Category Archives: Uncategorized

Revealed: Lansley’s simply crazy commissioning guide for your operation

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Lansley's latest complicated NHS Commissioning diagram:Uploaded with help of Political Scrapbook

Commissioning-Intelligence-Model-v13

 Feeling ill and need to see your doctor. Well here’s a bit of draft helpful advice under the Lansley reform measures.  Click on the link above and  get a big surprise. Just a simple commissioning guide so the NHS can smoothly run to help meet David Cameron’s ” NHS is in my DNA ” pledge.
This was sent to me as part of the big response to the NHS London board  diagram of how the NHS will look which I published on Sunday night. I can verify  its contents and it comes from @nhs_supporters and  the respected and informed  Health Service Journal. It makes interesting bedtime reading.
This appears to lay out a few guidelines. By the time they have answered all these questions I suspect you might be dead. Notice that GPs will have to send in monthly accounts and that a lot of computer programmes (more waste on IT) will be employed to work out the mix of services. It sound a nightmare to me.
But I am sure you will be eternally grateful to the huge cut in bureaucracy needed to answer all these points. Have a good time at your doctor’s surgery. Or alternatively why not e-mail Mr Lansley himself on lansleya@parliament.uk and ask him to go through the process with you. He claims to have spent five years thinking all this up. Pity he didn’t bother to tell the voters at the election.

Revealed: Whitehall angst and a KPMG U-turn on Lester’s tax affairs

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ImageNew e-mails and financial advice put up today on the Exaro news website (http://exaronews.com) reveal more of the background surrounding the extraordinary decision to grant Ed Lester, the chief executive of the Student Loans Company, an arrangement when he was not taxed or paid his national insurance at source.

It shows that senior civil servants were really uneasy about the deal. In one e-mail, Daniel Jenkins of the Department of Business, Innovation and Skills legal department wrote: “Applying the tests of employment status, I wonder whether it is possible for a CEO to be anything other than an employee/office-holder, given the degree of integration into the company which he presumably needs to carry out his duties.”

In another e-mail Michael Hipkins, then a BIS appointee to the SLC board writes:

“The risk, which nearly the whole interim industry currently runs, is that a contract for ‘supplying an individual’ is deemed to be an employment contract, rather than a commercial contract for services. So it appears there is a risk, and there is a judgement whether the risk is worth running.

“For my part, I note that when the terms of the interim CEO’s remuneration were cleared with Treasury, they raised no objection to the form of the contract, nor that there was an agency acting as intermediary.”

“It looks as if the company would be running no greater a risk than any other company employing interims on consultancy contracts; and the fact that the Treasury raised no objection to the proposed arrangement in the case of the CEO must mitigate that risk further.”

But the angst is nothing to the role of KPMG, the auditors and advisers to the SLC, who gave contrary advice in the space of a month.

 First they said – as subsequently was proved right by Chief Secretary to the Treasury,Danny Alexander’s decision to cancel the deal,- that no office holder could be a  limited company.

 Then they changed their mind saying; HMRC “may agree on a concessionary basis”, under a provision known as the extra-statutory concession, A37, to override the rule that all company office-holders must pay tax and national insurance.

It said that Lester’s pay can then be treated as “income of Penna (who acted as the recruiting agency for Ed Lester) for corporation-tax purposes and not income of EL for income-tax purposes.”

KPMG said that the SLC should make no expenses or bonus payment direct to Lester, but only through Penna to his personal company, otherwise it would invalidate any concession.

Even more interesting  given the developing furore over this issue the memo reveals that KPMG had done this before.

 It said KPMG “have been successful in the past in agreeing with HMRC that the concession can be extended to circumstances similar to the arrangements in place here. However as this is a concession (rather than a statutory provision) there is no guarantee that HMRC will agree that the concession  applies in this case given the agency and personal service company arangements in place.”

