Fears spending at Peterborough’s mayoral authority ‘spiralling out of control’

Mayor James Palmer
Mayor James Palmer
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There are fears the spending of Peterborough’s mayoral authority is “spiralling out of control” as it is revealed the cost of staff salaries has risen significantly in the last year.

The Cambridgeshire and Peterborough Combined Authority - headed by metro mayor James Palmer - was founded in 2017 in a bid to give more powers to local government. It is involved in many major housing and infrastructure schemes, including the proposed University of Peterborough.

However, having initially been hailed as an “efficient” and low-cost authority, some are beginning to worry about rising costs and the “spiralling” cost of paying for staff.

Lewis Herbert, leader of Cambridge City Council and combined authority board member, said staffing costs at the authority are “spiralling out of control” after it emerged the authority is set to spend £5.6 million on staff salaries this year.

Initially, it was anticipated the combined authority would have fewer than 20 staff, and would have a maximum “operating budget” of £850,000 a year.

In February, the budget for paying staff alone in 2018/19 went up to £1.78 million. This nearly doubled in May to £3.24 million.

Now, according to the combined authority, it is estimated staffing costs in 2018/19 will be £5.66 million.

Cllr Herbert said he was worried about the rising costs, saying cash that was being spent on staff should be being spent on delivering or improving infrastructure.

Cllr Herbert said: “Every £1 of unnecessary operating costs overspend is £1 lost from the new rail, road and housing projects that we need so badly, and efficiency measures are essential to significantly increase funding for infrastructure investment over the next four years.”

A spokeswoman for the combined authority said they had had to spend more on salaries having unexpectedly taken over the duties and staff of the local enterprise partnership (LEP) which was scrapped in December 2017.

The spokeswoman said: “Within the summary revenue budget the salary figures shown include both the combined authority and the LEP and show the gross figure which includes national insurance and pension contributions paid by the organisation.

“The cost of paying staff is a key part of a revenue budget and makes up a total of 43 per cent of that budget. This is a comparatively low figure for an organisation managing a capital budget in excess of £145 million for the delivery of projects.”

Cllr Herbert said the total operational costs of the combined authority, which come to £7.6 million, “also need scrutiny and reduction”.

He said this represented over a third of the £20 million core combined authority funding from government which, Cllr Herbert said, “is supposed to be for infrastructure”. He said the authority’s overheads, including staff costs, were too high.

Cllr Herbert said: “The half year combined authority budget reports show financial management during 2018 that has been woefully inadequate, particularly on uncontrolled staffing and overhead budgets and unreported delegated spending decisions, totalling a projected £7.6 million spend this year, over three times the original February budget.”

Cllr Herbert said he, alongside fellow board member and leader of South Cambridgeshire District Council, Bridget Smith, would be calling for a programme of cuts to help save money.

He added: “All the evidence supports the call by Cllr Bridget Smith and myself at the board meeting in September for a full financial audit and we now need an urgent programme of major overhead cuts.

“Together with Cllr Smith, we will ask again at the CA Board next Wednesday for that audit and a demanding programme of efficiency measures, and to start making savings now.”

Cllr Smith said the combined authority needed to deliver for residents and said that, at the moment, it was costing a lot while not doing a lot to help local people.

She added: “The combined authority needs to be mindful of the public’s’ perception of it and at the moment that is of escalating running costs and no real difference to my residents in their day to day lives, especially in relation to travel to work times.”

Cllr Lucy Nethsingha, chairwoman of the combined authority’s overview and scrutiny committee, said she was aware some salaries at the combined authority had been increased. She said other local authorities had been able to recruit officers for less, and suggested the combined authority may need to offer higher salaries to attract people.

Cllr Nethsingha said: “There are a couple of individuals who I believe had massive salary uplifts when taking on new roles.

“I am also aware that the combined authority has found it very difficult to appoint to some of these posts (they are on the fourth interim finance director, for example).  

“This may imply that they do need to pay this level of salary for some of these posts, although other councils also seem to find chief financial officers without paying such high salaries.

“Another possibility is that there are other reasons why this combined authority is finding it particularly difficult to recruit staff, and the events of the summer with the surprise departure of the chief executive (Martin Whiteley, who resigned in August) may have made recruitment more difficult.”

Josh Thomas, Local Democracy Reporting Service.