The TaxPayers’ Alliance believes that a healthy and vibrant local press ensures proper scrutiny of local authorities. When councils use taxpayers’ cash to distribute their own publications they create direct and unfair competition for local media, harming genuine accountability. They also cost taxpayers’ money and savings need to be made.
The Department for Communities and Local Goverenment have produced a Publicity Code. It contains many sensible suggestions for how councils should conduct themselves when it comes to publicity. Unfortunately, many are ignoring the code of practice and are wasting taxpayers’ money on rival newspapers, or making political points by plastering posters all over town.
Our response, which can be found here, calls for an end to free-sheets so that local journalists can play their part in keeping local politicians honest. We encourage everyone to respond to the three-question consultation, which you can do by clicking here.
Pub groups have slammed Department for Business, Innovation and Skills plans for a new quango to micro-manage the details of agreements between pub landlords and their commercial tenants. Punch Taverns said:
A founding commitment of the coalition was to reduce regulation, but ministers now seem intent on wrapping Britain’s pubs in red tape.
The problems that the pubs industry faces are not because of a lack of regulation and taxes from ministers and civil servants. The problem is crushing taxes and too much regulation.
It was a great move by the Chancellor to listen to our Mash Beer Tax campaign and scrap the beer duty escalator in the Budget, cutting the tax by 1.5 per cent. But at the same time he also hiked tax on cider, wine and spirits by 5.2 per cent.
And tight planning restrictions which drive up residential rents and house prices, causing the housing crisis are also contributing to the slow but steady disappearance of our pubs. The high residential property prices caused by planning regulations provide a financially attractive alternative for pub buildings, putting economic pressure on owners to convert them into flats.
Pubs don’t need Vince Cable’s battalion of beer bureaucrats to pontificate about what ‘fair prices’ are or dictate the terms of their agreements. They need planning reform so residential property developers are allowed to build homes in commercially viable locations and don’t have to resort to converting pubs. And they need lower taxes not just on beer, but on wine, spirits, cider and business rates, too.
New research by consultants KPMG for tobacco company Philip Morris International has claimed that the UK has the EU’s fastest growing black market, which now accounts for one in six cigarettes sold.
These figures follow research published last year by the TaxPayers’ Alliance which revealed that the tax loss from illicit alcohol, tobacco and fuel totalled £28.5 billion.
It’s increasingly clear that the UK’s high lifestyle taxes have become ineffective at both raising revenue and controlling consumption. Governments can only go so far in hiking taxes before people start to ignore them and enter the black market instead.
With the Coalition intent on hitting the arbitrary target of spending 0.7 per cent of our national income on international aid, the Department for International Development is awash with taxpayers’ cash and short of ideas on how to spend it.
In a fiercely critical report, an all-party committee of MPs found evidence of two-thirds of DFID’s budget being channelled through inefficient international organisations, money being moved between accounts to hit targets, and other poor spending decisions. Official documents reveal how in 2011, the department was forced to boost spending by £580 million in a frantic rush to meet increasing spending targets, with £130 million used just to increase the value of payments due on a number of projects.
DFID will see its budget increase to £8.2 billion with a superfluous cash injection of an extra £500m this year. This comes at a time when all other Whitehall departments, barring health, face cuts. The government needs to call time on its policy of pouring taxpayers’ money into international development so they can meet meaningless targets and feel self-righteous.
Friday’s Independent carried details of globe-trotting MPs leaving their constituencies without representation for long periods of time. Mark Hendrick MP spent over 100 days outside the country and at one point spent a month in Beijing learning Mandarin.
Some foreign travel may be justifiable in the interests of informing an MP’s work on a specific policy area or geographical region. But it would seem that some need reminding that they are elected to look after the interests of their constituents both locally and in Parliament – and being on the other side of the world makes that task somewhat harder.
Another case raised by the Independent was Barry Gardiner MP, who spent 73 days out of the country. He is Ed Miliband’s Special Envoy for Climate Change and the Environment and visited Berlin, Cape Town, Cape Town again, Jakarta, Rio de Janeiro (twice), Venice, Warsaw, Washington, New York, Mexico City, Japan and China. It seems strange that there were no other more energy efficient alternatives to all this air travel…
Indeed, politicians and bureaucrats working on climate change seem to be fond of taking lots of flights, despite the emissions. Our research earlier this month showed that the Department of Energy and Climate Change is fond of a flight or two as well, including the occasional trip on business class.
David Miliband MP, who stated after failing to win the Labour leadership that his constituency, “South Shields comes first”, managed to spend 47 days out of the country with a total of 14 foreign trips. There are of course times when foreign trips are necessary, but excessive time overseas impedes the very job our MPs are paid to do.
The issue of adequate representation has been brought to public attention this last fortnight by Nadine Dorries MP, who gallivanted off to Australia for her cringeworthy appearance on a I’m a Celebrity Get Me Out Of Here. All the while, her constituents were left without a parliamentary representative.
Taxpayers have very real and pressing concerns. They pay for MPs to represent them in Parliament. A few necessary trips aside, MPs should be in their constituency or at Parliament as often as possible.
