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Public Service Sell-Off Companies Involved in Tax Havens

Sep 5

Written by:
05/09/2011 09:39  RssIcon

Ethical Consumer looks at the ethics of PFI contractors

A new report published today by Ethical Consumer magazine reveals that 13 of the 20 biggest private companies now being awarded public service contracts by the government have subsidiaries in tax havens.

The report identifies that companies including Capita, KPMG and Serco have subsidiaries in places usually used to minimise tax bills.

Ironically this June Capita was awarded a £100 million contract by the DVLA to crackdown on vehicle tax and insurance evasion.

Co-author of the report Tim Hunt from Ethical Consumer said:

"At a time when the government is implementing the biggest cuts to public spending in living memory, the government should demand that companies being awarded contracts should not be allowed to also make use of tax havens."

Richard Murphy from the Tax Justice Network said:

"These findings are troubling, but seem to form part of a pattern that now appears deliberate. We're seeing taxpayers money now being captured by private corporations who are using it for the benefit of a few in society at a cost to the great many ordinary people who're paying the price through reduced services, benefits and even healthcare, and all at the cost of increased tax.”

The groundbreaking report surveyed 20 of the biggest companies now profiting from the privatisation of public services. The results show that some of these companies are amongst the least ethical in the UK with Capita, G4S, Serco and Sodexo getting a bottom rating for a number of ethical and environmental criteria including environmental reporting and supply chain management.

The results of the survey also suggest that the government is now awarding public service contracts to companies without any scrutiny of a company's ethical or environmental policies. This apparent policy vacuum threatens to undermine the government's efforts at introducing sustainable procurement policies.

Green Party MP Caroline Lucas said:

"It is completely unacceptable that the government is paying no regard to the social and environmental records of the companies who are being awarded contracts to run our public services, and it completely undermines their rhetoric about aspiring to be the greenest government.

The fact that the majority of those surveyed appear to be implicated in tax avoidance adds insult to injury, with tax-payers effectively subsidising the sell-offs. I urge the government to end this practice, and to completely rethink its privatisation strategy."

The Ethical Consumer report can be viewed here:



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