1 December 2011

Consultant or employee - which costs more?

and another over £500 list error, which are so common that they mean that one can't really place any reliance on the published lists.

So Mr Mustard looked at the over £500 lists for the year ended 31 March 2011 and picked out payments to Anna Klonowski Associates Ltd as being worthy of a bit of research and here is what was in the list along with some extra detail from the Freedom of Information response ( thank you to some of the ladies and gentlemen in the FOI section of governance who are starting to realise what their role is and that Mr Mustard is not the enemy of the less senior staff - one day the senior management and ruling councillors might realise that bloggers help them to stay on the straight and narrow - as if they diverge from the true path, we will find them out one day ).

Date
Ref
Value £
Days
Other
at £675
12/05/2010
5000256666
13,838
22

17/05/2010
5000257246
13,838
none*
Duplicate entry
07/06/2010
5000259604
14,850
20.5

07/07/2010
5000263626
11,813
17.5

14/07/2010
5000264374
1,500

Coaching across Finance dept
29/07/2010
5000266475
12,825
19

07/09/2010
5000271688
1,884


18/10/2010
5000276825
3,375
5
Coaching for health to the business

Mr Mustard did not ask for and was not told the daily rate, he worked it out for himself. The first entry of £13,838 was for work in April which has 30 days of which 22 were working days giving £675 per day and as all the other months divided by £675 it looks like the logical answer.

So there are 260 working days in a full year. Let us remove 10 for bank holidays and 25 for holidays and so a consultant would in a full year invoice 225 * £675 = £151,875

There is a problem about to land at Barnet Council. All temporary staff will after 12 weeks of work get many of the same rights as permanent staff, rights like holiday and sick pay which mean that in effect they will cost 10% more. Mr Mustard wonders if the Interim Assistant Director of Human Resources, Jacquie McGeachie, is busy going round chopping re-negotiating downwards the ridiculous daily rates that are paid. You will have to start with your own daily rate Ms McGeachie as you pay yourself through Jacquie McGeachie HR Consulting Ltd rather than submit to PAYE like a normal employee. Your company was paid £140,803 in the year ended 31 March 2011. Shall we say £125,000 for the year ahead which is still at least £25,000 too much. It will be interesting how you deal with your boss Mr Andrew Travers on £1,000 a day. It would be interesting to see you tell him that really he needs to reduce that down to a trifling £900 a day; how will he get by?

Now here is a bit of luck. A picture of Andrew Travers on the right and Jacquie McGeachie on the left (ignore the lady officer in the middle for today)

who chose the earwax flavoured Bertie Bott's Every Flavour Bean?
Back to the comparison. In the high salary list published by Barnet Council there is now a permanent Assistant Director of Financial Services ( Barnet Council are always tweaking titles slightly ) who gets paid only £84,543 a year (oh it's tough almost at the top) but you can't compare that directly to a consultant's invoices.

For an employee paying PAYE as they all should, employer's National Insurance needs to be added. That is £10,680 for the year. 

Also, the small matter of payments into the council's under-funded pension scheme. So, for the moment, 24% of payroll has to be paid in. That is another £20,290

So we have £84,543 + £10,680 + £20,290 = £116,000 for round numbers to employ someone
as against £151,000 for a consultant, which is 30% more
How many consultants are there in Barnet? too many to mention. Agilisys were paid £214,072 ( and 20p!) In October 2011 alone.

It's time for a musical interlude.


So there we have it. Loads of money spent on consultants and 30% of it is avoidable expenditure.

Just looking back at the list in the table at the top you will see there are two entries for £13,838. This was explained to Mr Mustard as "April 2010 miscoding transferred (see above 5000256666), not another invoice paid, this was a journal transaction". Ignore the spin. The extra entry was a blunder. The published information was just plain wrong.

Mr Mustard feels a Freedom of Information enquiry coming on about that subject. Bye for now.

Yours frugally

Mr Mustard

4 comments:

  1. Now that my expertise in audit has earned me a well deserved partnership at Grant Thornton, Mr Mustard, I must cast my professional eye over your sums. I would suggest that you have missed something very important in your calculations of overpayment for these hard working and underpaid consultants: that One Barnet (is it still called One Barnet?) x factor, the value added element which is so hard to define. They are quite properly paid more because no one in their right minds wants to sign up for a sea voyage on a sinking ship. Also there may be an element of danger money for coming under fire from broadsides by the Barnet bloggers.

    I note in the pic that Captain Black Hole is a rose between several thorns: is that Cllr Coleman's friend Ms Pam Ayres sitting on his left? The captain's body language is saying: I want to hide, and I do not like what I am hearing. I think that is Mrs Angry's cllr Jim Tierney speaking, so that may be why.

    ReplyDelete
  2. So that's what he looks like. I think I might have leafleted him on Tuesday outside the Capita conference. If I did, he was too coy to introduce himself.

    ReplyDelete
  3. Surely all these consultants fall foul of the IR35 rules which state that any consultant whose main income is derived from one source should be treated as though they were an employee and pay tax and NI at the commensurate rate?
    http://www.hmrc.gov.uk/ir35/

    ReplyDelete
  4. Este blog é uma representação exata de competências. Eu gosto da sua recomendação. Um grande conceito que reflete os pensamentos do escritor. Consultoria RH

    ReplyDelete

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