Monthly Archives: June 2018
Carillion: taxpayer £200 million bill – government contracts placed after warnings
“The collapse of Carillion will cost taxpayers more than £200 million, according to a report.
The National Audit Office (NAO) said that ministers had failed to monitor the government’s sixth largest contractor effectively before it went into liquidation with debts of £1.5 billion.
The spending watchdog questioned why the construction company was given public work, including a £1.3 billion contract to help to build HS2, after a profit warning last July. The company had 420 public-sector contracts worth £1.7 billion a year. The scale of its profit warning was a “surprise” to the government, the NAO said.
“Doing a thorough job of protecting the public interest means that government needs to understand the financial health and sustainability of its major suppliers, and avoid creating relationships with those which are already weakened,” said Sir Amyas Morse, head of the NAO. “Government has further to go in developing in this direction.”
The cost to the taxpayer on the losses on Carillion’s contracts since it was put into the hands of the Official Receiver in January is £148 million, the NAO report found. On top of that is an expected bill from PWC of £50 million for handling the first six months of the receivership. That bill is expected to rise as the liquidation process continues.
Frank Field, the Labour MP who leads a House of Commons committee that has issued a report on Carillion and the failings of its directors, said that the NAO report showed how the Cabinet Office had fallen short.
“Carillion hoodwinked the government as they did many others who were so naive as to trust their published accounts,” he said. “At the earlier stages government oversight was inadequate. The government has to up its game.”
The report says that the Cabinet Office employed no direct overseer of Carillion in the three months after the profit warning after the departure from the civil service of the “crown representative” that each major contractor is assigned by government.
Despite the evidence that Carillion was in a crisis from which it might not recover the company was not assigned to the Cabinet Office’s “high risk” red alert until September and contingency plans for Carillion’s failure were not stepped up until October. Even when the company went into liquidation in January, the Cabinet Office still did not have a complete list of the government’s exposure to Carillion and did not have contingency planning in place.
A spokesman for the Cabinet Office said: “Throughout this process the government has been clear that its priority is to ensure that public services continue to run smoothly and safely. The plans we put in place have ensured this, and we continue to work hard to minimise the impacts of the insolvency, having safeguarded over 11,700 jobs to date.”
Insolvency Service reports show that 2,332 Carillion staff have lost their jobs.”
Source: Times (pay wall)
“Persimmon pay panel chief unable to tell MPs firm’s average pay”
“Persimmon’s executive pay row was reignited on Wednesday after the head of the housebuilder’s remuneration committee said she did not know how much the average worker was paid by the firm.
MPs on the business, energy and industrial strategy (BEIS) committee were stunned by the admission from Marion Sears, who was giving evidence after Persimmon angered shareholders earlier in the year by handing its chief executive Jeff Fairburn a £75m bonus.
“The average … I don’t have that figure to my finger tips,” Sears told MPs, when asked by the committee chair, Rachel Reeves, what average pay was.
“You’re chair of the remuneration committee at Persimmon aren’t you? And you don’t know what average pay is, as chair of the remuneration committee?” asked an incredulous Reeves.
After the meeting had concluded, the Labour MP tweeted that Sears’ lack of knowledge was a disgrace.
She added in a statement: “Executive pay at Persimmon is a tale of corporate greed and incompetent pay management, financed on the back of a tax-payer funded housing scheme [help to buy].
“Persimmon paid out huge bonuses to the men at the top of the firm and yet this morning we have heard that Persimmon are unable to tell us how much average workers at the company are paid.”
A spokesman for the firm later confirmed the average salary at the firm is £35,600.
During the bruising session, Sears also appeared confused about the sum Fairburn received last year, at first answering “£675,000”. Prompted by Reeves to give the total pay figure, she said it was “about £45m”. The total figure shown in the 2017 annual report and accounts was £47.1m.
When asked by Reeves whether or not Persimmon was a living wage employer, Sears said yes, but then went on to clarify that the FTSE 100 firm was not accredited by the living wage foundation. …”
“Universal broadband speed plan ‘unambitious’, say Lords”
“The government has been told to “up its game” over plans to guarantee a minimum internet speed for all broadband users.
Peers said the current Universal Service Obligation (USO), which will entitle consumers to a minimum internet speed of 10Mbps, was “unambitious”.
But the government said the USO was a “safety net” and it had “much greater ambitions”.
“The USO has an important part to play in ensuring that no-one is left behind,” it added.
