Category Archives: Uncategorized

How Michael Gove plays fast and loose with taxpayers money on school redundos

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 ImageOne would expect a right-wing Tory like education secretary  Michael Gove to be pretty diligent on how he spends taxpayers cash. You wouldn’t expect him to spray public money around without Treasury approval and then tell auditors  to get lost if they pick him up on it.

This is exactly what he has done  by handing out extra cash to his beloved school academies so they can  buy staff  redundos with extra payments without bothering to get it cleared by the Treasury.

And when this was rightly picked up by the National Audit Office – the independent Whitehall body that scrutinises taxpayers’ cash –  he has had the cheek to demand that the NAO and the Treasury go away and forget it.

The row is revealed by me in a piece for Exaro News (http://www.exaronews.com ) this month after the NAO took the decision to qualify the £6.1 billion accounts of the quango that funds academy schools ( now merged into a wider body ) after it found  14 cases of excess severance payments, totalling just under £230,000 at nine academies.

This may not sound much but it only found out about them after checking accounts of 135 academics – just eight percent of them. The other 92 per cent of academy accounts were never scrutinised by the quango. If this figure were applied pro rata the number of excessive unapproved redundo cash would top nearly £3m.

Now this may be good news for the people involved but it seems to me like a repeat performance of what happened in the Thatcher era where millions of pounds of taxpayers money were paid out in early retirements just when cash was short. The result was worse as many of these people are probably still claiming pensions now.

Don’t get me wrong I am not against people getting a good redundo deal ( I got one myself in the private sector) but I do think that where public money is concerned the deal should be scrutinised by the Treasury first. Otherwise every pound paid out on top of normal redundo is being taken out of paying for kids education.

Amyas Morse, the head of the NAO, writes in the report: “YPLA ( the now defunct quango) has not required academies to notify them of severance cases or any other payments that require Treasury approval, and so I have concluded that the assurance framework that YPLA had in place for the financial year was not capable of identifying and managing all cases.”

“I have been unable to confirm that, in all material respects, grants to academies conform with the authorities that govern them, and have been applied for the purposes intended by Parliament.”

Michael Gove’s response was: “We do not believe that we need approval for these payments because maintained schools are not required to submit them. We are working with the NAO and HM Treasury on this.”

This conveniently leaves out the fact that these schools are responsible to the  directly elected local authorities, academy schools are responsible to unelected civil servants.

My solution is simple. If Michael Gove wants to spray  taxpayers’ money around in this way, he should pay for it himself. After all the  excellent new search the money website (http://SearchTheMoney.com/) reveals he has received £462,000 in donations, £304,000 from one private equity firm). So he could raise the money for this excessive payments and leave the taxpayer to fund what it should do-public education.

Something rotten in Ruritannia

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Fillingham,Lincolnshire – the most unaccountable parish in England


Picture Credit: Ian Sykes
By David Hencke and Anne Hassan ( my daughter who has been training to be a journalist)

Updated: Since this blog appeared BBC Radio Lincolnshire have followed up the situation in Lincolnshire where some of the councils – who spend up to £140,000 a year – have said that they have prepared accounts but not submitted them to the Audit Commission. The effect of the local broadcast has been to highlight the councils’ behaviour in the county which had until then gone completely unnoticed.

Would you ever pay a bill without the slightest idea of where the money has gone? If you happen to live in 14 parishes across England you would have been doing this for up to the last ten years.

This extraordinary fact is buried in a  report by the Audit Commission on parish council spending (see http://bit.ly/yLaEhD ). It reveals that these parishes have levied a tax on all the householders in their area but have never produced any accounts of how they spent it for the last three years.

The worst place in England is the tiny parish meeting of Fillingham, near Gainsborough, where people have paid taxes- a precept with their council tax- for the last TEN  years and the meeting hasn’t bothered to produce an audited account of how they spent it since 2001.

Despite repeated warnings and rude letters from auditors the councillors there have obdurately refused to publish anything. They are not alone.

