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In defence of Town Hall “fat cats”

If the TaxPayers’ Alliance is so opposed to high pay, why does it want to abolish the top rate of income tax?

By Jonny Ball

This week, the TaxPayers’ Alliance (TPA) published its annual Town Hall Rich List. It reveals that 2,759 senior figures in local government are earning more than £100,000. That salary puts them in the top 4 per cent of UK earners – nothing to be sniffed at, particularly during a cost-of-living crisis.

The list has prompted a predictable chorus of rage, with the Daily Mail railing against “council fat cats”, and the TPA itself attaching an accompanying petition to its publication, calling for councils to “offer value for money and stop council tax hikes”.

The subtext to all this is clear: local government is a bloated cash cow. While ordinary rate-payers struggle to pay the bills, council bosses (probably lefties, probably liberal, perhaps even metropolitan elites) are wasting the money of hard-working people.

As a resident of Liverpool, where the local authority is in “special measures” at least partly due to allegations of financial mismanagement, I can attest to the fact that many English councils waste resources. But this is far from the complete picture. Councils have had their budgets decimated since 2010, and many, particularly metropolitan authorities, have seen their central government funding cut by up to two thirds (which is why most will be raising council tax by the maximum of 4.99 per cent this year).

According to the cross-party Local Government Association, more than half of local authority spending goes on social care – not an industry known for its generous staff remuneration packages, and one that has been cut deeply in the past decade, piling more pressure on limited hospital beds.

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The heads of local authorities lead institutions with budgets that run into the hundreds of millions of pounds. They provide services with thousands of staff, from waste collection to schools to social care to roads, planning, parks, libraries, museums and more, for the collective use of hundreds of thousands of people. That they should be paid around, say, the salary of a partner in a law firm, or a senior figure in a corporate consultancy, or a newspaper editor, seems fairly obvious. It’s an important job that requires a serious, hard-working, highly capable individual who would likely be paid many, many factors more if they managed an organisation with similar nine-figure revenues in the private sector.

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And that’s where the TaxPayers’ Alliance comes in. If the TPA is so opposed to senior figures earning so much money, why is it in favour of abolishing the top rate of tax altogether? Surely our progressive income tax bands are the key to ameliorating these gross displays of elite extravagance?

The TPA has an E rating for financial transparency by the Who Funds You? website – the lowest possible grade. Given its outsized influence on public debate, that isn’t great. A 2009 Guardian investigation into the identity of the think tank’s funders found that Anthony Bamford, the Ampleforth College-educated hereditary heir of the machinery manufacturer JCB, had donated to the organisation, along with several other millionaire businessmen. Today he’s estimated to be worth around £7bn – which would take one “council fat cat”, for example the chief executive of Halton Borough Council (salary, pension contributions and benefits: £199,500), roughly 35,000 years to earn.

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