The £20,000 benefit bonus rewards for the metropolitan elite at the Department of Work and Pensions

neil couling

Neil Couling – £145,000 a year

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Last week I had a story in the Sunday Mirror about top bonuses and pay rises for five of the most senior  and well paid civil servants at the Department of Work and Pensions over the last two years.

The information was published in the annual report and accounts  of the DWP released last month. These same accounts were qualified for the 29th year  running according to the the National Audit Office – because of fraud and error in payouts to claimants rendered them inaccurate and wrong.

 

 

Sir Robert Devereux pic credit Twitter

Sir Robert Devereux – £190,000 a year Pic credit : Twitter

The bonuses announcement came at the same time as 31 Labour MPs had called for a pause in the roll out of the ministry’s new Universal Credit  programme – which replaces five benefits – because of reported chaos in its administration leaving some claimants without money for up to six weeks. One of those 31 MPs, Kevan Jones, who represents Durham North said the bonuses were a ” reward for failure”.

He described them as “an insult to many of my constituents who are already living on the breadline. In my constituency they plan to introduce this in November which could leave thousands of people without money in the run up to Christmas.”

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Mayank Prakash £220,000 a year including £20,00 bonus Pic credit: DWP Digital

Within days of the publication of the story the FDA ( the First Division Association) which represents the top civil servants attacked the article in a report in Civil Service World.

Jawad Raza, FDA national officer for DWP, said officials should not be used as targets by political opponents of the system simply for doing their jobs.

“The suggestion that these civil servants have been ‘rewarded for failure’ shows a blatant disregard for the facts regarding their pay and

Jeremy Moore pic credit

jeremy moore – £135,000 plus £20,000 bonus

wilfully misrepresents the true complexity of their roles,” he said.

“Senior civil servants have delivered billions of pounds worth of savings since 2010 with an ever reducing workforce. These are highly skilled professionals working in challenging circumstances and they deserve to be adequately remunerated without having their names and faces spread across news pages.”

Sorry Jawad I think there is more to this.

The five civil servants are Sir Robert Devereux, permanent secretary at the Department of Work and Pensions; Neil

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Andrew Rhodes – £140,000 a year plus £15,000 bonus

Couling, director general of universal credit; Jeremy Moore, director of strategy; Mayank Prakash, director general of digital technology and Andrew Rhodes, director of operations have received between £10,000 and £20,000 each .They are nearly all paid more than Theresa May, the PM.

The bonuses were awarded for “ top performance “ and “ leadership “when the rest of Whitehall is limited to one per cent pay rises and many benefits have been frozen.

Sir Robert last year received up to £20,000 extra on a salary of up to £185,000 a year. This year he hasn’t received any bonus but his basic salary has moved to £190,000 a year.

Neil Couling, who is directly responsible for universal credit, got a bonus of up to £20,000 last year on a salary of £125,000 a year. This year instead of a bonus his salary has jumped by £20,000 to £145,000 a year.

Mayank Prakash, director of digital strategy has received a bonus of up to £20,000  this yearon top of salary of £200,000 taking his annual salary to £220,000 .

Jeremy Moore, director of strategy, has received bonuses two years running –  totalling up to £40,000 over the two years – taking his total salary to £155,000 a year.

Andrew Rhodes, director of operations has received a £10-15,000 bonus this year, taking his salary to £155,000 a year. He also claimed £37,600 in travel expenses.

The ministry insist that all these pay rises were decided objectively by line managers.

In a statement it said:

Line managers are required to make an evidence-based and objective assessment over whether objectives have been met, not met or exceeded. 

 Individual performance is assessed by the individual’s line manager through an appraisal discussion, with supporting evidence from a range of stakeholders.

But apart from Sir Robert – whose bonus was decided by Sir Jeremy Heywood, the Cabinet Secretary – the Department declined to say who these line managers are and which outside organisations and people recommended they should get bonuses. The bad news for the DWP is that Kevan Jones plans to table a Parliamentary Question next month to find out who.

Now the FDA has a point that compared to the top of the  private sector they are badly paid. A report put out by the House of Commons library revealed that the top 3000 bankers are ALL earning over £884,000 a year – which makes £20,000 sound small beer. But if anything that reflects that huge growth of inequality in Britain.

At other end of society how effective are these five top men ( note they are all men) in delivering what they are supposed to do. All are responsible in one way or another for the delivery of Universal Credit.

