The TaxPayers' Alliance - Burning our Money

Non-job of the week

One of the criteria for a job to qualify as the non-job of the week is whether we could live without it.  This week, see for yourself from the Guardian Society pages:

“Community Capacity Building Officer

£25,320 - £31,606 pa (pay award pending)

Ref: CS85

Fixed term post for 3 years

Take on this key role in the Community and Voluntary Relations Unit, and you will ensure the continued growth and development of the voluntary and community sector in Solihull. Your capacity building remit will involve working in partnership with local voluntary and community organisations, other service areas within the Council, as well as a range of partners from Solihull's Local Strategic Partnership.

Expert at translating strategy into practice, building and developing strong relationships, and carrying out meaningful community engagement, you will be involved in the design, development and delivery of Local Area Agreement initiatives and targets around volunteering, community cohesion and a thriving third sector.

A graduate-calibre professional, you will have a proven track record of working with the voluntary and community sector to support the growth, development and sustainability of local community groups and organisations. Working knowledge of local strategic partnerships, thematic subgroups, community strategies and local area agreements will also be essential. For an informal discussion, please contact Faisal Hussain, Head of Community & Voluntary Relations on 0121 704 8541.

Apply on-line at http://www.solihull.gov.uk

Alternatively for a recruitment pack and application form: Tel: 0121 704 6800 (24 hour answerphone)

Email: connectcc@solihull.gov.uk

We are unable to accept CVs. Please quote reference number CS85 in any communication.

Closing date: 23rd May 2008.

Interview date: 3rd June 2008.

All applications will be considered on their merits and people with disabilities meeting the essential criteria will be guaranteed an interview.”

Whilst the aims of the post are honourable, the voluntary sector has survived long enough without government interference.  People turn to and get involved in the voluntary sector partly because it isn’t government related, and usually does a better job too.  Similarly with community groups, people take their time out for a good cause they care passionately about.  The strength of a voluntary group is the cause, not government employing an officer to get people to volunteer – that defeats the point of voluntary activity.

During these tough economic times, families have to tighten their belts.  Councils should be expected to do the same instead of squandering taxpayers’ money on positions the community can easily live without.

The Staff Room Dumbs Down

How staffrooms used to be

Hard on the heels of last week's teachers' strike, we've had news of school pupils being paid to take lessons in place of qualified teachers:

"A school is paying sixth-formers as young as 16 to teach lessons instead of hiring qualified supply staff. It has put a team of 24 A-level students on standby to fill in when regular teachers are away, paying them £5 for each 50-minute lesson they take. The headmistress says they do a better job than qualified adult teachers hired from supply agencies."

Meanwhile, Schools Minister Jim Knight has released a Good News Bulletin. He says:

“Teaching is now one of the most sought after professions thanks to increases in the average teacher’s salary by 19% in real terms to an average of over £34,000; cuts bureaucracy and tougher disciplinary powers for staff. The result is almost 41,000 more teachers in our schools in the last decade and buoyant recruitment.”

Huh?

“There are now more teachers, teaching assistants and support staff and more staff per pupil than ever before. We’ve freed up teachers from administration tasks to do what they do best - teaching and giving pupils more individual attention. And we have invested massively in support staff on the ground to give them the back up they need."

Since every teacher we know is severely hacked off, and the pupils evidently do a better job than qualified teachers, we decided to take a closer look. Just what has been happening in the staff room? What do Knight's claims actually mean?

First, let's note that last year the government spent £41.5bn on schools in England. That's up from around £23bn in 1997-98, an increase of about 80%. Which is a lot of money.

So have teacher numbers increased by 41,000, as Kight claims?

Well, waddaya know, yes they have. According to the official stats, the number of full-time equivalent (fte) teachers increased from 400,000 in 1997 to 441,000 this year. So he's spot on.

Except, when you study the detail, a very large number of these extar teachers turn out to be unqualified and/or part-timers.

First, strip out the statistically shadowy 6,000 who work for the new Academies and City Technology Colleges- we know virtually nothing of their provenance. That leaves 435,000 working in the traditional local authority maintained school sector, up by 36,000 since 1997.

Of that 36,000, no fewer than 14,000 lack what's known as Qualified Teacher Status (QTS). In other words, they are teaching without the proper qualifications to do so. Back in 1997, the number of such teachers was a mere 3,000, so under Labour there has been more than a fourfold increase.

And of the 22,000 additional qualified teachers, 20,000 are part-timers: there are now over 100,000 part-time teachers altogether, and on average they work about half-time, thereby comprising 50,000 full-time equivalents. While they may be perfectly good teachers, we can't help thinking there are some obvious disadvantages in terms of teaching continuity.

