Why does this man keep secret the pay and perks for people running David Cameron’s taxpayer funded National Citizen Service scheme?

micheal lynas

Michael Lynas Chief Executive of the National Citizen’s Trust. Pic credit: Twitter

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This is Michael Lynas. So far he has spent £475m of taxpayer’s money as chief executive of the National Citizens Trust – a legacy project of David Cameron’s government aimed at providing community projects to aid character building  for 15 to 17 year olds across the nation.

His Linked In profile reveals that his sole qualifications  to do the job are a four year spell as a consultant for Bain and Company and just under three years in Downing Street as a policy adviser to David Cameron and Nick Clegg. He is obviously conventionally bright having studied at  Harvard and Cambridge.

Recently he appeared before MPs on the Commons Public Accounts Committee following a highly critical report from the National Audit Office questioning whether  National Citizen Service was value for money. The NAO pointed out that it was almost entirely funded by the state and the cost providing places on its schemes was very high. Also it has paid out money up front to organisations for places that were not taken up and was now trying to get the money back. I have written about this in Tribune magazine.

Indeed he was challenged by MPs about his ( lack of ) experience.This is the extract from the minutes:

Michael Lynas :”I have been involved in this now for eight years. I helped
to set up the first pilot. That is my ultimate experience. I have worked in
Government covering everything from the London 2012 Olympics to the same-sex marriage proposals when I was a senior policy adviser at No.10.
Chair ( Meg Hillier MP) : The same-sex marriage proposals, important as they were, are not quite the same things as running a contract with a big budget.
Michael Lynas: The Olympics had a large budget, obviously. When I was a management consultant for five years I looked at a whole range of projects, some of which were very large, but as I said, I have not managed something with this budget before.”

But the MPs were also concerned about the complete lack of transparency in declaring the salaries of directors -including himself- and senior staff  who are funded by the taxpayer. This is because  the trust was set up as a community interest company by David Cameron – so it did not have to disclose any details of the pay or perks  of directors or senior staff. Even though it was funded by you and me  –  the taxpayer.

MPs challenged him to publish the information and he agreed he could – but avoided pledging to do so. A flavour of the exchange can be seen here at the hearing.

Kevin Forster MP :”I have asked you if there is a legal bar to sharing that information and you have not said that there is.. .But you have said several times that you are waiting for the new Bill to go through. I accept that would be a new transition and structure but, if you want to sharei nformation and there is no legal bar to do doing so, and it relates to an
organisation that is taxpayer-funded, why don’t you do it?
Michael Lynas: I absolutely agree. I just thought it was a question about whether we did it under the auspices of the new arrangements or whether  we did it before then. We can do it before then.
Mr  Richard Bacon MP: This question of whether we do it under the old auspices or
the new arrangements: how profound is that question and how difficult to solve? Why does it matter? Why can’t you just do it, if it doesn’t make any difference? Are you familiar with the maxim, “Don’t ask for permission, ask for forgiveness”? Why don’t you just get on with it?”

An examination of the accounts and the original advertisement for the job of chief executive does reveal some information. Mr Lynas’s original job was advertised at £120,000 a year. The accounts reveal that in 2015 the highest paid director ( and he is also a director) received £117,688 a year and £5775 towards his pension. This increased by nearly £20,000 to £137,253 in 2016 and to £6343 towards his pension. We don’t know if that is him but it is very likely it is.

Total payments for directors increased by £45,000 in the same period from £466,608 to £511,182 whole pension contributions rose slightly from £23,025 ro £23,480.

Now there are 12 directors – eight are non-executive and four are executive – so you  might assume they share this between them. But you would be wrong because one of them, Lord David Blunkett, the former Labour home secretary, has had to declare what he gets in the House of Lords register of interests – even if the trust wants to keep it secret. And guess what, he is doing it pro bono – not claiming a penny salary for sitting on the board.

And I would be willing to bet the other seven- Dame Julia Cleverdon former chief executive of Business in the Community ; Pippa Dunn, Nick Farnhill, John Hartley, Sue Gray.,( Director of Propriety and Ethics at the Cabinet Office) Martina Milburn, ( head of the Prince’s Trust)  and Shaun Watling- may be in the same position. The Prince’s Trust confirmed that Martina Milburn also gives her time on a voluntary basis.

