“Nearly 60 per cent of applications were from people aged 34 and under 34. …”
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Category Archives: Accountability
More flack for EDDC Leader Ingram on spending and transparency
Not looking good … now being attacked for wanting to employ consultants to tell him what town centre problems are:
“East Devon District Council ‘lacks good detailed intelligence about its towns and their economic wellbeing’.
Cllr Ben Ingham, leader of the council, admitted: “This is not a good state of affairs,” when questioned at Wednesday night’s full council meeting.
It came after Cllr Mike Allen asked questions over the decision of the portfolio holder for economy, Cllr Kevin Blakey, to commission a major study into town centres.
Cllr Allen asked for an indication of the cost proposed and in the interests of proper transparency, for the Consultancy brief envisaged be put to the next Overview Committee for discussion before any expenditure is committed. …”
https://www.devonlive.com/news/devon-news/east-devon-lacks-good-intelligence-3474769
“Leader says in hindsight, notes should have been taken when CEO met developers”
Owl says: Well, duh! And just how long has EDDC’s CEO been in the job? Where was his “hindsight”?.
And our “Leader” is now fully au-fait with the language if the previous majority party as far as giving non-answers is concerned!
Everything changes, nothing changes …
“At last Wednesday’s full council meeting, Cllr John Loudoun, asked questions around the keeping of notes from meetings that officers of the council are involved in.
Notes of meetings when senior council officers meet with developers over planning issues should be made in future, councillors have been told.
It follows an instance where East Devon District Council’s chief executive allegedly told developers to appeal his own council’s refusal of planning permission for the Sidford Business Park.
Paragraphs 13 and 14 of the Richard Kimblin QC final closing arguments at a planning inquiry held this said: “After the 2016 application was refused, there was a meeting with Councillor Stuart Hughes and the CEO of the Council. The CEO advised that the way to progress was to appeal. That is an extraordinary state of affairs.”
The claims, made both in writing and verbally, were unchallenged by East Devon District Council during the inquiry, but afterwards, an East Devon District Council spokesman said that Mr Williams did not advise the appellant of anything but the applicant chose to interpret the comments he did make as encouraging an appeal, and the comments were made in a ‘situation where a degree of hyperbole and exaggeration is not unusual’.
At last Wednesday’s full council meeting, Cllr John Loudoun, asked questions around the keeping of notes from meetings that officers of the council are involved in.
He said: “Sometimes officers from this Council, beyond those directly responsible for local planning matters, meet and/or discuss with developers their planning applications. Sometimes these meetings take place to discuss applications that this Council has failed to support.
“Does the leader of the council agree with me that when such meetings and/or discussions take place, it is most imperative that they are held in ways that give residents faith that the Officers are transparent and accountable in these matters?
“Does the leader agree with me that it would be appropriate that at such meetings, or in such discussions, there should be more than one Officer present, such as a legal adviser and/or planning officer? Do you agree that any meetings or discussion with developers when they relate to planning should have a formal record kept of what was discussed and agreed, and why?”
In response, Cllr Ben Ingham, leader of the council, said: “The circumstances surrounding any meeting will determine whether it is necessary for them to be held in any particular way. I have the upmost faith that our officers would appreciate the need to act in a way that ensures nothing untoward occurs.
“But in hindsight, it is probably a very good advice and many members and officers of the council may say in future they will.”
It was of a number of questions raised at the meeting relating to concerns about the processes of the council which followed what some councillors called the ‘shambles’ of the previous full council meeting which left councillors unclear as to what they were voting for.
Cllr Loudoun added: “At the last Full Council meeting there was lengthy debate around a motion. A Member at one point interjected and proposed ‘that the question now be put’ and the chairman put this point of order to the meeting.
“Many members did not fully appreciate the implications of voting for or against this point of order and when passed by a show of hands, there appeared to be confusion amongst some Members as to what had just been agreed. When the chairman invited the meeting to vote on the motion on the agenda paper, some Members appeared not to understand what was happening and what they were now being asked to vote on.
