Apr 2011 14

New TPA Research: Council Mileage Spending18

Council staff claim £427 million for mileage

As councils complain that they are cash-strapped, the TaxPayers’ Alliance has discovered that £427 million was paid out in mileage allowances in 2009-10. Many of those councils paid up to 65p a mile to staff using their cars.

Click here to read the full report

Of course most drivers can claim a tax free allowance from their employers if they use their car for work, but many council employees are receiving well in excess of the HMRC approved rate. In the latest Budget this rate was raised from 40p per mile to 45p per mile (with effect from 6 April).

Motorists are one of the most overtaxed groups in the UK and with eye-wateringly high fuel bills many taxpayers will be angry that they are subsidising council staff to claim 25p a mile more than most ordinary private sector workers get.

Click here to read the full report

The key findings of this report are:

  • £427 million was paid out in mileage allowances in 2009-10 by councils to staff, compared to £402 million in 2008-09
  • Lancashire paid out the most in mileage allowance payments in 2009-10 – a total of nearly £8.8 million
  • 80 per cent of councils paid above the HMRC approved rate of 40p per mile. The average council rate was 56.45p per mile in 2010-11. Only 80 councils paid the HMRC rate of 40p in 2010-11
  • In 2010-11 a driver claiming for 250 miles at the average council rate would be £41.13 better off than someone paid the HMRC rate
  • For 500 miles, a driver paid the average council rate would be £82.26 better off
  • For 1,000 miles, a driver paid the average council rate would be £164.52 better off

Click here to read the full report

Matthew Sinclair, Director of the Taxpayers’ Alliance, said:

“It is shocking that the same councils that are pleading poverty are paying well above the recommended mileage rate. This extra cost on all those journeys makes up a large part of the half a billion pound bill for taxpayers. Ordinary motorists who are feeling the pinch will be shocked that council staff are getting such a generous deal for their mileage claims, it simply isn’t fair. Some authorities have shown that it is possible to save millions by cutting back to the rate recommended by the taxman. This is a quick and painless saving that won’t affect council services and will ease the burden on households, who’ve seen Council Tax double in the last decade.”

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  • Turnedoutniceagaineh

    Hi

    Why dont you just shut up on this one and get your facts right and present a more balanced arguement.

    Yes, I get 40p per mile using my own car on local authority child protection business, but it costs 25p+ per mile on fuel alone. The extra pennies go into tyres, servicing , repairs etc. What your cost model doesn’t take into account is the fact that people like me use our cars to save the the taxpayer / authorities additonal millions in bus fares, train fares, private parking costs and lost time in business hours. Given the fact that most authories now at least two peoples jobs due to co-allition cuts, i strongly think you need to re-evaluate your argument.

    By the way – I’m a tax payer too, with a frozen income on less that the national average wage.
    Regards
    Scott

    • AndyN

      25p a mile just on fuel??? What do you drive, a Hummer?

    • http://twitter.com/RedFxTrade Chris

      Anyone that works in the public sector is not a taxpayer, but a tax consumer. Where does the money come from in the public sector. The public sector has none of its own money. It can only expropriate money from the private sector. So when you say you pay tax, you are merely returning the money to its original source.

      • Andy Richards

        Tell this to the private companies who only exist because of the public sector work they do. This is very much the case with the TPA’s big business and academic backers (information about whom no longer seems to feature very prominently in this site, having been replaced with lots of “dedicated volunteers working on a shoestring” guff).

        • http://twitter.com/RedFxTrade Chris

          Its the chicken and the egg question then, only in this case it is clear what comes first. The only reason the public sector can exist is due to the private sector. Yes some private companies have money distributed to them through the public sector, however, there is no net gain to wealth from this, as it is being redistributed from its original source in the private sector.

          • John Smith

            Oh dear… a little confused? “Its the chicken and the egg question then, only in this case it is clear what comes first. ”

            Second part of the sentence contradicts the first. Oooops.

            And in absolute terms, I am not sure that even your assertion that “The only reason the public sector can exist is due to the private sector.” is true. However, abhorrent to some (see, I’m not personalising things!), a country can exist – not necessarily successfully – without a private sector. Is that not what communist countries do in theory and do, not quite so well, in practice.

            Maybe a compromise which accepts a “mixed economy” and system works best.

            In time, you’ll see that the private sector has faults and the public sector has faults. And if you don’t like it, go somewhere its totally private sector. Does that place exist? If Sky was a country, you could believe in better.

          • http://twitter.com/RedFxTrade Chris

            There was no contradiction. The money comes from the private first and foremost every time. Governments do not have any money of their own. The money comes from individuals who start businesses , and then the government taxes those business. The two most prosperous countries in the world are Hong Kong and Singapore, Hong Kong having a 2% income tax. It is no accident that they have the largest private sectors compared to government. About 50% smaller government than the UK.
            You seem to be advocating Communism. Would you choose North Korea over South Korea, 20th century China over Singapore?

          • Blarg1987

            You also forget Hong Kong and other countries where they have lower direct state spending have higher indirect services spending from companies paying for employee housing, education, services and other things which direct taxation over here accounts for, it would be interesting to see once you take thses things into account what percenatage it adds up to and if it is more or less then over here.
            Then to expand on it see what the infastructure and service will be like in say 30 years time if investment is kept as it is / decreased or increased.

