- Excluding the NHS, there are more public sector workers drawing a pension than there are working and paying in
- Public sector pensions are unsustainable. Trade Unionists should go for reform, not strikes

The TaxPayers’ Alliance has today revealed that the number of retirees across the public sector is fast catching up with the number of active members in unfunded public sector pension schemes. Excluding the NHS, there are more public sector workers drawing a pension than there are working and paying in.

With the high number of deferred members – those no longer paying in and owed a pension but who haven’t started drawing it yet – this problem is set to get far worse fast.

Click here to read the full report

On Wednesday (30 November) public sector workers will take part in one of the biggest strikes ever seen in the UK. The walk-out is over pension reform, with unions unwilling to accept changes like increased employee contributions. But failure to reform public sector pensions would be unfair on taxpayers. We have an ageing population and final salary schemes mean taxpayers are funding more expensive deals for much longer. It may even be possible for some public sector retirees to draw a pension for longer than they paid into it.

The key findings of this report are:

• The Civil Service pension scheme has more people drawing a pension than it has active members.

• Excluding the NHS pension scheme, there are more people drawing an unfunded public sector pension than there are active members.

• For every five active members of unfunded public sector pension schemes, there are four people drawing their pension.

• Already, ‘pensions in payment’ for unfunded public sector schemes (£25.9 billion) are considerably more than employee and employer (taxpayer) contributions combined (£21.4 billion).  When the number of retirees outstrips active members, this gap will increase still further. Since 2006-07, the gap has increased from £1 billion to £4.5 billion – without reform, it will get bigger.

• There are over 1.7 million deferred members of unfunded public sector pension schemes. As more of these members begin drawing their pension, the gap between those drawing their pensions and active members will close more quickly.

Click here to read the full report

Matthew Sinclair, Director of the TaxPayers’ Alliance, said:

“Public sector pensions in their current form are unfair on taxpayers. Pay-outs for unfunded schemes have increased and are projected to go up even more over the coming years, meaning expensive problems now and huge liabilities for the near future. It won’t be long before the number of retirees outstrips the number of active members and this will be extremely tough on ordinary families who are struggling to save for their own retirement, let alone pay higher taxes for pension schemes they could never afford. The Government must face down the unions and push ahead with pension reforms, so taxpayers are not forced to guarantee unaffordable and overly-generous final salary deals.”

- Taxpayer funding of trade unions has increased from last year
- The value of direct grants to trade unions is higher than that shown last year
- The Government says that even a reduction in levels of paid for trade union time to private sector levels would save millions each year

In one of the most extensive Freedom of Information campaigns ever carried out, the TaxPayers’ Alliance has calculated the value of the direct grants and paid time off that trade unions receive and found that it has increased significantly from last year to £113 million. There are now at least the equivalent of 2,840 full time staff working on trade union activities or duties at taxpayers’ expense, an increase of 32 from last year (only counting organisations which provided data for both years).

Click here for the full report, including a breakdown of local councils, fire authorities, NHS PCTs and trusts and more

On Wednesday 30 November public sector trade unions will conduct one of the largest and most widespread strikes ever seen in the UK. Our findings reveal they do so with even more taxpayers’ money than last year. Earlier this year Cabinet Office Minister Francis Maude MP and local government Minister Bob Neill MP acknowledged public and parliamentary concern about paid time off for trade union activities and duties.

If the number of public sector staff working for trade unions were reduced to levels seen in the private sector (where facility time is 0.04 per cent of the annual bill), then 2,028 full-time equivalent staff could return to frontline services, equivalent to saving taxpayers £57.2 million.

