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Posted by: John Brace | 17th September 2015

Why do councillors get allowances tax-free and YOU end up paying the £10,820.28 tax?

Why do councillors get allowances tax-free and YOU end up paying the £10,820.28 tax?

                                             

In an update to the earlier story Why is there a £17k to £19k discrepancy in allowances and expenses for councillors on Merseyside Fire and Rescue Authority?, Merseyside Fire and Rescue Service have been in touch to explain what’s going on.

Firstly, when Merseyside Fire and Rescue Authority declared that councillors cost (and told the public this at a public meeting) £7k in expenses earlier in the year (it was this public meeting).

This should’ve actually been £14k.

£7k was the amount claimed back by councillors, Merseyside Fire and Rescue Service then paid a further £7k in expenses directly (that should’ve been included in the figures).

With me so far?

No I come to a rather shocking revelation.

The allowances paid to councillors at Merseyside Fire and Rescue Authority are paid tax-free. A Wirral Council councillor has left a comment stating that for Wirral Council, income tax and NI are deducted from councillors’ allowance from the amounts councillors receive.

I’ll try and explain.

I’m self-employed so I have to declare what I earn each year to HMRC [Her Majesty’s Revenue and Customs]. HMRC then tell me how much National Insurance and Income Tax I pay and I pay that out of my gross profits.

However councillors are paid allowances and at MFRA (and presumably other public bodies but not Wirral Council) that pays them the allowance is paying any income tax or National Insurance due on top of that!

It isn’t coming out of their allowances! So everybody else has to pay tax out of their gross pay councillors do not! Who pays for this cosy arrangement? You do through taxes!

The amounts of course for a small authority like Merseyside Fire and Rescue Authority for these beneficial tax arrangements the costs are small (£10,820.28) as it has only eighteen councillors.

However in the annual totals published each year because of the The Local Authorities (Members’ Allowances) (England) Regulations 2003, SI 2003/1021 these amounts are not included. This misleads the public into thinking that councillors cost far less than they actually do cost.

The Wirral Council figures for councillors allowances for 2014/15 were published earlier this year. These figures presumably include income tax/NI, whereas similar figures for the MFRA do not.

In a question I posed to Councillor Adrian Jones earlier this year he stated “however in future the cost of Member’s [councillor’s] taxi journeys undertaken pertinent to these taxi contracts will be published on the Council’s website as soon as practicable after the end of each financial year.”

This response to a FOI request I made, shows the total spend on councillors for taxis from April to December 2014 was £1,829.55.

So over the whole year, that would be an estimated £2,400.

The figures however declared in the official expenses table only come to less than a thousand pounds.

Obviously this means the taxi amounts have once again not been included with the official figures despite Councillor Adrian Jones suggesting that they would.

I exercised my Audit Commission Act 1998, s.15 right this year (as I’m a local government elector in Wirral) to copies of the paperwork to do with expenses.

Wirral was supposed to (as not to do so would be breaking the law) provide them by the end of the inspection period which finished on the 14th August 2015.

This is to allow a reasonable period for any questions to the auditor or any objections to be resolved by the time the accounts have to be closed by 30th September 2015.

I have sadly only received a very small fraction of what I requested.

Merseytravel, Merseyside Fire and Rescue Authority and Merseyside Waste Disposal Authority all managed to provide the information either by the end of the inspection period or shortly after.

Wirral Council has not. It’s now over a month passed the 14th August 2015 and I’m still waiting.

There’s also a right to inspect these councillor expenses, again Wirral Council just states that they are dealing with this under the audit legislation, that the paperwork they have from HR on councillor expenses is  incomplete  therefore I can’t see it yet!!!

I mean seriously! They didn’t mind giving me incomplete paperwork last year (but did mind me pointing out it was incomplete and having to go back and do it properly).

Apparently they’ve spent some money this time on software to black bits out, since the Vincenti incident and the accidental disclosure of ~200 members of staff names, dates of birth, national insurance numbers and pension details to me in a contract it seems that Wirral Council has difficulties in doing this right.