The next questions in this saga will be who else has benefitted from this arrangement and what George Osborne, the chancellor, proposes to do to close this loophole in the budget this month. The full story is revealed in four new articles on the Exaro website.

Save FOI: Putting the case to MPs

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 I am giving evidence to Mps on the House of Commons Justice Committee on Tuesday as part of their inquiry into the future of freedom of information. I shall be there alongside three  other journalists – Martin Rosenbaum from  BBC News, Doug Wills, from the Evening Standard, and David Higgerson, from Trinity Mirror Regionals. I shall be there on behalf of the National Union of Journalists, who have put a submission to the committee and as someone who regularly uses FOI for both my blog and for Eaxro News, the investigative news website.

We will be asked a wide range of questions on FOI. If any  journo or blogger has any point that they think should be raised about FOI you can put a comment upon this site. Please keep any comment short and succinct. I don’t promise to be able to raise everything but it would  be good to know of any burning issues which may have escaped me.

The hearing starts at 11.15am and will be broadcast live  on the internet and will also be saved for other broadcasts.

Did the former Cabinet Secretary unwittingly sanction “tax avoidance”?

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Gus O'Donnell: Tax avoiders friend in Whitehall? Pic Courtesy: Daily Telegraph

The huge  row following the disclosure  of the tax  ” avoidance” arrangements for Ed Lester, chief executive of the Students Loans Company, has concentrated on how government ministers approved the arrangement.

Not highlighted was the role of the then Cabinet Secretary, Gus O’Donnell, recently retired on an index linked pension and getting £300 a day for every day he turns up as a newly ennobled peer.

Documents released to me under the Freedom of Information Act reveal that Gus O’Donnell when he heard Lester was not going to be on the pay roll of the Student Loans Company rightly demanded an ” urgent clarification “. He also insisted on an explanation about the ” costs to the Exchequer” of the arrangement. He was then sent a detailed document which showed that if he was paid through an agency it would cost less than if he was on the staff. Details of  the document are published tonight on the Exaronews website (www.exaronews.com)  and also detailed in a story by Rajeev Syal on the Guardian website(http://bit.ly/yWOy7H ).

Basically it is a scam explanation – revealing huge fees (£83,000) to be paid to Penna Consulting, the management firm, who acted as middlemen to pass money on to  his private company – if he was taken on the pay roll. It also suggested that his expenses of £550 a week for a flat and fare would have to be grossed up to cover his personal tax bill if he was on the staff.

Meanwhile the savings side if he was not on the pay roll included a whopping £17,000 to the SLC for avoiding paying the employers national insurance contribution.

 Any cursory glance at these figures by anybody reasonably intelligent would suggest that these were sham calculations and could have been knocked down, particularly the big fee to the agency. Yet the e-mails show Gus was ” content”.

Frankly this is as bad as Danny Alexander, chief secretary to the Treasury, not realising the tax implications of the deal. Here one of the most highly paid people in Whitehall and head of the civil service appears to be oblivious of what he is sanctioning. What does this say of the ability of people at the top or are they so used to paying out such big fees (taxpayers money) that they don’t notice?

I have tried to contact Lord O’Donnell for an explanation but he has not returned my calls. And the Cabinet Office is now sheltering around the fact that Danny Alexander has ordered a review to stop answering questions – even though some of the points I have raised have nothing to do with the review. Senior civil servants seem rather good at covering their tracks – it is probably a key part of their training.

Exclusive: Whitehall tax avoidance “scam” revealed

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Flashy Student Loan Co HQ where Ed Lester works without being taxed at source. Pic courtesy BBC

Civil servants could be able to avoid legally paying tens of thousands of tax while working in Whitehall. An investigation by Exaro News and BBC Newsnight based on documents obtained by me through a Freedom of Information request has revealed an extraordinary personal tax deal negotiated by the Student Loan Company for its £182,000 a year Whitehall boss, Ed Lester. The deal is £140,000 salary,£14,000  bonus, £28,000 pension and £28,000 expenses for flight and Glasgow flat.

