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Tax cut in South Oxfordshire

Dec 15th, 2011
by Darren Rutland.
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South Oxfordshire district council are proposing to cut council tax next year by 2.5 per cent. The Henley Standard says that this would reduce the amount paid by a typical Band D taxpayer from £123.73 to £120.64. The council are able to do this because they have outsourced some services, and have also been sharing services with Vale of White Horse District Council since 2008.

Staff are shared between the two authorities, and most services are integrated. This has included shared terms and conditions for staff, and joint department managers between the two councils. Of course, each authority provides different services depending on their local area, but the way they have co-ordinated their operations have allowed South Oxfordshire to pass on the savings to local residents.

This is good news. Individuals have to make savings to their own budgets and councils have to cut back too; why shouldn’t councils look to ease the pressure on their residents? It was disappointing to see Brighton and Hove Council reject central government’s incentive to freeze council tax last week, opting instead to increase it by 3.5 per cent. Their refusal to do so led to Brighton and Hove Council’s Cabinet Member for Finance and Central Services, Cllr Jason Kitcat, being named as the TPA’s November’s Pinhead of the Month. While it’s good to see most local authorities have accepted the freeze, it is even more encouraging to see councils go one step further and reduce council tax for their residents.

Earlier this week, Hammersmith & Fulham council announced they are to cut council tax next year by 3.75 per cent. Due to a variety of cost-cutting measures, including combining services with Westminster and Kensington & Chelsea councils, they have been able to cut management and overhead costs by half. As a result they are able to cut their council tax for the fifth time in six years. It is disappointing that more local authorities do not look to pass on savings to residents through lower council tax bills.. Many could start by ending recruitment to non-jobs, and our research archive contains a whole host of other savings to be made.

Local authorities across the country should take a closer look at tax-cutting councils to see how it can be done, even with necessary spending reductions.

Hammersmith & Fulham Cuts Tax

Dec 13th, 2011
by Paul Harwood.
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Hammersmith & Fulham council (H&F) has announced that they are proposing to cut council tax next year by 3.75 per cent. This will be the fifth year in six where the council has managed to cut council tax. This saving is due to several cost cutting measures including combining services with Westminster and Kensington & Chelsea councils in order to cut management and overhead costs by half.

This tax cut will be realised without resorting to the kind of ‘bleeding stump’ approach of shutting libraries and cutting services that some councils have taken, say H&F:

“While planning to cut [council] tax, H&F is intending to freeze parking charges, keep all its libraries open, maintain weekly or even twice-weekly refuse collection and plough £1.3 million into extra town centre police.  It is also one of just two councils in London offering homecare to people in the ‘greater moderate’ as well as ‘substantial’ or ‘critical’ banding.”

Further savings are to be made by selling off underused property, co-locating services among other measures in order to pay off about half the council’s debt and reduce annual interest payments.

We are pleased to see that some councils are giving taxpayers a break. The dramatic savings that H&F are proposing show that other councils can follow suit with tax cuts by cutting out waste. Sharing services can be a sensible way forward, too. It’s a shame that other councils are choosing to increase council tax, like Brighton & Hove who are looking to impose a 3.5 per cent hike.

The welcome move by the Department of Communities and Local Government to use money generated through other taxes to help councils freeze council tax bills cannot compete with genuine tax cuts. Funding from central government grants may be falling but since council tax has doubled over the last ten years, there is plenty of space for efficiency savings and for more creative solutions.

Cllr Stephen Greenhalgh, Leader of Hammersmith and Fulham council, spoke at a TaxPayers’ Alliance fringe event at the 2011 Conservative Party Conference. He explained the position they were in when they took over and how things have changed since then. Council tax has fallen from one of the highest levels in the country to one of the lowest, while debt levels have been reduced at the same time.

Other councils should look at how tax cuts across the country have been achieved and copy good ideas.

(Not quite) the whole story

Dec 6th, 2011
by Paul Harwood.
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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.

Councils can publish more spending information

Dec 2nd, 2011
by Chris Daniel.
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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.

Spending cuts essential according to new Audit Commission report

Nov 18th, 2011
by Chris Daniel.
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Most councils are coping well with current level of cuts but the future could be challenging, according to findings of a new Audit Commission report. It says well-managed councils are weathering the current economic storm far better than others. They claim:

“big expenditure cuts are always hard but auditors feel that well-managed councils can deliver their 2011-12 budgets. Facing big cuts is not, on its own, enough to worry auditors. It is councils with big cuts and weak management that are at higher risk of not achieving their budget. Good financial management is helping most councils cope in 2011-12.”

The report explains three ways councils can help plug the financial gap. They can either raise charges and/or council tax, dip into reserves or make reductions in spending.

Many families are struggling, making savings to household budgets and coping with increasing fuel and energy bills. That means raising council tax or charges is unacceptable. It’s a lazy option.

At the start of the 2011-12 financial year, councils held £11.8 billion in reserves. This was equivalent to 30 per cent of total revenue spending in 2010-11. According to the report single tier and county councils held unallocated reserves equivalent to two-thirds of their central government reduction in funds, and district councils around twice the value. If earmarked reserves are included in this figure then the picture is markedly different: district councils reserves are then six times the value of their cuts and single tier and county councils nearly three times.

But when it comes to using reserves, Sir Merrick Cockell, Chair of the Local Government Association makes a strong point: that councils should only consider dipping into their reserves in extreme measures and only for use in the immediate term.

The final way of making up the shortfall – cuts to spending – is something the Audit Commission says is essential. Once falls in income and reserves are taken into account there is a net gap of 7 per cent in total income available to fund services for single tier and county councils and 8 per cent for district councils. But those figures relate to existing services. Councils must consider the difficult but necessary options of scrapping services or departments that are not a priority, or can be performed by someone else.

Besides, the report states that there was no identifiable link between the extent of impact on services and the size of cuts. It is something that is more affected by local decision making and individual council priorities, meaning many councils’ excuses don’t stand up to scrutiny.

Much of this report confirms what the TPA has been claiming for some time – that spending cuts are achievable through good management and the willingness to make difficult decisions. Councils should look through our research archive for suggestions on what to cut. Harry Phibbs’ list of 100 ways to cut council tax without cutting key services also has some excellent suggestions.

Tip of the iceberg: Councils are not doing enough to tackle fraud

Nov 11th, 2011
by Tom Welsh.
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Yesterday the Audit Commission (AC) released its annual report into fraud against local authorities, with a chilling warning that councils had detected ‘just the tip of a very large iceberg.’ Out of an estimated £2.1 billion lost in fraud from council budgets, just £185 million was detected – the profits of 121,000 cases of criminal abuse of council tenancies, council tax discounts, housing benefits, personalised social care budgets, and procurement contracts. It was an improvement on last year, but local authorities are still not doing enough to tackle this considerable strain on local government finances. Their failure leaves taxpayers out of pocket, and prevents genuine claimants from accessing services.

