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Counting the cost of criticism

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LGC probes the Taxpayers’ Alliance.

How did three rather obscure people secure substantial media attention by attacking local government’s spending on salaries, publicity and even pensions, create an impression that councils are wasteful, and successfully imply that thousands of people support them?

The Taxpayers’ Alliance has what it believes is councils’ extravagance in its sights, and shows no sign of going away. Though it does enter caveats that show it recognises the sector has a valid role, it consistently suggests the spending it probes contains high levels of waste, a stance guaranteed to secure coverage in certain media outlets fond of bashing bureaucrats.

Earlier campaigns targeted central government, and councils fell fully under its gaze last winter with its analysis of how much they spend on publicity. This was followed by reports on salaries and pensions this year. The alliance typically issues freedom of information requests to every council and publishes the results accompanied by criticism of what it deems profligacy.

Unlike some critics, it doesn’t simply highlight spending that sounds anomalous or foolish, but its accompanying comments suggest that council spending is generally excessive.

Alliance complaints are regularly rebutted for the Local Government Association by its deputy chief executive John Ransford, who has had to try to respond to the emotional appeal of attacks on ‘waste’ and high individual salaries. For example, when the alliance called for a 10% cut in publicity spends, Mr Ransford said: “People would be furious if they had no idea of what services their cash was paying for and how they could get to use them.”

Pay and pensions

It’s a similar story on pay and pensions. The alliance concedes some high salaries may be justified, but gives the impression it believes that councils are excessively generous employers.

When it launched this assault, Mr Ransford sought an equally emotive response, saying the alliance was “condemning lollipop ladies, bin men, street cleaners and librarians for getting a pension worthy of the years of service they have given helping local people”. He also pointed out that many councils “have bigger budgets than FTSE100 companies and to get the brightest people to deliver the best services for local people they need to pay a competitive wage”.

Alliance chief executive Matthew Elliott has criticised councils for having too many middle managers who are “being paid more than MPs”. The choice of comparison is interesting. It sounds as if officers receive outrageous sums.

But as Alastair Robertson, secretary of the Association of Local Authority Chief Executives, puts it: “I resent the silly comparisons between us and MPs’ or the prime minister’s salary, as if you can compare chief executives with people who hold elected jobs. We are taxpayers too.”

The alliance’s “town hall rich list” lambasted local government for having six senior people across the sector who earn in excess of£200,000 a year, and many others, mainly chief executives, more than£100,000.

Unlike its criticism of middle managers, where it simply suggested there were too many of them, it implied senior staff were not worth the money.

Mr Elliott says: “Too often, council executives are rewarded handsomely even when they fail. Families and pensioners are struggling with the demands of yet another council tax rise, and councils owe it to them to cut back on executive pay hikes.”

The rich list conceded that the alliance had “no problem with council staff being paid well for good performance”. But, it added: “It seems that in far too many cases senior council officials are being paid over the odds for inadequate performance.”

The alliance did not, though, say on what basis it judged these failures to have occurred there is, for example, no reference to comprehensive performance assessments.

Councils are responsible for billions of pounds of public money, and must be prepared to account for it, with councillors taking the political consequences if voters object. It is fair enough for the Taxpayers Alliance, or anyone else, to shine a light on local government finances. But can one shine a light on the Taxpayers’ Alliance?

Up to a point. It says it exists to “represent taxpayers and to fight for lower taxes”. According to its website, it was launched in 2004 by its chair Andrew Allum, Mr Elliott and Florence Heath. Its directors are these three founders and one Alexander Heath, listed on its Companies House documents as resident in France.

Supporters

The alliance now claims more than 18,000 supporters, but they are not ‘members’ and do not vote on its officers, policies or campaigns, so the extent to which it ‘represents’ taxpayers is debatable.

Campaigns director Mark Wallace admits: “Our supporters don’t vote on what we do, though they could withdraw their support. We are a limited company, and in that sense we are not elected.” Funders, Mr Wallace says, contribute “from£5 up to quite a lot more and we are fortunate that no one funder contributes more than 5% of our income”.

The alliance does not list donors publicly. Mr Wallace insists it is not politically partisan and that it is “looking at waste and spending in councils whatever their political control; our priorities are better services and lower taxes”.

However, while the alliance has criticised some Conservative councils, its political leanings are fairly clear. Mr Allum is a former Westminster City Council Conservative councillor who, the alliance says, “left the party in 2003, having lost faith that it represented his brand of free market, individualist and compassionate politics”.

Last November, Mr Elliott received the One Of Us award from Conservative Way Forward, an organisation that takes inspiration from Margaret Thatcher and says that “the torch she lit is now carried forward by us”. Ms Heath is listed as having held numerous posts in Conservative student bodies and local parties, and the alliance’s supporters list is replete with people who were among Baroness Thatcher’s prominent followers in her heyday.

Hostility

Inevitably, the alliance’s campaigns have been greeted with hostility in local government.

Mr Robertson says: “They have made a lot of high salary levels, but from what I know of their political connections it seems surprising that they are not supporting rewards tied to market economics.”

He argues that the growth of opportunities for people to move within and between local government, central government, the NHS, regional bodies, inspectorates and private sector consultancies means “a lot of people are looking for a limited amount of available talent, and that pushes up salaries”.

He adds that local government has been asked to do a lot more over the past decade and has offered the best performance in the public sector on efficiency.

Heather Wakefield, Unison’s head of local government, particularly dislikes the alliance’s attack on council pensions. She says: “They have a completely wrong view of local government pension scheme costs, and they seem obsessed with those few on high pay, but not obsessed by the many on low pay.

“They have a simplistic approach to local authority spending. They would be the first to complain if their bins were not emptied, yet they think councils can provide services out of thin air.”

Alex Aiken, secretary of Local Government Communications, which represents officers in this field, admits that some councils have “turned into leaflet factories”, but rejects the thrust of the alliance’s attack on publicity. He says: “Communications helps people to know how their money is spent, how to access services and how to engage with democracy.

“The alliance is picking the wrong target when it looks at council newspapers and magazines, which consistently show up as doing a good job of reaching people.”

Public concern about tax is growing, as the 10p tax row showed. Local government will need to tell a good story to address this clamour, especially because, in the Taxpayers’ Alliance, it has a new monitor whose criticisms could have the cumulative
effect of making the public doubt the value of councils’ spending.

Taxpayers’ Alliance supporters

  • John Blundell, director general, Institute of Economic Affairs, free-market thinktank

  • Dr Eamonn Butler, director, Adam Smith Institute, free-market thinktank

  • Professors Tim Congdon and Patrick Minford, prominent academic supporters of Baroness Thatcher

  • Sir Alan Walters, former economic adviser to Baroness Thatcher (above)

  • Chris Woodhead, former chief inspector of schools

  • Roger Scruton, prominent Conservative philosopher

Grievances against local government:

  • Average annual spend of£985,000 on publicity

  • Nine times more people on over£50,000 a year than a decade ago, three times the growth of the whole economy

  • Average council spends over£10m a year on staff payments towards ‘gold plated’ pensions.

  • 14 officers earn more than the prime minister (£188,849) and 132 more than a cabinet minister (£137,759)

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