Lies, Damned Lies & Local Authority Accounts.

There are lies, damned lies and there are Local Authority Accounts to add a new twist to an old adage. The data Local Authority Accounts present is not always clear and easy to understand, even when one is informed in simple tables and graphs about data which looks meaningful but turns out to be anything but.

Let’s take the remuneration packages for members of staff earning above £50,000 for Shepway District Council (SDC) and Kent County Council as an example.

On page 63 of SDC’s Draft Statement of Accounts 2016/17 it shows the following chart about remuneration packages.

This table shows the number of staff receiving a remuneration of greater than £50,000 for the financial years 15/16 and 16/17. However, a plain reading of this table is incorrect. So we’ll clarify how it ought to be read. This table does not relate to council staff employed on salaries of greater than £50,000 but just the number of staff receiving greater that £50,000 in remuneration; which includes redundancy packages and exit packages. This is a very unusual way to present information. But the CIPFA Code of Practice for Local Authority Accounting 16/17   says that setting the data out in this way is OK.

So in the data above for example, a person listed in the £50,000 – £54,999 bracket could be someone who earned only £40,000 per annum, but was made redundant and paid a £12,500 redundancy package – bringing their total remuneration in 15/16 or 16/17 above the reporting threshold.

So we decided to take a look at remuneration packages for the last five financial years 12/13 through to 16/17.

As you can see the numbers have risen and fallen. So what we have done when looking at remuneration packages is to take the midpoint (which we believe shows a fair and conservative estimate) as it is impossible to deduce from the tables presented how many staff are employed on salaries of greater than £50,000.

Why any set of Council Accounts does not allow the public to know precisely how many persons are employed on salaries of greater that £50,000 is a question for CIPFA and those who feed their recommendations into the Code of Practice for Local Authority Accounting.

So we can only estimate that between 12/13 and 16/17, the rise in remuneration for SDC officers over £50,000, averages 3.4% per annum. Yet even this data is not meaningful as it is necessary to know how many redundancy & exit packages is in the 1st table above. Nowhere in the accounts is this made clear. So the facts presented, all derived from SDC’s accounts, mean very little because of the way they have been packaged and presented. This is the same for all Council’s in England & Wales. The data is not transparent, so it does not allow meaningful interpretation by the public.

So the graph above shows that in 2015/16, twenty nine members of staff received salaries greater than £50,000. And that SDC paid salaries totalling £1.9 million. But to say that would be misleading and incorrect, as that figure could easily have redundancy and exit packages included in it.

Regarding KCC remuneration packages they do state at page 20 of their Draft Statement of Accounts for 16/17 the following:

• all sums paid to or receivable by an employee including non-taxable termination payments, redundancy payments and pay in lieu of notice. This includes all payments, regardless of whether or not they were due in the year e.g. advance payment of salary in lieu of notice.

And at pages 29 & 30 set out the following remuneration packages for Non-Schools and Schools. For simplicity we have only looked at Non- Schools.

We wish we could be clearer about this, but this is local government we are talking about, where nothing is quite what it seems.

So we would love to be able to tell you that for four years in a row the amount paid in Salaries rose by £5 million and then in the fifth year it fell back by £2 million, but we can’t. Even if we knew the exact numbers of staff who are employed on salaries greater than £50,000, we could not give you an exact figure, as we wouldn’t know how many redundancy and exit packages entered into the equation. And no you can’t just minus the exit packages from the remuneration packages over £50,000, that would be too easy and this is local government we are talking about as we said.

It is clear to us that Local Government needs a massive sea change in presenting information about its accounts to the public. A lot of the data presented by Councils in England & Wales is meaningless and open to misinterpretation by the public through no fault of their own.

Between 12/13 and 16/17 we’d love to tell you that the rise in remuneration for KCC officers earning over £50,000 has risen by 4.3% per annum on average. Alas though to do so would be deliberately misinterpreting the data.

So, to use a well known adage but with a new twist, there are lies, damned lies and local government accounts. We do not see why it is necessary to bolster Council accounts with useless and meaningless data, do you?

Perhaps it is a new style of management known as Mushroom management – which restricts public/employee access to information and decisions (keeps you in the dark) and when information is conveyed – such as via the accounts – it is incomplete, inaccurate or full of spin (throw manure on them).

We’ll leave you to decide if this is the case or not.

The Shepwayvox Team

Hat Tip to the The Bristol Cable