Key findings:

• Trade Unions received £113 million of funding from taxpayers in 2010-11. That is an estimated £80 million in paid staff-time plus £33 million in direct payments. That is £7 million more in direct payments than 2009-10 (although the Skills Funding Agency was unable to provide figures for its legacy organisation in 2009-10)
• At least 2,840 full time equivalent public sector staff worked on trade union activities or duties at taxpayers’ expense in 2010-11. This means that there are now more taxpayer-funded trade unionists in the UK than British Transport Police officers (2,835)
• At organisations which provided data for both the years covered in this note, there was an increase of 32 full time equivalent public sector staff from 2009-10
• Our figure of 2,840 is almost certainly an underestimate. Bodies that do not record facility time acknowledge that staff do utilise it. For example, Wrightington, Wigan and Leigh NHS Foundation Trust in the North West have 42 union stewards who meet regularly, but the time they spend on this is not recorded
• 257 organisations kept no record of the time taken off by staff to carry out union duties
• In the public sector 0.14 per cent of the annual pay bill is spent on facility time, compared to 0.04 per cent in the private sector. If the number of public sector staff working for trade unions were reduced by the same ratio 2,028 full-time equivalent staff could return to frontline services, equivalent to saving taxpayers £57.2 million 
• The organisation with the highest number of staff working on trade union activities was the Department for Work and Pensions, with 308 full time equivalent staff. HMRC had the second highest number, with 181 full time equivalent staff
• Birmingham City Council was the local authority with the highest number, with nearly 62 full time equivalent staff working on trade union activities and duties. The second and third placed local authorities were Coventry with 29 and Nottingham, with 26
• The top quangos were Defence Equipment and Support with 36, Transport for London with 31 and Remploy with 29
• The organisation in Scotland with the most employees on union duties was the Scottish Prison Service, who had 34 full time equivalent staff
• In Wales, Betsi Cadwaladr University Local Health Board came top with nearly 11
• In Northern Ireland, Belfast Health and Social Care Trust had the most with 16 full time equivalents
• The top police force was the Metropolitan Police Force who had 16 full time equivalent staff undertaking union duties

Click here for the full report, including a breakdown of local councils, fire authorities, NHS PCTs and trusts and more

Matthew Sinclair, Director of the TaxPayers’ Alliance, said:

“Taxpayers shouldn’t be funding staff to work for trade unions, providing them with a huge activist base to support strikes and freeing up resources for political campaigns.  Paying for the salaries of full-time union staff and the many grants the unions receive is yet another burden on hard pressed families, diverting money they expect to be spent on frontline services.  The Government need to take action and end this scandalous subsidy for unions disrupting services in a vain attempt to stop necessary restraint in public spending.”

Click here for the full report, including a breakdown of local councils, fire authorities, NHS PCTs and trusts and more

Today the TaxPayers’ Alliance announces for the second time its new monthly awards to celebrate those in power who have sought to save – and waste – taxpayers’ money.

The man, woman or organisation to be congratulated for saving public money or acting in the interests of the hard-pressed taxpayer is named the TPA’s “Pin-Up of the Month”, whilst whoever is found to have shown the greatest disregard for taxpayers’ cash is shamed as the TPA’s “Pinhead of the Month”.

October 2011’s Pin-Up of the Month is Margaret Hodge, the Labour MP who chairs the House of Commons Public Accounts Committee.  At a session of her committee this month, she mauled Dave Hartnett, the Permanent Secretary for Tax at HM Revenue and Customs for lying about a deal with Goldman Sachs worth millions. Aided in her questioning by colleagues, including long-serving committee member Richard Bacon, she not only accused Mr Harnett of lying to another parliamentary committee about the affair but also of “ripping off the taxpayer”. It has since emerged that after an intervention by Margaret Hodge, the Cabinet Secretary is going to investigate how to increase the accountability of HMRC in its dealings with big business.

Meanwhile, the TPA’s latest Pinhead of the Month is Cllr Nick Clarke, the Tory leader of Cambridgeshire County Council. At a council meeting earlier this month, Cllr Clarke led moves to increase councillors’ allowances by an eye-watering 25%.

Only four of his fellow Conservatives voted against the rise, which will increase councillors’ allowances from £7,610 to £9,500 and Cllr Clarke’s own package from £29,856 to £38,000. The changes will cost Cambridgeshire council tax payers an extra £166,000 a year.

