Category Archives: Reward for failure
Shocked by the unbridled tone of the Attorney General in the Commons today – recorded here – his fury mounting after the second minute – I searched online for information which would shed light on his character.
When practising as a barrister, Geoffrey Cox frequently led in commercial actions and arbitrations overseas, appearing in the Dubai International Finance Centre, Mauritius and the Cayman Islands. He served as MP for Torridge and West Devon from 2005-15.
- In September 2014, it was reported that Cox was one of a number of individuals investing in the Phoenix Film Partners LLC scheme run by Ingenious PLC which HM Revenue and Customs(HMRC) had alleged to be a tax avoidance
- In 2016, at that time Britain’s highest-paid MP, it was reported he had a number of office expense claims for items, such as a 49p pint of milk, rejected by the Commons authorities.
- In January 2016, Cox, a landlord, backed the Conservative Government in voting down an amendment in Parliament on rental homes being “fit for human habitation”.
- He was a member of parliament’s Committee on Standards and the Committee on Privileges, ‘the sleaze watchdog’ but was the subject of an inquiry in 2016 after ‘neglecting to register more than £400,000 of outside earnings.
In February 2016, Cox announced in the House of Commons that he supported the case for leaving the EU and would campaign and vote to do so in the forthcoming referendum.
He was appointed to the Cabinet as Attorney General for England and Wales and Advocate General for Northern Ireland by Theresa May in 2018 and, in February 2019, was put in charge of negotiating changes to the Northern Ireland backstop in the EU withdrawal agreement.
On 24 September 2019, minutes of a conference call seen by Sky News revealed that Cox had advised the government that the prorogation was lawful and constitutional and that any accusations of unlawfulness “were motivated by political considerations”.
On the same day, the Supreme Court of the United Kingdom ruled unanimously that Prime Minister Boris Johnson’s prorogation of parliament – as advised by Attorney General Cox – was unlawful.
The reasons for his astonishing parliamentary outburst can now be understood.
Shining a spotlight on four government agencies: an educational psychologist, a cook, a farmer and an accountant
The relatively powerless are harassed: corporates survive censure unscathed
OFSTED had not inspected more than 1,600 schools that were judged “outstanding” by it for at least six years – and of those, almost 300 had not seen an Ofsted inspector for at least 10 years, according to a report by the National Audit Office – see chart on page 27 of the report.
The case of Waltham Holy Cross is ongoing. Last year the government decreed that Waltham Holy Cross would be handed over to Net, a chain of academy schools in May. As the NAO records, this has already happened to over 7,000 other state schools in England since 2010: public assets built and maintained by generations of taxpayers are being given away. Waltham Holy Cross parents made almost 100 freedom of information requests which revealed errors in the draft Ofsted report and that Net was being sounded out on “their appetite to take on this school” in January, over a month before the Ofsted verdict was published. News of teachers and parents there – and in other parts of the country taking action to prevent this ‘forced academisation’ may be read here.
In an article in the Times Educational Supplement (TES), head teacher Geoff Barton, the general secretary of the Association of School and College Leaders, said “Ofsted and the government are the source of much of the stress and anxiety on staff through an extremely high-pressure accountability system and concluded ‘the accounts above reveal an inspection system that appears in too many cases to be doing great damage. My sense is that it’s time to stop quietly accepting that the way Ofsted is, is the way Ofsted should be”.
This month. four years later, TES readers discussed overhauling Ofsted, a ‘toxic’ system. One letter, whose signatories included Dr Richard House, chartered psychologist, former senior lecturer in education studies, Dr Rowan Williams, former Archbishop of Canterbury and Sir Tim Brighouse, former schools commissioner for London, was provoked by a recommendation by Ofsted head Amanda Spielman to shut down what she labelled as “failing Steiner schools”. The signatories are founding a campaign to bring about the replacement of Ofsted with a new inspectorate that is ‘empowering, collaborative, and understanding and respectful of pedagogical difference’.
