Harry Fone: Unanswered questions about Slough’s bankruptcy

13 Jul

Harry Fone is the Grassroots Campaign Manager for the TaxPayers’ Alliance.

It wasn’t a huge surprise when I learned that Slough council had declared itself bankrupt. As I’ve pointed out in this column, the authority’s frivolous spending and poor financial accounting practices all contributed to its downfall.

This being the third English council bankruptcy, it’s worth analysing exactly what went wrong for Slough. In the past, senior council executives and leaders have often pointed the finger at cuts in central government funding. But interestingly, that narrative doesn’t seem to be taking hold this time, perhaps for obvious reasons.

If we look at historical council tax data, it’s clear for all to see that Slough council shouldn’t have a revenue problem. In 1996-97 it increased council tax by 17.8 per cent; only four councils raised rates by a higher amount in this year. Increases of 10 per cent or greater followed in the next two years. Then 9.9 per cent in 2002-03 before another astronomical increase of 17.5 per cent in 2003-04.

Previous research by the TaxPayers’ Alliance showed that between 1997 and 2017, Slough’s council tax bills increased by 72 per cent in real terms – 15 per cent higher than the average for England. But if you look at Band D bills from 1995 to the present day, they have nearly doubled from £900 (inflation adjusted) to £1,795.

And what have residents got for their hard-earned council tax in recent years? Sticking out like a sore thumb is the £49 million spent on a new office complex complete with “innovative collaboration spaces, a tranquillity room, innovation room and even an exercise studio.” In 2019, the TPA’s Town Hall Rich List revealed Slough’s outgoing chief executive at the time, Roger Parkin, pocketed total remuneration of nearly £600,000 – the highest in the country. Then, almost unbelievably, in November last year, councillors awarded themselves a pay rise despite the devastating effects of the pandemic on many Slough residents.

Perhaps most comically of all, the council created a snazzy website with the phrase “Let’s Be World Class” adorning one of its pages. I’m still waiting on a response from the council as to the cost of the website, but judging by the flashy graphics and slick animated videos it can’t have been cheap. The council proclaims how well it has coped with Covid as it “redesigned [its] world class leadership structure” and “Launched the Brilliant Basics ways of working framework.” Clearly, there is more work to be done to justify these bold claims.

In a leaked internal video to Slough council staff, chief executive, Josie Wragg, made clear the council had endured a “challenging situation based on poor financial practice over a number of years” adding “as the closing of the 18-19 accounts progressed, the exposure of the financial challenges was starting to become apparent.” Additionally in an email to staff, Ms Wragg wrote, “Since April our new ‘A-team’ of financial experts, together with the Leadership team, have been undertaking a review of our finances, financial processes and other related matters.” Begging the question, was the previous ‘A-team’ up to scratch? Seemingly not.

We know from a recent audit report that the council’s accounting practices were lacking. The wait for the publication of the draft statement of accounts for 2019-20 goes on and 2018-19’s accounts are still unaudited. For me though, not enough attention has been focussed on Neil Wilcox, the former Section 151 officer at Slough council. He announced his resignation in April this year supposedly to “spend more time with family and friends” but the timing is interesting to say the least.

In an email sent on April 22nd to Slough council staff, Wilcox said, “for 2021/22 the Council balanced its budget”. Yet just a couple of weeks ago, his replacement, Steven Mair, filed a Section 114 notice for bankruptcy and declared the budget will not be deliverable after all.

So several key questions remain unanswered. Did Wilcox know about the massive black hole in the council’s finances? If he did, when was the discovery made and did he raise the alarm with chief executive Josie Wragg? And if Ms Wragg was made aware, what action did she take? Conversely, if Mr Wilcox was not aware of the looming financial armageddon then I think it would be fair to ask whether he was fit for the role and worthy of his six-figure taxpayer-funded salary.

Council tax is a huge burden on households and many feel short-changed when it comes to frontline services. Local authorities have a tremendous duty of care to taxpayers’ money. This sorry saga raises serious concerns about Slough’s management structure and whether checks and balances were in place. Lessons must be learned and those responsible held to account. The nation can’t afford to see a fourth, fifth, or even sixth council go bankrupt.

Harry Fone: Social distancing rules have pushed up the cost of council meetings

29 Jun

Harry Fone is the Grassroots Campaign Manager for the TaxPayers’ Alliance.

In recent weeks I’ve received a lot of correspondence from concerned taxpayers and councillors about the costs of holding covid compliant council meetings. During the pandemic, temporary legislation allowed local authorities to hold hybrid meetings – a mix of virtual and in-person meetings – in order for local government to function effectively.

Since May 7th, councils, by law, must hold meetings in person, despite the fact that social distancing guidelines are still in place. Many authorities lack the floor space to facilitate this and have effectively been forced to hire venues that do, at significant cost to the taxpayer.

