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Who was paid a £150,707 salary by the Liverpool City Region Combined Authority?

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Monty Python’s famous sketch about chartered accountancy (as it’s very hard to make jokes about this subject)

Councillor Phil Davies shows off the LGC award Wirral Council received for being most improved Council 12th March 2015 — Councillor Phil Davies (Chair of the Liverpool City Region Combined Authority) shows off the LGC award Wirral Council received for being most improved Council 12th March 2015

As it states in the video above, accountancy can be dull. However I wrote this email below (sent the day before the meeting) about a disclosure mistake in the Liverpool City Region Combined Authority accounts for 2014/15. The Liverpool City Region Combined Authority meets this morning to approve the accounts for 2014/15.

It’s quite simple really, about six years ago the law changed so that public sector employees that are paid a salary of £150,000 or more had to be named in the accounts.

For example on page 160 of the accounts for the Merseyside Fire and Rescue Authority approved last week Dan Stephens, the Chief Fire Officer (on a salary of £170,000) is named. In fact Merseyside Fire and Rescue Authority also name the Deputy Chief Fire Officer and Deputy Chief Executive, as despite their salaries being below the £150,000 threshold it is more transparent to do so as the total they receive is over the £150,000 threshold.

The Chief Executive of Merseytravel (David Brown) on a salary of £150,707 should’ve been named in the Liverpool City Region Combined Authority’s accounts. The email below from myself details the reasons why (KPMG are the external auditors for the Liverpool City Region Combined Authority). Hopefully this will be sorted out at the meeting and corrected.

Subject: agenda item 7 (Liverpool City Region Combined Authority Final Accounts 2014/15) meeting 20th September 2015

To: Cllr Phil Davies
CC: Mayor Joe Anderson
CC: Cllr Barrie Grunewald
CC: Robert Hough
CC: Cllr Andy Moorhead
CC: Cllr Rob Polhill
CC: Cllr Ian Maher

CC: David Brown (Chief Executive/Director General, Merseytravel)
CC: Louise Outram (Monitoring Officer, Merseytravel)
CC: Angela Sanderson (Monitoring Officer, LCRCA)
CC: Stephanie Donaldson (Head of Internal Audit, Merseytravel)
CC: Tim Cutler (Partner, KPMG LLP (UK))
CC: Ian Warwick (Manager, KPMG LLP (UK))
CC: Richard Tyler (Assistant Manager, KPMG LLP (UK))

Dear all,

I am bringing this up in advance of Monday’s meeting, in the hope it can be amended. If it isn’t amended, please class this as a formal objection by a Merseyside local government elector to the accounts of the Liverpool City Region Combined Authority for 2014/15.

The draft statement of accounts at note 9 (which is page 41 in the numbering of the report or page 67 of the supplementary agenda) contains details of the remuneration paid to the Liverpool City Region Combined Authority’s senior employees.

For the year 2015 (I presume this means financial year 2014/15), the Chief Executive/Director General received a salary of £150,707.

A number of years ago the Accounts and Audit (Amendment no 2) (England) Regulations 2009, SI 2009/3322 changed the audit regulations (this change started in financial year 2009/2010) and added the paragraph below:

"(c) the remuneration, set out according to the categories listed in paragraph (d), by the relevant body during the relevant financial year of—

(i) senior employees, or

(ii) relevant police officers,

in respect of their employment by the relevant body or in their capacity as a police officer, whether on a permanent or temporary basis, to be listed individually in relation to such persons who must nevertheless be identified by way of job title only (except for persons whose salary is £150,000 or more per year, who must also be identified by name)."

This requirement was kept in The Accounts and Audit (England) Regulations 2011, SI 2011/817 reg 7(2)(c) and the Accounts and Audit Regulations 2015, SI 2015/234 (which although referred to in the draft statement of accounts will apply from the 2015/16 financial year onwards).

Clearly, the Chief Executive should’ve been explicitly named and wasn’t. I think everyone I write this email to will know he’s called David Brown, but the draft statement of accounts should be amended to state this.

It’s a basic issue of openness and transparency (which I’m sure you’d expect the press to take a viewpoint on).

Yours sincerely,

John Brace

P.S. I know Merseytravel’s accounts are audited separately to the LCRCA, has the same error been made there too?

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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

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?

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Why did Merseytravel spend £2,775 on a "Parliamentary Reception"?

Why did Merseytravel spend £2,775 on a “Parliamentary Reception”?

Below is an invoice from the House of Commons to Merseytravel for £2,775.

Merseytravel invoice House of Commons £2775 7th May 2014

Sadly the invoice doesn’t state a lot other than Ms Louise Ellman MP was the sponsoring MP. To find out what the room booking was for is better explained in an invoice from Bircham Dyson Bell (see below).

