Whitehall’s nasty agenda:Impoverish the low paid, reward their bosses with riches

The Student Loans Co headquarters in Glasgow

The Student Loans Co headquarters in Glasgow

The government has always claimed that the main reason it is holding down pay in Whitehall, schools and the NHS is because the taxpayer can’t afford it and we need to cut the deficit. Francis Maude, the Cabinet Office minister responsible for Whitehall’s industrial relations, claims to have safeguarded the very lowest paid and attacked perks given to richer civil servants. The ex banker is on record as saying ” It is absurd to expect that people can be paid the same amount in the public sector as they are paid in the private sector.” This reference is to the higher paid where he is pledged to end perks. It was made in 2011 just at the time when Ed Lester, head of the Student Loans Company, had secured a very lucrative deal where he avoided paying tax or national insurance at source on a £223,000 a year package.
Now in the very same organisation a new drama is being played out which also proves the government is lying about its intentions to protect the lowest paid and curb bonuses for the rich. I have written about it in Tribune.
The Public and Commercial Services Union, which represents Whitehall’s lowest paid, put forward a rather interesting negotiating ploy for 2014. They suggested that his successor, Mike Laverty, forgo a £25,000 a year bonus on top of his £160,000 salary and taxable expenses of £30,000 a year. Instead it suggested that the bonus be redistributed to the staff,benefiting the lowest paid.
The union had calculated that, if all the money available, including a below inflation rise and one off £265 payment (worth £595) for those earning less than £21,000 a year and a one-off £560 payment to those over £21,000, all 2400 staff could get an increase of more than £600 incorporated into their salaries. The few very lowest paid would get a £960 pay rise to take them up to the nationally-recognised living wage. It would benefit people working in Glasgow, Darlington and Colwyn Bay.
But it is understood that the Cabinet Office blocked this move and are insisting the bonus is paid to one person instead.
Now it is not known whether Mike Laverty, the present chief executive of the SLC, would have agreed. But he is unusual in that he returned some £80,000 to the Treasury last year from a previous redundancy deal when he got his new job. This is almost unknown among senior mandarins.
Unfortunately he is so media shy, he seems worried, like his predecessor,to talk to me. I can’t think why.
However what this sorry saga exposes is that the lower paid are not having to take a pay freeze to save taxpayers’ money to help bring down the deficit because such a deal would hardly have cost the taxpayer another penny.
What it does show is that the government WANT to keep the lower paid poor and reward the rich – probably because those at the top in the private sector are seeing their salaries soar during the recession.
The results can already be seen in the prosperous parts of the country with the rich looking for things to spend all their money while the poor economise or go into debt.
I was behind a well paid young couple in Berkhamsted Waitrose at the butchery counter who were ordering fillet steak – not for their own dinner- but to feed their dog. The complacent man boasted that he wouldn’t normally be at Waitrose because he regularly got the fillet steak for the dog at Harrods food hall.
I have no doubt Francis Maude – if it is he who approved this – is happy for the rich to buy fillet steak for their pampered pets this Christmas, while the poor juggle the cost of the fuel bills to cook their Christmas turkey. He has created a system where this happens every day.

Exclusive: The shy mandarin who gave back half his redundo to the Treasury

This is an unusual story for our time. Just when the snatch it all culture from money grabbing bonus seeking bankers and utility bosses, and golden goodbyes for multi billionaires dominate the media, someone has a conscience.

In July 2012 Mick Laverty was made compulsorily redundant when the government axed West Midlands Advantage as part of the government’s closure of  all  the regional development agencies. This little bureaucracy bashing exercise  supervised by Vince Cable, the business secretary, has led to an amazing £60m in payouts to the 2300 staff. According to a report from IPPR North (http://www.ippr.org/images/media/files/publication/2013/03/UKfirst-northern-FDI_Mar2013_10500.pdf ) it has contributed to Britain’s downturn outside the bloated London and the South East with inward investment dropping drastically,particularly in the North and Midlands.

Mick Laverty: the shy mandarin who gave back half his redundo; Pic reproduced with permission Student Loans Company

Mick Laverty: the shy mandarin who gave back half his redundo; Pic reproduced with permission Student Loans Company

Among the super size redundo package was an award of £14o,772 to Mick Laverty – and the last accounts of the agency record he got some £351,000 (including the redundo) in the last 15 months in the job.

At the time the Department of Business Innovation and Science said none of these highly paid mandarins were going to get any new jobs in Whitehall.

And yet just six months later he was appointed as the new chief executive of the Students Loans Company to replace Ed Lester – a name familiar to this website after his amazing deal where he avoided paying tax or national insurance at source led to a huge crackdown across Whitehall when Danny Alexander, chief secretary to the Treasury, discovered 2500 civil servants were doing the same thing.

And guess who approved his appointment none other than the Department for Business. Furthermore as is reported in Exaro News, his salary is £160,000 a year plus up to £25,000 in bonuses, some £45,000 more than his predecessor. See http://www.exaronews.com/articles/4902/ed-lester-to-depart-from-student-loans-company-this-month

But there is a rather nice silver lining – at least for the taxpayer. To his credit Mick Laverty decided to return £82,117  redundo to the Treasury entirely as a voluntary gesture since he is entitled to the money under the Civil Service Compensation Scheme. I tried to talk to him about it but he seems very publicity shy and wouldn’t comment. People around him say he believes it was the right thing to do as he was only six months without a job.

If only some of our other big fat cats in Whitehall,local government  and the banks thought the same Britain might be a fairer place. But sadly the National audit Office tell me that is very rare in Whitehall, they didn’t know of another instance.

How the Student Loan tax scandal broke

Here is a short video produced by Exaro showing how I got hold of the original story and the repercussions that followed. For those interested in this you can view it here.


It also partly a tribute to Whitehall sources who decided this scandal had to stop and  a warning to ministers how clever some Whitehall people are in slipping stuff through right under their noses.