Yesterday Steve Beynon sent us answers to the questions posed in Retired Hack’s piece we published on Monday, titled “Questions For Isle of Wight Council Over Ltd Company Loophole.”
Below are the questions, the verbatim responses and a comment from VB.
Senior roles on contract
1 – Apart from Dave Burbage, how many other senior roles at the Council are filled by people on whose behalf PAYE and national insurance is not paid at source as a result of their contractual arrangements?
SB’s response: “There are no other chief officer roles filled in this way as this current time. This does not mean that in terms of value for money that the council will not adopt this approach in future, if appropriate.”
VB comment: As it often appears (sadly), when we ask a question to the council, the response feels like it doesn’t completely answer the question, but dances around the original question with some nifty foot work. The question asked specifically about “senior roles”, the answer talks about “chief officer roles” – leaves the answer looks far more narrow, but then again, perhaps it’s the same thing?
HMRC consent
2 – In each of these cases, does the Council have HMRC’s specific written consent that payments may be made gross (i.e. without the deduction of income tax or national insurance), as was the case with the Student Loan Company and Mr Lester?
SB’s response: “We do not need written consent as the contractual arrangement is subject to the regulations laid down by the HMRC. However, our external auditors have looked at the arrangements and have raised no objections. The arrangement with Mr Burbage is not comparable to that of Mr Lester.”
VB comment: Appears clear, but a great opportunity for full openness – laying out the reasons the “arrangement with Mr Burbage is not comparable to that of Mr Lester” are different – is missed. Also missed in Mr Beynon’s statement.
Unwind arrangements?
3 – Given Mr Alexander’s statement to the Commons on February 2, what steps are the Council taking to unwind these arrangements?
SB’s response: “We do not need to unwind these arrangements as since stated above our arrangements not comparable to that of Mr Lester. Through our own monitoring processes when Mr Burbage was contracted we ensured that all regulations were met, hence a review is not necessary.
“If we were to make another similar arrangement we would again make all the necessary checks and ensure the HMRC regulations are met. As a point of information when councils were required to appoint school improvement partners we ensured we met the HMRC regulations. Some councils did not and have since been threatened with fines by the HMRC.”
VB comment: Quite clear. Mr Beynon doesn’t feel unwinding is necessary.
Head of Education (Mr Edwardson) company’s contract
4 – What was the cost to the Council of ending Mr Edwardson’s company’s contract a year early? Specifically, what sums were paid to the company over and above those due for the first two years of the three-year contract?
SB’s response: “There were no costs because of the arrangement the contract was terminated at the end of two years with no financial penalty. This is the advantage of such an arrangement. If Mr Edwardson had been an employee then the council would have incurred redundancy costs.”
VB comment: Again clear. There were no costs to the council to finishing the contract a year early.
