For many of you claiming mileage for using your car/van for work will be paid at 0.45p for the first 10,000 business miles in a year and then 25p per mile thereafter. This chimes with what Councillors are allowed to claim.
However, 50 officers of Folkestone & Hythe District Council (FHDC) are entitled through the essential car user scheme to receive £1239 per annum paid in equal monthly installments of £103.25, plus are entitled to claim up to 50.5p per mile depending on the engine size of their vehicle. However, in 2015/16 and 2016/17, FHDC (previously Shepway) were allowing rates of 65p a mile, not 50.5p.
Essential Users are defined within the NJC National Agreement, which started in 2011, as being:
‘those whose duties are of such a nature that it is essential for them to have a car at their disposal whenever required. If the employee uses a private car in carrying out those official duties then they shall be entitled to receive a lump sum and agreed mileage rates (Part 3 Section 6).”
In 2014 the Local Government Association (LGA) carried out a survey on terms and conditions that formed Part 3 of the NJC National Agreement, and the findings indicated that nearly 40% of councils were already moving away from the Essential User scheme and applying HMRC mileage rates for any claims.
In 2013/2014, a review by FHDC of the application and validity of the essential user allowance and associated mileage with a view to moving to the HMRC rates of mileage reimbursement was mooted. The same happened in 2016/17, but after the Taxpayers Alliance report on Council mileage claims a council spokesperson said:
“We are currently reviewing mileage rates and the HMRC ‘approved rate’ is one of the factors we will take into account, as it has an impact on the tax payable by staff,“
Of course a review was undertaken but nothing changed. In 2018/19 there was an understanding that the essential car user allowance would cease by 1st April 2020. However after three reviews in six years nothing has changed. Now the personnel committee will look at this again on June 4th.
By removing the essential car allowance there would be a budget saving in excess of £60,000 per annum.
There are so few staff who regularly do in excess of 2,400 miles per annum due to their roles, as such the effect of moving to HMRC rates is substantial and would provide an actual cost saving to the council.
FHDC provide an alternative to the essential car user scheme called the cash alternative scheme. This is open to any other officer who travels in excess of 4,000 miles annually are eligible to apply to join this scheme. But as we know few staff regularly do in excess of 2,400 miles.
The cash alternative scheme is offered on the basis of a 3 year renewable contract, subject to eligibility. Any officer who is graded H and above on the council pay scales are automatically entitled to join the scheme.
There are currently 3 levels of payments associated with this scheme: –
£4,236 per annum for those at Grade J, K & L of the pay scales –
£3,900 per annum for those at Grade H & I of the pay scales –
£3,036 per annum for those eligible due to travelling in excess of 4,000 miles each year.
This suggest there are staff at FHDC who are entitled to claim both the Essential Car Scheme and the Cash Alternative Scheme. If you are a Grade J, K or L rate officer, you’d be eligible for £5,475 – Essential Car Scheme £1,239 + Cash Alternative Scheme £4,236 – on top of your salary
FHDC are recommending to the Personal Committee on the 4th June to scrap the essential car user scheme and implement a new cash alternative level.
The current cash alternative model requires staff to travel in excess of 4,000 miles each year to be eligible for one of the three annual payments set out above.
However, it is recommended to the Personnel Committee that a new level of the scheme could be introduced that enables staff to apply for the cash alternative payments if they travel in excess of 2,400 miles per annum (which few do). A suggested amount for this would be £1,800 per annum (£150 per month) with mileage reimbursed at 18p per mile. The cost to the council of implementing these new level would be £10,800 per annum based on 6 staff members.
That said, there are 50 members of staff eligible for the cash alternative payments meaning that the new scheme would cost approx £90,000.
Scrapping the essential car users allowance means some FHDC officers will receive less money for using their cars. After six years and four reviews it’s about time those at the top of the tree at FHDC brought their claims in line with the HMRC approved rate of 45p a mile.
The Shepwayvox Team
The Velvet Voices of Dissent