In Lincolnshire  there are five other parishes which have not produced accounts for between six and three years running. They are Wycliffe cum Hungarton Parish Meeting (six years);Little Ponton and Stroxton Parish Council (four years) and Fenton, Greatford, and Saxilby with Ingeby parish councils ( all three years).

Outside Lincolnshire there are eight parishes which have not produced accounts for three years or more, two in Leicestershire (Barleythorpe and  Burton Overy), and one each in Shropshire (Bromfield), Dorset (Church Knowle), Lancashire(Carrington), Suffolk (Ilketshall St Laurence),Warwickshire (Luddington)  and Cumbria (Newbiggin).

In addition 133 parish councils  which had submitted accounts have had them qualified for three years running and 567 have received qualifications this last year. This means their basic accounts are at best incorrect, at worst, a work of fiction.

Why should we care? The general opinion that these councils are so miniscule  that  the unreported cash is meaningless (Private Eye does  not even consider them for Rotten Boroughs).

Not so, these bodies – there are 9600 in England – raised a staggering £500m from householders last year.

As the Audit Commission says in its report: “Local electors are entitled to see how their parish council has spent taxpayers’ money. Those parish councils that fail to publish an audited annual return are not providing this most basic level of accountability.”

And it adds: “It is unacceptable that parish councils should fail persistently to produce an annual return, yet still be able to raise a precept.”

My daughter tried to contact three of the parish councils without  any success. Fillingham Parish Meeting’s chairman Mr Andrew Carter at Lake Farm was never available for comment. Mrs Mel Brown, the clerk at Wyeville cum Hungerton slammed the phone down with shock when asked why they had hot submitted accounts for six years . Ms Natalie Bowes, clerk of Little Ponton and Stroxton parish council numbers were unobtainable, despite being on a public website.

I began to  have sympathy with the Audit Commission in trying to chase up our money and whether it had been spent wisely. This is not a good advertisement for localism.

Leveson Inquiry: Do you want to comment on Newspics, Mr Embley ?

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Yet another development today in the fast moving Leveson inquiry into press standards. Lord Leveson – following the two blogs by Roy Greenslade in The Guardian and my exposure of Newspics website at http://www.exaronews.com – has invited the former editor of The People, Lloyd Embley, now editor in chief of  the Daily and Sunday Mirror, to comment on Matt Sprake’s evidence.

In a statement to the inquiry he said:” The Inquiry only learnt of the existence of Matthew Sprake very recently, but I am conscious that his evidence last week concerned, in large part, the work which he had been employed to carry out for The People.  Further, it raised issues relating to the responsibilities for the ethical decisions in connection with its commissioning.

Although I recognise that it is now too late to serve a notice under Section 21 of the Act on the editor, Mr Lloyd Embley (who gave evidence during the course of Module 1), should he wish to provide his account of that relationship, dealing with what Mr Sprake has said, I will, of course, consider it..”

It came on the same day the inquiry was told separately by the Scotland Yard chief, Sue Akers, that her bribery investigations were now covering allegations involving the Trinity Mirror group, owner of The People, over payments to prison officers involving Trinity Mirror as well as News International.There is no suggestion whatsoever that Matt Sprake is involved in this investigation.

Trinity Mirror were given the opportunity to comment on the Exaro News revelations about the inducements offered to public officials on Matt Sprake’s Newspics website but declined to take it up. Perhaps they will take more kindly to Lord Leveson’s request.

Full link to Leveson is :http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Transcript-of-Morning-Hearing-23-July-20121.txt

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Great Rail Journeys has ignored complaints over a Swiss hotel (not just from me) they used last Christmas. The British company is not all it seems either – it is really based in tax havens.

davidhencke's avatarWestminster Confidential

Since this blog was written Great Rail Journeys have not used the Ambassador Hotel in Brig. The Swiss private equity company ‘s new brochure shows they plan to use it again for Christmas. I would not recommend staying there -particularly over Xmas to avoid disappointment.