Documents released by the SLC and the Department of Business,Innovation and Skills reveal that Mr Lester, chief executive,pays no tax or national insurance at source but instead the SLC pay a consulting firm called Penna who pass the gross cash to a personal service company run by Mr Lester and a partner. This arrangement was approved by HM Revenue and Customs and the deal was signed off by David Willetts, the universities minister, and Danny Alexander, chief secretary to the Treasury.

As a result instead of paying tax at the top rate of 50 per cent – the company is likely to only have to pay corporation tax at the government’s new lower small company rate of 21 per cent and minimal national insurance. Mr Lester has declined to discuss the matter with Newsnight or Exaro News.

Full and extensive details are revealed in a series of articles on the Exaro News website (http://www.exaronews.com) – behind a pay wall but if you register  it is free for a week – or you can see the film about it on BBC Newsnight.

The investigation has forced Mr Alexander into ordering a  Whitehall wide inquiry to find out how many civil servants are benefitting from the same secret deals.  The reason is that ministers  DONT’ KNOW  and it looks like in Mr Willetts’ case DON’T CARE.  Alexander personally examined each top pay contract and now admits he missed the tax implications of this particular deal.

Whatever his inquiry reveals this arrangement looks to me on a par with all the recent scandals involving banker’s bonuses and Sir Fred the Shred’s stripped honours. Basically you as a taxpayer are paying the state to negotiate a deal for a very highly paid  official to avoid tax. This can’t be fair, right or decent to millions of low paid public and private sector workers who are paying a big whack in tax and can’t set up personal service companies – effectively to avoid paying tax. It also has the added insult that the man who has got this deal is pursuing every single student in the UK to make sure they pay every penny back of their student loan.

Dole queues – What dole queues? The huge divide among the unemployed

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Dole queues -growing rapidly in Labour, falling in some Tory and Lib seats Pic:courtesy Daily Mail

Ever wondered why with  dole queues at their highest levels since 1996, in many areas pubs and restuarants are heaving, the West End theatres full and motorways crowded with traffic? The answer is provided in an extraordinary analysis by the House of Commons Library of the latest claimant figures released by the government (see http://bit.ly/x6wWxw).

Far from  the picture painted by David Cameron’s infamous slogan ” We are in it together” the United Kingdom is as divided over who is on the dole and who isn’t as it is over bankers’ bonuses and public sector worker pay freezes. And it is not just the differences between the disproportionate numbers of young people-under 24- on the dole and an older generation in work.

It is  the fact that across  the nation the number of people claiming job seekers’ allowance is now dividing area against area and becoming party political. Put it simply the government – whether it intended to or not – is dumping on areas that voted Labour and leaving many coalition seats- Liberal Democrat and Conservative alike – completely unscathed from the grim dole reaper. In fact -taken year on year in some Tory and Lib Dem seats unemployment claims are, believe it or not, actually FALLING.

Am I making this up?  No it is all in the report. The Commons library report looks at dole claimants and breaks them down by constituency -taking as its base the economically active – those aged between 16 and 64 – and working out how many people in the constituency are unemployed.

It then ranks them all. The top 15 dole  constituencies-with the exception of three- are all Labour seats. And the other three are in Northern Ireland. The bottom 15 are all Conservative or Liberal Democrat. And the difference is stark . In Labour held Birmingham,Ladywood, – the Number One seat for dole claims- more than one in five people are claiming. In Liberal Democrat held West Aberdeenshire and Kincardine, the figure is 1 in 100 and falling for the long term unemployed.

Among prominent politicians John Redwood and David Cameron both have miniscule numbers on the dole- and the overall jobless claims are falling in Redwood’sconstituency despite a rise in youth unemployment. While Liam Byrne, the shadow works and pension secretary, and ex union leader Jack Dromey have some of the highest. There is more on this in an article by me and Rajeev Syal on the Guardian Society website (see http://bit.ly/xvUv8M ) and by me in Tribune (http://bit.ly/z3dAhM).