Most reporters have focused their write-up on eye-catching cons like the local government officials tricked into paying £7m into false bank accounts. But of far greater significance are the everyday, bread-and-butter frauds that make up the vast majority of the stolen money. Of the £185 million detected, £110 million was lost in illegal claims for council tax and housing benefits, and £22 million in false claims for student and single person council tax discounts. The value of the 1,800 homes recovered from social-housing fraud stood at £266 million.

But these are just the amounts detected. It’s welcome news that detection is up 37 per cent, but from such a low starting point the rise is minuscule. £185 million is still less than 10 per cent of the total estimated local government fraud.

The figures also reveal sharp contrasts across the country, with some councils performing much worse than others in their counter-fraud efforts. The Audit Commission estimates that 1 per cent of social housing is occupied by illegal subletters and other fraudulent tenants, but the North East councils recovered only 3 properties – less than 0.002 per cent of their total housing stock. The picture isn’t good anywhere. Even if London councils did proportionally better – they clawed back 0.306 per cent of their housing stock – the Audit Commission estimates housing fraud is also more of a problem in London, with fraud accounting for 2.5 per cent of the housing stock. Some experts put the figure as high as 5 per cent.

So what can be done? Councils have responded to the report by complaining about staff and budget cuts. This ignores the highly successful measures taken by some local authorities at very low cost. Ashfield Council spent £10,000 on a whistleblowing and investigation campaign and recovered 8 council houses which would’ve cost £1.2 million to replace. Havering Council spent £40,000 investigating single-person discounts for council tax and saved £300,000. Effective anti-fraud measures can save councils money.

The Audit Commission has provided a long list of excellent measures councils can easily take to tackle fraud. They range from pooling resources to improved risk assessment. There are more general, but no less important recommendations like highlighting vulnerable spending and a ‘zero tolerance culture towards fraud’.

But these huge lost sums suggest a deeper problem with the benefits system itself. Labyrinthine layers of tax discounts and benefit hand-outs create opportunities for fraudsters and administrative difficulties for local authorities. A simpler tax and benefits system would close those opportunities, and increase the ability of local authorities to detect abuse.

It’s in taxpayers’ interest that fraud is attacked at both ends – restricting the ability of criminals to play the system, and ensuring that authorities notice fraud and consistently prosecute against it. Local government fraud forces up council tax, hinders legitimate claimants, and limits the money that can be spent on services residents want most. With the extra £50 million detected this year local councils could pay off debt, fund 700 libraries, or 11,000 care workers, for example.

Civil servant credit card spending over £500 set for publication

Oct 27th, 2011
by Chris Daniel.
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This morning the Government began publishing all spending over £500 on Government Procurement Cards (GPCs). Earlier this year we launched a campaign against wasteful spending on GPCs and other corporate credit cards, uncovering millions of pounds that was previously insufficiently monitored.

GPCs are credit cards used widely throughout the public sector. For many items they are often the most efficient way to purchase goods and save significant sums in administering expense claims. Previously, civil servants had to pay for items themselves upfront and wait for claims to be signed off. With corporate credit card schemes, there is not the same concern. However the ease of making purchases has resulted in many dubious claims slipping through the net. Of course we are fully supportive of a scheme that if used correctly would save taxpayers’ money, however until now, spending by civil servants on credit cards has gone largely unchecked.

It is great news that the Government has been paying close attention to revelations such as those covering spending in Whitehall Departments, Local Authorities, the Equalities and Human Rights Commission, NICE, Ordnance Survey and the Health and Safety Executive. In addition to stricter oversight policies, publishing details of transactions online (in an easy to use format) will hopefully make civil servants think twice before booking into 4 or 5 star hotels, or making dinner reservations at Michelin starred restaurants.

But why only publish spending over £500? While it is consistent with other government spending releases, it is an arbitrary figure that would still exclude a huge number of transactions. Many of the claims made on GPCs are small in value, and indeed so too are many of the egregious claims, all of which would be exempt from publication. Strangely the Government’s own press release notes a couple of transactions to support their policy. Unfortunately one of the items, £258 spent at Puppets by Post which sells “finger puppets, hand puppets and glove puppets”, would clearly go unpublished under these new guidelines.

In our experience of requesting information on GPC/credit card spending, providing information for transactions above a certain threshold is often more expensive and demanding because of the transactions needing to be removed. Instead, the Government should consider revising its policy to cover the publication of entire GPC and credit card statements (personal details redacted, of course). Publishing entire credit card statements must surely be easy than filtering out claims under £500.

DFID under fire from Commons Committee

Oct 26th, 2011
by Darren Rutland.
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Last week MPs criticised the Department for International Development’s “poor understanding” of the scale and possibility of aid being lost to fraud. This is all the more troubling given DfID will see its budget increase by a third over the course of this Parliament. We’ve said before that the Government had a good opportunity to set out priorities at the Spending Review that would have eased pressure in other budgets, and enjoyed support among the British public. Instead, they decided to increase spending by nearly £4 billion.

The Public Accounts Committee said:

“We questioned whether the culture within the Department was sufficiently focussed on value for money…While the Department had increased its focus on value for money, it acknowledged that it had not yet maximised value for money in everything it was doing and could do more.”

Time after time, the British public show their generosity – best highlighted by their amazing response to natural disaster appeals. But when it comes to how the Government spends taxpayers’ money, things are less rosy. Previous TPA research has shown that 13 per cent of DfID’s budget is spent on non-front line costs. And for every pound of taxpayers’ money spent by DfID through multilateral organisations such as the UN and the EU, 5 pence of this goes to the administration of DfID. A further 15 pence (on average) then goes on the administration of the multilateral organisations. That’s a fifth of the money not directly helping the people it’s supposed to reach.

And it’s these external multilateral organisations that the Public Accounts Committee has warned against giving more funds to, as DfID had planned. If too much money is being spent on administration, it is only right that DfID must look to cut these costs. The Committee indicates that it is more transparent if DfID spends the money itself, rather than giving it to organisations such as the World Bank and the EU. It must not be forgotten that how money is being spent is important, as well as the total amount.

British aid undoubtedly saves lives across the world, and DfID’s work on crisis appeals is admirable. But it is vital that aid spending is transparent, so that taxpayers can be assured it is effective for those it is intended to help. Simply hiking DfID’s budget at a time when public spending needs to be brought under control does not guarantee greater efficiency and could mean more money lost to administration and fraud.

Public Accounts Committee says that the NHS must make better use of machines

Oct 25th, 2011
by John O'Connell.
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Improving technology in healthcare can save lives. The latest machines can catch illnesses earlier and can administer more effective treatments than ever. Julia Manning of 2020 Health wrote on Friday that a heart clinic in Southampton monitors pacemakers remotely so patients don’t have to travel to hospital for check-ups and diabetes patients being warned by a text to their mobile phones if they have abnormal readings of blood pressure and blood sugar levels. This improves and simplifies the lives of patients, while easing the pressure on budgets.

My paper Wasting Lives argued that technology – along with improving lifestyles – can be bigger drivers of healthcare improvement than simply spending more money on existing systems.

