The new Government have started to take the first steps towards an honest assessment of the costs facing taxpayers over the next few years.
For far too long, the official figures on the national debt, the forecasts for tax revenues, and the true liabilities faced have been fiddled to make things look better than they really are. The British Government is not as bad as Greece in its deceit, but it is certainly committing much the same sins.
Moves, we are told, are now afoot to set the right with better forecasting, independent assessments and – crucially – on-balance-sheet publication of things like PFI and public sector pension liabilities.
Councils must do the same.
Fortunately, by law each council must assess its own pension liabilities, but many of them show a disturbing tendency to openly disregard them once they have been calculated. The blasé dismissal of any expression of concern when the TPA or others raise the issue is worryingly reminiscent of the attitude of the banks in the run-up to the financial crisis – a “Mañana, Mañana” shrug of the shoulders.
But at least they actually calculate the amount they will have to shell out for pensions. When it comes to the liabilities buried away in staff contracts, no-one knows what nasties are lurking hidden away.
Management contracts in particular are peppered with a wide and potentially extortionate range of possible bills for taxpayers to pick up. Take, for example, the recent case of Adam Wilkinson. Mr Wilkinson worked for 12 months as Director of Development and Regeneration at Kent County Council. He was commuting a long way and found the distance too disruptive to family life, so he decided to quit. There’s nothing unusual or wrong in that – plenty of people in the private sector have had a similar experience and come to the same conclusion. Where his experience differs from the norm is that his contract with the council resulted in him pocketing a staggering £365,000 as a result of his decision to quit.
Nor is Mr Wilkinson’s experience particularly unusual in the public sector. In recent years a growing
stream of these stories have emerged, while many council still fight hard to keep details of the payoffs given out secret even from Freedom of Information requests. If one officer can cost a council £365,000 in a year, then the potential liabilities posed by their contracts as a group is surely vast.
This issue is even more pertinent following the disgraceful victory handed by the Court of Appeal to Rose Gibb last week. When she was forced to leave her job as Chief Executive of the Maidstone and Tunbridge Wells NHS Trust after a C. Difficile outbreak claimed the lives of 90 patients, the then Health Secretary Alan Johnson took the decision to withhold her severance pay.
On appeal, and after a legal battle which it is estimated has cost taxpayers up to £1 million, she has now been awarded £190,000, setting a disturbing precedent that will make it more difficult and more expensive to get rid of managers even when the organisations they are responsible for running have failed catastrophically.
These cases illustrate that the liabilities stored up in the contracts of public sector managers are not just hypothetical, they can swiftly become very real indeed. Just as the Coalition Government have chosen to publish all senior local government salaries, so they must publish the contracts awarded to staff. Only
then will we know the true costs that councils may have committed taxpayers to.