Which means that the increase in traditional qualified full-time teachers - the sort of people we'd like teaching your children - actually comes down to a mere 1800. Or less than one-tenth of an extra teacher per school.

So much for Knight's trumpeted 41,000 extra teachers. But what about all those support staff he goes on about? They must help, right?

Well, since 1997, the number of support staff in state schools has exploded.

The number of classroom assistants has virtually trebled, going from 61,000 to 176,000. A trebling. They've gone from from one for every six full-time qualified teacher, to one for every two. It's a massive change in the way our schools are organised, and it's passed by virtually unremarked outside of education circles.

The number of other support staff has also rocketed, doubling from 73,000 in 1997, to 147,000 now.

The bottom line? Just as they've dumbed down our exam system, it seems Labour has also seriously dumbed down our school staff rooms. In fact, the proportion of school staff who are full-time qualified teachers has plummeted from 69% in 1997 to a mere 49% now: a 20% drop which means that fewer than half the people now employed in schools to educate our kids are full-time qualified teachers:

No wonder Chalfonts Community College has had to revert to the original Victorian method of pupil teachers.

Just one question: given they only cost five quid a lesson, when can we taxpayers have a refund on that 80% increase in schools spending?

Correcting The Brown Version

The real tax grab

This morning Gordon Brown was interviewed by John Humphrys on BBC R4 Today. Unfortunately John Humphrys allowed him to get away with a number of infelicities that should have been properly challenged:

• "Tax is only 37% of GDP" - when Humphrys put it to him that taxes are now 40% plus, Brown whacked him: "you must get your facts right John." But the truth is that while declared tax is officially put at 37% this year (Budget report), that excludes a further 2.3% of GDP accounted for by "other receipts". Among other things, they comprise all those service charges now imposed for things that used to be delivered free, or nearly free (eg see this blog). Including them, the government's take goes up to 39%. And on top of that, we have government borrowing of 3% of GDP, implying that the government is actually grabbing 42% of our income, as shown in the chart (government borrowing being no more than deferred tax - an inescapable fact first highlighted by David Ricardo 200 years ago).
• "The 10p tax rate mainly lined the pockets of the rich"- jaw-droppingly, Brown explained he'd abolished the 10p rate because 85% of the benefit was going to the undeserving rich. Humphrys failed to point out it had been Brown himself who had introduced it in the first place. And he also failed to point out that the money from its abolition had been used to fund a cut in the basic rate, which itself "lines the pockets of the rich".
• "The banks were wrong to conduct so much business off-balance sheet"- coming from the Great Enron accountant Brown, who currently has well over £1 trillion of off-balance sheet debt (see this blog), that is outrageous cheek. But once again Humphrys failed to pick it up, preferring instead to concentrate on what he called "moral issues" and whether Mr Brown was enjoying the job? To which his reply was...

..."it is a privilege to serve."

A privilege to serve.

Taxpayers would feel much better served if Mr Brown took less of their money, and was a deal more open and straightforward about his fiscal sums.

Non-job of the week

For all of those who criticised our Council Spending Uncovered paper on publicity spending, take a look at our non-job of the week:

“Publications Editor
£26,067 - £27,584 (pay award pending)

This is your chance to get involved in producing our Council publications.

In our county, effectively communicating and engaging with our residents is crucial. The quarterly Your County publication plays a huge part in this - providing important news updates, advice and features. As the Editor, you can expect real freedom to develop your ideas and take the magazine forward. This will involve liaising with the full range of council departments, sourcing, writing and editing stories and overseeing the full production process. We’ll also look to you to produce other council publications and your expertise will enable you to offer advise [Tim edit: oh dear, oh dear, oh dear] to colleagues. Inspirational and highly motivated, you’ll bring a proven editorial background, exceptional relationship building skills and an ambitious approach. Ref: QO1094.”

Clearly they didn’t edit this ad.  Someone better advise East Sussex Council to check over their work in future. 

Councils are under an obligation to inform taxpayers of its essential services, letting us know when the pharmacies are open for example.  They're not obliged, however, to produce expensive, glossy magazines propagandizing at our expense - they can save that for their party-funded leaflets. 

On Monday we challenged councils to reduce their publicity, middle management and pensions by 10% to produce real tax cuts next year.  East Sussex Council could start by axing this job and work that bit harder to give us some of our money back.

Feel free to recommend this saving to the leader of East Sussex County Council, Peter Jones, by sending an email cllr.peter.jones@eastsussex.gov.uk or drop him a line at the council 01797 226243. 

