Local authorities are wasting millions by offering excessive payments to staff who use their car for work, according to a report.
An investigation has found that 173 councils are paying employees more for mileage than the rate approved by HM Revenue and Customs.
This can make them hundreds of pounds better off than workers in private sector firms – or other town halls – that stick to the limit.
The Government stressed last night that councils should not be paying more for mileage than recommended by HMRC.
Local authorities are wasting millions by offering excessive payments to staff who use their car for work, according to a report (file picture)
Employees who use their own vehicles for business journeys are often reimbursed with mileage allowance payments to cover their expenses, including fuel and running costs.
HMRC’s Approved Mileage Allowance rate for cars and vans is 45p for the first 10,000 miles, and 25p thereafter.
This is the amount an employee can receive without paying tax and is designed to prevent firms from using the allowance to pay staff more without incurring more tax.
But an investigation by the Taxpayers’ Alliance found that 173 councils are paying more than the approved rate, with 73 authorities, including Ashford in Kent, Blaby in Leicestershire and Tewkesbury in the Cotswold, paying 65p a mile in 2016/17.
Bassetlaw in Nottinghamshire paid the highest rate at 69p per mile – more than 50 per cent over the approved rate.
An employee claiming for 1,000 miles would be £240 better off before tax than someone paid the 45p rate.
£300,000 LOAN TO SELL FRIED CHICKEN
A council loaned £300,000 to a DJ so he could open a fried chicken shop – despite there being more than 30 already nearby.
Ben Rymer was awarded the sum to open Chicken Town in Tottenham, North London, in 2015 on the grounds it would be paid back once it makes £50,000 a year.
Rival outlets criticised the hand-out to the takeaway, a not-for-profit enterprise that offers ‘healthier versions’ of fried chicken. Haringey Council said it was simply ‘encouraging new businesses’.
But the TaxPayers’ Alliance said the loan was ‘grossly unfair’ on other firms who ‘go to the bank to get businesses off the ground’.
In total, local authorities handed out £223million in mileage allowances to employees in 2016/17, down from £231million the previous year.
The Taxpayers’ Alliance says the average council mileage rate is 48.92p.
Chief executive John O’Connell said: ‘It’s not credible for local authorities to plead poverty and raise council tax while paying over the odds for basic expenses, especially when the Government has been telling them to rein in these payments.
‘Councils must continue to root out wasteful spending like this so that they can deliver tax cuts for hard-pressed residents.’
Tory MP Julian Knight said: ‘It’s staggering that at a time when we have councils telling residents that they have to make savings, some are paying up to 50 per cent more than the HMRC maximum for mileage.
‘It seems a gross waste of public money and is indefensible.’
But the Local Government Association said the findings failed to distinguish between urban and rural councils, where employees need to drive more.
A spokesman said: ‘The average figures used by Taxpayers’ Alliance are utterly misleading. By failing to weight the data, they have shown they can’t tell the difference between a council in London and a council in Cumbria.
Bassetlaw District Council in Nottinghamshire paid the highest rate at 69p per mile – more than 50 per cent over the approved rate
‘If they had weighted their figures, they would have found the average is actually 45.7p – just 0.7 pence higher than the HMRC recommended rate.’
A Department for Communities and Local Government spokesman said: ‘Authorities ought not be paying more than recommended HMRC levels.’
Bassetlaw council said it had reduced the cost of staff mileage by a third in four years and plans to cut its mileage rate.
TOWN HALL SOLD CHAIRS WORTH £42,000 FOR JUST £5,000
Town hall bosses sold designer chairs on eBay for £5,000 only later to learn they were worth £42,000.
Darlington Council put 60 be-spoke vintage chairs, made by a renowned British designer, on the site for just £100 each – selling most and netting £5,000.
But buyers spotted a bargain and snapped the seats up, re-selling them with price tags of up to £695 on websites specialising in vintage and designer furniture. If the council had sold all 60 for that price it could have made £42,000.
Darlington Council sold designer chairs (pictured) on eBay for £5,000 only later to learn they were worth £42,000
The retro cream leather and rosewood chairs were made specially by Peter Hoyte and embossed with the town’s coat of arms.
The designer was commissioned to make 60 of them in 1969, a year before the town hall was opened by Princess Anne. The £5,000 proceeds from selling the chairs went into refurbishing the council chamber which will now also be used to host weddings.
Town hall chiefs said the furniture had been valued by an auctioneer beforehand but one dealer in Bath, Cilla’s Vintage, bought six of the chairs and said some buyers ‘would be willing to pay up to £1,000’.
Chloe Westley, of the TaxPayers’ Alliance said: ‘Every penny counts. In future the council should be conducting its business more openly so that items can be sold at the highest possible price.’