Government

Comments are off for this post

North Somerset Council is looking for a Waste Minimisation Officer. As far as I can see, the officer will spend a large amount of time either visiting or communicating with schools, community organisations, and other partners showing them how to minimise the amount of waste going into their standard refuse bins.

This is despite the various leaflets already sent out to residents and businesses informing them of what they can and cannot recycle. Does it really need someone to be constantly haranguing them with the same messages? Non-Job of the Week The EU landfill directive keeps increasing the burden on council taxpayers, so I can understand why councils are keen to push the recycling message. There does come a point though where you wonder just how far councils will go. With recycling rates already on target to hit 60% this financial year, this is one job North Somerset council taxpayers can do without.

A central government department is looking for a Senior Integrated Communications Officer based in Leeds, paying £180-£220 per day (£900-£1100 per week). This role requires the jobholder “to gather intelligence about the mood, activities, opinions of key stakeholder e.g. staff representative groups and professional bodies, the national media.”

The job description goes on to say they will be “supporting senior members of the team to deliver communications about pensions reform to staff. This will be vital as elements of the reform ratchet up over next 6 months and will also entail feeding into the Departments industry relations policy group.”

When we published our report on the taxpayer funding of trade unions, we were told by union leaders that union reps needed time off on our watch because it promoted harmony in the workplace. Recent strikes don’t back up that message, but leaving that to one side, it could be argued the government needs to communicate its message on public sector pensions reform more effectively. As TPA Research Director, John O’Connell wrote last week, there are many myths about pensions reform still being articulated in the media – mainly by unions.

Take a look at the job advert. This role predominantly involves communicating with staff and stakeholders, which in turn means the unions. We will be paying someone the equivalent of £45-55K per annum on a temporary full-time contract to tell the unions what they already know – or at least should know.

I appreciate there is more to this job, but as it’s a temporary contract on a daily rate, clearly it’s not going to last a long time. Once again though we don’t know which department it is, as the job is advertised through a recruitment agency, which will also incur additional fees.

This job is unnecesary as the government already has a team of negotiators working with the unions. The unions then pass on the information to their members, with additional employer information distributed to staff. This is an additional expense we can do without.

Wasteful spending during Council efficiency drive

Dec 7th, 2011

by Paul Harwood.

Comments are off for this post

Like many councils, Sheffield City Council recently embarked upon a £57 million cost-cutting exercise in response to a fall in the central government grant. After council tax bills have nearly doubled across the country in the last decade there is no way taxpayers should pick up the bill.

Apparently unaware of the irony, the council has spent £21,000 sending 230,000 leaflets to residents asking them for ideas how to save money, living up to Sir Humphey’s mantra that it’s more expensive to do them cheaply.

While it is obviously good for a council to talk to voters about a necessary reduction in funding and how to save money, it should be done when it can have a meaningful impact on all aspects of spending rather than at the tail end of the discussions.

The consultation is open until January 6^th leaving the Council just three months to prepare and adopt a budget to take effect in April 2012. The opposition Lib Dem leader, Shaffaq Mohammed, claims that decisions must have already been made about next year’s budget, “We are now almost at the door of the final closure of the budget process as far as I’m concerned.”

If this is just a smokescreen for councillors to use to defend their own plans when the outcome is already decided, it is a very cynical waste of money.

Julie Dore, the Labour-run council’s leader, claimed that it cost just 9p to produce each leaflet and this represented “value for money.” But the question isn’t whether they have bought the leaflets at a reasonable price but whether or not the project was worthwhile in the first place, whether it was a genuine attempt to engage with the public or just a presentational gimmick. Taxpayers will suspect it was the latter.

Cheltenham Council’s bizarre costly case continues

Dec 7th, 2011

by Tim Newark.

Comments are off for this post

The bizarre case of Christine Laird, former managing director of Cheltenham Borough Council (CBC) continues to drain money from the taxpayer. The media consensus is broadly sympathetic to her claim for damages suffered as a result of a bullying environment at CBC during the years of her employment, and yet, her statements in court betrayed a strange attitude to public sector employment.

Mrs Laird was appointed to the post at CBC in 2002 but left in 2005 after accepting early retirement on the grounds of ill health—severe depression—that involved a council payment of £450,000. The council accused of her acting fraudulently by withholding details of her past depressive illness and said this resulted in a substantial financial loss. In 2009, the council sued her for £1 million—that is, taxpayers’ money.

In her defence, she claimed that the recruitment pack she was sent did not truthfully represent the organisation she would work for. ‘The statement that the council,’ she told the court, ‘embraced the values of being honest, truthful, wanting to work together in partnership with other organisations and providing quality service at the right price was absolute bunkum.’ Well, I would have to agree with her on that, but could that not be said of almost every council? And the level of naivety shown by her seems amazing in someone recruited to such a high council post. But it does not end there.

