BLT are delighted once again to be co-sponsors of the Tax Journal Indirect Tax Awards 2009, designed to award excellence in the field of Indirect Tax over the last year. In 2008, the inaugural awards were a great success; as well as celebrating the achievements of the winners, the evening proved a great opportunity to catch up with friends and colleagues over a glass or two of wine.

The judges are currently accepting nominations for awards in the following categories:

Outstanding Contribution to Indirect Tax

Rising Star within Indirect Tax

Best Indirect Tax Team (a new category)

There will also be an award presented for the Tax Journal Indirect Tax Writer of the Year.

For details of how to nominate, please visit www.indirecttaxawards.co.uk, and if you would like to attend but haven’t as such yet received an invitation, do let me know asap (gnb@blt.co.uk) and I’ll see what I can do (places are limited though, be warned!). The event will be held in central London on 15th October 2009.

The Department of Health has spent almost £500 million on management consultants, including deals with firms which have hired senior Labour figures and high ranking civil servants, an investigation has revealed.

The disclosure of more than 100 contracts worth a total of £470 million last Friday engulfed the Government in accusations of "cronyism".

Among those recruited are a former health minister, an ex-adviser to the health secretary and a senior Whitehall official responsible for encouraging private sector involvement in the NHS.

Doctors' and nurses' leaders have expressed concern over the use of resources which could have paid for more than 60,000 hip operations, or the annual salary of 22,000 nurses.

Critics also said the revelations indicated that the "revolving door" between the Government and its favourite consultant firms was spinning ever more quickly, with former senior politicians, officials and advisers linked to companies profiting directly from the policies they had introduced.

Dr Mark Porter, deputy chairman of the BMA's consultants committee, said: "These consultants aren't just taking money from the front line; they are often drawing up policies which in themselves damage patient care."

Dr Peter Carter, general secretary of the Royal College of Nursing, said: "We are unable to find any evidence about whether this represents good value."

Andrew Lansley, the shadow health secretary, said: "This lays bare the hypocrisy of Labour's claims to have cut back on Government administration costs."

How can the DoH justify this expenditure at a time when staff shortages in the NHS have led to increasing concern over the standard of patient care?

Signs of life are returning to recruitment at Britain's bruised investment banks, with new job openings at a peak for the year and hiring expected to continue after the summer lull.

There were twice as many job listings across London's financial sector in June and July compared with December, according to data from recruitment consultancy Morgan McKinley, which added it expected a "very, very good" August.

Interest in hiring is growing on hopes that strong half-year results from some banks herald a rebound after the worst financial crisis since the Great Depression.

Hiring is picking up in specialist divisions, such as equity and risk management, and across the sector from bank start-ups to larger institutions.

Of course banks have some way to go before staffing levels return to pre-crisis levels. When asked about hiring levels, an official at one bank said: "Due to staff holidays, we don't have the resources to look into that today."

Elsewhere there are also signs of a sharp increase in optimism, enhanced activity and robust executive outlook that speak to a reversal of negative trend and pulling out of the downturn.

KPMG"s August 2009 Business Outlook Survey shows a strong rebound in confidence amongst UK manufacturers following the dramatic deterioration recorded in the preceding two surveys. Activity, new business and profits are all forecast to increase sharply over the next 12 months. Employment prospects are a little better, and have risen steeply since the winter. This survey was quite broad, covering 3,700 manufacturing companies in 11 EU countries. Over 65% of the UK survey panel signal hopes of an improvement in business activity during the next 12 months. July 2009’s reading is the highest in the EU and was the strongest for two years.

Here at BLT we are cautiously optimistic as we have also begun to notice a pick up.

Do you share in the current optimism or do you believe we still have a long way to go before we can say the UK is out of the worst?

Actions taken by firms to strengthen their risk management procedures are too often proving ineffective and possibly counter-productive, a survey has revealed.

Ninety-six percent of organisations believe they still have an opportunity to improve their risk management functions. While nearly half say committing additional resources to risk management could create a competitive advantage, according to Ernst & Young’s Future of Risk survey, which examined organisations’ attitudes toward risk management.

The survey of more than 500 senior executives reveals the downturn is heightening awareness among companies of the need to manage risk more effectively.

Paul Kennard, UK & Ireland head of risk at Ernst & Young, said, “Although many organisations have boosted the size and reach of their risk management functions, this does not always equate to an increase in effectiveness. In fact, too few organisations can claim that shared reporting, data exchange and coordination consistently occurs among their various risk management functions. In the end, this only leaves the organization more vulnerable to the threat of risk.”

Despite improvements in risk management over the past several years, organisations should continue to challenge their approach - especially now when most will be asked to do more with the same or limited additional resources. While only two percent plan to decrease investments in risk management, almost two-thirds (61%) of survey respondents said they do not plan to commit more resources to risk management over the next 12-24 months.

The survey also revealed that the number of risk management functions has increased to keep up with compliance requirements. However, the coverage and focus of these multiple risks functions has become increasingly difficult to manage, and is compounded by a lack of alignment.

Seventy-three percent of respondents indicated they have seven or more risk functions. Furthermore, sixty-seven percent have overlapping coverage with two or more risk functions. Fifty percent of those surveyed reported gaps in coverage.

The survey demonstrated that companies want improved risk coverage while decreasing costs and improving value. They also aspire to have their risk and control activities aligned and coordinated. The key to making this possible lies between the risk and control functions and the business units. This includes having an aligned mandate and scope, coordinated infrastructure and people, consistent methods and practices and common information and technology.

Kennard concluded, “Leading companies are creating a competitive advantage by using the economic downturn as an opportunity to make practical yet valuable improvements to the way risk is managed. More than ever, organisations need to have a comprehensive and coordinated risk management approach with strong executive oversight and board of director governance. The opportunity to make those changes is now.”