Education Secretary Michael Gove announced yesterday a pioneering drive to cut spending on bureaucracy after a comprehensive, zero-based review identified potential savings of £290 million. As Peter Hoskin points out on ConservativeHome, the Education Secretary is going further than his cabinet colleagues by aiming to cut departmental spending on administration by 50 per cent by 2016, exceeding the coalition’s target of 33 per cent by 2015.
The headline-grabbing statistic that staff numbers will fall by around a quarter to 3,000 is welcome but the review has proposed a more comprehensive package of cost-cutting measures. The department will also be moving out of its pricey Westminster HQ to cheaper digs while excessive overhead spending on finance, HR and IT will be slashed and six unnecessary regional offices closed. The TaxPayers’ Alliance has long been calling for departments to make savings on office space, identifying a staggering £112 million being wasted in recent research. It’s great to see the pressure we’ve been putting on ministers resulting in real gains for taxpayers.
The report found decision making in the department to be “slow and laborious” highlighting duplication of work, uncertainty among employees of their roles and general overstaffing – themes all too common in our bloated public sector.
The TaxPayers’ Alliance has led the way in campaigning for an end to profligate spending by Whitehall departments and for leaner, more efficient bureaucracy that delivers better value for money. However, while this programme shows there is scope for savings in the education department, they are by no means the worst offenders when it comes to waste. We identified £59 million that could be saved by the Department for Environment, Food and Rural Affairs on office space alone compared to just £2 million at Mr Gove’s department. The initiative shown by the Department for Education is commendable but it will only deliver a very small percentage of the potential savings. Taxpayers deserve value for money from all departments and it’s about time Mr Gove’s colleagues followed his lead.
A government-backed mortgage scheme NewBuy is being rolled out throughout the country with a number of local authorities eagerly signing up – the video clip above is a report on ITV Central News focusing on the situation in Nottinghamshire. The scheme involves first-time buyers only paying a deposit of as little as 5% whilst taxpayers effectively underwrite the rest of the amount required to secure a mortgage, supposedly using the property as security.
There are many reasons why this scheme does not add up. Firstly, it is aimed at first-time buyers who cannot afford the deposits of 20% and 25% typically required by high street banks. The private sector is not willing to lend to those without substantial deposits as the default rate with these high-risk borrowers is greater. So why should the taxpayer be expected to pick up the tab when problems with default inevitably arise? Low-deposit loans to high-risk groups that were backed by government schemes exacerbated the US sub-prime mortgage crisis less than five years ago, so it’s unsettling that politicians here seem so eager to make the same mistakes again.
Having the mortgaged property as security does not ensure taxpayers’ money is safe. It assumes that house prices are rising and will continue to rise – a trend that has not been seen outside of London for many years now – and only a few days ago did Halifax report that house prices had fallen 0.7% last month. The problem of negative equity, where the debt owed is greater than the value of the property, is a serious one that councils should not so easily dismiss.
The impact on the housing market as a whole is also worrying. A scheme such as this distorts the housing market, artificially increasing house prices. Where prices should reflect the ability to pay (demand) and the supply of houses, it will now reflect ability to pay and a taxpayer subsidy (demand) and the supply of houses. This may make it easier for a small number of first-time buyers on the scheme, but the vast majority of buyers would face artificially higher house prices. As a result, just as many, if not more, problems are created with the housing market.
Councils, too, are not banks. They should be providing value-for-money services such as emptying our bins regularly and ensuring our streets are well lit, not gambling with taxpayers’ money like a casino bank.
If councils want to solve the housing crisis, they should be looking to ease planning regulations to make it easier for more houses to be built, helping increase the supply of desperately-needed homes. Meanwhile, the Government should focus on why people are struggling to save for deposits in the first place: the high cost of living, excessive taxes and stamp duty have all made it harder for people to save up for their first home. If councils and the Government moved to lift such burdens, the housing market could be more responsive to changes in supply and demand, which would benefit all buyers, not just the small numbers who join the scheme.
At a time when councils need to tighten their belts, putting money into a risky scheme that will distort the housing market further whilst ignoring the root causes of the problem is something our politicians must avoid.
Earlier this week I spoke at a PoliticsHome event at Liberal Democrat Party Conference sponsored by the Association of Train Operating Companies, Railways: Public Service or Private Profit. I made the case that taxpayers who mostly drive to work shouldn’t be asked to pick up the bill for more railway subsidies, but we needed a much more efficient rail network so that doesn’t mean higher prices for commuters already paying a fortune for their tickets.
My contribution was based on an article which I wrote for a Network Rail publication earlier in the year. It was interesting that Transport Minister Norman Baker made a similar case that the more efficient management of rail infrastructure was the key to more affordable train tickets. Research as part of the 2011 McNulty Review found that introducing separately owned regional infrastructure managers, for example, could improve efficiency and save billions. You can read my article here.
The huge fare increases coming in at the moment are a disaster for thousands of people who need to get to work, or who want to work but can only find a job a train journey from their homes. That doesn’t mean we should accept calls to hammer motorists yet again. But it does mean that there is an urgent need to improve the efficiency of our relatively expensive rail network.
