North Yorkshire Council says it has already saved taxpayers £3.8m a year in the transition from eight councils to one by cutting the roles of 24 senior managers.

The council’s finance boss, Cllr Gareth Dadd, underlined that none of the senior staff would be paid enhanced severance packages as the Conservative-run authority works towards a total of £67m of efficiencies by uniting the county, district and borough councils.

The comments follow critics of local government reorganisation questioning the amount of staff salary savings that it would achieve.

Cllr Dadd’s remarks come just weeks after severance packages of £770,000 were paid to four senior officers at Hambleton District Council because they did not wish to work for the incoming unitary authority.

A highly charged meeting of the district council last November heard the directors were fearful about the ring-fenced roles they would be given at North Yorkshire Council, despite no decisions having been made about their jobs.

A meeting of the unitary council’s executive heard the total exit costs for three senior management as a result of the transition had been estimated at £513,000, which had been raised as one of the former district councils had an enhanced redundancy scheme.

However, the changes had achieved £332,000 savings of salaries, meaning it would take around 18 months for the council to benefit from the redundancies.

Cllr Dadd said the redundancy costs were “minuscule” in comparison.

He said: 

“That £3.8m is the first step on our journey to possibly £67m of saving. That’s come from what some would describe as fat cats, but let’s just say the higher earners in the local government family.

“We should not lose sight of the fact that we have straightaway produced £3.8m as a result of local government reorganisation.”

The new council’s management structure has significantly fewer posts than the total for the previous eight councils, 60 compared to 36, resulting in some managers moving to the unitary authority without a specified role in the new structure.

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A number of the senior staff left prior to vesting day on April 1, in the main having secured another role elsewhere, while some planned to retire just before or shortly after vesting day, while two are undertaking duties covering work for the new council which will take them up to their planned retirement.

An officer’s report to the executive states: 

“These duties make full use of their significant skills and experience to the benefit of the council and cover work areas that would otherwise require additional resource in terms of appointments, interim managers, or consultants.”

The new leaders of North Yorkshire Council have said making £252 million worth of savings in the next five years as part of local government reorganisation has become “massively tougher”.

Chief executive Richard Flinton and the authority’s political leader, Cllr Carl Les, said almost two years after using large-scale savings as a key plank in its case for creating a single unitary authority for North Yorkshire that “the world is in a different place”.

In 2021, auditors’ analysis of the county council’s unitary found it could save £30m a year by cutting red tape and reducing senior management and elected member costs.

In addition, by using the new council as a springboard for change, the auditors concluded savings could rise to between £50m and £67m a year, netting up to £252m at the end of the first five years, saving of up to £185 a year for households.

However, on the eve of the new authority launching, Mr Flinton said the council was instead looking at needing to cut £70m over the next three years just to balance its books and achieving savings had become “massively tougher”.

He said: 

“Since those predictions were first made the councils have made a lot of savings themselves that would have been in that territory.

“Lots of demand pressures have changed. Austerity has come around the cost of living pressures, the price we are paying for things has increased massively.

“The world is a different place from two years ago where people were making projections using consultants around the art of the possible. The reality against more people having problems looking after kids, more people presenting wanting adult social care, more of the housing challenges such as mould, the world doesn’t stand still.

“Against that backdrop we’re saying we need to save £70m over the next three years. We are going to be honest with people and say that’s not going to be a breeze.”

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The county council has stripped £200m from its annual spending since austerity hit in 2010, partly by relying on volunteers to help run services such as public libraries.

Mr Flinton said: 

“As we come under more and more financial stress that type of innovative dealing with the public is probably going to be more and more.”

“One of the new unitary council’s early cost-cutting programmes will be to sell some of the former district, borough and county council properties, which equate to more than 3,500 bits of property excluding schools.”

When selling the properties Mr Flinton said the council would have regard to the interests of the community and in some cases the property could be used in a regeneration scheme, but in the majority of cases it would be “good old fashioned case back into the bank and value for money.”

The incoming council aims to bolster its online offer, but has pledged face to face contact with residents would continue with a council office kept in each of the former district areas.

Cllr Les said: 

“As soon as we put any one of those properties up for closure you can bet your bottom dollar there will be a campaign to save it.”

Harrogate Borough Council has received almost £500,000 from Harrogate Spring Water since 2017 as a share of the company’s annual turnover, new figures reveal.

The council owns the land where the company is based on Harlow Moor Road and receives £13,000 a year in ground rent.

Harrogate Spring Water also has to pay a percentage of annual turnover to the council. This is known as turnover rent.

The turnover rent agreement was drawn up in the early 2000s when the council granted planning permission to build a bottling plant on land leased to the company.

However, the figure has never been made public.

Two-year battle

For almost two years, the Stray Ferret has tried to find out exactly how much the council benefits from the success of the Danone-owned company.

We first asked the question to HBC in a freedom of information request in January 2021, almost two years ago.

But the council refused to tell us. It said:

“This information is deemed to be of commercial value and, if disclosed, may impact on the council’s ability to negotiate and harm its legitimate interests, putting it in a commercially disadvantageous situation.”

We then requested that HBC undertake an internal review of this decision.

However, Joanne Barclay, acting chief solicitor at HBC, came to the same conclusion, adding “confidence may be eroded if commercial rents were to be disclosed”.

In summer 2021, we submitted a complaint about the council’s decision not to disclose the sum to the Information Commissioner’s Office (ICO).