She went on to tell the court that she believed CBC was ‘at the least negligent and at worst deceived me into accepting a job that, had I been aware of all the facts, I would have immediately turned down, or at best reserved judgment about.’ So, she claims she was deceived into accepting a very highly paid job that she would not have taken had she known how councils really behave. Well, that does rather open the floodgates, doesn’t it? Couldn’t most disgruntled public sector workers say that?

Mrs Laird claims that her bouts of depression were sparked by family bereavements, her personal financial situation and a lack of certainty in employment. Otherwise, she believed herself to be in good health. But there appears to have been no point when she thought that maybe it would have been best for her, the council and the taxpayer if she just quietly resigned her position.

In fact, according to an external auditor’s report, the atmosphere of conflict between Laird and the council appears to have arisen out of a change in political administration following a local election a few months after she took the job.

In 2009, the council lost its £1 million case and was ordered by the High Court to pay her £250,000 in damages. In total, however, spiralling legal fees meant that the case actually cost £2.1 million in taxpayers’ money and the council sent letters to local residents apologising for its failed legal action. In 2010, an industrial tribunal declared that her treatment by the council was ‘calculated to cause personal distress’.

Now, Mrs Laird claims that £75,000 of public money is still owed to her and, apparently, Eric Pickles agrees. ‘The secretary of state has said I am entitled to an injury allowance in law,’ she told the BBC this week, ‘a tribunal has ruled I was injured at work because my illness is an industrial injury and yet the medical advice to make me an award has been ignored by the council.’ Bouts of depression—personality clashes with councillors—an industrial injury, eh? It is an interesting definition that is exciting a lot of lawyers.

‘I’d been a chief officer since I was 32, and working in local government at senior level is no picnic, so I was used to the rough and tumble of political life,’ she says. ‘What I wasn’t used to was being personally attacked and undermined. It got to the point where I would wake up in the morning and feel physically sick at the thought of having to go to work.’

Bullying in the workplace is never acceptable, but this case is not just about bullying, it is about someone with an apparently fragile mental capacity taking on a demanding job with all the cut-and-thrust of party politics thrown in. Certainly, she now admits that throughout the costly saga ‘I can’t think of anything worse than someone with a severe mental illness [having] to be dragged though the courts system.’ And yet she has shown the mental strength to carry on her long battle against the council.

An external auditor’s report on the case concluded that that there were ‘flaws in the decision-making process whereby decisions were made with an over-emphasis on legal matters.’ That is, councils should not be too eager to call in lawyers at the taxpayers’ expense. But, it also concluded that ‘It is not unreasonable for a council to go to court to seek recovery of a substantial financial loss. The Council had incurred significant costs as a result of the employment dispute with Mrs Laird and it was appropriate to consider options for recovering losses.’ What is clear is that there was a succession of poor decision making and management at the council during this dispute and that the subsequent legal fees was allowed to spiral out of control with little regard for the cost to the taxpayer.

Certainly, locals commenting on the case have been far from charitable towards Mrs Laird. ‘This woman caused hell at the council,’ says one anonymous Cheltenham resident, ‘why should the ratepayer fork out for her malicious actions?’

Cheltenham Council’s bizarre costly case continues

Dec 7th, 2011

by Tim Newark.

Comments are off for this post

(Not quite) the whole story

Dec 6th, 2011

by Paul Harwood.

Comments are off for this post

The Treasury has recently published the Whole of Government accounts for 2010, which provide consolidated financial information for over 1,500 public sector organisations. This is the first time that such a detailed document has been put together and is a positive step towards greater transparency in how taxpayers’ money is spent.

Perhaps the most worrying figure in the report is the UK has a liability of £2.4 trillion – the amount of money that taxpayers are currently committed to paying out if there was no change in government policy. This is a staggering sum – equal to 170 per cent of GDP. Even if the government sold off every asset it had, from the Royal Navy’s ships to the road network, we would only be able to pay off less than half this liability.

It’s a stark reminder of the challenge facing the government. The deficit is equal to 92 per cent of the public sector wage bill. The net public service pension liability (not including state pensions) is over one trillion pounds.

There are still many organisations not included in the report, perhaps most notable the banks in ‘temporary’ public ownership and various transport organisations, so the total size of the state is yet bigger than the report suggests. However, they may be included in future releases to give a more representative picture.

There is a huge amount of information presented in this report so it is well worth a look, whether you’re interested in pensions, the cost of services or simply curious to see where your money goes.

TaxPayers’ Alliance sets out powers the PM should bring home from European Council

Dec 6th, 2011

by Robert Oxley.