Bournemouth, Christchurch and Poole council shelled out £6,000 to hold a recent meeting at a local exhibition venue. So too Sefton, Sheffield and Manchester, costing taxpayers £3,000, £10,000 and £7,000 respectively. Similarly, Portsmouth City Council bought £5,000 worth of AV equipment in order for its meeting to go ahead. Across England’s 330 plus councils, it’s very possible that the total bill to ensure meetings are covid compliant could be in excess of £1 million.

With many in the private sector adopting the financial and environmental benefits of video conferencing technology, it’s a massive shame that the temporary legislation couldn’t have been extended until social distancing restrictions are lifted. Councils aren’t to blame for this and many local leaders have called for hybrid meetings to continue. It’s not hard to see why – time and money could have been better utilised on frontline services.

A warm welcome?

Back in March, the government announced the Welcome Back Fund (WBF) “to help boost the look and feel of high streets and seaside towns”. £56 million has been allocated to local authorities in England to invest in everything from seating areas to parks.

I’m not a huge fan of the WBF. Yes, I want my town centre to look nice but there really isn’t a magic money tree. Given the devastating effects of covid we have to focus public cash on real priorities like adult social care and children’s services. Is this fund really a priority at a time like this? Put it another way, if you were struggling to pay your mortgage every month you wouldn’t splash out on fripperies would you?

Sheffield City Council was allocated some £520,216 from the fund and I have to question whether they’ve made the best decisions when it comes to spending taxpayers’ cash. The council has tendered two contracts, one to appoint a “media and PR agency” and the other a “creative agency” to promote the objectives of the WBF. The total value of these contracts is £135,000 – 26 per cent of allocated funding.

It begs the question, will taxpayers’ actually see any value from this? It seems quite ridiculous to me that such a large chunk of their budget will be splurged on ad men. Does the council really need two agencies to achieve its goals? Why not ask the public directly (for little to no cost) what they want by getting them to email their suggestions. Or why not go to businesses directly in the town centre and get their opinions?

Promising news from Croydon

At long last there’s a glimmer of hope for Croydon Council following the latest report from its Improvement and Assurance Panel. You may recall that the council ploughed £214 million into a housing company called Brick-by-Brick (BBB) which at last count had only built a handful of the homes it promised. This coupled with other serious failings led to Croydon Council declaring bankruptcy.

A brighter future is on the horizon though. The decision has been taken to continue with housing construction on some BBB sites but with the overarching goal to extract the company from all activities by October of this year. Additionally, a property developer is seeking to buy up BBB and a deal will hopefully be struck next month.

There are opportunities for further savings to be made too. The council has 313 external contracts worth around £200 million that are up for renewal this year. The Improvement and Assurance Panel described the council’s arrangements for ensuring that contracts deliver value as “poor.” So one would hope that in future negotiations they can both negotiate better deals and ensure that suppliers better fulfil their contractual obligations.

Croydon Council is by no means out of the woods. It’s only thanks to capital injections totalling £120 million from central government that there is a balanced budget this year. In all likelihood, residents will be paying for the council’s mistakes in the form of even higher council tax bills. Let’s hope Croydon residents get good value for money in future, especially since the newly appointed chief executive will be paid £192,000 a year.

Harry Fone: Northamptonshire’s downfall was brought about by highly paid group-think

15 Jun

Harry Fone is the Grassroots Campaign Manager for the TaxPayers’ Alliance.

One of the common rebuttals to the TaxPayers’ Alliance’s Town Hall Rich List, is “if you don’t pay top dollar, councils can’t attract the best staff”. I was reminded of this after reading an in-depth report published recently by the Ministry of Housing, Communities and Local Government (MHCLG) into the bankruptcy of Northamptonshire County Council in 2018.

It’s a highly critical analysis of a failed council and lays bare the “cultural malaise” that engulfed the authority. The report’s authors write:

“A ‘group-think’ mentality had prevailed at the Council for many years, with senior officers and politicians inclined to pursue misguided courses of action while failing to accept the reality of the organisation’s predicament. Dissenting voices were ignored, partners were brushed aside if they didn’t adhere to the Council’s view and offers of help from within the sector were rebuffed until it was too late.” 

Perhaps no surprise then, that an impartial assessment of the authority’s finances revealed that a forecasted shortfall in the budget of £8 million was actually nearer £64 million – it would almost be funny if the consequences weren’t so serious.

Looking back over the figures for 2017-18, Northamptonshire employed 19 members of staff who received remuneration in excess of £100,000. The annual bill to the taxpayer for these staff alone was £2.8 million. Adding insult to injury, the outgoing chief executive – who ironically then went on to work for a firm that advised councils on how to reduce financial pressures – received a loss of office compensation package of £142,000. So much for the top dollar argument…

If you’re a councillor and your authority also suffers “from a lack of strategic direction” or a “preoccupation with far-fetched experiments and ill-thought through exotic solutions”, I urge you to read the report and act on its recommendations.

Can we have some more, please?

From one report to another, as the Public Accounts Committee released its latest report on COVID-19 and the effects on local government finance. As you would expect, it details the impact of the pandemic on council finances – despite injections of funds from central government the future still looks bleak.