So it’s crucial that the procurement of capital equipment in the NHS is cost-effective and the assets are used to their fullest potential. Unfortunately, this is not the case. The Public Accounts Committee has today published a report criticising the approach to hospital equipment usage. Margaret Hodge, the PAC chair, said that the variation in the frequency machines are used across Trusts is ‘unacceptable’.

In 2009, we analysed the usage of five machines – Linacs, MRI scanners, Lithotripters, PET scanners and CT scanners – and found that it varied greatly between Trusts. For those Trusts that were below average use, bringing them up to standard would have meant more scans; over 650,000 more CT scans, for example, which is the same as having 88 additional scanners in the system.

The National Audit Office confirmed these findings in March 2011, in its report on managing capital equipment in the NHS. It found wide variations in utilisation rates of scanning machines. This means that NHS trusts are unable to compare the efficiency of machine usage with other trusts – the report says there is no repository of data to do so.

Our paper was the first to gather these numbers in a meaningful way but it’s important that this data is made available every year so that Trusts can benchmark against each other. They shouldn’t be afraid to copy the good ideas of other Trusts. Why, for example, don’t they offer scans outside of working hours, even past midnight? Perhaps they could even incentivise having scans out of hours by offering two options – a normal scan date and an earlier one for using the machine when it’s in less demand?

I spoke at the National Biomedical and Clinical Engineering Conference a couple of weeks ago and it was just these types of topics that were discussed. Can Trusts deliver quality healthcare and save money? I argued that they absolutely can – by sweating their assets to ensure they were getting maximum value from them, and looking at areas in the current budget for necessary cut backs. Our research showed that the NHS compares badly with European peers on keeping people alive with timely and effective healthcare for treatable illnesses and conditions. Technology will help but that means reforming the healthcare system so we don’t keep spending money on out-dated processes and procedures.

Council saves £10 million by auctioning contracts online

Oct 20th, 2011
by Liz Holliday.
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At a time when some councils are squandering taxpayers’ money, it is refreshing to hear that one council has managed to save around £10 million by offering contract jobs to the lowest bidder online. In an example that other councils should follow, Leicestershire county council seem to be taking plans to save £79m over the next four years seriously by making savvy cuts wherever they can.

The thrifty council has made £9.6 million in savings over the past four years by using an e-auction website to find the best value for money. This makes it easier for the council to find the lowest bidder for their services and contracts and creates an open source for quick and efficient competition among bidders; it is also a move towards greater transparency.

Creating this auction website seems like a creative and commendable solution to the council’s money woes, and one that appears to be working quite well for Leicestershire. In fact, the council is using the savings on purchasing costs to help “protect frontline services”.

Councillor David Parsons told the BBC that such protection of priority areas includes money “reinvested in services for children and vulnerable adults”. Finding the right savings are important for councils, but it is important for councils to make savings and work more efficiently; to do more for less while saving money for the taxpayer.

And this isn’t the only example of how Leicestershire is looking to trim the fat – other resourceful solutions include sharing back office functions with Nottingham City Council for another £1 million in savings. In total, the council hopes to save £57 million (out of the planned £79 million) through general ‘efficiency savings’, with another £5.5 million coming from reserves, according to the BBC.

Councillor Parsons explained that £2 million in savings from the council’s communications budget and £7 million from management and administration will also be made. He clarified that by attempting to change how the council is run – by prioritising children and vulnerable adults, and focusing on spending efficiency – the savings have been made without sacrificing things like the education system, for example. According to Parsons, the exam results this year were “the best we’ve ever had in Leicestershire,” and have improved immensely from past years.

Though he also admits the council’s 1,000 redundancies may indeed have to go through over the next four years to make the £79 million mark, it is good to see that at least one council is being serious when it comes to reducing spending. It can do more though. Cutting down on wasteful “back- slapping award ceremonies” is just another way Leicestershire CC could cut costs without affecting front-line services. Perhaps other councils will take Leicestershire’s crafty savings as an inspiration to get creative when it comes to their own budgets.

European Regional Development Fund loses millions

Oct 19th, 2011
by Paul Harwood.
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Alastair Jamieson at the Telegraph recently reported that huge amounts of public money were lost by the EU after being used to prop up schemes to “reduce economic disparity” between countries and regions as part of the European Regional Development Fund (ERDF).

The total ERDF budget for England was £3.7 billion between 2000 and 2006 during which time the Department for Communities & Local Government (DCLG) confirmed that £38.1 million (about 1%) had been misspent or unaccounted for. Losses could have totalled £236 million, but officials had managed to “claw back” £63 million and a further £133.9 million remains outstanding.

In 2010 the UK made a net ‘contribution’ to the EU of £9.2 billion (about the cost of the police and courts combined) and a total transfer to the EU of £19.7 billion (roughly a quarter of the education budget). Amongst the indispensable projects on which this money was misspent were:

  • an enterprise scheme in Tees Valley where £1.8 million is unaccounted for due to “audit trail and document retention issues”;
  • a rooftop plant nursery to provide seeds for biodiversity projects, which lost more than £300,000 after its promoter, Tower Hamlets Environment Trust, went into liquidation;
  • regional film agency Screen East was responsible for £368,000 of “ineligible expenditure”.

The situation was so bad by March that even the EU had had enough and cut funding for the projects. Funding resumed in July after the DCLG, which allocates funding for projects, introduced tighter controls to prevent further losses.

The EU itself doesn’t seem too concerned. Out of a total budget of €140 billion (£122bn) the EU claims that “a 2% to 5% error rate is not big” which works out at £2.4bn-£6.1bn . This is fine, we are told,  since “this represents a considerable reduction from past levels”. Luckily, suspected fraud only accounted for about £244 million of the EU budget by their own estimates.

DCLG may be reintroducing weekly bin collections but there is still a large waste management problem to tackle with these EU budgets.

Councils can return to weekly bin collections

Sep 30th, 2011
by Chris Daniel.
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Yesterday the Coalition announced it is to provide £250 million to enable local authorities across the UK to switch back to weekly bin collections. In June I wrote about our disappointment that the Conservatives had backtracked on their manifesto pledge to end to fortnightly collections. However, Local Government Secretary Eric Pickles yesterday made the offer councils will hopefully find impossible to refuse.

Council tax has almost doubled over the last decade and for many the most valued and visible service in return is waste collection. While councils across the country reassess their priorities after reductions in their central government grants, many are reluctant to return to weekly collections. But we regularly publish stories and produce research that shows there are savings to be made in council budgets.

While it is not ideal that the Government felt forced to bribe councils to provide the weekly service, as with the council tax freeze introduced earlier this year, it is often the only tool Ministers have. But this decision places power back in the hands of local residents. Councils will find it difficult to go against their will.

There will be some who claim that offering an incentive to local authorities goes against the localism agenda. Firstly, the offer is optional. The councils that genuinely believe a weekly collection is what their residents want but who find it financially prohibitive have the funds available, those who strongly believe in fortnightly collections can refuse. Secondly, the eye-watering landfill taxes councils frequently moan about emanate from the European Union, the very anathema of localism. Meddling from the EU in council affairs severely restrict the service they can provide residents. If councils want more power, they should first tell the Government to stop accepting diktats from Brussels.

