And now the $64,000 question.
Or in the case of Craven District Council, the £17,000,000 question.
That of pensions.
The pensions situation is horrendous, in 2003-4 there was a deficit of around £10 million, frightening enough one might suppose, but that deficit increased to over £17 Million by April 2006, around five times as much as the total paid by tax payers in a year!
CDC will argue that this is because of new rules introduced in respect of pension liabilities, and whilst this is true, Bradford Metro.Council (for example) have been subject to the same change of rules, and yet do not have a similar large increase in liabilities percentage or per employee. See Part 5 for more details.
Despite such large amounts going in staff, Craven District Council do not take staff expenses into account when giving costs of work undertaken, and there are so many staff that they were off for ten days over Christmas/New Year at the cost, to that lucky staff, of either one half or one whole one day’s leave. Any staff which were essential were then paid overtime!
Even banks cannot afford such generous terms!
So far so bad one might think, but councils have, by their very nature, much in the way of assets.
Perhaps these have increased since 2000/1?
No.
At 31st March 2002 the council (and that’s you remember!) had in Total Net Assets the grand sum of:
Or in the case of Craven District Council, the £17,000,000 question.
That of pensions.
The pensions situation is horrendous, in 2003-
Despite such large amounts going in staff, Craven District Council do not take staff expenses into account when giving costs of work undertaken, and there are so many staff that they were off for ten days over Christmas/New Year at the cost, to that lucky staff, of either one half or one whole one day’s leave. Any staff which were essential were then paid overtime!
Even banks cannot afford such generous terms!
So far so bad one might think, but councils have, by their very nature, much in the way of assets.
Perhaps these have increased since 2000/1?
No.
At 31st March 2002 the council (and that’s you remember!) had in Total Net Assets the grand sum of:
£51,306,187
By 31st March 2006 we had:
£9,058,221
Over £42,000,000 less in three short years!
Over £42,000,000 less in three short years!
Why? Keep reading to find out!
Your Money, Part Four
And now we have covered most things, all that’s remaining is to see whether those responsible for needing ever more money, vastly reducing assets, and employing so many staff that ten day breaks can be taken without caring about customer service, have received their just rewards.
We also need to know what the council are doing about what might appear to be a slippery financial slope with our money, and why our assets have plummeted.
Rewards for Failure?
Any business cannot afford to alienate the public, who buy from them, but councils are in a different position. As already stated you have no choice but to pay ever more, unless you fancy a spell as a guest of Her Majesty!
Councils are led by Chief Executives, so let’s take a look at the Chief Executive’s salary and pension plans over those same years:
2001: £54,591
2005: £72,579
2005: £72,579
In addition, 22.9% of salary is added to the pension plan.
An increase of 33% in four years.
No doubt you too have had similar increases in your salary or pension - Or have you?
But what of the councillors, who oversee the council, ensuring best value?
We know that they’ve recently had a 10% increase in allowances, but how have they fared over similar years?
Councillors’ Allowances:
We know that they’ve recently had a 10% increase in allowances, but how have they fared over similar years?
Councillors’ Allowances:
2000/1: £31,805
2004/5: £156,100
A five fold increase in 4 years!
2004/5: £156,100
A five fold increase in 4 years!
Despite presiding over the financial mess which Craven District Council is now in, it has been suggested by the soon to be defunct Yorkshire and Humber Assembly (YaHA) that she be given an increase to as much as £95,000. This idea was fortunately kicked out by councillors.
CDC have a representative on YaHA - one Carl Lis- and members such as he did not receive any allowances up to a few years ago.
Then they decided that they needed some.
The following year they increased them by 43%
The year after (2006/7) they increased them by a further 300% plus. Good, aren’t they?
Incidentally, councillors are permitted to refuse all or a part of their allowance, so did any at Craven District Council?
No.
At least not as far as records show.
Six councillors even draw allowances for IT from both NYCC AND CDC (Read HERE) and one councillor even continued drawing his allowance despite being in prison!
