On Byline Times: MPs slam secrecy and cover up over Brexit management consultancy contracts

Whitehall claimed ” administrative error” for all the secrecy

Whitehall is condemned yesterday by a powerful all party committee of MPs for being over secretive over the award of nearly £100m of management consultants contracts to handle Brexit.

The Commons Public Accounts Committee accuses Whitehall of breaching government guidelines in making public contract details, awarding nearly all the work to just six companies and covering up some of the contracts.

Full story on Byline Times.

Vietnam: The scooter boys in a booming Communist state with a widening wealth gap 

Imagine being dropped in the centre of a huge, unfamiliar vibrant place like Ho Chi Minh City without any local currency or understanding the language. The first thing you might do is look for an ATM to get some local cash. But there is not one in sight.

Then a friendly young guy on a motor scooter who speaks English suggests he can direct you to one which turns out to be round the corner.

You successfully get the money. Then he asks for payment. In the end You give equivalent of £3 and he goes away. As a tourist to the city this happened to me. I was politely fleeced.

The incident is symbolic of the current state of affairs in Vietnam. The loss of £3 was not a huge matter for me but it was a small fortune for him. It illustrates both the gulf between first world tourists and third world countries and the internal divide between the rich and poor in an emerging nation like Vietnam.

The young motor scooter rider is one of the enduring features of Ho Chi Minh City.There are thousands of them desperate and anxious for work and they dominate the roads and the pavements. Trying to negotiate a wheelchair along the pavements I found they were my main competitors for the few ramps that made the streets accessible. The traffic in the city is anarchic and you take your life in your hands to cross the road. Many of scooter riders use the ramps for the disabled to mount the pavement to avoid being held up by traffic lights.

They are at the bottom of a very large pile with shoe shine cleaners and people selling fans to tourists. At the top are wealthy entrepreneurs and property developers in the new Asain tiger.

And a visit to Ho Chi Minh city and a popular seaside resort Nha Trang confirms this. Both are booming with new tower block offices and apartments in the former Saigon and new multi storey hotels in the seaside town.

Ho Chi Minh City still has a number of its original French colonial buildings including the old post office, a Roman Catholic cathedral and an opera house that would not look out of place in Paris.But any idea that the writ of Macron runs here is out of the question. France has left an architectural legacy but not much else.

Instead it is the Japanese,Chinese, Americans and British ( in the shape of banks like HSBC and accountants like KPMG) that dominate the city alongside growing new Vietnamese entrepreneurs.

In Nha Trang a seaside resort that was a favourite relaxation destination for US troops during the Vietnam war it is US and Japanese hotels that are dominating the seafront with at least six new tower block hotels under construction when I visited.

After the American troops left it became a holiday destination for the Russians and Chinese. Now it is seeking a wider tourist market from Asia and even Europe. The resort is not just a cruise ship destination but a major tourist centre in its own right.

The present beautiful uncrowded beach could in future become as crowded as one on the Costa del Sol.

Small shacks with corrugated roofs are cheek by jowl with new luxury hotels in Nha Trang. And in Ho Chi Minh City huge swathes of modern apartments are going up in the city centre which are well beyond the reach of the average Vietnamese worker.

Communism comes in is over property ownership. The concept of private freehold property does not exist. Instead people buy a state licence to occupy the house or flat which can be revoked if the state requires the land for development. People are compensated for having to move and foreigners are restricted to a 50 year occupancy. Some, the guide suggested, get round this by getting a Vietnamese person to “own” it for them.

Most companies expect their staff to work a six day week . Japanese employers are rated the best as they offer staff a five day week.

Vietnam is a country in transition and is aping China. It is an inexpensive holiday destination if you ignore the poverty gap.

By the way the country plans to ban motor scooters from the Ho Chi Minh City by 2030 to combat smog. I wonder where they will go or whether they will succeed.

Britain’s nuclear future: Doomed by its own contractors and skill shortages

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Britain’s  £70 billion nuclear programme is in serious trouble. Contractors have either started or are threatening to pull out of four planned nuclear power stations.

There is also huge recruitment crisis to get enough trained  staff to build them in the first place.

The country could literally be on the blink as 14 out of the 15 existing nuclear power stations  are due to close by 2030 – drastically reducing the current 21 per cent share of  electricity generated by nuclear power.

They were due to be replaced by eight new nuclear power stations – but only one is currently under construction by the French nationalised energy firm EDF  – at Hinckley Point in Somerset. And that may well miss its 2025 opening deadline.