Labour spokesman Lord Stevenson of Balmacara opened the debate by sying the House had previously asked for the USO to specify a download speed of 30Mbps, but the general election halted work on the issue.
He said the current USO plans contradict other government initiatives.
“Surely the architecture of the USO has to be consistent with the government’s productivity plan, the industrial strategy and the national infrastructure plan.
“The argument is that without some ambition the USO itself may become a constraint on all these important challenges,” he said.
Liberal Democrat Lord Foster of Bath said the current plans would see a continuation of the “digital divide”.
A ‘smokescreen’
Conservative backbenchers also expressed frustration, with Earl Cathcart complaining about the “appalling” speeds he receives at his home in Norfolk.
He told of being unable to download a Department for Environment, Food and Rural Affairs report.
He added: “So I have to ring up my agent in Norwich, get him to print it out and send it to me in the post.
“That’s hardly 21st Century communications, but at least the post is reliable.”
In the same debate, crossbencher the Earl of Lytton called for a ban on using the term “up to” in advertised internet speeds, labelling them “a smokescreen of the first order” that allowed providers “to conceal poor performance”.
Digital minister Lord Ashton of Hyde said: “The USO has an important part to play in ensuring that no-one is left behind,” and the present minimum specification was being kept under review.”
Local buses – one town’s successful fight
It’s a lovely story BUT people work up to 60 hours a week for nothing but Owl can’t help thinking that, because of that, this solution still makes it part of the problem – if you want it, pay for it and get volunteers to work for it for free to keep it going. Bet Chris Grayling, the (non)Transport Minister and Sajid David (Communities) adore it.
“… Witney’s town service had been run by Stagecoach for a fee of £95,804 per year, according to documents published in March 2015. Without that public money, the transport giant wouldn’t run it. (Like the council, Stagecoach refused to comment on subsidies but says: “Oxfordshire county council has made changes to its own contracted bus services.”)
Months before the service shut, Labour’s Price hoped to whip up some opposition. The reaction surprised even her. Public meetings were packed out, with passengers, shopkeepers and young people fretting about their grans. “I’ll always remember one lady – she was almost in tears every time she spoke.”
This made her wonder: why not take over the service? Sure, it was a bit of a left turn for her – the 38-year-old’s CV could be summed up as: worked in publishing, DJs northern soul records, raises a nine-year-old boy. No sign here of buses as a Mastermind subject. But “when your residents are crying because they’re going to be trapped in their homes, it’s not enough to say, ‘Aren’t the Tories evil?’ This felt like that one opportunity to do something practical while in opposition.”
Others soon got onboard, such as bus expert Miles, who now helps with timetabling and routes for free. Frantic tin-rattling raised the 18 grand that bought an old bus, and at the start of 2017 West Oxfordshire Community Transport (WOCT) was on the road. From the start Price wanted the venture to be a co-operative: “We need people to understand they’ve got a stake in making it work.” Anyone paying a quid can be a voting member, drivers get a proper living wage, and whatever profits might turn up are reinvested in the business.
The result is a mini-miracle, made of love and sweat. Price and a handful of others give their time for free. If a driver goes off sick, one of the directors gets behind the wheel. There’s no bus depot, just a corner of a yard rented cheap. Even though he’s paid only a part-time wage, the operations manager, Andrew Lyons, works 60 hours a week and will nip off on a Sunday to wash the buses. At 52, he supplements his earnings by driving a minicab; the day we meet, he’s booked to do a midnight run down to Gatwick. …”
https://www.theguardian.com/commentisfree/2018/jun/06/rural-town-austerity-buses-witney
Privatisation: water company fat cats
“The bosses of England’s privatised water companies have been criticised for banking £58m in pay and benefits over the last five years while customers have been faced with above-inflation rises in their water bills.
The GMB union said the chief executives of England’s nine water and sewage companies were “fat cats” earning “staggering sums” from the management of a natural resource. …
Household water bills have risen by 40% above inflation since the industry was privatised in 1989, according to a National Audit Office report. The average bill this year will be £405, a 2% increase on last year, according to Water UK, the trade body that represents water and sewerage companies. …
Anglian Water and Southern Water paid no corporation tax last year, while Thames Water “has paid no corporation tax for a decade”. …
Liv Garfield, the chief executive of Severn Trent, was paid £2.45m last year, making her the UK’s best-paid water company boss. Garfield took home a salary of £674,000, a £615,000 bonus, and long-term incentive shares worth £975,000, a pension contribution of £168,000 and other benefits worth £18,000. …”
https://www.theguardian.com/business/2018/jun/05/water-companies-pay-national-scandal-gmb-union-says
Hinkley C “never to be repeated mistake” to be repeated!