          • http://twitter.com/RedFxTrade Chris

            Yes companies from the private sector, who actually generate wealth from demand for whatever products services they produce.

            Whatever way you look at, since 1957, when government was the economy in Hong Kong, and Hong Kong was a shanty town, since they have embraced what approximates to as close to a free market as we have today, wealth has grown exponentially. In the same time that the state grew and grew in the UK, Hong Kong per capita income not only caught up, but has surpassed the UK by a large margin.
            Perhaps there is indirect spending, but that spending comes from companies who produce, whereas in a socialist based state, the money is redistributed.

  • John Smith

    Your report is rubbish! You talk of a government approved 40p/mile. on waht basis is that set at 40p? How long has it been that figure? Does this bear any relation at all to the actual cost to people who have to use their cars for their job? What is the real cost of running a car. The respected motoring organisation, the AA publishes annual figures of the actual cost of motoring, which includes all the costs that contribute to the price per mile. For an average small family car, last year (not counting all the fuel increases we have had in the last months), was approx 53p/mile, based on 10,000 miles pa. So a person who drives 10.000 miles pa for work actually susbidises his/her employer to the tune of £1,300 each and every year. Get your facts right. Do you deal in facts?

    • AndyN

      I’m afraid it’s you who needs a lesson in facts, Mr Smith. The source you cite (The AA) actually gives the combined standing and running costs of a car doing 10,000 miles a year as 43.3p per mile not “approx 53p”. Take a look here:

      http://www.theaa.com/allaboutcars/advice/advice_rcosts_petrol_table.jsp

      The ACTUAL running costs (petrol, tyres etc) amount to only 21.27p a mile – the remainder is made up of items like the car’s depreciation, individual’s cost of capital and their road fund licence. (And presumably you believe that these “standing costs” – those borne by everyone who owns a car – are the taxpayer’s responsibility too?)

      It’s hugely ironic (but not entirely surprising) that you demand that the TPA gets its “facts right” when your own source disproves you, and when in support of your viewpoint, you round up your figures more than 20% in excess of their actual level.

      Still, what’s a piffling 20+ percent over-calculation if the taxpayer is covering it, eh?

      • John Smith

        Sorry Andy, any calculation of vehicle operating costs should take into account all costs – not just the immediate consumables (e.g. petrol).

        For example, by using a car, it depreciates in value. This is calcualted as a per mile cost and should be included. Whyever not – by driving the car on business, it depreciates, and the cost of this depreciation is a real cost that comes from its business use. Similarly, insurance costs and the initial capital outlay.

        The comprehensive running costs in the AA guide, as I have quoted, are correct .

        Are you really suggesting that employees who need to use their cars for work should personally provide and insure the car for this purpose and accept depreciation costs accrued from business mileage? Whatever your own position is on the exploitation of employees, not paying a realistic and fair mileage rate for business use of an employees private vehicle is unacceptable.

        Of course, as a taxpayer, I would agree that paying over the actual costs in the public domain, is also unacceptable. But I would suggest that this is rare compared to underpayment. Business travel should be by public transport where possible, but in a significant number of situations, this is not feasible – nor good value for taxpayers.

      • http://twitter.com/RedFxTrade Chris

        Great reply!

        • John Smith

          …in your opinion.

          Others differ, as is their right.

          Would you agree with that? Or…

  • MandyGreen

    I work for the NHS and we get 14p/mile. Of course I knew that wasn’t enough, but I am shocked that some are getting up to 65p/mile.

  • Cameronsbigsociety

    Yet another shameful manipulation of statistics to represent councils in the worst possible light! The vast majority of council employees do NOT receive enhanced rates. I’ve just been made redundant from a local council and I can tell you that the majority of employees (who use their cars at work – not all do) only get the standard rate. As usual though, the Taxpayers Alliance present the worst possible scenarios as the norm. The kind of journeys undertaken by council employees is probably the least economical i.e. 2/3 miles per journey between clients / offices. Compare that to private companies I know of who charge their clients 40p/mile for journeys of 250+ miles. Not forgetting the risks that council employees take by using their own cars. They regularly have to park their cars in some of the most deprived areas while visiting clients, only to find their vehicles have been vandalised while they’ve been doing their job. Who picks up the bill for such repairs? Certainly not the taxpayer!
    Try some balanced reporting for once!

  • Paul

    Genuine question – what mileage (or equivalent) do TPA staff get?

    Interesting that it shows such a difference in payments between authorities, although even in the NHS with national terms and conditions there can be quite significant differences in practices.

    Not sure the report gives the whole picture – I’ve worked in the NHS in the past (self-employed at the moment) and a fair chunk of my travel was paid at a public transport rate of about 20p / mile. Even driving a small car, it certainly didn’t feel like I was making a profit on mileage – quite apart from frequently having to leave my car places you probably wouldn’t by choice, and thus risk my insurance excess / NCD.

    Have always thought higher payments for bigger cars should be phased out on environmental grounds. There have been quite a few NHS bodies that have forced all regular car users onto lease cars (which has the added advantage that no-one vital is relying on an old banger to get into work urgently).

  • Disgruntled

    Cornwall Council have cut their mileage rates from 40p to 20p after you reach 3000 miles and they have never paid any more than 40p for mileage; so where did these figures come from???
    Another ill informed report based on data that is fabricated – typical high profle headlines for the press no doubt.