ICO is an independent government body that promotes openness within public bodies.

After a long delay due to a backlog, it investigated HBC’s refusal and asked the council to look again at the Stray Ferret’s question. It has now decided to publish the figures for the last five years.

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Finally publishing the figures

Earlier this year, the BBC’s Local Democracy Service revealed that HBC receives 0.5% of the company’s annual turnover.

It estimated the council received £853,033 over an 18-year period, however, new information suggests that is likely to be a higher figure.

Since 2017, HBC has received £495,000.

Company accounts published on Friday revealed turnover has returned to pre-covid levels after dipping significantly due to the pandemic.

Each year, the council has received the following sum from Harrogate Spring Water in turnover rent:

2017  – £92,811.87

2018  – £138,026.18

2019  – £91,153.15

2020  – £152,332.02

2021  – £21,995.79

Global brand

Harrogate Borough Council and Harrogate Spring Water’s histories are intertwined.

Water has been bottled in Harrogate for centuries but in the early 1990s Harrogate Spa Water, as the company was previously known, was selling just 1,000 bottles of water a year.

The company’s fortunes changed in the late 1990s when HBC, run then by the Liberal Democrats, identified an opportunity to explore water resources at the current site on Harlow Moor Road.

Harrogate Spring Water has since gone from strength to strength to become a global brand.

The relationship between the two organisations has come into focus due to Harrogate Spring Water’s attempts to expand its bottling plant into Rotary Wood.

The council has always maintained that its status as planning authority and Harrogate Spring Water’s landlord are separate.

A Harrogate Borough Council spokesperson said:

“We have had a base rent and turnover rent agreement in place with Harrogate Spring Water Ltd since 2002.

“As with all of our rental agreements, the money generated is used to help deliver valuable front-line services across the Harrogate district.”

This article is sponsored by James Henderson Wealth Management.

It’s estimated that considerable savings have been built up by some Brits during lockdown, and for many, especially younger people, this could be a once in a lifetime moment to think ahead.

If you’re one of the lucky ones who’ve been able to save money over the past year, do you have a plan for it?

You might be thinking about buying a new car, splashing out on a holiday, or simply saving it for a rainy day. If you’re thinking about saving, read on. If you’re not, read on anyway, because it might change your mind!

Jim Henderson, of Harrogate-based James Henderson Wealth Management, has some top tips for helping you get as much wealth out of your money as you can, aiming for you to live the lifestyle you want in years to come. Jim can help you prepare financially for your future, regardless of your income.

Jim says:

“People often think you need to have vast amounts of money to invest, but in reality you don’t have to be wealthy to create wealth.

“Even if you only save a small amount each month, if you plan properly now, I can help you reap rewards in later life, by utilising tax breaks to keep as much of your existing money as possible.”

Jim’s tips:

1. Start saving sooner rather than later

Albert Einstein reportedly called compound interest the ‘eighth wonder of the world’. Put simply, the earlier you invest, the longer your money has the potential to gain interest and grow, and as Jim puts it, “what’s important for investments is time”. 

“Let’s say you’re planning to retire at age 67, and make a £200 pension contribution per month:

If you start saving at age 20, your estimated pension fund at retirement might be £349,000.

If you start saving at 30 it could be £215,000.

And if you start saving at 40, it might be £123,000.”

Please note that these figures are for example purposes only and they are not guaranteed – they are not minimum and maximum amounts. What you get back depends on how your investment grows and the tax treatment of the investment. You could get back more or less than this. 

2. Put your savings in an Individual Savings Account (ISA)

Gone are the days when the best way to save money was to put it in a piggy bank or hide it under the mattress – or even just leave it in your current account.

If you don’t put your savings somewhere tax efficient, you could end up paying tax on any interest you gain… one of the most popular ways around this is to put it in an ISA.

Everyone gets an annual ISA allowance, meaning you can save up to £20,000 each year and any growth received is not subject to income tax or capital gains tax.

Jim explains:

“The ISA allowance is a ‘use it or lose it’ situation. Once the tax year has ended, you can’t go back for more tax-free investment. This tax year ends on 5 April, so my advice is to get organised and move some savings to an ISA this month.”

3. Pay into your pension

New freedoms to take benefits and generally leave pension savings as tax-free inheritance have made paying into a pension even more attractive than it was a few years ago – but the tax man actually adds to your savings as well.

For most people, for every 80p you put into a pension, then government will automatically add 20p in tax relief, so a £1 contribution can effectively cost you just 80p. Higher earners can claim extra tax relief through their annual tax return, paying 60p for a £1 contribution.

4. Speak to a professional

It’s normal to feel confused about finances, but that’s where the experts like Jim come in: he can explain everything you need to know in a way that makes sense to you.

“The word ‘financial adviser’ is scary enough for people, but we’re really just about helping people to build their finances in the best way for them.

“If our car breaks down, we see a mechanic; if our body hurts, we consult a doctor. So the same logic follows for our financial situations.”

To get in touch with Jim for advice on ISAs, pensions, or investments, visit his website. 

The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested. An investment in equities does not provide the security of capital associated with a deposit account with a bank or building society.

The levels and bases of taxation, and reliefs from taxation, can change at any time and are generally dependent on individual circumstances.

James Henderson Wealth Management is an Appointed Representative of and represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the Group’s wealth management products and services, more details of which are set out on the Group’s website www.sjp.co.uk/products.