Thursday 25 April 2013

Breaking the Code and the Healthcare Chain

'In the conduct of their parliamentary duties, Members of the House shall base their actions on consideration of the public interest, and shall resolve any conflict between their personal interest and the public interest at once, and in favour of the public interest.' - the Lord's Code of Conduct

The Lords have spoken. The coalition with a little help from Labour Peer, Lord Warner chose to vote in favour of the government to keep section 75 regulations of the Health and Social Care Act in place. In doing so, they imposed increased legal pressures on the new commissioners to put out services to tender, which will fragment the NHS into the hands of private companies.

Tuesday 23 April 2013

Healthcare Coup: The Lords Didn't Save us the First Time

Lord Tim Clement-Jones
In early 2012 the Lords voted in favour of the Health and Social Care bill, the final step in turning it into an Act. As the Lords sat in the house to debate and vote on the bill, research conducted by Social Investigations revealed the Lords were riddled with private healthcare interests across all parties. Despite these recent or present financial links to private companies involved in healthcare, they were allowed to debate and vote. 

Now, for the second time of asking the Lords are about to pass or reject a key piece of legislation that will affect the NHS to such an extent its very existence is in the balance. Will they or will they not choose to vote for or against section 75 Regulations of the Health and Social Care Act. If it is the former, then if passed will sound the death knell to the NHS.

Tax Haven? No Contract

The message proffered by David Cameron when he spoke at the World Economic Forum in Davos was tax avoidance would become a priority of the UK’s presidency for this year. In reality, the government acts in the opposite manner, rewards those companies who channel money to tax havens with further contracts paid for by the taxpayer.

The calls for the government to bring about an end to tax havens has continued to grow ever louder as the general public observe the stripping of the welfare state, whilst billions of pounds exits the county into offshore accounts. Many of these companies are in receipt of taxpayer’s money, which are handed contracts by cash-strapped councils who continue to work with the organisations despite their dubious tax practices.

Rights for Shares: No Mandate, Unwanted, Rejected

Michael Fallon
George Osborne has maintained his stance to weaken worker protections in exchange for shares. In doing so he exposes himself as utterly undemocratic, and highlights the need for the unions to regain some strength. 

The latest chapter of the undemocratic tale that threatens to shred hard-earned worker protections is about to reach a conclusion. The Lords have just voted for a second time to reject plans to swap protections for shares, a policy rejected by business as unworkable and unwanted.

The process began when David Cameron asked Adrian Beecroft, a venture capitalist; a funder to the Tory party and investor in pay-day lender Wonga, to write a report on ways to grow the economy. The report focused largely on how difficult it is to dismiss someone, and that the process 'makes it too easy for employees to claim they have been unfairly treated'.

Wednesday 10 April 2013

Tax Havens: Outsource Company's Half Billion Transfer

A private outsourcing company who are in receipt of one of the highest government spends have channeled over half a billion pounds into an offshore tax haven.

The Pears family’s property empire began back in 1950 when the grandfather ran the humble business of three greengrocer stores in North London. Today however, they control Trillium Holdings which owns about a third of the Department of Work and Pensions (DWP) estate, including job centres, the pension service and child maintenance offices.

Trillium and its subsidiary companies - are responsible for a £3.2bn 20-year deal to manage and provide property services for the DWP offices.

This is where it gets complicated. The parent company of Trillium Holdings is owned by London Wall Outsourcing, which in turn is owned by London Wall Outsourcing Holdings Limited. This company is incorporated in the British Virgin Islands. The ultimate controlling entity is the B Pears family trust in Bermuda.

Since 2008, London Wall Outsourcing accounts reveal that the vast sum of £666.7m  has been sent in dividends to its Virgin Island based parent.

The British Virgin Islands appeared in the news recently in dramatic fashion, after a massive leak of over 2 million emails and documents revealed a host of political leaders and wealthy individuals whose fortunes are stored in the tax haven.

The Pears family control a property empire valued at £6bn through a labyrinth of companies. Until her death in 1999, the matriarch Clarice Pears was one of the country’s richest women, with a fortune that surpassed that of the Queen. The Pears brother, Mark, Trevor and David, have an estimated wealth of £1.7bn, which ranks them at 38 on the Sunday Times Rich List.

One of the Pears brothers, Trevor, part-funded David Cameron’s leadership campaign in 2005 with two £10,000 payments. The Prime Minister has said tax havens and avoidance will be key part of the G8 summit in June this year, yet here we have his leadership being part-funded by a director of a company who are involved in tax havens.

In a rare interview given to the Telegraph, director Mark Pears said “We have got nothing to hide, but we are a private company”.

The business empire is run by the William Pears Group, which has been built over the last sixty years and encompasses residential property, offices and fund management. The latest accounts reveal the family company quadrupled their profit over the last year. One of the family’s property coups has been the purchase of a vast chunk of the DWP estate.

In 1998 under Blair, the then Department of Social Security transferred the management and ownership of its estate to Trillium, which had been set up by two entrepreneurs and was later bought by the property company Land Securities. The government obtained £250m for its estate and agreed a £2bn contract for serviced accommodation until 2018.

In December 2003, the Land Securities contract - known as the PRIME agreement extended to cover the Employment Service estate. The company bought the offices for £140m and agreed a £1.2bn deal to provide serviced offices. A NAO inquiry concluded that the deal was good value for the taxpayer and justified.

Six years later, Land Securities sold Trillium to the William Pears Group for £750m, which included the DWP estate and the government contracts. The changeover of more than 300 government offices to a company who’s ultimate ownership lies in an offshore company was not undertaken.

