Almost £860,000 paid for seconded directors by GMPTE

Article published: Friday, June 18th 2010

Crain’s Manchester Business reported this week that the Greater Manchester Public Transport Executive paid £857,000 for three of its executive directors to firms from which they are seconded.

In the past year Ernst & Young, Parsons Brinkerhoff and Acuity Programme Ltd were paid to release David Leather, Robert Morris and Paul Griffiths respectively, so that they could work as directors for GMPTE.

GMPTE oversees Greater Manchester’s public transport network and infrastructure, but does not directly run bus and tram services. It received £186 million from the Greater Manchester Integrated Transport Authority (GMITA) in the year ending 2010. A spokesperson told Crain’s they could not provide a detailed breakdown of the £857,000 and how it was spent. The highest salary for a permanent member of staff of GMPTE is £124,845.

Leather is managing director at GMPTE, a position he was already committed to for two years. Morris will also remain in his position as interim chief executive for the foreseeable future according to GMPTE. Griffiths has now left his position as interim projects director and returned to Acuity.

According to GMPTE, the payments “reflect the long term nature of the arrangements between the respective organisations and the PTE” and that Leather and Morris provide the organisation “with the experience and continuity required” for the future.

Steve Warrener, GMPTE’s Finance Director, said: “The fees paid for the services of our interim Directors are indicative of the value of their roles in the private sector, and they have provided hugely beneficial financial and managerial expertise to GMPTE.”

It was also revealed that the three companies had been awarded contracts by GMPTE worth nearly £10 million. A GMPTE spokesperson stressed the three men were not involved in the decisions in their roles with GMPTE or the firms from which they were seconded, and that “robust arrangements and procedures” are in place to deal with potential conflicts of interest.

However, at a time when cuts are falling everywhere and hitting the poor especially hard, people are seriously questioning the massive amount of taxpayer money finding its way into the coffers of rich private companies rather than directly into public services. A poll running on Crain’s shows even 90 per cent of its readers see the fees as a “waste of public money” considering the executives’ already high salaries.

This article was edited on 21 June after GMPTE pointed out to MULE that some of the original claims made by Crain’s were factually incorrect.

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  1. Why is this allowed to go on? Why aren’t we, the long suffering Greater Manchester Council Tax payers, not asking serious questions from our elected GMITA councillors or our MP’s? Why isn’t this so called “long term arrangement” stopped immediately? The more one looks into this, the more uncomfortable one feels about it! In most cases eyebrows would be raised when it’s revealed, that in addition to the outrageously high 867,000 pounds worth of fees paid to Ernst & Young, Parsons Brinkerhoff and Acuity Programme Ltd, all three companies also benefited from over 10 Million pounds worth of GMPTE contracts. There has to be a glaring and obvious conflict of interest here? Think about it for a moment. We have very influential directors, supporting an arrangement which is blatantly beneficial to themselves, but even more so, for their substantive companies that they originally, and still do work for? Do we not get it? In effect GMPTE is paying Mr Leather and Mr Morris very high salaries twice over? Put yourself in either Ernst & Young or Parsons Brinkerhoff’s position for example. You are being paid this very substantial amount of money from GMPTE for the “loan” of your executives. This fee not only allows you to pay their full salary for the period they are seconded from you, but also makes you a very nice commission on top. In addition and probably most importantly, you win very substantial contracts, worth many millions of pounds from GMPTE. Is it unfair to assume this whole arrangement could be substantially influenced by having the decision makers in place. How many companies have the advantage of selling their products and services to their own employees, strategically placed as the decision makers in the customers organisation, whilst also being paid for it? I find it hard to believe GMITA or the government allow this very convenient arrangement to exist? Now lets put ourselves in Mr Leather’s or Mr Morris’s shoes? Would we not possibly ensure we continued to receive a very high salary from GMPTE and then another very high salary from Ernst & Young and Parsons Brinkerhoff respectively? It would not surprise me if additional “finders fees” or consultant fees were also paid to either Mr Leather, Mr Morris or Mr Griffiths? Lets be realistic here, would you want to jeopardise this very lucrative arrangement if you were them? Is it not in every one’s interest (with the exception of Greater Manchester Tax payers) to keep this arrangement going? No wonder we get statements from GMPTE trying to justify this outrageous cost on the basis of a so called “long term arrangement” or “experience and continuity”. What?867,000 pounds worth? Plus over 300,000 pounds which we pay for their salaries from GMPTE. Well over 1 million pounds of our tax payers money for the salaries of these two men. Its unacceptable! And it’s even more vexing, when we learn that much lower paid, loyal employees of GMPTE are being made redundant as part of an efficiency drive, promoted by both Mr Leather and Mr Morris. Why can’t Mr Leather and his fellow director resign from their substantive employers to concentrate on their current responsibilities and make a real contribution to the cost savings they are now demanding from their own staff. We as taxpayers need to ensure this is investigated, exposed and stopped as soon as possible.

    Comment by Thorn on February 4, 2011 at 2:58 am

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