Unthinking adherence to FOOD STANDARDS AGENCY bureaucracy led to the unjust downgrading of a new small business, damagingly reported in local paper
As the public perception is that businesses with a one rating will give customers food poisoning, a cook-manager has criticised the food hygiene inspection system after her business was given a one rating out of five – though hygiene and food storage was rated highly.
At a (requested) pre-opening inspection by the council in March 2018, no reference had been made to the need for a staff manual and staff training procedures but this ‘one-person’ operation was ‘put on a warning’ for not having a staff training manual – though no staff was employed – and was told that a tick paper exercise (officially a ‘documented food safety management system’) is required for all aspects of work.
The work required to maintain cleanliness and produce wholesome food appeared to be discounted and a paper exercise – easily forged – was prioritised. The District Council inspectors were unhelpfully applying the rules of The Food Standards Agency, a non-ministerial government department, to the letter and not the spirit of those regulations.
Solution found and accepted: a whiteboard was put up in the workplace, a photo taken once a week and an online manual was printed.
On several farms which had passed inspections by the ASSURED FOODS STANDARD (Red Tractor) agency in July 2018 serious cases of animal abuses were reported in the media.
A farmer recently wrote an article in the Western Daily Press foreseeing the advent of similar tick-box regulations:
“What I have been pulled up on is the fact that I do not keep written mobility and condition records. These are not yet enforceable under the scheme – but I have reason to suspect they soon may be.
“The only thing that will be achieved by keeping written records will be the creation of more work for the assessor; more forms for him to sit down and read through and check; one more task to help fill his required nine-to-five working day.
“And let’s suppose I decided to cook up a completely bogus set of records. How would he even know?
“When the Red Tractor scheme was launched the president of the NFU (under whose wing it actually operates) was Ben Gill who told us all how vital it was going to be in supplying the nation with safe, wholesome food which consumers could buy with confidence while, equally, bringing more prosperous times for farmers.
“What I see now is an organisation riddled with pointless bureaucracy (I understand another tier of inspectors is in place to check on the assessors).
“I see, equally, an organisation which appears to operate dual standards: one for the soft-target, small producers like me and another for the industrial giants such as Moy Park, over whose portals the Red Tractor flag proudly flies but where recent footage captured undercover at Moy Park showed stinking, squalid poultry houses where chickens will be lucky to survive their miserably short allotted span”. He ended with two pertinent questions:
- if Assured Foods was aware of conditions at this plant why did it not intervene?
- And if it wasn’t aware, why not?
The FINANCIAL REPORTING COUNCIL, the UK’s accounting and auditing regulator, is regrettably funded by the audit profession and its board of directors is appointed by the Secretary of State for Business, Energy and Industrial Strategy.
Its monitoring of out-sourcing firms such as Capita and G4s in several sectors, including health, social, military and prison services has not led to effective disciplinary procedures – in fact they continue to receive lucrative government. The Financial Times reported yesterday that though its auditing of Carillion since 1999 is under investigation by the Financial Reporting Council, the value of new UK public sector contracts awarded to KPMG increased more than fourfold last year. In 2013 seven senior members of the FRC scheduled to investigate KPMG’s role in the collapse of lender HBOS, were current or former employees of KPMG itself.
Prem Sikka, professor of accounting at the University of Sheffield, has posted almost 400 FRC entries on the AABA website (now well hidden by search engines). A recent article adds news of another appointment: Revolving Doors: FRC appoint new member to the Audit and Assurance Council – former PwC and Royal Bank of Scotland exec .
Professor Sikka has said he is worried that the government is rewarding these firms with valuable contracts when they have been undermining the public purse through their involvement in several tax avoidance scandals (FT: 29.7.19).
The ‘soft targets’ are harassed: corporates survive censure unscathed
George Monbiot recently pointed out that the Commons report on the Carillion fiasco is one of the most damning assessments of corporate behaviour parliament has ever published. It trounces the company’s executives and board and laments the weakness of the regulators.
