Download or read book The creation and sale of Northern Rock plc written by Great Britain: National Audit Office and published by The Stationery Office. This book was released on 2012-05-18 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Treasury's decision in early 2009 to support mortgage lending by splitting Northern Rock in two was reasonable but based on a business plan prepared by Northern Rock management which events quickly showed to have been optimistic. The Treasury went ahead with the split without further detailed analysis. The alternative of selling the deposits and closing down the business was, however, unlikely to have been significantly better. Although targets were not met, lending by Northern Rock plc was over 20% of all mortgage lending during 2010 and 2011. The financial performance of the business was worse than planned, principally owing to the continuation of low interest rates. In 2011, UK Financial Investments (UKFI), a body owned by the Treasury, reviewed a full range of options for the future of Northern Rock plc. The NAO considers that UKFI's recommendation for an early sale was the best way to minimise the losses. The sales process went well and UKFI improved the overall offer from Virgin Money. The NAO expects the taxpayer to lose £480 million of its original £1.4 billion investment in Northern Rock plc. If account is taken of the likely value of Northern Rock assets remaining in public ownership, UKFI expects that the taxpayer will recover all of the cash provided. However there could be a net present cost for the taxpayer of some £2 billion by the time the assets are fully wound down. This net present cost should, however, be seen as part of the overall cost of securing the benefits of financial stability during the financial crisis.

Download or read book HM Treasury written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and published by The Stationery Office. This book was released on 2012-11-16 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: The run on deposits at Northern Rock in September 2007 was one of the key moments in a financial crisis. After nationalising Northern Rock in February 2008, the Treasury eventually decided to split out a new retail bank, ("Northern Rock plc"), for sale, and to run-down the majority of the mortgage assets in a separate public sector vehicle, Northern Rock (Asset Management) plc ("NRAM"). Northern Rock plc was sold to Virgin Money in 2011 for proceeds currently estimated at £931 million, an expected loss of £469 million. The Treasury hopes to recover all the public funds provided to Northern Rock but this is far from certain as it relies on a profitable wind-down of NRAM. Moreover there will still be an economic loss, currently estimated at £2 billion. The Treasury took too long to nationalise the bank and failed to make an effective challenge to the bank's business plan. The Treasury has started to address this lack of capacity: it has established UK Financial Investments ("UKFI") with a small team of 12 people to manage the taxpayer shares in banks. The £66 billion cash spent purchasing shares in RBS and Lloyds may never be recovered. In hindsight, the Treasury's decision to create and sell a new bank turned out to be no worse than any available alternative, because no matter which part of the bank was sold, or when, a larger amount of assets would need to be retained in public ownership.

Download or read book Saving the Market from Itself written by Christopher Mitchell and published by Cambridge University Press. This book was released on 2016-12 with total page 257 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book examines state responses to the financial crisis of 2007-9, arguing that economic logic alone cannot account for differences. The author argues that the answer lies in the politics of private governance. The book will appeal to scholars and advanced students of political economy, comparative politics, economic sociology, economics, and public policy.

Download or read book HM Revenue and Customs written by Great Britain. Parliament. House of Commons. Committee of Public Accounts and published by The Stationery Office. This book was released on 2012 with total page 84 pages. Available in PDF, EPUB and Kindle. Book excerpt: This report looks at a range of issues among HM Revenue & Customs' activities, but principally into the corporation tax paid by multinational companies. International companies are able to exploit national and international tax structures to minimise corporation tax on the economic activity they conduct in the UK. It is believed that this practice is widespread and that HMRC is not taking sufficiently aggressive action to assess and collect the appropriate amount of corporation tax. Both HMRC and corporate taxpayers are failing to meet the legitimate public expectations from the tax system. Evidence received was unconvincing, in some cases evasive, and there is concern that multinationals have an unfair competitive advantage. A change of mindset needs also to apply to HMRC's approach to the Tax Gap - the difference between tax collected and that which, in the Department's view, should be collected. While total tax revenues have increased by £4 billion since 2010-11, the Department's own assessment of the gap stands at £32 billion and has only reduced by £1 billion since 2004-05. HMRC deserves praise for clearing the backlog of un-reconciled legacy PAYE cases, before its target of December 2012, but is too complacent about the service it provides to customers. The next challenges HMRC faces are the roll-out of the Real Time Information system and the changes to child benefit. The system is vital for the Department for Work and Pensions' introduction of Universal Credit, but HMRC has no contingency planning to cope with any delays in implementation. The Department's performance in reducing the level of error and fraud on the tax credits it pays has got worse rather than better, and it has failed to meet its target

