Thursday 14 April 2011

Council mileage allowances

 

Our report on council mileage allowances was released this morning. Many of the statements released in response are actually answered in the sources and methodology section of our report. But I will respond to a few of them here to clear a few things up.

  • The figures are “out of date”. The figures we provided were for the most recent full financial year available. Total amounts paid for 2010-11 were not available from the vast majority of councils and many had not decided their rates for the 2011-12 financial year. The National Joint Council stated their intention to freeze rates for this year pending the outcome of a review of the entire mileage allowance system. When our request for information was sent in February many councils had not decided their rates for the 2011-12 year and this explains their absence from the table. For those councils that have now lowered their rates to match HMRC’s in the current financial year, we fully praise this.
  • You chose the highest rate. The LGA said that we chose the highest rate and are therefore not presenting an accurate picture of current mileage rates across the UK. We chose the rates for a 1200CC car, not an unreasonable methodology to use considering the Department for Transport say the average engine size on Britain’s roads is in fact 1600CC. Therefore our report presents a more than fair picture.
  • It focuses too much on casual users. The reason for selecting casual users was this provides a fair comparison with other workers. There are those who can claim an essential allowance which is a slightly lower rate, however this is topped up with a lump-sum payment – the rate alone would not be presenting an accurate picture.
  • So Council workers shouldn’t be able to claim for mileage at all? We have in no way suggested that employers, in this case the councils, should not be fairly reimbursing employees for the use of their cars. What we have said is that the HMRC rate of 40p per mile, now 45p per mile, more than covers the cost of motoring for the vast majority of vehicles in the UK. This amount takes into account fuel, wear and tear and depreciation of the car. Anything above this is a taxable perk.
  • Our authority is really big, so of course we pay more. We fully acknowledge this and have acknowledged it in interviews. What we have also been saying, repeatedly, is that those councils that do pay out large amounts have a lot to save if they can reduce their rates to the one recommended by the taxman.
  • Many local authority employees, including home carers and social workers, use their own vehicles in the course of delivering vital council services to often vulnerable residents, like the elderly and disabled. So, to do their job, like every other worker. We fully accept that councils need to reimburse employees when they use their cars, and our report does not attempt to refute this. What we are saying is that HMRC have an advisory rate in place because this covers the cost of motoring. Anything above this is an unnecessary and unaffordable perk.

In addition to this, Sunderland Council responded to the outstanding part of our request yesterday evening, after the report had actually been sent out. They provided their totals: for 2008-09 this was £1,838,465.13 and for 2009-10 it was £1,934,192.73

http://www.taxpayersalliance.com/bettergovernment/2011/04/council-mileage-allowances-2.html

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