Once the meeting had voted on the motion some Members were confused and it was only at this point that it was fully explained what had happened and the implications of their first vote, but by this point the votes had been cast and decisions made.
“The meeting ended with some Members expressing frustration and/or confusion about what the meeting had decided. Does the Leader recognise this set of events and if he does, what would he recommend this Council does to avoid a similar set of circumstances occurring in the future?”
In response, Cllr Ingham said: “It is not for me to say what other members may or may not have understood. I understood what was happening but members are always able to ask for confirmation on what is going on and I am sure the Chairman would, in such circumstances, ensure that clarity was given on the procedures from the officers present. We have may acted at a speed that was not appropriate for new members.”
Asked by Cllr Paul Millar on the potential merits of ensuring Members can make informed decisions when asked to vote in Council meetings, Cllr Ingham said that any council or committee makes mistakes, but as the new council learns, he hopes members and officers will make fewer mistakes when acting in a hurry.
Cllr Eleanor Rylance also questioned why a significant number of meetings had been scheduled to take place during the half-term break. As well as the full council meeting, a Strategic Planning Committee, an Audit and Governance Committee, and a Scrutiny Committee meeting took place last week.
She said: “In the spirit of inclusivity, how is it that this council is wilfully disadvantaging anyone with school aged children, caring responsibilities for school aged children, or those who work in schools or other educational establishments, by organising major meetings including this one during school half term? This is entirely avoidable. Please can the council set its timetable with school dates in mind in the future?”
In response, Cllr Ingham said: “Whilst it would clearly be difficult to plan a yearly meeting cycle to accommodate school holidays, particularly bearing in mind the length of the summer holiday and the potential impact on the business of the Council, it would be helpful to consider if changes could be made in future. “
https://www.devonlive.com/news/devon-news/leader-says-hindsight-notes-should-3475242
How company debt (and greed and tax avoidance) will sink us all
“Corporate addition to high debt threatens to destabilise the world economy. Not my words – those of the International Monetary Fund.
A recent report by the IMF says that “in a material economic slowdown scenario, half as severe as the global financial crisis, corporate debt-at-risk could rise to $19 trillion —or nearly 40 percent of total corporate debt in major economies—above [2008] crisis levels.”
In other words, in an economic slowdown, many firms will be unable to cover even their interest expenses with their earnings. Countries most at risk are US, China, Japan, Germany, Britain, France, Italy and Spain.
One study estimated that in 2018 UK s FTSE 100 companies alone had debt of £406bn.
Sinking in debt
Low interest rates have persuaded companies to pile-up debt in the belief that they will be able to use it to maximise shareholder returns. The key to this is tax relief on interest payments.
Ordinary folk don’t get tax relief on interest payments for mortgages or anything else because successive governments argued that such reliefs distort markets and encourage irresponsible behaviour.
However, corporations get tax relief on all interest payments. Currently for every £100 of interest payment, companies get tax relief of 19%, the prevailing rate of corporation tax, which reduces the net cost to £81. The tax subsidy enables companies to report higher profits.
Companies do not necessarily use debt to finance investment in productive assets. The UK languishes near the bottom of the major advanced economies league table for investment in productive assets and also lags in research and development expenditure.
British companies appease stock markets by paying almost the highest proportion of their earnings as dividends. BHS famously borrowed £1 billion to pay a dividend of £1.3bn. Carillion used its debt to finance executive pay and dividends. Thomas Cook had at least £1.7bn of debt but that did not stop lavish executive pay and bonuses.
Fatal effects
Corporate debt facilitates profiteering and tax avoidance. Water companies have long used ‘intragroup debt‘ to dodge taxes. Typically, they borrow money from an affiliate in a low/no tax jurisdiction. The UK-based company pays interest which qualifies for tax relief and reduces the UK tax liability.
Many a tax haven either does not levy corporation tax or exempts foreign profits from its tax regime. As a result, the affiliate receives the interest payment tax free.
