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Councils maxing out the credit card

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laughing dogA little light relief for South Tyneside tax payers

I’m already getting pretty tired of the lacklustre economic performance of the Conservative led coalition government still labouring under the debt burdens left by its predecessor and weighed down by the yolk of the Eurozone debt crisis, the mantras are now ineffective and sharp clear results are what we are all screaming out to see. In the absence of any real growth policy the UK economy continues to slumber and the message that Labour “maxed out” the nation’s credit card continues to be broadcast ad nauseam. Yet, even after acknowledging the massive difficulties faced in attempting to reduce the structural budget deficit, and the mounting contributions to the IMF and the Central European Bank to shore up Italy, Greece, Ireland, and possibly Spain and Portugal too, it will be hard to argue that they are succeeding in meeting many targets when the next round of public spending figures are produced by the National Statistics Office. I confidently predict that despite the reductions in spending that we will see overall public expenditure continuing to rise seemingly unabated  and the PSBN (Public Sector Borrowing Requirement) will once again be a huge area of concern, after almost eighteen months in office the coalition will not have been able to show any real impact on the important numbers that determine how the international financial institutions regard our economy. Additionally the recently announced plan to print more money inject a further £75 Bn worth of quantitative easing into the banking system will have no guarantee of reaching the parts of the economy that need it (SMEs and consumers) and almost every guarantee to further fuel inflation which is already above the Bank of England’s targets, savings and pensions are about to be eroded further.

So, it comes as little surprise that we learn today that fiscal responsibility is still not something appreciated by some officials in local government, the Daily Telegraph carries an account of how councils in England, Scotland, and Wales continue to allow Chief Executives and other higher managers to spend on corporate credit cards to fund a “work style” that many could only dream of. I know it’s only small beer in the larger scheme of things but it is indicative of an attitude that ignores a responsibility and accountability that they have to local tax payers and the way that they spend other people’s money. Local councils. they say, have racked up credit card debts of around £100 m over the last three years spending on such things as overnight hotel bills, first class travel, and gifts. However when delving deeper into the reported figure for spending which exceeded £500, we see things which perhaps might put some Chief Executives on a par with MPs during the horrendous disclosure of their expenses.

  • Take a look at Essex County Council and ponder on its spending of almost £1m on “legal matters”, it turns out that most of these were the payment of fines! They also ran up huge bills at Tesco and Marks and Spencer.
  • Then ponder over how Pembrokeshire Council can spend over £5m on a credit card and include what looks like the whole of its social housing maintenance bills, £500 for a gingham dress, and over £1000 for an iMac (surely a Windows PC would have done the job?). On closer inspection it feels like the whole of their operations are paid for by credit card rather than the direct paying of invoices from departmental budgets, one has to ask why?
  • Aberdeenshire spent over £2500 on 60″ and 42″ flat screen TVs, almost £1000 on Nintendo DS game consoles, almost £6000 on Apple Macs and software, over £6000 on camcorders and digital cameras, over £1000 on tickets for the Edinburgh Fringe Festival, they are another council who spent over £1000 on a top spec iMac Pro where a cheaper laptop would probably have done the same job. They also spent almost £5000 on theatre tickets and sent staff to just about the four corners of the earth!

Council tax payers in South Tyneside might like to know that our neighbours at Gateshead Council spent almost £44000 on their credit card, North Tyneside a whopping £1.28m over three years, Newcastle City Council under £7000, Sunderland along with South Tyneside managed to total an absolute NIL! (There may, of course be smaller amounts that fell below the £500 reporting threshold).

I am pretty much shocked at how councils have managed to use credit cards so widely, I’d like to think  their use may be a way to pay for goods and services quickly and effectively especially if they are engaging in internet shopping, I’d also like to think that they are buying at the cheapest available prices on behalf of their tax payers. However, items like Macs are more a “desirable” than a “must have”.

Any thoughts from those involved in buying on behalf of local councils would be much appreciated.

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Written by curly

October 17, 2011 at 10:22 am

One Response

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  1. Slightly off topic but there was a report in yesterday’s papers saying Boris Johnsons office had run up something like six million pounds in taxi fares since he became Mayor of London. Bit ironic since he’s always seen posing on a bike to emphasise his ‘green’ credentials.

    Ispy

    October 18, 2011 at 4:52 pm


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