Correspondence to Isitfair by Christine Melsom

I receive letters from all over the country from members telling me their stories regarding council tax, suggestions on how the tax could be made fairer and their difficulties in paying it.  I also receive a lot of information on how councils spend taxpayers’ money.

Firstly, a letter received this week from an Isitfair supporter in the East Midlands has really made me see red.  She asks how we can make the Government and the councils sit up and take notice of the predicament of some pensioners.  Both she and her husband are of pensionable age and receive no state benefits.  She has, since retirement, taken on two cleaning jobs to help pay the £1,200 council tax due on their home.  Recently, due to the recession, she has lost one of these jobs and the second has cut the hours.  She has been unable to find other work.

Of course you may say that they should apply for benefits – but they have just too much in the way of savings.  Like thousands of others across the country they are asset rich and income poor.  Savings are required to pay for the upkeep on a property they have struggled to buy through their working years.  It is their rainy day money, put by for emergencies.  Unlike Governments, that is what they did, they spent according to their means and saved for those rainy days because, unlike people living in rented property, there is no one else who will pay for replacements and repairs.  They are people living on the edge of the benefit system, financially worse off than those receiving all the state benefits.  Sir Michael Lyons in his infamous inquiry said he thought that the savings limit should be raised to £50,000, but it did not happen.

Secondly, you can imagine my anger when I was asked for my opinion on the bonuses or emoluments being paid to the executive staff on councils throughout the country.  People already receiving huge salaries and contributions to their pensions from the public purse, being paid bonuses larger than many of us (including council staff) receive each year to live on and even bring up a family.  It seems that monetary restraint applies only to those in the lower echelons of public service.

So here we have on the one hand, this lady of retirement age worrying about how to pay her council tax bill, and taking on cleaning jobs to do so and, on the other hand, people employed by the council receiving five figure bonuses on top of salaries so enormous they beggar belief.  There is something very wrong here.

You may say that these high paid executives are responsible for huge budgets, but are they really?  If they are, then why are we paying millions of pounds every year to councillors?  Councillors, I would add, who are also receiving high salaries (or if you really want to be picky, allowances), can also join (and do) a very favourable Local Government Pension Scheme.  You must remember that everything in the public sector is paid for by the private sector.

The world has gone mad.

Many councils have prepared themselves for shedding staff.  They have continued to recruit and still recruit.  Last in, first out. Easy come, easy go.

The proposed £250 per annum pay rise for the lowest paid staff now seems to me to be more of an insult.  I just hope that when the good times roll the flat monetary rise will apply across the board – halt the widening gap between rich and poor.  The highly paid executives, living in their own little world of protected wealth and advantage, and thumbing their noses at their paymasters, must surely receive their comeuppance.

I suggest you ask your councils how much they have or are paying out to executives in addition to their normal salaries.  The councillors may well call them bonuses – or emoluments – or honorariums, but it all boils down to the same thing.  They are being paid extra money for doing a job for which they already receive ample salary.  It has to stop.  The Government and the councils must take a leaf out of the book of the Irish Government – not just job cuts but salary cuts from top to bottom.  The previous Government has, to say the least, left us all in a hole and to be seen fiddling around with the expenses is not enough. Fewer MPs, fewer councillors and fewer state employees – add to that a change in the local government and civil service pension systems.

Remember that everything in the public sector is paid for, one way or another, by the private sector.

The following emails are from a sitting councillor and he has given full permission for them to be printed and for his name to be attached.

Dear Christine,

One of the biggest injustices in Local Government is the Local Government Pension Scheme and here are my reasons why.  I am a Wealden District Councillor and the figures I give to you are accurate.  Wealden District Council has an overall budget of £18 million.  The employee contribution to the Local Government Scheme varies between 5% and 7% depending on the income of the individual.  However, the employer contribution is 21.6%.  Putting this into perspective, Wealden District Council had to pay £2.478 million in employer pension contributions out of its £18 million budget in the financial year 2009/10.  The current law states that District, Boroughs, County and Unitary Authorities can only offer the Local Government Pension Scheme and is not allowed to enter into a cheaper private scheme.