In the last two months  while Brexit dominated the news three unrelated announcements have drastically changed the situation for the worse.

Plans for a new nuclear plant at Sellafield in Cumbria – called Moorside – have been scrapped by Toshiba which has decided to pull out of the UK development. The company failed to find a buyer for the project.

And meetings are being held by Hitachi to consider abandoning its plans to build a £16 billion nuclear power station at Wylfa in Anglesey – only six months after the UK agreed to pump £5 billion of taxpayer’s money into the project to keep it going. Hitachi’s share price went up on the announcement of a possible pull out.

The decision also puts at risk two other projects by Hitachi in Oldbury, Gloucestershire leaving Britain mainly relying on the Chinese to build a new power station in Bradwell, Essex and help develop a new power station at Sizewell.

Huge recruitment crisis

Meanwhile a damning report has been produced by the Nuclear Skills Strategy Group, an employer led organisation, which includes representatives of government, the unions and a representative from China. It shows that the UK has an enormous skill shortage of available engineers and could face an “age related cliff-edge loss of current skills and experience” as well qualified staff reach retirement. Many of the current experienced staff are in their 50s and 60s.

Although written up in an upbeat way the strategy also signed off by three government ministers in the business, defence and education departments makes grim reading. The link to the report is here.

 It says to recruit the 100,000 skilled people to build the new power stations it will be required to double existing recruitment as it has a 50 per cent shortfall.

Among shortfalls are electrical and civil engineers, safety experts, emergency planners, control and instrumentation experts,project planners and regulators. In basic construction there is a shortage of scaffolders and concrete experts.

 The report says: “Even where there is a large national pool from which new staff and trainees can be drawn, recruitment, attraction, and retention factor heavily in determining available supply. Remote locations, competing industries, and the lack of practical training opportunities can all affect workforce availability.”

 The problem is also being made worse by Britain leaving the EU which could hit skilled people from other EU countries taking up work and also affect nuclear research.

The report reveals that the shortage also extends to the military. The UK is committed to replacing Trident.  Yet will it have the people to do it.

There is growing collaboration between the military and civil nuclear industry with new initiatives set up in Cumbria and  at Hinckley Point and they are even desperate enough to want to shorten security checks to attract new staff.

Will nuclear survive?

 Britain’s civil and military nuclear expansion and modernisation has been under attack by Greenpeace and the Campaign for Nuclear Disarmament for decades. It would be the ultimate irony if the programme closed down because the contractors walked and Whitehall ran out of the money it needed to subsidise them. There is a real danger of this happening now.

Last of the Summer Time: The next new EU row for Theresa May

Theresa May about not to enjoy a row over summer time Pic Credit: Articular/ Freepik

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As the UK and the EU come to a deal on the withdrawal of the country from the EU the practicalities of the arrangement are about to rebound on Theresa May.

The European Commission  are planning  a new directive that will affect everyone in the UK and Ireland and from March 29 when the UK ceases to be an EU ” rule maker” and becomes a ” rule taker” it can do nothing about it.

The EU want to change our time. They want to standardise time across all countries by abolishing the move in the UK from Greenwich mean time to summer time – keeping the same hours for the whole year. While the EU will still respect different time zones – Brussels is normally one hour ahead of the UK – it no longer wants any difference  between summer and winter time. The UK could decide to adopt permanent summer time but this has proved unpopular in the past.

And one of the byproducts of this is that Ireland could have two time zones if Britain doesn’t agree -a sort of new ” time border” that because of the complexities will mean some farms that straddle the border will be working in two time zones.

Not surprisingly the UK does not want this. But with all the excitement about  the enormity  of Brexit we are not going about making our views known very well.

The future of this massive change – which would mean darker evenings and  lighter mornings – has been left to the most junior of ministers, Kelly Tolhurst, the MP for Rochester and Stroud and a Parliamentary under-secretary at the Department of Business. She has only been an MP for three years and a minister for just six months.

And the only discussion about this in Parliament has taken place at an obscure committee meeting a week or so ago where she did not particularly distinguish herself.Parliament has passed a resolution without debate in the chamber objecting to the move – but who in the EU will think they have to take much notice.

It has arisen because since 1980 the EU has had some  competency to  regularise time to help business and now wants to extend its role to end the ritual of clocks going forward and backward across the EU.

The pressure has come from the Germans, the French and the Austrians who, according to a survey, are fed up with changing the clocks twice a year.  The UK, it emerged, had objected at a meeting in Graz in Austria and has so far got the support of Greece and Portugal.

