HS2 Fiasco: Should these two top Whitehall figures get the sack for covering it up?

Bernadette Kelly, permanent secretary at the Department for Transport Pic credit: gov.uk
Mark Thurston, the £605,000 a year head of HS2. Pic credit: HS2

The damning report by the Public Accounts Committee out today tells you everything you already knew about HS2 – the high speed rail link from Euston to Birmingham and eventually Manchester and Leeds.

This rail line – at one stage facing being scrapped by Boris Johnson – earned a reprieve despite costs escalating almost out of control from costing £55bn when it was commissioned to an estimated minimum £88 billion today. Even commitments to petitioners against the scheme were wrongly calculated at £245m when the figure is now nearer £1.2 billion .And that may not be the end of the story as costs could still rise while the public will get a much delayed service with fewer trains.

The report also shows there is a huge problem with the redevelopment of Euston station – used by millions of mainline travellers and commuters – which no doubt will create another out of control of budget. We still don’t know the real cost for that.

But what I found really distasteful that Bernadette Kelly, the highly paid permanent secretary at the Department for Transport and Mark Thurston, the UK’s highest paid public official in charge of HS2 – he is on an eyewatering £605,350 salary and got a £46,000 bonus despite not keeping public money under control- conspired to cover up their failings and keep information from the public and Parliament.

The report is quite clear desperate officials were well aware that public money was going down the toilet but decided NOT to tell Parliament and be less than honest in the official annual accounts of HS2 to disguise the mess they faced.

Bernadette Kelly revealed to MPs in March that she had undertaken four separate assessments to see if the project was viable last year – but neglected to tell MPs anything about it when she appeared before them. She claimed it was ” commercial sensitivities ” that held her back.

This is serious stuff. As the report says: ” We are disappointed by the Permanent Secretary’s response to our concerns about her failure to explicitly inform the Committee of the programme’s delays and overspend when asked about the general health of the project.

“This was something that an accounting officer should share with the Committee. Failure of an Accounting Officer to provide accurate information to Parliament is potentially a breach of the Civil Service Code and a breach of Parliamentary Privilege. “

To put it bluntly she may have broken the Civil Service code which lays down the ethics and rules governing how officials should behave and she may have lied to Parliament.

In that case I think there should be an inquiry and if she is found to have behaved as badly as that she should be disciplined or even sacked.

Mark Thurston appears to made sure that his company accounts did not give too many hints of the failure to control money. Why he should have a bonus when his costs went sky high – is a mystery to me. He should pay it back and questions asked whether he is the right man for the job..

I agree with Sir Geoffrey Clifton-Brown MP and deputy chair of the committee: “This PAC report on HS2 is one of the most critical, in both the transparency of Government and the handling of a project, that I have seen in my nine years in total on the committee.

“The Permanent Secretary appeared before the committee in October 2018 and again in May 2019. In March 2019 HS2 Ltd formally told the Department it had breached the terms of the Development Agreement, and would be unable to deliver the programme to cost and schedule – yet the Permanent Secretary did not inform the committee on either appearance that the programme was in trouble.

“This is a serious breach of the department’s duty to Parliament and hence to the public, which as the report says, will undermine confidence. Furthermore, the PAC was in the dark about serious cost overruns and was therefore unable to do its duty to inform Parliament that value for money .on the project was at risk.”

The United Kingdom used to be regarded as a world leader in upholding high standards in public life. The actions of these two individuals in trying to cover their tracks is more in line with a banana republic.

Wasted: £1.35 billion cost overrun (already!) on the cost of replacing Trident

MPs slam latest Ministry of Defence scandal as typical of 30 years of contract mismanagent

Burghfield Site: Massive cost overrun and six year delay

Taxpayers are set to fork out anywhere between £41 billion ( latest government estimate) and £205 billion ( if you believe the Campaign for Nuclear Disarmament estimate) to pay for replacing Trident.

So it is extremely disturbing to discover that the first facilities to allow this hugely expensive military project to start – are already wildly over budget and years behind schedule.

Our present nuclear deterrent is due to be upgraded in 2030 with the building of four Dreadnought submarines and the government is considering ordering new nuclear warheads from the United States. No doubt this will be one of the discussions between Boris Johnson and Donald Trump.

To get the programme on the road the government signed contracts worth £2.5 billion to upgrade three facilities. They will now cost at least £3.85 billion.

These were a new a new nuclear warhead assembly and disassembly facility at the Atomic Weapons Establishment site at Burghfield.

A new nuclear core production capability at the Rolls Royce site in Derby to produce the latest nuclear reactor core designs.

And a new facility at the BAE Systems shipyard at Barrow-in-Furness where the new Dreadnought class submarines to carry nuclear missiles will be built.

After a damning National Audit Office investigation into the projects MPs on the Commons Public Accounts Committee have produced their verdict on the projects and it is not a pretty sight.

Warning to the public: is your taxpayer’s ,
money safe here?

For a start the whole cost has shot up by well over 50 per cent and we haven’t even completed any of the projects. The worst case is the project at Burghfield whose costs have increased from £1.8 billion to over £2.8 billion and it has gone up 146 pc since first proposed in 2011. It should have been completed three years ago in 2017 but won’t now be ready until 2023.

Similar cost and time overruns apply to the nuclear reactor core programme which will now cost £484 million should have completed next year but won’t be ready until 2026.

And the work at Barrow now costing £240 million won’t be ready until 2022 – some 20 months behind schedule.

Part of the reason for the mess is that the projects were poorly designed and the ministry went ahead before they had finalised the upgrades.