Offering his immediate reaction to the news, our Chief Executive Matthew Elliott said:

“Weekly bin collections are the number one service which council taxpayers expect to receive from their local authorities, so it is terrific to hear that councils will no longer have any excuse not to provide this to every resident in their area.  Rubbish collection may not be seen as a sexy issue to the chattering classes in London, but it is one which is of great concern to ordinary hardworking taxpayers. It’s good to see a manifesto promise delivered despite the difficult financial times we live in. Woe betide the councils who do not reinstate weekly bin collections or who persist with plans to scrap this basic service, causing misery to local residents.”

Meanwhile our Campaign Director, Emma Boon, was on Sky News discussing the announcement:

Health and safety gone mad (with our cash)

Sep 22nd, 2011
by Darren Rutland.
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Another week, another example of wasteful spending on Government Procurement Cards (GPCs). This time, it’s the Health Protection Agency who have indulged at taxpayers’ expense. Their spending on GPCs cost taxpayers over £3 million in 2008-09 and 2009-10. At a time when families are cutting back on luxuries, the HPA spent £1,200 at a four-star mansion.

When a government health body spends £60 on golf equipment, and almost £600 at a garden centre, it is easy to see why taxpayers are so frustrated with the lack of accountability that quangos face. Spending transparency will help improve this and research like ours will help inform the debate.

As we’ve mentioned before, GPCs are meant to be more efficient than asking staff to buy products themselves and claiming back the money. It is disappointing to see that this system is being taken advantage of and it simply can’t continue.

CPS report urges Government to reform pensions and stand up to irresponsible trade union tactics

Sep 9th, 2011
by Chris Daniel.
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Trade unions have announced further plans for widespread public sector strikes. Compounding the gloom of the passing of summer, commentators are now talking of an ‘Autumn of Discontent.’

Not satisfied with the disruption earlier in the year, they plan a fresh wave of strikes intended to bring many public services to a standstill once more, this time over proposed reforms to public sector pensions. In a new report, the Centre for Policy Studies (CPS) warn:

“the on-going negotiations between the government and the unions are as great as any other negotiations between government and unions in history.“

Andrew Haldenby of Reform – who themselves have a report out today on public sector reform – has an excellent article for the Telegraph today, arguing the Coalition cannot and must not let the TUC derail plans to reform public services. The public sector has grown so much that it is now unaffordable and urgently needs slimming down. Ordinary taxpayers cannot be expected to continue paying the generous pensions of public sector workers when figures show that one in six have had to stop paying into their own.

 In his article, Haldenby quotes Tony Blair on public sector “reformers” and “wreckers.” It is obvious which bracket the trade unions fall into. Haldenby concludes:

“Britain needs excellent public services with smaller, better workforces and great results… the TUC’s retrograde vision would achieve none of these things.”

And today’s CPS report reiterates how important pension reform is:

“The relatively lavish pensions enjoyed by many public sector workers are a burden which will largely be met by the private sector. Yes, reform of public sector pensions is tremendously difficult. But this must be ruthlessly pursued if we are to have a lasting and fair solution.”

Five years ago contributions into and withdrawals from pension funds were roughly in balance. Today the shortfall is expected to exceed £5.8bn and will rise to £8bn if the Hutton Review’s measures are not implemented in full. Public sector pensions must be self-sufficient as soon as possible because it’s not fair to leave taxpayers to foot the bill.  And if plans to privatise organisations like Royal Mail go ahead, their enormous pension liabilities look set to stay with taxpayers.

Trade unions often argue that lower pay in the public sector warrants generous reward in retirement. But Office for National Statistics now show that gross pay is 4 per cent higher and rewards are 13 per cent higher in the public sector, completely discrediting their case.

The size of the pension black hole illustrates how essential it is that public sector pensions are reformed as soon as possible. The Government must stand firm against union action, as giving into the “wreckers” will simply leave future generations of taxpayers to pick up the tab.

More than 100 quango chiefs sitting on £1 million pension pots

Sep 5th, 2011
by Chris Daniel.
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A Sunday Times (£) survey has revealed that more than 100 of Britain’s most senior quangocrats now have pension pots worth more than £1 million. The investigation found many growing by up to £240,000 every year, with some increasing by more than the salaries they are paid.

The size of these pension pots only compound other stories about huge six-figure salaries, and other perks. One of the biggest beneficiaries is Cynthia Bower, Chief Executive of the Care Quality Commission. In 2009 her pension pot was worth £871,000 but has since grown to a staggering £1,350,000, as of March this year.

Others sitting on hefty £1 million-plus pension pots include the Health and Safety Executive Chief, Geoffrey Podger, at £1,741,000; Lynda Hamlyn of the NHS Blood and Transplant at £1,640,000 and Peter Lauener, Chief Executive of Young People’s Learning Agency whose pot is worth £1,289,000.

It is feared that many will cash in on the government’s intention to shrink quango numbers and staff with perks such as early retirement pay-offs. Tony Cooper, the former Chief Executive of the Rural Payments Agency, took early retirement last year with a pension pot of £1,295,000. In addition he received an early retirement lump-sum of £243,803.

Those leaving the soon to be abolished regional development agencies are expected to receive some of the biggest financial packages. Pam Alexander, who left her position last week as Chief Executive of the South East England Development Agency, has a pension pot worth £1,268,000 and received an undisclosed “exit package.”

Following the closing ceremony of the Olympic Games next summer, the Olympic Delivery Authority (ODA) also plans large pay-outs. Chief Executive Dennis Hone has a pension pot of £1,354,000 which will be topped up when the body is shut down.

In 2008 we revealed that more than 8,500 NHS employees ad pension pots in excess of £1million, and the situation has only become worse.

After the disappointment of the so-called “bonfire of the quangos” and irresponsible credit card spending, The Sunday Times findings will do nothing to repair quangos’ discredited reputations. Staff is often the biggest area of spending for many organisations; hidden costs such as pensions and pay-offs are considerably more than their annual salaries therefore it is important this information is publicly available.

Lord Hutton published a report this year proposing widespread reforms including higher contributions and pensions based on career average earnings rather than final salary. Ros Altman has advised the government on pensions and agrees that something must be done:

Huge sums of money will be payable and people don’t realise this…taxpayers need to understand what the costs are.

The public finances are in crisis and big pension liabilities add to these worries. Hutton’s suggestions are a good place to start, although in the long term it may be advisable to switch to a system based on defined contributions.

What are the priorities of the NHS?

Sep 1st, 2011
by Darren Rutland.
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It has been revealed that English primary care trusts and strategic health authorities have spent more than £180 million on ‘media professionals’ over the last four years. There is non-stop debate about the future of the National Health Service and how it should be funded, yet I have heard no one back up their argument by saying that NHS bodies should spend vast sums of taxpayers’ money on spin doctors. The last financial year saw a total of £44.3 million spent on public relations officials. In 2009-10, this cost to the taxpayer was a staggering £50 million.