Download or read book Tax Avoidance written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and published by The Stationery Office. This book was released on 2013-02-19 with total page 66 pages. Available in PDF, EPUB and Kindle. Book excerpt: HMRC estimates that in 2010-11 the tax gap due to avoidance was £5 billion and that the present total tax at risk from avoidance over time is £10.2 billion. There is a proliferation of contrived schemes which exploit loopholes in legislation and abuse available tax relief schemes. Promoters are deliberately taking advantage of the time lag between the launch of a scheme and the closure of the scheme by HMRC. Promoters and providers sign up as many clients as possible before HMRC changes the law and shuts the scheme. They then move on to a new scheme and repeat the process. The complexity of tax law creates opportunities for avoidance, there is no effective deterrent, and HMRC is ineffective in challenging promoters. All too often Government introduces tax incentives to stimulate economic activity that become an opportunity for tax avoidance. Promoters collect their fees even when the schemes are found not to deliver a tax advantage and few schemes are covered by mis-selling regulations. Those who promote a tax avoidance scheme are required to notify HMRC of the scheme however, HMRC does not know how much avoidance is not disclosed but should. It is alarming that some QCs' opinions are being used by promoters as a "reasonable excuse" for non-disclosure which prevents HMRC from applying a penalty. HMRC could learn from how other countries deter and tackle tax avoidance. HMRC should also name and shame those who promote tax avoidance schemes, to harness public opinion and reduce the appetite of companies to promote or use avoidance schemes.

Download or read book Excess Votes in 2011 12 written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and published by The Stationery Office. This book was released on 2013-02-07 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Ministry of Defence written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and published by The Stationery Office. This book was released on 2013-02-28 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: The National Audit Office report on this topic published as HC 190, session 2012-13 (ISBN 9780102975529)

Download or read book Department for Transport written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and published by The Stationery Office. This book was released on 2013-02-26 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Department for Transport's complete lack of common sense in the way it ran the West Coast franchise competition has landed the taxpayer with a bill of £50 million at the very least. If you factor in the cost of delays to investment on the line, and the potential knock-on effect on other franchise competitions, then the final cost to the taxpayer will be very much larger. The Department made fundamental errors in calculating the level of risk capital it would require bidders to put on the table and it did not demand appropriate levels of capital from both bidders. Faced with the possibility of legal challenge, it cancelled the competition. The Department failed to learn from mistakes made in previous projects. Recommendations made in the Committee's report 'The failure of Metronet' (HC 390, session 2009-10, ISBN 9780215544216) to prevent a lack of oversight and information were clearly not applied in this competition. Cuts in staffing and in consultancy budgets contributed to a lack of key skills. There was no single person responsible from beginning to end and, therefore, no one who had to live with the consequences of bad policy decisions. For three months, there was no single person in charge at all. Not only that, there was no senior civil servant in the team responsible for the work, despite the critical importance of this multi-billion pound franchise. Given that the Department got it so wrong over this competition, there is concern over how properly it will handle future projects, including HS2 and Thameslink

Download or read book The Ministry of Justice s Language Service Contract written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and published by The Stationery Office. This book was released on 2012-12-14 with total page 78 pages. Available in PDF, EPUB and Kindle. Book excerpt: Before January 2012, the Ministry generally booked interpretation services directly with individual interpreters, many of whom were listed on the National Register of Public Service Interpreters (NRPSI). This approach was administratively inefficient and the Ministry decided to set up a new centralised procurement system. The Ministry awarded the contract to a company, ALS, that was clearly incapable of delivering. Despite having been warned that ALS was too small to shoulder a contract worth more than £1 million, it went ahead and handed them an annual £42 million national contract. The Ministry did not understand its own basic requirements and ignored the views of interpreters, who had serious concerns about the contract. Capita took over ALS in late 2011. The Ministry needed access to 1,200 interpreters when the contract went live but the company had only 280 properly assessed interpreters willing to work for it. The Ministry, though, still decided to go live nationally in one go. Many of the 'interpreters' it thought were available had simply registered an interest on the company's website and had been subject to no official checks. As a result, the company was able to meet only 58% of bookings causing a sharp rise in delayed, postponed and abandoned trials; individuals being kept on remand solely because no interpreter was available; and the quality of interpreters has at times been appalling. However Capita has only been fined £2,200 to date for failing to meet the terms of the contract. Capita-ALS is now fulfilling more bookings, but it is still struggling