The DWP is paying about £464m a year for services to Trillium, but the company has also seen a steep increase in the value of the offices it now owns. Trillium,
who are advised by Conservative Peer Lord Griffths of Fforestfach, values its DWP estate at more than £1bn.

The group’s use of tax havens will be even more frustrating for the taxpayer given the fact that the company’s revenue is hugely bolstered by British public spending; a situation that looks set to significantly increase. In 2012, the government made an announcement that a new organisation to manage Defence property was to be formed, called the Defence Infrastructure Organisation. The new programme will see contracts of MOD facilities across England and Wales drawn up, worth up to £4.35bn and Telereal Trillium, who are a member of free market think tank Reform, have been short-listed as part of one of three consortia approved for making bids for the MOD estate contracts.

See Telereal Trillium Holdings Accounts (scroll to bottom to see link to London Wall)
See London Wall Outsourcing Accounts (scroll to bottom to see link to BVI and Bermuda)

Friday 5 April 2013

Abolish ACOBA

The Chair of the committee that advises on business appointments to departing senior civil servants is a director of a company that has won a contract related to the Health and Social Care Act in which he voted in favour.

Lord Lang of Monkton is the chair of the Advisory Committee on Business Appointments (ACOBA). Set up in 1975, the remit of the committee is given by the Chairman Lord Lang on the website

‘It is long-standing government policy that it is in the public interest that those with experience in government should be able to move into business or other areas of public life and it is equally important that in the taking up of an appointment, there is no cause for suspicion of impropriety.’

Lord Lang of Monkton is also the director of Marsh & McLennan, a risk and strategy management company that amongst other services helps ‘hospitals, insurers, pharmaceutical companies and industry associations understand the implications of changing policy environments". 

Despite this interest, Lord Lang along with 142 other peers with recent or present financial links to companies involved in private healthcare, was able to vote on the Health and Social Care bill helping it become an Act. The Conservative peer did indeed vote in all key divisions loyal to his party.

In February 2011 Marsh was appointed by the Department of Health to conduct an ‘industry review’ of the NHS Litigation Authority. The objective of the review was to ‘identify opportunities to introduce greater commercial management and practice to services.

Early days
ACOBA was initially created to provide advice on applications from the most senior Crown servants who wish to take up outside appointments after they leave Crown service. The work of the committee then expanded from 1995 to provide advice to Ministers on their employment for two years after leaving office.

The organisation’s inability to prevent the conflicts of interests that riddle both parliamentary houses led the transparency campaigners Spinwatch to call for ACOBA’s abolition.

In written evidence submitted to the Public Administration Committee on a report on business appointment rules, they pointed out the danger private interests being in a position to gain ‘a competitive advantage by virtue of the inside knowledge, contacts and networks developed while in (temporary) public service.’

Further evidence focused on McKinsey, the management consultancy company that encouraged the £20 billion cuts the NHS is now forced to apply and who made several suggestions to end the free at the point of need in Northern Ireland.

Spinwatch pointed out how Tom Kibasi who ‘started at McKinsey in 2004, left two years later to become Senior Policy Advisor to chief executive of the NHS David Nicholson, and moved back to McKinsey in 2008, where he’s been busy helping the DH reform the system.’ Further revolving door behaviour came in the form of David Cox, who ‘worked in the NHS, jumped ship to McKinsey, then moved to the Conservative Party’s “Implementation team” for nine months, before settling at NHS London as “Strategy Manager” responsible for “cutting-edge system-wide design and planning of London’s healthcare system strategy.”’

Ex-NHS hospital head Mark Goldman is now an adviser for the ‘McKinsey Hospital Institute, (which contracts its services to NHS hospitals); ex-McKinsey consultant Nick Moberly who is now CEO of Royal Surrey County Hospital; Dr Doug Russell, ex-medical director of Tower Hamlets and now senior advisor to McKinsey.’

Such links are but the tip of the iceberg, which Spinwatch rightfully concluded continue despite the existence of ACOBA, which led them to conclude ‘We believe that ACOBA is an ineffective body that should be abolished and replaced with a statutory regulator.’

All civil servants who go through the site are told either it is okay to take up this job without conditions or if conditions apply then a standard reply is given such as - so long as it is on the understanding that the person ‘would not draw on any privileged information from his time in Government.’

When Jim Easton left his position as ‘Director of Improvement and Efficiency’, at the Department of Health to become Managing director of Care UK, ACOBA stated that there must be a waiting period of three months from his last day of service; that for 12 months, he should not become involved in advising on bids or contracts for Department of Health business; and that, for two years from the same date, he should not become personally involved in lobbying UK Government on behalf of his new employer.

Do you trust that this won’t happen in some form? Do we honestly believe that when a person moves to a corporation they do not pass on information to their corporate employer on government thinking!

The line between public servants and corporate employees is practically non-existent which Spinwatch suggests would be much better served with a statutory regulator because ACOBA lacks ‘teeth’. ACOBA has no enforcement powers, so even if a person was to step out of line, nothing would be done, which is why Paul Flynn, Labour’s tireless campaigner on lobbying described it as a ‘Committee of Futility.’

In the meantime, they can start improving things by removing a chairman who voted on a health bill despite a financial link to a company who earned a contract from the NHS on the changes before it became an Act. A Lord who offered his services to a fake lobbying company in a 2010 Channel 4 sting. 

The committee is utterly flawed, the work they do has made no difference to combat the problems of the revolving door of civil servants working in the private sector only to return on the corporations behalf.
I add my voice to those of Spinwatch and Paul Flynn calling for its abolition. Also the resignation of Lord Lang from both ACOBA and the Lords.