Comments are off for this post

The TaxPayers’ Alliance (TPA) today (Tuesday December 6th) sets out how David Cameron has, for the first time in a generation, a serious opportunity to renegotiate Britain’s relationship with the EU and seek the repatriation of powers back to the UK.

Click here for the complete press release

Setting out a list of twenty policy changes that could make up any new deal between the UK and the EU, the TPA says the British Government could take immediate action on six of these areas without the need for any agreement in Brussels. The remaining fourteenwill require negotiation at the European Council on December 9th.

The twenty pieces of the policy jigsaw cannot be tackled in isolation. Britain is in a strong negotiating position and should force these issues onto the agenda.

Any package of reforms brought home from the European Council should be judged in comparison to this list; otherwise the Government could declare victory while delivering a poorer deal for taxpayers.

Click here for the complete press release

Fourteen pieces of this jigsaw should be on the negotiating table at the European Council:

Bringing to an end the treaty objective of “ever closer union”
Repatriating the Common Agriculture Policy to national government control
Repatriating the Common Fisheries Policy
Repatriating control over International Development
Radical cuts to budgets where policies have limited demonstrable benefit
Slashing the UK budgetary share
Re-establishing the Social Chapter opt-out
Ensuring UK Parliamentary sovereignty overrides EU law
Dropping UK participation in EU defence integration
Introducing flexibility involving Justice and Home Affairs, including Asylum and Immigration control
Restoration of UK Government powers over taxation
Greater freedom for Britain to enter bilateral trading agreements globally
Rowing back from costly EU space ambitions, particularly the Galileo programme
Triggering massive reform to the structures of the EU itself

There are also six areas where immediate action can be taken by the British Government and without the need for any agreement in Brussels:

Commissioning a measured, independent and trustworthy cost-benefit analysis of EU membership
Demonstrating an intent and capability to act unilaterally if necessary to improve Britain’s position
Appointing a Cabinet Minister to review the acquis communautaire
Requiring EU-sourced legislation to be printed on differently-coloured paper, and to carry a cost-benefit summary that can be compared with the EU original estimate, in order to avoid ‘gold-plating’ (extra red tape from British civil servants)
Securing transparency in Westminster over EU laws
Improved use of the national scrutiny reserve, the Parliamentary veto

This list should be considered a toolbox for the British negotiating team and should help inform the backbench business debate to be held in Parliament on Thursday 8th December. Senior Conservative Ministers have long argued for a repatriation of powers; now that they have the chance, they must exploit this opportunity to make changes in the long term interests of Britain.

Tinkering with individual treaties is not enough. In the history of negotiation with the EU Britain has experienced a number of false dawns where despite winning a concession or opt-out from legislation, the policy has been enacted via the back door (such as the Working Time directive). There is no reason why Britain cannot fundamentally renegotiate its position; various nations already have differing relationships with the EU.

Click here for the complete press release

Dr Lee Rotherham, Research Fellow of the TaxPayers’ Alliance, said:

“The British people are crying out for the Government to stand up to Brussels and reclaim powers that should never have been surrendered in the first place. Senior ministers who have long called for a repatriation of powers now have a once in a lifetime opportunity to negotiate with their European counterparts from a position of strength. This report sets out a comprehensive list of reasonable demands that David Cameron should take into the negotiating chamber alongside a number of steps that can be implemented immediately at home, without recourse to Brussels. The Prime Minister has an opportunity to bring home a wonderful early Christmas present for British taxpayers, it is against these benchmarks that his ability to deliver for Britain will be judged.”

Who watches the watchmen? Government credit card agency in its own waste scandal

Dec 5th, 2011

by Tom Welsh.

Comments are off for this post

Who watches the watchmen? Taxpayers will be demanding answers after it was revealed that the very agency charged with delivering ‘significant sustainable cost reductions’ in public sector procurement has splurged £1.7million of taxpayers’ money in nightclubs, five star hotels and on trips to New York.

The Government Procurement Service (GPS) manages a vast scheme of government procurement cards (GPCs), some 133,000 of which have been issued since 1997. Civil servants in departments, agencies and quangos can use these cards to make purchases on behalf of government. In theory, it is a ‘fast and efficient way of purchasing different types of goods and services’, speeding up transactions and ensuring prompt payment to the businesses that supply these services. Spending on credit cards has got way out of hand. We need more transparency and accountability and fewer civil servants running up extravagant bills and leaving them to taxpayers. Civil servants have legitimate expenses, but there is no excuse for some of the lavish spending that has been uncovered .

