It was revealed earlier this week on BBC Radio Leeds that Yorkshire councils will be dipping into various budgets to pay for the ‘Grand Depart’ of the Tour de France next year. The famous cycle race starts in Leeds next year on 5 July. Wakefield Council plans to spend £100,000 from its public health budget even though none of the race will take place in Wakefield. Kirklees Council is taking £672,000 from its jobs & growth fund, Bradford is dipping into its reserves to the tune of £731,000, and Leeds Council is taking £360,000 from its capital programmes. A total of around £6 million will be taken from various budgets by councils in West Yorkshire, and all of this money is on top the cash already spent to win the right to start the race in Yorkshire.
Councils will argue that the ‘Grand Depart’ will be a money spinner for Yorkshire and will showcase the county to the world. I don’t disagree with that assessment, however at a time when councils are reducing spending, why don’t they think of alternatives to constantly dipping into taxpayers’ money? How is taking £672,000 from the jobs & growth fund in Kirklees going to help jobs & growth there? This is what the leader of Kirklees Council, Mehboob Khan, had to say:
The return on our investment through the spending of the visitors expected in the region will be many times what we are paying. It is the biggest sporting event in the world and one billion TV viewers will see the Tour in Kirklees, in addition to all those who come here.
This still doesn’t explain how hundreds or thousands of new jobs are going to be created. I watch some of the stages of the Tour de France on television. To be honest, I couldn’t tell you where most of the stages take place. The cyclists race by at such a speed, you don’t have time to appreciate the surroundings. I can’t imagine many people around the world watching the race immediately thinking of taking a holiday in Huddersfield.
When asked what Bradford Council was getting for its £731,000, city councillor, Andrew Thornton, mentioned some of the money would be spent getting the roads up to standard, something the council should be doing anyway. (A recording of his interview and my response is at the bottom of this post)
The main benefit to those parts of Yorkshire staging the event will be cycling enthusiasts wanting to watch the race live. No doubt local hotels will be fully booked at the time, and bars and restaurants will have a roaring trade – at least for a couple of days. Then everything will go back to normal again. Some taxpayers’ money will inevitably be spent, but an additional £6 million out of already stretched council budgets cannot be justified.
Why are councils not thinking about getting commercial sponsorship to mitigate some of the costs? Surely many local, regional and national businesses would like to be associated with the Tour de France and would be willing to put their money where their mouth is? Last year’s Paralympic Games were sponsored by Sainsbury’s. Other cultural events are regularly sponsored by companies in the towns and cities they take place. Why haven’t councils thought of this?
Although it doesn’t make sense to me why the Tour de France is starting somewhere other than France, I am not a killjoy. All I ask is for councils to think of alternatives before collectively committing around £6 million of taxpayers’ money, taken from budgets it was not intended for.
Dominique Lazanksi wrote last week about the disastrous project, ‘South Yorkshire Digital Region’. Thankfully the Government has decided to pull the plug so as not to expose taxpayers to even more losses, but what has happened to those people who were responsible for making the decisions?
In the Yorkshire Post last Saturday, some of those questions were answered. Jim Farmery was Head of Innovation at Yorkshire Forward, the now defunct Regional Development Agency (RDA). In 2009, Mr Farmery said: “I don’t have any sleepless nights over the business plan. I think if you ask people on the street if they could get five times the broadband speed, would they pay an extra £10 or £20 a month, most will say yes.” Clearly Mr Farmery didn’t go out on the streets and ask those questions. When Yorkshire Forward was wound up, he received a £70,000 pay-off and he now works as Director of Business Investment for Creative England.
David Holt was Digital Region’s first chief executive, paid around £100,000 a year. When the project was launched in April 2010 he promised a “very exciting few months”. Just a few weeks later, when the scheme was unravelling, he left his post. He know runs his own management consultancy business, ‘Improved Potential Limited’. On his LinkedIn profile he describes himself as a “proven business leader” who can “deliver high-performance results”. He also says he considers himself as “versatile, and capable of rapidly adapting to different business environments and situations to deliver results.”