It is important to note that the company is effectively paying interest to another member of the group and no cash leaves the group. The inclusion of interest payments in the paying company’s cost base can also enable it to push up charges to customers, especially if has monopoly rights on supply of goods and services.
Thames Water is an interesting example here. From 2006 to 2017, it was owned by Macquarie Bank and operated through a labyrinth of companies, with some registered in Caymans.
During the period, Thames’ debt increased from £2.4bn to £10bn, mostly from tax haven affiliates, and interest payments swelled the charges for customers. Macquarie and its investors made returns of between 15.5% and 19% a year.
For the period 2007 to 2015, the company’s accounts show that it paid £3.186bn in interest to other entities in the group alone. Tax relief on interest payments reduced UK corporate tax liability. For the years 2007-2016, Thames Water paid about £100,000 in corporation tax.
Private equity entities use debt to secure control of companies and engage in asset-stripping. A good example is the demise of Bernard Mathews, a poultry company.
In 2013, Rutland Partners acquired the company and loaded it with debt, which carried an interest rate of 20%. This debt was secured which meant that in the event of bankruptcy Rutland and its backers would be paid before unsecured creditors.
In 2016, Bernard Matthews’ directors, appointed by Rutland, decided that the business was no longer viable and sought to sell it. However, they only sold the assets of the company which realised enough to pay secured creditors, Rutland and banks.
The big losers were unsecured creditors, which included employee pension scheme, HMRC and suppliers. The purchaser of the assets told the House of Commons Work and Pensions Committee that it offered to buy the whole company, including its liabilities, but the offer was declined by Rutland because by dumping liabilities it collected a higher amount.
What needs to change
There is some recognition that corporate addiction to debt poses a threat to the economy. Following recommendations by the Organisation for Economic Co-operation and Development, the UK has placed some restrictions on the tax relief for interest payments, but that is not enough.
An independent enforcer of company law is needed to ensure that companies maintain adequate capital. Companies need workers on boards to ensure that directors do not squander corporate resources on unwarranted dividends and executive pay.
The insolvency laws need to be reformed to ensure that secured creditors can’t walk away with almost all of the proceeds from the sale of assets and dump liabilities.
And finally, tax relief on debt needs to be abolished altogether.”
https://leftfootforward.org/2019/10/prem-sikka-how-companies-use-debt-to-line-their-pockets/
Does Boris Johnson want an election on 12 December so university students can’t vote?
“The December 12 date is really odd for many reasons. It’s so near Christmas, it’s after universities have ended their terms, etc,” the Labour leader said. “There’s lots of, lots of things very odd about that date.” …
Swire can change his mind on Brexit – we can’t
Owl says: Remember Swire started out as a Remainer!
“When the Withdrawal Agreement negotiated by Theresa May was debated in the House of Commons many Conservative MPs argued that they could not vote for an arrangement that would treat Northern Ireland differently from Great Britain. The revised deal negotiated by Boris Johnson envisages far greater divergence within the UK, yet is far more popular among Conservatives. Jack Sheldon and Michael Kenny explain how this about-turn has come about. …
During the debates on May’s deal, Boris Johnson himself argued from the backbenches that it would ‘not be good enough to say to the people of Northern Ireland that… they must be treated differently from the rest of the UK’. Jacob Rees-Mogg, now Leader of the House, claimed previously that by treating Northern Ireland separately the deal ‘seeks to divide our country’. Many other MPs made similar arguments even more forcefully, including Sir Hugo Swire, for whom placing part of the UK in a different position from the rest was ‘an appallingly dangerous precedent’. Our analysis showed that 49 different MPs argued May’s deal was bad for the Union ahead of the first meaningful vote in January, and 47 of those went on to vote against the deal. …
While there was little attempt to justify this u-turn in thinking on Northern Ireland’s relationship to the Union in Saturday’s debate, the editor of the influential Conservative Home website has made the case that ‘just because [Northern Ireland] is British as Finchley doesn’t mean that it can or should be governed in exactly the same way as Finchley – any more than Scotland or Wales should’. The dissonance between this line of argument and the claims pervading Conservative circles when May’s deal was being debated is very marked – as the DUP will certainly have noticed. Recent events in parliament have shone a harsh glare upon a fundamental tension between the delivery of a Brexit acceptable to its Conservative proponents and the implications of the DUP’s brand of political unionism. It was always likely that Brexit-supporting Conservative MPs were going to have to choose which of these goals to prioritise, and it should not come as a huge surprise that they have ultimately opted for delivering Brexit. What this decision means for the party’s relationship with the DUP will now become one of the most important, and unpredictable, questions in British politics. …
Water companies enraged that OFWAT is putting consumers before investors
“Top investors in the water industry have complained to the Treasury that the regulator Ofwat is being politicised and warned of a flood of appeals against its financial demands.