The TaxPayers’ Alliance has attacked wasteful GPC spending many times before:

In November this year we revealed the £185,000 credit-card spend at the Sustainable Development Commission between April 2009 and March 2011 – including £10,000 on air travel, and £14,000 in 4-star hotels.
In August, we exposed the £20,000 put on government credit cards by the Equality and Human Rights Commission in payments to political parties.
In June, we condemned the £25m spent by 18 Whitehall departments, including £60,000 dining at exclusive restaurants.

Today’s news is a stark reminder of how deeply a culture of profligacy can take root. Taxpayers must have trust that there are controls in place to prevent unauthorised and wasteful spending. So when those who should be strict financial guardians indulge their personal fantasies at Newz nightclub in Liverpool (popular with Cheryl Cole) or spend £6,000 in New York hotels, it’s clear that the problem is systemic and won’t be solved by shuffling around personnel.

It’s good news that the Government has begun publishing all spending on GPCs over £500. But £500 is an arbitrary figure and taxpayers clearly can’t trust government watchdogs to be stringent and critical on sums beneath this level. Government should publish GPC and credit card statements in full (personal details redacted, of course) so taxpayers can judge for themselves what is necessary and what is wasteful.

Arts Centre gobbles up our cash

Dec 2nd, 2011

Comments are off for this post

Theatres and arts centres are costly things for taxpayers. Earlier this year I wrote about ‘The Waterfront’ in Aylesbury. Taxpayers give this theatre a £500K subsidy, yet despite this, when the council wanted to hire the theatre on election night, we had to stump up another £20K for the privilege.

It’s not a pretty picture further north in West Bromwich. A controversial arts centre, ironically called The Public, eats up £2.29 million in taxpayer subsidies, and only manages to generate a profit of £58,801.

Looking at the figures, it appears very few people use this venue. One of the excuses for such a poor financial performance is ticket sales are down, but they are down from £54,850 to £34,267. In what is described as a good year, tickets sales only generated a little over £1000 a week.

Conferences generated an income of £174,893 from 240 events. In a £72 million arts centre, there must be plenty of space, so an average income of £728 per event must mean the conferences were very small.

No doubt I will be described as a Philistine for daring to criticise the arts, although anyone who knows me will tell you I am certainly not. As a musician I fully appreciate the role the arts play in our country. I have been involved with small theatre groups in the past, and they had to balance the books. If they made huge losses, they went out of business.

What appears to be happening here is no-one is taking responsibility. Taxpayers’ cash keeps rolling in – even during tough economic times – and for as long as this continues, the incentive to make this venue pay is not there.

This is a classic example of a grandiose plan gone wrong. I very much doubt there was ever a sound business case put forward for the building of this arts centre. It will have been dreamed up as something to put West Bromwich on the map. As so often happens with these examples, taxpayers are left footing an enormous bill.

I would rather have fewer venues that really succeed, are popular, and are a credit to the their town or city, than countless white elephants gobbling up our money, especially when there are many very worthwhile projects for the money to be spent on.

Councils can publish more spending information

Dec 2nd, 2011

by Chris Daniel.

Comments are off for this post

When asked by the Department for Communities and Local Government to publish all spending to suppliers over £500, all but Nottingham City Council did so. Of those that did, there are still some issues regarding how the data is put online.

This degree of transparency is still in its infancy though, and will hopefully become more efficient and more meaningful in some areas. After all, allowing residents to properly analyse spending without having to wade through a maze of indecipherable data is the whole point.

Some councils are going beyond the £500 limit. Hammersmith and Fulham have recently published all spending, not just to suppliers and not just over £500. They have acknowledged the benefit of this exercise to taxpayers and ultimately to the council themselves.

While they admit there are limitations to the data at this early stage, it is undoubtedly a big undertaking and one which we would encourage all other councils to follow.

Wiltshire Council Parking Fiasco

Dec 1st, 2011

by Tim Newark.

Comments are off for this post

In the vital shopping days leading up to Christmas, Wiltshire Council continues to hinder hard-pressed traders with their farcical parking charges policy, ignoring both popular protest and a ‘Show Some Sense’ local newspaper campaign. The latest twist in this sorry saga sees Wiltshire Council proffering a miserly 10p cut in parking charges in Trowbridge, Chippenham and Salisbury—after having increased charges by 300 per cent in some of their car parks!

Council leader Jane Scott was forced to introduce this 10p cut following a sharp shortfall in business for local traders, but the revised charges won’t formally come into effect until December 19th, leaving just six shopping days before Christmas. Nice timing!

Local residents have been unimpressed. ‘As if 10p will tempt anyone to pay for parking in any of these towns,’ said one. ‘It is pitiful to watch perfectly reasonable town centres having the life sucked out of them by supermarkets and out-of-town mega-stores with their free parking, whilst the local governments and planning agencies actually encourage the process with bizarre and unimaginative policies.’

