WE live in financially chastening times, both locally and nationally, and as a result taxpayers will be more concerned than ever that their hard-earned cash is being put to good use.
It is a sad reality that many councils are having to cut back on basic services or are raising council tax to keep themselves “in the black”, so scrutiny is needed to make sure that budgets are not being wasted and that residents are getting value for money
So this week the TaxPayers’ Alliance has published the Town Hall Rich List, a nationwide survey of employee pay and perks for every local authority. Using this, taxpayers can judge whether their town hall is up to the job and whether those in charge are making the most of their tax revenues.
Nationwide, almost 3,500 employees cost the taxpayer over £100,000 each and the enormity of the findings do not stop there. Over 350 employees cost more £150,000 (more than the Prime Minister’s salary), 106 over £200,000 and 10 over £300,000.
A methodology never used before has made this Town Hall Rich List the most accurate yet. Just looking at the salary of the employee doesn’t give anything like the full cost to the taxpayer. It is very important to include the employer’s pension contribution, any expenses incurred and redundancy payments to get the true figure.
The Yorkshire and Humber region had 207 employees who cost more than £100,000 – a middling figure compared to the other major UK regions.
Likewise the 27 officials costing more than £150,000 and the four accruing more than £200,000 are unexceptional, but now taxpayers across the region will be able to view the actions of councils and either criticise where the service is not up to snuff or lead the plaudits where costs are kept down.
This is a crucial point. The TaxPayers’ Alliance would never argue that all of these packages are necessarily undeserved and wasteful – that would plainly be ridiculous.
We would be the first to agree that challenging circumstances require good people who are expensive to hire but the emphasis must be on not tolerating a situation where a failing council continues to fork out fortunes when little is being achieved.
The problem is that such a high level of transparency has only come about after a year’s hard work and 6,000 Freedom of Information requests.
While some of the information we needed is in organisation’s annual accounts, there are many details that are not. And this is why we should be concerned about the Government’s review of the Freedom of Information Act. Any attempt to water-down the powers within the Act would be a gross betrayal of taxpayers,
Some critics have argued that FOI is being misused by the media and campaigners to dig up stories, but it strikes me that this is precisely what the Act should be used for: bringing stories that are of public interest out into the open. If it wasn’t important that the public know, then the media would not run the stories.
The public sector is still undergoing a pay freeze with raises capped at just one per cent, but they still earn more than their private sector counterparts and with CPI inflation at zero per cent this is still wage growth in real terms. And the pensions received in the private sector are often much less generous than those in the public sector – if one is offered at all.
We found pension contributions close to a quarter of an annual salary, but there are great discrepancies in this across the public sector with some employees only getting half of that.
Overall the research undertaken by the TaxPayers’ Alliance shows that there needs to be a bit of a rethink when it comes to employee remuneration. And it is certainly pleasing that George Osborne has indicated he will write to all councils to set out new rules on pay and perks.
For him, these revelations should be seen in the light of the upcoming Spending Review and Autumn Statement. There he will have to demonstrate where he is going to make cuts that could affect the lives of millions as we continue the necessary course of deficit reduction. And it is there that the Chancellor must make it clear that wasteful spending is a moral outrage when cuts are having to be made elsewhere.
This includes the massive pay packages found in local councils which are raising their council tax or cutting services. Taxpayers need protecting and we at the TPA do our utmost to do so but the man who can really make a difference sits next to the Prime Minister in the House of Commons.
To persuade him to make the savings we need the public must demand them and, armed with the Town Hall Rich List, they can show him where there is fat to trim.
Jonathan Isaby is chief executive of the TaxPayers’ Alliance.