Harry Fone is the Grassroots Campaign Manager for the TaxPayers’ Alliance.
The TaxPayers’ Alliance is well-known for scrutinising the pay of council bosses but our latest research has focused attention on allowances for elected representatives. In 2018-19 alone, the cost of councillors was at least £255 million. As witnessed across numerous local authorities, members vote through an increase in their allowances whilst often claiming they don’t have enough money for statutory services.
There was little surprise when an opposition councillor at West Sussex County Council (WSCC) met with fierce resistance after suggesting that cabinet members have their special responsibility allowances (SRAs) cut by 25 per cent. SRAs are typically paid to chairs of committees, cabinet members, and opposition leaders in addition to a basic allowance.
At the heart of the dispute were plans to cut the SRAs of the opposition leaders whilst cabinet members and committee chairs saw no decrease. It’s always welcome when councils make savings but some will question why the cuts fell almost solely on the opposition.
This spurred one opposition leader to propose an amendment calling for a cut in all SRAs. Even if this was an act of retribution, savings of around £90,000 a year would no doubt be well received by ratepayers. Councillors should be compensated for their efforts but the role should not be treated as a full-time job with a decent salary. Civic duty should be put above all else.
Given WSCC’s recent poor performance – notably “systemic and prolonged” failures in children’s services and the £265,000 golden goodbye to controversial former chief executive Nathan Elvery – you would think councillors would want to do everything possible to make amends with constituents.
Across the border in East Sussex, Brighton and Hove City Council is forecasting a budget shortfall of around £15 million next year. With residents facing a rate rise of five per cent, it has to be asked if better decision-making might have mitigated such a large increase.
The ongoing saga that is the i360 observation tower is failing to deliver on its promises. Funded by £36.2 million of council loans (via the Public Works Loan Board) to a private management company, the 530 feet “doughnut on a stick” has never really got off the ground. Even before the pandemic, it was plagued with low passenger numbers and frequent breakdowns.
Adding insult to injury, loan repayments have regularly been deferred due to financial difficulties. To date, only £5.9 million has been repaid, with £33 million now outstanding.
One of the key players behind the project, former leader of Brighton council, Jason Kitcat, claimed back in 2014:
“The project will provide a new source of income to help shore up vital frontline services.”
It seems there’s a long way to go before the council will see the estimated “£1 million a year” profit from its investment.
While residents are still shouldering the burden of this white elephant, Kitcat, a self-described “recovering politician” has fared rather better financially. After being asked to stand down as council leader by his own party, he became the Executive Director of Corporate Development at Essex County Council. A role that remunerated him to the tune of £190,000 in 2018-19 and gifted him a payout of nearly £164,000 when he left shortly after.
Let’s hope for a change in the i360’s fortunes so that local ratepayers see a ‘recovery’ in the council’s balance sheet.
Following a recent government review, fears are mounting that Nottingham City Council (NCC) could fall foul of bankruptcy. As residents of Croydon and Northamptonshire know all too well, a Section 114 notice is far from desirable.
The similarities between Croydon and Nottingham are disconcerting. Both authorities engaged in ambitious commercial investments with well paid council employees lacking the necessary financial expertise, as borrowing exceeded £1 billion – Nottingham has the third highest debt to net budget of all the core cities.
Over recent years, NCC has seen its reserves dwindle mostly due to the collapse of its ill-judged energy company. Formed in 2015, Robin Hood Energy (RHE) tried and failed to compete in the highly competitive and regulated energy sector. Financed with £43 million of public money, RHE failed to make a profit in every single year of operation. Total losses are estimated at £38 million.
The government’s report is particularly scathing of RHE’s directors who are described as “unable to critically appraise the trading position and a forecast profit [£202,000] outturned as a significant loss [£1.6 million]”. Another damning report by auditors Grant Thornton went further saying there was “institutional blindness within the Council.”
Despite warnings from NCC’s Section 151 officer about RHE’s worsening finances, the authority failed to take action. The report doesn’t specifically blame then chief executive, Ian Curryer, for failing to act but does state, “The Council does not appear to have a mechanism for setting targets and goals for its Chief Executive and holding the postholder to account for it.” Local residents may be irked to learn that between 2012 and 2020 Mr Curryer received total taxpayer-funded remuneration of over £1.3 million.
As Robert Jenrick, the Local Government Secretary, put it:
“Taxpayers and residents have been let down by years of disgraceful mismanagement and inept ventures”.
A series of recommendations have been put in place to turn the ship around but councils all across the country must learn from Nottingham’s mistakes.