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.” …”

https://www.theguardian.com/world/2019/oct/20/tax-havens-uk-government-pays-millions-strategic-suppliers?CMP=Share_iOSApp_Other

Tory donors can, and do, control Prime Ministers

“Two former Conservative prime ministers lobbied a Middle Eastern royal family to award a multi-billion dollar oil contract to a company headed by a major Tory donor, the Guardian has established.

In March 2017, while in Downing Street, Theresa May wrote to the Bahraini prime minister to support the oil firm Petrofac while it was bidding to win the contract from the Gulf state.

Two months earlier, and just six months after stepping down as prime minister, David Cameron promoted the company during a two-day visit to Bahrain where he met the state’s crown prince.

Cameron was flown back to Britain on a plane belonging to Ayman Asfari, Petrofac’s co-founder, chief executive and largest shareholder. Petrofac did not ultimately win the contract.

Asfari and his wife, Sawsan, have donated almost £800,000 to the Conservative party since 2009. The donations were made in a personal capacity.

Documents obtained by the Guardian raise questions about how governments should best manage the perceived potential conflicts of interest generated by donations from business figures to political parties.

The government said it was routine for ministers to support British businesses bidding for major foreign contracts. Petrofac said official support had been obtained through entirely proper channels.

The Serious Fraud Office (SFO) has been investigating Petrofac over suspected bribery, corruption and money laundering for at least two years. …”

https://www.theguardian.com/politics/2019/oct/15/revealed-cameron-and-may-lobbied-bahrain-royals-for-tory-donors-oil-firm?CMP=Share_iOSApp_Other

Millionaire slum landlords … Times (harrowing) special investigation … disgusting flats as small as parking spaces for £800+ per month

The Times today is doing a heart-rending expose of modern slums, slum landlords and the links between these landlirds and donations to the Tory party.

There is a heart-breaking story of one such young mother living with her sick and asthmatic 6 year-old young son in the most appalling conditions in a flat in Croydon – placed there by Waltham Forest council, which is 20 miles away. They pay £800 per month for her to exist there – one cannot say “live”. Conditions worthy of the very worst Victorian slums.

In a second article, the newspaper looks further into the types of properties and their landlords and the loopholes that allow them to benefit from these apalling places. They find:

“The developers have exploited a change in planning rules to convert offices into hundreds of flats without any minimum size requirements, prompting claims from experts that they are building “some of the worst homes in Britain” and the “slums of the future”.

Flats costing £800 a month are as small as 14 square meters (150 sq ft), barely bigger than the size of a typical parking space.

Families are living on industrial estates and alongside busy roads, with some residents claiming that mould, noise and anti-social behaviour inside the buildings are damaging their health.”

They then go on to turn the spotlight on three such landlords:

Caridon, a property group founded by Mario Carrozzo, receives at least £8 million in housing benefit payments to house hundreds of tenants in flats as small as one-third of the minimum size which would be required under the planning regime;

Joel Weider, the owner of a double glazing company, has converted office space in Leicester, Aylesbury and south London, including flats branded a “hell-hole” by an MP;

A third developer, Anwar Ansari, a former eye surgeon, rents small studio, one and two-bed flats to tenants, including a former office block which has been cited for fire safety breaches.

A change in permitted development rights introduced in 2013 means that developers do not have to adhere to normal planning standards when converting offices into residential housing.”

A further article goes on to look at how much money these “developers” are raking in:

“Caridon

Mario Carrozzo’s sprawling Surrey mansion was once owned by a Premier League footballer and boasts a tennis court, indoor swimming pool and cinema. The £6 million home has three sitting rooms, a gym, spa and games room with bar. It is a far cry from the tiny flats his property empire is built on.

Caridon Group flats are among the smallest in the country, with some measuring 14 square metres (150sq ft). Three of these flats would fit into Mr Carrozzo’s cinema room.

The conversions include Token House in Croydon, where the smallest flats are 15sq m (160sq ft). In one, a sofa and bed fill the flat. The rent is almost £800 a month. “I can open my fridge and make a cup of tea or answer the door while I’m still lying in my bed,” one tenant said. …

Joel Weider

Located in a south London industrial estate with lorries passing near by, a former office building has become home to dozens of people including families. Many of those living in Connect House’s 86 flats, some of which are only 14sq m (150sq ft), have belongings piled up in suitcases and boxes because of a lack of space. Residents have reported breathing problems and rashes which they claim have been caused by damp and mould. The smell of cannabis fills the corridors. A bag with traces of a white powder lies discarded.

The developer behind it is Joel Weider, the owner of a double glazing company who bought the property for £3.1 million in 2015. …

AA Homes

AA Homes and Housing is owned by a Labour donor, Anwar Ansari, 59, and has property holdings worth more than £170 million. Dr Ansari trained in London as an eye surgeon but is now a full-time developer.

AA Homes and Housing is behind at least five big office-to-residential conversions and rents mainly to private tenants. The flats are generally larger than those created by Caridon and Mr Weider but are often still below space guidelines set out by the government.