Council Spending Uncovered No. 5: The Ten Percent Challenge

• TAXPAYERS' ALLIANCE THROWS DOWN GAUNTLET TO COUNCILS
• WITH SIMPLE AND MODEST SAVINGS COUNCIL TAX CAN BE CUT BY 3.5%, WHICH IS £40 OFF THE AVERAGE BAND D BILL
• INDIVIDUAL DETAILS FOR HUNDREDS OF COUNCILS SHOWS SIMPLE SAVINGS IN PUBLICITY, MANAGEMENT AND PENSION COSTS

Ahead of the local elections on May 1st, this fifth Council Spending Uncovered paper brings together the previous papers which revealed large amounts of spending poured into publicity, middle and senior management and gold-plated pensions, and issues councils of all parties across England and Scotland with a simple challenge:

If councils cut publicity, management and pension costs by just 10 per cent, they can cut council tax by an average of 3.5 per cent, or around £40 off an average Band D bill.

This is the TaxPayers' Alliance "Ten Per Cent Challenge".

KEY FINDINGS:

• In 2006-07, councils in England and Scotland spent over £400 million on publicity, £1.9 billion employing managers earning over £50,000 and over £4.3 billion on employer pension contributions. The total of the three expenditures is therefore £6.6 billion.
• Saving just 10% on those three areas alone would therefore reduce expenditure by £660 million.
  In the same year, council tax collected in England and Scotland totalled £18.7 billion (excluding Fire and Police precepts). Saving £660 million from that total would allow councils to reduce council tax by 3.5%.
• The average Band D council tax bill in 2006-07 (including both the district and county council where relevant but excluding the GLA and Fire and Police precepts) was just over £1,100. A 3.5% reduction would equal around £40.

The full report, which can be found here, provides detailed breakdowns for the savings that can be made by each local authority in England and Wales.

Matthew Elliott, Chief Executive of the TaxPayers’ Alliance, said:

“Council tax has doubled in the last decade and is now so high that it tips many families and pensioners over the edge.  But it doesn’t have to be that way.  Local authorities of all parties could make meaningful council tax reductions if they saved a modest 10 per cent in these three non-priority areas.”

Andrew Allum, Chairman of the TaxPayers’ Alliance, said:

“These 10 per cent savings could easily be achieved if local authorities focused resources on the real priorities.  We hear repeatedly that councils are cash-strapped, but there is a lot they can do to reduce costs, cut council tax and better serve their local residents.”

Vote Red Mist

You'll need plenty of £2 coins

As you may have heard, ex-Sun editor Kelvin MacKenzie is so incensed by the unaccountable money burning antics of his local council that he's standing for election as a councillor. His Red Mist Party pledge card reads:

1. Cut car parking charges, which have just been increased by up to 43% in one year alone
2. Cut the pay of the council leader, which has just been increased by 40%
3. Scrap the final salary pension scheme for council employees (see many papers from the TaxPayers' Alliance)

He should poll well. Apart from his eye-catching policies, someone of MacKenzie's intelligence and energy is sure put a rocket up the council. We're just sorry he's not standing for our council.

MacKenzie's red mist descended because Elmbridge Council decided to increase the cost of his station's daily car parking charge by 43%. Just like that.

Interesting. Because all of us are suddenly realising how much these local authority charges have escalated. From car parks, to library fines (see this blog), to policing fees (see this blog), to pest control charges, these days local authorities routinely rack up their charges far faster than prices generally.

We've been taking a closer look at this. In 1997-98, charges and fees levied by English local authorities raised £5.5bn (excluding most council house rents). By 2005-06, the most recent year available, the total had shot up to £10.7bn, an average increase of 9% pa. Which compares to the government's official inflation rate (the Consumer Price Index) over that same period of just 1.3% pa.

Assuming this rate of charging increase has continued - and if MacKenzie's experience is anything to go by, that's a conservative assumption - by 2007-08 the total would have reached £12.6bn, more than £500 pa for every single household. Council charges now raise well over half the sum raised by Council Tax itself.

It's high time we started monitoring this properly. Because Council Tax is by far Britain's most unpopular tax, councils have become circumpect about increasing it, and anyway it's capped by Whitehall. But there are no such restraints on charges.

In principle, usage charges have a useful role to play as an alternative to taxation. But in practice, they are an addition to taxation: they are effectively yet another stealth tax.

Ever higher charges need to be opposed, just as Kelvin is doing.

Non-job of the week

As councils up and down the country do their best to expand their middle management, bloat their own salaries and scale back frontline services, they never fail to come up with yet another non-job for us to expose.