Next - Let’s look at just why our Total Net Assets dropped over £40 Million in a few short years.
CDC have a representative on YaHA -
The following year they increased them by 43%
The year after (2006/7) they increased them by a further 300% plus. Good, aren’t they?
Incidentally, councillors are permitted to refuse all or a part of their allowance, so did any at Craven District Council?
No.
At least not as far as records show.
Six councillors even draw allowances for IT from both NYCC AND CDC (Read HERE) and one councillor even continued drawing his allowance despite being in prison!
Next -
Your Money, Part Five
In this chapter we’re going to look at what happened to our assets, our ‘Total Net Assets’ as they’re called in the Annual Accounts.
These figures are made by subtracting the estimated liabilities from the estimated worth of our assets. Total Net Assets also has any borrowing removed.
These figures are made by subtracting the estimated liabilities from the estimated worth of our assets. Total Net Assets also has any borrowing removed.
Put simply, Total Net Assets are what we have in the worth of buildings and so on.
Two items stand out from the above, firstly the Assets underwent a huge decline between 2002 and 2006, and secondly the pension liability had a staggering increase between 2002 and 2006.
Craven District Council will point out that new rules for calculating the deficit are in operation, and so they are. These apply to all councils, and, as a comparison, North Yorkshire County Council’s deficit is around £12,000 per employee, Bradford’s around £20,000 per employee.
Craven’s? Around £62,000 per employee.
What it is now we’ll find out later this year, but as staff numbers have increased by almost 25% in the few short years since the new Chief Executive joined, it is unlikely to make for pleasant reading.
So why did our assets drop in value by so much?
That’s easy, on April 1st 2002 we owned council housing, around 1540 dwellings, and they were valued at £41,371,831 - This adds up to under £27,000 per dwelling, little enough one might suppose, especially as in 2000 those same houses were independently valued at around
Two items stand out from the above, firstly the Assets underwent a huge decline between 2002 and 2006, and secondly the pension liability had a staggering increase between 2002 and 2006.
Craven District Council will point out that new rules for calculating the deficit are in operation, and so they are. These apply to all councils, and, as a comparison, North Yorkshire County Council’s deficit is around £12,000 per employee, Bradford’s around £20,000 per employee.
Craven’s? Around £62,000 per employee.
What it is now we’ll find out later this year, but as staff numbers have increased by almost 25% in the few short years since the new Chief Executive joined, it is unlikely to make for pleasant reading.
So why did our assets drop in value by so much?
That’s easy, on April 1st 2002 we owned council housing, around 1540 dwellings, and they were valued at £41,371,831 -
£70Million!
On March 31st 2003 the council sold those houses to a new company, Craven Housing. Whilst all other houses in Craven had rocketed in value during those three years, these houses valued at £70 Million in 2000 were sold for £8 Million in 2003 - just over £5,000 per house!
But still, surely Craven Housing would enable tenants to buy those houses at a cheap price, there is, after all, according to CDC a need for affordable housing? And even if they charged five times the price they had paid, well £25,000 is cheap for a house in Craven!
Craven Housing charged, for that next year, an average of £50,000 per dwelling, a ten fold increase, and none of the profit was returned to the Craven tax payers who had owned those houses.
For all tenants since that time the price is almost full market value, meaning that even a terrace house goes for around the £125,000 mark, or about 25 times the price paid by Craven Housing.
It might be supposed that at least Craven Housing would be responsible for the homeless etc. And such would not be a charge on council tax payers, Such a thought would be wrong, they are still the responsibility of council taxpayers. Had those houses been sold at the low price of £50,000/house then all council taxpayers could have received around £3,000 each as a bonus, as a change from the ever increasing council tax bills.
Even worse, Craven Housing stated that more houses to rent would be built by them, something Craven Council could not do, and at the rate of 20 a year. So we might expect to see over sixty in the 3½ years since they took over the council housing stock.
