Public Sector Review: 6th August 2010
Financial Times - MPC opts to leave policy unchanged
The Bank of England voted to leave monetary policy unchanged on Thursday with interest rates at the historic low of 0.5 per cent and £200bn of newly created money pumped into the economy to boost the recovery. At its crunch August meeting, the Monetary Policy Committee’s considered verdict on June’s emergency Budget is that it will not undermine the recovery sufficiently to warrant taking offsetting action. It has also judged that inflation is not enough of a concern to begin to raise interest rates, even though prices in June were 3.2 per cent higher than a year earlier and inflation has been at least 1 percentage point above the Bank’s 2 per cent target throughout 2010.
Financial Times - Clegg accused in Forgemasters row
Labour MPs have complained to the parliamentary standards watchdog about the deputy prime minister, alleging he deliberately misled MPs on the reasons for cancelling an £80m government loan to Sheffield Forgemasters. The Labour backbenchers Barry Gardiner and Rachel Reeves have written to John Lyon, the parliamentary commissioner for standards, asking him to investigate claims that Nick Clegg deliberately misled the Commons and then tried to cover it up. The letter, a copy of which has been seen by the Financial Times, says: “We believe that the Rt Hon member for Sheffield Hallam has misled the House. We believe that he did this knowingly.
Business and Finance
Times - China set to buy Liverpool
The Chinese Government is the secret backer behind a key bid for Liverpool Football Club, it has been revealed this week. The debt-ridden club is to change hands this month after its lender, the Royal Bank of Scotland, forced its beleaguered American owners to put it on the market. The other bidders are thought to be a wealthy Kuwaiti family and an American private equity group.
Times - Economy stagnates
Economic data has suggested that the recovery is losing momentum and that Britain could be entering a period of ‘stagflation’, meaning that the cost of living will rise sharply in tandem with slow economic growth. A recent salary survey by VocaLink has revealed that take-home pay is increasing by just 0.8% per month. The Bank of England is set to announce its decision on interest rates today – this is expected to impact significantly on household spending.
Financial Times - Business experts to judge red tape proposals
Ministers will have to answer to a panel of business experts before proposing new red tape measures, under plans to be announced by Vince Cable on Thursday. The business secretary has decided to give the regulatory policy committee more power, allowing it to challenge rules before they are put in place. The independent quango is headed by Michael Gibbons, the former Powergen executive, who advised the previous government on cutting red tape. Business groups called the move “a major shift on government thinking”, welcoming the added impetus they believe the coalition has given to the issue of deregulation.
Telegraph - Strikes loom in “winter of discontent” for Government
Whitehall has been urged to bolster employee consultation and communication during the toughest cutbacks in decades, or run the risk of staff siding with trade unions to cause mass disruption to services, according to the Chartered Institute of Personnel and Development. The CIPD’s employee engagement survey published last month found just 16pc of public sector staff trust their senior leaders. Job satisfaction has also plummeted to a record low.
Independent – Councils to face ban on lobbying
Councils are to be banned from hiring lobbying companies following accusations that they are using public money to run political campaigns. Eric Pickles, the Communities Secretary, claimed town halls were increasingly hiring lobbyists to make their case for extra public funds or to alter legislation in their favour. He named 74 councils and police authorities which have signed contracts with public affairs companies to lobby the government on their behalf and said the practice would end under new rules to come into force shortly.
Times – Halal meat on menu for State schools
Only halal meat will be available at secondary state schools in Harrow from next month. Some have praised the initiative in the borough, which is thought to be the most religiously diverse in Britain. Mohammad Rizvi of the Pakistan Society of Harrow said: ‘For Muslim children the only option they have to eat is halal, whereas it isn’t a problem for children of other faiths to eat halal. It’s just common sense’. Others have criticised the move, including the President of the Halal Food Society: ‘Some people are opposed to halal and kosher meat on animal welfare grounds and they should be given the choice not to eat it’.
Guardian – Local Authorities threaten legal action over axed school buildings programme
At least two councils are taking steps to sue the government in the high court over the cancellation of multi-million-pound contracts to build new schools, it has emerged. Local authorities have criticized the Education Secretary for refusing to give them answers over whether new buildings for thousands of pupils would eventually go ahead. Last month Michael Gove axed the £55bn Building Schools for the Future initiative. He said it had been dogged by “massive overspends, tragic delays, botched construction projects and needless bureaucracy”. More than 700 schools were told their plans for new or refurbished buildings would not go ahead and another 151 were placed “under discussion”.