But time, no pun intended here, is running out. A decision will be taken in March and implemented later next year during the transition period when the UK has to accept all new EU rules.

Worse though was the reaction from the minister to telling the people of the UK about what is under discussion.

She came under repeated questioning from MPs, notably Stella Creasy, Labour MP for Walthamstow, and Michael Tomlinson, Conservative MP for Mid Dorset and North Poole, to launch a consultation about the changes. But she refused to do it.

” Currently we do not intend carry out a consultation. We are working with other member states to block the proposal. Obviously, we will respect the implementation of EU rules while we are still a member but at this moment in time we do not want to consult because we are fundamentally against the proposed clock changes.”

This extraordinary position was even worse for Northern Ireland which could find itself in a different time zone to the Republic because Stormont is suspended she is not even proposing any guidance.

Instead she insisted that the UK  would be successful in blocking it – ignoring the fact that after March 29 the UK won’t be in a position to do so.

Patrick Grady, SNP MP for Glasgow North, pit it succinctly: ” Once we leave the European Union—if the United Kingdom finally leaves—there will be nothing to stop there being different time zones across the island of Ireland, because the United Kingdom will no longer be in a position to have the kind of influence that the Minister has been speaking about, to work with other member states to come to an agreement that this is not necessary. Once we are out, we will have no say in those discussions whatsoever. ”

So I predict a  perfect storm after we leave. The only way we can stop it – if you are a Brexiteer is to press for a ” no deal” situation. The only other way to stop it is if you are a Remainer is to stay in the EU and demand a derogation from the decision which is perfectly possible.

The one way to be forced to do this is Theresa May’s present solution  which leaves UK as a ” rule taker” rather than a ” rule maker”. This I suspect will be the first of many issues that will cause massive problems. And changing our time affects everybody in the UK. For those who want the full details of the debate here’s the video of the European Committee meeting on November 12 that discussed it, courtesy of parliamentlive.tv

MPs slam complacent equality watchdog and the government over “rife ” ageist discrimination

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The Equality Act: Government complacency is allowing rife discrimination in the workplace against the over 50s Pic credit: Parliament UK

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A damning report from the  Commons women and equalities committee has attacked the country’s equality watchdog and ministers for their complacent attitude in tackling age discrimination in the workplace and elsewhere.

The report released by the all party committee of MPs warns that the talents of up to one million women over the age of 50 are being wasted by outdated employment policies. Its strongly worded condemnation of the Equality and Human Rights Commission and ministers responsible for equality follows what can only be described as a pretty lack lustre response from both.

Chair of the Women and Equalities Committee, Maria Miller MP, said:

“Without effective intervention from the Government and EHRC, we cannot see how discriminatory practices against older people in employment, that we know are rife, will be tackled. That’s why I find the responses we have received today disappointing as we had hoped they would have worked together to agree specific enforcement actions across both the public and private sectors.

Our Committee will be taking follow up action to make sure we get the change that is desperately needed.”

The response from MPs highlights what they see as a failure to implement the  2010 Equality Act. They are particularly scathing of the failure by the EHRC which has powers – which appear to be rarely used – to use enforcement procedures  against employers who have ageist recruitment policies.

The lack of the use of its powers is worrying given that campaigners for 50s women who are waiting up to six years to get a pension also want the EHRC to use its powers to remedy what they see as discrimination against this group. This group who are being forced to look for work until they are 65 – are facing a double bind of  finding employers don’t want them while the state won’t give them a pension.

They have even had the facetious suggestion from Guy Opperman, the pensions minister, that they take jobs as apprenticeships at £3.60 an hour while they wait until they get a  pension.

The EHRC today said it would take action – even though this seems to be confined to fine words rather than deeds.

A spokeswoman  said: ““Everyone has the right to work and the right to a working environment that allows them to achieve their full potential. We have taken and will continue to take robust enforcement action, using all of our statutory powers, to tackle unlawful discrimination and ensure that no one is excluded from the workplace. This includes enabling Britain’s employers to benefit from the talent and contributions of workers of all ages.

“The right to request flexible working should apply from day one in all jobs and we have stressed the need for employers to make their workplaces accessible for everyone, including older people, parents and carers. We have also sought to tackle bias in recruitment by taking action against discriminatory adverts that request characteristics or terms that are associated with a particular age group.”
MPs are particularly angry that the government will not enact section 14 of the Equality Act – which would allow people to bring multiple ground cases against employers who discriminate against them. Thus an older woman could not bring a case on both age and sex – she has to choose one or the other.