And yet another Local Enterprise Partnership will be subsidising yet another expensive nuclear power plant with OUR money.
“The government has confirmed it is considering putting taxpayers’ money into a project to build a new nuclear power station at Wylfa in North Wales.
It’s a decision that, if taken (and it almost certainly will be), will mark a significant U-turn in the government’s approach to procuring new nuclear power.
In 2010, the government was adamant that the UK public should never have to run the risk of lengthy and costly overruns that have become a hallmark of nuclear plant construction.
In the case of Hinkley Point C in Somerset, the government made much of the fact that come what may, the UK taxpayer would be insulated from the skyrocketing costs that the contractor, EDF, had incurred on a similar plant in France.
But there was a price to pay for that taxpayer protection: very expensive electricity.
In return for shouldering all the risk, EDF demanded a price for the electricity that Hinkley will (one day) produce that is double the current going rate.
The National Audit Office and the Public Accounts Committee were critical of that deal and there was considerable pressure to significantly reduce the cost of power from the Wylfa plant. It’s expected it will come in around £77 per unit, compared to £92.50 for Hinkley. …“
“Two Dorset councils take out [allegedly] ‘fraudulent’ high-risk loans worth over £120m”
“Campaign group Debt Resistance UK revealed that Dorset County Council and Weymouth and Portland Borough Council have taken out £123m of Lender Option Borrower Option loans (LOBOs) in an effort to reduce their debts.
Dorset County Council took out £95.9m, while Weymouth and Portland Borough Council took £27m at the end of the 2015-16 financial year.
The LOBOs, which were uncovered on Channel 4’s Dispatches documentary series, allow private banks to propose or impose a new fixed rate on a pre-determined future start date.
This means that the borrowing party can either accept the new interest rate or repay the entire loan, paying a ‘breakage penalty’—the fee a client must pay its lender to break from the contract— incurring further costs on the local authority.
Last month the Chartered Institute of Public Finance and Accountancy (CIPFA) urged local councils to review their LOBO loans after auditing firms expressed concern at their impact on local authorities’ accounts. Channel 4’s Dispatches found that over 200 authorities had used the loans, totalling up to £15bn.
Cllr John Whitworth, chair of the Newham Council Scrutiny Committee, labelled the LOBO loans a “fraud on the people,” arguing that many local authorities took out the loans when they were struggling financially during the economic downturn in 2008. He added that the loans became “a very serious handicap” on councils dealing with austerity in later years.
Debt Resistance UK campaigner Joel Benjamin noted: “it is always cheaper for government to borrow than banks, and that PFI and by extension LOBO loans are therefore a fraud.”
Last week a merger between all nine Dorset councils was approved, creating the formation of Christchurch and Poole Council and Dorset Council. The deal is expected to deliver £6m in savings.”
“Council leaders ‘do not want to be town hall James Bonds’ “
Who says? I know one or two council leaders who think they ARE James Bond. CORRECTION: who ARE Ernst Blofeld – the villain in On Her Majesty’s Service, no less!
“Local authorities must not become a “replacement” for the security services under the government’s updated counter-terrorism strategy, council leaders have warned.”
https://www.publicfinance.co.uk/news/2018/06/council-leaders-do-not-want-be-town-hall-james-bonds
DCC East Devon Alliance Councillor backs East Devon National Park
“I’m putting forward a motion to the next meeting in July for the Council to support a new park, which would include the East Devon Area of Outstanding Natural Beauty, and prepare a case for submission to the review of national parks recently announced by the Government.
And EDDC Leader Thomas is … silent so far. And Hugo Swire is … silent so far!
East Devon: proud to be English, best years are past, things getting worse, most people can’t influence decisions
What a sorry state people think our country is in!
“Rural businesses say the government’s review of national parks could fuel economic growth in the countryside”
This will be a REAL test of what EDDC councillors’ priorities: a clean, green environment (remember Diviani promising this years ago!)
or more concrete.
“… Country Land and Business Association president Tim Breitmeyer said boosting economic growth and productivity in designated landscapes should be at the centre of the review.
“Designated landscapes are crucial to the wellbeing of the nation, providing opportunities not only for visitors but most especially for those who live and work there,” he said.