There is a real danger that civil service numbers could creep up again following initial cut backs if departments fail to “fundamentally redesign” their working practices, the Public Accounts Committee has warned. The commons’ spending watchdog has published a report based on findings from the Cabinet Office, the Department for Work and Pensions and the head of the Home Civil Service.
According to the report, the civil service reduced in size by around 35,000 in 2011 of which nearly 18,000 were through early departures. The report showed that much of the “low hanging fruit” has now been picked through voluntary ‘early departures’ with figures showing this should reap savings of around £400 million per year in around 15 months’ time. But the report warned that the savings achieved could be undone by having to rehire staff further down the line.
With fundamental changes to the way departments are run and, the scope for further savings is significant. But as we revealed earlier this month some departments are bucking the trend and are actually hiring more staff. So while the Ministry of Defence has successfully slimmed down its back office staff by 5 per cent, the Department for Energy and Climate Change increased their overall headcount by 4 per cent from December 2011 to March 2012.
It’s important that some departments’ good work is not undone by a small minority of irresponsible ones. There is a real risk that when restrictions on recruitment are lifted that more departments will start to reverse some of their good work. But the reality is that the challenge has only just begun. If the government wants to achieve lasting savings in Whitehall’s budgets then it must ensure that the current programme is managed carefully and that measures are in place to ensure all changes are sustainable and guarantee permanent savings for taxpayers.
The Public Accounts Committee announced that government departments could cut the cost of running buildings by a whopping £800 million. Margaret Hodge MP, who chairs the committee, said that such savings could be made if departments were incentivised to ‘work together’ by the Cabinet Office’s Government Property Unit.
The committee recommended that local and central government co-operate to maximise savings by sharing office space and selling or letting unused buildings. This has the potential for huge savings to the £1.8 billion annual cost of running central government buildings. The Cabinet Office responded with a statement saying that it would consider the Public Accounts Committee’s conclusions ‘carefully’, but insisted that costs had already been cut by £200 million in 2011-12. It also highlighted its revenue of £640 million in the last two years from selling government properties and its pilot projects with councils in Bristol and Preston which aim to let empty office space to small businesses and free schools.
This is clearly very good news during a time when local and national government need to reduce spending. But as the PAC report shows, there is still huge scope to make savings. The Cabinet Office should act on the findings of the report and work towards getting better value for taxpayers’ money. Government departments co-operating in key areas will help to deliver more effective and efficient public services, rather than bureaucratic Whitehall empires run by power-hungry mandarins.
The report we released on Tuesday on councillors’ allowances showed the massive differences in allowances paid to local councillors across the country. For local authorities that carry out the same functions and have the same powers, there is a stark difference in the levels of remuneration that councillors receive. In Scotland, it is notable that councillors’ allowances are amongst the highest in the UK with each councillor receiving at least £16,000 a year for performing their duties, excluding expenses and other perks.
Unlike English councils, councillors in Scotland receive a basic annual salary of £16,234 – a figure set nationally by the Local Governance (Scotland) Act 2004 (Remuneration) Regulations 2007 after recommendation by the Scottish Local Authorities Remuneration Committee.
Scottish councils perform the same functions as an English Unitary Authority, a Metropolitan District Council or a London Borough and yet, councillors north of the border receive considerably more from the taxpayer to carry out their duties.
The level of councillor allowance is the same for every Scottish Council but do councillors in Glasgow City Council have the same demands on their time as those in the Orkney Islands?
The Scottish Government should review this anomaly and consider allowing councillors to set their own level of allowances, rather than dictating to them how much they should receive. Only then will councillors be accountable for how much they take from taxpayers each year.
A committee of MPs have today called for more people to be prosecuted for smuggling alcohol by HM Revenue & Customs (HMRC). The Public Accounts Committee cited the paucity of successful prosecutions in the four years to 2009-10 as evidence of HMRC’s failure to adequately grasp the problem. Our Tax Gap report shows that during this period, £4.5 billion’s worth of tax revenues has been lost to the illicit trade in beer and spirits, whilst HMRC is less sure as to how much is lost on wine. According to their latest figures, illicit trade accounts for 11 per cent of the Spirits market and 14 per cent of the beer market.
Obviously, those who break the law should be prosecuted, but the booming illicit trade has its roots in punitively high alcohol duty. Despite claims that price increases benefit public health, there is a body of evidence that shows no link between higher prices and overall consumption. Constant increases in alcohol duty are simply another way for governments to milk ever more money from the taxpayer.
Furthermore, escalating taxes have fuelled the trade in counterfeit alcohol – seizures of fake hooch have increased fivefold in the last two years as criminals capitalise on increasing demand for more affordable alcohol.
The illegal trade of excessively taxed goods such as alcohol, tobacco and diesel cost the treasury £28.5 billion between 2005-06 and 2009-10 – more than enough to fund a 1p reduction in the basic rate of income tax. The criminal trade in these goods will continue to flourish in the absence of sensible and restrained tax and regulatory policies.