At present they are using Newcastle-upon-Tyne – to roll out the full effect of Universial Credit.

Catherine McKinnell , Labour MP for Newcastle North, said:“ My office has been deluged with complaints from constituents about a Universal Credit system that is clearly struggling to cope and failing to deliver the support that claimants need in anything like an orderly or timely fashion.”

Her debate can be read here.  Suffice to say it reveals a very sorry picture. The  new IT system means people can’t talk to a human. It has  a verification process that requires claimants to produce photographic identification such as a passport or driving licence, “which many simply do not possess and certainly cannot afford, even though some have been in receipt of benefits for several years.”

“I also have numerous examples of Universal Credit claims being shut down before they should be; of documentation being provided to the DWP, at the constituent’s cost, and repeatedly being lost or even destroyed; and of totally conflicting, often incorrect, information being provided to constituents about their claims.”

For a time the ministry effectively banned MPs from taking up cases by making impossible verification demands before they would talk about it.

What this shows to me is a growing disconnect between the people at the top – who are computer savvy, have nice centrally heated homes, no problems with bills, can afford expensive holidays, and can’t conceive of anyone not having a passport – designing a system for poor, dispossessed, desperate people without any understanding of how the world works for them.

It was this disconnect between the elite and the poor  in the USA that led to the rise of Donald Trump and I suspect this huge gulf between the Metropolitan elite – whom top Whitehall civil servants are part – and the provincial poor is in the end going to propel Jeremy Corbyn into Downing Street.

 

The £5 billion pay out to people who shouldn’t have received it

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Department for Work and Pensions – £3.5 billion of overpayments detected by auditors

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Here is a strange paradox. The government has imposed a tough and to many people unfair benefits and  tax credits regime which has squeezed the poorest – both the unemployed and those in work.

Yet this summer accountants have revealed that HM Revenue and Customs and the Department for Work and Pensions has paid out £5 billion to people on benefits and low incomes who should not have received it. And they predict that even more will receive these payments next year. I have written about this in Tribune magazine this week.

The disclosure comes in the annual audit of both departments by Parliament’s financial watchdog, the National Audit Office, who have qualified the accounts of both departments – as not being a true and accurate description of public spending.

According to the NAO report: “HMRC estimates that the overall level of error and fraud that resulted in overpayments in Tax Credits in 2015-16 increased to 5.5% of Tax Credits expenditure (from 4.8% in 2014-15)

“HMRC estimates that the overall level of error and fraud resulting in underpayments in Tax Credits in 2015-16 remained at 0.7% of Tax Credits expenditure (0.7% in 2014-15). This equates to overpayments of £1.57 billion and underpayments of £210 million.

“HMRC has told us that it believes the level of error and fraud in Tax Credits will increase further when measured for 2016-17. Two main factors have been identified that will lead to this increase: the introduction of the ‘Commercial with a view to a profit’ self-employment test for those who are self-employed and the impact of the Concentrix contract. The impact of these factors on error and fraud levels will not be measured until June 2018, and so the estimate of error and fraud in 2015-16 remains the most up-to-date indication available of error and fraud in Tax Credits expenditure for 2016-17.”

Concentrix were sacked by the department after a privatisation programme went wrong – and they were not up to the job.

Worse are the figures for DWP.

The  NAO’s findings are: “Excluding State Pension, overpayments are at the highest levels since 2009-10, while underpayments are at the highest recorded levels.”

Overpayments amount to £3.4bn, excluding the state pension, an increase of £400 million while underpayments are £1.5bn In percentage terms this amount to an increase to 4.1 per cent of all overpayments and 1.9 per cent of all underpayments.

The report says: “Amongst benefits measured annually for fraud and error, Employment Support Allowance and Housing Benefit overpayments are at the highest recorded levels, and Jobseeker’s Allowance overpayments have returned to the highest levels since 2010-11.

The NAO questions some of the techniques used by the DWP to calculate fraud – saying it assumes that when people don’t get back to the department for a re-assessment that they have been fraudulently claiming. This may not be the case. Also, information is out of date.

“The absence of up-to-date information on error rates in large benefit streams creates a risk that the department is not targeting its fraud and error interventions effectively,” the report says. “For example, Disability Living Allowance, which accounted for £11.5 billion of expenditure in 2016-17, has not been measured for fraud and error since 2004-05.”