This week Liverpool City Council burns taxpayers’ money by offering this job, yet again, from the Guardian Society pages:

“Public Art Officer

£30,598 - £33,291

Liverpool is looking for people with the passion, commitment and skills to make their mark and deliver an exciting and challenging agenda. If you have ambition for yourself and for Liverpool; if you can improve yourself and support the development of your colleagues; if you share our values and strive to make others feel valued then we want to hear from you.

The post holder will be based in the Urban Design Team and will be dealing with all matters related to public art, including guidance and strategy.

Successful applicants will have a degree/diploma in a visual arts related subject and/or substantial experience of public art matters.

Candidates should preferably have experience of working within Local Government and should be self-motivated, well organised and be able to communicate effectively and work well as part of a team.

You must be able to work well under pressure and have the ability to meet deadlines.”

What?  No taxpayer-funded chalk?  No subsidised paint sets?  Liverpool City Council lets us down.  But give them credit, at least the ad wasn’t blank like last week’s non-job.

Seriously, though, Liverpool Council claim to be cash strapped, yet they have a sixty million black hole in their finances.  Why are they employing artists when there is something very wrong with their finances?  They spend £9.4million of taxpayers’ money (a 700% increase on 10 years ago) on its own publicity, with well over £1million of that on its staff advertising (a 1,000% increase on 1997 figures).  Add more on top of that after Liverpool City Council’s 4.9% Council Tax grab this year and you find even greater scope for this council to waste more of your money.

This is where you come in.  Kindly ask the leader of Liverpool City Council, Warren Bradley (warren.bradley@liverpool.gov.uk) whether this public art officer is value for money.  How much longer are you going to let these council get away with wasting your money?

Thank Goodness For The Old Lady

Haircuts from the Old Lady

Mervyn King has taken heavy flak over his handling of the banking crisis, especially from government politicians. For months he stood virtually alone in the corridors of power arguing that the bankers had made the profits, so they should reap the losses. Thank goodness he was there, because left to themselves our spineless politicos would long ago have given the bankers whatever they asked for.

This morning we finally got details of the Bank of England's new Special Liquidity Scheme to "unbung" the financial markets. And we have to say, it's less bad than we'd feared - King seems to have insisted on a degree of sanity being maintained.

As already leaked, the SLS scheme involves the authorities swapping our high quality Treasury securities for the banks' dodgy securities and loans - in particular those Residential Mortgage Backed Securities (RMBS) that nobody now wants. Stripped of technical jargon, we taxpayers are lending them £50bn (or more) secured against the collateral of a bunch of mortgage and other assets they will pledge to us. The arrangement will be for a 12 month period, extendable for up to three years.

From the taxpayer's perspective, the key questions are whether the collateral is secure, and what we are being paid.

On security, the Bank has published the haircuts (ie discounts) that will be applied to the collateral (see table above). And as we can see, for mortgage and credit card based collateral, they will only accept the very highest quality (AAA as rated by two recognised credit rating agencies). And values will be discounted by up to 22% for quoted sterling denominated securities, with further discounts for unquoted or foreign currency denominated securities. What's more, the securities will be marked to market (ie repriced) daily, and collateral will need to be topped up if its value sags.

For choice, standing as we are on a property cliff-edge, we'd have preferred even harsher haircuts, but for AAA securities this is probably tough enough for taxpayers to at least snooze at night.

On charges, the banks will have to pay a fee. It will be equal to the difference between what they can already borrow at in the unsecured interbank market (3 month LIBOR), and what they can borrow at in the so called repo market, secured against government bonds. At present that difference is c 0.9% pa, which is therefore the fee they will be charged.

Again, for choice, we'd have preferred a higher fee: after all, we taxpayers are digging the banks out of a huge hole so we should get fully rewarded. But at least we're not giving them free money.

Overall, this deal seems a bit tougher on banks than some of last week's rumours suggested. And the equity markets seem to agree, with all the major banks' share prices down this morning. Which is reassuring.

And what will happen in the mortgage market? Darling and Brown will doubtless claim this move will "unbung" that as well, bringing "fresh hope to hardworking families and first time buyers". Don't believe a word of it. This is about giving the banks a breathing space to rebuild their capital and free up their balance sheets. Mortgage borrowers will not be high on their priority list.

Indeed, the Bank of England statement makes absolutely no mention of any deal with the banks to help mortgage borrowers. In fact, it makes quite clear that these new loans will not be provided against the collateral of any mortgage loans made since December 2007- so there is specifically no linkage with future mortgage lending.