Scathing remarks from Meg Hillier, chair of the public accounts committee
Pic credit: Creative Commons

No wonder Meg Hillier, the chair of the committee, is so scathing today about the waste of money.

“ To utterly fail to learn from mistakes over decades, to spectacularly repeat the same mistakes at huge cost to the taxpayer – and at huge cost to confidence in our defence capabilities – is completely unacceptable.  We see too often these same mistakes repeated.

“The Department knows it can’t go on like this, it knows it must change and operate differently. The test now is to see how it will do that, and soon.

“We expect the MoD to report to us later this year, in its 2020 update on the Dreadnought nuclear submarine programme, on how it is working with industry and other departments to develop and keep in place the skills it badly needs to take forward nuclear work.

We also expect a detailed assessment, of whether the current ownership arrangements for nuclear regulated sites are in the best interests of the taxpayer, to be provided to us by the end of this year.” 

What is extraordinary is this ministry has a track record of over budget and late projects stretching back 30 years. Boris Johnson’s spooky adviser, Dominic Cummings, wants a review of how the ministry runs its entire procurement programme.

I don’t agree with him on practically everything else but in this case he is spot on.

Useful documents: House of Commons library report on the cost of the nuclear deterrent here.

National Audit Office report on the scandal here.

Public Accounts Committee report here.

Revealed:The chaotic free prescription and dental treatment scandal

An example of an attempt to check whether you are entitled to a free prescription by Trent Valley Surgery

If you are under 60 and over 16 do you know when you can get a free prescription and free dental treatment? No, if you don’t you are in good company and if you claim could even be one of 1.7 million people in England falsely sent a £100 penalty by the NHS.

A absolutely scathing report out today from MPs on the Commons Public Accounts Committee today describes the whole system for regulating free prescriptions and dental services as ” not fit for purpose “.

It reveals that despite a so called 24 page ” simplified ” guide telling you when you qualify most people are completely confused and rightly so.And if you get it wrong you are automatically guilty of fraud and get a £100 penalty fine rising to £150 if you don’t pay it promptly.

The report said :” Exemptions from prescription and dental charges include age, maternity, receipt of certain means-tested benefits, low income, and long-term medical conditions in some cases, although we are told that this list of long-term conditions has not been updated for 50 years [YES 50 YEARS -my point] save the addition of cancer in 2009. “

Worse qualification for a free prescription does not automatically qualify you for free dental treatment. And if you are on Universal Credit your right to claim will vary from month to month depending on your income.

The report says : “There is currently no way of indicating receipt of Universal Credit on prescription forms, resulting in more confusion, and the Department for Work and Pensions does not confirm eligibility when they write to claimants about their confirmed benefit entitlements.”

The result of all this chaos is that since 2014 no fewer than 5.6 million penalty notices have been issued and 1.7 million have had to dropped once the person challenged it because it was found out they were entitled to claim.

Naturally the threat of penalities has made vulnerable people more frightened of going to the dentist for essential treatment in case they were fined and to get prescription medicines.

Worse the policing of the system to prevent fraud has been an abysmal failure. The report found “nearly 115,000 people have received five or more PCNs [penalty notices] for prescriptions, over 1,600 have received 20 or more—yet only five cases have been referred to the Crown Prosecution Service. Only one has been heard in court ” Yes that it right one court case.

And anyway the NHS does not have a proper system for collecting the debt – relying in part on Capita.

The MPs said: “The PCN process generated a net yield of £25 million for the NHS, a pitiful sum compared to the annual cost of prescriptions which is around £9 billion. We do not dispute that it is right to try and deter fraud and recover costs mistakenly paid by the NHS, but the current system is not fit for purpose.

Now there is a simple high tech solution to check prescription entitlement in real time – and the government is committed to eventually introducing a computerised system. It is trialing one now in just four chemists. How pathetic is that.

Meg Hillier, chair of the committee, makes some very pertinent points .

Patients find it very confusing to understand whether or not they can claim free prescriptions or dental treatment because of a convoluted system that causes patients, in some cases, distress.

“A presumption of guilt means penalty charge notices are issued too readily, particularly where vulnerable people are concerned. Yet where there is clear evidence that people are persistently committing fraud by making false claims, there has been a failure to take effective action.

The Committee fully support efforts to deter fraud and pursue those who claim exemptions to which they are not entitled to but the current penalty notice system is cumbersome, inefficient and not fit for purpose.

The Department should substantially overhaul the system, so that those who are rightfully entitled to free prescriptions and dental treatment get the exemption they deserve.”

Over to the NHS to sort out this scandal – one among many. MPs want to call officials back next year to explain how they have solved it.

On Byline Times: MPs slam Home Office for “Windrush” scandal that hit 50,000 overseas students over cheating claims

Home Office HQ: MPs accuse the ministry under Theresa May of ” entirely unacceptable” behaviour in handling the problem

MPs today accused the Home Office of learning nothing from another “Windrush” scandal over their treatment of 50,000 overseas students from outside the EU and European Economic Area who were said – many wrongly – of cheating in oral English language tests to get a university place.

The Commons Public Accounts Committee said it is “staggered” by the uncaring attitude of the Home Office over the fate of thousands of students who were accused five years ago and had their visas cancelled or voluntarily left the country as a result. Others had to spend thousands of pounds to win court cases against the government to prove their innocence.

The full story is here on Byline Times.

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

Whitehall claimed ” administrative error” for all the secrecy

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

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

Full story on Byline Times.

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

CROSS POSTED ON BYLINE.COM

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

CROSS POSTED ON BYLINE.COM

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.