What is the technology industry gaining from the army of well-paid Government bureaucrats that now professes to serve it? And why are they being permitted to use grubby methods to further inflate their already generous pay packages?
At the end of last week, the Telegraph reported that David Bott, “innovation director” at the Technology Strategy Board, was being paid a staggering £235,000 – paid, what is more, via a private company, so that Bott could avoid paying his fair share of income tax.
This method of weaselling out of tax is widespread among civil servants who are being remunerated via private companies set up specifically to help them reduce their tax exposure. While not illegal, the practice is outrageous.
These people are public servants who, particularly in the case of Mr Bott’s friends at the Tech City Investment Organisation, are yet to prove that their sound and fury has created a penny of value to the real economy.
I have met Mr Bott. He seems like a nice man. But I am at a loss to explain why he earns so much more than the Prime Minister. He has been paid over £1 million for his services over the last few years, at this “reduced rate of tax”.
And Bott is not even the highest-ranking official in the organisation. Multiply his salary out across the many executives at the Technology Strategy Board’s Swindon headquarters and the numbers become quite terrifying.
Remember that this is not taxation levied against value created in the economy: these salaries come straight from the public purse. It is arguable whether income tax from publicly funded salaries is income for the Treasury at all: it’s really just an effective brake on outrageous pay packets.
Of course, The Technology Strategy Board is not alone in dodgy dealings around salaries. Recently, we saw similar deception and obfuscation from Tech City: TCIO pays its staff via a complex arrangement with consulting firms PA Consulting and Grant Thornton as a way of avoiding Freedom of Information enquiries into just how much of Tech City’s £1.7 million annual budget is being frittered away on the bloated salaries of its staff.
In other words, it’s your money, but you’re not allowed to know how it is spent. Nor are we permitted to know who the management consultants and PR people on its books are, and whether they are delivering value for money to an organisation that has spent £1 million on administration in a year and whose annual “events” budget is a quarter of a million pounds.
By overall Government standards, these are not outlandish sums. But one has to ask where the value is for the taxpayer. I have lost count of the number of initiatives and investment funds announced in the last two years that have sunk without trace after the initial fanfare.
Tech City is looking like one of the most expensive and ineffectual PR agencies in history: it is already the butt of jokes in the area it seeks to represent, the ridicule in which it is held increasing alongside its secrecy about the salary of chief executive Eric van der Kleij and his minions.
As for the Technology Strategy Board, its greatest contribution to strategy innovation in Britain thus far would appear to be reducing its own employees’ tax bills. The technology industry must now demand transparency and accountability from these quangos.
Entrepreneurs who are prevented from hiring people – that is, creating jobs – and from growing their businesses more quickly thanks to the amount of tax they must pay have a right to know where and how the Government is spending that money, and to voice their opinion about whether that money is being better spent than it would be by them in the private sector.
The full extent of the lavish pay and perks available to Government pen-pushers and the abundance of loopholes enabling colossal remuneration for state bureaucrats, management consultants and publicly-funded public relations executives is only now coming to light, thanks to Communities Secretary Eric Pickles.
But more must be done. The tactics employed by public servants show a duplicitous contempt for the public and an ignorance of value for money and the responsibility the public sector has to be honest about what it is doing with your hard-earned cash.