I used the public question slot at Cambridgeshire Police Authority on the 28th of June 2012 to ask the following:
Is the authority’s Deputy Chief Executive and Treasurer, John Hummersone, still paid “fees” via “Hummersone Consulting (Sole Trader)”? What are the reasons for this arrangement? Are all authority members confident this isn’t tax / national insurance avoidance and that we won’t see authority staff line-managed by an individual not employed by the organisation?
The authority provided a written response:
The Treasurer’s services are provided through a contractual arrangement. His consultancy business is run as a sole trader and he has informed us he pays all assessed tax and NI liabilities on earned income including from the police authority contract. The details of fees paid to him are published annually in the Statement of Accounts. The services were originally selected by the police authority in 2005 when proposals were invited (by open competition) from companies/individuals who were interested in fulfilling the role of Treasurer. The arrangement gives flexibility to the authority; the contract can be terminated at any time on either side. The Treasurer is a key member of the authority executive team and has provided line management support in the past and may do in the future.
The authority’s annual statement of accounts for 2011/12 states, in a note at the bottom of page 43:
The post of Treasurer was provided by a consultant at a cost of £74,825 in 2011/12 (2010/11 £80,993)
The response to an FOI request I made in relation to the 2010/11 accounts revealed the details of the arrangements.
Recently there has been quite a national scandal following the revelation of the extent of such “off payroll” arrangements for paying senior individuals working in the public sector, especially in central government.
In May 2012 Chief Secretary to the Treasury Danny Alexander was forced to make a statement on the subject in the Commons. He stated:
Today I can announce new tighter rules on off-payroll appointments. First, the presumption is that in the future the most senior staff must be put on the payroll.
Mr Alexander announced fines for central government bodies which did not follow the new rules, but left it up to local bodies, such as Cambridgeshire Police Authority, to do the right thing themselves. I was surprised to learn that the arrangements for engaging the services of Mr Hummersone have still not been regularised.
Mr Alexander’s Review of the tax arrangements of public sector appointees states:
when an individual is not on the payroll, it is not clear to the employer whether the individual is paying the right amount of income tax and National Insurance in relation to their role.
While the Police Authority has passed on an assurance that John Hummersone, pays all assessed tax and NI liabilities, it is possible that he, and the police authority, will be avoiding significant amounts of National Insurance payments as a result of the arrangements. Depending on Mr Hummersone’s other activities and arrangements there my be further benefits to him.
In relation to his role as Deputy Chief Executive of the Police Authority and the revelation he “has provided line management support in the past and may do in the future”; I think that is simply inappropriate for someone who is not on the payroll.
I note Mr Hummersone did not attend the full police authority meeting on the 28th of June when the authority’s summary accounts went before members. (The full accounts were not on the agenda as they are considered too long and complex for authority members). Perhaps its a good job he didn’t turn up as he would probably have sent us an invoice for attending.
Police and Crime Commissioner’s Chief Finance Officer
Police and Crime Commissioners will be required by Schedule 1 part 6 of the Police Reform and Social Responsibility Act 2011 to appoint:
a person to be responsible for the proper administration of the commissioner’s financial affairs (referred to in this Part as the commissioner’s chief finance officer).
I would hope that a process of an open invitation for proposals from companies/individuals interested in fulfilling the fulfilling the role of Police and Crime Commissioner’s Chief Finance Officer could be run in a similar manner to the process the authority said they ran for appointing their Treasurer. I would like to see accounting services acquired at a competitive commercial rate. Perhaps if a firm of accountants is is doing the work, a partner from the firm would volunteer to act as the commissioner’s CFO, if the legislation requires a “natural person” rather than a firm to fulfil that role; I think it looks as if a “natural person” may be required, but it’s there’s a whole lot of new law yet to be interpreted in practice. Interesting times.
Mr Hummersone
Mr Hummersone is listed as a member of the Police Authority Treasurer’s Association, his photo on that site matches that of the John Hummersone listed on a Newmarket Church website on which his biography states:
He is a chartered public sector accountant (CPFA) and has held a number of senior local government finance positions before setting up his own consultancy business in 2005. He is a ‘can do’ accountant!