The person not mentioned in the Yorkshire Post report was Tom Riordan. He was Chief Executive of Yorkshire Forward from 2006 – 2010, and had been with the RDA since its inception. Since 2010, he has been Chief Executive of Leeds City Council. As the man in charge of Yorkshire Forward at the time, and ultimately accountable for £40 million of taxpayers’ money being pumped into the scheme, why wasn’t he asking more probing questions?
Not that council chief executives were asking probing questions either. The Yorkshire Post describes Phil Coppard, the former Chief Executive of Barnsley Council, as evangelical about the scheme’s transformational impact. In July 2009 he said: “If anyone doubts the value of Regional Development Agencies… then let them look no further for evidence to the contrary than Digital Region.” He can hardly be described as a prophet! Neither can former Chancellor, Alistair Darling, who said the scheme would “stimulate economic activity” in South Yorkshire.
We are constantly told that we need to pay high salaries to these people because they are the best, and we need to retain their services to prevent them from moving to the private sector. With this disaster on your CV, which private company would want to employ you? Instead, the majority of those people connected with this failure will continue their public sector careers as if nothing happened. They will go on to retire on generous taxpayer-funded pensions whilst taxpayers pay the price in reduced services and higher taxes.
Full-pay suspensions by West Yorkshire police have cost taxpayers more than half a million pounds over the last three years, bringing the total paid to suspended workers by police forces, health trusts and councils in Yorkshire to more than £8 million. The £513,114.58 was paid out to 28 officers and staff by West Yorkshire police since 2010, with one community support officer (PCSO) receiving over £65,000.
Some suspended workers received up to £100,000 each, while investigations carried on for as long as three years.
Chair of West Yorkshire Police Federation Jon Christopher described the payments as “an awful lot of money, especially in the present climate – but in any climate really… We find cases take an inordinate amount of time when really they should be moved on quicker so officers can return to work and be part of West Yorkshire Police again to do their job and help their community.”
The allegations of misconduct include sexual assault, maltreatment of patients and substance abuse.
A spokesman said: “[The] decision isn’t taken lightly, as people can only be suspended on full pay… We understand the concerns about public money, but people must be confident that we will always make the right decision, in the public interest.”
West Yorkshire Police will not disclose the reasons for suspensions or the dates over which they took place, nor the outcomes of any disciplinary proceedings.
We looked at full-pay suspensions for councils in the West Midlands and found similarly expensive problems there. Issues should of course be properly investigated but it’s unfair to taxpayers to leave staff lingering on full pay. Indeed, it’s also unfair to the staff themselves.
Many employees in the public and private sectors have seen their pay cut or frozen to protect their job. Not so for the top brass at Network Rail: three of the five executive directors at the taxpayer funded monopoly are set to receive £300,000 each next year just to stay in theirs. Despite Network Rail’s past performance Patrick Butcher, Robin Gisby and Simon Kirby will split £900,000 of taxpayers’ money between themselves in a ‘golden handcuff’ scheme – presumably designed as an incentive to stop them jumping ship to, er, any of the other state-run monopoly rail networks in this country.
These retention payments are, of course, in addition to other perks. All five executive directors receive six-figure salaries ranging from £350,000 to £580,000; annual performance bonuses of up to 60 per cent of salary; long-term incentive packages worth 100 per cent of salary (due to be paid out in 2015); plus an assortment of other benefits (including generous pensions) that cost the taxpayer over £1 million every year. Nice work if you can get it.
A Network Rail spokesman attempted to justify the payments by arguing that “our best talent was in real danger of being poached by big international firms,” describing Butcher, Gisby and Kirby as “key… to [seeing] through the delivery of our plans.”
But Maria Eagle, the Shadow Secretary of State for Transport, said it best:
”Senior managers should not demand additional retention payments simply to stay in jobs for which they are already well remunerated.”
This is particularly true when the taxpayer-funded organisation missed performance targets last year.
Despite being scrapped in 2010, the FiReControl project to establish nine regional fire control centres continues to be a millstone around taxpayers’ necks. The Public Accounts Committee report released yesterday highlights that FiReControl has wasted at least £482 million of taxpayers’ money and still racked by problems. Margaret Hodge MP, the committee’s chair, has described it as “one of the worst cases of project failure we have seen.”