These leaves another four executive directors to share the spoils ,Will Gallagher ( resigned last December);Doug Fraley ( resigned June 2015); Simon Jones ( resigned January 2016) and Natasha Kizzie in the previous financial year. Indeed the disappearance of so many executive directors seems to suggest another hidden story. Particularly since Will Gallagher was NCT’s chief operating officer and Simon Jones was NCT’s finance director. Natasha who is still in post is director of communications and marketing.

The accounts also reveal that in 2015 50 staff shared a £3 million wage bill. They are now over 100 staff.

The Trust will be forced to release information once  a bill  turning it into a public body goes through Parliament under Theresa May’s government.

I asked for the trust to release these figures now  and explain how much of the millions they lost on ” ghost places” they had recovered. I got no reply – no doubt Mr Lynas was too busy to be bothered by pesky journalists.

But I might say when the public sector ( especially education) is being squeezed by cuts and wage freezes – the largesse shown  to a few here is out of proportion. Unless of  course the former PM arranged ” mates rates” for the privileged few so they could help the underprivileged masses understand their role in society.

 

 

 

Bumped by Trump: How Whitehall used the US elections as cover for £1 billion military spending blunders

donald-trump-pic-credit-cnn

Donald Trump Pic credit: CNN

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One of the oldest tricks in the Whitehall playbook is to use a major event as cover to publish unpalatable or embarrassing news.

It means the media are diverted by the event and don’t notice the announcement or report.

It worked an absolute treat for the Ministry of Defence and the Treasury over the US elections to hide two very bad news stories for them. They couldn’t believe their luck when Trump unexpectedly won.

The Ministry of Defence took advantage on polling day to slip a very embarrassing announcement about money for war veterans pensions and disability payments. Evidently the previous July the Treasury, believe it or not, forgot to include in its spending statement the proper  money to pay them this year. As a result they will have to raid the contingency reserve for emergency payments to make sure these veterans have the money.

Mark Lancaster, parliamentary secretary to the ministry, admitted the error in a written statement to the Commons just as Parliament rose on November 8  describing the failure to disclose it as an “inadvertent publishing error”.  It involved a staggering £438,193,000 in the Armed Forces Pensions and Compensation scheme which is available to serving and former personnel who are injured in military service including in Afghanistan and Iraq.

The second cover up by the Ministry of Defence came on results day. This was an embarrassment to the image of the Ministry of Defence. For years they have endured criticisms on cost overruns on equipment, bad spending decisions and lack of control.

Last year this was all meant to change. A new agency the Defence Equipment and Support, was supposed to take control  and rein in all these errors. It describes itself as a bespoke agency in charge of equipment and projects for the armed forces.

Well it seems to have deliberately chosen  the US election day to publish its first report. The reason I suspect is that the National Audit Office has qualified its accounts and made a stinging attack on its performance. The NAO can only release this when the report is published and the agency chose election day to do it.

The report by Amyas Morse, the Comptroller and auditor General is damning.Some £499 million of public expenditure cannot be properly accounted for.

“I have qualified my opinion on the financial statements due to a limitation on the scope of my audit because DE&S has been unable to provide me with adequate evidence to enable me to confirm whether or not the private sector support costs, other programme costs and the related trade and other payables balance shown in the financial statements are free from material misstatement.

“I believe this situation has arisen because the Agency’s financial management systems, processes and controls for these transactions and balances are not yet sufficiently well developed to meet the Agency’s needs.”

Examples include having to manually insert some 100,000 changes into the computer programme because it had not  been drawn up properly. And reporting money for the wrong year.

Luckily in both cases MPs are not going to let the matter rest- and come back to the issues

Nia Griffith, the shadow Defence  Secretary has attacked the government for putting at risk funding to help military veterans warning that they must be given an urgent reassurance that they will not lose money.

Anne Marie Trevelyan, Conservative MP for Berwick on Tweed and a member of the  Public Accounts Committtee, said :“At a time when we are seeing a lot of change in the Ministry of Defence, causing a great deal of anxiety for those who are serving, it is very disappointing to see Defence Equipment & Support has not got to grips with financial management.

“At the same time there are serious issues with service family accommodation, highlighted by the Public Accounts Committee which would benefit from a much smaller investment.

“This points to a lack of joined-up financial planning in the Ministry and raises concerns about whether the department is delivering value for money across the board.”

Quite right. Whitehall must not get away with playing games with how it discloses it is spending our money. I have written a news article for Tribune magazine on this.