Quite why Merseytravel, Merseyside Fire and Rescue Authority and Merseyside Waste Disposal Authority didn’t have any major difficulties (bearing in mind these are public authorities that from memory have a far smaller budget than Wirral Council), even when one of the documents I requested was an over 800 page £1.2 billion contract with a company to send Merseyside’s rubbish on a train far away and burn it with many redactions scattered through the contract or with a contract with Merseyside Fire and Rescue Authority, that was so big it came on DVD and on paper took up three massive storage boxes (in fact the contract is so large I’ve only been able to publish part of it), I think has to do with the fact that those public authorities have a culture of taking their legal obligations more seriously.

These other public authorities understand a culture of openness and accountability, but Wirral Council can sadly (despite improvements) cling to an insular culture from its past. This culture was in part what led to the events that removed of a previous Labour administration in 2012 and former Leader of the Council Cllr Steve Foulkes.

Wirral Council likes it seems to be downright unusual and not learn from best practice elsewhere how to get better. As detailed above in the question to Councillor Jones, change from practices that shouldn’t happen are promised, but then the changes that have been promised don’t happen.

The public notice for those other authorities (apart from one that didn’t include a name) meant the request went straight to a member of their senior management team.

At Wirral Council that wasn’t the case.

At those other authorities this meant the request got dealt with within or near the timescales as the “instructions came down from on high” .

Fort Perch Rock car park New Brighton 29th June 2015 photo 1

Fort Perch Rock car park New Brighton 29th June 2015 photo 1

I might point out that last year using the same rights under the audit, I published part of a Wirral Council lease with Neptune about car parking in New Brighton that was referred to in the Cabinet decision to U-turn and abandon plans to introduce charges for car parking at Fort Perch Rock.

Wirral Council would seriously try the patience of a saint. Sadly they force me into a position where I have to use arcane legal procedures and involve the external auditor (thus costing Wirral Council more by sadly driving up their external audit costs) to try and get anywhere.

Wirral Council’s Audit and Risk Management Committee meets next week on the 22nd September to discuss the 2014/15 accounts. One of the matters they’ll be discussing formed an earlier story on this blog.

The £6.9 billion Merseyside Pension Fund that Wirral Council manages pays a pension to a close relative of mine so I had better declare that as an interest.

However does anyone have any suggestions as to what I can to ensure Wirral Council does things better?

Or do people already think I’m perfectly capable of answering that one myself?

If you click on any of the buttons below, you’ll be doing me a favour by sharing this article with other people.


Responses

  1. This is as bad as a duck house or moat! Only it happens more regularly than those.

  2. John that is a shocking revelation, that the public believes the cost of councillors be some £800,000 but in reality is at least 10/8 times £800k.

    That puts a new light on a leading councillor’s claim to me that he paid income tax on his allowances. Legerdemain perhaps as yes he does, it being deducted from the gross to arrive at net figures.

    Companies Act regulations on corporations, and WBC is a corporation, dictate that emoluments are declared GROSS in published accounts.Having read the local government allowances legislation, link provided by yourself, it refers to publishing the “payable” amounts which I interpret not as that paid in money to councillors but as with all other corporations that paid to councillors and that paid to HMRC on their behalf-tax and Ni inclusive.

    Some clarification on this point is desperately needed as to

    whether WBC accounts show councillors “allowances” gross

    whether payable in local government regulations demand the true cost of payments to and on behalf of councillors to be published

    At least the WBC transparent declarations would have urged it to point out that the £800k figures it publishes were NET of tax and of NI. Legerdemain on the behalf of a corporation seeking to mislead its electors?

  3. G’day John and Wirralbizz

    Where is Reprahnehpets?

    I have no doubt Wirralbizz when you refer to a leading clowncillor/ lying/ legerdemain in the same paragraph you must be talking of that vile little stab you in the back even when asleep in the chamber welsh troll lookalike.

    A discredit to his family.

    Ooroo

    James

  4. G’day John

    In the rubbish local propaganda sheet

    Paula Basnett, chief executive of Wirral Chamber of Commerce said: “We recognise the importance of the 2020 Vision and are committed to supporting this plan.

    “We have a wonderful opportunity to make a real difference but it is important to ensure the 2020 Vision is successful and achieves its goals.”

    This is more bizarre than the worlds biggest municipal golf course attached to some world class golf resort.

    This from the woman who knew Wirral “Funny” Bizz was getting away with £2,000,000.00 of taxpayer money, wanted them closed down, and, did absolutely nothing aprt from watching them escape.

    Where John does all the money come from for her to support this ridiculous pie in the sky bullshit?