16 responses to “Police Authority Treasurer Hummersone Sill Paid Off-Payroll”
An update on the Treasurer’s position is at:
http://www.rtaylor.co.uk/million-pound-office-cambs-pcc.html#comment-74396
Following a question from Cllr Tim Bick at Cambridgeshire’s Police and Crime Panel meeting on the 7th of February 2012 Commissioner Graham Bright admitted that he was still engaging Mr Hummersone and still paying him off-payroll.
Cllr Bick suggested that in the wider public sector attitudes to such arrangements had now changed; he suggested there were government guidelines which could be being contravened by the arrangement.
The Commissioner got his Chief of Staff / Chief Executive to respond; she agreed the situation ought be reviewed.
Commissioner Graham Bright argued it was a situation he had inherited and not his fault.
Cllr Bick asked if there were any other staff paid off-payroll in the Commissioner’s office and was told by the Commissioner and his Chief Executive that there were not.
Hummersome is now not listed as working for the PCC and his role is advertised.http://www.cambridgeshire-pcc.gov.uk/vacancies/chief-finance-officer/
Was there any mention of this at the last Police and Crime Panel. One would have thought that this was fairly significant given the significance of the role.
No the Police and Crime Commissioner didn’t mention this at the last Police & Crime Panel.
He has however promised to bring the treasurer on-payroll. I suspect advertising the post might be the only way to achieve that. The current treasurer could apply to continue doing the job as an employee.
I see the commissioner has decided to employ consultants to deal with applicants for the job.
Commissioner Sir Graham Bright may not be on top of the detail when he says that it is not his fault and he inherited this position. Above you quote the Police Authorities response to your question regards Mr Hummerstones employment which sates in writing that, “The arrangement gives flexibility to the authority; the contract can be terminated at any time on either side.” This suggests that Sir Graham Bright had no obligation contractually to continue his employment and could have insisted at any point that he joins the payroll or lose his position. Given the Governments expressed view on this type of public sector arrangements it is difficult to understand how this has been allowed to continue withou challenge. I am pleased that Councillor Bick saw fit to raise this issue.
well ferreted, Richard! Keep it up!
From today’s Cambridge Evening News it appears the Hummersone situation is still going on!
The Cambridge-News article is at:
http://www.cambridge-news.co.uk/Cambridge/Crime-tsar-spends-65k-on-consultants-20130419060019.htm
The FOI request which the article appears to be based on is at:
https://www.whatdotheyknow.com/request/details_of_expenditure
Commissioner Bright is quoted as saying:
Notably he does not say he has not accrued any expenses which he intends to bill the taxpayer for, just that he has not yet made a claim.
Commenters on the Cambridge News article are complaining about the Police and Crime Commissioner’s failure to proactively publish information as he is required to by law.
If he fails to make a claim before the end of an accounting period then he will have difficulty in getting proper accounts publisher and audited.
Of course, spending money and not getting it paid back means you can get tax relief so perhaps this is a clever tax phasing plan.
Looks like Sir Graham is advertising for a Finance Director:
http://www.reed.co.uk/jobs/finance-director/23897750
Salary is negotiable. Doesn’t say if the payroll arrangement is also open to negotiation.
That’s been mentioned above in a comment thread. I suspect it’s the mechanism for correcting the problem, just employing a contractor without an open advert wouldn’t be the right thing to do. Mr Hummersone will, if he wants, be able to apply for the position as an employee.
Hummersone has now been appointed CFO to Norfolk PCC from 1st January 2014. As yet there is no replacement the current CFO Nikki Howard for the Cambridgeshire Constabulary has put the budget together for the coming financial year. One could ask whether there are any issues with this in terms of responsibility for oversight, and independance of the PCC. Sir Graham has made much of his being represetative of the people not the police, sharing a finance officer to set the budget would rather undermine this.