We’ve actually seen 12 built and 2 demolished - a net gain of only 10 instead of the 60 or 70 we thought we would have. To add insult to injury, after all that we, the taxpayers, have given to Craven Housing, they are seeking reduced price land from Craven District Council (OUR land) to attempt to deliver a few more of those they had promised to build!
Craven Housing charged, for that next year, an average of £50,000 per dwelling, a ten fold increase, and none of the profit was returned to the Craven tax payers who had owned those houses.
For all tenants since that time the price is almost full market value, meaning that even a terrace house goes for around the £125,000 mark, or about 25 times the price paid by Craven Housing.
It might be supposed that at least Craven Housing would be responsible for the homeless etc. And such would not be a charge on council tax payers, Such a thought would be wrong, they are still the responsibility of council taxpayers. Had those houses been sold at the low price of £50,000/house then all council taxpayers could have received around £3,000 each as a bonus, as a change from the ever increasing council tax bills.
Even worse, Craven Housing stated that more houses to rent would be built by them, something Craven Council could not do, and at the rate of 20 a year. So we might expect to see over sixty in the 3½ years since they took over the council housing stock.
We’ve actually seen 12 built and 2 demolished -
|
Date |
Pension Liabilities |
Total Net Assets |
|
31/3/02 |
£7,000,000 |
£51,306,187 |
|
31/3/05 |
£16,661,550 |
£9,922,739 |
|
31/3/06 |
£17,123,000 |
£9,058,221 |
Your Money, Part Three
*This figure is £527,753 higher than 2004/5 and £1,379,154 or 25% higher than a mere two years ago! Is there no limit to staff numbers? No end to this hugely increasing bill?
|
Year |
2002- |
2003- |
2004- |
2005- |
|
Staff Numbers |
223 |
241 |
261 |
272 |
|
Year |
2003- |
2004- |
2005- |
|
Cost of Staff |
£5,619,710 |
£6,471,111 |
£6,998,864* |
We believe that we are now paying more in staff costs than CDC is receiving in total council tax, and this does not include the cost of their pensions.
Unlike debts to money lenders, banks and building societies, non payment of council tax can be punished by imprisonment. Your money is taken from you under threat of such imprisonment, and is spent on your behalf by those who are wiser than you.
But are they?
Every council tax payer in Craven is entitled to receive a copy of the Statement of Accounts. This wordy tome is around 50 pages in length, and, to the layman, perhaps not very comprehensible.
To help it being understood, there is a three page Glossary of Terms of Reference where you can discover, if you care, what exactly BVACOP; CIPFA; SSAP’s and SORP mean.
By which time you’ll wish you’d never started.
So this is in the form of a ‘Readers’ Digest’ in that we’ve tried to make these statements easier to understand, after all it’s YOUR money, surely you should know where it’s going?
To make life a little easier, we’re going to look at the last five years of Finance, that’s 2000/1 - 2001/2 - 2002/3 - 2003/4 and 2004/5 because councils work April 1st to March 31st, and the accounts for 2005/6 won’t be out until around October this year.
Now some operations make money, when you go to the swimming pool you have to pay, that’s a profit, but of course the staff have to be paid, and that’s a loss. So what we’re going to show you is how much of an increase they’ve needed from you each year in terms of percentages. After that we’ll try to show you where it’s going.
But are they?
Every council tax payer in Craven is entitled to receive a copy of the Statement of Accounts. This wordy tome is around 50 pages in length, and, to the layman, perhaps not very comprehensible.
To help it being understood, there is a three page Glossary of Terms of Reference where you can discover, if you care, what exactly BVACOP; CIPFA; SSAP’s and SORP mean.
By which time you’ll wish you’d never started.
So this is in the form of a ‘Readers’ Digest’ in that we’ve tried to make these statements easier to understand, after all it’s YOUR money, surely you should know where it’s going?