In the meantime, traders and residents in Devizes are furious that Wiltshire Council is not introducing cuts to their parking charges. ‘Charges should be reduced in Devizes,’ says their Mayor, ‘because they are stopping people from coming into our town. I really can’t understand why Melksham has kept its two-hour free parking and Wiltshire Council hasn’t changed the parking in Devizes Market Place. We are very similar towns.’

Wiltshire Council cut the free parking in Devizes Market Place to just half-an-hour, hardly time to fill a shopping basket. ‘The feedback we have had is that retailers in the town are suffering as a result of increased parking charges,’ says the chairman of Devizes’ Chamber of Commerce, ‘in spite of Wiltshire Council putting it down to the general economic situation.’

Tim Newark, Bath & South-West TaxPayers’ Alliance

David Cameron challenged at strike day PMQs about TPA report on taxpayer funding of trade unions

Dec 1st, 2011

by Jonathan Isaby.

Comments are off for this post

There has already been much publicity in the media for our report last week into Taxpayer funding of trade unions. We found that at least £113 million of taxpayers’ money was last year given to trade unions either in direct grants or through taxpayer-subsidised “facility time” – and we believe that it should be stopped.

At yesterday’s Prime Minister’s Questions – coinciding with the strike by many of the unions which are benefiting from that taxpayer funding – Tewkesbury MP Laurence Robertson cited our research as he raised the issue with David Cameron.

The Prime Minster agreed in his answer that it was indeed time to review the situation and said that he would end the practice of “full-time trade unionists working in the public sector on trade union business”. The exchange is the subject of a report in this morning’s Guardian and you can watch if for yourself above.

This is the second week running that TPA research has been discussed at Prime Minister’s Questions. Last week our report into excessive motoring taxes was raised with David Cameron.

Union myths unravelling

Dec 1st, 2011

by Matthew Sinclair.

Comments are off for this post

Following up on our release yesterday confronting union myths, and TPA Research Director John O’Connell’s blog for this site, I wrote for the Spectator Coffee House about the TUC using a poll which showed the public had a good idea of the value of normal public sector pensions to try and sell their misleading average pension statistic.

Since then the Institute of Fiscal Studies have estimated that public sector workers are 7.5 per cent better paid, even after “allowing for the higher age and qualifications of public sector workers”. Their work confirms the figure from the Office for National Statistics which we have been quoting. The unions just can’t defend the strike except with misleading claims that fall apart when challenged, like they did when I debated the issue with the ATL President on Sky News:

Non-job of the week

Nov 30th, 2011

Comments are off for this post

In our report last, week, we revealed that trade unions are subsidised by taxpayers to the tune of £113 million. That is made up of an estimated £80 million in paid staff time, plus £33 million in direct payments. This is an increase of £7 million from 2009/10.

One of the beneficiaries of our cash is the Union Learning Fund. This was created by the last government in 1998 with the aim of promoting ‘activity by trade unions in support of the objective of creating a learning society.’

Non-Job of the Week In plain English, this means that instead of unions paying for their training courses out of the subscriptions they receive from their members, taxpayers pick up the tab.

On a day when our bins are not be emptied, many schools across the country are closed, and some operations in our hospitals are being cancelled, we are paying for the staff time to organise the strikes and the courses that teach them how to do it.

Ironically, the TUC is currently advertising for a Media and Public Affairs Officer for unionlearn – the body responsible for administering the Union Learning Fund. This comes with a salary £38,534, and part of this role’s job description is to be responsible for the provision of good news stories and information raising the profile of unionlearn to the national, regional, local, specialist and union media.

This is a non-job as far as taxpayers are concerned. If the TUC wants to employ a media officer to promote its training courses, that is up to them, but it should not be done with our cash.

Media and Public Affairs Officer – unionlearn

Grade 7: Salary £38,534 per annum rising incrementally to £39,929 pa including London Weighting

Unionlearn is the education and skills section of the TUC. We administer the government’s union learning fund and promote lifelong learning and skills in the work place. The communications team are responsible for the promotion of unionlearn and its work, for liaising with the media and opinion formers and ensuring that the skills agenda and our work on learning in the workplace remain part of the wider debate on learning and skills.

The post holder will be responsible for the provision of good news stories and information raising the profile of unionlearn to the national, regional, local, specialist and union media.

As well as having experience of writing for publications and/or high quality websites, the successful candidate will also need to demonstrate:

• Qualitative research and analysis including interview techniques

• Participatory research projects, finding stories or data which illustrate issues

• Project management

• Experience of working on public affairs campaigns

• Excellent communication skills including writing press releases, reports and features

• Good computer literacy including handling database programmes and ability to source material from the internet and publish online.