A number of recommendations are made to MHCLG. A key one is that there should be more certainty about the amount of funding coming from central government. Consequently, there have been yet more calls for gaps in council budgets to be plugged by central government.

This is one of the big issues I have with the report. Yes, I’m sure MHCLG could improve, but what about local authorities? The report notes that councils are making efficiency savings to make up for funding shortfalls but seems to suggest that the pips are already beginning to squeak.

As I hope I’ve made clear in this column over the weeks and months, there is still plenty of fat left to trim. Councils’ first instincts shouldn’t be to demand more money from central government (read: taxpayer) – this mentality must change.

The highs and lows of Council Tax bills

Last week I visited Nottingham where residents are now paying the highest council tax in the country at £2,226 for a Band D property. On the journey, my colleague asked me what the highest bill in England was irrespective of banding. I didn’t know, only that it would be over £4,000 for a Band H property in Nottingham. This got me thinking, we always talk about Band D bills because it’s a handy average but what about bills at the high and low end of the scale?

Data reveals that the highest council tax is indeed in Nottingham with a Band H bill coming in at a colossal £4,452. 104 local authorities in England have a Band H charge in excess of £4,000 but only one is in London – Kingston-upon-Thames charges £4,114.

On the other end of the scale, only eight councils charge less than £1,000 for a Band A bill (without any form of discount, e.g. single person or carer discount etc). Of those seven are in the capital, the City of London, Hammersmith & Fulham, Kensington & Chelsea, Newham, Tower Hamlets, Wandsworth and Westminster. Westminster has the lowest Band A bill in England at a mere £553. Windsor & Maidenhead is the only local authority outside of London to charge less than £1,000 for Band A at £982.

It’s interesting to see the huge range in Council Tax charges across the country. However, if trends continue next year we’ll likely see fewer people paying less than £1,000 and more facing bills of over £4,000. This is why it’s vital that authorities eradicate as much wasteful spending as possible.

Harry Fone: Slough Council slammed for sloppy accounting

1 Jun

Harry Fone is the Grassroots Campaign Manager for the TaxPayers’ Alliance.

Back in February this year, I revealed that Slough Borough Council had spent millions of pounds of taxpayers’ cash adorning their new headquarters with plush fittings, astroturf and even bean bags. I questioned whether council bosses had their priorities straight – and it would seem that a recent independent audit confirms my suspicions.

The report by Grant Thornton lays bare the local authority’s financial incompetence, “we are not satisfied that, in all significant respects Slough Borough Council put in place proper arrangements for securing economy, efficiency and effectiveness in its use of resources for the year ended 31 March 2019.”

At the time of writing, Slough Council is yet to publish its latest statement of account. It’s perhaps not hard to see why given the auditor’s comments that there is a “lack of supporting audit trail for key notes in the accounts”. Worse still, the council has a budget gap of nearly £1.3 million and is forecast to have a mere £550,000 in its general fund reserves.

Grant Thornton has recommended a series of measures to address the council’s financial management. For the sake of local residents who suffered a 5.1 per cent increase in Council Tax this year, I hope town hall bosses are able to turn the ship around. They shouldn’t get comfy in those bean bags just yet.

Councils face tax deficit

The latest figures from the Ministry of Housing, Communities and Local Government reveal that councils in England face a £509 million net shortfall in the amount of Council Tax they expect to collect. The revelations come despite another year of inflation-busting council tax rises.

Out of 309 local authorities, 258 (83 per cent) reported they are expecting a deficit in council tax collections which totals close to £546 million. 10 councils are on par with just 41 reporting an expected surplus amounting to nearly £37 million.

Liverpool City Council has the highest deficit at £17.7 million compared to South Oxfordshire which had the greatest surplus at just over £4.2 million. Another name that jumped out of the top ten highest deficits was Croydon at £9.2 million – which will offer little comfort to local taxpayers who have seen their council go bankrupt in 2020 and leading to massive increases in council tax.

No doubt the pandemic has greatly affected balance sheets and the government has allowed councils to spread shortfalls across upcoming financial years until 2024. But once again this highlights why local authorities shouldn’t see residents as cash cows to be milked. They need to trim the fat in their budgets. As I wrote just the other week, there are plenty of places where they can make a start.

Laying down the law

I was delighted to read this week that the newly elected Police and Crime Commissioner (PCC) for Nottinghamshire has announced plans to save taxpayers £78,000 a year. Caroline Henry is set to scrap the role of deputy PCC and furthermore will not claim any expenses.

In fairness to the previous incumbent Paddy Tipping, he didn’t claim any allowances in 2020 and only claimed £1,885 in 2019. A relatively small amount of money in the scheme of things but it’s great to see Henry displaying the right attitude towards taxpayers’ hard-earned cash. Especially so, after residents were subjected to the maximum possible increase of £15 (Band D) for the police precept this year.