The Chair of the Public Accounts Committee made clear in the report that the “DCLG (Department for Communities and Local Government) still hasn’t decided what it is going to do with many of the specially designed, high-specification facilities and builds” and that “four out of the nine regional control centres are still empty and look likely to remain so.”
Rushed, not wanted by the fire and rescue services from the start, littered with badly negotiated contracts and rents way over the market rate – FiReControl is the leading example of civil servant and ministerial bungling.
In an attempt to resolve this continuing problem, DCLG has decided to spend another £82 million to change the project into 22 separate, locally-lead projects.
But unfortunately, this looks set to create another set of problems with the project. Ms Hodge warned that “relying on multiple local projects risks value for money.” Echoing the project’s past issues, she states that the committee is “not confident that local teams have the right IT and procurement skills to get good deals from suppliers and to monitor contracts effectively.”
The report points out that even now this new approach is behind schedule, with two local projects delayed by 12 months and seven also running late. The committee has also stated it is sceptical that project savings and benefits will be achieved.
This increased spending, in addition to the £482 million at least already wasted, brings the total cost of FiReControl project since it began in 2004 to at least £564 million. Yet with no end in sight, taxpayers continue to fund this project nine years after it started and three years after it was supposedly scrapped.
Lurene Joseph is the chief executive of Leeds and Partners, a Leeds City Council funded investment initiative. Despite the Council having to reduce its expenditure by ten of millions of pounds, Ms Joseph still manages to enjoy £285 taxi journeys and overseas trips with stays in five-star hotels, letting struggling taxpayers pick up the bill.
In September and October last year, Ms Joseph and one other official managed to rack up a charge of more than £8,000 on a nine-night trip, which included a three-day conference in Boston. The accommodation costs were £6,203 alone. Leeds and Partners claim that the remaining six days abroad were spent on investor meetings. Ms Joseph also spent over £400 on taxi journeys on the days before and after her holiday, with a single journey from Leeds to her home in Buckinghamshire costing a staggering £285.
This is not an isolated incident: two further Boston trips took place in February and April this year, with two delegates spending £5,000 on the first and four spending £11,500 on the second. Leeds and Partners also spent over £12,000 sending nine delegates, including Ms Joseph, to a four-day commercial property conference on the French Riviera. Ms Joseph declined, however, to stay in the cheaper accommodation afforded to other delegates – including the chief executive of Leeds City Council Tom Riordan – preferring a five-star Cannes hotel.
You would think Leeds City Council would be mounting an investigation into this egregious spending. Not a bit of it. Instead, in a statement to theYorkshire Post, the council said it ‘does not question the rationale for individual financial transactions as highlighted by the Yorkshire Post but we are confident that the board and executive of Leeds and Partners are committed to demonstrating financial probity and delivering value for money.’ If the council does not question the spending of Leeds and Partners, how can it ensure our money is being spent wisely?
The Council also states that Leeds and Partners is not required to show a breakdown of expenses, being a private company with ownership shared between the Council and Leeds Chamber of Commerce – despite the organisation receiving £2 million of taxpayers’ money every year.
Ms Joseph herself receives a salary of £160,000 and is entitled to a seven per cent performance-related bonus, whilst managing a staff of around 25. Compare this to the £176,000 earned by council chief executive Mr Riordan, with responsibility for a staff of around 15,000. Both the council and Leeds and Partners have refused to comment on any specific spending, or release details of all expenses claimed by Ms Joseph.
This worrying habit of hiding excessive spending behind ‘private’ firms and arm’s length management organisations (ALMOs) is, unfortunately, not exactly new to Leeds. If this is their idea of fiscal transparency, the council still has a long way to go.
The Independent Parliamentary Standards Authority (IPSA) – the body charged with administering expenses for MPs and their staff – has surpassed itself in what appears to be an effort to lose any remaining shreds of credibility.