The crucial challenge is to strike the right balance between ensuring designation that delivers natural beauty, alongside encouraging the right types of economic activity.
Together, this more positive balance will sustain these areas and create thriving communities, said Mr Brietmeyer.
“Most businesses within designated landscapes experience significant opposition and hostility to development of any kind.”
Success would see more landowners, users, park authorities and conservation boards working together to identify opportunities to deliver sensitive development, said Mr Breitmeyer.
This could help improve the use and enjoyment of these unique areas, he added.
Two-thirds of people in England live within 30 minutes of a National Park or AONB, with visitors contributing more than £6bn each year to the local economy.
Game-changing
Emma Marrington, senior rural policy campaigner at the Campaign to Protect Rural England (CPRE), described the review as “potentially game-changing”.
It was an opportunity to shine the spotlight on national parks and AONBs – and to consider whether there should be new additions to the current network of designated landscapes. …”
http://www.rsnonline.org.uk/rural-groups-react-to-national-park-review
Young people stuck in low-paid, insecure jobs
And that’s why “great employment figures” are not to be trusted.
“… The number of 21- to 30-year-olds working in precarious, often low-paid work has exploded, according to the report. In that 20-year period, numbers of young people working in private social care has increased by 104%, while in hotels and restaurants the figure is 80%. The generational pay gap has increased in real terms from £3,140 in 1998 to £5,884 in 2017 for someone working a 40-hour week. …”
Why the Grenfell Tower fire happened – by a survivor
““Every single link in this chain is going to be found to be rotten and cancerous,” Daffern [the survivor who had lived there for 16 years and predicted the tragedy in his blog] said.
“The government didn’t implement the inquest recommendations after the Lakanal House fire where six people died in 2009. Had they done that Grenfell wouldn’t have happened. RBKC failed to carry out scrutiny of the TMO.
“The way the TMO [Tenant Management Organisation] operated, the handling of the contracts, the construction, through to the building regs, the materials that were used, the consultation process.”
When asked what links these failures, he said: “Greed, lack of respect, lack of humanity. It is the opposite of everything it should be. This is housing as a commodity to be exploited. It is not only in RBKC [Royal Borough of Kensington and Chelsea], it is what housing has become.”
Only in the Sunday Times …
… would you find an article with the headline:
“Small businesses at risk from house price fall”
about small business owners using their homes as collateral.
Might a headline in the Daily Mirror read:
“Small business owners forced to use houses as collateral as big banks fleece them with high interest rates and government fleeces them with high business rates”!
Beware the close pals of your close pals …
Swire is a 50% director of a company planning to invest in energy projects in emerging markets with Lord Barker:
Lord Barker is facing pressure to resign as chair of the Russian aluminium giant En+ owned by sanction-hit billionaire Oleg Deripaska.
Here is what the Sunday Times has to say about Mr Deripaska today in an article headed: ” ‘Dirty money’ probe targets oligarchs”:
” … aluminium tycoon Oleg Deripaska, who is worth more than £2.6 billion and whose company En+ Group is listed on the Lindon Stock Exchange … was accused of illegal wiretapping, extortion, racketeering, money laundering, and threats against business rivals. …”
Source: Sunday Times (pay wall)
“Home Builders Federation criticises planning proposals”to
Oh, those poor, poor developers … less profit … that’s all this is about:
“Proposed changes to the National Planning Policy Framework could cause the cost of land to increase and exacerbate the housing crisis, the Home Builders Federation (HBF) has warned in a letter to the Government.
The industry body claimed that proposed changes, which would enable councils to base contributions towards affordable housing based on the existing value of land – rather than its projected sale value – would mean they would have to offer lower sums to landowners and therefore be able to build fewer homes.
A spokesman for the Ministry of Housing, Communities and Local Government said that proposed changes “will mean that developers know the contributions expected of them and local communities are clear about the infrastructure they will get alongside new homes. We are currently analysing responses to the consultation and will set out next steps in due course.”
Sources: Telegraph p1, Times p1 (pay walls)
Surprise, surprise – no new GP surgery in Newton Poppleford even after houses linked to its construction are completed!
Press Release:
“Statement From Coleridge Medical Centre and Clinton Devon Estates
To: Newton Poppleford Parish Council, District and County Council Representatives
Dear Paul
Please distribute to all Parish Councillors/add to Parish Council website/Newsletter
A statement from the Coleridge Medical Centre and Clinton Devon Estates regarding the proposed new medical centre in Newton Poppleford, near Sidmouth.