In a perhaps unfortunate twist, she may be forced to employ a deputy. The Home Secretary, Priti Patel is seeking to make the appointment mandatory in the near future. Time will tell whether this is the right move but I’m not sure it will please taxpayers. Doing some back of the envelope calculations and assuming an average salary of say, £60,000 for a deputy (it’s likely to be higher) – across the country the cost will be in the region of £2.5 million a year. This is just for salaries; the bill will likely be much larger when pensions, perks and expenses are factored into the equation.

In response, Caroline Henry has said she will not appoint a deputy until she is legally mandated to do so. I hope other Police and Crime Commissioners will follow her lead.

Harry Fone: Councils have saved millions on their printing bills

21 May

Harry Fone is the Grassroots Campaign Manager for the TaxPayers’ Alliance.

Following the local elections, there will be many newly elected councillors, possibly now in overall control of a council, eager to make a big difference in their local communities. One of the best ways to do this is by ensuring that every penny of council tax nets maximum possible value. But of course hand-wringing council bosses and bureaucrats may well claim that there is no fat left to trim. That’s why I’ve laid out where simple savings can be made.

Printing costs

New research by the TaxPayers’ Alliance (TPA) reveals that councils made huge savings on printing over the last twelve months. Local authorities spent just £41.6 million from April 2020 to February 2021, a staggering £32 million less than the previous financial year.

Some things must be printed out, perhaps most notably everything required to run a successful local election, but big reductions are possible as Chorley and East Riding have shown. Locking in these economic and environmental savings for the future can only be a good thing.

Make changes to senior staffing 

As the latest edition of the Town Hall Rich List revealed, thousands of council employees are enjoying remuneration in excess of £100,000 per year. Polling by the TPA showed that 59 per cent of people want their salaries to be frozen or cut.

But questions remain about whether these executive positions are needed in the first place. Many insiders I’ve spoken to argue that there are too many directors in councils – a lot of the work could be done at management level.

Stoke City Council is seeking to reduce its number of senior staff and save taxpayers £360,000 a year in the process. If staff numbers can’t be cut, why not consider sharing senior staff between two councils and halve the wage bill for taxpayers?

Work with the private and voluntary sectors

I think most Conservatives would agree that the private sector tends to be more efficient than the public sector. I would argue that local government doesn’t fully explore the potential that’s available – there is no shortage of people and organisations seeking to make their area better for all.

Consider council award ceremonies for example. In 2019 the TPA discovered that nearly £6.6 million was spent on these extravagances. A minority of entrepreneurial councils managed to cover the costs through private sponsorship. More authorities should do so – not just for awards ceremonies (which are highly questionable in the first place). But perhaps for beautifying town centres or even covering the costs of Christmas lights. The possibilities are endless and if you don’t ask, you don’t get.

Councillor allowances

Throughout the pandemic, we’ve seen numerous examples of councillors awarding themselves increases in their allowances. From Bristol to Tower Hamlets, elected members have been seemingly tone-deaf to the financial problems many households have experienced.

As a newly-elected councillor, why not lead by example and return a portion of your allowances to taxpayers? If more of your fellow councillors follow suit there are huge savings to be made. In 2018-19 alone the TPA calculated the cost of allowances to the taxpayer at £255 million. At the very least, councils should commit to a freeze in allowances for as long as possible. Local taxpayers will thank you for it.

Seize the benefits of the working from home revolution

As I recently highlighted, councils are all too eager to splash the cash on shiny new headquarters. But given the pandemic has seemingly kickstarted the working from home revolution, should councils think again before building a new office block? With fewer people coming into the office, a smaller amount of space will be needed. Hot-desking is likely to be more widely adopted. With it comes very welcome savings on heating, electricity, IT equipment, to name a few.

It’s also worth considering what impact working from home could have on productivity and absenteeism. Figures by the ONS showed a huge decline in public sector productivity in Q2 and Q3 of 2020. Public sector absenteeism is still greater than that of the private sector and the trend doesn’t look like reversing anytime soon. Council wage bills eat up huge amounts of taxpayers’ cash. Councillors must enact policies and practices that get the best performance out of staff.

Savings must be made

It’s very plausible that in 2022-23, the average Band D council tax bill in England could be just shy of £2,000. Residents want a break from inflation-busting rate rises. They need proactive councillors who will keep a tight grip on the purse strings and ramp up efficiency.

There will be plenty of people who will tell you this can’t be done, but the government begs to differ. This document outlines even more ways to make savings. I hope this will inspire you to launch a ‘War on Waste’ in your local authority. If you’d like a helping hand, feel free to email me, harry.fone@taxpayersalliance.com

Harry Fone: Profligacy is to blame for the Council Tax rise in Wolverhampton

20 Apr

Harry Fone is the Grassroots Campaign Manager for the TaxPayers’ Alliance.

Following the release of the Town Hall Rich List, my inbox has been flooded with examples of local authority profligacy. Of particular interest was a tip-off from Wolverhampton which revealed the massive increase in the Council’s expenditure on its communication team.

