Sensational allegations that senior Lambeth council officers have illegally been paid via their own ‘management companies’, ‘consultancies’ or as ‘suppliers’ to the council are made in this week’s issue of Private Eye magazine.
“This has the advantage, for the employee and the council, of reducing tax and national insurance bills considerably” says the article in the magazine’s ‘Rotten Boroughs’ column.
Lambeth’s Green party Cllr Scott Ainslie told News From Crystal Palace: “If Lambeth has been failing in its duties on tax and National Insurance and receives a fine it will be council taxpayers who end up footing the bill.
“Lambeth Green party calls on council leader Lib Peck to carry out a root and branch investigation into the issue.
“As the People’s Audit Lambeth have highlighted, all of Lambeth’s finances need much closer scrutiny.
“Lambeth’s Labour leaders seem to just bury their head in the sand – but the spotlight is not going away.
“It’s time to face up to the new reality that people want total transparency and nothing short.”
And Lambeth’s Conservative opposition leader Cllr Tim Briggs told News From Crystal Palace: “It shows how two-faced Labour councillors are. “On the one hand they talk about trying to reduce staff that are not employed by the council, but on the other hand allow senior staff to do whatever they like when it comes to how they are paid.
“These council officers are doing what Labour councillors allow them to do. “This Labour administration will not listen to residents and act in their interests. “It lost its integrity a long time ago.”
LAMBETH COUNCIL RESPONSE TODAY (FRIDAY)
Lambeth council have posted the following statement on its Love Lambeth website:
“Responding to recent inaccurate reporting of payments to workers under “IR35” regulations, a Lambeth council spokesman said:
“The vast majority of temporary or interim workers at the council are ‘inside IR35’, and are subject to PAYE.
“A small number of people, working on time-limited projects, predominantly capital projects, work as consultants outside IR35. “This is under regular review by the council and checked against current practice in local government. “We are also subject to audits by HMRC.
“The payment of individuals outside IR35, in both public bodies and private companies, is entirely legitimate and fully in line with national tax & employment regulations. “It is neither unique nor ‘illegal’ as Private Eye suggests.”
The revelations come as Lambeth council leader Cllr Lib Peck is set to answer questions at an election hustings in Vauxhall tonight (Thursday) organised by People’s Audit Lambeth.
Candidates from all major political parties have been confirmed to take part in the hustings, which will take place at the Vauxhall Gardens community centre, 5 Glasshouse Walk, SE11 5ES from 6.30pm-9pm.
The event will be chaired by Rev Steve Coulson, Vicar of St. Mark’s Kennington.
Panellists are: Cllr Lib Peck (Lab) ; Cllr Tim Briggs (Con), Cllr Scott Ainslie (Green), Ashley Lumsden (Lib Dem), Cllr Rachel Heywood (Ind) and Janet Baker (Women’s Equality Party).
The People’s Audit, which is politically unaligned and includes a chartered accountant, quantity surveyor and other financial professionals, has unearthed what it describes as “evidence of extensive financial mismanagement and failings in its financial governance” within Lambeth council.
A People’s Audit Lambeth statement says questions are expected to centre on their main findings to date, which include:
- High-paid staff working at Lambeth council. Despite deep cuts in services and overall staff levels at Lambeth council, the number of senior staff employed by the borough has soared – along with its salary bill.
- Construction costs of the new Lambeth town hall more than doubling – from £50M to £104M.
- Contractors for repairs at Cressingham Gardens estate, Tulse Hill being paid for works that have not been carried out; repeat instances of the same repair; and instances of overcharging.
- Indications of possible price fixing between some contractors. In one instance all four tenderers on a £1.3m project within 7 per cent of each other; in another, two of the tenderers had identical prices for several items – both unheard of in the building industry.
- Sale to private developer Pocket Living of three pieces of land from Lambeth council estates in Kennington and Streatham at a discount of at least £1m in 2015/16 – without any competitive tender.
People’s Audit Lambeth co-ordinator Simon Morrow said: “The People’s Audit initiative was started as a result of a group of citizen’s concerns as to how councils, in our case Lambeth, make decisions and spend our money. “The People’s Audit hustings will be an opportunity for members of the public to question candidates in Lambeth on the issues raised by our reports.”
Lambeth council have been asked if they have any comment to make on the Private Eye article. As yet – as usual – no answer has been forthcoming.
Social media: In the wake of yesterday’s Private Eye article People’s Audit Lambeth posted on social media:
@PeoplesAudit There will now follow the customary three day silence whilst the tax payer funded #Lambeth PR department thinks up ways of spinning their way out of this
♻ Michael J Keane @KeaneMJ (People’s Audit and Green party candidate Oval ward – Ed.) replied:
Are you taking bets on the lines Lambeth will take? I’ll go for something like: “These payment arrangements help us retain the best staff and we believe they offer better value for our residents.”
Tom Keene @anthillsocial suggested:
How about: “The information in the Private Eye article is wrong. “We have adhered to all legislation relevant to employees and consultants and maintain high standards in our monitoring of consultant contracts”
♻Michael J Keane ♻ @KeaneMJ later responded:
What really saddens about the current Lambeth administration is their pretence at infallibility in the face of mounting evidence that they are out of their depth. They may have a well oiled canvassing machine and a tame PR department but what’s wrong is wrong.
On the hustings meeting Defend The Ten Retweeted Laura Swaffield @lswaffield1
Lib Peck on panel at People’s Audit hustings. Does this mean council will give real answers at last?
BACKGROUND (The dull but important bits – Ed.): IR35 is tax legislation that is designed to combat tax avoidance by workers supplying their services to clients via an intermediary, such as a limited company, but who would be an employee if the intermediary was not used. Such workers are called ‘disguised employees’ by Her Majesty’s Revenue and Customs (HMRC).
The HM Customs and Revenue website says: “Public authorities are responsible for deciding if off-payroll working rules apply in the public sector.
“The person providing services through their own intermediary will need to provide information to the public authority to help them make their decision.
“If the rules apply, the public authority, agency or other third party who is responsible for paying the worker’s intermediary must deduct tax and Class 1 NICs and pay and report them to HM Revenue and Customs (HMRC).”
“Penalties for not following off-payroll working rules: You can be charged interest and penalties on any Income Tax or NICs owed because you’ve not applied the off-payroll working rules. “The penalties can be more severe if the rules were deliberately ignored.”