I am also reblogging this following revelations that up to £13 trillion is diverted by wealthy individuals to tax havens. The ultimate owners of Great Rail Journeys are in the Jersey tax haven and are directly connected to a Swiss Luxembourg bank which has links to taxhavens across the world from the Caymans to the Ukraine.

I can’t quite resist  going off piste and writing an evaluation of taking a break this Christmas – going with my wife Margaret on an organised rail trip to Switzerland in search of snow. Run by Great Railway Journeys (more later), a well-known up market travel company, parts of the trip equalled expectations…

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Leveson Inquiry: The unedifying world of Matt Sprake

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Matt Sprake in action with the Met

Matt Sprake, the head of Newspics photo agency, whose website was exposed by me on the Exaro News website (http:// www.exaronews.com) and with Oliver Wright on the Independent, put on a bravura show at the Leveson inquiry this week.

He insisted that  the wording on his website offering thousands of pounds to police staff, prison officers, doormen and nurses, for years  for  stuff on celebrity’s private lives had been a “mistake” and had only not been taken down until the exposure by Exaro because his website was ” broken.”

During the rest of the questioning by Robert Jay, the Leveson counsel, and Lord Leveson himself, he tried to portray himself as a ” White knight” fervently checking that any of these informers had not obtained salacious gossip by breaking the law  and making sure that our great tabloids from The People to the News of the World were not so foolish to indict innocent people on their front pages. Unauthorised  snatch photography with morals, so to speak.

He even provided a detailed example where an innocent referee who had engaged the wrath of Alex Ferguson was saved by Sprake’s due diligence from an exposure at a late night party that never took place.

But he has probably dished himself with Leveson over his explanation of the 330 surveillance jobs he has done, mainly for The People and the News of the World and his amoral view  that whatever the scandal was – his sole interest was whether it was true or not and ” morality and ethics” was something left to the editors. I don’t do ethics that’s for someone else, to put it simply .All this has been more eloquently covered today by Roy Greenslade in his Guardian blog – see http://bit.ly/MpYH81 .

What emerged in detail was his treatment of two stories for The People – the chasing up the McCanns on their first private holiday in Canada without Madeline. Evidently it was fine for The People to spend thousands of pounds sending a team of snatch photographers and a reporter  to Canada because in Mr Sprake’s word he was a ” celebrity” and wanted “to keep Madeline’s name in the public mind.” Now  I would think Gerry McCann is the last person to want to  be a celebrity, more a diligent father trying to get to the bottom of his daughter’s tragic disappearance – and if he wanted the publicity, he could have organised a photocall in Heathrow before he went away. Obviously he didn’t and  that wasn’t good enough for Sprate or The People. They were happy enough to invade their privacy on a well-earned holiday for loadsa dosh.

Similarly the ” ethical ” treatment of Andy Hayman, the Met Police chief who is alleged to have had an affair with someone from the Independent Police Complaints Commsision was considered fair game just because there was an inquiry. Did the People or anyone else have a shred of evidence that the inquiry was compromised or that Hayman was after illicit information? No. But it was worth £10,000 to Sprake for the pics. Hayman did resign but  there seem to far more serious allegations about him over the first hacking inquiry years later.

I am backing Roy Greenslade on this one. Mr Embley needs to be summoned by Leveson for further questioning. The need  for this is made more compelling now Roy Greenslade has revealed that the People’s picture editor, Mark Moylan, forgot to tell Leveson  that he did ANY business with Matt Sprake – now revealed as enormous by Sprake himself. See his new post at http://bit.ly/PqViXw.

Meanwhile just 15 or so minutes after I had  finished covering the Leveson inquiry myself I had a phone call on my mobile.

An anonymous friend of Mr ” Ethical , never done anything wrong, guvnor” Sprake warned me to lay off any further inquiries. They named  some  person  they think is supplying me with information that  led to Mr Sprake’s appearance before Leveson. Sorry mate, the steer came from someone else.

They signed off with a cordial affectionate greeting: ” You fucking geek “. Nice circles you move in , ex police snapper Matt Sprake.

Tax Avoidance:Treasury ” We screwed Up”,BBC ” Nothing is wrong.”