Figures show that since 2014-15 spending has more than doubled from £412,681 to £922,978 in 2020-21 – an increase of 123 per cent. In 2019-20 spending peaked at over £1 million. Alongside this, Council Tax has increased from £1,522 (2014-15) to £1,989 (2021-22). You have to wonder if council bosses have their priorities in the right place.

The council argues “the team has remained relatively stable and costs have reduced year-on-year”. I’m not sure I would describe an increase of 123 per cent as stable. Furthermore, cost reduction only came in the last year after five consecutive increases.

It’s worth adding that the director of communications hasn’t seen any reduction in their salary. Quite the opposite in fact. In 2019-20 they were paid £95,800 but by 2021-22 this had risen to £105,113. Let’s not forget a healthy pension contribution of over £27,000 as well. That means that 14 per cent of the communication team’s budget was spent on just one member of staff.

Residents in Wolverhampton suffered a 5.3 per cent increase in their council tax this year. I’m not saying councils shouldn’t have the means to communicate information about local services. Rather, maybe this money would be better spent on key services, such as collecting bins and fixing potholes.

Vanity and virtue-signalling

Similar questions need to be asked of Leicester City Council. Its use of taxpayers’ cash isn’t exactly exemplary. Band D Council Tax bills increased by almost £100 this year to £2,012. What are residents getting for their money? A litany of highly questionable spending decisions, it seems to me.

For starters, the authority wrote off a loan worth £600,000 to a local theatre, after it went into liquidation. This came after spending £3.6 million renovating the building which reopened in 2018, only to close three years later. Once again it begs the question, why does the public sector think it can succeed where the typically highly efficient private sector has failed?

Not put off by the failure, plans are now afoot to convert a museum into a tourist attraction at a cost of £11.6 million. But it’s not just vanity projects the council is fond of, it’s now planning to virtue-signal with taxpayers’ cash. On the council’s website and in its Capital Programme for 2021-22, £500,000 of funds have been set aside for the political movement Black Lives Matter. As my colleague, John O’Connell laid out on this website last week, taxpayer-funded lobbying creates something of a merry-go-round and cash is diverted away from frontline services.

Over the last five financial years, the average tax rise by Leicester City Council has been 4.5 per cent. Only on one occasion was the increase less than 4 per cent. Arguments that there is no fat left to trim from council budgets simply don’t hold water. If the trend continues, bills will be over £2,100 by next year. Residents deserve better. The authority must put an end to its specious spending.

Waffle from Waltham

The TaxPayers’ Alliance warmly welcomes transparency at all levels of government, especially when it comes to public sector procurement. As such the Contracts Finder website is an excellent resource for everyone from armchair ‘waste watchers’ to broadsheet journalists, wanting to keep an eye on public tenders. However, this is only any good if what is written in the contract makes sense.

Take this example from Waltham Forest Borough Council. It’s looking for “consultancy support for a strategic reset”. This sounds like something that would emanate from David Brent’s mouth. But it gets worse. The details of the proposal can only be described as a word salad:

“The Council is seeking to commission a Bidder to help us shape our strategic activity over the next year, creating a compelling narrative, working with management team to define and agree priorities and establishing the strategic programme that will enable us to deliver our priorities effectively.”

You’d have to go a long way to find a worse example of rambling middle management speak than this. I might be wrong of course and it might make perfect sense to you. If so, I recommend you apply as this ‘non-job’ pays up to £75,000. Maybe this role will bring long term benefits to the taxpayer but I wouldn’t bank on it.

Harry Fone: Almost 700,000 council staff are paid over £150,000 a year

8 Apr

Harry Fone is the Grassroots Campaign Manager for the TaxPayers’ Alliance.

Despite everything the pandemic has thrown at taxpayers in the last year, they’ve still had to suffer yet another round of inflation-busting council tax rises. Analysis by the TaxPayers’ Alliance has shown that more than a third of local authorities in England are now charging over £2,000 for a Band D property. Over one hundred councils have now crossed the Rubicon, with many more surely planning to follow.

This is the latest development in a long-running tale of tax hikes. In less than 20 years, bills in England have increased on average by 111 per cent in cash terms. This year, out of 147 authorities who could increase council tax by the maximum amount of 4.99 per cent, 89 councils (61 per cent) did so. Consequently, the average bill is £1,898 – more than £300 higher than it was in 2018-19.

In Wales, the double-digit rises we’ve previously seen seem to be on hold, but bills are still climbing. Scottish ratepayers enjoyed a council tax freeze this year. This was only possible, however, thanks to a significant cash injection from the Scottish government. One way or another, the public will be footing the bill. That’s why it’s so important that local authorities do everything possible to keep rises to an absolute minimum.

A common defence from councils is that there is no more waste to find and they are focussing every penny on essential services despite years of central funding cuts. I’d have some sympathy for this argument, were it not for the fact that I continue to see example after example of taxpayers’ cash going down the drain. No sooner do they plead poverty and claim there are no more savings to make, than councils set up an energy company, set up a new pet project, or splash on pay rises.

