The Friday joke's on Andrew Travers (and other senior execs at Barnet council)

A great initiative from the trade union Unison today. Their national office is calling on Eric Pickles, Secretary of State for Communities and Local Government, to look into Barnet council's practice of employing consultants in top posts - eg, deputy chief executive Andrew Travers.

(Yes, the second in command at our council has been employed for a long period under an arrangement similar to that which caused so much anger recently when Ed Lester, the chief executive of the Student Loans Company, was in the headlines.)

UNISON CALLS ON ERIC PICKLES TO INVESTIGATE BARNET COUNCIL

UNISON, the UK’s largest union, is calling on the Secretary of State, Eric Pickles, to launch an immediate inquiry into the use of consultants at Barnet Council after public sector tax avoidance hit the headlines in the case of Ed Lester the Head of the Student Loans Company.

The union believes that the proper employment and procurement practices have not been followed exposing the Council to significant reputational and financial risks.

Eric Pickles has already had to step in and reprimand the council, after local residents and Barnet bloggers exposed the METPRO Audit scandal when METPRO a private security firm were awarded a contract at a cost of over a million pounds - without a tendering exercise, written contact or any proper invoicing - to ‘keep an eye’ on local bloggers.

Laura Butterfield, Regional Organiser at UNISON, said:

“We are really concerned that proper procedures have not been followed at Barnet Council. Over the last two years Barnet Council has employed a long list of consultants including the Deputy Chief Executive and Assistant Director of HR. Only an immediate inquiry can clarify the correct processes were followed. Given Danny Alexander’s intervention in the Ed Lester case last week how can we ensure that future cases are avoided unless all public sector employees are employed through the correct processes?"

UNISON’s key concerns

• The Council has failed to comply with its Contract Procurement Regulations (CPR) and Financial Regulations by employing consultants without any procurement/selection process being followed.– which exposes it to significant reputational and financial risks.
• The Council does not have accurate and complete centrally held contracts register and effective monitoring arrangements so are unable to confirm if this is an isolated incident.
• The Council does not have a complete, centrally held register of contractors showing who is employed, on what basis and at what cost.

We recommend that all spend over the stated threshold in the CPR be reviewed and matched to a central contracts register (in development) in a timely basis. This register needs to be drawn up in full and maintained.

Back in February 2011 the local UNISON branch submitted a report to all 63 Barnet Councillors on 10 February where they made the following recommendation:

Recommendation

The Council undertakes as a matter of urgency a review of all payments to staff not employed directly by the Council.

Furthermore we recommend that the Council refer to the HMRC Guidelines in particular the advice to be found here that explains that “It's your responsibility to correctly determine the employment status of your workers - that is, whether they're employed by you or self-employed. This depends on the terms and conditions of your working relationship with each worker.

It's important to get your workers' employment status right because it affects the way tax and National Insurance contributions (NICs) are calculated for them. And it determines whether or not you have to operate PAYE (Pay As You Earn) on their earnings.”

Read full details here.

For comment or more information please contact Laura Butterfield: 07718 520850/l.butterfield@unison.co.uk

1. Student Loans chief 'to pay tax at source'

2. Pickles attacks Barnet Council

Soul Trader; Or: The Perverse Joy of Paying Income Tax

Last night, benefiting from the strike by civil servants in Her Majesty's Revenue and Customs against proposed privatisation, I filed my tax return late. Ooh, it felt naughty but nice!

I avoided the £100 fine for late filing because the deadline had been extended.

Seems others have been naughty about their tax but less legitimately. Much cleverer bloggers than I are looking in more detail at the tax arrangements of senior Barnet council staff, some of which bear a marked resemblance to those at the centre of the storm around Ed Lester.

Ed Lester is Chief Executive of the Student Loans Company. He has been paid through a private firm (which he owns) rather than in the way that most, more lowly people doing the government's work earn a crust, being directly employed, which entails them paying tax at source. By this means, it is alleged, Lester has managed to pay a lot less tax than someone directly employed on his pay scale would expect to fork out.

This is how the Telegraph, for one, reported it today:

Mr Lester, a former chief executive of NHS Direct, was hired as interim chief executive in May 2010 before the deal was made permanent in December 2010. His two year contract runs from 1 February 2011 to 31 January 2013.

He is paid a basic salary of £140,000 a year, and can qualify annually for a £14,000 bonus and a cash pension contribution of £28,000, taking his total pay to £182,000, via the head-hunter which placed him with the Student Loans Company.

However the sums are paid to a private company he owns, rather than to him personally as if he were an employee.

This allows Mr Lester to pay corporation tax of 21 per cent, rather than up to 50 per cent, income tax on his earnings. Mr Lester’s pay arrangements are estimated by accountants to have saved him £40,000 a year, according to Newsnight.

Having just coughed up a handsome percentage on the measly pittance of pay that I made as a sole trader last year, I feel this issue quite keenly.

I'm not avoiding my tax; Harry Redknapp says that he'd rather pay too much tax than too little; now, how about those senior executives at Barnet Council? Do they want to review their arrangements? Or, like Ed Lester, do they want their arrangements reviewed for them in full public glare?