One major problem that emerges from this survey is that risk management functions within an organisation are often disconnected from one another and the wider business strategy. As a result, risks identified in one area may not be communicated or recognised by another. Moreover, different areas within an organisation may have different views on the severity or importance of certain risks.

If communication and lack of understanding of the severity of certain risks is holding companies back, what should they be doing to align their risk management procedures?

Corporate governance definitely does matter according to recent research. A study by GovernanceMetrics International (GMI) and recently published by UBS Investment Research examining 10 Asian markets confirms that companies with higher corporate governance ratings tend to outperform low-rated companies on an annualized basis for holding periods of one year or longer.

Commenting on the findings, GMI chairman Gavin Anderson notes: “The first thing that is evident in the study is that corporate governance does matter and the authors contend that governance as an investment criterion will become more important as the economic recession recedes.”

Another study published earlier this year by the University of Wisconsin, quoted in the UBS report, suggested that share prices of companies with better governance tend to outperform both in bull and bear markets.” Anderson continues: “Clearly, there is an association between good governance practices and company performance.”

The study also found that countries with a British colonial heritage – Hong Kong, India and Singapore – tended to have higher levels of transparency and higher average ratings. “This should not surprise since they all share the same common legal system inherited from the British,” says Anderson. “But that is not to say that if you have a strong legal system, you automatically have well governed companies. A legal system that protects property rights is a plus, but that seems to us to be a minimum for corporate behaviour, not a maximum. Several companies highlighted in the UBS report have disclosure practices well beyond what is simply mandated by the law of their home country. From an investors’ point of view, the greater the transparency the better able one is to make an informed investment decision.”

As you are probably aware, Sir David Walker is currently leading an independent review of corporate governance in the UK banking industry. In July he published his proposals for the future of corporate governance in the banking and financial industry and he intends to issue a final version of the report and its recommendations in November.

In light of the independent studies quoted above, what measures do you think should be included in his final report to ensure British companies achieve the highest standard of corporate governance?

Although a recent survey discovered that a third of UK employees believe that employers look badly on jobseekers that have been made redundant, this could not be further from the truth.

In fact 35% of employers are actively targeting redundant workers from rival firms, according to research from Jobsite.

HR Managers’ approach to hiring is the opposite to candidate perceptions, with one in three looking to hire specific talent now to help see their companies get through the downturn and enjoy rapid recovery as the economy improves.

And if you think about it, this makes a lot of sense. Private sector employment has already started to show signs of recovery and companies who are looking to expand their workforce are much more likely to hire experienced staff. And someone who has been made redundant is in a position to step into a new role immediately.

In the private sector, the North East of England is expected to see the greatest increase in recruitment as 82% of employers plan to hire new staff. This was closely followed by London with 75% of employers, and Wales with 66% of employers.

Are you an employer who targets redundant workers? Or have you got back into the workplace after suffering redundancy? We’d love to hear your stories…

UK non-executives at leading FTSE companies earned an average of £121,000 for each board role in 2008, a 10pc increase year-on-year, according to AlphaValue, the independent equity research firm.

The increase in non-executive pay leaves UK directors in fourth place by remuneration across Europe.

Pierre-Yves Gauthier, a director at AlphaValue, said higher fees for UK non-executives might be down to the likely introduction of a more rigorous governance regime.

"Tightening regulation and increased scrutiny means that the role of a UK non-exec in particular is tougher than ever at present," he said.

Following the release of the Walker Report last month, the burden on non-executives is likely to increase, with those in the financial sector in particular likely to have to work for more days and reduce their number of board positions. He believes that NEDs on all bank or financial institutions boards should be prepared to give a time commitment of between 30 to 36 days a year.

The far-reaching report, commissioned by the Government in February, comprises recommendations on boardroom practices and conventions that could result in a deluge of corporate governance bureaucracy if they are adopted in the autumn after a consultation period, as is thought likely.

Even if NEDs have to cut down on the number of board positions they hold, at £121,000 per role, they’ll still be earning a sizable income.

While everyone else has to make do with a meagre salary increase, or in some cases no pay increase at all, do non-execs really deserve such a large remuneration?

Is the end of the recession insight? The Times believes that the flurry of much-improved vital signs looks compelling.

House prices have risen for at least two of the past three months, according to Halifax and Nationwide. The Royal Institution of Chartered Surveyors, however has forecast that an acute shortage of homes for sale would push prices up this year, but has warned that the market had not yet hit the bottom and that prices could start falling again next year as more homes were put on the market.

Confidence in a wider economic rebound was fuelled by the crucial survey of services businesses, which make up two thirds of the economy. The survey, closely tracked by the Bank of England, showed that the services sector grew for a third month in a row, and at its fastest pace since February last year.

The equivalent manufacturing survey shows that industry is rebounding too, and the fightback is affirmed by official data, with the biggest monthly output jump since October 2007.

The markets seem convinced — the FTSE 100 is up by a third from its lows plumbed at the start of March and earlier this week the pound was trading at its highest level for nine months.

Of course much can still go wrong. A large element of the manufacturing upturn comes from a move by companies to rebuild stocks that were allowed to run down drastically in the depths of the slump.

Business leaders have made last-ditch pleas to the Bank to do more to ensure economic recovery but Mervyn King, the Governor of the Bank of England, is expected to take a cautious stance when he gives his latest assessment of Britain’s economic outlook next week. He is likely to voice growing faith in a short-term upturn, but warn about dangers that could yet derail recovery.

So whilst we may have won a small battle we still have a way to go before we finally win the war.
What additional steps do you think the Bank of England should be taking to guarantee a decisive economic resurgence?