High expense of council miles

OLDHAM Council pays its employees one of the highest mileage rates in the North-West, a report by the Tax Payers’ Alliance has revealed.

It shows Oldham, along with Bolton, Manchester and Rochdale, pays staff 65p per mile when their car is used for business purposes.

The rate, set by the National Joint Council (NJC), applies to employees who use their car for business purposes on a casual rather than daily basis. Staff who use their cars for work every day, such as social workers, are paid an annual lump sum and a lower mileage rate.

Jan Parkinson, managing director of Local Government Employers, said: “Many local authority employees, including home carers and social workers, use their own vehicles in the course of delivering vital council services to often vulnerable residents, like the elderly and disabled.

“Offering mileage to workers helps councils avoid the much greater expense of maintaining a fleet of vehicles.

“This report contains a number of factual inaccuracies, as well as being months out of date, failing to recognise that a large number of councils have already re-negotiated lower mileage rates for 2011/12 to reflect reduced budgets.”

The HMRC Approved Mileage Allowance Payment is 40p per mile which is designed to cover the cost of fuel and a contribution towards maintenance and depreciation of the vehicle — 80 per cent of UK councils paid staff a higher rate than this. Anything over 40p per mile is classed as a taxable perk and is subject to income tax and national insurance.

The extra 25p per mile paid by Oldham Council means that for every 1,000 miles driven by staff who qualify for this rate, an extra £250 is paid in taxable perks.

The average rate across the UK was 56.4p in 2010–11 meaning that staff eligible for the payment would have ended up £164 better off for every 1,000 miles driven.

The study found that local authorities paid staff a total of £427 million in mileage allowances in 2009–10, up from £402 million in 2008–09.

Tax Payers’ Alliance director Matthew Sinclair said: “It is shocking that the same councils who are pleading poverty are paying well above the recommended mileage rate.”