Merseytravel invoice Bircham Dyson Bell £2298.95 30th June 2014 Page 1 of 2

Merseytravel invoice Bircham Dyson Bell £2298.95 30th June 2014 Page 2 of 2

As you can see from the pages of the invoice above Bircham Dyson Bell charged Merseytravel £425.50 + VAT to attend a parliamentary reception on the 25th June 2014 plus £327.99 + VAT in travel expenses.

I’ll leave it to readers to comment on whether they think Merseytravel being charging £55.50 + VAT by Bircham Dyson Bell to write an email is reasonable in these times of public sector cutbacks.

Next is a “strictly private and confidential” matter. In fact so strictly private and confidential the invoice for £1,867.80 from Weightmans below only specifies that it is for “Matter number 44 Re professional services”.

Merseytravel invoice Weightmans £1867.80 27th June 2014 Page 1 of 2

But as anyone me, I like demystifying such matters, so let me let Weightmans explain what this invoice is really about.

Merseytravel invoice Weightmans £1867.80 27th June 2014 Page 2 of 2

In case you can’t read the above I’ll quote the pertinent bit here.

“Strictly private and confidential
Employment advice

Please find enclosed a bill of costs for work carried out by myself and Simon Goacher in relation to issues surrounding the Chief Executive and Director contracts.

I have not put any detail of the work on the bill or identified what it is for reasons of confidentiality. However, there is a breakdown of the work done so far on this matter attached for your attention.

I assume that matters are currently progressing satisfactorily but if you do require any further advice when the drafting is completed then please do not hesitate to contact either myself or Simon Goacher.

Thank you for your kind instructions in this matter, it is always good to work with you.

Kind regards,

Yours sincerely

Bernadette Worthington
Partner
For and on behalf of Weightmans LLP”

Going back to the original theme of political engagement is an invoice below from Kenyon Fraser for £29,160. This is for work on Merseytravel’s campaign to have a high-speed rail connection to Liverpool.

Merseytravel invoice Kenyon Fraser £29160 28th July 2014

Continuing on lobbying but this time at party political conferences is an invoice for £11,429.96 for “PTEG Political engagement at Party Conferences and events each PTE see attached”.

Merseytravel invoice Nexus £11429.96 12th March 2015 Political engagement at party conferences

Finally, here is an invoice for £811.20 from Key Travel for train tickets for travel from Liverpool Lime Street to London Euston. So what’s so unusual about that? Well the passengers are just listed as UNISON and it’s Merseytravel that have paid the invoice (I hope the costs were charged back to UNISON)!

Merseytravel invoice Key Travel £811.20 train fares London to Liverpool

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How much does a Superlambanana cost to repaint?

I went to Merseytravel’s headquarters to inspect various invoices and contracts. A Superlambanana costs £500 to repaint, but a penguin only costs £400 as you can see from the invoice below.

Merseytravel invoice repainting Lambanana Artopia £900 27th March 2014

Below are invoices that I requested from the first month of expenditure in 2014/15 that had something blacked out on them.

First there’s a larger invoice for £1,241.08 from Bircham Dyson Bell. This is for a “claim by Charles Denton as owner of Olympia Public House” and more specifically “To professional charges acting for you in the above claim for compensation in connection with advising you by Mr Charles Denton for the period from 21 December 2013 to 26 March 2014 for the Olympia Public House as set out in the attached breakdown. Actual fees £1,721.90 less £771.00 as per email dated 19th March 2014.”

Blacked out are the hourly rates charged. These are:

(Partner) 0.10 hours @ 141.92 per hour = £14.19
(Partner) 1.00 hours @ 141.92 per hour = £141.92
(Partner) 5.60 hours @ 141.92 per hour = £794.79

Merseytravel invoice Bircham Dyson Bell £1241.08 Claim by Charles Denton as owner of Olympia Public House 28th March 2014

Next is a two page invoice from Hays for agency staff. Whereas Merseytravel have blacked out the name of the person whose services this invoice relates to on the front of the invoice, the name is clearly visible on the timesheet on the second page of this invoice (Melissa Waring). The timesheet also shows this is for 35 hours of work (a detail again blacked out on the front of the invoice) at a rate of £30.35 an hour + VAT.

Merseytravel invoice Hays £1019.77 assistant senior accountant 15th April 2014

Merseytravel invoice Hays £1019.77 assistant senior accountant 15th April 2014 timesheet

There are three further invoices from Hays from that month which are each for the services of Melissa Waring. However the timesheets on the back of those invoices aren’t included. Those invoices (including the second page where you’d expect the timesheets) are below.

