A regional publisher has “entirely rejected” an accusation that it is keeping taxpayer’s money which is meant to be used for expenses related to the Local Democracy Reporting Service.

The National Union of Journalists claims there is a gap of more than £10,000 between the BBC licence fee money Newsquest receives for each LDR role and the cost incurred from wages and employer contributions for National Insurance and pensions.

It said that Newsquest was currently paying LDRs an average of £24,000 a year compared to the current annual BBC funding of £37,734 per role.

The union said that when it challenged Newsquest about the figures, based on data provided by the BBC following a Freedom of Information request, the company said the surplus was “taken up by other internal business costs”.

Publishers under contract to host LDRs incur other expenses, including the provision of kit such as laptops and phones, but the BBC’s FoI responses stated that “where a supplier’s annual LDR employment costs are less than the agreed funding, the difference is retained by the supplier”.

The NUJ believes that in Newsquest’s case, where the union says a £24,000 salary is often paid to reporters employed under the scheme, only “very limited” additional expenses are incurred and a large part of the £10,000+ “headroom” between normal employment costs and the funding provided is being kept.

NUJ Northern & Midlands senior organiser Chris Morley, pictured, accused the publisher of “squirrelling away” money which should be passed on to journalists in the form of higher wages.

But Newsquest has hit back at what it called a “flawed assessment” by the NUJ, saying the union’s calculations do not take into account other costs including Employer Tax, the LDR bonus scheme, licences and other costs.

A spokesman told HTFP: “We entirely reject this flawed assessment which completely fails to take into account National Insurance, Employer Tax, Employer Pension contribution, the LDR bonus scheme, laptop and technology provision, licences and all the other real costs of hiring and supporting LDRs in our local newsrooms.

“It’s a shame that the NUJ continues to try and pick holes in a scheme that has done so much to sustain local government and public sector reporting across the UK.”

The dispute comes after a pay dispute between the two parties after the Newsquest LDR NUJ chapel submitted a claim for a £26,000 minimum salary, or six per cent increase, whichever was the greater in November last year.

This union has said this was consistently rejected by Newsquest with only the obligatory 1.5pc increase, or £558, being passed on from the BBC.

Subsequent talks hosted by conciliation service ACAS are said to have broken down last month.

According to the NUJ, some of the 29-strong team of LDRs employed in Newsquest newsrooms have been “forced to consider second jobs to bolster their income because of the low pay and rising living costs.”

Said Chris: “The LDR scheme is a successful one that has done much to maintain a level of local public interest journalism to the great benefit of our democratic structure.

“While our members are proud of the work they do, it is deeply disappointing that Newsquest conspicuously fails to appreciate its value – or their true worth.

“We accept that the current period of high inflation has shown the funding mechanism and minimum salary set by the BBC has been found wanting, but there can be no excuse for a profitable publisher like Newsquest ignoring the plight of its own employees and squirreling away money that rightfully should be used to bring about a liveable wage.

“Our members are not even asking Newsquest to incur a real cost to employing LDRs – but just to provide a living salary within the overall money it gets from BBC licence fee payers to undertake the service.”

A BBC spokesperson said: “We have clear processes in place to make sure all local democracy reporters are paid within the same fair pay range.

“The BBC treats all suppliers equally no matter the size of the publishing company when it comes to what funding is available for the reporters.”