That’s what we see in this year’s edition of the TPA’s Town Hall Rich List. Our list details all council employees in the UK who receive remuneration in excess of £100,000. The figures show that in 2019-20 at least 2,802 local authority employees did so. That’s an increase of 135 compared to the previous. 693 staff enjoyed pay packets of £150,000 or more – another increase.

Every region of the country – with the exception of the North East – has experienced an increase in the number of council bosses receiving over £100,000. Essex County Council topped the charts for the third year in the row, for the most employees taking home more than six figures.

Now at this point, councils argue that they have to pay these salaries to attract the best people for the job. In principle, I would agree with that. If council bosses are working hard, eradicating wasteful spending, ramping up efficiency, providing good frontline services, and keeping council tax bills under control, then residents have no complaints. But as I’ve seen first-hand, many authorities are simply not up to scratch.

Take Nottingham City Council. It employed nine members of senior staff receiving over £100,000 in total remuneration. What did local taxpayers get for their money? A failed council-owned energy company that suffered losses of nearly £40 million. In 2021-22 residents will endure the highest Band D council tax bill in the whole of the UK, at a staggering £2,226.

And consider the shambles we’ve seen at Liverpool City Council in recent weeks. The Town Hall Rich List revealed 14 staff got more than £100,000, 5 of whom enjoyed more than £150,000. The total cost of these wage packets came in at over £2 million. Liverpudlians pay the highest council tax (Band D) bills in the North West at £2,129, yet their council has let them down terribly. Residents are paying top dollar and not getting bang for their buck.

Wherever we live in the country, we can all think of a council like that. Look at the top 20 list of highest remunerated employees and some familiar names pop out. Nathan Elvery, former chief executive of West Sussex County Council, took home £427,653 which included a loss of office payment of £170,000. He left the job following a report which documented “systemic and prolonged” failures in children’s services. But this was nothing compared to the £395,110 golden goodbye that Coventry’s deputy chief executive, Martin Yardley enjoyed. His total remuneration was over £570,000. During his four years in the top job, Band D council tax bills increased by £312.

Examples like this are exactly why we fought so hard for a cap on exit payments. Despite the short-lived life span of the legislation – which was introduced last year only to be revoked in March – it’s reassuring to hear that the chief secretary to the Treasury, Steve Barclay, is keen to reinstate a cap as soon as possible. Based on what we see in this latest Town Hall Rich List, I urge him to act quickly.

As I’ve written previously, the examples above are just the tip of the iceberg. Undoubtedly many more will be uncovered in the coming weeks and months. The TPA’s inbox is flooded daily with tip-offs from angry residents complaining about their council’s wasteful practices. Residents expect their councillors to be holding town hall bosses to account and putting an end to these wasteful practices. Instead, we’ve seen multiple instances of councillors voting to increase their own allowances during the pandemic.

It’s quite possible that in 2022-23, nearly two-thirds of English councils will be charging over £2,000. This can’t go on. Getting spending under control and reining in overly generous salaries is one of the surest ways to keep bills as low as possible. Otherwise, well-paid bosses should be spending time finding savings elsewhere. Taxpayers expect nothing less.

Harry Fone: Councillors in Walsall give themselves a big increase in allowances

9 Mar

Harry Fone is the Grassroots Campaign Manager for the TaxPayers’ Alliance.

As I’ve argued from day one, many local authorities simply don’t have their priorities right. This seems particularly clear in Walsall where councillors have awarded themselves a pay rise – although opposition members voted against it.

The basic allowance for members will now be set at £11,938 – an increase of over £500. But since 2017-18, remuneration will have risen by over £1,000. When it came to pay for special responsibility allowances (SRAs), there were huge hikes. Four options were proferred by an independent remuneration panel – the least expensive costing taxpayers just shy of £65,000 and nearly £110,000 at the high end. Councillors opted for the most expensive option. The council leader will see his SRA rise from £22,841 to £33,325 – a 45.9 per cent increase. The deputy leader also enjoys a significant bump of £5,698 and cabinet members receive a £5,356 boost to their allowances.

At the same time, a council tax rise of 4.99 per cent has been approved. If you include parish precepts, residents of Walsall have seen their bills shoot up from £1,600 (Band D) in 2015-16 to £2,007 in 2020-21. Bills are likely to exceed £2,100 for the coming year.

This double-whammy of councillor pay rises and tax hikes isn’t fair. Many households have suffered profound economic hardship in the last year. Councillors should consider their plight before awarding themselves lavish allowances.

Saving for a rainy day

With many local authorities increasing tax by the maximum permissible amount, it’s often interesting to read their justifications for doing so. A statement released by Tunbridge Wells Borough Council (TWBC) mentioned it will have to “bear a quarter of the expected £3 million loss of income for 2020/21”. They could have covered the loss easily had they not wasted cash on a vanity project that never left the drawing board.