International investors that control suppliers including Anglian, Yorkshire, Affinity, South East and South Staffs led a delegation this month ahead of a crunch ruling on prices by Ofwat, due in December. They are reeling from the toughest draft settlement from the regulator in years and fearful of Labour’s pledge to renationalise the sector at a big discount to market value.
After years of taking huge dividends from water companies and piling debt onto them, while paying minimal corporation tax and overseeing scandals such as sewage spills and water leaks, utility investors have seen the industry and political environment turn toxic.
Ofwat, chaired by former Anglian Water boss Jonson Cox, stunned the sector in July when it rejected the spending plans of all but three companies and sent the other 14 back to the drawing board, demanding more efficiency, faster paydown of debt and better customer service. It will publish its final ruling on their 2020-25 spending plans in December.
The meeting on October 14 is believed to have included blue-chip investors such as German insurer Allianz, Singapore sovereign wealth fund GIC, Deutsche Bank’s wealth division and Australia’s IFM Investors. Among the issues raised was Ofwat’s independence and the dangers of it reacting to political pressure.
Cox has been on a crusade to clean up the sector. In an interview last year, Cox told The Sunday Times: “This industry still doesn’t accept that customers should be at the heart of this business. We are unwinding one of the last bits of the pre-crash bonanza: buying an asset and gearing it up.”
Investors also asked senior mandarins whether the Competition and Markets Authority had the resources to deal with simultaneous appeals against Ofwat’s financial stipulations. At least five suppliers are believed to considering appeals.
The funds called on the Treasury to assess the financial resilience of the sector, after companies including Thames and Northumbrian complained that Ofwat’s demands were “unfinanceable”.
Global investors have ploughed billions of pounds into former state-owned companies since the privatisation wave of the 1980s and 1990s, yet are increasingly reassessing whether the UK is still an attractive place to park their cash.
Ultra-low interest rates and the need for returns inflated asset values and led to a bidding war for infrastructure companies. However, the appetite for water companies has cooled over the past two years. The Sunday Times revealed in April that Labour planned to renationalise the industry at a big discount to market value, making deductions for “asset-stripping since privatisation”.
That and Ofwat’s clampdown have spooked local authority pension funds, which have belatedly begun pouring cash into infrastructure. GLIL, which invests the pensions of council staff, was among the attendees at the Treasury meeting.
Last month, Alain Carrier, European boss of the CAN$400bn (£239bn) Canada Pension Plan Investment Board, which owns a stake in Anglian, said: “It’s difficult for the regulator under the current political climate not to be seen to be very tough. The independence of the regulator is under some pressure.”
Ofwat said: “Our decision-making is independent from government and based on delivering the very best for customers. Investors have always made clear they value the independence of the regulatory regime.”
Source: Sunday Times (pay wall)
Indie councillor wastes no time holding EDDC Leader to account**
And some very interesting answers he gets too (and the questions of other councillors are also pertinent):
To answer questions asked by Members of the Council pursuant to Procedure Rules No. 9.2 and 9.5
** Apologies for the deletion of this post earlier today due to technical problems with the attachment.
Planning, dogs and tails: another correspondent writes
“The East Devon electorate were, indeed, hoping for a significant change by voting for an Independent Council and, therefore, it is frustrating to read such controlling comments from the Tory Councillor Philip Skinner (he who was responsible for the extending mahogany table fiasco and who lives in the rural village of Talaton which is not one of the proposed GESP Clyst Villages) stating that ‘this is a really exciting project and I hope people grasp it with the enthusiasm, that I have so we get the good things for the area that we live in’!