All this points to some serious mismanagement by the ministries – which have been squeezed by successive coalition and Tory governments. But it doesn’t mean that those at the top have suffered. I shall return to some interesting findings in their annual reports.

Uncork the Gauke: Could the Tories go for another grey man to lead the party – like John Major

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David Gauke: potential leader? pic credit; Gov uk

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August is the time of the year when lobby journalists love to speculate on leadership plots. If Jeremy Corbyn had done really badly in the June general election – it would be all about who is going to succeed him. But as it is Theresa May who lost her majority and authority – the speculation is all about who will replace her – even though she is at the moment determined there will be no vacancy. So I thought I would add my pennyworth.

The last Tory PM to be deposed in office was Margaret Thatcher in 1990 and she was at that point even more unpopular than Theresa is now. Her disaster was the poll tax – which was quickly replaced by the present council tax – after she stood down.

People forget that at the time John Major was the least known of the candidates who stood to be leader and PM.

Just as now the leadership favourites were big beasts –  the two top runners were Michael Heseltine – who had resigned over a row over the  fixing of an order for a new generation of helicopters in what became the Westland affair – and Douglas Hurd, a well known big Tory beast and foreign secretary. Both are now peers.

Heseltine was at the time a bit of blonde bombshell – unpredictable and strident. Nicknamed ” Tarzan ” because- though he denies it – he was accused of swinging the Parliamentary mace in protest against Labour. Definitely regarded as leadership material – he had shades of Boris Johnson in his leadership claims for today.

While Hurd was seen as more thoughtful – just like Michael Gove who prides himself as a radical thinker – sees himself today.

But both these big beasts were trounced by the ” grey man ” – the relatively unknown John Major.

Today there is another relatively unknown man – a John Major for the 21st century. He is David Gauke. In the Westminster bubble he is known by the phrase ” Uncork the Gauke ” for  his ability to smoothe over gaffes made by his then boss George Osborne in successive budgets. He is a safe pair of hands to send to Westminster and handle Opposition anger over ministerial mistakes.

He was first out of the traps to address the Westminster  press gallery lunches this month – and came to put himself over as an agreeable lunch companion with a store of self deprecating jokes. He is also benefiting from Theresa May’s decision to promote him to Secretary of State for Work and Pensions, presumably thinking like Thatcher about Major that he is no leadership challenger.

But don’t be fooled by his manner. At the heart of the man is a determination to continue the Conservative austerity programme. He was careful only to park plans to end the ” triple lock” on pensions and a new charging system for social care. He has since taken the decision to raise much earlier the pension age to 68 – something that was not in the Tory manifesto.

He also showed little real concern that benefit claimants had committed suicide as a result of  tough decisions. He came out in favour of means testing and to a question from me that his ministry was turning into the Department of Corporate Manslaughter – ignored the point – saying  lamely that there might be mistakes by staff.  There is a lot of difference between a  mistake and a suicide.

A lot is at  stake at the next general election – and Jeremy Corbyn has no longer that element of surprise that he is supposed to be a ” no hoper”  to become PM. So expect the unexpected from the Tories – they will devise new ways to stay in power and an unexpected figure emerging as their leader could be one of them.

 

 

 

 

 

 

 

Why the Tory plan to axe pensioners fuel benefits is as flawed as Labour’s Ed Balls up

Tory manifesto

Tory Manifesto: An Ed Balls Up on fuel payments for pensioners

 

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This  is the extract from the Tory manifesto relating to plans to axe the £200 a year payment to all pensioners and the £300 a year payment to those over 75 . The plan is stolen from the Labour manifesto of 2015 and was originally proposed by Ed Balls to “save £100m “.

we will target help where it is needed most.So we will look at Winter Fuel Payments, the largest benefit paid to pensioners, in this context. The benefit is paid regardless of need, giving money to wealthier pensioners when working people on lower incomes do not get similar support.

So we will means test Winter Fuel Payments, focusing assistance on the least well-off pensioners, who are most at risk of fuel poverty.

Fine words but very difficult to implement. Why?

Four years ago I investigated how Labour could implement the same policy – and found it unfair and unworkable. This is what I said:

“As a punter and pensioner who pays higher rate tax because my freelance earnings top up my pension I expected to be one of the people targeted by Ed Balls. In fact it will have zilch effect, a load of old Balls if you like.