Perhaps it can be best illustrated by comparing Liam Byrne constituency with Chris Grayling, the Secretary of State for Works and Pensions.

Liam Byrne’s Birmingham Hodge Hill  seat has the second highest number of dole claimants in the UK with 7257  claiming benefits – 1750 for over a year – and a rise of 723 – 250 on the long term register.

Chris Grayling in Epsom and Ewell has  1007 on the dole – an increase of 44 in a year – with a rise of just 5 people out of work for a year -to just 135.

No wonder perhaps the dole queues do not have the same resonance for the Tories  as Labour. Tory Mps’ surgeries are hardly going to be packed with desperate people looking for jobs – but Labour Mps are going to be overwhelmed. It also has a political impact and might be one reason why Labour is not capitalising on the recession- simply because in some areas it does not exist.

The most interesting point is that Lord Young’s much criticised statement about people never having it so good – is actually true in some Tory areas.

Labour is going to have try much harder to get the point of the horror of the dole queues across to a wider general public – because as it stands the Tories seem to have manipulated a recession that concentrates almost entirelyon their constituencies and affects mainly their voters.

Blog review 2011: Who came, saw and commented

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The WordPress.com stats helper monkeys prepared a 2011 annual report for this blog.

Here’s an excerpt:

This blog was viewed about 67,000 times in 2011. This compared with 17,000 in 2010 – the year the blog was launched.Click here to see the complete report.

Exclusive: Francis Maude’s secret gold plated banker’s pension

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Francis Maude: The man with the gold plated pension. Pic courtesy: The Guardian

Armchair audit is  raising its sights. As well as looking as councillors like Brian Coleman, it is now turning the spotlight  on auditing the  seriously wealthy to see if they follow David Cameron’s dictum that we are in it all together.

Francis Maude is the public face for taking on the public sector trade unions and  insisting their low paid members are being offered the best possible  pension terms which anyone in the private sector will be really envious.

But is everyone in the private sector worse off than public sector workers? Not Mr Maude for a start.

He has taken one hit and is about to take another since he rejoined the Conservative led coalition.

His  Cabinet Office minister salary  is £98,740 (includes MP’s salary of £65,738). This is a reduction of £5197 on his Labour predecessor, Tessa Jowell.

It is his pension history which marks the real divide. When he reaches retirement age at 2018 he will be able – unlike his public sector colleagues –  to be able to draw FOUR pensions.

 He will get the state pension – promised by the coalition to reach £140 a week – which will go to everybody.

He will get  TWO public sector pensions – one as an MP and one as minister. Their arrangements are hideously complicated – and not as open as figures available for public sector workers.

As an MP  since 1983 of 28 years standing ( he was out of parliament between 1992-97) by 2015 he will entitled – assuming a virtual wage freeze – to a pension of around £31,000 a year because he has a private sector pension and this taken into consideration to save taxpayer’s cash. Otherwise it would be worth over £46,000.

But while workers will be paying higher pension contributions Mr Maude is able to pay less under this deal. His contribution rate drops from 7.9 per cent to 5.9 per cent.

His minister’s pension by 2015 will be worth over £10,000 a year. His contributions, to be fair, are now 11.9 per cent and will rise to 18 per cent.

This gives him a state pension in excess of £40,000 a year – TEN times the average pension of lower paid civil servants bearing the brunt of the cuts and FIVE times the average civil servant pension. For that matter it is also FIVE times the average teacher’s pension.

But this is by no means the full picture. These calculations  miss out Mr Maude’s private pension – which is a huge elephant in the negotiating room.

 During the period he was out of office Mr Maude was director of  27 companies between 1992 and 2011. Six were dissolved and three went bust.