Merseytravel invoice Hays £1092.61 assistant senior accountant 3rd April 2014

Merseytravel invoice Hays £1092.61 assistant senior accounant 3rd April 2014 timesheet

Merseytravel invoice Hays £1153.06 assistant senior accountant 27th March 2014

Merseytravel invoice Hays £1153.06 assistant senior accountant 27th March 2014 timesheet

Merseytravel invoice Hays £1274.71 assistant senior accountant 9th April 2014 timesheet

Merseytravel invoice Hays £1274.71 assistant senior accountant 9th April 2014

Finally there is an invoice for £3,800 from DWF for the services of Martin Stafford seconded to Merseytravel at £200 a day. It was pretty pointless blacking out the daily rate of £200 a day on this invoice and leaving in “for 19 days work carried out from 3rd March 2014 to 31st March 2014” along with the amount of £3,800.

Merseytravel invoice DWF £4560.00 Martin Stafford secondment 31st March 2014

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What are the changes next year to the public's right to inspect documents of public bodies during the audit?

What are the changes next year to the public’s right to inspect documents of public bodies during the audit?

Wirral Council lease Neptune Wirral Limited Neptune Developments Limited Neptune Projects Limited 20th June 2011 for New Brighton Phase II draft car parking management plan page 2 of 2

Above is one of the documents I requested under the 2013/14 audit last year, which is a page of a lease that Wirral Council have with Neptune that states that if Wirral Council introduce car parking in the Fort Perch Rock car park, then charges can be introduced in the free car parks part of the Marine Point development.

Each year for the past few years I have exercised a right you get to exercise only for three weeks each year, which is a right under section 15 of the Audit Commission Act 1998 to inspect documents relating to the previous financial year (2014/15) during the audit.

This has in years gone past has been the only way to see such financial information and to give one example of a story that resulted in many interesting stories on this blog (ranging from councillor’s expenses and taxis to an unsigned contract for a million pounds worth of work).

This year I have exercised my s.15 right not just with Wirral Council, but with Liverpool City Council, Merseytravel, the Merseyside Fire and Rescue Authority and the Merseyside Recycling and Waste Authority.

A couple of weeks before the three-week period when the public can inspect these documents each of these bodies has to publish a public notice in a newspaper that circulates in the area covered by that body. The regulations also require each body to publish this notice on their website. Wirral Council’s notice can be found on their website here.

To save myself trekking off to Birkenhead Central library and spending an afternoon going through back issues of the local newspapers trying to find the public notices, I found this website that has a searchable database of all public notices published by the Trinity Mirror group.

All of the notices (apart from the Merseytravel one) had a name of someone at that public body who I wrote to (whether by letter or by email). In the case of Merseytravel I wrote to the Chief Executive, who passed my request on to the person at Merseytravel dealing with it.

So far the responses have been as follows:

Merseytravel – dates of Monday 27th July 2015/Tuesday 28th July 2015 agreed to come in and inspect the documents. They have a “paperless office”, but will be printing off copies of the invoices/contracts I requested so their legal department can redact parts of them.

Merseyside Waste and Recycling Authority – dates of Friday 24th July and Wednesday 29th July 2015 have been agreed to come in and inspect documents.

Liverpool City Council – email sent yesterday, no reply received yet

Merseyside Fire and Rescue Authority – email sent and acknowledged on the 15th July 2015, no further reply received since

Wirral Council – email sent with request for contracts & councillor expenses on 19th July 2015, reply received yesterday, list of invoices sent this morning, no reply received yet or date/s arranged

Next year, any right of access to invoices and contracts will be under the new section 26 of the Local Audit and Accountability Act 2014.

The main differences will be next year that a new ground of refusing a request on grounds of “commercial confidentiality” has been added in to the legislation unless there is an “overriding public interest in favour of its disclosure”.

This puts on a statutory footing the Veolia case, see [2010] EWCA Civ 1214 if you’re curious about what I mean.

The new section 26 also means that determinations about what is “personal information” on documents (therefore not open to inspection) will in future be made by the public body themselves and not the situation at present of the public body having to get agreement from their external auditor to this. It does make it crystal clear that the names of sole traders on invoices is not covered by the definition of “personal information” and defines “personal information” as “identifies a particular individual or enables a particular individual to be identified”. The restriction on information about the public body’s staff remains in section 26 next year.

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Who was paid a £150,707 salary by the Liverpool City Region Combined Authority?

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

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Why did Merseytravel spend £2,775 on a “Parliamentary Reception”?

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How much does a Superlambanana cost to repaint?

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What are the changes next year to the public’s right to inspect documents of public bodies during the audit?

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