Jonathan Isaby, Political Director of the TaxPayers’ Alliance, commented:

“The TaxPayers’ Alliance has always believed that key to delivering taxpayer value for money is exposing those in power to public scrutiny by ensuring that there is transparency and openness in how they spend our hard-earned cash. And as well as making examples of those who have wasted public money, it is important to recognise those who have tried to do the right thing by taxpayers.

“This month Margaret Hodge has demonstrated why the Public Accounts Committee is arguably the most important of all the parliamentary committees. She is a redoubtable committee chairman whose mission is, in her own to words, ‘to ensure value for money for the taxpayer’. We salute her and her colleagues for their work, in particular this month for their part in holding HMRC to account for dodgy deals with Goldman Sachs.”

“Unfortunately Cambridgeshire taxpayers have this month badly been let down by their county council leader, Nick Clarke, who – along with all but four of his Tory colleagues – voted for a massive increase in their own allowances. A 25% hike in the taxpayers’ cash that councillors take for themselves would be hard to justify in the best of times, but when council employees are facing pay freezes and the council is looking for all kinds of savings, it really is profligate in the extreme.”

You can read the full report here

Click here for the complete press release

The TaxPayers’ Alliance (TPA) has called for National Insurance (NI) to be scrapped to make the tax system simpler and more transparent. The need for tax reform has never been more pressing, particularly in light of this week’s revelations about HMRC errors.

The campaign group says National Insurance serves no purpose and has set out a package of measures to merge both employers’ and employees’ contributions with Income Tax. The call comes as part of the Treasury’s call for feedback as part of its consideration of the integration of the operation of the income tax and National Insurance contributions system.

The TPA is urging George Osborne to announce the move in his Autumn Statement as a key measure to kick-start economic growth.  It would also fit with the transparency agenda that has seen, for example, councils urged to publish all spending above £500 and the Government publish details of all contracts with suppliers. Details of how the reforms could be executed have been laid out in a report that breaks new ground since this issue was last considered by government, when Nigel Lawson was Chancellor of the Exchequer in the 1980s.

The move could significantly reduce the burden on businesses of complying with these taxes, as well as making it easier for people to see exactly how much tax they are paying on their earnings.

You can read the full report here

Click here for the complete press release

The key findings of this paper are:

• The Government should abolish National Insurance – both for employers and employees. It makes the tax system opaque, complicated and costly yet serves no purpose that could not be fulfilled by the Income Tax system. Abolition would make it simpler, cheaper and more transparent
• Pensioners, the self-employed and others who pay reduced rates of National Insurance should not pay more tax when it is merged into the Income Tax system
• New Income Tax rates for these groups can be introduced to ensure they do not lose out. Any subsequent alignment should only happen by reducing the higher rates, rather than increasing the lower rates
• A first stage of a merger should operationally align the charges, publish employers’ National Insurance on wage slips and rename National Insurance to something which more honestly and accurately describes its function
• A second stage should simultaneously abolish National Insurance completely, mandate a reassessment of earnings to incorporate employers’ National Insurance contributions and adjust Income Tax rates to collect the same revenues from the same individuals as before abolition

You can read the full report here

Click here for the complete press release

Matthew Sinclair, Director of the TaxPayers’ Alliance, said:

“George Osborne needs to take action to boost economic growth and abolishing National Insurance could be a key part of that.  Having to administer three taxes on the same income wastes time and money businesses should be using to grow the economy and then take on new staff.  It also wastes taxpayers’ money enforcing the different sets of rules.  Abolishing National Insurance will make the tax system simpler but also more transparent.  People should be able to see exactly what they are paying, instead of being misled because employers’ national insurance depresses their earnings but doesn’t appear on a payslip.  Now isn’t the time for timid tinkering with the tax system, we need serious reforms to make it simpler and more honest.”