But, as Prem Sikka said in his April article, it scarcely touches the structural causes that make gluttony a perennial feature of corporate life.
Both agree that the problem begins with an issue the report does not once mention: the extreme nature of limited liability. Sikka points out that this system, under which executives are only financially accountable for the value of their investment, has also benefited frauds and led to the self-enrichment of executives at the expense of workers, consumers, creditors, pensioners and citizens.
Monbiot adds that the current model of limited liability allowed the directors and executives of Carillion to rack up a pension deficit of £2.6 billion, leaving the 27,000 members of its schemes to be rescued by the state fund (which is financed by a levy on your pension – if you have one). The owners of the company were permitted to walk away from the £2 billion owed to its suppliers and subcontractors. (Left: the former Carillion chief executive Keith Cochrane in Westminster after appearing before the Commons work and pensions select committee)
Monbiot continues: “There is no way that fossil fuel companies could pay for the climate breakdown they cause. There is no way that car companies could meet the health costs of air pollution. Their business models rely on dumping their costs on other people. Were they not protected by the extreme form of limited liability that prevails today, they would be obliged to switch to clean technologies”.
So what is to be done?
Prem Sikka (right) proposes that the bearers of unlimited risks and liabilities should be given rights to control the day-to-day governance and direction of companies.
He advocates including employees and citizen/consumers on company boards – because both ultimately have to bear the financial, health, social and psychological costs associated with environmental damage, pollution, poor products, industrial accidents, loss of jobs, pensions and savings. Through seats on company boards, they could secure a fairer distribution of income, challenge discrimination, curb asset-stripping and influence investment, training and innovation.
Across the 28 European Union countries (plus Norway), most have a statutory requirement for employee representation on company boards – unlike the UK, Belgium, Bulgaria, Cyprus, Estonia, Italy, Latvia, Malta and Romania.
George Monbiot proposes a radical reassessment of limited liability.
He points out that a recent paper by the US law professor Michael Simkovic proposes that companies should pay a fee for this indemnity, calibrated to the level of risk they impose on society. He adds, significantly, that as numerous leaks show, companies tend to be far more aware of the risks they inflict than either governments or the rest of society. Various estimates put the cost that businesses dump on society at somewhere between 4% and 20% of GDP
His own ‘tentative’ and ingenious proposal is that any manager earning more than a certain amount – say £200,000 – would have half their total remuneration placed in an escrow account, which is controlled not by the company but by an external agency. The deferred half of their income would not become payable until the agency judged that the company had met the targets it set on pension provision, workers’ pay, the treatment of suppliers and contractors and wider social and environmental performance. This judgement should draw on mandatory social and environmental reporting, assessed by independent auditors.
If they miss their targets, the executives would lose part or all of the deferred sum. In other words, they would pay for any disasters they impose on others. To ensure it isn’t captured by corporate interests, the agency would be funded by the income it confiscates.
Monbiot then says “I know that, at best, they address only part of the problem” and asks, “Are these the right solutions?
- support them,
- oppose them
- or suggest better ideas.
He ends: “Should corporations in their current form exist at all? Is capitalism compatible with life on earth?”
Natural England – sponsored by the Department for Environment, Food and Rural Affairs – is responsible for ensuring that England’s natural environment, including its land, freshwater and marine environments, geology and soils, are protected and improved.
The Farmers Guardian reported that in 2016 Natural England’s payment record was rated even worse than that of the Rural Payments Agency (RPA) as it also failed to deliver the required Countryside Stewardship payments for work already done.
Its performance did not improve in 2016; farmers were kept waiting for their first Countryside Stewardship payment. Though Natural England had pledged to make advance payments to 2016 mid-tier and higher-tier scheme holders between November 2016 and January 2017, with final payments due between January and June 2017, the NFU said exasperated members were calling the union demanding to know why their payments had not arrived. Farmers Weekly understood that ongoing delays in processing payments were because of problems with IT systems and processes at Defra.