Back in July 2019, the TaxPayers’ Alliance campaigned against plans by TWBC to spend £108 million on a controversial development. Calverley Square was an ambitious plan to relocate the council headquarters – and build a theatre, office block, and underground car park with plenty of public space. There was a vociferous backlash from the local community even before it was revealed that a loan of £77 million would be required. Worse still, it would take half a century to pay back with yearly interest payments of £2.4 million.

As the TPA pointed out at the time this would have to be paid for by council tax increases and very likely cuts to public services. All the while the TWBC had a perfectly usable town hall that just needed refurbishing. Indeed this is exactly what happened. After cancelling the Calverley Square project, the existing HQ is being re-modernised for a fraction of the cost at £625,000.

Unfortunately, despite a spade never going in the ground, the doomed project still cost the taxpayer £10.6 million in legal fees and compulsory purchases. Things could have been far worse of course had the project gone ahead. But this is why it is so important that councils are careful with every pound of taxpayers’ money. They can’t afford to waste it, otherwise it will come back to bite them in future.

A place to call home

On the subject of council offices, Shropshire County Council has approved plans to build new premises at a cost of £12.5 million. On the face of it, the decision seems very sensible. The current Shirehall building is uneconomical to run and refurbishments are estimated at £24 million, although nearly £400,000 was spent on consultants to establish that.

It already owns the site it plans to develop – Pride Hill shopping centre was bought for £51 million in 2018. At the time it was argued that it would bring returns of £2.7 million of annual income. So the council seems to have given up on that now. Even before the pandemic, many organisations including the TaxPayers’ Alliance, have argued that commercial property is far from a safe investment.

You can’t change history though, the decision has been made and it makes a lot of sense to repurpose the site. But I have to question if the council has fully thought things through. Given the uncertainty around the economy, wouldn’t it be better to wait and see how the cards fall? After all, it is very possible that a glut of cheap office space could come onto the market, following more staff working from home and businesses going bust.

And who knows if £12.5 million will be the final bill. This is the council that splurged £130,000 of taxpayers’ cash to hire a ‘pothole expert’. As I’ve seen across the country, local authorities have a far from perfect record when it comes to big projects. Shropshire council must get it right; otherwise, it’s taxpayers who are left to pick up the tab.

Harry Fone: Whip withdrawn on Conservative councillors in Kent – for opposing Council Tax rise

23 Feb

Harry Fone is the Grassroots Campaign Manager for the TaxPayers’ Alliance.

It’s all kicking off in Kent, after a dispute over Council Tax led to two Conservative councillors having the whip withdrawn. The axe was swift to fall after Paul Cooper and Gary Cooke spoke out against a five per cent rates rise.

Delving into Kent County Council’s budget for 2021-22, it seems clear that a smaller increase could have been implemented. Despite everything that has happened in the last twelve months, KCC “is still forecasting a significant underspend in the current year [2020-21], primarily due to the reduced demand for core services”. Furthemore there will be a £14 million increase in general reserves. As I have argued before, surely this is the perfect time to be using the hoards of cash that councils have squirreled away over the years.

Then we get to what I think many will find to be the most egregious part of the budget. Council staff are to be rewarded with a two per cent pay rise, costing Kent households £4.6 million. Given that private sector workers have endured tremendous hardship, and many can only dream of a boost to their pay, this really isn’t a good look for the council. I don’t doubt that KCC employees have worked hard, but their salaries and pensions have been virtually guaranteed this year. Many in the private sector have not been so fortunate.

Defenders of the Council Tax hike will argue that it only equates to a rise of £1.30 a week for a Band D property but that ignores the countless inflation-busting rises households have suffered in recent years. Councils like Kent must try harder to avert these hikes in future.

Slough’s swanky council offices

An inside source at Slough Borough Council recently sent me photos of the authority’s swanky new headquarters. The interior is rather luxurious and looks like an office you would expect to find in Silicon Valley rather than Berkshire. Staff are able to relax in rooms with bean bags, rocking chairs, designer lighting suspended on ropes and even sprawl out on artificial grass carpet if they desire.

Staff need somewhere decent to work but I suspect local residents will be flabbergasted that the council has splashed their hard-earned cash on such ostentatious offices. If the bean bags aren’t comfortable enough, the photos also reveal more seating available in ‘padded pods’ complete with flat screen TVs. My mole informs me that nearly £30,000 was spent on fake plants and even ping pong tables in an attempt to reduce the amount of staff sick days.

Recently the council revealed it had a £10 million black hole in its budget. Worth noting then that the HQ was purchased in 2018 for £39 million and a further £8.5 million spent on refurbishment, with annual running costs of £1.3 million. Given that council tax increased by four per cent last year (Slough has only cut it once in the last 20 years) perhaps authority bosses should consider focusing funds on essential services rather than lavish workspaces and the accompanying accoutrements.