 

A4e: Six jailed in £300,000 fake job fraud scam

A4e: Improving People's lives -and defrauding the government

A4e: Improving People’s lives -and defrauding the government

The scandal that rocked A4e, the private contractor condemned by the Commons Public Accounts Committee, for fiddling the books, hit home this week.

Six people were given jail sentences and another four were given suspended sentences by a judge at  Reading Crown Court.

The BBC reported here yesterday the sentencing by the judge. The scheme as reported earlier on this blog involved mentoring single parents – some of the most vulnerable in society so they could get work. But the £1.3m Aspire programme turned out to be a vehicle for fraud by the staff.

The court was told  staff made up files, forged signatures and falsely claimed they had helped people find jobs, enabling them to hit targets and gain government bonuses.

Judge Angela Morris said there had been a “systematic practice” of compiling bogus files over a “considerable period of time”, behaviour which she described as “appallingly cavalier”.

She said: “No amount of pressure justifies the wholesale fabrication of information in files or the forgery of other people’s signatures on documents, all of which is designed to extract money from the Department of Work and Pensions.”

The roll call of fraudsters are:

  • Charles McDonald, 44, of Derwent Road, Egham, Surrey, pleaded guilty to six counts of forgery and one of conspiracy to commit forgery. He was sentenced to 40 months in prison.
  • Julie Grimes, 52, of Monks Way, Staines, Surrey, pleaded guilty to nine counts of forgery. She was sentenced to 26 months in prison.
  • Nikki Foster, 31, of High Tree Drive, Reading, pleaded guilty to nine counts of forgery, and was jailed for 22 months.
  • Ines Cano-Uribe, 39, of Madrid, Spain, was found guilty of one count of forgery and one of conspiracy to commit forgery. She was jailed for 18 months.
  • Dean Lloyd, 38, of Rochfords, Coffee Hall, Milton Keynes, pleaded guilty to 13 counts of forgery. He was given a 15-month jail sentence.
  • Bindiya Dholiwar, 29, of Reddington Drive, Slough, pleaded guilty to seven counts of forgery, and was jailed for 15 months.
  • Zabar Khalil, 35, of Dolphin Road, Slough, was found guilty of one count of forgery. He was given a 12-month sentence, suspended for two years.
  • Matthew Hannigan-Train, 31, of Westacre Close, Bristol, was found guilty of one count of conspiracy to commit forgery. He received a 12-month sentence, suspended for two years.
  • Hayley Wilson, 27, of Middlesex Drive, Milton Keynes, was found guilty of one count of conspiracy to commit forgery. She was given a 12-month sentence, suspended for two years.
  • Aditi Singh, 32, of Albert Street, Slough, pleaded guilty to two counts of forgery and one count of possessing items to commit fraud, and received a 10-month sentence, suspended for two years.

However less we forget the Department for Work and Pensions was severely criticised in a Commons public accounts committee report for failing to conduct checks on what was going on with A4e at the time – and the company was only investigated because whistleblowers came forward about what was going on.

Chris Grayling, then the minister responsible for employment, took no action to investigate further either. As the PAC said at the time in a report  on A4e and other programmes the DWP never looked at whether A4e was ” a fit and proper contractor” to run other programmes.

A4e chief executive Andrew Dutton said  yesterday the company has a “zero-tolerance policy” towards fraud and money had been set aside so “the taxpayer will have lost nothing” from the scam.

Mr Dutton said: “Their claims do not reflect the way this company operates, or the values of our 2,100 staff, whose honesty and integrity are much-valued.”

I remain to be convinced whether the company has truly reformed.

Is Whitehall still letting profit hungry contractors off the hook to rip off the state?

Chris Grayling: His £400m gift to contractor's profits sparked a pathetic clampdown pic courtesy: BBC

Chris Grayling: His £400m gift to contractor’s profits
sparked a pathetic clampdown pic courtesy: BBC

Remember the major row over  justice secretary Chris Grayling’s “poison pill ” contract to privatise the probation service. This allowed  the successful bidders to walk away with up to £400m profit on a ten year contract should an incoming Labour government have the temerity to cancel it if they won the next election.

Grayling  not so innocently said that this was just normal Whitehall practice. Margaret Hodge, the chair of the Commons public accounts committee said it was “It is not value for money. It is unacceptable and must be challenged before the event.”

