Brent LBC is paying £200,000 a year for its interim chief executive through a private company instead of the pay roll, LGC can reveal.
A Freedom of Information request uncovered the arrangement just as civil servants promised MPs they would investigate how many so-called personal service contracts are in use in local government.
The authority had refused to divulge the salary of interim chief executive Christine Gilbert (left) but, following a Freedom of Information request, revealed she was paid via a company called Christine Gilbert Associates Ltd.
Although its FOI response did not reveal the amount paid to the company, the authority did say “the fees payable to CGA are less than to the former chief executive” whose upper salary band was £194,550.
The authority later clarified that the contract between the council and CGA Ltd was £100,000 for a six month period, but pointed out that the £194,550 pay band of the previous chief executive excluded “on costs” such as pension contributions which would be an additional 40% of salary.
Details of Brent’s payment arrangements for its interim chief executive were uncovered as the Department for Communities & Local Government promised to look into the number of councils using companies to pay staff.
Permanent secretary Sir Bob Kerslake made the commitment when he appeared before the public accounts select committee on Monday in response to complaints from chair Margaret Hodge (Lab) that the LGA did not hold the information.
The committee’s enquiries follow a ministerial review into the use of off payroll employment arrangements within the public sector.
Chief secretary to the Treasury Danny Alexander (Lib Dem) , who led the review, said the “opaque nature of those engagements has created the conditions where tax avoidance could be taking place”.
The review identified 2,400 off payroll engagements within central government and its agencies.
Mr Alexander described this as “an unacceptable number of off payroll engagements given the lack of transparency on the tax arrangements of the contracts” and said such a “lack of transparency cannot continue”.
His review, published in May 2012, did not apply to either the BBC or local government, and he said “it will be for those organisations to justify their own off payroll arrangements in the light of the unprecedented transparency we are showing today”.
Pressure on the BBC resulted in a November announcement that it would move away from the practice when appointing new staff and offer employment contracts to a number of existing freelancers.
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