Today’s strike and pension myths

Nov 30th, 2011

by John O'Connell.

Comments are off for this post

The strike today has been called the “largest coordinated action ever seen in the UK” by the Public and Commercial Services Union (PCS). The unions claim nearly 3 million public sector staff are not at work today, but the paltry number of strikers outside government department buildings in Westminster this morning doesn’t quite give you that impression.

The strike is over pension reform, and the unions are refusing to accept necessary changes to unaffordable deals. Our response this morning is here, including a calculator which allows you to see the public sector salary required to match your total remuneration.

There are plenty of comment pieces out there this morning perpetuating myths about public sector pensions, so it’s important to knock a few of them on the head. Let’s take George Eaton’s piece in The New Statesman first:

“But as the graph below from the government-commissioned Hutton Report shows, public sector pension payments peaked at 1.9 per cent of GDP in 2010-11 and will gradually fall over the next fifty years to 1.4 per cent in 2059-60. The government’s plan to ask employees to work longer and pay more is a political choice, not an economic necessity.”

Here’s the graph Eaton references:

What Eaton’s piece doesn’t tell you is that this graph shows pension accruals and pensions-in-payment growing with CPI, rather than RPI, which is one of the measures the unions are so angry about. The projections shown in that chart are also the result of assumptions about public sector workforce and economic growth that may prove optimistic. The article also doesn’t tell you that the PCS, one of the unions on strike today, are looking to index their own pension scheme against CPI because their current scheme is unaffordable. They also want members to pay more more in contributions, according to reports. They’re striking against something they’re doing themselves.

Let’s take a look at another. Dave Prentis, the General Secretary of Unison, wrote on the Huffington Post this morning:

“Under the proposals, the low paid will receive only just enough to keep them above the threshold for means tested benefits when they do retire. The average pension in local government is £3,800 a year, but for women, it’s less than £2,800 – just £56 a week. More than half of women pensioners in the NHS receive a pension of less than £3,500 a year.”

If you worked in the public sector for a short amount of time, your total pension pot would be understandably small. But to add these pensions into an ‘average’ calculation is misleading. Look at the online calculators for the schemes themselves to get more informative results based on a career of work. A local government middle manager who retires on £60,000 a year can expect a pension of £30,000 a year. And the lower paid? A more junior worker at a council who retires on £25,000 a year can expect a pension of £12,500 a year. These are based on 30 year careers, too. You can add more to these figures if someone spends their entire working life in the public sector.

What about the NHS? A worker in the NHS who retires on £40,000 a year could expect a pension of £15,000 a year and a lump sum of £45,000, again based on a career of 30 years.

Mr Prentis also says:

“Both the health and local government schemes are in good shape, with billions more coming in than has to be paid out in pensions every year.”

Let’s take them in turn, the NHS pension scheme first. There was a cash surplus of around £2 billion last year. That includes huge employer contributions, which are taxpayer contributions of course. But anyway, this is not an indication of sustainability; the NHS surplus is a result of having a growing workforce. Those paying contributions to create the surplus are also building up pensions that will need to be paid in the future. Further, the surplus is returned to the Treasury, it’s not like this is a pension fund where they can realise increases in the value of that £2 billion to pay for future pensions. It just goes back to the Treasury’s general fund to spend on wasteful projects like High Speed Rail.

Additionally, this is the kind of warning sign our research note last week signalled – the NHS pension scheme has a lot more active members relative to ‘pensioners in payment’ than other schemes, but that will be changing rather quickly over the years. Overall the Treasury already had to top up unfunded schemes as a whole by a huge £4 billion last year, and that number is only getting bigger. Thinking the NHS pension scheme is fine now, so therefore it doesn’t need reform, is the kind thinking that got us to where we are now. It’s simply kicking the can down the road, and it’s disingenuous to pick the only unfunded scheme with so many more active members than pensioners to paint a picture of health for the wider public sector.

Now local government. Yes, it’s a funded scheme, with invested assets, and more coming in than paid out at present. Again, this includes massive employer contributions, which is taxpayers’ money to start with. Also, the argument that this scheme is “healthy” just defers any responsibility for paying off massive liabilities to future generations. Our paper on local government pension scheme deficits highlights how big this problem is, with over £50 billion more liabilities than assets in 2010. And it will get worse. Funded public sector schemes in countries like The Netherlands are not allowed to hold assets of less than 80 per cent of liabilities, but a quick glance at our paper shows that many local government schemes are nowhere near this. In fact, some have asset to liability ratios of less than 50 per cent. That’s not sustainable and will have to be paid off at some stage.