Download or read book Department of Health written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and published by The Stationery Office. This book was released on 2013-02-07 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: The strategic management of health resources across the East of England Strategic Health Authority has failed. Ultimate responsibility for this rests with the Department of Health. For many years to come, the local community as well as the NHS and taxpayers will have to live with the consequences of separate decisions to build a new PFI hospital at Peterborough and to award a franchise to a private company to run the nearby Hinchingbrooke hospital. These decisions were taken separately despite the fact that the two hospitals are only 24 miles apart in an area where the NHS has long acknowledged that healthcare provision is running ahead of local needs. The reality is that there is not enough funding there for both Trusts to thrive as currently configured. Their financial viability will be further eroded if more people are treated outside hospitals, in line with present and past government policy. Circle Healthcare, the franchisee of Hinchingbrooke, has not achieved its expected savings in its first few months and its Chief Executive has already left. The bid was not properly risk-assessed and the successful bidder was encouraged to submit over-optimistic savings projections. The PFI deal for Peterborough and Stamford PFI hospital has proved catastrophic, with the Department now being forced to pay out nearly £1 million a week of taxpayers' money to keep the Trust afloat. Both Trusts will have to make unprecedented levels of savings to become viable. In Peterborough and Stamford's case, this won't be enough

Download or read book British Broadcasting Commission written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and published by The Stationery Office. This book was released on 2012-12-20 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: On Saturday 10 November 2012, the BBC Director General George Entwistle agreed to resign after just 54 days in the job. In order to secure his quick departure, the BBC Trust agreed to a pay-off that included 12 months' salary of £450,000, twice what he was contractually entitled to. The BBC Trust also agreed to give the former Director General 12 months' private medical cover and contribute to the cost of legal fees and public relations advice connected with his departure and his participation in the ongoing inquiries into Newsnight and Sir Jimmy Savile. The Comptroller and Auditor General offered to carry out an immediate and independent audit examination of the package, in time to inform the deliberations of this Committee but the BBC Trust refused to take that offer up. This inhibited Parliament's ability to hold the Trust to account for its use of public money and Entwistle's severance package could only be considered on the basis of information publicly available. Furthermore, since November 2010 the BBC has made severance payments to 10 other senior managers at a total cost of more than £4 million. These payments are excessive and completely out of keeping with public expectations about how their licence fee money is spent. It also emerged that 422 senior BBC managers received private medical cover worth £667,489 as part of their remuneration packages in 2012. The Comptroller and Auditor General has been asked to examine severance payments and benefits for senior managers as part of his future programme of work on the BBC

Download or read book Managing Budgeting in Government written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and published by The Stationery Office. This book was released on 2013-03-08 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Government needs strong budgetary systems to be able to control and manage public spending and to provide high quality public services that offer value for money to the taxpayer. The 2010 Spending Review set a four-year spending total for each department and focused on reducing public spending and delivering the coalition Government's programme. The Treasury managed the Spending Review by collating bids from departments and challenging submissions. The process built on the experience of previous CSRs and was better managed, however concerns remain. Departments and the Treasury failed to take a longer term view on spending, making cuts in those budgets that were easiest to cut. For instance, whilst Treasury improved assessment processes to be able to rank capital projects, the overall level of capital investment was cut. Resource expenditure as a whole will increase in nominal terms, albeit at a much slower rate. There were gaps in data which made it difficult to compare options or benchmark spending proposals. There were no incentives for departments to collaborate on cross-government issues. There was no evidence of clear thinking on how one decision to save money in one budget area might lead to an increase in expenditure elsewhere. Decisions on where to spend or cut rest with Ministers and cannot be divorced from the political process. But these decisions need to be informed by rational analysis. Officials must do more to provide Ministers with reliable and comparable information to help them weigh up the effect of different spending options

Download or read book Funding for Local Transport written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and published by The Stationery Office. This book was released on 2013-02-05 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Department for Transport works with local partners to deliver many of its policies. Local authorities play a key role in planning and commissioning transport services, such as bus and light rail, and providing and maintaining roads and other local infrastructure. They spent a total of £8.5 billion on transport in 2010-11. The Department provided around a quarter of this (£2.2 billion), with the rest raised locally from council tax, from the £411 million surplus raised from parking levies, or from the Department for Communities and Local Government formula grant. In 2011-12 the Department provided £1.2 billion to local authorities for highways maintenance and small transport projects in the form of two un-ringfenced formula-based grants. The Department does not monitor how un-ringfenced grants are spent and there is insufficient information to determine the impact of the Department's contribution on local authorities' spending decisions and therefore to achieving the Department's objectives. The Department plans to devolve more control over its funding to the local level (raising the proportion of resources which are not ringfenced portion from 60% to around 80%); and new local transport bodies will take on some decision-making responsibilities previously held centrally. Full details of how the new system will work are still to be determined and there is uncertainty over how the arrangements will work in practice.

