Town Hall bosses’ spending on credit cards revealed2

The latest in a series of investigations by the Daily Telegraph into public bodies’ use of credit cards exposes the bills run up by local authority chief executives across the UK. Earlier this year we led the campaign to uncover huge amounts being spent by Whitehall civil servants racking up million pound credit card bills, and have exposed similar waste at many of Britain’s biggest quangos.

The findings show that town hall bosses spent £2.6million on luxury perks using corporate credit cards, including concerts, sport events, dining at Michelin-starred restaurants, tailored clothing and fine whiskies. Council chief executives themselves have expenses tens of thousands of pounds, despite many enjoying six-figure salaries, and at a time when councils need to make all of the savings they can.

Some of the biggest expenses claims were from Colin Carmichael, chief executive of Canterbury Council (salary £135,000), who claimed expenses totalling £18,181; Tim Shields, the chief executive of Hackney council (£203,376), claimed £34,186; Andrew Taylor, chief executive of Lincoln City Council (£149,445), claimed £11,403; and John Foster, chief executive of Islington Council (£210,000), claimed £14,815.

Here are just a few of their claims:

•  The chief executive of Hackney council spent £6,000 on flights to the 2008 Beijing Olympics for “training” to which he flew business class.

• Colin Hilton, former chief executive at Liverpool City council, spent £1,152 taking colleagues to a sold out Coldplay concert.

• Andrew Taylor, chief executive of Lincoln City Council charged more than £4,000 to his card for flights to Beijing, Frankfurt and Krakow for his assistant, the mayor and his wife. Other items he charged for included £2.17 mini-bar bill and a cash withdrawal of £362.77 which was classified as “unidentified expenditure” when asked by the Telegraph.

Of course many chief executives use corporate credit cards to expense small work-related items, and this is often the most cost effective means of doing so. But evidence suggests that, in practice, taxpayers are footing the bill for much more.

Some of the other favourite destinations include the luxury Dorchester Hotel in London; the Hotel Gray D’Albion in Cannes; the Hard Day’s Night, a Beatles themed hotel in Liverpool; trips to the world renowned Belfry Golf Course; a five star spa in Cardiff Bay; and Lushy Beg, a private 75-acre island.

Many of the items claimed for have little relevance and questionable benefit to the residents council bosses work for. Council chief executives already receive more than substantial salaries that, if they feel they need to stay in luxury hotels, mean they could easily pay for it themselves. This sentiment was echoed by an unidentified chief executive of a UK local authority who said:

“If I spend any money for work I just get it reimbursed but champagne lunches and first class travel is shocking. Chief executives incur costs in their jobs but we are paid well and you should not exploit that. No-one expects a chief executive to stay in a fleapit, but there is a big difference between the Dorchester and a fleapit.”

Unsurprisingly, the LGA has leapt to councils’ defence. They claim:

“It is part and parcel of the job that they have to travel to meet top people from the public and private sectors, and this can involve stays in hotels and the proportionate use of hospitality.”

But they completely miss the point. No-one is claiming council chief executives won’t incur reasonable expenses while carrying out their day jobs, but it is unacceptable for taxpayers to pick up the bill for visits to the Dorchester and luxury restaurants that many can only dream of. Such a staunch defence of irresponsible spending suggests the LGA doesn’t care about the interests of taxpayers or residents. If councils were transparent, residents could decide whether they agree with this sort of spending. The LGA claim that the spending is “properly audited and transparent”, but if it weren’t for newspapers like the Telegraph and bodies like ourselves, such waste would go unnoticed.

While they are one of the more cost-effective means of paying for items, corporate credit cards are inadequately monitored. Far too many dubious claims slip through the net and must be brought under control. If chief executives had to pay for the items up-front and then wait before being reimbursed, the number of lavish claims would almost certainly fall considerably.

Procurement cards were supposed to improve this more inefficient system of claiming expenses, but our research, along with the Telegraph’s inquiry, shows that this system needs to be tightened up to stop taxpayers picking up the bill for unnecessary luxuries.

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Chris Daniel
Chris is a Policy Analyst at the TaxPayers’ Alliance, focussing on local government spending. His work in this area includes papers on trade union funding and our Town Hall Rich List.
Follow @the_tpa