Let me explain why. The fuel allowance is currently paid to individual pensioners with a cap of £200 per household. So for a start I only receive £100 of  fuel benefit. The other £100 goes to my wife, also a pensioner, who is a standard rate taxpayer. So his planned saving will be halved anyway in my case.

But it is actually worse than that. My wife became a pensioner before me and was entitled to the full household fuel allowance in her own right. So when I was on The Guardian, ( then on just over £80,000 a year) our household was receiving then  a £200 fuel subsidy for a short time. What will happen under the Balls changes is that my wife will get back the full benefit of £200 – so we will still continue to receive exactly the same subsidy.

I suspect I am not alone. I know of many people around me in the shires, where in traditional families of that generation the main earner is the male who will  pay high rates of tax. His spouse who brought up the children, and did part-time work instead, would be a  standard rate taxpayer. These wealthy households will continue to get the subsidy.

Ed Balls

Ed Balls in more serious mode

Now Ed Balls could get round this by imposing a household cap equivalent to the income level set by the higher rate of tax. But if he does this he will run into fresh problems.”

I chased this up with the Inland Revenue.

They confirmed four years ago that they do  not collate figures showing how many households have higher rate and standard rate taxpayers who are currently eligible for winter fuel payments. They do not need to collect the information as taxpayers are assessed individually. So they don’t know the breakdown. The only figures they have are the number of higher rate taxpayers who are pensioners. I doubt anything has changed.

Theresa May

Theresa May:Leader of the Tory party. Pic credit:BBC

So how are the Tories going to do this. They could scrap the present system and go back to the old fashioned 1950s style tax system- where the man had to fill in the form for the household. But that would be deeply regressive, anti feminist and take no account of modern relationships where couples may not even be married or have  a gay partnership.

They could limit payments only to those claiming pensioner credit – removing all other pensioners- but that would hit the JAMS – just about managing pensioners with a huge hole in their income and be deeply unpopular.

Or they could  say every person has to fill in a means test form – which means even if it was done on line – have to employ more staff at a huge cost just when they want to axe more civil servants.

It ain’t going to work and will be deeply unpopular and  be full of anomolies.  In other words Theresa May has just created another Balls-up.

Should £1 bn of unclaimed pensions, shares and insurance policies be used to alleviate austerity?

Rob Wilson

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Just before Christmas the government  that promised a ” bonfire of the quangos”set up a new one.

It is called the Dormant Assets Commission and it is unusual in that every member of the quango is a wealthy business person.

Not surprisingly there was little coverage of this body. But the government itself provided a lot of information about what it would do and who was sitting on it. I have written about it in last week’s Tribune magazine.

It has been given a year to scour the financial markets to find unclaimed stocks and shares, pensions, bonds and insurance policies which have not been claimed for more than 15 years.

The quango, set up by the Cabinet Office, follows on the work of identifying dormant bank accounts which led to £850m being distributed to good causes by the Big Lottery Fund since it was set up by the last Labour government in 2008.

The decision on who will get the new money however will depend on Cabinet Office ministers who are making it clear that it is likely to go to charities which are replacing services provided by local government and the state.

Minister for Civil Society, Rob Wilson said:

“More than a billion pounds of assets, that might otherwise sit gathering dust, will go into funding for charities that make a real difference to people’s lives across the country.

“To build an even more caring and compassionate country we need to transform dormant resources and give the funds to those who need it.”

The commission is entirely staffed by business people – many global players – under the chairmanship of Nick O’Donohoe, chief executive officer of Big Society Capital until the end of last year and a former head of global research for bankers J P Morgan.

The business people aiding him are Richard Collier-Keywood, PwC Global vice-chairman; Kirsty Cooper, group general counsel and company secretary, Aviva plc;Gurpreet Dehal, former chief operating officer Global Prime Services, Credit Suisse;Rachel Hanger, partner, KPMG; Jackie Hunt, non-executive director, CityUK and member of the Financial Conduct Authority Practitioner Panel; Mark Makepeace, group director of information services, London Stock Exchange Group and chief executive of FTSE Group; Susan Sternglass Noble, senior advisor to the Investor Forum; and Martin Turner, group business risk director, Lloyds Banking Group.

Richard Collier-Keywood was the head international tax expert for PriceWaterhouseCoopers advising international companies on global taxation.

