In the first week of June 2015, the watchword for organisations of all shapes and sizes was ‘culture’. From the ongoing allegations of bribery and corruption associated with Fifa, football’s world governing body, to fresh revelations of misdeeds in banking with the news that UBS’s chief executive was informed of staff rigging Libor, there seems to be a new development every day that questions the rigor of corporate systems and the ethics of those at their helm.
The latest on Fifa is that the Irish FA is alleged to have received a 5 million euro bribe (that’s £3.6 million) to stop legal action after France controversially beat Ireland in a World Cup play-off in 2009. If you remember, that was due to French striker Thierry Henry’s controversial handball. The BBC reports that FAI chief executive John Delaney said a "legitimate agreement" was made to drop the claim after Ireland missed the 2010 World Cup.
And yet, when it comes to culture, few can wag their finger at the John Lewis Partnership. The news that the department store chain has dropped PwC as its auditor after 20 years means it falls into line with new standards requiring broader competition in accounting oversight. Having adopted the policy of putting its audit out to tender every five years, John Lewis has selected KPMG for the role.
Story of the week, however, was whether the Chancellor George Osborne should ease back on the pace of austerity. This was in the run-up to the announcement on Thursday that Osborne will sell off the government's remaining stake in Royal Mail while making £3bn worth of cuts this year to all unprotected government departments.
It’s not just local councils and anti-poverty campaigners putting pressure on Osborne to slow down on spending cuts to protect the most vulnerable people in society, the warnings are now coming from international economists too. Go back to the last parliament and you’ll find it was the OECD (the Organisation for Economic Co-operation and Development) who backed Osborne's austerity measures, but this week they were the latest group to speak out against the adverse effects of continued cuts on spending.
Here’s a quick round up of what the nationals have been saying on the subject:
Writing in the Telegraph, Allister Heath is all for the cuts to public spending. “They are another modest step in the right direction, and confirm that the new Tory government understands the need to continue to tighten its belt,” wrote Heath. However, he concedes that although Thursday’s extra reductions are worth less than 0.4pc of total public spending, “the fact that they are focused on a small number of unprotected departments – because of the misguided decision to ring-fence politically-sensitive parts of the public sector – will exacerbate their impact”.
In a slightly different take on this story, The Guardian suggests that, although George Osborne defended his debt consolidation strategy last month to the CBI (Confederation of British Industry), the Chancellor may have other motives. “Tory strategists are keen to push through painful cuts in the early years of the parliament to allow room for tax giveaways and more generous public sector pay settlements ahead of the 2020 election," said the paper.
According to the Beeb, public spending watchdog the National Audit Office (NAO) says that the Home Office has little understanding of how much further it can cut funding in England and Wales without putting services at risk. The NAO’s report found police funding was cut by 18% in real terms from 2010-16, and "significant" further cuts are expected. The report went on to say central government funding to police and crime commissioners was reduced by £2.3bn between 2010-11 and 2015-16.
The Indy said that cuts to adult social care mean some of the most vulnerable people in society are being "placed in jeopardy". As the social care budget is not ring-fenced, it has been cut by £4.6bn since 2010, a 31% overall reduction. Health service bosses warn that social care cuts are adding to the pressure felt by the NHS.
The Financial Times
In its in-depth article, the FT referred to the OECD’s comments, pointing out it was highlighting the importance of reducing the effects of the cuts on the working poor and warned that the speed of the Chancellor's debt consolidation strategy risked putting the recovery in danger.