With shares, property and other portfolios sliding in value, it is the employer (council tax payer) that has to make up the shortfall in higher contributions as the employee contribution is capped whatever happens in the open markets.

This is a total injustice to the council tax payer and needs reforming at the earliest opportunity in order to reduce the burden on the council and national tax payer.

best wishes

Nick

**************

Hi Christine,

You can use this and am happy for my name to be put against it.

In addition to what I said in my previous e mail, perhaps it would help if I went further. Town and Parish Councils have the option in law whether they enter the Local Government Pension Scheme or run a Stakeholder Scheme.

Hailsham Town Council opted to enter the scheme in 1978.  Last year, following escalating costs to over £50,000 in employer pension contributions out of a £818,000 annual precept in 2009/10, the council looked at coming out of the scheme.  The East Sussex Pension Fund told Hailsham Town Council that it would have to pay £950,000 if it closed the scheme to all employees.

If you add the cost of the Parish, District, County, Police and Fire Authorities total employer contributions, the council tax payer is paying an exorbitant amount of money each year to provide gold plated pensions to a minority of individuals which is generally unavailable in the private sector.

This is one of the biggest hidden secrets of local and national government (the same concept applies to civil servants) and is a public outrage.

best wishes

Nick

and this from another Isitfair supporter

Dear Christine

As much as I welcome your e-mails and respect your judgement on council tax, the council tax is only one aspect of the unfair structure.  The whole policy of government, the last one and so far this one, reflect nothing but ignorance, incompetence, arrogance, corruption and the lowest level of ability possible.

The history of politicians is promises, promises and promises all of which get broken and the only thing that remains intact is overseas aide which is at the expense of our own pensioners, knowing full well that this aide reaches the pockets of the racketeers and not the people in need.  The State Pension of this country, the lowest in Europe and less than 14% of the national average wage while ALL the Continental countries have a State Pension of at least 40% of their national average wage and that is why 2.5 million pensioners live below the bread line and 25,000 pensioners die prematurely every year from hypothermia, all because the pension is inadequate, and could be corrected overnight.  Instead of the government as well as the last government borrowing money from the fund the pension should be increased to a level so that all expenses are met including Council Tax.

The Statement from Steve Webb Pensions Minister 17 June 2010:

The Government borrows money from the fund and therefore if that money were to be used to pay for higher pensions, the Government would have to raise that money from elsewhere.  Once that surplus had been spent, more money would need to be found to pay for higher pensions.  The Government is not prepared to do this.

In 1945 (when I was in India in the services) the political pledge by Harold Wilson was "VOTE LABOUR FOR A QUICK DEMOBILIATION" and in 1946 the first thing he did was to stop demobilisation.  "A COUNTRY FIT FOR HEROES",well where has that gone?

My reward for serving in the forces was, on being demobilised, subsidised by my parents in order to finish my education.  There was no monetary assistance to help you through that period of study.

What I find difficult is naivety of the public and also the campaigners organising marches.  What has so far succeeded?  Absolutely nothing.  When this point is raised with the NPC the response is nothing yet again.

My conclusion is that Parliament is not the representative of the people, the House of Lords a waste of public money and all the people who are in jobs of bureaucracy are not saying anything any more than turkeys sending Christmas cards.

The Country needs policies of Christian Doctrines and humanitarian values but no politician will be willing to comply with these values.  To think that the last Prime Minister the son of a church minister could not even remember the parable of the Good Samaritan.

Keep up the good work and God Bless

Bernard Wright

Related links

Mature Times: "Pensioners take cleaning jobs while Council bosses get five figure bonuses"
BBC: "Public sector pensions 'need reform', says commission"
Communities & Local Government: Rt Hon Eric Pickles MP speech to the Local Government Association Conference 2010