 But standing out from the lot is a period of over two years from February 1994 to November 1996 when Mr Maude was managing director of  investment bankers,Morgan Stanley, in London and New York.

The accounts are still available at Companies House and the salaries – paid in 1990s money – were stratospheric for directors.

The highest paid director’s salary went from £786,873  in 1994 to £1,234,690 in 1995 and to £1,708, 063  in 1996 – a rise  of well in excess of 100 per cent. And that excludes pension payments.

Mr Maude’s salary is not  identified –  but as MD in two countries – it will be nearer to those  figures – plus a pension to boot.

 The Cabinet Office declined to comment on his private pensions arrangements. But a City management consultant told me:

“It would be inconceivable that Morgan Stanley would not have paid Mr Maude a high pension because it is a much more tax efficient way of paying out money. Often City firms offer pensions equivalent to say 10 years service, rather than three, as a way of giving more money to people when they leave.”

Indeed Mr Maude had a lot of spare cash in 1996. Land registry records reveal that on 1st August 1996 Mr Maude and his wife Christina, bought for cash a large farmhouse and land at  Dial Post in West Sussex.  Property around there with land goes now for sums well in excess of £1m.

Perhaps the time has come for Mr Maude to reveal his true pension status when he is lecturing people to settle for less for life. He is the Government’s Mr Transparency and has released lots of personal data on individual civil servant’s  pay and pensions.

Just this weekend, his boss at the Cabinet Office, Nick Clegg, called for more transparency on top executive pay and perks. Mr Maude could lead by example by revealing the historic facts of his secret pension deal.

 My guess is that he has a private fund worth well over £1m on top of his three other state pensions. Prove me wrong, Mr Maude.

You can of course express your own views – you might feel Francis Maude is worth a mega pension, or you may feel he doesn’t  deserve anything like it.. You can e-mail him on psfrancismaude@cabinet-office.x.gsi.gov.uk .

Taxpayer subsidised Brian Coleman’s hypocritical cheek in berating a single mum

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Brian Coleman: Paying half the rent of the single mum he berated

I don’t want to be seen hounding  Barnet and London Assembly Brian Coleman on this website but his latest outburst takes more than the biscuit. The man who takes £128,000 from the taxpayer in council allowances – he’s probably about the third highest paid councillor now – has recently berated a desperate single mum with a six-year-old son for complaining that she is  facing a £150 a month rent rise to £1100 a month.

 She wrote to him for advice as she said ” out of desperation in the hope that someone can offer me guidance”. Mr Coleman was unsympathetic to say the least. Ms Sharada Osman wrote back surprised at his lack of empathy.

Mr Coleman told her ” I am afraid you have to live in the real world where the country has no money and residents will have to deal with their own issues rather than expecting  ” the system” to sort their lives out.”

What Mr Coleman did not tell her was that he was living in a subsidised  flat, courtesy of the Finchley Methodist Church charity, where he doesn’t even  have the responsibility of painting his windows.

His  rent is £546 a month – half that of Ms Osman. In the real world – the rest of the road-people are paying £1100 a month, according to local estate agents.

Don’t believe me. Well his fair rent agreement is a public document obtainable on-line from the Valuation Office Agency. Search Electronic Rent Register and put in N3 1ND and you can read for yourself and even print your own personal copy.

Then I might suggest – as Mr Coleman seems finally to have got over his technophobia and can use e-mail, send him a e-mail about what you think about it. His work e-mails are

 
 I’ll be interested to see if you get a reply.

The American and British time bombs still under Liam Fox and Adam Werritty

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Together forever?- Adam Werritty and Liam Fox. Pic courtesy:http://www.parker-joseph

When Cabinet Secretary Sir Gus O’Donnell publishes his report this week on whether  former defence secretary Liam Fox broke the rules over his curious working relationship with ” adviser” Adam Werritty, it may not be the end of the matter.  There is still unfinished business across the pond in the US and there could be a kickback in Britain as well.

