Tagged: Treasury

Buy-out deal frees Hexham Hospital from PFI burden

The crippling Private Finance Initiative scheme which funded the building of the new Hexham General Hospital has been bought out.

This is thanks to a £114m loan agreement struck between Northumberland County Council and the Northumbria Healthcare NHS Foundation Trust. The trust has pledged that the £3.5m annual savings generated by the deal would be ploughed back into frontline services.

The hospital was built 10 years ago with the help of one of the first PFIs in the country.

But the burden of PFI repayments has taken its toll on the trust’s balance sheet.

So, after two years of delicate negotiations, and with Treasury approval, the trust has signed a loan with the county council to buy out the PFI. The council has access to loans through the Public Works Board below rates available to the trust.

The loan is the first of its kind agreed between a local authority and a healthcare trust.

Trust chief executive Jim Mackey said: “We are delighted that we are able to progress this agreement which delivers real value for money for taxpayers and helps save millions of pounds which will be reinvested directly in patient care.”

County council deputy leader, Coun. Dave Ledger, said: “This announcement is excellent news for local people and the local economy.

“The loan represents good value for the residents of Northumberland as it will reduce overall borrowing costs and release resources to support frontline health and social care services across the county.

“This is a result of the very strong and close working arrangements that have existed between Northumberland County Council and Northumbria Healthcare for a number of years, resulting in some of the best examples of integrated health and social care in England.”

Source –  Hexham Courant,  11 June 2014

Oxfam – UK housing strategy will let the poor fall through the cracks

From April this year, the UK government will cap overall spending on welfare. Chris Johnes (Oxfam) hoped this would encourage government departments to invest in long-term programmes tackling poverty to cut future spending… but the current social housing strategy seems to be aiming for exactly the opposite.

Tackling the high cost of welfare is one of the government’s top priorities. Isn’t it? Both the Prime Minister and the Chancellor have repeatedly said that cutting welfare costs is essential to getting the budget deficit under control. So after freezing many benefits for working age people last year, the government has since decided it will introduce an overall cap on many benefits starting from next financial year.

This should be a spur to government departments to look at ways they can get the welfare bill down. Indeed, our experience as a charity is that the Treasury is interested at looking at how longer term preventative programmes – which help people tackle deep rooted personal problems – can be supported to cut the need for welfare spend in the future. These kinds of preventative spending could include family support, more tailored back to work schemes, expanding the supply of cheaper housing and better vocational education.

However, nobody seems to have told the Department for Communities and Local Government (DCLG), which seems determined to continue a housing strategy for England that will further push up rents. The strategy – which doesn’t include plans for building new homes for “social rent” (ie genuinely affordable rent) – will also drive up the need for people on low incomes to draw on housing benefit to be able to afford their rent.

The reality is that the current mix of jobs and housing available means that many people in work, especially in the south east, need housing benefit to be able to pay their rent. And the DCLG’s policy is based quite deliberately on allowing the housing benefit bill to rise – it’s not their problem, it’s another department’s budget. However, it could soon become the tenants’ problem in a big way.

If the welfare spending cap is breached, then housing benefit is an obvious target – it’s one of the largest benefits covered by the cap (it costs £24bn per year) – which means the amount of housing benefit available per person could be reduced if overall welfare spend goes too high.

And if people on low incomes will no longer have their rents fully covered, then they will face their household budgets getting even more squeezed and being forced to choose between paying the rent, heating their homes or eating. In other words, severe hardship will be imposed on thousands, if not hundreds of thousands of families because different bits of government failed to work effectively together.

There is, of course, an alternative, as charities have been telling the Treasury and governments in other parts of the UK have been pursuing. This is to put proper investment in genuinely affordable social housing – it may be expensive initially, but its long-term impact on rents will save both government money and human misery in the future.

Source – Chris Johnes, Director, UK Poverty Programme, Oxfam

http://policy-practice.oxfam.org.uk/…m_TW_PandP_BAU

Coalition drags out the pain with promise of many more cuts

Vox Political

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The BBC has reported findings by the Institute for Fiscal Studies, showing that the Coalition government will be less than halfway through its planned spending cuts by the end of the current financial year (March 31).

The organisation said 60 per cent of the cuts were still to come.

This raises a few urgent questions. Firstly: This government was formed on the promise that it would balance the books by 2015, which presupposes that its entire plan for doing so would be in place long before then. We know that this ambitious claim was dismissed after years of failure, but part of the reason for this failure was that George Osborne stopped a recovery that was already taking place, and which would have led to economic growth of 20 per cent by now, if it had been allowed to continue (according to Michael Meacher MP). My question, therefore…

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Tory Priorities Writ Large

On the same day that the government announced it was scrapping the £180-million-a-year Social Fund for the destitute, a new survey showed that the big US internet companies operating in Britain have increased their UK sales last year by 18 per cent but paid even less tax to the Treasury than the year before.

Apple UK made £1 billion this country in 2011, but paid only £15.7m in tax. Last year its UK turnover rose £1.2bn, but its tax payments vanished to almost nothing – £1.7m, or precisely 0.1 per cent of turnover.

Facebook made £20m in the UK in 2011 and paid an almost invisible £200,000 in tax.

Last year its turnover nearly doubled to £35m, but its tax payments to Britain shrivelled to nothing at all.

Taking all the seven companies together – Apple UK, Google, Microsoft, eBay, Yahoo UK, Facebook UK and Amazon UK – their turnover in the UK last year was just under £3bn, but their tax payments totalled just £51m, or 1.7 per cent of turnover.