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Treasury mandarin Sir Nick Macpherson- admitting catalogue of errors Pic Courtesy: BBC

Yesterday Parliament’s Public Accounts Committee had the Treasury, the BBC, Revenue and Customs and local government before them. Subject: How have so many publicly paid figures got away with tax avoidance.

You could not draw more of a distinction between the evidence given by Whitehall and the BBC on the  same issue. There are are detailed reports by me and Mark Conrad on the Exaro news website ( http://www.exaronews.com) about the hearing.

Suffice to say Sir Nick Macpherson, permanent secretary to the Treasury, put his hands up. He admitted ” a catalogue of errors” had led Student Loans Company chief, Ed Lester, to get a £182,000 a year  job with the government and avoid having tax and national insurance deducted at source. Indeed Howard Orme, the financial director of the Department for Business, Innovation and Skills, admitted he originally wanted £260,000 a year to do the job.

The disclosure that 2400 Whitehall staff have personal contracts shocked Sir Nick. He was forthright: “The Treasury had been asking the wrong questions. We were concentrating on value for money and not on the tax implications. We should have looked have looked at the figures more carefully.”

Contrast this with the BBC’s chief financial officer,Zarin Patel, who despite disclosing that the BBC employs a third of staff – some 25,000 – as freelances and admitting that 148 of the 467 journalist talent are paid through personal service companies, thought there was no tax avoidance at all.

Patel said: “There is no difference to the HMRC whatever way this is done.” In other words it doesn’t matter.

Not a view shared by the committee, Margaret Hodge, the chair, pointing out there was nothing worse than ” a person paid by the taxpayer avoiding tax.”

Patel’s complacency was also shattered later when HM Revenue and Customs chief, Lin Homer, revealed the paucity of checks on these people who have personal service companies. She disclosed that over three years the number of checks had been 25,12 and 23 respectively. One MP  even wondered whether this should be made public because it would only encourage more tax avoidance and evasion. This is now going up to 230 – but with 3,000 non journalists at the BBC on personal service contracts alone – how much difference will this make. More grist to the case presented by Mark Serwotka, general secretary of the Public and Commercial Services Union, that the Revenue is indeed well understaffed to do its job.

More interest for Freedom of Information freaks – it emerged that the information I got through  the freedom of information request  which blew the whole story – is now to be used as a case study by Whitehall of how something can go wrong ( or at last I hope so!).

The London borough of Barnet also emerged in its true colours . Evidently it had not replied to a request from the Local Government Association to disclose how many senior staff were on personal service contracts – the number according to the redoubtable Mrs Angry @brokenbarnet is 13. But Mps appear to be on the case – they will need to be vigilant, Barnet has a habit of not co-operating with anyone who wants information.

The hearing was a success. The next stage will be to ensure there is proper action to get these wheezes stamped out, the sooner, the better. And of course end the BBC’s complacency over this issue.

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now with full cast of characters to appear before MPs

davidhencke's avatarWestminster Confidential

On Monday BBC chiefs will appear before Parliament’s most powerful committee, the Commons Public Accounts Committee.

They will be there to answer questions on the vexed question of employing people through personal service companies to avoid paying tax and national insurance at source.

The BBC will be joined be civil servants from Whitehall and local government who have all been exposed of using this device to employ people and avoid paying tax and national insurance at source.

The scandal was first exposed by me on the ExaroNews website (http://www.exaronews.com)  and BBC Newsnight when it was discovered that Ed Lester, the Student Loans chief, had used this device to be paid £182,000 a year.

The furore that followed led Danny Alexander,Chief Secretary to the Treasury, to launch an inquiry which discovered that another 2500 civil servants were using the same device across Whitehall. The review’s findings were also leaked to…

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Ex Met Police snapper to face Leveson Inquiry over cash offers to public officials

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Lord Justice Leveson ; Pic courtesy Leveson Inquiry website

Update: There is a report today (wednesday) on the exaronews website (http://www.exaronews.com ) of today’s hearing where Matt Sprake  defends himself.

