Sir Peter Bazalgette, the chair of the Arts Council England, yesterday told a Centre for Policy Studies conference that the Government should continue give taxpayers’ cash to his organisation because the money is necessary to spend on ‘risky’ art projects. In other words, there are projects that profit-seeking companies and arts charities funded by charges and donations would see as a waste of their scarce resources. But this poor value for money isn’t a concern if it’s only taxpayers who will have to pay.
Bazalgette isn’t a poor man. For his chairmanship of the Arts Council, the annual report showed that he received £40,000 in 2012-13. He’s also a non-executive director of ITV plc, for which he received another £35,000 in 2013. As non-executive director of YouGov plc, he received another £32,917 in the year ending 31 July 2013. In addition, he enjoys several other interests and has had a successful career in television, most notably at Endemol, creating Big Brother.
So why does he insist that these projects must be paid for by people who don’t necessarily want to pay for them, most of whom earn much, much less than he does? Shouldn’t they instead be funded by people like him who think they’re a good idea? When people on modest incomes struggle to make ends meet thanks to crushing tax burdens are still having to pay tax and when the Government is running up an enormous deficit, the case for wasting other people’s money on ‘risky’ projects becomes even weaker.
When people want to spend taxpayers’ money, there is an awesome responsibility to ensure that it isn’t wasted. There are good reasons to spend taxpayers’ money on a variety of causes. But something being ‘risky’ isn’t one of them. If people want something ‘risky’ funded, they should offer their own money, not someone else’s.
Thanet District Council in Kent has come under pressure to issue a compulsory purchase order (CPO) for local Manston Airport, which closed on 15th May, with the loss of 144 jobs. This marks a low point in the airport’s recent turbulent history, which had seen it host a James Bond movie and target 6 million passengers a year.
Manston Airport’s closure has proved contentious. A petition launched by Roger Gale MP has already attracted attention, and even Nigel Farage has waded in, describing the closure as “economic vandalism”. This support for the reopening of Manston Airport has culminated in the council’s consideration of a CPO.
That Manston Airport has closed is disappointing, not least for those who worked there. But it isn’t surprising. The airport has seen a series of owners, and none succeeded in making it viable. It is reported that Manston Airport had been losing £10,000 a day before its closure. Thanet taxpayers would therefore face a bill for £3.65 million a year if it were to reopen – and that’s before factoring in its price tag and necessary investment.
It would not be the first public body to purchase an airport with taxpayers’ money. Prestwick and Cardiff airports were bought by the Scottish and Welsh Governments respectively. Both have gone on to eat up millions of pounds. These examples should serve as a warning to Thanet District Council – a local authority not known for its aviation expertise – to focus on essential services.
If that’s not enough, then it should remember its other bad investments. Dreamland, a derelict theme park, was subject to a CPO in 2011. £6.8 million of taxpayers’ money has since been ploughed into the site without generating a single penny in return. The port at Ramsgate, meanwhile, has seen its revenue plummet under council ownership – yet still consumes millions of pounds in investment.
Central Government learnt the hard way in the 1970s that ‘picking winners’ becomes a game of subsidising losers. Thanet District Council, unfortunately, is yet to accept this. Losing Manston Airport would be sad, but throwing millions of pounds of taxpayers’ money at a white elephant would be tragic.
Another day, another example of wasteful spending in the NHS – this time with the NHS England board the guilty party. During the first year of the organisation’s existence, top-level officials managed to run up an expenses bill of almost £200,000 on travel, hotels and restaurants. All of that, of course, is charged to the taxpayer.
The biggest spender is Sir Tim Kelsey, National Director for Patients and Information, who claimed for an £46,000 on top of his £185,000 salary, including almost £7,000 on flying to conferences in the US.
Other members of the executive board were equally busy. Jane.Cummings, Chief Nursing Officer, has total expenses of £27,000, while Bill McCarthy’s £23,000 tab includes £491 for one night in a hotel following a £313 train journey. Together the three make up over a quarter of the total bill with the remaining balance shared between the 12 remaining executive and non-executive directors.
Andy Silvester, our Campaign Manager, gave the following comment:
These NHS expenses will be enough to give taxpayers a heart attack. The public expect their cash to be spent on doctors and nurses, not on train tickets and flights to Los Angeles. At a time when the health service is having to make much-needed savings, hard-pressed taxpayers will be wondering how bosses have managed to run up such a massive bill. We need a war on waste right across the NHS to make sure that the public are getting value for money from their health service.
With the NHS England board making such eyebrow-raising claims, eliminating waste in the rest of the system really doesn’t appear to be a priority.
With the NHS no longer being handed inflation busting budget increases, you might expect a certain amount of belt tightening. Yet the world’s fifth largest employer continues to squander cash with another eye watering pay off for a former Deputy Chief Executive who never actually left.
The scandalous pay off was exposed in the Times as part of a revised list of 36 health chiefs paid a total of £10.2 million when 161 organisations were abolished under last year’s NHS reforms.
Rob Cooper of the Yorkshire and the Humber Strategic Health Authority was given a golden goodbye of £370,000 when the body was abolished. However, by then he had already found a new directorial role in a London NHS trust on another undoubtedly generous pay packet. NHS terms and conditions of service oblige staff to wait just four weeks before taking up new roles in the NHS if they are to be eligible for redundancy payments.
It is also in direct contrast with the words of NHS boss David Nicholson who has pleaded with managers to hold off for at least six months. But it doesn’t look like anyone’s listening. This certainly isn’t the first time such huge payoffs have been made either. Other former Chief Executives have received amounts of £290,000 and £340,000 under similar circumstances.
The list also exposes the underestimation of at least seven payments costing taxpayers a further £1 million.
George Osborne made a mistake in ring-fencing the NHS budget. Now he should heed the advice of the likes of Liam Fox and tear the fence down.
This is not the first time we’ve written about the public sector merry-go-round. It remains in full flow in at central and local government levels and it’s high time politicians declare war on this continual, inexcusable waste of taxpayers’ money.
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.