She demanded something be done and now the Treasury have responded. They have written to every accounting officer of every ministry and every government agency laying down new guidelines. You can read the letter here and see my news article in Tribune this week.

In my view the response is particularly pathetic and certainly not nearly hard-hitting enough to protect taxpayer’s money.

Of  course accounting officers are reminded that they must consider value for money and must be able to justify such decisions but it does include some  remarkably helpful  “get out “clauses that allow such deals to continue.

One  says they should consider: “whether it is likely that, if the public body terminates the contract for policy reasons, the supplier would have a legal case to claim even without the clause being in the contract.” Well it might but I would be amazed if a judge allowed them to keep all projected profits.

They are also expected just to ask rather than instruct companies “whether the market be willing to bid without such clauses, particularly when outsourcing for the first time, or establishing a new market.” And they should ask whether such a deal is “normal practice in this area of business.”

To me this seems an open invitation for private contractors to say, of course it is, where if they had a private contact with another private firm, they would lucky to get all the money back if the other company just collapsed.

It is only that the Government cannot go bankrupt that they are in a position to negotiate such terms.

Now of course accounting officers could refuse to sign such one-sided contracts in the first place and demand the minister in charge directed them to do so. But in fact remarkably few permanent secretaries and chief executives  ever do this. They can be counted on the fingers of one hand in any financial year.

Once again this coalition government is running the country for the benefit of private companies not for the taxpayer or even to the benefit of the ordinary public.

 

 

Tackling tax demons: Trick and treat at the heart of the City Establishment

On Halloween eve an unique invitation only conference took place in the historic  and just slightly spooky Livery Hall in the City’s historic Guildhall.

For six hours the Westminster Establishment politely occupied the bastion of  the City Establishment to discuss a subject that perhaps capitalism would like to go away – global tax evasion and tax avoidance.

Margaret Hodge;

Margaret Hodge;

Margaret Hodge, chair of the Commons Public Accounts Committee and scourge of tax avoiders Google, Amazon and Starbucks, brought together business chiefs, politicians, tax accountants, civil servants, charities, trade unionists and the odd pesky journo like me from Britain and across the world.

The event was unique because on a grand scale it put people in the same room who would verbally be at each other’s throats and tried to find some common ground to tackle a world-wide scourge.The scourge that is making the elite ever richer and leaving the poor, and increasingly the middle classes,left behind as well as exploiting developing countries.

The result was interesting – both for unpredictable quotes and for disclosure of what is really happening to try to tackle this.

One of the  most memorable quotes came from Justin King, the thoughtful former CEO of Sainsbury’s, who admitted that “If business becomes more unpopular than politicians then we really do have a problem”. He also warned no doubt with declining Tesco in mind – that business rates and corporation tax were both on the way out – as business needed less real estate to function and countries vie with each other to reduce corporation tax.

Another memorable moment was Will Morris, chair of the CBI Tax Committee, backing the Public and Commercial Services Union case that George Osborne was wrong to axe a third of HMRC staff. What next Mark Serwotka , the general secretary, sharing a platform with the CBI?

Or for Prem Sikka, professor of accounting at Essex University, who pointed out, after accountants defended their role, that not one accountant had ever been disciplined by their venerable professional body, dating from the 1880s, for producing an illegal tax avoidance scheme.

The other striking feature of the conference in the  male dominated City was the role played by powerful women on both sides of the argument.

For me the most striking was the speech given by Grace Perez-Navarro, Deputy Director of the OECD Centre for Tax Policy and Administration. She revealed that the OECD were not just talking about it but had secured some 90 plus agreements with tax authorities like the Cayman Islands, Gibraltar among many others to exchange information but not to make it public yet. She is also a firm advocate of forcing companies needing to release country-by-country reporting of profits generated by multinationals.

“Our efforts to increase transparency, combat offshore evasion and counter tax avoidance by multinational enterprises are having an impact on the ground and helping countries to make sure that all taxpayers pay their fair share,” she said.

But there were also outstanding contributions by Irene Ovonji-Odida, ActionAid chair, on what needed to happen in Africa and on the pro business side by Heather Self, of  lawyers Pinsent Mason, the capitalist’s best legal friend and from the floor by Maya Forstator, an independent researcher who has challenged the claims by some of the world’s leading charities like Christian Aid and Action Aid on the effects of multi nationals taking money away from developing countries.