A spokeswoman for Natural England declined to comment on the number of 2016 scheme payments already made.
FW added that farmers are yet to receive the first tranche of their 2017 payments for work done. Parliament’s Public Accounts Committee was scathing in its criticism of the RPA’s failure to distribute basic farm subsidies whilst requiring prompt applications from farmers (below left).
The extent of the Rural Payments Agency’s failure to pay farmers in England on time and in full is now clear. The RPA paid only 38% of farmers under the Basic Payment Scheme on 1 December 2015—first day of the payment window—compared with over 90% in previous years.
By the end of January this had risen to 76%, but at the end of March 2016 there were still 14,300 farmers (16%) who had not received any payment.
Government agencies should honour their own injunction: don’t leave it too late.
Over 10,000 farmers who had received a payment had not been paid in full. Two thirds of the additional payments made to these farmers were in excess of €1,000 and were first paid in September 2016, over 9 months after the first payment should have been received.
Farmers Weekly reported in February this year that the RPA boss was ‘blasted’ over farm payment delays and mapping.
At a NFU council meeting on 30th January at Stoneleigh Park, Warwickshire, farmers took RPA’s chief executive Paul Caldwell to task over BPS payment delays. More than one in 10 farmers are still waiting, according to an NFU survey (see “Survey uncovers extent of delays” right) – although the RPA’s own statistics suggests that figure is nearer to one in five. NFU vice-president Guy Smith said: “When you look at current payment performance and the levels of outstanding issues from previous years you could describe the RPA as ‘just about managing’.
In March 2017, having received what Miles King described as a ‘verbal beating’ (Countryside Stewardship in front of the EFRA committee) Guy Thompson, Chief Operating Officer, left Natural England and now works for Wessex Water.
Natural England announced in the autumn that it would increase first tranche payments, traditionally paid in the autumn, from 50% to 75%, with the remaining 25% following later, reflecting payment reductions or penalties.
Missing payments have reduced cashflow, leading some to take out bank loans
According to farm leaders, many claimants are still waiting for that first payment, with some now being forced to take out bank loans because of their resulting cashflow difficulties. Max Sealy, NFU county delegate for Wiltshire and a consultant with the Farm Consultancy Group, said some farms were waiting for substantial sums of money for work which they had already completed.
“What we need is clarity on the situation and better communication,” he said. But a Natural England spokesperson declined to clarify how many payments were still outstanding and when farmers could expect to see them.
Farmers who have signed up to Countryside Stewardship, or still have an old Higher-Level or Entry-Level Stewardship agreement, have yet to receive the first tranche of their 2017 payments. Farmers Weekly reports that farmers want to know when they can expect to receive their agri-environment scheme payments, with ongoing delays leading to budgeting problems and growing resentment about the way the schemes are being managed.
The Farmers Guardian then reported that Defra is to transfer delivery of the Countryside (agri-environment) Stewardship scheme from Natural England to the Rural Payments Agency (RPA) – more confusion?
NFU Deputy President Guy Smith (right) said:
“The Countryside Stewardship scheme has been plagued by poor delivery from its launch in 2015 and the NFU has been raising these concerns from day one. It seems almost every day we have complaints from members about the muddled application process, wrong maps, moving goalposts, late start dates and delayed payments. All this has undermined farmer confidence in the schemes leading to very poor uptake. Plans to improve delivery have to be welcomed but until we see improved delivery we will withhold judgement.
“I know many farmers will not be reassured that delivery is moving from NE to the RPA, which is notorious among farmers as the organisation which comprehensively screwed up the payment of the as then new Basic Payment Scheme back in 2014. A highly complex new IT system was commissioned to enable farm payments to be moved online. 7 years later the system is still not working properly.
Conservationist Miles King went further, calling for the abolition of the Rural Payments Agency before the introduction of the government’s England Agriculture Policy which is expected to be published this spring: “We need a publicly-funded independent champion for nature (as Natural England was intended to be when it was set up) and a new body which will deliver the public goods for public money”.