Who are the ‘we’ he is referring to? Perhaps, not the numerous residents of the 10 rural village communities of Poltimore, Huxham, Clyst St Mary, Clyst St George, Ebford, West Hill, Woodbury, Woodbury Salterton, Exton and Farringdon who appear to be the prime targets for his exciting large scale development? Living in the small, rural idyll of Talaton, he should be aware that those who have also chosen to live in rural village communities may not wish them to mutate into sprawling suburbs of Exeter and, therefore, many may question Councillor Skinner’s motives?
Yes – we all have to be forward thinking – but aren’t these 10 villages the very essence of the intrinsic nature and indispensable quality of East Devon? Some may be persuaded that the proposed idyllic concept of happy, peaceful, picturesque environments labelled ‘Garden Villages’ would be pure nirvana – but, unfortunately, the vision in planning terms is not always what you get in reality!
Sizeable growth in this North West Quadrant, without adequate road infrastructure improvements in the surrounding districts, already results in the regular gridlock of the entire highway network! ‘The cart before the horse’ approach of continuing large-scale commercial growth and adding more people to the equation before the provision of an appropriate, sustainable transport system is an unsatisfactory method for success.
There is no doubt that we must do better with designing new communities than we have in the past and East Devon District Council Planners are fully aware that there are lessons to be learned from pursuing misguided judgements and courses of action by barking up the wrong tree!
Hopefully, the Independents are canines with character strength and principled, with adequate bite at the sharp end! Dogs can control their tails but often wagging lacks conscious thought! Canine body language is so much more than just tail movements, so to achieve control, it is very important to pay attention to other factors. Furthermore, excessive tail wagging can often be associated with fear, insecurity, social challenge or a warning that you may get bitten!
Sidford Business Park already being touted for relocated Lidl
Or Alexandra Business Park – where its inadequate size and location for businesses was given as a reason for development of Sidford Business Park!
Shafted.
https://www.sidmouthherald.co.uk/news/sidmouth-lidl-relocation-possibility-raises-concerns-1-6335164
Independent councillor gets policy on car parking charges changed
“A motion put forward by councillor Paul Millar, to add car parking strategy to the list of policy areas which need the approval of full council, was approved on Wednesday (October 23).
Previously, final decisions on parking were made by the cabinet, which is made up of councillors from the ruling party.
As a result of Cllr Millar’s motion, cabinet can make recommendations to full council which will have the final say.
In its last meeting, cabinet decided to launch a consultation process on proposals to increase the hourly rate in East Devon car parks from £1 to £1.20.
The decision has been called in by the district council’s scrutiny committee which was due to hold an extraordinary meeting on Thursday (October 24).
A task and finish forum has also been set up to look at the issue.”
Tories pretend to try to solve problems they caused!
Er, who caused these problems?
“The housing secretary has warned that developers building poor-quality homes will have to “change their practices”.
Robert Jenrick called for a “systemic change” in Britain’s approach to planning and design, saying: “For too long there has been a misconception in the housebuilding industry that quality is the enemy of supply.
“In fact, experience shows us that it is those developments of the highest quality and the most attractive designs which are approved faster, sell faster and which are the most enduringly popular.”
Speaking at an event hosted by the Policy Exchange think tank and Create Streets, a research institute, he said: “Design now matters in this country and developers who bring forward poor-quality designs are going to have to change their practices.”
The government issued a national design guide this month setting out ten principles of good building. There was previously no accepted standard for new homes. The guide will be followed by a more detailed “national model design code” early next year. Local authorities will be encouraged to create their own versions of the code, giving communities a legal right to hold developers to account.