“The spin doctor will see you now”

The Daily Telegraph cites one example where Karl Milner, the director of communications for the Yorkshire and the Humber Strategic Health Authority, was paid more than £128,000 in 2009-10. By contrast, two senior staff actually involved in treating patients, the national cancer screening director and the director of patient care, were paid £106,000 and £127,000 respectively. While remembering this is just one authority, it is a damning insight into the thinking behind large parts of NHS spending.

And the disparities between organisations are stark. According to Richmond and Twickenham Primary Care Trust, their annual communications budget stands at £15,000. However, their counterparts in Solihull have allowed £1.2 million per year to be spent on communications. These examples give the impression that some NHS chiefs appear to be more interested in gaining good publicity than actually supporting care for their patients. Their priorities must be reassessed to ensure the best value for taxpayers, and the greatest care for patients.

Enterprise Zones highlight problems the rest of us will still face

Aug 18th, 2011
by Rory Meakin.
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The Department for Communities and Local Government yesterday announced eleven new Enterprise Zones in England designed to boost economic growth after disappointing recent jobs, inflation and growth data.

The current Enterprise Zones scheme was launched in March this year with the first zones covering sections of Liverpool, Manchester, Nottingham and London. The zones provide a 5-year break from Business Rates for new and incoming firms, departmental help to develop simpler planning regimes, taxpayers’ money to subsidize superfast broadband and, for 25 years, local authorities will be able to retain additional Business Rate revenues which arise from growth in the zone.

Some zones will also offer more generous capital allowances (effectively, lower corporation tax bills) for plant and machinery, but only for zones which are limited to identified sectors for a limited number of companies with a ‘manufacturing focus’.

The current scheme attempts to recreate the success of the London Docklands Development Corporation, one of the zones set up in a similar scheme in the 1980s by Michael Heseltine, which helped turn the run down, derelict London docks into the gleaming towers of financial commerce they are today. But while they share the same name as their Thatcherite predecessors, the new Enterprise Zones are notably different in some respects. Both boast relief from Business Rates, advantageous capital allowances for Corporation Tax and a streamlined planning regime. However, the new scheme has chosen areas more likely to respond to the policies and generate jobs and prosperity – it’s important to remember that while the Docklands was a success, the other zones were much less successful. Alexandra Jones, of the Centre for Cities, said:

They are locating the new zones in areas where there is a realistic chance of producing growth, rather than focusing on reviving rundown areas which weren’t realistically going to produce new jobs.

Councils will also be able to keep additional revenues from Business Rates in the zones instead of the money going straight to the Treasury. This will mean councils as organisations will directly benefit from development and enterprise. Currently, development often only appears to mean complaints and disruption in the eyes of short-sighted officials. It’s not all good news, however.

While the original zones often benefitted from planning deregulation that took planning decisions outside the remit of the local authority, the new scheme merely points out an existing power already available to councils -Local Development Orders – and encourages them to be used. And while the Business Rates exemption will be set at 100 per cent, it will only last for 5 years instead of 10. Finally, the generous capital allowances in the original scheme have been significantly weakened in order to comply with EU law. The new allowances are limited to just £55,000 per year and apply only in schemes where the local authority has chosen to limit the zone to specific economic sectors, such as the “Newquay Aerohub Zone”, which only applies to companies deemed to be in the aerospace sector.

As well as Newquay, there is also the Alconbury Airfield Zone, the Discovery Park in Sandwich, the Science Vale Enterprise Zone, the MIRA Technology Park and, with the most entertaining name of them all, the Humber Estuary Renewable Energy Super Cluster. All of these new zones will focus on economic activity in particular categories which thoughtful officials have decided is of greater economic importance than the prosperity businesses in other sectors might have provided.

They will no doubt help some economic activity relocate and will even result in actual marginal growth. The problem is that some of what’s good about them is just an exhortation to councils to do what they should be doing anyway. The rest of what’s good isn’t nearly good enough and should be applied nationally and across the whole economy. As JP Floru pointed out in this deliciously absurdist parody for the Adam Smith Institute, if the zones will generate the jobs and prosperity Britain’s faltering economy desperately needs, why limit them to a few select districts? Why not apply the medicine nationwide?

The very existence of Enterprise Zones is emblematic of two worrying problems. They are an acknowledgement that Britain’s tax and regulatory environment is not ‘fit for purpose’. It is because the rest of the country can accurately be described as a ’bureaucracy zone’ that ministers are trying to create zones of enterprise in the first place. Acceptance of a problem is the first step to resolving it, so perhaps there is some room for optimism here. The second problem the zones highlight offers less hope for optimists: the ‘Whitehall knows best’ dirigisme.

Bureaucrats have chosen particular small strips of the country where they believe enterprise should occur. What makes them think they know best where businesses should locate? In many of those areas they have also selected particular industries which they have judged to be of a suitable ‘strategic fit’ for the area. Why has the Government not learned from the mistakes of the 1970s, still thinking it can, let alone should, ‘pick winners’? These distortions provide incentives for companies to relocate into the zones and reclassify themselves to match bureaucratic definitions in order to qualify for the financial advantages. The Government have introduced rules to prevent this happening but business will attempt to find flaws they can exploit. More complexity in the form of schemes, zones and regulations is the opposite of what Britain’s already gargantuan tax code needs.

Ministers have also decided that ‘superfast broadband’ is of strategic economic importance, much in the same way as they thought ownership of such commanding heights of the economy as British Telecom was in the 1970s. Inevitably, taxpayers’ pockets have been put on notice as ministers have decided that, “if necessary”, our money will be spent on providing the economic Miracle Gro if the businesses benefitting don’t think it’s worth their own money. Dominique Lazanski explained how the Government should promote broadband yesterday on The Commentator.

If the Coalition really wants to stimulate growth there is plenty they can do. On taxes they could cut Corporate Tax, abolish National Insurance and scrap the 50p rate. On regulation they could end Sunday trading restrictions, simplify the planning system nationwide and scale back quangos like the Health & Safety Executive. What isn’t going to do very much good are little centrally-chosen zones for officially-approved sectors, who get welcome  but inadequate relief from the tax and bureaucracy the rest of the country will still have to endure and yet more wasteful government spending  on ‘superfast broadband’.

Enterprise Zones highlight problems the rest of us will still face

Aug 18th, 2011
by Rory Meakin.
Comments are off for this post

The Department for Communities and Local Government yesterday announced eleven new Enterprise Zones in England designed to boost economic growth after disappointing recent jobs, inflation and growth data.

The current Enterprise Zones scheme was launched in March this year with the first zones covering sections of Liverpool, Manchester, Nottingham and London. The zones provide a 5-year break from Business Rates for new and incoming firms, departmental help to develop simpler planning regimes, taxpayers’ money to subsidize superfast broadband and, for 25 years, local authorities will be able to retain additional Business Rate revenues which arise from growth in the zone.

Some zones will also offer more generous capital allowances (effectively, lower corporation tax bills) for plant and machinery, but only for zones which are limited to identified sectors for a limited number of companies with a ‘manufacturing focus’.