 Matt Sprake, the former Met Police forensic police photographer, has been summoned by Lord Leveson to appear  before his inquiry.

This follows the exposure by me on Exaro News website (http://www.exaronews.com)  and with Oliver Wright in the Independent last week.( http://ind.pn/M48suc ) which  revealed his http://newspics.co.uk  website was offering to pay thousands of pounds to police, prison and probation officers for tips on celebs having affairs. There is a new article on the site now.

Just to remind readers – as he has taken it down now – the wording included  the phrases:

Officials are told: “All sorts of people have been paid thousands of pounds by us for giving information that leads to a picture being sold or a story being written, are you a doorman, police worker, civil servant, probation officer, prison officer, nurse? Make some extra money without anyone ever knowing…”

The agency website has endorsements from the picture desk of The People, the red-top Sunday tabloid, OK magazine, the celebrity title, and the Press Association, the national news agency.

In a section headed “news exclusives”, the agency tempts public officials to provide details of “a scandal” or, “where a prominent person is living or what they get up to,” or, “a celebrity having an affair”.

“You can earn yourself good cash now by calling… 24 hours a day and remember, nobody ever needs to know it was you that told us!”

Mr Sprake’s forthcoming appearance was announced on the Leveson inquiry website this afternoon. Among those appearing on the same day – next Wednesday – will be Max Mosley.

Lawyers for the Levenson Inquiry had asked to see the articles on Exaro News and the Independent after they appeared. They have also examined his website.

So next Wednesday Mr Sprake will be able to explain in public exactly what is going on. He has also put a complaint into the Press Complaints Commission against the Independent  about  last week’s article. I look forward with interest to the next event.

Exposed: The Ex Met Police snapper’s website offering “cash for celeb scoops” to public officials

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Matt Sprake: Trying Out the PM’s chair in the Cabinet Room in the 1990s while on the Met Police pay roll. Pic courtesy his Facebook page

Given the Leveson Inquiry is in full swing  can  you imagine this appearing on  a website supplying the national media – from the People to the Press Association?

” Do you know of a story, a scandal, something that made you interested, chances are that a newspaper will pay for that information.  Do you know where a prominent person is living or what they get up to, is a celebrity having an affair that you know of, do you know anyone who’s on reality TV?  You can earn yourself good cash now by calling 01277 (deleted) 24 hours a day and remember, nobody ever needs to know it was you that told us!

All sorts of people have been paid thousands of pounds by us for giving information that leads to a picture being sold or a story being written, are you a doorman, police worker, civil servant, probation officer, prison officer, nurse?  Make some extra money without anyone ever knowing…

Never go direct to a newspaper, come to us, it’s what we do, we are better positioned to get you much more cash. ”

The full story  on this is available  at http://www,exaronews.com   and on the Independent at http://ind.pn/M48suc. Since the disclosure the website has been rapidly redesigned and the page taken down but the website page is captured on the exaronews.com website.

Part of his agency’s website is devoted to its “surveillance photography”, offering a menu of services, including “covert foot follows”, “covert vehicle follows” and ”remote technical surveillance”.

“You can utilise the very same skills that are used by the security services and the police,” clients are promised.

“Our surveillance team has worked for and been trained by various police and government surveillance agencies within the UK. If you need it photographed without being seen, we are your experts.”

So what is the  explanation of the managing director  of  http://newspics.co.uk ,  ( one Matt Sprake, whose company is owned by his wife, Marion, described in her Companies House return as a banker.

According to him  the wording on his agency’s website was “just advertising” aimed at the “general public”.

He said that he would have removed it by now but for the fact that his website is “broken” and cannot be edited because the company that created it went bust.

“We are in the final stages of a company redesigning our website,” he said. “If there was a way of changing it, believe me, I would.” That seems to have  happened remarkably quickly after  the story was published.

On the social-media website, Myspace, he puts his income at between £100,000 and £150,000 a year.