Rachel Hanger from KPMG is also another international tax adviser for hedge funds providing what her biography describes as “pro tax advice” to fund managers.

Mark Makepeace is the man who co-ordinated the “big bang” deregulation at the London Stock Exchange and runs his own global index business. He is the only one of the new appointments who declares any interest in charities, having been a long-standing supporter of Unicef.

To my mind the present Conservative government is pursuing a pretty nasty policy of cutting services. But should it make up the shortfall by grabbing other people’s assets and employ wealthy people skilled in tax avoidance to find them.

And how will ministers spend other people’s money. Will  the ” sofa style ” government of Tony Blair be replaced by the ” dinner party ” style of government by David Cameron and George Osborne distributing other people’s assets to their mates favourite charities or services in Tory marginal seats.?I am deeply suspicious of this venture and we are entitled to know more about it.

A worrying indictment of how child sex abuse cases are handled today

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This week the inquiry into historic child sexual abuse under New Zealand judge Lady Justice Goddard will start preliminary hearings which could last years. On Wednesday it starts with a hearing into allegations against the late Lord Janner. The following Wednesday there are two short sessions looking into abuse inside the Anglican Church and at Knowl View and other venues in Rochdale and on Thursday March 24  into child sexual abuse of people in the care of Lambeth Council. The details are here.

Last week a report came out from the United Kingdom  Child Sex Abuse People’s Tribunal- a very small scale investigation that took evidence from 24 people covering different types of sexual abuse with families, institutions and paedophile rings. What comes out – apart from horrific stories from the testimony of individuals – is a system not capable of sensitively handling the issue. As it says in this paragraph:

people's tribunal two

That to my mind  is as important as the recommendations reported on Mail On line by  the Press Association here . These include a permanent commission,provision of advocates to survivors  proper links between mental health and  police investigating abuse  and a safe channel for victims yo give evidence anonymously.plus better training for police, the judiciary and the health service to handle cases.

This report deserves to be taken seriously as its steering committee was composed ,mainly of survivors themselves  aided by professional advisers and two experts, Regina Paulose, an American lawyer and former prosecutor and Alan Collins, a British solicitor with enormous experience in handling child abuse cases from Jersey’s Haut de la Garenne inquiry  to Australia and Kenya.

If the Goddard Inquiry really wants to tackle the issue they could  not do much better than take  this on board  when they start their hearings.

The full report can be found here.

 

 

 

 

 

Spending Review: Caveat Emptor- Buyer Beware

George-Osborne1

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Today the Chancellor, George Osborne, launched the autumn spending review.

From the statement you might guess that he has climbed down over welfare spending cuts by abolishing his plan to cut tax credits, climbed down over big cuts to police budgets and acted to save the mental health budget and save the NHS from further cuts. All terribly good news along with more money for defence equipment, the security services, already announced.

But if you look at the figures he still planning  the same  huge level of cuts  but apparently with no pain.

For a start we are going to have no changes to the tax credits – yet there is going to be a change to the new universal credit which will replace a whole series of benefits. So the government will still be cutting the welfare bill by £12 billion. No details yet but it will be sneaked through when the figures are announced much later, hitting another group. And he is proposing to sell 20 per cent of the Department of work and Pensions estate- selling off  Jobcentres and benefit offices.

The NHS is getting more money but will have to make £22 billion of efficiency savings and provide a 7 day a week service. How? No details.

The police may not get their budget cut but the budget is not protected against inflation which is expected to start rising – so there is a hidden cuts inside this announcement.

And  the government claimed it had protected the science budget – but within hours engineers were announcing that a major demonstration project into carbon capture – which could save some coal fired power stations from closure – had been cancelled.

And both the extra money for defence and spending by HM Revenue and Customs – on equipment and tackling tax evasion- is going to be financed by axing thousands of civilian jobs in defence and closing down almost all local tax offices.

And while there is a £600m fund for mental health inside the NHS many voluntary organisations looking after the mentally ill and handicapped will be hit by the huge cut in local government funding.

There is more privatisation on the way – the rest of air traffic control, ordnance Survey and the Land Registry.

So what looks like a series of good announcements are often little more than smoke and mirrors. And in this budget it will depend more than most on the small print hidden in government announcements. Journalists are often fooled into first believing the initial message only to find it starts to unravel over the next few weeks when the policy bites. This is a Caveat Emptor Spending Review- buyer beware.