Major probe reveals public sector squanders £5.6bn of your cash 


A shocking waste of billions of pounds of taxpayers’ money is exposed by the Mail today.

A major investigation has found that £5.6 billion in public cash has been frittered away on luxuries, feathering Whitehall mandarins’ nests and a wide range of jaw-dropping projects.

It comes as Chancellor Rishi Sunak prepares to set out a plan for taking back control of the nation’s finances after spending hundreds of billions tackling the Covid-19 crisis.

The investigation – carried out with the TaxPayers’ Alliance – involved more than 4,000 Freedom of Information requests, and the analysis of thousands of government contracts and databases. 

Ofcom’s new chief executive Dame Melanie Dawes (pictured with Prince William at Buckingham Palace) pocketed between £15,000 and £20,000 on top of her salary 

The exact waste figure the Mail arrived at was £5,577,988,036.64.

Our probe into the state sector gravy train exposed how:

  • Whitehall mandarins banked at least £42 million in bonuses last year, and taxpayers stumped up £81 million for trade union representatives to take time off work;
  • Thousands were spent on first-class flights at the Treasury;
  • Millions were earmarked for government staff to work from home, including the purchase of designer furniture;
  • Hipster takeaways worth a total of £50,000 were ferried to the health department during lockdown;
  • Thousands were spent on luxury restaurants, steakhouses and even on a day at the zoo;
  • Almost £500,000 was shelled out on an art collection the public never sees.

Meg Hillier, chairman of the public accounts committee, said: ‘There is no magic money pot – this is taxpayers’ money that’s being spent at a time when the low-paid and hard-working people have seen a massive cut in income or lost their livelihood.

‘It’s important that everyone responsible for the management of taxpayers’ money is held to account and the Daily Mail’s investigation is a vital part of that accountability. All public servants need to remember whose money it is and be careful about their spending.

‘Meals in luxury restaurants are not necessary and not on when so many people are relying on food banks.’

The major investigation found that £5.6 billion in public cash has been frittered away on luxuries. Pictured: Covent Garden's The Delaunay

The major investigation found that £5.6 billion in public cash has been frittered away on luxuries. Pictured: Covent Garden’s The Delaunay 

 

Thousands were spent on luxury restaurants, steakhouses and even on luxury beds for dogs

Thousands were spent on luxury restaurants, steakhouses and even on luxury beds for dogs

Liberal Democrats leader Sir Ed Davey said: ‘Boris Johnson’s Government is wasting so much money, their competence in spending taxpayers’ money has to be seriously questioned.

‘Ministers have been on a spending spree with taxpayers’ credit cards – and look set to charge us the interest.’

John O’Connell, chief executive of the TaxPayers’ Alliance, said: ‘This investigation is just the tip of the iceberg.

‘Tens of billions of pounds are still squandered each year, and if we eradicate waste it leaves the room for lower, simpler taxes, promoting economic growth and funding better public services. 

‘The Chancellor must stop writing blank cheques using taxpayers’ money – and wasteful bureaucrats must end the absurd claims that there are simply no more savings to be found.’

It comes as Chancellor Rishi Sunak prepares to set out a plan for taking back control of the nation's finances

It comes as Chancellor Rishi Sunak prepares to set out a plan for taking back control of the nation’s finances

In his spending review on Wednesday, Mr Sunak will announce a £3 billion package to support the NHS in recovering from the pandemic – a massive amount, but only half the amount the Mail has uncovered as waste. 

Similarly, nearly four million public-sector workers, including soldiers, police officers and teachers, face a pay freeze next year, which is expected to save £3.4 billion.

The Chancellor last night vowed to carry on spending as he hinted that major tax rises will be delayed until the ‘fog of uncertainty’ caused by the pandemic has cleared. But he acknowledged the pandemic had triggered an ‘economic shock’ that would require tough decisions on tax and spending in future.

The Mail’s investigation highlights how Mr Sunak’s own department, the Treasury, invoiced the taxpayer £23,400 for travel, including first-class air fares, earlier this year.

The Mail also analysed the spending of government procurement cards since January. They represent only a fraction of overall public expenditure, but are a mine of information.

Some of the most outlandish purchases were made via these electronic cards, similar to debit or credit cards.

A Government spokesman, on behalf of Whitehall departments, said: ‘We are committed to delivering the best value for money, cutting waste and inefficiency and ensuring every pound of taxpayers’ money is spent in the best possible way. 

‘We routinely publish our expenditure to maintain transparency and ensure that we are held to account by Parliament, the Press and the public.’

Mandarin’s £42million bonus bonanza 

Whitehall officials banked at least £42 million in bonuses last year – and the true figure is likely to be much higher, the Daily Mail can reveal.

Civil servants at the Ministry of Defence pocketed the lion’s share of salary top-ups, with the department spending more than £12.2 million on bonus packages.

Bureaucrats on salaries of almost £200,000 were handed cheques for up to £20,000, while up to £25,000 was pocketed by a department boss earning more than £130,000.

Civil servants at the Ministry of Defence pocketed the lion's share of salary top-ups, an investigation has found . (Stock image)

Civil servants at the Ministry of Defence pocketed the lion’s share of salary top-ups, an investigation has found . (Stock image)

News of hefty bonuses to senior staff – many already on six-figure salaries – will anger taxpayers, most of whom earn a fraction of public sector staff’s lucrative pay packets.