To make life a little easier, we’re going to look at the last five years of Finance, that’s 2000/1 -
|
Year |
From Taxpayers |
Increase in money from taxpayers |
|
2000- |
£2,536,748 |
0% |
|
2001- |
£2,707,844 |
6.7% |
|
2002- |
£2,938,413 |
15.8% |
|
2003- |
£3,188,673 |
25.7% |
|
2004- |
£3,428,487 |
35.2% |
|
2005- |
£3,623,470 |
42.8% |
So we can now easily see that Craven District Council received a great deal more from taxpayers in a few short years.
But where does the money go?
Where do they spend your money?
There are many areas of spending, but the accounts break them down into a few items such as:
But where does the money go?
Where do they spend your money?
There are many areas of spending, but the accounts break them down into a few items such as:
Cultural and Related Services, Environmental Services and so on.
The main problem with these is that it’s not easily possible to compare things, but we’ll try to make it easier.
There are some items of expenditure which can be seen to have remained stable, and some which have risen dramatically through the last few years.
Let’s examine some of these:
The environment is very topical, and of ever increasing importance, indeed CDC have a special place for Environmental Initiatives, but how important is it really? How much do we spend on these initiatives?
Well in 2000/1 we didn’t think much of them so we spent the grand total of £20,582 on them.
But of course the environment has grown in importance so that in 2004/5 we spent, er...
£5,257 on the environment. Less even than the council spent on trying to suppress this site, but still too much for CDC, so in 2005/6 they spent nothing at all on environmental initiatives.
Not a lot for the environment then, but the council has the task of ensuring that your hard earned is spent only on essentials, not luxuries. So where have the millions gone?
Let’s first of all look at the total amount of money that the council spends compared with where they get it from. In this example we’ll look at what they get from the government and from you, the taxpayer.
We can see that the Government Grant has increased by around 50% in five years, and as you already know the amount from taxpayers has increased by almost 43% .
But this doesn’t say, as yet, where it’s going.
The main problem with these is that it’s not easily possible to compare things, but we’ll try to make it easier.
There are some items of expenditure which can be seen to have remained stable, and some which have risen dramatically through the last few years.
Let’s examine some of these:
The environment is very topical, and of ever increasing importance, indeed CDC have a special place for Environmental Initiatives, but how important is it really? How much do we spend on these initiatives?
Well in 2000/1 we didn’t think much of them so we spent the grand total of £20,582 on them.
But of course the environment has grown in importance so that in 2004/5 we spent, er...
£5,257 on the environment. Less even than the council spent on trying to suppress this site, but still too much for CDC, so in 2005/6 they spent nothing at all on environmental initiatives.
Not a lot for the environment then, but the council has the task of ensuring that your hard earned is spent only on essentials, not luxuries. So where have the millions gone?
Let’s first of all look at the total amount of money that the council spends compared with where they get it from. In this example we’ll look at what they get from the government and from you, the taxpayer.
We can see that the Government Grant has increased by around 50% in five years, and as you already know the amount from taxpayers has increased by almost 43% .
But this doesn’t say, as yet, where it’s going.
Whilst some things cost more, and some (such as the environment) cost less, there is one major cost to the council, and that’s wages and pensions, so let’s examine those next.
Now it begins to be apparent where many millions of the council’s (our) money goes, it goes on staff.
There seems to be no end to the number of employees that CDC needs, and following past records it is not a surprise to find that this number has increased again during 2006.
Now it begins to be apparent where many millions of the council’s (our) money goes, it goes on staff.
There seems to be no end to the number of employees that CDC needs, and following past records it is not a surprise to find that this number has increased again during 2006.
|
Year |
Government |
YOU |
|
2000/1 |
£1,315,631 |
£2,536,748 |
|
2001/2 |
£1,469,003 |
£2,707,844 |
|
2002/3 |
£1,326,635 |
£2,938,413 |
|
2003/4 |
£2,008,943 |
£3,188,673 |
|
2004/5 |
£1,966,762 |
£3,428,487 |
|
2005/6 |
£2,000,339 |
£3,623,470 |
©2007 Craven Matters & CRAG
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