James Brokenshire, the former housing secretary, warned housebuilders in March that they must end “unacceptable” punitive costs and “nightmare” snagging problems in new homes if they wanted to continue to benefit from Help to Buy — the government-backed equity loan scheme that has supported home ownership. Some of its biggest housebuilder beneficiaries, such as Persimmon, have been criticised about the quality of their homes.
Mr Jenrick, 37, said that he would give “careful consideration” to how his department could use a revised version of the scheme in 2021 to stipulate improved build quality.
He also announced a “heritage preservation campaign” under which the government will commit £700,000 of funding for a campaign to encourage people to nominate buildings and assets in their local areas to be protected with listed status.”
Source: The Times
Local Enterprise Partnership: DCC scrutiny committee in crisis?
Comment as post:
“This positive change has long been requested by East Devon Alliance DCC Councillor Martin Shaw (Colyton and Seaton). See …
On 13 October I made a comment on the Heart of the South West (HotSW) Joint Scrutiny Committee meeting scheduled for the 17 October. I pointed out that attendance at this essential exercise in democracy had steadily fallen through the year from eleven to just five councillors [correction, should read six] and added my opinion that this scrutiny committee has all the appearance of being in crisis.
Sadly this view seems to have been confirmed from the October 17 meeting.
From the minutes and associated documents of this Joint Scrutiny meeting of 17 October attendance is recorded as follows, down again to a bare quorum of five:
(https://democracy.devon.gov.uk/ieListDocuments.aspx?MId=3572&x=1)
Present:
Councillor Jerry Brook Devon County Council (Chair)
Councillor Richard Hosking Devon County Council
Councillor Julian Brazil Devon County Council
Councillor Gareth Derrick Plymouth City Council
Councillor Barrie Spencer South Hams District Council
Apologies:
Councillor Ray Bloxham Devon County Council
Councillor Mike Lewis Somerset County Council
Councillor Jonny Morris Plymouth City Council
Absent:
Councillor Rod Williams Somerset County Council (Vice-Chair)
Councillor Ann Brown Somerset County Council
Councillor Simon Coles Somerset County Council
Councillor Lee Howgate Torbay Council
Councillor Karen Kennedy Torbay Council
Councillor Norman Cavill Taunton Deane Borough Council
Councillor Richard Chesterton Mid Devon District Council
Councillor Ian Dyer Sedgemoor District Council
[Only 16 councillors are listed though the Terms of Reference of the Scrutiny Committee sets the number at 17 – see Appendix 1 of the October briefing pack]
Three of these attendees: Councillors, Hoskins, Brazil and Derrick were also among the six attending the previous meeting in June. These Councillors deserve credit for taking their scrutiny responsibility seriously where the majority clearly have not. Note that not a single Councillor from Somerset attended. This is democratic deficit writ large.
As reported by Owl, the meeting did agreed that future meetings be webcast to continue to increase transparency of the Committee; and that public participation be adopted at future Committee meetings in line with Devon County Council’s public participation scheme. This is something that should have been included at the beginning but nevertheless represents progress.
In my comment I conjectured a number of reasons why members might find attendance to be a waste of their time and, mischievously, raised the rhetorical question as to whether HoTSW might be using creative administrative devises to make scrutiny difficult or seem unimportant. So it is interesting to read, from the minutes that among the topics discussed were the following:
1. the challenge of actively scrutinising the LEP when funds had already been allocated and projects begun;
2. the need for Scrutiny to have sight of policies before they are agreed and implemented by the LEP, to add value and effectiveness to the governance process;
3. the requirement of the Committee to scrutinise strategic documents and the cost effectiveness of the LEP.
These are excellent questions which would certainly have benefitted from members of the public being able to follow the details through webcasting. We now need to know the HotSW’s response.”
Young people – PLEASE register to vote then DO it
Go to: gov.uk/voting
“Plan for fracking ‘years behind schedule’ and has cost taxpayer £32m”
Imagine what we could have done with £32m!
How did our MPs vote?
No surprises – both for exit, both for no scrutiny.
DCC opens up its Local Enterprise Partnership Scrutiny Commmittee to public scrutiny and participation
This positive change has long been requested by East Devon Alliance DCC Councillor Martin Shaw (Colyton and Seaton).