The company owns a five-storey former NatWest office building in Croydon. A previous owner had sought permission to convert it into 34 flats but Dr Ansari squeezed in an extra 20. In 2017, the fire service issued an enforcement notice over safety concerns including a locked fire escape, poor ventilation and defective fire doors. The company was also fined £20,000 for failing to secure a landlord licence for 36 of the building’s privately rented flats. It is contesting all of these findings.

Dr Ansari and his wife Hina live in a sprawling estate near Caterham, Surrey. …”

Surprise, surprise: the business people running Local Enterprise Partnerships are not attracting funding – from business people!

As Owl has been saying for YEARS – THESE EMPERORS HAVE NO CLOTHES!!!!! Neither do they have transparency or accountability.

It’s verging on the corrupt, definitely a conflict of interest and is certainly unethical – it means a very, very few business people, taking no risks for themselves or their businesses, divvying up OUR money for their own pet projects, with almost no oversight from the councils they have robbed of funds and no loss for them if projects fail or over-run in time or cost.

A national scandal.

“Private sector firms are not matching public sector funding for local regeneration, senior civil servants have admitted.

Two senior civil servants at the Ministry of Housing, Communities and Local Government told MPs on Parliament’s Public Accounts Committee (PAC) that cash from the EU, public sector and higher education are still the main sources for funding regional development projects.

The department’s permanent secretary Melanie Dawes and director general Simon Ridley said match funding for the £9.1bn Local Growth Fund is largely dependent on match funding from councils and other public bodies.

Ridley also admitted there were still challenges over transparency and the boundaries of some Local Enterprise Partnerships (LEPs).

The LEPs were set up following the abolition of regional development agencies with the idea that they would be a partnership between business and local government – with an expectation that firms would help funding regional regeneration.

Ridley told the committee that the main private sector input into the LEPs is the time and expertise of board members who work for free.

Committee member Anne Marie Morris said: “Clearly, you are having the private sector involved, so how come you haven’t got a significant financial commitment from them?”

Ridley responded: “The capacity funding we give requires match from the LEP in different ways.

“A large number of business people on the boards do it without renumeration. A lot of the capacity support around the accountable body that the local authority provides is paid for by the LEP.

“Our core expectation was to set up partnerships between the private sector and local government to think about local area development.

“Some of those funding streams are matched by private sector funding schemes.”

Committee chair Meg Hillier asked if developers and construction firms were giving over and above Section 106 contributions to enable projects.

She said: “There is a danger that without having any skin in the game, businesses can walk away and local taxpayers end up picking up the bill.”

Ridley replied: “What the LEP is seeking to do is bring forward projects in the local area that wouldn’t otherwise be coming forward.

“They are often funded by more than one funding stream from the public sector.”

The committee also challenged the pair over a claim that LEPs tended to go to the top-five local employers and as a result, other firms were being left out of key decisions.

Oxford University has become a major decision-maker for its LEP, the committee heard.

Committee member Layla Moran asked: “How do we know that everyone who is a stakeholder in this money is actually involved in the decision?”

Hillier also questioned if the LEPs were accountable, citing Oxfordshire, where meetings were not being held in public.

Dawes said the use of scores in the LEPs annual performance review were conditional for funding being released and this had impacted on responses.

She said: “The real test is how it feels for local communities and I think that’s something that’s very difficult for us to judge in central government. We are on a bit of a journey here. It’s going to take a while.”

Ridley said local authorities had a crucial role in oversight, specifically through Section 151 officers who are ideally placed to deal with complaints.

He said: “All LEPs have got their complaints procedures. We have a clearer role realisation with the accountable body and the 151 officer, so they [the public] might write to them.

“The section 151 officer does have to get all the information that goes to the LEP board. I can’t personally here guarantee that absolutely all of that is in front of every scrutiny committee.”

Dawes confirmed the department has no metrics for assessing complaints being made about the LEPs.

MPs also raised concern about territorial battles between LEPs and combined authorities.

Decisions have still yet to be made about the boundaries in nine LEPs.

Dawes told the committee: “There are legitimate reasons why these geography questions are there. We are working actively with them.

“What ministers will have to work through is whether to impose a decision centrally.

“That would be a matter of last resort.”

Businesses failing on LEP match funding, MPs told

Tories for Trumpery? Drafting new law to protect MPs on party overspending

Tories draft law to protect MPs if parties overspend

Conservative ministers are drawing up a new law to protect MPs and party officials from prosecution if their national parties overspend during elections, leaked documents disclose.

It follows the conviction in January of Marion Little, a Tory party organiser from head office, and the acquittal of the MP Craig Mackinlay after they were accused of breaking electoral law as the party fought off a challenge from Nigel Farage in Thanet South. …

Transparency campaigners believe the government’s latest move is an attempt to avoid future prosecutions and would overturn a ruling by the supreme court.

Alexandra Runswick, the director of Unlock Democracy, said a “test of authorisation” would give candidates and party officials another level of defence from prosecution. “Such a move would not appear to be about reinforcing and strengthening electoral law. This would instead protect party candidates and open up the possibility of outspending rivals.”