We also learnt some curious irrelevant information  about the cars some of the speakers drive. Richard Murphy, the Tax Justice accountant used the analogy that he drove an 11 year old car to show how out of date international taxation law is only to be trumped by Grace Perez-Navarro who drives around in a 22 year old motor.

There were no instant changes arising from this conference. More important was the fact than in an age of increasing inequality – the issue of tax is certain to remain  high on the agenda and there are active people wanting to deal with issue to make things happen.

Meanwhile as Margaret Hodge wound up the conference with a  damning speech on what more needed to be done, in another part of the Guildhall, another Parliamentary select committee chair, Keith Vaz, was undermining another powerful woman, Fiona Woolf, the current Lord Mayor of London, who has been appointed by Theresa May, the home secretary, to head the child sexual abuse inquiry

The home affairs committee chairman released seven drafts of her letter outlining her links with Leon Brittan,who is likely to be investigated over the disappearance of crucial home office documents,on the issue.showing how she kept changing her story. Today people think she will be under enormous pressure to quit.

 

 

 

 

 

 

 

Silence of the Whistleblowers

Knives out for A4e whistleblowers? Pic courtesy:snippits-and-slappits.blogspot.com

Today  confidential evidence given to MPs on Parliament’s most powerful committee of MPs by a team of whistleblowers on fraud should have become public.

The whistleblowers-  people once employed by two rapidly growing companies A4e and Working Links which are dominating the government’s welfare to work programme – spent two hours giving dramatic evidence in private to the House of Commons Public Accounts Committee last May.

The result of their information and a frankly complacent performance by Robert Devereux, the patrician permanent secretary, to the Department of Work and Pensions led  to a damning report  by MPs on the ministry’s stewardship of  taxpayers’ money handed over to these profit-making companies.

As reported in Exaro News today ( see http://www.exaronews.com ) Tory and Labour MPs were disgusted at the ministry’s performance.

Margaret Hodge, the Labour MP who chairs the committee, said: “The DWP’s arrangements for overseeing and inspecting its contractors were so weak that vital evidence on potential fraud and improper practice was not picked up.”

Richard Bacon, Conservative MP and deputy chairman of the committee, said: “Encouraging innovation and fresh approaches is important, but so is ensuring value for taxpayers. Providers cannot be allowed to run wild and free with public money.”

Margaret Hodge; Agrred to withold whistleblowers evidence

The evidence came from an appalling internal audit report prepared in 2009 by A4e’s own auditors and leaked to committee on the Exaro website which concluded:” found that more than one quarter of the company’s placements was potentially fraudulent, irregular or unverifiable. The jobs agency even placed one job-seeker at a Liverpool lap-dance club. Last May, Exaro published the auditors’ findings in full. That was under Labour.

But according to  one of the whistleblowers it continued under the Tories. Eddie Hutchinson, former chief auditor of A4e, told the committee in his submission of “systemic” fraud and malpractice at the company.

Hutchinson, worked at A4e from October 2010 until May last year, and at Working Links before that. He described what he saw at both companies as “a multi-billion-pound scandal”. This we only know because of his evidence was leaked to the Daily Telegraph. A4e insist that this eveidence is not true and the new company is now wonderful.

Today we should have had a more rounded picture with new evidence from other whistle blowers. The draft report would have included the minutes of that meeting and with names redacted all the information.

But just days before publication the whistleblowers, according to a top source panicked and asked the chair, Margaret Hodge, to censor all their evidence.

Why? All the whistleblowers were happy to give evidence in public last May but some Tory Mps, Chris Grayling, then the minister for work, and A4e were desperate for the public to know nothing. They stopped the public hearing. Billions of pounds of new contracts were at stake. Now ministers and A4e have got their way.  We are none the wiser. Have the whistleblowers been threatened?  Did they decide they had lied to the committee? Or is there a blacklist in the auditing profession to prevent people who blow the whistle from getting fresh work?

Today is a bad day for transparency and democracy when the most powerful committee in Parliament that holds the government to account cannot publish the facts. The government is making matters worse by changing the law protecting whistleblowers to make it even more unlikely they will risk their careers at the moment.

A4e as well should have been allowed to give evidence to the committee as well as the rather arrogant Mr Devereux. The company could then have put its case and been questioned on its performance. For those interested in the full or should I say half redacted report, it is here (http://bit.ly/PKPO9a ).