Blog Archives

Are there really plans to strengthen the damaging corporate–political alliance if Conservatives get another term in government?

gravy train

The FT ‘understands’ that the Treasury is to permit Francis Maude, Cabinet Office minister, to offer leading business people salaries bigger than the prime minister’s as he hunts for 25 commercial directors for Whitehall.

Senior figures from the business world are to be drafted into government on salaries higher than David Cameron’s in an effort to use their corporate expertise to make billions more in savings after the general election.

corporate lobbying graphic stepsCommercial heavy hitters with the ability to drive harder bargains for the taxpayer will be recruited to negotiate the big “legacy” contracts, particularly in IT, up for renewal after the election.

Alongside the new appointments, the government will seek to strengthen commercial skills further by launching a new project leadership programme at Cranfield University. It will run alongside the existing Major Projects Leadership Academy, based at the Saïd Business School in Oxford.

The move follows a string of scandals that have outwitted Whitehall, such as the revelation that G4S and Serco, two big outsourcers, had overcharged on electronic tagging contracts.

atos costs

Will the poachers turn gamekeeper – or become more effective poachers?

Arms corporates, the MoD, procurement and privatisation

The MoD’s Defence Equipment and Support organisation (DE & S formerly DESO), employs 16,000 full-time staff and more than 3,400 contractors to handle the three armed services’ £14bn annual spending on new equipment and on maintenance. It oversees Britain’s £163bn 10-year defence budget and most of the government’s largest expenditure projects.

But today, the Times and the FT confidently predict that defence secretary Michael Fallon, speaking at an Institute of Directors dinner in Durham, will reveal many shortcomings, including fraudulent charges that arms companies have levied on the taxpayer for:

  • croquet lessons,
  • horseracing trips,
  • speeding tickets
  • and magicians.

And today, the National Audit Office has released a report saying that during attempts by the DE & S to privatise the running of procurement, which were abandoned in December 2013 after a collapse of the bidding process, MoD civil servants had ‘squandered’ £33m on consultancy fees and preparatory work.

Mr Fallon’s proposal:

A Whitehall defence watchdog will be set up, with the power to fine defence companies up to £1m if it discovers abuse of the contracting process. The defence secretary will tell the audience that the MoD will demand “100% transparency”.

FT: “Mr Fallon’s remarks are likely to be greeted coolly by a defence industry that has so far been broadly critical of government reform efforts”.

And sadly, the ‘fat cat’ mentality survives unscathed . . . The FT reported (14.4.14) that the MoD had asked the Treasury for permission to give top staff in the new watchdog inflation-busting pay rises or bonuses when they leave.

More information: 2015 2014

The Secret State – 9: gagging whistleblowers

whistleblowers 3As noted earlier, a growing number of whistleblowers are coming from many quarters including hospitals, police stations, the military, nuclear and pharmaceutical industries, to reveal information about ‘covered up’ dangers or other misdeeds deliberately withheld from the public.

govt legislation logo

But despite the so-called Whistleblowers Act – the Public Disclosure Act – these people are being victimised  or ‘gagged’ and for years the Department of Health and the Treasury have withheld information about the full extent and cost of this practice.

gary walker whistleblowerBBC News reports that Gary Walker, a health service manager, signed an agreement linked to a confidentiality clause in April 2011. This, he claimed, prevented him from speaking out about his dismissal and his concerns over patient safety. He has now decided to break the gag – the first former NHS employee to do so.

MP Steve Barclay, a member of the public accounts committee, spent two years obtaining the information that in three years there were 598 ‘special severance payments’, almost all of which carried confidentiality clauses aimed at silencing whistleblowers, costing the taxpayer £14.7million.

The Department of Health and the Treasury, which was sent the information by the relevant NHS bodies, refused to publish the costs until Mr Barclay tabled a series of parliamentary questions.

Advice from Dr David Nicholl (repeated)

Never blow the whistle alone (check with colleagues that you have your facts right) go up the chain of command first (your medical director, chief executive etc).

If they don’t reply or fob you off, write to them again- this time get a letter signed by your colleagues in your department – and – if the problem is still ongoing and is risking patients, and you haven’t had a proper reply following the above, you are duty bound to go to the press in my view.

Make sure you are 100% sure of your facts, would you be prepared to swear on oath in court that your evidence is correct? Whingeing is one thing, but being sued for libel doesn’t do anyone, least of all your bank balance any favours.

Successive governments bravely confront elderly taxpayers, but don’t pursue corporate tax evaders

In similar vein to the Motley Fool in January this year, Sam Dunne reports in more detail that a Money Mail investigation finds that some elderly taxpayers are receiving intimidating letters and unexpected bills from HM Revenue & Customs.

On retirement, many pensioners who have had one income all their working life and had all their tax deducted by their employer, are expected to understand allowances, credits and forms couched in unfamiliar terminology.

One such pensioner contacted us. She has a basic state pension, a separate company pension, a widow’s pension and savings accounts. Though all this information is held by HMRC, and all this income is taxed at source, she still has to fill in a return and this year has been asked to pay £139. This would not be regarded as a large sum in government and corporate circles and she will pay it, lacking the knowledge to understand the reason for this charge and the morale to contend with the department.

Sam Dunne says it is due to HMRC failing to take into account all of a person’s sources of income – so the pensioner pays for the HMRC error?

The widespread closure or staff reductions in excellent local tax offices has made it almost impossible for such people to see an adviser face to face and they are left to make expensive switchboard calls, lucratively prolonged as ‘all our advisers are busy’.

Journalist Ian Birrell summarises:

Tax evasion and avoidance has been estimated to cost the Treasury up to £70 billion each year — only slightly less than the total amount being cut from public spending by the Coalition Government. Tax authorities — so ready to crack down on small business owners or the self-employed — indulge the wealthy with ‘sweetheart deals’.

The country can ill-afford double standards at any time, let alone when public services are under pressure and many families are struggling as the cost of living soars.

He concludes: “We simply cannot afford to live in a nation in which — in the words of an infamous billionaire tax avoider — ‘only the little people pay taxes’ . . . there is something profoundly wrong about wealthy individuals or firms existing in a society and using its services when they do everything possible to avoid paying their fair share of tax.” 


Free fiscal watchdog from political interference

The Financial Times reports that on Monday Sir Alan Budd, interim chairman of the new Office for Budget Responsibility [OBR], made a bid to establish the fiscal watchdog’s independence from political interference. 

At present, the Office for Budget Responsibility has a team of 11 people who are all employees of the Treasury despite its core purpose of ‘independence,’ according to the Mail Online. 

Sir Alan said that parliament should scrutinise the appointments of the most senior OBR staff and that arrangements should be made to move the OBR out of the Treasury building. 

Those working in the core forecasting jobs should move to the OBR so that “core [forecasting] tasks can be fully controlled and co-ordinated within the OBR”.