The current scheme attempts to recreate the success of the London Docklands Development Corporation, one of the zones set up in a similar scheme in the 1980s by Michael Heseltine, which helped turn the run down, derelict London docks into the gleaming towers of financial commerce they are today. But while they share the same name as their Thatcherite predecessors, the new Enterprise Zones are notably different in some respects. Both boast relief from Business Rates, advantageous capital allowances for Corporation Tax and a streamlined planning regime. However, the new scheme has chosen areas more likely to respond to the policies and generate jobs and prosperity – it’s important to remember that while the Docklands was a success, the other zones were much less successful. Alexandra Jones, of the Centre for Cities, said:

They are locating the new zones in areas where there is a realistic chance of producing growth, rather than focusing on reviving rundown areas which weren’t realistically going to produce new jobs.

Councils will also be able to keep additional revenues from Business Rates in the zones instead of the money going straight to the Treasury. This will mean councils as organisations will directly benefit from development and enterprise. Currently, development often only appears to mean complaints and disruption in the eyes of short-sighted officials. It’s not all good news, however.

While the original zones often benefitted from planning deregulation that took planning decisions outside the remit of the local authority, the new scheme merely points out an existing power already available to councils -Local Development Orders – and encourages them to be used. And while the Business Rates exemption will be set at 100 per cent, it will only last for 5 years instead of 10. Finally, the generous capital allowances in the original scheme have been significantly weakened in order to comply with EU law. The new allowances are limited to just £55,000 per year and apply only in schemes where the local authority has chosen to limit the zone to specific economic sectors, such as the “Newquay Aerohub Zone”, which only applies to companies deemed to be in the aerospace sector.

As well as Newquay, there is also the Alconbury Airfield Zone, the Discovery Park in Sandwich, the Science Vale Enterprise Zone, the MIRA Technology Park and, with the most entertaining name of them all, the Humber Estuary Renewable Energy Super Cluster. All of these new zones will focus on economic activity in particular categories which thoughtful officials have decided is of greater economic importance than the prosperity businesses in other sectors might have provided.

They will no doubt help some economic activity relocate and will even result in actual marginal growth. The problem is that some of what’s good about them is just an exhortation to councils to do what they should be doing anyway. The rest of what’s good isn’t nearly good enough and should be applied nationally and across the whole economy. As JP Floru pointed out in this deliciously absurdist parody for the Adam Smith Institute, if the zones will generate the jobs and prosperity Britain’s faltering economy desperately needs, why limit them to a few select districts? Why not apply the medicine nationwide?

The very existence of Enterprise Zones is emblematic of two worrying problems. They are an acknowledgement that Britain’s tax and regulatory environment is not ‘fit for purpose’. It is because the rest of the country can accurately be described as a ’bureaucracy zone’ that ministers are trying to create zones of enterprise in the first place. Acceptance of a problem is the first step to resolving it, so perhaps there is some room for optimism here. The second problem the zones highlight offers less hope for optimists: the ‘Whitehall knows best’ dirigisme.

Bureaucrats have chosen particular small strips of the country where they believe enterprise should occur. What makes them think they know best where businesses should locate? In many of those areas they have also selected particular industries which they have judged to be of a suitable ‘strategic fit’ for the area. Why has the Government not learned from the mistakes of the 1970s, still thinking it can, let alone should, ‘pick winners’? These distortions provide incentives for companies to relocate into the zones and reclassify themselves to match bureaucratic definitions in order to qualify for the financial advantages. The Government have introduced rules to prevent this happening but business will attempt to find flaws they can exploit. More complexity in the form of schemes, zones and regulations is the opposite of what Britain’s already gargantuan tax code needs.

Ministers have also decided that ‘superfast broadband’ is of strategic economic importance, much in the same way as they thought ownership of such commanding heights of the economy as British Telecom was in the 1970s. Inevitably, taxpayers’ pockets have been put on notice as ministers have decided that, “if necessary”, our money will be spent on providing the economic Miracle Gro if the businesses benefitting don’t think it’s worth their own money. Dominique Lazanski explained how the Government should promote broadband yesterday on The Commentator.

If the Coalition really wants to stimulate growth there is plenty they can do. On taxes they could cut Corporate Tax, abolish National Insurance and scrap the 50p rate. On regulation they could end Sunday trading restrictions, simplify the planning system nationwide and scale back quangos like the Health & Safety Executive. What isn’t going to do very much good are little centrally-chosen zones for officially-approved sectors, who get welcome  but inadequate relief from the tax and bureaucracy the rest of the country will still have to endure and yet more wasteful government spending  on ‘superfast broadband’.

More councils to share services

Aug 8th, 2011
by Andrew Allison.
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It was revealed over the weekend that the five unitary authorities that make up West Yorkshire - Bradford, Calderdale, Kirklees, Leeds and Wakefield – are to share legal services. It is estimated this will save taxpayers around £1.6 million every year.

This is good news, however, as the leader of the Conservative group on Leeds City Council said, “We shouldn’t stop at legal services, I believe we can also look at joint working in other areas such as human relations, licensing and training services. I welcome this news but it should have been introduced earlier and perhaps could have gone further.” 

I agree with him. This is a very good start, and I am not going to criticise the leaders of the various councils for making this decision. It is yet another example of areas where significant savings can be made. It proves cutting front-line services is wrong when there is so much waste, and also proves when councils start talking with one another, progress can be made.

In June, it was announced that East Riding of Yorkshire Council and North Lincolnshire Council are looking at ways of sharing services. They are establishing a working group where all possibilities will be considered. This is what all councils across the country should be doing, and it’s the logical next step for those councils in West Yorkshire. To assist them further, here are some examples from other councils:

  • Merseyside Council leaders are exploring ways of sharing legal and payroll services, and much more.
  • South Holland and East Lindsey District Councils have agreed to merge five back-office services.
  • Oldham and Rochdale Councils are looking at ways to merge dozens of council services.
So a good start from the West Yorkshire councils, but they must go further. If they do, they will collectively save millions of pounds, which will help to protect front-line services, and reduce the tax burden on residents, as the savings made will be year-on-year savings. 

If your local council is looking at ways of merging and sharing services, please get in touch with me. It is important to highlight good practices, as it encourages other councils to do the same.

DCLG are right to urge local authorities to publish asset registers

Aug 5th, 2011
by Chris Daniel.
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The Department for Communities and Local Government has published a list of all assets owned by more than 600 public sector bodies. Many are schools, health centres and leisure centres as you would expect, but what is more astonishing is the sheer number that are shops, theatres, golf clubs, hotels, stables and even football clubs. A map released by DCLG shows where more than 180,000 assets worth more than £385bn are located. More than two thirds of these assets are held by councils, which emphases how important is it that all councils publish their assets register so residents can use it alongside new powers in the Localism Bill to get better value and engage in local decisions. Perhaps what is more disappointing is that councils do not publish this information themselves and the task has fallen to a central government department, as it so often has.