    Ooroo

    James

    • Consider this: he who comes to a court must come with clean hands. WBC may have been reluctant as in any trial of wirralbiz directors many facts would emerge which wirralbiz would adduce in their defence and which would likely show the Council in a very bad light.

      The judge and defence naturally would demand a copy of the contract for Working Neighbourhoods-LOST- and a signed contract for BIG-does not exist.

      The judge might indeed point out that if you do not want your house burgled you dont leave the door wide open and unlocked.He would incredulously demand why proper checks on wirralbiz were never made until AFTER you whistleblew in the last 6 months of a seven year project(s). The judge would remark that unlike Mr Adderley’s contention that the Accountable body was A4e he found that reading of the contract clearly indicated that the Accountable body was indeed WBC for the £880,000 of ERDF money.

      Everything would be to the discredit of the Regeneration department, and that in open court, covered by local and national newspapers.Light would forensically be shone on some dark corners. Having already just escaped the Whitehall Commissioners by the skin of their teeth, having lost multiple senior directors, the loss of more directors and managers would not be a risk WBC would take.

      Rally when you look back on it it is obvious that WBC whatever Grant Thornton reported, would not upset the Peer Improvement arrangement for the small matter of punishing a wayward contractor.

      As to the council holding me to libel account for the above surmise I rather fancy they are in the position of Oscar Wilde on receipt of the note from the Marquis of Queensbury.

  5. Well John you have done it again by sending my blood pressure to boiling point< veins bulging head throbbing and I am as angry as hell that that we are paying the tax & national insurance on the councillors allowances.
    Well done for exposing the truth about what they are getting away with.
    Why not go public in the Globe & expose this, I am going to put it on my face book page to gauge friends reaction to see what you have so cleverly exposed well done John another triumph for investigative journalism.

    • I sometimes think I should check my own blood pressure, but usually if it’s enough to send my blood pressure up it has the same effect on the public!

      I’m not sure yet whether this is just MFRA or common practice elsewhere. Certainly the fact these allowances declared each year under the regulations for each councillor didn’t include the true costs including tax is news to me (but then I’ve never been a councillor or worked in local government payroll).

  6. G’day John

    They seem to me to be of the same ilk as the scum employees at Wirral “Funny” Bizz.

    Maybe that is why they defend them and let them get away with £2,000,000.00..

    Ooroo

    James

    They must be so jealous and those people were real ugly dim wits.

  7. Hi John

    I can tell you categorically that my Councillors Allowance is taxed and subject to NI and has been for as long as I have been a Councillor. I am happy to Provide evidence if required On top of this as you know I do not claim any expenses from the Council so bear that cost out of my allowances!

    Cllr Chris Blakeley, Conservative Councillor Moreton West and Saughall Massie Ward. Wirral Council

    • Thanks for clarifying this Cllr Blakeley. It seems some public bodies deduct income tax and NI from the amounts councillors receive.

      Other public bodies pay the councillors allowances in full, then pay an extra amount of income tax or NI on top (MFRA and it seems Knowsley too).

      I’ll update the story tomorrow to make it clear that at Wirral these amounts are deducted from what councillors receive, but it seems there is very little consistency between public bodies on this, when you’d expect it should be done the same way across all public bodies.

    • Cllr Blakely just to be precise. For the standard Councillor allowance some £8,500 do you receive say approx 70% in you hand approx £6,000; or is it that you receive £8,500 net in your hand with WBC deducting tax and ni on a larger gross figure?

      • G’day Wirralbizz

        Looks like the overfed Tory has been told to keep his mouth shut.

        Or, he probably like 64 others doesn’t understand things, money, like the £2,000,000.00 fraud of Wirral “Funny” Bizz.

        Ooroo

        James

  8. G’day John

    What a hero John he pays tax on his allowances for letting Wirral “Funny” Bizz get away with about £2,000,000.00 of taxpayer money like 65 others.

    If only they had the decency of Stuart Kelly forever a hero at Wirral.

    He says nothing meaningful about Wirralgate.

    Ooroo

    James

    What a hero paying tax on his money for nothing.

  9. G’day John

    Tell him and “The Raving Loony” in his party you won’t believe them about anything they say for four years. ha ha ha ha

    Worst scandal in the Loony’s forty years one minute and all’s wonderful with Wirral the next. ha ha ha ha ha

    Ooroo

    James


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