When you walk past a striker today, ask them if it’s fair that a worker on the minimum wage pays for generous public sector pensions, while being unable to even nearly afford a deal like that for himself. As I mentioned earlier, the unions’ own pension schemes are in trouble. You’d be forgiven for thinking that peddling misinformation and coordinating strikes is designed to boost their own membership and increase employee contributions, to fix their own broken schemes.

TaxPayers’ Alliance information on public sector strikes, pensions and unions

Nov 30th, 2011

Click here to use the online calculator

Comments are off for this post

Below is some background information on public sector pay and union pension myths, as well as an assortment of recently published work that you may find of use.

The TaxPayers’ Alliance is today also releasing a new online calculator that allows someone in the private sector to assess how their total remuneration per hour is comparable to that enjoyed by public sector workers on significantly lower salaries.

Public sector pay background

Public sector workers are significantly better paid than those in the private sector. Research at the Office for National Statistics concluded in July that “after accounting for: gender, age, occupation, the region that the job is located in, and factoring in qualifications, the public sector, on average, earned 7.8 per cent more per hour (excluding overtime) than the private sector in 2010”.

Public sector pensions

The unions are propagating two key myths about public sector pensions:

1. They claim that Chart 1B in the Hutton Report shows public sector pensions are affordable. But that chart is based upon pension accruals and pensions-in-payment growing with CPI, rather than RPI, which is one of the measures the unions are striking against. They cannot have it both ways. The projections shown in that chart are also the result of assumptions about public sector workforce and economic growth that may prove optimistic.

2. They claim that the “mean average public sector pension is £7,000” and “the majority” receive less. But that average will include a large number of workers who were only in a given public sector job for a short period of time, and have therefore only accrued a small public sector pension. With a 30-year career in the public sector, workers can expect generous pension provision:

A local government manager who retires on £60,000 a year could expect a pension of £30,000 a year
A more junior worker who retires on £25,000 a year could expect a pension of £12,500 a year
A worker in the NHS who retires on £40,000 a year could expect a pension of £15,000 a year and a lump sum of £45,000
A teacher who retires on £50,000 can expect a pension of £25,000 a year

Recently published TaxPayers’ Alliance research

Public Sector Pension Gap (Nov 2011) – Research showing how, excluding the NHS, there are already more public sector workers drawing a pension than there are working and paying in to the system.

Taxpayer Funding of Trade Unions (Nov 2011) – How the taxpayer subsidises trade unions to the tune of at least £113 million each year through direct grants and “facility time”.

Trade Union Rich List 2011 (Sept 2011) – The comprehensive annual run-down of the now 38 trade union bosses who took remuneration packages worth more than £100,000 in 2010-11.

Reacting to the strikes, Matthew Sinclair, Director of the TaxPayers’ Alliance, said:

“It is incredibly unfair that taxpayers already struggling with the bill for the higher pay and better pensions enjoyed by public sector workers are now facing the disruption of a massive strike. Even after the proposed reforms, staff in the public sector will still get a great deal. The unions need to be more realistic and stop expecting everyone else to pay so much for public sector pensions.”

TaxPayers’ Alliance reaction to Autumn Financial Statement

Nov 29th, 2011

Comments are off for this post

Matthew Elliott, Chief Executive of the TaxPayers’ Alliance, said:

“There is some good news for taxpayers in the Autumn Statement, but over time the Government still needs to do more to deliver lower and simpler taxes. If tax remains the heavy and uncomfortable burden it is today, growth will stay disappointing. Motorists will be grateful for a better deal as they have been overtaxed for years, although they will need to remain vigilant with a big hike still scheduled for next August. And it is right that the Government keeps pay for public sector workers under control, as they currently get a much more generous deal than those in the private sector. The Autumn Statement was a reasonable start in reacting to the huge challenges facing the British economy, but a more ambitious plan for growth will be needed by the Budget.”

VIDEO: TPA/IEA Autumn Briefing

Nov 29th, 2011

Comments are off for this post

The bleak state of the public finances

Nov 29th, 2011

by Mike Denham.

Comments are off for this post

Getting debt under control is proving harder than anyone envisaged

- David Cameron last week

At the time of the March Budget, the Office for Budget Responsibility forecast that borrowing would overshoot the Coalition’s original 2010 forecasts by a cumulative £46 billion. The overshoot was entirely attributable to a spending overrun:

Since then growth prospects have deteriorated, largely reflecting the turmoil in the Euro area. So how much worse are things now?

According to the latest monthly public finance data (covering April to October) borrowing this year seems to be only slightly higher than the increased March forecast. However, tax revenues are coming in below expectations – Corporation Tax receipts have been especially weak. And some elements of spending – including debt interest and social security – are running higher than expected.

Against that, there is now evidence of retrenchment in other areas of government spending. Public sector employment fell by 4 per cent over the last year (to Q2), although average earnings are still increasing (up 2 per cent in the year to September).

