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.
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 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!