Download or read book Department for Work and Pensions written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and published by The Stationery Office. This book was released on 2013-02-22 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Work Programme was introduced in June 2011 to help long term unemployed people move off benefits and into sustained employment. It is estimated to cost between £3 billion and £5 billion over five years. The Programme's performance for its first 14 months of operation - from June 2011 to July 2012 - fell well short of the Department's expectations. Overall, only 3.6% of claimants on the Programme moved off benefit and into sustained employment, less than a third of the 11.9% the Department expected to achieve, and well below the Department's own estimate. Individual Work Programme providers' performance in helping claimants into employment varies widely, but not one of the 18 providers has met their contractual targets. The difference between actual and expected performance is greatest for those claimants considered the hardest to help. The Department's own evaluation suggests that these claimants have been receiving a poor service. Creaming and parking are clear policy concerns. Despite assurances, the Department has not provided the further analysis on such matters. Given the poor performance across providers, there is a high risk that one or more will fail - either they will go out of business or the Department will cancel their contracts. The Committee is concerned about the Department's approach to publishing performance statistics. The Department did not make clear what level of performance it had expected or say why performance was lower than planned. Yet it did publish unvalidated information on performance produced by a trade body.

Download or read book Department of Energy and Climate Change written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and published by The Stationery Office. This book was released on 2013-01-14 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: It is estimated that offshore wind farms have the potential to contribute 8-15% of electricity by 2020. This will require a large investment in offshore infrastructure, including around £8 billion of investment in transmission assets (offshore platforms, cables and onshore substations). An elaborate regime that licences operators of offshore electricity transmission assets following competitions has been introduced. The aim was to develop a competitive market for offshore electricity transmission but the reality is that the first six licences were won by just two companies. Furthermore, the terms of the transmission licences awarded so far appear heavily skewed towards attracting investors rather than securing a good deal for consumers. The transmission operators receive their income from the National Grid which recovers its costs from electricity suppliers and generators. Future payments to licensees are estimated at around £17 billion, and this will ultimately be funded by customers who could well end up paying higher electricity prices. The investors' estimated returns of 10-11% on the initial licences look extremely generous given the limited risks the investors bear. Licensees are guaranteed a fully retail price index-linked income for 20 years regardless of the extent to which assets are used. Yet penalties are limited to 10% of expected income in any one year if the operators fail to provide the transmission facilities when required. Despite the lessons from the PFI market the Government has failed to ensure that gains secured, for example, from debt refinancing are shared

Download or read book Restructuring of the National Offender Management Service written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and published by The Stationery Office. This book was released on 2013-03-05 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: The National Offender Management Service directly manages 117 public prisons, manages the contracts of 14 private prisons, and is responsible for a prisoner population of around 86,000. It commissions and funds services from 35 probation trusts, which oversee approximately 165,000 offenders serving community sentences. For 2012-13, the Agency's budget is £3,401 million. The Agency achieved its savings targets of £230 million in 2011-12 and maintained its overall performance, despite an increase in the prison population. However, the Agency's savings targets of £246 million in 2012-13, £262 million in 2013-14 and £145 million in 2014-15 are challenging. The Agency believes it has scope to make the prison estate more efficient by closing older, more expensive prisons and investing in new ones. These plans, however, assume the prison population will stay at its current level. Furthermore, the Agency has not yet secured the up-front funding for the voluntary redundancies needed to bring down prison staffing costs. Unless overcrowding is addressed and staff continue to carry out offender management work it is increasingly likely that rehabilitation work needed to reduce the risk of prisoners reoffending will not be provided. The Agency has not done enough to address the risks to safety, decency and standards in prisons and in community services arising from staffing cuts implemented to meet financial targets. The Agency plans to increase the role of private firms and the third sector in probation but the probation trusts don't appear to have the infrastructure and skills they need to commission probation services from these providers effectively

Download or read book Nuclear Decommissioning Authority written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and published by The Stationery Office. This book was released on 2013-02-04 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Nuclear Decommissioning Authority (the Authority) was set up in 2005 with the specific remit to tackle the UK's nuclear legacy. Sellafield is run for the Authority by Sellafield Limited. In November 2008, the Authority contracted with an international consortium-Nuclear Management Partners Limited-to improve Sellafield Limited's management of the site, including the development of an improved lifetime plan. Over several decades, successive governments have been guilty of failing to tackle issues on the site. Deadlines for cleaning up Sellafield have been missed, while total lifetime costs for decommissioning the site continue to rise each year and now stand at £67.5 billion. The Authority believes it now has a credible plan for decommissioning Sellafield and expects Sellafield Limited to start retrieving hazardous waste currently held in legacy facilities in 2015. Nonetheless, given the track record on the site and given that only 2 of the 14 major projects were being delivered on or ahead of schedule in 2011-12, the Committee is not yet convinced that this date will be met or that sufficient progress is being made. Basic project management failings continue to cause delays and increase costs, while doubts remain over the robustness of the plan, in particular whether the Authority is progressing the development of the geological disposal facility as quickly as possible. Nor is the Committee convinced that taxpayers are getting a good deal from the Authority's arrangement with Nuclear Management Partners. And taxpayers currently bear the financial risks of delays and cost increases.