Month: Dec 2008

Today the papers are reporting on Eric Pickles’ plans for reform of local government, see FT, Times, Guardian and Evening Standard. Pickles is the Shadow Communities Secretary. A lot of the reporting has talked about town hall “fat cats”, ie highly paid council staff, in particular chief execs.

The reported comments from the LGA in the Times really need challenging, namely:

The Local Government Association argues that its chief executives are paid modestly compared with private and public organisations with comparable turnovers and staffing levels. Paul Coen, the head of the association, has pointed out that a chief executive at a big council could earn on average more than twice as much in a public or private organisation of a similar size.

It seems (see The Red Box blog in the Times) that Coen is on the way out. No wonder as he is really talking crap here.

As capable as many local authority chief execs are they don’t have to create and sell stuff. They just work out their costs, find out what the government grant will be and ask council tax payers for the difference. Ideally they will be of a mind to keep those costs under control. Sure you want good people doing this but you don’t need the really expensive, talented people who can create and sell.

You shouldn’t compare council chief execs to corporate chief execs. More properly you might compare them to operations directors of equivalent sized commercial organisations in very mature industries where there is little or no growth.

I don’t always agree with the TaxPayer’s Alliance but their Town Hall Rich List published in March is a useful read. It put Ealing’s own Darra Singh at number 7 in the country.

Update: A reader points out this article in the Sunday Times 4th January which highlights up the rather dubious role that Solace Enterprises plays in the the setting of chief executives pay in local authorities. Solace is the Society of Local Authority Chief Executives.

Yesterday the Telegraph did a piece on Labour’s proposals to charge people more if they happen to live somewhere nice. No doubt Northfield and many parts of Ealing will have high ratings in Labour’s scheme of “value significant codes”.

Simon Heffer in the Telegraph today fulminates:

The Brown Terror, having wrecked the economy, now proposes to wreck it further by penalising those who already make the biggest contribution, and ensuring they contribute even more. That is what socialism is all about, and why socialist countries are inevitably economic failures. If you tax successful people until their pips are squeaking, they tend to clear off to be successful elsewhere, and stop paying our taxes altogether.

This is just another example of a process that has been accelerating throughout the last 11 years.

With the 45% tax rate and this new nice neighbourhood tax Labour are nakedly plotting to raise taxes on the middle classes, something they have been wary of doing up until now. They have massively increased taxes but not nakedly. They have done it stealthily, by inches. Please note Conservatives the way to undo Labour’s damage is by inches too.

What Labour have also consistently done hitherto is to target “deprived” groups for extra help, whether it is spending more on bad schools, spending Lottery money in deprived areas, giving more money to inefficient Labour councils or targeting health resources at unhealthy people to “reduce health inequalities”.

In many ways this seems laudable but at some point the better off just decide to stop being forced to be so generous. They work out how to avoid taxes or they simply leave the country. In Britain today you can give up almost half your income in taxes, pay two grand in council tax and still not get a school that pushes your child academically, get hold of basic healthcare quickly and conveniently and enjoy a high quality public realm. If we fail to meet the basic aspirations of those paying the bills something will change.

It is one thing to expect wealthier people to contribute more. It is quite another if you then give a disproportionate share of the proceeds to people who can’t or won’t contribute.

In Britain today too much public money is diverted to people who make poor choices all of their lives; people who consistently choose not to get educated, not to work, not to stay with their partners, not to look after their own children and not to look after themselves. No amount of cash can undo these poor choices and often the money provides perverse incentives to keep making poor choices.