It emerged over the weekend that IPSA’s board came up with its proposals to hike MPs’ pay while luxuriating on a two-day “away day” at a plush Surrey hotel boasting “sumptuous surroundings”, an “exquisite restaurant” and an 18-hole championship level golf course.
In its 2011/12 Annual Report, IPSA stated that one of its key aims going forward was to “bring down our operational costs… without compromising public trust”.
While we are yet to discover exactly how much IPSA has billed taxpayers for the caper, there is no question that they have compromised public trust with this unnecessary and wasteful expedition.
What possible justification could this unaccountable quango have for holding its deliberations at the Selsdon Park Hotel? A spokesman for IPSA told the Sunday Telegraph was that it was “important for the board to meet off-site to consider these proposals.”
WHY?? What’s wrong with meeting in IPSA’s offices in Westminster?
The IPSA spokesman even deigned to suggest that Selsdon Park was offering best value for money because they had explored more expensive options.
IPSA has come in for criticism before over its running costs, which have led me to accuse it of being a “bureaucratic monster of a quango”.
But the decision to head to a luxury hotel to discuss MPs’ pay means that the body has now lost any sense of moral authority to safeguard taxpayers’ money.
After the Olympic security debacle the security firm G4S, along with others, has further failed taxpayers by charging for criminal monitoring services they were not actively providing. G4S and Serco were given contracts in 2005 to electronically tag and monitor criminals. To date the Government has paid £700 million to firms for these contracts.
However Justice Secretary Chris Grayling has revealed up to £50 million of this amount may have been charged illegitimately for criminals who were either back in prison, had had their tags removed, had left the country and in some cases were actually dead. There are also cases of taxpayers picking up the bill for individuals who were returned to court yet had never been tagged in the first place.
Mr Grayling said the firms had been charging for keeping watch on prisoners released into the community when they “were not in fact providing electronic monitoring”. This is not only a scandalous waste of taxpayers’ money; it also raises questions of whether criminals who should have been under supervision were allowed to wander unchecked. In some instances, charging continued for a period of many months and indeed years after active monitoring had ceased.
This is unacceptable and the Government must take all necessary steps to secure not only a refund for the taxpayer but also a proper account of what has happened so that further action can be taken. While Serco have agreed to a forensic audit, G4S has not, leading to the Justice Secretary calling on the Serious Fraud Office to investigate the firm. It’s vital that the full details in this debacle come to light. It’s not good enough for G4S just to pay back the wrongful charges and pretend that everything else can continue as normal. Were you to find out a mechanic had not only overcharged you but had not even undertaken any work on your car, it’s not likely you would say, “It’s OK, just pay me back for what you didn’t do”.
When a private firm fails to deliver on a public sector contract there must be consequences for that and these should be more than not being paid for work not done. They must be accountable for their mistakes and financial punishments must be in place to ensure taxpayers and service users are protected. A private contractor’s record of delivery must also be considered when bidding for future public contracts. We also need greater competition and transparency in bidding for these contacts if taxpayers are to gain an advantage from contracting out some services.
A new report from the National Audit Office shows that the NHS has spent an eye-watering £435 million in redundancy payments as a result of the Health and Social Care Act which came into force April of this year. As part of the new reforms, 10,000 full-time employees have left their jobs at an average cost of over £43,000 each.
Hundreds of those workers whose positions were made redundant received severance packages of over £200,000, with one high-ranking manager receiving a package of nearly £580,000.
However, more than one in five of those that have been laid off walked back in to new positions within the NHS – some after a mere four weeks – meaning some could walk through a lucrative revolving door.
Our Bumper Book of Government Waste uncovered similar cases. For example, Newcastle Council spent £1.1 million on making 55 members of staff redundant, only to subsequently rehire them. This happened in Stoke-on-Trent Council as well, with £330,000 being spent on severance packages, with these same employees once again being rehired. We also showed this to be the case at the regulator Ofcom.
The NHS budget has been protected, but it’s clear that there are plenty of savings to be made. And it’s not restricted to huge payouts.
For example, our Bumper Book highlighted an annual £666 million bill spent on locum doctors due to increased regulations on doctors’ weekly work hours and centralised pay bargaining. As locum doctors are more expensive and more difficult to schedule, reforming the system to minimise their use would certainly be helpful in the fight to reduce waste.
