UK: Fraternal finances - the administrative burden shouldered by Britain's trade union members.

UK: Fraternal finances - the administrative burden shouldered by Britain's trade union members. - Ken Gill, the unrepentant communist general secretary of the Manufacturing, Science and Finance union, who retires next year, should have some explaining to

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Last Updated: 31 Aug 2010

Ken Gill, the unrepentant communist general secretary of the Manufacturing, Science and Finance union, who retires next year, should have some explaining to do to his 653,000 members. Under Gill's leadership the union seems to require an inordinate amount of administration compared with many other unions.

In fact a Management Today analysis of the 1990 accounts of several unions (see below) leads to the inescapable conclusion that the more left-wing the union leadership, the higher the burden of union administration per member.

Administrative burden per union member

Admin costs

per head % of total

Union 1990 in £ spending

MSF 31.65 90.45

ASLEF 89.61 90.44

GMB 30.88 80.58

TGWU 38.87 76.50

AEU 22.65 73.30

Source: Annual returns for 1990 filed with the Certification Office for Trade Unions and Employers' Associations.

Head office and administration costs at MSF, for example, soaked up 90.4% of the union's total expenditure - some £31.65 out of £34.99 per member. By contrast, benefits actually lavished on the membership amounted to the princely sum of £1.87 per head. But at least MSF seems to be improving - marginally. In 1989 the equivalent head office figures soaked up 90.5% of spending per head.

Gill's nearest rival in the head office stakes is Derrick "Silver Fox" Fullick, the old-style general secretary of ASLEF, otherwise the Associated Society of Locomotive Engineers and Firemen. There may be no firemen actually working in British Rail (apart from on occasional steam specials), but ASLEF puffs on as if the 1980s and Thatcherism had not happened. Last year, from its Hampstead headquarters, ASLEF managed to spend an average of £99.08p per member, nearly three times the average for other unions. Of this sum, some 90.4% also went on administration. But then ASLEF, with just 18,850 members scattered the length and breadth of the country, may be a particularly difficult union to administer.

If Fullick and his colleagues tire of union affairs, they clearly have a future in the estate agency business, as their 1990 accounts reveal. Unlike ever other resident of genteel Hampstead, the occupants of 7 and 9 Arkwright Road appear to have enjoyed something of a property boom last year. At the beginning of the year the two ASLEF properties were valued at £900,000, but after some £12,985 worth of improvements at 7 Arkwright Road the two properties have been valued by the union at £1,690,000 by the end of the year - an 87% rise. If that is a valuation in recessionary times, what will ASLEF pull out of its hat in a boom?

Still, ASLEF's problems are just the ones that Bill Morris, the new general secretary of the Transport and General Workers' Union, would like to have. With a membership of 1.22 million (against over two million in its heyday in the late 1970s), the TGWU is in deep financial crisis. Last year its total income was some £7.7 million adrift of expenditure. Alarm bells do seem to be ringing at Transport House. The percentage of spending per head devoted to administration actually fell from 78.8% in 1989 to 76.5% in 1990.

And the harassed TGWU financiers, anxious to top up their funds, will no doubt be watching the outcome of the Hanson-ICI battle with a keen and certainly not entirely dispassionate interest. Their latest accounts reveal 10,000 ICI shares on the books at £117,000 and 45,006 Hanson shares at £105,000. The rise in the ICI share price will have added some £11,500 to the TGWU portfolio, though this will do little to help its rocky finances.

John Edmonds's GMB union, one of the few to be able to boast a membership increase in 1990, still spends some 80.5% of its spending per head on administration. Presumably this figure will rise as Edmonds and his executive have to spend time and money trying to bring the wayward GMB machine in Liverpool into line, so as to present the new model face of the Labour Party and the unions for the general election.

Gavin Laird, general secretary of the moderate engineering union the AEU, only spends some 73.3% of his £22.65 expenditure per member on administration - a slight increase on 1989 - but the union appears to be tackling the financial problems which bedevilled it in the mid-1980s. Membership is still falling (it is currently 702,278), but its proposed merger with the electricians' union should restore it to its former one million mark.

Meanwhile the membership must be thankful for an astute investment strategy that has seen the value of the AEU's portfolio of quoted shares, both British and overseas, rise by 53% in 1990, far better than any stock market professional achieved. "Gavin Laird, engineering analyst at Warburg Securities" - doesn't it have a nice ring to it?

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