See minutes below for a full account of discussion at the meeting – about what is working well and (more importantly and interestingly) what is not:
https://democracy.devon.gov.uk/ieListDocuments.aspx?MId=3572&x=1
“UK to use £1bn meant for green energy to support fracking in Argentina”
“The UK is planning to invest in Argentina’s controversial oil shale industry using a £1bn export finance deal intended to support green energy, according to government documents seen by the Guardian.
UK Export Finance, the government’s foreign credit agency, promised in 2017 to offer loans totalling £1bn to help UK companies export their expertise in “infrastructure, green energy and healthcare” to invest in Argentina’s economy.
Instead official records, released through a freedom of information request, have revealed the government’s plan to prioritise support for major oil companies, including Shell and BP, which are fracking in Argentina’s vast Vaca Muerta shale heartlands.
One government memo, uncovered by Friends of the Earth, said that while Argentina’s clean energy sector was growing, it was “Argentina’s huge shale resources that offer the greatest potential” for the UK. …”
“£14 Billion ‘wasted’ by the government on ‘botched’ outsourcing”
“The government has wasted at least £14 billion between 2016 and 2019 on poorly managed outsourcing contracts finds a report from the Reform Think Tank.
The report is based on an analysis of investigations by the National Audit Office NAO), Parliamentary Select Committees and other statutory bodies. The total value of the contracts investigated was £71.1 billion.
The Ministry of Defence accounts for 27 per cent of this waste. This includes a 17 year delay in the full decommissioning of nuclear submarines and a poorly planned army recruitment programme. This saw soldiers forced into backoffice jobs to clear an IT backlog created by an untested IT system created in partnership between the army and Capita.
Other examples include the vastly expensive liquidation of Carrillion, which cost the government at least £148 million as well as involving the time and resources of 14 government departments and public bodies.
Also the Department for Education continued to give Learndirect £105 million after the programme was rated ‘inadequate’ by Ofsted. This should have led to the funding being withdrawn.
A third of the government’s annual budget is spent on outsourced services, at a total of ££292 Billion.
Reform is now calling for an independent regulator of the outsourcing sector which – unlike the NAO or Select Committees would have the power to enforce change and impose sanctions on failing providers.
Senior Researcher and Reform procurement lead, Dr Joshua Pritchard said “Our public services cannot function without outsourcing. But when it goes wrong, it’s taxpayers who end up footing the bill
“The £14.3 billion wasted as a result of poorly drawn up and managed government contracts is inexcusable.
“We need a new regulator with the power to prevent public money being squandered because of totally avoidable mistakes.”
£14 Billion ‘wasted’ by the government on ‘botched’ outsourcing
Nearly 75% of government contractors are based in tax havens
“Almost three-quarters of companies who have been given major government contracts have operations based in tax havens, according to a new report.
Value Added, published on Sunday by the thinktank Demos, reveals that 25 of the government’s 34 strategic suppliers – organisations that receive £100m or more in revenue from the government – operate in offshore centres.
According to estimates, they account for about a fifth of total central government procurement spend. Of these, 19 had operations in jurisdictions included on the EU’s “blacklist” or “greylist” of countries that are considered to be non-compliant with EU international standards for “good tax behaviour”, according to the report.
The Labour MP and former chair of the public accounts committee, Margaret Hodge, said it was “perverse that the government continues to pay significant sums of taxpayer money to big corporations that practise tax avoidance on an alarming scale”.
There are claims that aggressive use of tax havens can distort competition.
The Labour peer, Lord Haskel, added: “For too long large international tech companies have failed to pay their fair share of tax while being rewarded with government contracts, leaving British companies at a competitive disadvantage.”
The Demos report states: “Large multinational companies, for example, continue to squeeze their tax contributions ever lower: the OECD estimates that US$100–$240bn (£78bn-£186bn) is lost globally in revenue each year from base erosion and profit shifting by multinational companies.” …”
East Devon Watch 