Bankers On A Promise

It's not just home loans that can go critical

We've been trying to uncover exactly what the government has promised to the banks. But so far taxpayers have been told very little.

Still, the bankers definitely know they're on a promise, as we can see from their share prices. For example, since Brown's crisis breakfast meeting on Tuesday, Barclays and HBOS are both up around 10%. That's a significant rise, and it underlines just how valuable they reckon Browns' promise is. On our reckoning, we taxpayers have given a £2bn present to HBOS shareholders (10% of their c£20bn market capitalisation) and a £3bn gift to Barclays. And that's just two of them.

These gifts are taking the form of credit risk on the mortgage portfolios we will be swapping for gilts. But what will taxpayers get in return?

There's talk of a "penal" fee for doing the swap, but as we learned from the Crock fiasco, such macho talk is most unlikely to translate into anything bankable.

Government spin says it will "free things up", ensuring cheaper and more available loans all round. But don't hold your breath: in practical terms the government won't have a prayer of ensuring benefits are passed on to customers, rather than being used to boost bank profits... not to mention those bonuses.

Moreover, given our wobbling crazed property bubble, many question whether yet more credit is what we want anyway. Sooner or later asset prices have to adjust, and postponing the hour may simply mean an even bigger bust in the future.

Of course, by then Brown's government may have gone. Leaving behind an even larger fiscal crater than we already have.

In the light of the £100bn Crock rescue, the omens for this latest deal are worrying. We have little confidence that the government will protect taxpayers interests, and we will need to scrutinise the details very carefully.

PS Driving through London this morning, I tried to do a quick crane count. Alarmingly, there are still so many I gave up - even though commercial property values are down 15% since last summer. The banks are naturally up to their gunwales in commercial property loans and the associated Commercial Mortgage Backed Securities (CMBS). So are we heading back to a 1990s style nuclear scenario? According to Fitch Credit Ratings, 10% of UK CMBS would go bust in such a world, and it could be a lot more (for even more anxiety, see this excellent FT Alphaville post).

Non-job of the week

Braintree borough council has disgraced itself today.  Their advert in this morning’s Guardian Society jobs page for a ‘Climate Change Manager’ is blank save for two sentences and the council logo.  It measures 13cms x 19cms and has barely anything in it.  The ad boasts that it’s ‘saved ink’ but it’s wasted taxpayers’ money on a blank advert.

My guess is that some over-promoted advertising halfwit thought it would be a good idea to advertise this job using empty space.  How very post-modern... 

This is what Braintree’s taxpayers’ money is going to.  Your Council Tax went up and all you got was an empty page.  They may as well have thrown the money down the drain for what this entire ad is worth, let alone that it’s an advert for another climate change non-job.

“Climate Change Manager

£34,542 - £38,556

A very exciting opportunity has arisen for a Climate Change Manager at Braintree Council.

Delivering the kind of changes we're aiming for will take a special kind of person. The odd trip to the bottle bank won't be enough. We're looking for someone who has real passion for all things environmental and the ability to get other people involved in taking positive action.

Your first challenge will be enthusing those around you about the benefits of thinking green. Because whilst we're already doing a great deal to improve our environmental responsibility, as an organisation, we could be doing more. So it'll be your job to educate and motivate your colleagues, giving them all the understanding they need to start making changes to the way they live and work.

You'll also lead a range of climate change initiatives that'll see you engage local communities in a variety of ways and encourage them to take responsibility for reducing the impact they have on the environment. And by working closely with everyone from community representatives to senior level Council members, you'll help ensure both local and national climate change performance indicators are met, if not exceeded. With your help, we'll set the kind of example that other boroughs will want to follow.

This role clearly requires a great deal of knowledge and understanding when it comes to environmental science, legislation, guidance and practice. It also requires experience in environmental management, promotion and climate change issues. But most crucially, this role needs someone who can turn innovative ideas into effective action, and plan, develop, manage and deliver projects that'll benefit the environment both close to home and further afield.”

Aside from the blank advert, costing thousands of pounds, the job itself is more of the same from local government.  Where they could cut taxes and attract business (saving on commuting) whilst creating incentives for green behaviour, they find it better to employ another drain on borough finances – which this job is.

For those interested, also check out our green jobs report we published back in 2007.  Furthermore, it's also worth contacting Braintree Borough Council's leader - Graham Butland, the Cabinet member for the Environment - Roger Walters and the cabinet member for resources - Michael Lager.  Please ask them what value a blank advert and a redundant non-job brings to the over-taxed residents of Braintree.