Walker commented that “mob rule seems to be the order of the day”. It’s not called mob rule Paul, it’s called democracy!

Northumbria Police spend £50K on artwork

Northumbria Police Authority have taken insensitivity to a whole new level by installing a £50,000 public artwork outside their spanking new headquarters – on the same day they told staff that 450 jobs are being axed.

The steel and glass sculpture was winched into place last week just as support staff were being told that their jobs were at risk.

The artwork, which is described as “looking like a ball-bearing inside a hula hoop”, is part of the new £27 million Northumbria Police headquarters and, according to the Mail on Sunday, the Police Authority chair, Mick Henry, believes the sculpture will give pleasure to the local community.

The MoS quoted Councillor Henry  as saying: “The cost is  a tiny proportion of the overall building costs. The artwork will give pleasure to the local community.”

Coun Henry is, of course, the leader of Gateshead Council, which has ‘previous’ for wasting public money on pointless and expensive artworks.  The Angel of the North, a hulking lump of rusting metal, cost more than £800,000 and was the brainchild of Gateshead Council.

We residents of Tyneside are constantly told by people who know about these things that we love “the Angel”, which apparently represents – variously – hope for the north east, resilience of Tyneside, a warm welcome home, pride in our industrial past, emblem of Geordie defiance, etc etc.

I’ve often wondered if the single mothers who live in the flats overlooking this structure view it in quite the same way, or if they believe like everyone else that it’s more evidence that the custodians of our hard-earned taxes live on a different planet to the rest of us.

Newcastle City Council gets into property speculation

Newcastle City Council, after just announcing nearly 700 jobs cuts, has obviously decided that the solution to their financial difficulties is… property speculation!

The Council has just bought a six-storey building in the city centre for £5 million, claiming it will make a profit by renting out office space.

The last time I looked, commercial property agents in Newcastle (ie people who are actually experts on commercial property) had acres of empty office space on their books which they’re struggling to give away. And perhaps the council has forgotten one of the main reasons for our current financial predicament – rampant property speculation and an unsustainable property bubble?

More than 650 jobs have been axed at the authority as Council bosses get to grips with £45 million of cuts,  and council staff have been hit with a two-year Government-imposed pay freeze. However, this hasn’t stopped the caring and sensitive Newcastle City Council awarding their Chief Executive Barry Rowland a “performance-related” pay rise of almost £5,000 extra, on top of his existing £160,500 a year salary.

If, as seems highly possible, the council does not manage to buck the local
commercial property trend and it makes a loss on this venture, maybe Mr
Rowland might take a “performance-related” pay cut?”

Colin Cameron, North East TPA

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