Both former women’s minister Harriet Harman and the Fawcett Society have condemned ministers for not doing this. The government says it won’t do it because it increases burdens on business and promises more research in its response. One has to ask as this legislation was passed by Parliament – there must have been some research already behind it – so this is a pretty lame excuse.

The government uses the same excuse of putting too much a burden on employers to make it mandatory for firms employing over 250 people to publish an age breakdown of staff. Yet Whitehall already does it.

Altogether this is a pretty pathetic response from both the government and the watchdog to a serious issue. But I am very glad that the committee is also very dissatisfied and intends to pursue both organisations to come up with something better. You can get the full report here.

Boycott this mean Treasury National Savings ISA account that is slashing interest rates for pensioners and the poor

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HM Treasury: Slashing your savings in National Savings

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Over a month ago bank rate rose for only the second time in a decade – promising a bit more money for people who have savings and are seeing their money eroded by inflation.

They would probably hope to get an extra paltry 0.25 per cent interest on their already diminishing  savings – lucky to get just over one per cent on an instant access cash ISA when inflation is running at 2.7 per cent.

However the well paid top mandarins and ministers at the Treasury and National Savings ( their chief exec, ex Barclays banker Ian Ackerley is on a pittance of £185,000 a year plus an annual £69,000 payment into his pension) had other ideas. Why not use the cover of the bank rate rise to slash the interest we already pay out to people who use National Savings as a safe haven but need to access money to meet unexpected bills for a broken boiler or fridge. Everybody will think interest rates will go up, they wouldn’t think anyone would slash them now

So in July when both the Treasury and National Savings knew a bank rate rise was imminent they agreed not to put up the rate of their cash isa but CUT it by 0.25 per cent to just 0.75 per cent. It was though Mark Carney, the governor of the Bank of England was about to announce a bank rate cut not a bank rate rise.

Today the new cut came into effect – just at the point when other banks and building societies are putting their rates on equivalent cash isas UP.

You would think from the blurb on their website that National Savings would do the opposite. Their comment on interest rate changes reads:

 “Can NS&I change the interest rate?

Yes – the rate is variable so we can change it up or down from time to time, for example when the Bank of England base rate changes or when rates in the general savings market change. See the customer agreement (terms and conditions) for more details.”

So we know now  in this case when the bank interest rate goes UP,  the National Savings rate will go DOWN.

And as for other providers- Metro Bank for example, has an equivalent instant access cash isa which was paying less than National Savings at 0.75 per cent. But since the bank rate rise it is now paying more. Its new rate is 0.90 per cent -UP 0.15 per cent while National Savings are DOWN 0.25 per cent to 0.75 per cent. Which Money? has other recommended providers paying more.

So what’s their explanation?

A spokesperson said today :”The decision to reduce the interest rate on Direct ISA was taken in order to deliver positive value for taxpayers. NS&I sets its interest rates to balance the interests of its savers, taxpayers and the stability of the broader financial services sector.

“In order to take this decision, we made a proposal to HM Treasury which was approved. We review the rates on all of our products regularly and recommend changes to HM Treasury when we believe they are appropriate, to ensure that we continue to balance the interests of our savers, taxpayers and the stability of the broader financial services sector.

“We announced the change on 16 July 2018. It is NS&I policy to give customers at least two months’ notice of any detrimental variable rate change on our variable rate accounts, so the rate change will be effective from today, 24 September 2018.”

So basically National Savings are paying lower rates to small savers ( the maximum you can put in the isa is £20,000, the minimum £1) to make sure high rate taxpayers are not having to bear such a burden to fund other public services. No doubt it is linked to the Treasury regretting it has to pay people’s pensions anyway.

 My view is the National Savings Direct ISA should be boycotted because the people who run it appear to  have the Treasury’s interests than yours at heart. The decision also helps other big banks not to increase rates if the state rival is cutting rates – and will boost profits for the major banks.

I took all my money out of this particular National Savings account today. I would not blame other people doing the same – now you can get higher isa rates elsewhere. Your only restriction is that if took out an isa this financial year ( from April) you can’t take out another tax free cash account. But if you did it last year you can and should – rather than leave the Treasury to profit from you.

 

 

 

Why these liars, cheats and fraudsters should be prosecuted for ripping off taxpayers and cheating London’s firefighters

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John Shannon , former chief executive of Assetco. now exposed as a liar and fraudster, banned for 16 years from practising as an accountant and ordered to pay £550,00 in fines and costs

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This month one of the most devastating reports into a privatisation rip off was published by the Financial Reporting Council, which regulates chartered accountants. It involves a saga much reported on this blog, the failed privatisation of London and Lincoln’s  fire engines, handed over to what are now revealed to be liars and fraudsters who ran Assetco at the time.

