Latest Public Sector News

25.10.17

Councils drastically overspending on mileage allowance payments

Councils are paying their staff excessive mileage allowance payments, according to a report released yesterday.

The research by the TaxPayers’ Alliance (TPA) found that staff are receiving millions more than they should be entitled to.

Employees using their own vehicles for business journeys can be reimbursed by their employers to cover the cost of using the vehicle.

The value of the reimbursement has been approved by HMRC as 45p for the first 10,000 miles for cars and vans, and 25p thereafter. Motorcycles and bikes attract lower reimbursements of 24p and 20p respectively.

However, 38% of councils pay above this, with an average rate of 48.92p.

This amounts to the average driver receiving an additional £12.57 after 250 miles, £25.15 after 500 miles, and £50.29 after 1,000 miles.

Bassetlaw is the most generous, paying over 50% more than HMRC’s approved rate, at 60p per mile, equating to an additional £240 for a driver travelling over 1,000 miles.

Lincolnshire paid out a whopping £6.9 million in 2016/17 - more than any other council.

This is not the first time that the TPA has criticised the mileage payments made by councils.

Five years ago the DCLG advised councils to make savings by reducing their mileage payments to the approved rates.

Some councils have followed this recommendation, and overall mileage reimbursements have reduced to £223m in 2016/17, down from £427m back in 2009/10.

TPA chief executive, John O’Connell, said: “Driving is extremely expensive in Britain thanks to sky-high rates of fuel duty and vehicle excise duty, but there's no excuse for councils to pay more than HMRC's approved rate for mileage.

“It's simply 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 for the past five years.”

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Comments

Carolyn   26/10/2017 at 16:03

Are the journeys justifiable? Are the recipients conscience clear that the monies received are from many ratepayers who can barely afford to pay the councils rates?

Andrew   01/11/2017 at 15:57

The tone of this article is disgraceful....shame on the TPA for their short-sightedness. There has been no increase in the HMRC approved mileage rate for almost 8 years now, despite huge inflationary increases is the cost of motoring. Fortunately some councils take these inflationary costs into account when calculating their mileage allowances - otherwise, what with public sector pay freezes, council staff like me could not afford to use our cars for work.

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