The overall fiscal picture remains one of slippage. Borrowing is already forecast to be higher than originally planned, and the setback to European growth prospects means that the OBR’s new forecasts will be worse again. On unchanged policies, eliminating the current deficit by mid-decade now looks unlikely.

Yet despite that, the bond markets have continued to support the government, with funding costs down to a 60 year low. It is an impressive pay-off for maintaining fiscal credibility.

However, the gilt market is on very thin ice. Inflation is now more than twice the yield on 10 year gilts – 5 per cent inflation vs. 2.3 per cent yield – implying that the market is taking a huge amount on trust.

The lesson of history is that such trust can be very fragile. The UK may be viewed as a haven of fiscal stability compared to the Euro area, but negative real yields are unlikely to be sustainable for long.

The forecasts built into the March 2011 budget allowed for higher average gilt yields than those currently in place – rising up to 5.1 per cent by 2015-16. So right now, the public finances should be turning out better. But as we’ve seen, they’re not.

And given the inflation background, yields could easily go higher than allowed for in March. According to the OBR, for every one percentage point increase in yields above their baseline assumptions, debt interest payments would be £6 billion a year higher by 2015-16, with further cumulative increases beyond that.

And of course, the official debt is only one component of the real national debt. To get a complete picture we also need to take account of the government’s off-balance sheet debts. These include its unfunded pension liabilities and PFI contracts. Servicing of those liabilities means that the true cost of debt servicing (debt interest plus public sector pensions plus state pensions plus PFI) over the next few years will be around treble the official debt interest forecast:

This highlights an important longer term issue – the cost of our aging population. Because of the rising cost of pensions and healthcare for the elderly, we will need to continue our programme of fiscal consolidation far beyond 2015-16. According to recent calculations by the IMF, between 2010 and 2030, the UK needs to tighten fiscal policy by 13 per cent of GDP – the fifth biggest tightening of any advanced country. Against that, the current budget projections only allow for a tightening of around 8 per cent.

In these difficult circumstances, the Chancellor must use the Autumn Statement to underline his fiscal resolution. There is certainly a case for growth promoting tax cuts, but any such moves must be backed by a tougher stance on public spending.

In particular, we continue to believe that that the government should commit to a third fiscal rule, limiting the growth of public spending over the medium term. Such a rule could allow the Chancellor scope to cut some taxes in the short-term while reassuring the markets that the overall budget remains on a sustainable path.

New TPA research reveals that there are more former civil servants drawing a pension than paying in

Nov 28th, 2011

Comments are off for this post

- 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.

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.

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.”

If facility time cuts strikes, what is happening in the public sector?

Nov 25th, 2011

by Matthew Sinclair.

Comments are off for this post

Unison General Secretary Dave Prentis has responded to our report showing the unions getting a £113 million backdoor subsidy. He claims that the facility time reduces industrial strife, and leads to fewer strikes. If that was the case, then surely the public sector – where staff take three times as much in facility time – would see fewer strikes? After all, public sector workers are also better paid and get better pensions. It doesn’t work out that way:

The data on the relative number of strike days lost per worker are from our research last year. You can see the same thing with the ridiculous claim that having hundreds of staff working for the union, instead of the public service, improves public service productivity:

The data on productivity compares the market sector and the major public services. It is taken from the Economic and Labour Market review produced by the Office for National Statistics.

Either something else is going catastrophically wrong in the public sector, and things would be even worse without huge amounts spent on facility time, or union staff paid for at taxpayers’ expense aren’t associated with an efficient workplace. We shouldn’t fear ‘pay up, or we’ll strike’ threats from the union bosses. And our past experience with Dave Prentis shows that he isn’t above misleading the media and the public:

Taxpayers fund trade unions to the tune of £113 million a year

Nov 25th, 2011

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

Comments are off for this post

- 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).

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

David Cameron challenged at PMQs over TPA report on motoring taxes

Nov 24th, 2011

by Jonathan Isaby.

Comments are off for this post

In case you missed it, our recent report into the excessive motoring taxes paid by British drivers took centre stage in Parliament on Wednesday. We found that the residents of Maldon in Essex are clobbered by higher motoring taxes than anyone else in the country, so their local MP, John Whittingdale, asked David Cameron at Prime Minister’s Questions what he was going to do about this “intolerable burden”.

The Prime Minister replied by saying that he is “absolutely committed” to helping people with their motoring expenses at this time of economic difficulty – and you can be sure that we at the TPA will hold him to that. The Prime Minister added that the TaxPayers’ Alliance was doing “a good job” of highlighting the issue. Here’s the full exchange:

20% of councils may increase council tax

Nov 24th, 2011