At the other end of the scale the Social Fund is being wound up by the Tories – something even Thatcher refused to do.

The Social Fund is the last helpline for the poorest families in extreme distress, often brought on by an unexpected financial crisis.

This last-resort lifebelt has been in place for the hardest-hit ever since 1948 and its removal will devastate families, often including children, leaving them literally destitute.

The Tories will no doubt argue that it’s part of the drive to make savings to reduce the budget deficit.

That claim won’t pass muster for two reasons. First, the deficit last year was £111bn, so cutting £180m will save 0.16 per cent – an enormously painful and destructive cut for an utterly minuscule saving.

Second, tackling the corporate tax cheats would be far fairer and produce vastly more money.

So why doesn’t the government get serious about industrial-scale tax avoidance?

Partly because HMRC has been significantly scaled back – and it started under Blair and Brown – as a result of industrial lobbying.

And partly because the Tories get half their annual income each year from the finance sector, so Cameron, Osborne and co aren’t going to touch the biggest tax crooks of all with a bargepole.

Of course the companies will come up with their usual plaintive mantra that they’re complying with the tax laws.

What they mean is they devise the most artificial contrivances they can think of to circumvent the weak and inadequate tax regulations that exist, knowing perfectly well that their practices are aggressively anti-social and contravene the national interest, but as long as they don’t actually fall foul of the letter of the law they have no interest in Britain whatever and will go on feathering their own nests – as well as, of course, the Tories’.

Source – BS News,  09 Jan 2014

Right Wing Think Tank Recommends Lower Wages For North East

Right wing “think tank” Policy Exchange (PE) – described by the Daily Telegraph as “the largest, but also the most influential think tank on the right” –  wants pay to be cut for public sector workers in the North East (and Merseyside, and the South West), pointing to research claiming that taxpayer-funded jobs in the region  pay as much as 3200 pounds more than their equivalents in the private sector.

(As usual I have problems with terms like “as much as 3200”, which probably means a few lucky people do, but the majority get nowhere near. But policies like this will always quote the highest figure earned by the minority, rather than the far lower one that is the lot of the majority. Just something to bear in mind…)

What the PE has in its sights is regional pay policies. Matthew Oakley, head of economics and social policy at PE : “Nationalised pay negotiation is not fit for purpose for the modern public sector. It is bad for the economy and bad for public services. While the unions should still have a strong role in the future, we should move to a system  where local public sector employers can decide how to negotiate salaries with employees in order to reflect the realities of their labour market.”

Which I translate as something like – employers tell employees ” lots of unemployment out there – either you accept lower wages or we find someone who will.”

Incidentally, could this be the same Matthew Oakley who was recently described by The Void as ” Britain’s biggest scrounger” ?   It certainly could.

Matthew Oakley has previously authored a paper on welfare reform which includes not only a demand for a greater use of sanctions for part workers, but astonishingly even pre-emptive benefit sanctions for people on fixed term contracts.  Oakley believes that these workers should be stripped of any entitlement to benefits at all if Jobcentre staff decide that they weren’t doing enough to find work even before they lost their job.

So impressed was Iain Duncan Smith with this swivel-eyed nonsense that he gave Oakley a non-job on the Social Security Advisory Committee (SSAC) – the body whose job it is to scrutinise social security reforms..  This means he is now paid  £256.80 a day of tax payer’s cash to provide so-called expert opinions on policies he helped create.

Prior to working at the Policy Exchange, Oakley was in another  tax payer funded non-job at the Treasury where he worked on a white paper outlining proposals for Universal Credit.  Now Iain Duncan Smith is to shovel yet more of our money into his grubby pockets by asking him to carry out what is laughingly called an ‘independent review’ of benefit sanctions.

Whilst over two million people are desperate for any job, Oakley now has three – and two of them at our expense.

Full article – http://johnnyvoid.wordpress.com/2013/09/19/policy-exchange-clown-in-charge-of-sanctions-review/

Nice work if you can get it !

But as pointed out by Neil Foster, head of policy  at the Northern TUC : “PE still fail to compare like with like since many of the jobs in the public sector  simply don’t exist in the private sector  and vice versa.

“They lost the argument on regional pay and I’d advise them to move on to other areas of research such as looking at the wealth at the top that has gone up during austerity, rather than arguing North East nurses, midwives, teachers and school cooks are overpaid.”

You might think that what all this proves is that the wages of private sector workers are being kept low by unscruprulous employers, and that rather than reducing the pay of the public sector, we should instead be raising the wages of the private sector.

Alternatively, you might think that if we should have lower regional wages, we should also have lower regional outgoings – lower power bills, food prices, transport, etc.  But “pay more, get less” is the unofficial motto of organizations like PE and the neo-liberal forces they serve.

You might also like to bear in mind that a study for the GMB union shows 631,000 public sector jobs have been lost since the Coalition came to power in 2010,
and the union predicts that fresh cuts being eyed by Tory Chancellor George Osborne will take that figure over a million before the next election in May 2015.

GMB national officer Brian Strutton said: “These statistics show the devastating effect of this Government’s austerity cuts on total public sector employment. Some parts of the country that are most dependent on the public sector to support their local economies have been hardest hit.The tragedy is that the worse is yet to come.

“The Office for Budget Responsibility’s forecast for net total public sector job losses during the lifetime of this Parliament means that the prospect for the next two years could be up to a further 400,000 job losses.”

Still, as we’ve often been told, the private sector will take up the slack and replace all those lost public sector jobs, albeit for lower wages.

It doesn’t seem to be happening. Isn’t that strange ?

You don’t think they might have been lying to us, do you ?