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Why do Councils need to call in consultants?

Mark_wallace Mark Wallace of the Taxpayers Alliance says Councils justify more high paid managers by the need to have the best people. So why do they then need to keep calling in consultants?

This week saw the publication of the second report in the TaxPayers' Alliance's Council Spending Uncovered series, which began in December with the paper on publicity spending. The new report, which can be read here, investigates the growth and cost of middle and senior management in local government by counting up the number and cost of the staff revealed in councils' own accounts to be receiving remuneration of £50,000 or more a year.

The first time we did a survey like this, in early 2008, the TPA was able to produce the first ever national picture of middle and senior management in British local government. At that time, we only had the resources to compare 2006/07 to 1996/97. Even then, the figures were shocking: the number of council staff getting £50,000 or more a year had grown nine-fold in a decade, compared to the three-fold growth in such jobs in the wider economy.

One year on, and we have obtained 97% of councils' accounts for 2007/08 - the other 3% having at the time of writing the report still failed to publish their accounts! This means we can provide a year-on-year update, and see council by council how the picture has changed. Unfortunately, it is not good news for taxpayers.

In 2007/08, despite the economy starting its first credit crunch wobbles, and despite councils' repeated claims to be underfunded and strapped for cash, the number of staff enjoying these financial packages increased by a whopping 22% to a total of 36,851 officials whose salaries, bonuses and other benefits cost taxpayers £2.4 billion. Our town halls are the best paid and the most over staffed that they have ever been, and the staff numbers and pay packets are growing fast.

Take South Tyneside council as an illustrative example. In 1996/97, they had one staff member above the £50,000 grand mark – as it happens, that individual was in the £50,000-£60,000 bracket. By 2006/07, they had 80 staff over £50,000, costing £4.9m. In 2007/08, they made a huge leap to 144 such officials at a cost of over £9 million. That is far beyond simple inflation.

Far too many councils seem to have forgotten that people are already struggling to pay their council tax demands. They appear to have forgotten, too, that despite the massive boom in middle and senior town hall managers of the previous ten years, productivity has remained low, sickness absences have remained far higher than in the private sector, costs have increased and yet services such as libraries, playing fields and bin collections have repeatedly been cut back. This culture of top-heavy management has failed – and councils should not be simply pressing blindly on with it, regardless.

Councils, of course, defend themselves by saying that they need to pay such high salaries in order to get the very best staff. However, the quality of service that we actually get for our £2.4 billion is brought into question by the fact that at the same time as these thousands of managers have been taken on, the consultancy bill has gone through the roof in recent years, too. If we have to pay so much because the staff are all so worthwhile, then why do we also have to foot a massive bill for consultants to tell them how to do their job?

Some examples also demonstrate the fallacy of this argument. Haringey,for example, spent over £24 million on 385 staff at this level – one of the highest bills per head of population in the whole country. Despite their hefty salaries, we have in recent months seen all too vividly that Haringey's managers are far from competent.

As well as revealing an alarming rate of growth in the upper tiers of local government, though, this paper also demonstrates that there is undoubtedly space for reductions to be made. Councils may have felt – even when Northern Rock was crashing, and the economic slowdown was beginning – that they could afford to simply keep on spending. Now, with a recession formally underway and the number of people dragged before the courts for not being able to afford the council tax going sky high, councils have no excuse. This spending binge must stop immediately, and it must be reversed.

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