To use a metaphor that Mr Fox and his friend might be familiar just as  foot soldiers sent into battle in Afghanistan have to be wary of  the explosive danger of hidden IED’s in Helmand, Fox and Werritty are still in the middle of a minefield where one false step could be fatal.

One reason is that  a blogger from Manchester-Stephen Newton who had been pursuing  Fox and Werrity’s  Atlantic Bridge  Neo Con”charity” in Britain for two years – put a formal complaint into  the  US Internal Revenue Service about its sister organisation in America.

Basically the accusation was similar to the British charity whose organisers have just closed down rather than obey charity rules- that  Atlantic Bridge Inc was not a non-profit educational body which should avoid tax.

In a  cryptic reply, the IRS said it would evaluate the information they had received and decide whether to investigate but would not contact him until the investigation was complete. 

Remarkably ( and perhaps Revenue and Customs should do this here) they said that he might qualify for a financial  whistleblower’s award if Atlantic Bridge was found to be tax dodging.

 The IRS has still to inform Newton about his award  but has made it clear it will never discuss what action it is going to take. See his own website http://www.stephennewton.com/  for his  take.

 The signifance of this  is the US operation is totally bound up with the  British one – to the extent that it funded Liam Fox’ s charity and that some of the people thought to have bankrolled Adam Werritty on his trips with the minister may well be connected. On top of this as Sunny Hundal pointed out on the Liberal Conspiracy website last week, (see http://bit.ly/n53Oye ) they include through the American Legislative Exchange Council  links to powerful arms dealers like the Koch Foundation and the tobacco industry. It also backs the Tea Party. And one has only to look at the Guardian, Observer, Sunday Telegraph and the Times to see how extensive these connections are.

Now ,if and it is still if, the IRS acts against Atlantic Bridge Inc, this is only going to intensify the pressure on the people who have been backing Fox and Werritty and set a whole new trail going in the US ( no wonder the blogger has taken calls from the Wall Street Journal).

Meanwhile in Britain the trustees of the Atlantic Bridge charity have closed it down rather than comply with recommendations from  our own Charity Commission to make it less partisan.  the Commission seemed  to think it had to treat Atlantic Bridge with kid gloves. Indeed  unlike the treatment of the Smith Institute – slammed for links with Gordon Brown – it was almost obsequious in its dealings with a body that had five Tory shadow ministers advising it ( though two, Michael Gove and Chris Grayling can’t remember attending – I hope they take their present paid jobs more seriously!)

The Commission gave the charity months to change its rules – despite a decision that it was partisan which would disqualify it for charity status. Adam Werritty at the time objected to the findings-saying he was ” disappointed” by the ruling.

There was also the small question that five Conservative ministers-Liam Fox,George Osborne, William Hague,Michael Gove and Chris Grayling plus John Whittingdale ( current chair of the culture,media and sport committee) were all members of its advisory board of  what  is now known not to be a properly constituted charity.

 If I was a sharp tax inspector at Revenue and Customs I think I might decided to approach  the accountants of prominent donors like  Tory donor Michael Hintze   ( £47,000 in two years according to Atlantic Bridge Accounts) and see whether the donated money qualified for gift aid-saving tax payments by both the donor and the charity. And then I would claim it back.

Atlantic Bridge also charged unbelievable sums to attend its events -£400 a time and £700 for VIPs- to go to a  reception at the Lanesborough Hotel in Hyde Park Corner to see Henry Kissinger get the Thatcher Medal for Freedom. Luckily under gift aid rules, at least the people going could not get a rebate from the tax authorities. No doubt it was these lavish occasions that encouraged Werritty on his high living vists, funded we now know through his private company.

There is an interesting irony about all this – the resignation will enable Fox and his friend Werritty to continue their lobbying. Journalists should keep an eye on the Advisory Committee on Business Appointments website over the next few months to see what lucrative jobs Fox applies for next.

 Just like the Afghan war, this story will run and run.