The Ottery St Mary-based Coleridge Medical Centre has withdrawn its interest in renting a proposed new GP surgery in the East Devon village of Newton Poppleford which was to be built by the landowner Clinton Devon Estates near to a development of 40 new homes at King Alfred Way.
A spokesman for the Coleridge Medical Centre said:
“It is with some regret that we have made a decision to withdraw from the intended move to new premises at King Alfred Way. Since 2012/2013, when this project first started, GP care and strategy for premises has evolved considerably across the country with much more emphasis on innovative ways of working and a broadening range of co-located staff to provide specialist support and in shared premises. Any changes to the existing premises landscape are referenced to move us towards, rather than away from, that deemed nationally as best practice for our populations.
We would like to thank the residents of Newton Poppleford for supporting the provision of a new branch surgery and to Clinton Devon Estates for committing to provide a building. We would also like to thank NHS England and NEW Devon CCG in assisting us reach this decision.
We are currently working with commissioners at NHS England and NEW Devon CCG to consider how best to meet the needs, not only of the people in the Newton Poppleford area but to our wider practice population. At this time we intend to continue to run the existing branch surgery within the village, while reviewing options for developing and integrating services in the longer term as the population grows and general practice continues to evolve.”
Planning approval for the GP surgery near to 40 new homes, 16 of which are designated as affordable housing for local people, was granted by the Planning Inspectorate in March 2017.
Leigh Rix, Head of Property and Land for Clinton Devon Estates, said: “As an organisation that has a very long association with this area we strive for sustainable development to help communities prosper for years to come. As well as providing a good mix of new open market and affordable homes, we had been very keen to provide a modern GP building for the village.
“After almost six years of jointly developing plans and specifications for a new surgery, it is understandably very disappointing that the Coleridge Medical Practice have felt unable to proceed in the current circumstances.
“Over the coming weeks, we will review the options available to us with our development partner Cavanna Homes.”
How to buy British nationality
Just be rich … doesn’t matter how you got rich, just have the moolah!
A surgeon speaks on community hospitals and NHS privatisation
“David Halpin FELLOW OF THE ROYAL COLLEGE OF SURGEONS knows what is needed – see his letter………
LETTER sent by DAVID HALPIN FRCS to the WESTERN MORNING NEWS
Dear Letters Editor, 25th April 2018
I reply to the letter from B Gelder (WMN April 23rd) entitled ‘Cottage Hospitals ease strain on the NHS.’ I have written before on this vital subject and listed their functions.
Recovery from serious illness or major operations requires loving and professional care, good nutrition and sound sleep. These were provided in good Community Hospitals. The last thing patients might get in the District General Hospital is a good night’s sleep. The noise, the moving of beds and the distress of disorientated patients do not allow sleep.
This retreat, supposedly for economy, from past high standards is part of what I call the ‘atomising’ of all that we hold dear. The dogmas of capitalism win out all the time. ‘Private good, public bad’. So with the privatisation of OUR railways under the Major government, the wheels were stupidly separated from the tracks to meet EU competition rules. There are about 3000 separate contractors working on the permanent way. There are probably more ‘contractors’ working in OUR NHS.
This is a sign of these shabby and confused times. Walking to Paddington Station past St Mary’s Hospital where I qualified as a doctor in 1964, I saw an ambulance – ‘NHS working in partnership with DHL.’
I understand that Teignmouth Community Hospital is likely to be closed completely. That catch phrase ‘not fit for purpose’ is being applied – ‘going forward’. The Philistines who order this will know that the original hospital was bombed by the Luftwaffe. Seven patients and three nurses were killed. They do not ‘remember them’. The first hospital to be built by the NHS, when the UK was on its uppers, was Teignmouth Hospital. Patients were treated for acute illness there by good GPs, nurses and physiotherapists, and others taken for further care from the big hospitals. It is being bombed again.
When this good hospital, with its views over Lyme Bay, becomes a 5 storey block of ‘luxury’ flats and second homes, the capital from the sale of the site will disappear in a puff of smoke. Taxpayers money is being burned in the NHS. The non-clinical staff in one Devon hospital now outnumber the clinical staff – nurses, physios, doctors etc. Watch BBC’s ‘Hospital’ from Nottingham as a quart fails to be squeezed into a pint pot. The proliferation of managerial personnel with unusual titles is excruciating and the distress of patients likewise.”
East Devon Watch 