Rip-off News round-up. Our pick of the last week's media (Thu 18th Sept)

G4S, Serco: Cancelling “guaranteed profits” probation contracts could cost taxpayers £300m-£400m

Taxpayers will face a £300m-£400m penalty if controversial probation privatisation contracts are cancelled after next May's general election under an "unprecedented" clause that guarantees bidders their expected profits over the 10-year life of the contract. Labour is already committed to unpicking the justice ministry contracts to outsource probation services but will not now be able to do so without incurring the multimillion pound bill because of "poison pill" clauses written in by Chris Grayling's department. The Ministry of Justice say they are only following Treasury guidance by including the clause, which raises the prospect that similar clauses are being included in other politically controversial contracts across Whitehall that are to be signed before next May's general election. Margaret Hodge, the chairman of the Commons public accounts committee, has asked the Whitehall spending watchdog, the National Audit Office, to challenge any politically contentious contracts that are signed in the dying months before the general election: "It is not value for money. It is unacceptable and must be challenged before the event." The disclosure comes as the two outsourcing firms at the centre of serious fraud inquiries, G4S and Serco, confirmed they had been granted new government work during a period when the justice secretary, Chris Grayling, had told MPs that contracts would not be awarded. The confirmation has led to claims that Grayling misled parliament. GUARDIAN

Southeastern handed four-year rail deal despite rating “worst” with passengers

Southeastern has been handed a new four-year deal to run commuter railways in London and Kent, despite having the most dissatisfied passengers of any train operator. The company, run by Govia – a joint venture of Go-Ahead and the SNCF-owned Keolis – was given a direct award without competition to continue services until June 2018. It is the seventh such deal after the West Coast franchising fiasco ripped up the government's timetable for reletting the railways. The Department for Transport said that the operator would be forced to improve services while its subsidy would be cut. But the deal was met with dismay by passenger groups and unions who described it as a "reward for failure". GUARDIAN

Academy schools caught making “questionable” payments to board members

A report commissioned by the cross-party Education Select Committee highlighted potential conflicts of interest where individuals on trust boards could benefit personally or through their companies from their position. One anonymous interviewee told the researchers about an academy “where the headteacher had spent £50,000 on a one-day training course run by their friend” – a decision which was not run past the governors. Another example cited in the report was that Academy Enterprise Trust, which runs 80 schools, has paid nearly £500,000 to private businesses owned by its trustees and executives over the past three years for services ranging from project management to HR consultancy. The report said a range of “questionable practices” by academies were being signed off because existing rules were not strong enough. In another academy, “the chair of governors had told all staff that if they discussed with students or used text books referencing abortion or contraception they would be dismissed”. The researchers’ report said: “The ability of the system to pick up on intangible conflicts that do not involve money seems almost non-existent.”INDEPENDENT

Tories charge £2,500 a head for access to ministers at party conference. Labour and LibDems are doing it too

The Conservatives are charging business executives and lobbyists £2,500 each for access to David Cameron, George Osborne and other ministers at their party conference in Birmingham this year. The paying guests will attend the conference's "business day", which will include lunch with the prime minister and dinner with the chancellor. They will also have a chance to talk to ministers about their specific concerns in "policy break-out" sessions. Companies sending representatives are able to avoid disclosing if they have bought a table because parties are allowed to class the cash as fees received as part of a commercial transaction, rather than a political donation. Political donations of more than £7,500 have to be reported to the Electoral Commission. The Tories are not the only party to sell access to their frontbench. Labour is also marketing a "business forum package" for its conference in Manchester that includes breakfast, lunch and a guaranteed place at its business reception for just under £1,300 a head. It also classifies the cash as a commercial transaction. The Liberal Democrats are selling tickets for their business day at £800 each and for their business dinner at £350. The party's conference website describes the event as "an excellent occasion for business leaders and public affairs executives to meet senior Liberal Democrats and discuss the current issues, challenges and opportunities facing British businesses today". GUARDIAN