Listed in the disclosure are over 130 cafes and restaurants; more than 100 pubs; 60 theatres; over 40 hotels, 3 of which are Holiday Inns; 20 cinemas and an airport. Estimates show annual running costs top £25bn each year and the backlog of maintenance costs exceeds £40bn. All public bodies must first make their asset registers available to the public which will help them to use them more efficiently. Our Research Director John O’Connell wrote in his weekly ConHome column about the benefits of having this information made public: “A report by the Westminster Sustainable Business Forum (WSBF), led by Matthew Hancock MP, made a range of recommendations about local government estate management, including reducing asset lists by 20-30 per cent and handing control of property management to one central department in the council. It makes clear that although the money gained from sales is a one off, the reductions in running costs gained by merging services into fewer buildings will save money in the longer term too.”

There are huge savings for councils to make, whether through selling off assets or running them more wisely, helping to provide the best possible value for money to taxpayers and contribute to lowering council tax.

Non-job of the week

Aug 3rd, 2011
by Andrew Allison.
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Everywhere you look in local government these days you seem to find change managers. This week is no exception, and once again a recruitment agency is masking the identity of an unnamed London borough council wishing to appoint a Temporary Change Manager paying between £281-£350 a day.

Another London council, meanwhile, is looking to appoint an Interim Programme Manager who will take the lead and get a grip of the Parking Commissioning project. Once again we don’t know which council it is, but we do know the successful candidate will be paid between £400-£450 a day.

Central London Community Healthcare NHS Trust (CLCH) is looking for a Head of Communications and Engagement. Here’s part of the job description:

Reporting to the Director of Strategy and Business Development the Head of Communications and Engagement will be an expert in communications and engagement. You will lead on the development and implementation of the corporate internal and external communications and involvement activities including development of long term strategy and policy, reputation management, media and community liaison.

Non-Job of the WeekI suppose it would be useful for the Head of Communications and Engagement to be an expert in communications and engagement, otherwise what would be the point of appointing them to a role paying between £60,671-£73,351 a year?

Of course I accept there has to be people employed to handle media enquiries and contact with the public, but the primary role of the NHS is to heal the sick. If this Trust has a head of communications earning over £70K a year, how large is the team beneath them? How many communications officers are there in London? How many are there in the UK? During the last general election campaign, Nick Clegg stated we now have more bureaucrats and administrators in the NHS than we have hospital beds!

It strikes me that the NHS is over-reaching itself, employing people on large salaries to put a good spin on the work of the Trust. What I want is to be able to visit my GP, and if I need to see a specialist to get an appointment in good time, and if there are any problems for my complaint to be handled promptly. This does not require the services of a Head of Communications and Engagement earning over £70K to fob me off with excuses when things go wrong.

Civil Servants get their school report

Aug 3rd, 2011
by Robert Oxley.
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It’s the summer holidays for a lot of people, the children are out of school and MPs are on recess (I’m sure there are a few jokes to be made with that comparison). The end of the school term was always something to look forward to, six weeks of summer and driving the parents crazy, but for children across the land it also meant your school report. In it you would read about things that you did well that year and things that you “must try harder on”. So with this in mind, I have decided to do a mini-school report on the Government and its policy towards civil servants. The pay as well as the number of civil servants and senior executives of non-governmental public bodies (quangos to you and me) have been in the news recently so let’s have see how the issue is progressing.

First is the news last week that the Government had been forced by the Information Commissioner’s Office (ICO) to disclose the pay details of 28 highly-paid civil servants and quango chiefs who had previously resisted the moves to disclose the details of their pay packages. I blogged on this in my first post for the TPA, at the time I called for the publication of top pay packages to be automatic. The fact that it took the ICO to force the Government’s hand (although I secretly suspect they were glad of it) means they only get a C plus for this. They got the result in the end but it took far too long getting there.

Image via rich115 on flickr

On Monday the FT ran a piece on the number of new pay deals over £150,000 that the Government had approved. There were two bits of disappointing news: the fact that the Government had approved what appear to be nearly 40 new pay deals worth more than £150k, and that George Osborne didn’t seem to want to tell us about the ones that he had turned down. Sorry George, but that’s a big fat D minus for that one. The Government should be automatically publishing the details of top earners including the salary packages that they have rejected. Transparency on this issue is important; it allows us to see the workings behind the rhetoric and if an organisation’s pay agenda is in line with Government policy.

But it looks like someone might have been listening; yesterday the Government published the full list of senior officials that earn more than £150,000. You can see the list here. The Cabinet office were quick to highlight that the number of civil servants and quango bosses earning more that 150k had been cut by 50, a sure sign that they – and Whitehall – were taking austerity seriously. For that good work, the Cabinet Office gets a B plus for achievement. If they want to achieve an A grade they need to make the publishing process automatic, continue to reduce the number of civil servant earning more than 150k and make the information easier to find.

Unfortunately the rest of the class has not been doing so well. The news this morning is that, despite the Coalition’s promise for a civil service recruitment freeze, a series of parliamentary questions from John redwood MP have revealed that the rest Whitehall have not been listening to the teacher.  The Mail has the scoop that, despite the Government policy to halt recruitment in Whitehall, Government departments and quangos have taken on over 4,500 new staff – far more than have been made redundant in the same time. Even more aggravating, the figures reveal that quangos such as the Equality and Human Rights Commission, which should be scrapped altogether, have been able to take on new staff.

TPA Chief Executive Matthew Elliott said in response to the news, “these figures will reinforce taxpayers’ feelings that many in Whitehall believe they can continue on as if it’s business as usual.”

Whitehall cannot be allowed to carry on as normal while taxpayers and businesses up and down the country have to adjust to austerity. The bloated machinery of the civil service and pointless quangos cannot be immune to the austerity drive and moves towards leaner, more efficient government.

This revelation does not bode well for Whitehall or the Coalition’s school report. They need to go back, do their homework and take the test again. It’s time that the Government deliver on its promise of a recruitment freeze as part of its efforts to tackle the deficit. If not, voters will offer their own assessment in 2015, and the Coalition might not like what they have to say.

Civil Servants get their school report

Aug 3rd, 2011
by Robert Oxley.
Comments are off for this post

It’s the summer holidays for a lot of people, the children are out of school and MPs are on recess (I’m sure there are a few jokes to be made with that comparison). The end of the school term was always something to look forward to, six weeks of summer and driving the parents crazy, but for children across the land it also meant your school report. In it you would read about things that you did well that year and things that you “must try harder on”. So with this in mind, I have decided to do a mini-school report on the Government and its policy towards civil servants. The pay as well as the number of civil servants and senior executives of non-governmental public bodies (quangos to you and me) have been in the news recently so let’s have see how the issue is progressing.

First is the news last week that the Government had been forced by the Information Commissioner’s Office (ICO) to disclose the pay details of 28 highly-paid civil servants and quango chiefs who had previously resisted the moves to disclose the details of their pay packages. I blogged on this in my first post for the TPA, at the time I called for the publication of top pay packages to be automatic. The fact that it took the ICO to force the Government’s hand (although I secretly suspect they were glad of it) means they only get a C plus for this. They got the result in the end but it took far too long getting there.

