If you’ve heard the news today you won’t have missed the story about Ed Lester, head of the Student Loans Company and the questions being raised over him working full time, not as an employee, but through a company instead.
The story was broken by David Hencke writing on investigative news site Exaro (where ex-VB intern Alex Varley-Winter now works) and he collaborated with Newsnight for their extensive report on it last night.
VentnorBlog has in the past draw attention to this kind of arrangement happening at the Isle of Wight council for Dave Burbage, the Strategic Director of Resources and Roger Edwardson, now-ex Head of Education.
Paid through limited companies
They work/ed for the council, but through a limited company, not on a council salary, so like Ed Lester, not paying National Insurance or Income Tax at source. Their chosen companies are Dave Burbage Consulting Ltd and Roger Edwardson Education and Childrens (sic) Services Ltd, respectively.
Special attention was given to the fact that that Ed Lester was an Accounting Officer – financially responsible. The paralell with Dave Burbage here is exact. He is the council Section 151 Officer. The person responsible for the council finances.
Watch Newsnight coverage for background
If you watch the Newsnight coverage (worth doing), you’ll hear phrases like “An employee of the state ought to be paying all of their taxes”; that by working via a company Lester would be “Tens of thousands of pounds better off”; “He doesn’t pay NI or tax at source – despite having a full time job”;
They also revealed that Danny Alexander of the Treasury, has written to all Whitehall departments asking if similar deals exist. Will that also be extended to the local councils?
Urgent Internal Audit
Alexander has called for an “Urgent Internal Audit” to be completed by the end of March.
It will question “the appropriateness” of these deals and will “consider the wider cost of lost revenue to the exchequer when considering value for money.”
If deals are uncovered, the treasury says it will seek to “unwind them.”
Arrangement labelled unsuitable and inappropriate
In the discussion on Newsnight, Richard Bacon, a Conservative MP labelled this type of arrangement, “Plainly unsuitable and inappropriate. It shouldn’t be happening and we’ve got to stamp it out.”
When this was raised before, it was pushed aside as “Standard”, in fact Steve Beynon, Chief Exec of the Isle of Wight council wrote a long email to elected members attempting to persuade them of the “advantage” to the council (a letter VentnorBlog reproduced in full).
Questions need to be asked about this ‘Standard’ practice – and those questions need to have proper answers.