News for the ‘Tax issues’ Category

The NHS turns to Bin Laden for bereavement advice

PRs will be familiar with a tool called Response Source - it’s basically a way for journalists to email people asking for comment/case studies on topics without having to ring thousands of people individually.

Well, one’s just dropped into my inbox that really does amaze.

Bereavement is a serious topic - one that the NHS should absolutely have material on. But piggybacking on the death of an international terrorist to achieve this?

MEDIA OUTLET: NHS Online

DEADLINE:  6 May 2011 at 12:00

QUERY: In reaction to the huge news that Osama Bin Laden has been killed, and triggered by the repeated comments that ‘justice has now been served’, I’d like to question the notion of revenge on mental health.

Even better - they want vigilante case studies!

- The family/ friend of a loved one who was lost specifically in the 9/11 attacks and/ or someone who was either responsible for bringing about justice or was the family/ friend of someone who was avenged. Can either be within or without the law …

So  - there you have it. Thats your tax dollar hard at work.

Posted: May 3rd, 2011
Categories: Economy, Education, PR and Communications, Tax issues, The Media
Tags: ,
Comments: 1 Comment.

If National Insurance is dead, has anyone told IDS?

Back in October, I attended an event in Doncaster discussing the impact of benefit cuts with the local community.

Unsurprisingly, one of the first questions asked was ‘which benefit would you cut first?’ After debate focused on things like the winter fuel allowance going to expats, or child benefit for the Beckhams, I suggested an alternative - abolishing National Insurance, in its entirety.

This surprised some people, but after about an hour of discussion one of the emerging themes was the complexity of the benefits system, and how it both took money away from the front line and penalised those who were less savvy with their paperwork - not to mention those who didn’t get the benefits they recieved because they were unable to navigate through the various forms. When I returned to my origional point, the idea didn’t seem quite so radical.

When NI was first established, it’s purpose was clear - a contributory system of insurance against illness and unemployment. In subsequent years it would be diluted to cover pensions and then contribute to the costs of the welfare state at large. Now, it is essentially a way for Governments to increase the tax take without increasing income tax, for that is a political line no politician ever wants to cross. (Albeit explicitly, as Gordon Brown’s 10p/20p swindle demonstrated.)

As someone who has both a PAYE tax code and submits a self assessment, I’ve been on the recieveing end of NI paperwork madness, being told almost simultaneously I wasnt paying enough and was paying too much.

Aboloshing NI would simplify the process for businesses, make the true level of taxation more transparent and put back on the political landscape the question of taxes and spending. It will of course mean other taxes are increased - probably both income tax and corporation tax, which does raise competitiveness questions - but those issues already exist when the cost of PAYE and NI are combined, something businesses of all sizes all too aware of.

Equally, it would give a once in a generation opportunity to - in theory - not just reduce but transform the  tax system back office, delivering real savings without hitting frontline services.

However, there is an interesting question here - namely, whether doing this could scupper the government’s welfare agenda.

The NPS [National Insurance and PAYE Service] is one of the key components of implementing Universal Credits, and as I’ve previously warned if this technology link breaks down, there could be a high price to pay. The live-flow of data on earnings is essential for the DWP’s system to work, something that has been worrying many who have watched HMRC’s recent IT efforts with Accenture and Capgemini under the multi-billion ‘Aspire’ project.

There has been much positive discussion about improving Government IT, particularly at a pan-Governmenal level. It will be interesting to see amid all the excitement of aboloshing NI, anyone has looked at the impact it would have on existing government systems and the wider Coalition agenda already underway.

Posted: March 21st, 2011
Categories: Campaign Issues, Government IT, Innovation, Tax issues
Tags: , , ,
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Defeating the enemies of innovation

David Cameron caused a stir in Whitehall with his ‘enemies of enterprise’ line, with GOD (Gus o’Donnell) reportedly intervening on behalf of the mandarin class.

The thing is - I think Cameron was right. And I’d go further - it’s not just enterprise, I’d suggest the coalition needs to take on the enemies of innovation. And that absolutely includes swathes of whitehall mandarins and managers.

Yesterday the public administration select committee heard from a variety of industry figures about how the way government procures and uses technology could be improved.

The comittee heard some very clear messages - existing large suppliers had become oligarghs, innovation was designed out by lead contractors once the bid was won and it seemed outsourcing providers were incapable of failing badly enough to warrant legal action or heaven forbid not being given any more work.

Bluntly, Government was a gullible and badly informed customer who failed to take any meaningful action when things did go wrong.