Very accommodating councils

Last Autumn, I sent freedom of information requests to all councils in the UK, asking for a breakdown of their spending on putting up those affected by homelessness in hotels for 2019-20 and 2020-21.

Across all local authorities spending was at least £198 million. Edinburgh had the largest expenditure at just shy of £24 million, followed by Lewisham at £14.7 million. London councils featured prominently in the top ten biggest spenders. As you might expect, spending dramatically increased due to the pandemic. This isn’t unreasonable, but what I have to question is some of the hotel choices by certain councils.

For example, Basingstoke and Deane Borough Council seems to have a penchant for 4-star accommodation. It booked some 855 nights at luxury hotels such as the Basingstoke Country Hotel & Spa, plus Mercure hotels in Newbury and Winchester. Similarly, councils in Stratford-on-Avon, Broxtowe, Doncaster, Eastleigh, Erewash, Greenwich, and Wakefield also opted for high-end stays. Cambridge City Council even forked out public money on £3,381 worth of  “deep cleaning” and a further £203,505 for “on-site security”.

Now, it may well be that these rooms were the best value for money given the options available at the time. But it doesn’t send the right message to taxpayers, who in many cases can barely afford to pay their Council Tax each month, let alone enjoy a stay in a 4-star hotel. Councils must be able to demonstrate that they achieved the best value for money in these instances.

Harry Fone: Holding council meetings online can save millions in travel expenses

11 Feb

Harry Fone is the Grassroots Campaign Manager for the TaxPayers’ Alliance.

Across the country, local authorities have had to adapt to the challenges the pandemic has brought. One key area has been the ability to continue to hold regular council meetings using online services like Zoom and Microsoft Teams. In order to make this possible, the government has temporarily removed the legal requirement for public meetings to be held in person.

As a result, many councils have made saving courtesy of reduced travel expenses claimed by members. Powys County Council estimates it can save £40,000 per year by using a mixture of online and in-person meetings. Similarly, West Sussex County Council has stopped shelling out “some £6,000 per month” in expenses.

Based on back of the envelope calculations, and using Powys as a guide, across the UK’s 26 county councils and 120 unitary authorities, savings could be just shy of £6 million per year. And that’s before adding borough and district councils into the mix. The environmental benefits shouldn’t be ignored too. A reduction in car journeys would help authorities meet their ambitious green targets.

It begs the question: should things continue this way after the pandemic is over? After all, many in the private sector are embracing the working from home revolution. Especially given the huge savings afforded to them by reducing the size of expensive city centre offices.

There are undoubtedly concerns around whether holding meetings in this way would be good for democracy. Technology should be aiding councils’ decision-making processes, not hindering them. But potential multi-million pound savings shouldn’t be ignored.

Councils must get their priorities straight

One benefit the internet definitely has brought, is the ability to scrutinise local and national government more easily. The TaxPayers’ Alliance frequently scours the Contracts Finder website – which allows anyone to see tenders by the public sector – as part of our efforts to ensure money is spent wisely.

In most cases, contracts put forward by councils are more than reasonable, such as the provision of grass cutting or bin collections. But this week I found two examples that show a worrying attitude to taxpayers’ cash by public officials.

We’re all fed up of covid and can’t wait to see the back of it. But many will question whether Sandwell Metropolitan Borough Council has its priorities in the right place. It plans to spend £10,000 on “suitable experienced lighting companies” to project messages onto buildings that “will encourage the community to think about what they would like to tell themselves in a year’s time once things have changed and some sort of normality is hoped to have resumed.”

Fylde is another council that clearly thinks money grows on trees. It awarded a three year contract worth nearly £65,000 for a mayoral chauffeur. When households are struggling to put food on the table, it is nothing short of outrageous that council bosses think this is an acceptable use of money for what is a largely ceremonial role.

In the scheme of local government spending this is relatively small fry. But wouldn’t it have been far better to put this money into essential frontline services?

Keeping a tight grip on the purse strings

Following a tip off, I sent a freedom of information request to all councils in the UK asking how much money they had overpaid to staff (e.g. in salary, bonuses, expense, pensions etc) and of any excess payments, what amount had been successfully reclaimed. I’m pleased to say that at a majority of authorities only a microscopic sum of money was written off. But there were quite a few that didn’t fare so well.

In total for the financial years 2017-18, 2018-19 and 2019-20, £2.5 million was written off across a total of 57 councils. Much of this was made up by The Highland Council, whose response was particularly concerning. In just three years, it overpaid staff to the tune of £1.1 million but couldn’t say how much had been recovered, stating its “policy is to pursue all overpayments.” It’s worrying that they can’t provide a figure; let’s hope for the taxpayers’ sake, they’ve managed to claw back a decent percentage rather than nothing at all.

There is no doubt that payroll is a complicated area and correcting all errors may be almost impossible. But why is it that some authorities are able to recoup nearly all monies while others lag so far behind? Whatever the answer, councils should remember that they have a tremendous responsibility to taxpayers and must strive to get the best possible value for every penny.