NEWS


Public sector tax avoidance revealed by PAC


A new report from a committee of MPs criticises the off-payroll tax arrangements of some public sector workers.


The Public Accounts Committee suggested that too many were making their own arrangements to pay tax and national insurance, meaning they could be paying less.


In May, a Treasury report showed that over 2,400 central government staff earning more than £58,200 a


year were being paid ‘off-


payroll’. The BBC said it has about 25,000 off-payroll contracts.


The PAC also expressed concern that HMRC had reduced its enforcement of legislation designed to eliminate tax avoidance through the use of intermediaries.


Committee chairwoman Margaret Hodge said: “Avoiding tax and national


insurance when paying


public sector staff is almost always staggeringly inappropriate. It was shocking to find out that no fewer than 2,400 central government appointees were benefiting from off-payroll arrangements.


“Furthermore, the Treasury Review only covered civil servants. Tax avoidance in the public sector goes much wider.”


Government PR spending ‘to rise’


Government spending on PR looks set to rise next year, according to an analysis by the BBC and industry commentators.


Cabinet Office figures show the 2012-13 marketing budget for Government at £285m, while the COI spent £168m in its final year – though the Government says it is


meaningless to compare the two figures, for a variety of reasons, including that not all marketing spend was done through the COI before it was wound up. The overall total spent is still far below the Labour years, when spending on marketing reached half a billion pounds a year, a spokeswoman told the BBC.


Oliver Hickson, formerly of the COI, told BBC News: “My view on this is that spending is going up. The vast majority of central government marketing spend was through the COI. There was some other spend but I would suggest that was either internal press offices or local authorities, which will still carry on.”


Academics call for end to national pay bargaining in the public sector


Senior economists from leading universities have urged the Government to scrap national pay bargaining in the public sector, which they say harms the quality of public services and makes it harder for private sector firms to recruit in some areas.


Any such plan to force public sector workers to negotiate salaries individually is likely to meet stiff resistance from trade unions and both Labour and the Lib Dems.


But in their open letter to a national newspaper, the professors from LSE, Cambridge, York, Warwick and Birmingham say:


“National


pay rates in the public sector means that public sector wages are out of line with local conditions


in many parts of the country. In some areas, the public sector struggles to recruit staff because wages are too low. This worsens public services such as education and health in those areas.


“In other areas, the private sector struggles to recruit, making it hard for private sector firms to survive and expand. Neither is good for Britain.”


The economists suggest that total public sector pay in each area should remain the same, but allowing individual negotiation of salaries would mean more public sector workers being recruited in some areas – suggesting pay cuts for others.


See letters, page 13


Heathrow runway


decision will not be taken until after 2015


Airlines have welcomed the establishment of a commission to examine airport capacity, which will report in 2015 – with a final decision on expansion not taken during this Parliament.


Ex-Financial Services Authority boss Sir Howard Davies is leading the


commission, investigating options including a third runway at Heathrow and a Thames Estuary hub.


The prospect of a third runway at Heathrow – the scrapping of which was one of the first acts when the Coalition came to power – is highly controversial, especially in west


London, but many senior


Conservative MPs are now arguing it is necessary.


But Mayor of London Boris Johnson remains a high-profile opponent, and Nick Clegg has said the Liberal Democrats continue to oppose the idea.


Some have interpreted Justine Greening’s opposition to the third runway as a factor in her being reshuffled out of the transport secretary post. Opposing the runway was a key election pledge for her in her Putney constituency.


The new transport secretary, former chief whip Patrick McLoughlin, said the Davies commission will recommend “options for maintaining this country’s status as an international hub for aviation”.


He said in a statement: “The Government believes that maintaining


the UK’s status as


a leading global aviation hub is fundamental to our long-term international competitiveness. But the government is also mindful of the need to take full account of the social, environmental and other impacts of any expansion in airport capacity.”


An interim report will be published by the end of next year.


public sector executive Sep/Oct 12 | 7


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