Plans for a new law have emerged in correspondence seen by the Guardian and sent to cabinet ministers by Kevin Foster, the minister for the constitution.

“Legislation currently requires candidates to account for free or discounted goods or services that are made use of by or on behalf of the candidate. There have been calls to amend this legislation to include a test of authorisation by or on behalf of the candidate,” he wrote.

Foster told members of a cabinet subcommittee that the law on notional expenditure was tested in July when the supreme court ruled that the statutory requirement for an election candidate is to declare notional expenditure incurred on their behalf during a campaign. This might arise where a national party provided additional campaigning support in the constituency and was not limited to authorised campaigning.

Foster wrote: “There is a concern that candidates, their electoral agents and others acting on their behalf could be operating under legal risk. I am seeking the committee’s agreement to announce at an appropriate time that the government is exploring options to clarify the law on notional expenditure to alleviate the concerns highlighted. Any amendments in this area of law would require primary legislation,” he wrote.

Little, who had been employed by Tory campaign headquarters since 1974, was charged with three counts of encouraging or assisting an offence related to the filing of election expenses. …”

https://www.theguardian.com/politics/2019/may/21/tories-draft-law-protect-mps-party-overspend

“Shadow state” and privatisation – part 4

“Police have launched a criminal investigation into allegations of fraud at the UK’s largest government-funded apprenticeship provider.

Derbyshire constabulary said its specialist fraud investigation unit has begun a formal fraud investigation into the collapse of 3aaa, which was training 4,216 apprentices at companies including Ocado, Volkswagen and the National Grid.

“A formal criminal investigation has been launched into 3aaa,” a police spokesman said. “This follows a number of allegations of fraud that have been made by the Department for Education against the firm. Officers from Derbyshire constabulary’s specialist fraud investigation team will now begin the process of making formal inquiries into these allegations.”

The firm, which received £31m of government money last year, was placed into compulsory liquidation in October 2018 after the DfE withdrew all funding following allegations of fraud.

More than half of the apprentices being trained by 3aaa – which stands for aspire, achieve and advance – have been left in limbo by the collapse. Almost 2,000 of the 4,216 apprentices have been moved to new providers.

The founders of 3aaa, Peter Marples and Di McEvoy-Robinson, resigned as directors of the company shortly before its collapse last year.

Separate to the fraud allegations, an investigation by the Guardian and the higher education journal FE Week revealed that 3aaa had spent £1.6m of its mostly government-funded income on professional sports sponsorship.

The money was spent on sponsorship between 2015-18, despite the firm making a £2.8m pre-tax losses in the 18 months to January 2018, according to unpublished company accounts.

It spent £480,000 to become the “principal partner” of Derbyshire county cricket club, which includes shirt sponsorship and the right to rename the club’s 147-year-old ground as “the 3aaa County Ground”.

The sponsorship deal gave Marples and McEvoy-Robinson access to the team’s 1870 Business Club – a “relaxed and informal environment where local businesses can meet, create new contacts and watch first-class cricket”. Marples and McEvoy-Robinson are seen in the club’s team photo.

There is no suggestion that the sports sponsorship deals form part of the police fraud investigation.

A DfE spokesperson said: “As a criminal investigation is now under way, it would be inappropriate to comment further at this time.”

It is the second time the DfE has investigated alleged wrongdoing at 3aaa. A previous investigation in 2016 by the auditing firm KPMG found that 3aaa had been overestimating its apprenticeship success rate.”

https://www.theguardian.com/uk-news/2019/mar/18/derbyshire-police-criminal-inquiry-failed-training-firm-3aaa-fraud-allegations-department-education

People with certain convictions to be barred from being councillors

“The government is to strengthen rules preventing people found guilty of serious crimes from serving on local councils, it has been announced.

Local Government Minister Rishi Sunak said the new rules would mean any person who is subject to an Anti-Social Behaviour Injunction, a Criminal Behaviour Order, a Sexual Risk Order or who is on the Sex Offenders’ Register, would no longer be able to stand for elected office in their community.

Current conditions make clear that anyone convicted of an offence carrying a prison sentence of more than three months is banned from serving as a local councillor.

The new measures will see the disqualification rules changed to include the alternatives to a prison sentence as a barrier to becoming a councillor.

They will require changes to primary legislation, in particular the Local Government Act 1972, the Local Democracy, Economic Development and Construction Act 2009, and the Greater London Authority Act 2009.

The government will “look to identify a suitable legislative opportunity to bring the changes into law”.

Once the rules are implemented, councils across England will have the power to prevent individuals from standing as a councillor or mayor at the point they trigger the revised disqualification criteria. These proposals will not apply retrospectively, the government said.

Sunak said: “Elected members play a crucial role in town halls across the country, and are the foundations of local democracy. They are community champions, and have a leading role to play in building a better society for everyone.

“With such an important role comes great responsibility, and these changes will protect residents while upholding the values and high standards of behaviour we all expect.”

The move follows a consultation. The government’s response can be found here.

https://www.gov.uk/government/consultations/disqualification-criteria-for-councillors-and-mayors