Sprake continued: “I used to work for a specialist department at the Met in Scotland Yard looking, basically, at terrorism work. The level I was working at involved very covert stuff.

“I got out after 10 years. You are limited on the number of years you are allowed to do, so I am now doing other work. But I have still got all that training that is very handy to have.”

He also claimed his staff adhered to the Press Complaints commission code and his site promised to do surveillance work which would be covered by the Code.

The PCC were not so impressed – a spokesperson pointing out the code covered editors of papers not agency photographers.

I tried to contact Trinity Mirror publisher of The People- whose editor has already given evidence to Leveson . Their pages are all over his website including the page offering cash to public officials. But answer came there none.

One cannot  wonder why the reputation of the media is at such a low with such behaviour. If Sprake is telling the truth, it seems to me the height of folly and hubris  in these troubled times to put this on a website. If he is not this is exposing something else that is not particularly savoury and very worrying for ethical standards in the media and the people who are supplying him.

Q:Who’s afraid of the big bad Fox? A:The Charity Commission

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Liam Fox:Back in the News Pic courtesy:Metro

So Liam Fox is back from the political dead after having to quit as defence secretary.  How interesting! It comes after a little noticed report  from the Charity Commission into the affairs of  his doomed charity, Atlantic Bridge.  Conveniently it closes down any further investigation into his dubious past.

Remember this was the charity that promoted the Margaret Thatcher and Ronald Reagan view of Anglo-American relations and gave a Margaret Thatcher Freedom medal to Henry Kissinger.

 The Charity Commission would never have looked at it if it had not been the persistence of Stephen Newton the Labour blogger who lodged a complaint. The charity run by Mr Fox and his best man, former special adviser,Adam Werrity ( remember him too?) was found not to be a charity, not have charitable purposes and was also operating in breach of Parliamentary rules from Liam’s office in the House of Commons.You might have thought after the furore  over the Smith Institute which was dragged through a formal inquiry for being too close to Gordon Brown,you would get  a devastating critique from them. You’d be wrong.

The report reveals that because it was a faux charity – HM Revenue and Customs demanded that some £50,000 in back tax, which according to the Financial Times, was paid by Tory donor.billionaire City trader Michael Hintze. See http://on.ft.com/N5zxqS as part of a £53,478 loan to the charity from his hedge fund company CQS.

However the Charity Commission did not believe any of the trustees or for that matter their advisory board were culpable so it could not recover the money from them. As the report says: “in taking such proceedings it would need to be clear that the trustees were sufficiently culpable in law to make good the loss and the proceedings were in the public interest.”

It added that there was ” no evidence the trustees acted in  bad faith” and “no compelling evidence of deliberate wrongdoing.” It accepted the evidence from the trustees that they just thought they were acting lawfully and its was perfectly proper to set up a charity to pursue the political objectives of Margaret Thatcher and Ronald Reagan.

Of course it could just be that  Professor Patrick Minford of Conservative Way Forward, Lord Astor of Hever, a hereditary Tory peer, and the lobbyist Andrew Dunlop a former advisor to Margaret Thatcher, were a load of naive gits who didn’t have a clue how a charity works or an inkling of charity law. And of course their board of advisers was not stuffed with clever worldly political activists – it  was only composed of William Hague, George Osborne and Michael Gove.

And Liam Fox is so innocent he seems to have forgotten to declare some other US lobbying appointment in his ministerial interests, according to revelations in today’s Political Scrapbook.http://politicalscrapbook.net/

Curiously Dame Suzi Leather . chair of the Charity Commission, could have referred the matter up to Dominic Grieve, the Attorney General, to rule on whether there was a case to answer. But conveniently for  Dominic he was not placed in such an embarrassing position.

Of course it was different for the Smith Institute – everybody knows that Gordon Brown and Ed Balls  were  through Wilf Stevenson (now Lord) manipulating charity law and unlike Liam Fox had to be taken to task in much stronger terms. 

Job not well done, Dame Suzi. But I am sure you will be up for peerage as soon as your appointment ends, as a thank you for saving the present Establishment a lot of angst.