Image via rich115 on flickr

On Monday the FT ran a piece on the number of new pay deals over £150,000 that the Government had approved. There were two bits of disappointing news: the fact that the Government had approved what appear to be nearly 40 new pay deals worth more than £150k, and that George Osborne didn’t seem to want to tell us about the ones that he had turned down. Sorry George, but that’s a big fat D minus for that one. The Government should be automatically publishing the details of top earners including the salary packages that they have rejected. Transparency on this issue is important; it allows us to see the workings behind the rhetoric and if an organisation’s pay agenda is in line with Government policy.

But it looks like someone might have been listening; yesterday the Government published the full list of senior officials that earn more than £150,000. You can see the list here. The Cabinet office were quick to highlight that the number of civil servants and quango bosses earning more that 150k had been cut by 50, a sure sign that they – and Whitehall – were taking austerity seriously. For that good work, the Cabinet Office gets a B plus for achievement. If they want to achieve an A grade they need to make the publishing process automatic, continue to reduce the number of civil servant earning more than 150k and make the information easier to find.

Unfortunately the rest of the class has not been doing so well. The news this morning is that, despite the Coalition’s promise for a civil service recruitment freeze, a series of parliamentary questions from John redwood MP have revealed that the rest Whitehall have not been listening to the teacher.  The Mail has the scoop that, despite the Government policy to halt recruitment in Whitehall, Government departments and quangos have taken on over 4,500 new staff – far more than have been made redundant in the same time. Even more aggravating, the figures reveal that quangos such as the Equality and Human Rights Commission, which should be scrapped altogether, have been able to take on new staff.

TPA Chief Executive Matthew Elliott said in response to the news, “these figures will reinforce taxpayers’ feelings that many in Whitehall believe they can continue on as if it’s business as usual.”

Whitehall cannot be allowed to carry on as normal while taxpayers and businesses up and down the country have to adjust to austerity. The bloated machinery of the civil service and pointless quangos cannot be immune to the austerity drive and moves towards leaner, more efficient government.

This revelation does not bode well for Whitehall or the Coalition’s school report. They need to go back, do their homework and take the test again. It’s time that the Government deliver on its promise of a recruitment freeze as part of its efforts to tackle the deficit. If not, voters will offer their own assessment in 2015, and the Coalition might not like what they have to say.

Bolsover councillors vote to keep pay high

Aug 2nd, 2011
by Andrew Allison.
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Many parts of the UK are covered by unitary authorities, who have responsibilities for all council services. In other areas, there are two-tiers of local government, where districts and boroughs provide services such as bin collections, and county councils are responsible for things like highways and education. Derbyshire is a county where the latter applies.

District councils cover smaller geographic areas, and provide fewer services than unitary authorities. Councillors are not expected to devote as much time to their council work, and are therefore paid a smaller allowance. In North East Derbyshire Council, councillors are paid a basic allowance of £5,010 per annum, however in neighbouring Bolsover councillors are paid £10,047 – more than twice as much.

Both sets of councillors have the same responsibilities, and as a result, the Independent Remuneration Panel (IRP) in Bolsover has recommended the basic allowance should be cut to £5,354. They haven’t plucked this figure out of the air either. This figure is the average paid to councillors across similar authorities.

Unfortunately, the IRP can only make recommendations. It cannot enforce its will on councillors, who ultimately decide their own pay and perks. It will therefore not surprise you to learn that the turkeys have chosen not to vote for Christmas. Out of thirty-seven elected councillors, only one was in favour or reducing their pay. Instead, they have voted for a four-year pay freeze. The deputy leader of the council described the panel’s recommendations as flawed. He said they have no consideration to the amount of time and effort that is put in.

Although I accept there are fewer councillors than in the example I have given in North East Derbyshire, as the council tax is still roughly the same, they are not scrutinising more ways to get better value for money for council taxpayers and their work certainly doesn’t warrant twice the pay. I have written before about reducing the number of councillors in general, and how much this would save. Scrutiny is important, but take a look at many councils’ websites and you will see scrutiny committees packed to the rafters. It doesn’t take that many councillors to scrutinise decisions. Paul Francis, the political editor of Kent Online said this on his blog about Kent County Council:

So do we get value for money and would KCC be any different if it was represented by say, 60 county councillors, rather than 84? Democracy needs strong political advocates and it is vital that there are strong checks and balances in the system but I do sometimes sense that County Hall would get along just as well with fewer politicians.

Councillors in Bolsover are paid more than their counterparts in any other comparable council in the country. They had an option to reduce their allowances, even if it was not by the amount the panel recommended. They should be leading by example. Instead they are using their position to maintain the status-quo. If I had served on the IRP in Bolsover, I would feel my time had been completely wasted, and if I was a resident and council taxpayer, I would be asking councillors why they deserve to be paid twice the average. If you feel like me, you can write to the deputy leader, Alan Tomlinson. He seems like the man who does all the talking, and I’m sure he will value your views!

Red tape announcements should only be the first step to scaling back burdensome regulations

Jul 29th, 2011
by Jonathan Duell.
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Retailers, as well as the wider rational population, breathed a small sigh of relief on Thursday when Business Secretary Vince Cable announced that the Government will slash the burden of bureaucracy by removing over half the existing regulations faced by the industry as part of the ongoing ‘Red Tape Challenge‘. These long overdue reforms will consign 130 ineffective and needless restrictions to the scrapheap. The move has been welcomed as a step towards a freer, friendlier and hopefully more profitable retail sector.

Regulation has always been a drain on business time and resources, but it’s especially absurd when the Government enforce costly restrictions that yield little or no benefit to employees, customers or the environment. This was evident in the law requiring shops selling chocolate liqueurs to have a full alcohol licence, or the time-wasting rules of safe pencil use. It’s common sense to scale back on laws like this, and get rid of redundant ones that no longer apply. It will also boost short term confidence for smaller retailers in particular.

They can sell chocolate liqueurs to whoever they like now

The move should only be the start of tackling the major burdens on business, and a great deal of work remains to be done. Regulation will still be excessive and burdensome after yesterday’s announcement is made reality. Opportunities for job creation continue to be missed, and consumers continue to be short changed. In truth, this announcement merely skirted the edges of the obstacles in the way of small businesses. Cutting entrenched bureaucracy is easier said than done; it has been promised before and was promised by both parties in the Coalition’s Programme for Government, but efforts must be stepped up so that actions speak louder than rhetoric.

If anything, new regulations lingering like dark clouds on the horizon will make things tougher, worsened by incoming directives from Brussels. For example, the forthcoming EU Directive on agency staff will have a devastating impact on the ability of firms to make sensible business decisions. This measure has been estimated to single-handedly add £40 billion to the costs to British businesses in the next 10 years, putting yesterday’s announcement chillingly into perspective.

As business leaders acknowledge, the time for positive gestures has passed. Now is the time to deal with the major barriers that stand between the incentives of the market and the ability of firms to respond. Additions to the bureaucratic mountain must be resisted. Yesterday’s announcements are welcome but must be the first move of a much more drastic scaling back of regulations. As Matthew Sinclair pointed out on Monday, excessive regulations hit small firms particularly hard and if we want them to grow, create jobs and wealth, and help boost that much-discussed 0.2 per cent growth figure, then the Government must get off their backs and let them get on with it.

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