The £42.4 million in bonus packages is thought to be only the tip of the iceberg. 

The figure is based on 14 responses to Freedom of Information requests asking for details of bonus pay – meaning only a third of the Government’s 43 ministerial and non-ministerial departments provided figures – and details from two annual reports.

The Mail’s investigation shows that the Competition and Markets Authority paid chief operating officer Erik Wilson, who earns up to £135,000 a year, a bonus of up to £25,000. 

The watchdog’s chief executive, Andrea Coscelli, who earns between £190,000 and £195,000 – pocketed up to £20,000.

John O’Connell, chief executive of the TaxPayers’ Alliance, which worked with the Mail in uncovering the figures, criticised the lavish bonus payments and called for the ‘gold-plated bonuses’ to be cut.

Chief executive of the Competition and Markets Authority, Andrea Coscelli, who earns between £190,000 and £195,000 – pocketed up to £20,000

Chief executive of the Competition and Markets Authority, Andrea Coscelli, who earns between £190,000 and £195,000 – pocketed up to £20,000

Bonuses are awarded to staff based on performance at an individual, team or organisational level and assessed by each department. 

The Government launched a review of public sector bonuses in 2012 after outrage over pay-outs at bodies such as Royal Bank of Scotland.

Former Treasury Chief Secretary Danny Alexander wrote to all Whitehall departments at the time, asking them to examine their reward structures to ensure only ‘genuine excellence’ is recognised.

Public sector pay was frozen for two years up to 2013, then capped at 1 per cent rises for five more years. In July, pay was increased by up to 3.1 per cent, but workers say they have incurred nearly a decade of real-term pay cuts.

At the end of March, 6,450 Whitehall employees were at ‘senior civil service’ level, up from 4,300 five years earlier. Their median salary was £81,440 – three times the average across all ranks of £28,180. 

The MoD said its payouts were made up of £11.7 million to ‘below senior civil service’ staff and £595,410 to senior staff on ‘standard contracts’.

The figures are likely to infuriate those on the front-line of the Armed Forces whose staff numbers have fallen for nine consecutive years. Many who left cited poor pay as the main reason.

Also topping up civil servants’ pay by thousands was the Department for Business, Energy and Industrial Strategy, which spent £4.3 million on rewarding staff.

The Department for Transport made payouts of almost £9 million, while the Home Office figure was more than £8.1million. Several bodies would not disclose details of the highest bonus payments, claiming the figures would be published in annual reports.

The Department for Digital, Culture, Media and Sport was unable to provide a total figure, stating bonus payments have ‘not yet been paid in their entirety’.

The Department for Environment Food and Rural Affairs spent almost £2.5 million on bonus payments to more than 5,000 members of staff ‘for both sustained performance and exceptional contributions’.

Mr O’Connell said: ‘Taxpayers will be baffled at the bonuses being handed out to public sector fat cats.

‘People in the private sector are worried enough about keeping their own jobs, let alone the thought that they should fund big bonuses for government officials.’

A Government spokesman said: ‘We are committed to delivering the best value for money. We routinely publish our expenditure to maintain transparency.’

 …and they’re sitting on £1million gold-plated pension nest eggs

Mandarins have amassed £1million-plus ‘gold-plated’ pension pots with vast annual payments guaranteed when they finally retire.

Senior civil servants – dubbed the ‘pension aristocracy’ – are sitting on lucrative nest eggs that would cost millions more to buy on the annuity market.

Pension pots for the leading 23 civil servants totalled £24.5million in 2018-2019, the last year for which data exists, the Mail can reveal.

Thirteen had pension pots worth more than £1million, only two of whom were women. Those with the biggest nest eggs are guaranteed payments on retirement of £87,500 a year, almost ten times the full annual state pension of just over £9,100.

On top of this, 15 department heads will receive a lump sum on retirement – the average value of this is £148,167.

News of the figures is likely to outrage private-sector workers who have seen the value of their pensions plummet on the stock market.

Generous final salary schemes have been almost wiped out as bosses are unwilling to bear the cost or risk of running them.

The mandarins’ pensions are referred to as gold-plated because after retirement they get a guaranteed income for life linked to inflation. Simon McDonald, head of the Foreign and Commonwealth Office, is sitting on the largest nest egg valued at £2.05million.

Sir Mark Sedwill, former Cabinet Secretary, received a £250,000 ‘golden goodbye’ when he stepped down in September and also has a pension pot of £1.5million, or £87,500 annually.

Former pensions minister Baroness Altmann said it would cost those with a private pension at least £3.5million to buy such a package on the annuity market. She added: ‘I call them the pension aristocracy.’

Clare Moriarty, former permanent secretary at the Department for Exiting the European Union, had a pension pot worth £1.6million at the end of March 2019.

Miss Moriarty, a civil servant for 35 years, took on the post in April 2019 after three years in the same role at the Department for the Environment.

The other woman on the list of those with pensions of £1million-plus is Bernadette Kelly, permanent secretary at the Department for Transport, with a retirement package worth £1.39million.

A Government source said overall remuneration is constantly reviewed so it is affordable and competitive with the private sector.

They added the civil service pension scheme has been reformed twice and it is not unusual for senior staff to accumulate large pots towards the end of their careers.

Read more at DailyMail.co.uk