Sadly, it seems the IT industry body Intellect has surrendered its role as a representative body of the whole industry, in favour of defending and apologising for the large system integrators who bare a large degree of responsibility for the mess Govt IT is in, however also happen to be a very lucrative revenue stream for Intellect.

But why is innovation such a difficult task for Government? As I have argued in the past, in my view there are simply too many vested interests involved who stand to loose badly if a radical approach was taken.

In the back office, unions and civil servants cling to the status quo to protect their empire - headcount is still king for many. The pain of redundancy (and in some cases up-front cost) means staff are shifted sideways or left in defunct roles, meaning savings are not realised despite investment in technology or process improvment.

In the front office, continued state monopolies mean all the levers of social progress remain in the hands of civil servants and managers, while also allowing politically-motivated action that may not serve the public well in the long run. Equally, this blocks innovation from the private sector, voluntary and charitable organisations which could add huge value to public services.

And indeed, many suppliers - particularly those on long-term maintenance and support contracts - see any change, innovation or performance review as a significant risk to their revenue streams, and act accordingly.

So how can these interests be overcome? The public sector is particularly risk adverse, and this in itself is no bad thing. But equally, it also seems there is little willingness to find ways of experimenting and testing new ideas.

Where systems and processes have been outsourced, the state is increasingly - and sometimes entirely - dependent on the outsourcing provider for insight and expertise. Put another way, when things go wrong or policy changes, the suppliers have the state over a very pricey barrel. Government needs the skills to hold suppliers to account and procure what it really needs, not what it thinks it needs.

The key question remains where are incentives to innovate, and to drive suppliers to design-in innovation? For who in the public sector is it in their best interest to find ways of transforming the way services are delivered? And not just at a pan-government level, these people need to be embedded in departments, dealing with the day-to-day processes that have remained in place for decades.

Furthermore, the political class needs to be far more vocal in holding Whitehall to account, not only when things go wrong but also when new ideas are watered down or parked.

For the Coalition, the prize is a leaner, more efficient public sector that can indeed deliver more for less. The public are not concerned with process, it is outcomes that matter. If the outcome can be improved upon - and in the longer term taxes reduced as the defecit is dealt with - that will be rewarded with many years in Government.

So, Mr Cameron, the challenge is clear - overcome the enemies of enterprise, defeat the enemies of innovation and deliver the transformation in economic activity and public services that Britain so badly needs.

Posted: March 17th, 2011
Categories: Government IT, Ideas for living, Innovation, Spending Cuts, Tax issues
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Localism 2.0 - Uncapping council tax?

The Localism Bill will radically change the involvement local communities have in decision making - a landmark reform that will do much to reinvigorate local democracy.

However, as has already been seen with salvos from the likes of Liverpool and Manchester councils, front line services are being axed with Central Government being blamed by local councillors and activists. As has been shown time and time again though, cutting front-line services is the easy option too many in local Government turn to, rather than taking a long, hard look at their own organisational structure and questioning how services are delivered.

For example, Wakefield council is scrapping more than 1,000 jobs, but as far as I can tell the chauffer driven car the leader of the council enjoys, and the council’s own newspaper, are not for the chop just yet.

So how do we deal with this situation? I propose something very much in the spirit of the Localism Bill - abolish the cap on council tax rises.

At present, the Secretary of State for Communities and Local Government has the power to cap council tax increases. This year, the cap is 3.5%.

Tax has been off the political agenda since Tony Blair’s victory in 1997 and the (entirely symbolic) pledge not to raise income tax. But in times of deficit - where crudely the choice is between increasing the money coming in (tax rises) or to decrease the amount going out (spending cuts) - or a combination of the two - why not make tax part of the debate again?

I’d go even further - legislating that every ballot paper in the local elections must detail the increase in council tax proposed by the leading party, allowing the electorate to decide for themselves.

If, as many on the left tell us, the general public are outraged by ’savage’ spending cuts, why not give them the choice to pay for the services they wish to keep, but that can presently not be afforded?

In a situation like the Forgemasters loan, rather than running to central government for help, elected leaders could make the case for increasing local taxation to provide funding.

Many on the left are quick to point out about the reductions in frontline services, and how apparently this will reduce Britain to some kind of stone-age country, but they avoid with fervour any debate about how to pay for their community cohesion officers or regional spacial strategies. They aliken councils cutting council tax to evil privateers, overlooking the fact the public seem to quite like having their tax bill cut - and are far from up in arms about service provision.

The arguments around spending cuts are only one side of the coin - let’s make the debate full and open, and bring tax into it with equal weight.  Those who want to expand Government can argue to do so, and the public decided on polling day whether or not they want to foot the bill.