Other huge waste items include £1.2 billion lost as a result of NHS clinical negligence, £972 million in excess staff sickness days and £150 million in unused prescriptions. More must be done to cut out this waste and focus resources on patient care.
The NAO report has highlighted an expensive revolving door culture within the NHS but it’s just one area in which the organisation wastes taxpayers’ cash.
Calls for a rise in the maximum parking fine have been supported by the British Parking Association (BPA), which draws much of its funding from local authorities.
The BPA is a membership based industry body whose aims include lobbying government on parking policy. In response to a proposal to raise parking fines beyond the current maximum of £70, the BPA was reported in The Daily Telegraph saying:
Parking fines should be increased and free parking cut back. It has suggested that parking charges should be increased every four years.
A number of local councils pay a fee for the privilege of membership – up to £1,640 per year which is more than a familiy’s Council Tax bill in most areas of the country. This funding system means that Council Tax payers are indirectly funding a body which is lobbying to make their parking more difficult, more expensive, and would increase council revenue.
This is yet another example of branches of government lobbying one another with taxpayers’ money, a practice which is shockingly common, and one that is not in the interests of taxpayers and local businesses who are picking up the bill.
The failed Sheffield City Airport is to be redeveloped with a £1.8 million taxpayer-funded loan. This comes despite current owners having being allowed to purchase the £18 million site for £1. The airport was opened in 1997 but did not attract anywhere near the expected passenger numbers – just 13,000 customers in 2002, the year in which scheduled flights ceased.
Executives branded the project as the ‘London City Airport of South Yorkshire’, with short haul customers who were said to be desperate for an airport serving Sheffield’s business sector. This convinced the Government to spend £18 million of taxpayers’ money on the project. However in the post 9/11 aviation market, the airport was bypassed by the new low cost carriers due to a short runway. BA’s smaller craft, for which Sheffield’s runway had been designed, were slowly being cut back to make savings in a troubled market.
Passenger numbers dwindled and revenues plummeted. The operating company, Peel Holdings, lost £1 million in 2001 alone. This lack of financial viability led to, as agreed in the operating contract, Peel being allowed to purchase the land for £1 in 2002.
Since April 2008, when its Civil Aviation Authority license was withdrawn and it was officially closed, there have been attempts to salvage parts of the mess by office conversions. However, as neither central government and Sheffield City Council no longer own the land, none of these new developments will reimburse taxpayers for the £18 million loss. Furthermore, proposals to tear up the runway and build a business park are due to receive a further £1.8 million out of taxpayers’ pockets.
Yesterday, the National Audit Office (NAO) released a fiercely critical report on the levels of severance pay at the BBC. It found that the corporation had given licence fee payers poor value for money with the £25 million it dished out in payoffs to 150 senior members of staff.
BBC severance payments hit the headlines last year when Director General George Entwistle was handed a £475,000 golden goodbye despite being shown the door after just two months in the job. The BBC then called in the NAO to determine the extent of the problem. The report is damning.
The severance payments for senior managers averaged an eye-watering £164,200 in the three years to December 2012. In a quarter of the cases the NAO looked at, senior managers were handed bigger payoffs than their contracts entitled them to, costing license fee payers at least £1 million.
Some of the more bizarre deals, include a commitment to buy £60,000 worth of consulting services for one former employee and £49,000 of IT equipment to “improve the individuals skills and career prospects” for another.
In one case, the BBC sought a quick exit for an employee “because the individual’s relationship with a key BBC client had broken down”. In this case the employee was not owed redundancy having only been at the BBC for 7 months, yet was handed a payoff of £95,000 – six months’ salary. Throughout this period the BBC continued to pay his car allowance, private healthcare and contribute to his pension.
Huge payoffs are not confined to the BBC, of course. Just last month we saw that NHS Trusts ran up a £2 million bill on gagging orders. Councils also hand out massive amounts of taxpayers’ money to departing senior staff. These payouts are unacceptable and should not be written into contracts in the first place.