The three top directors, chief executive, John Shannon; chief financial officer, Frank Flynn; and group financial controller, Matt Boyle, could not even be bothered to attend a tribunal hearing to defend themselves against 27 allegations of misconduct. Shannon and Boyle are thought to be somewhere in South East Asia Flynn is in Northern Ireland

Between them they lied and hid millions of pounds ripped off from income paid by London fire brigade – the London Fire and Emergency Planning Authority – through a string of Northern Ireland companies and a consultancy to Abu Dhabi and falsified invoices from the London authority to boost the income of Assetco  duping shareholders so  they could live on the hog with large salaries.

The worst culprit was John Shannon  who has been banned as practising as a chartered accountant  for 16 years – a new British record – fined £250,000 and ordered to pay £300,000 in costs. This was the same man who wined and dined the now disgraced former Tory chair of the London fire authority, Brian Coleman, while simultaneously ripping off the authority for personal gain.

His story included in a damning  FRC report  is a trail of dishonesty and improper financial gain for himself and his family, His first act  in 2008 was to take £1.5 million out of Assetco, ostensibly to invest in a Northern Ireland property company, Jaras Property Development. In fact the report found  the money was transferred almost immediately from the company to Mr Shannon’s personal bank account to pay off a loan.

To compound his action when Assetco’s accounts were prepared for 2010 he created a false invoice and lied about the use of the money to fellow directors and the auditors, Grant Thornton.

The second dishonest act involved Assetco’s take over of Graphic, a company that provided lettering for vehicles, in 2010. Mr Shannon claimed he was owed £685,000 by the company. No documentation was ever found to prove the debt but the money taken from Assetco was the exact same money owed by this son, Joel, to clear a debt with another business he was running. The report concludes this was a sham.

He then moved to fiddle the accounts of another Assetco business, Assetco Abu Dhabi, which was launched with a  £15m share issue. Included in the costs was a management fee to a firm called XYZ2 for £900,000. In fact there were no management services provided by this company, instead the money was used to pay off  interest owed.

Earlier Mr Shannon and his fellow directors Frank Flynn and Matt Boyle inflated the goodwill value of three other companies,UV Modular Limited (“UVM”), The Vehicle Application Centre Limited (“TVAC”) and Simentra Limited (“Simentra”). All three had been bought by Assetco and had huge operating losses, all became insolvent, yet between them they were valued at over £15m.

UVM which built ambulances and mobility vehicles for the NHS was ” in a parlous financial condition ” and collapsed. It got contracts from the NHS by offering cheap deals which meant it lost money.

TVAC built chassis and fire appliances was acquired in 2007 and went bust in 2008 and was an operational disaster. But it was obviously intended to service fire engines for London.

Simentra had just three staff and was supposed to provide management advice for emergency services.

The report found Mr Shannon was well aware of this yet  allowed the £15m for goodwill to be included as an asset in the company’s accounts.

Mr Shannon, Mr Flynn and Mr Boyle also inflated income from the London fire authority on purchasing equipment and  providing emergency crew training. All this led to inflated accounts which Mr Shannon claimed he had not seen but the report found that he had lied to them about his knowledge of what was agreed to be published in the accounts. There is an earlier report on my blog here.

The conclusions against Mr Shannon are stark :” While there have been no actual convictions, certain of the activities contained within the allegations could be characterised as causing or facilitating fraud. The Jaras and Graphic Allegations amount to fraud on AssetCo by Mr Shannon. The XYZ Investment was also a fraud.”

The report also says the level of dishonesty even put the fire fighters  work at risk. It is as well that Assetco  operations in London and Lincolnshre went bust before the tragic Grenfell fire or their services would have only compounded the problems.

Most of the misconduct by Flynn and Boyle was to assist in covering up rather than exposing the dishonesty of Shannon.

Raymond “Frank” Flynn (former Chief Financial Officer) for  banned from practising for 14 years and Matthew Boyle (former Financial Controller) for 12 years. Additionally, £150,000 and £100,000 respectively have been imposed and they share paying  part of the £400,000 costs bill.

The Financial Reporting Council has a memorandum of understanding with the Serious Fraud Office which could launch a criminal investigation.

The SFO told me that they were aware of the case but could neither confirm nor deny whether they would take action. In my view they should pursue these people – even if they have left the country- with the aim of securing convictions so they can spend some time in British jails.