Corporate tax dodging: Tougher international tax rules to be agreed by G20 countries

Bold updates to international tax rules designed to force some of the world's biggest multinationals – including Google, Apple, Amazon, Vodafone and GlaxoSmithKline – to contribute their fair share towards government budgets are to be agreed by G20 countries this weekend. Under draft rules published on Tuesday by tax experts from the Organisation for Economic Cooperation and Development (OECD) many of the world's largest and best known corporations face being forced to rapidly dismantle their elaborate cross-border corporate structures. The moves by governments to corral companies back into a joined-up, modernised network of international tax treaties mark the halfway point in a two-year reform project begun by world leaders in Moscow last summer. If nerves hold among the 44 countries involved – which together represent 90% of the world's economy – the impact on corporate profits and treasury receipts could be significant in many economies, large and small. Meanwhile, countries that have courted multinationals with tax-friendly regimes – Bermuda, Ireland and Luxembourg among them – could suffer an investment exodus. Existing international tax rules, laid down in a network of about 3,000 bilateral tax treaties, have for decades been straining to keep up with innovations in technology and tax avoidance. The OECD has said the G20 reform project is urgently required "to prevent the existing consensus-based international tax framework from unravelling". GUARDIAN

An economy built on debt? Bank of England confirms high levels of mortgage debt made the recession worse

The UK's household debt to income ratio rose from around 100 per cent in 1999 to a peak of 160 per cent in 2008. Mortgage debt accounts for around 80 per cent of total household debt, and explains most of the increase in the debt to income ratio, the Bank said. The rapid rise in mortgage debt prior to the credit crunch had inflated household spending in general, boosting growth, but much of this was reversed when the crisis hit. The Bank said: 'In the second half of the 1990s, households with mortgage debt to income ratios greater than two appear to have increased the share of their income spent on non-housing consumption by more than mortgagors with lower debt to income ratios. But these higher debt mortgagors subsequently made larger-than-average reductions in spending relative to income after the financial crisis. In June, the Bank introduced measures to designed to prevent dangerously high levels of indebtedness. Mortgage lenders now have to be satisfied that borrowers would be able to meet repayments if the Bank Rate were to rise 3 percentage points. Lenders must also limit the proportion of mortgages of 4.5 times income and above to no more than 15 per cent of new loans. These measures could be tightened further if the Bank becomes more worried about household debt. DAILY MAIL

Water firms deluged with 300 complaints every day - and one in five households can't afford their bill

As many as 123,218 written complaints were received in the year to April 1, and more than half were about billing and charges, the Consumer Council for Water said. Complaints fell by 18 per cent compared to the previous year – and have now fallen for six consecutive years. But water firms were warned the cost of bills faced by hard-pressed households is still a crucial factor despite improvements. As many as one in five customers cannot afford their water bill, the study found. It warned that water companies and the regulator Ofwat must deliver prices that customers can afford and find acceptable or 'risk a backlash from struggling households'. Southern Water and South East Water were singled out for being the two worst performing companies when complaints are measure per 10,000 connected properties. Wessex Water, Portsmouth Water and Cambridge Water were hailed as the industry's best performers. DAILY MAIL

Fraudulent car insurance claims running at 500 a day

The Association of British Insurers (ABI) revealed that in 2013, UK insurers detected 180,675 attempted fraudulent applications for motor insurance. These cases involve motorists lying about, or knowingly failing to disclose, important information such as previous claims or unspent motoring convictions when asked. A combination of factors including the challenging economic climate, increases in the costs associated with owning and running a car, the fact that many people see it as a victimless crime and a lack of effective deterrents are all seen as helping to drive up the number of cases of insurance fraud. In turn, fraudulent applications and claims push up the cost of premiums for the majority of honest consumers, according to the industry. It is said that more than £2.1bn of undetected insurance fraud is committed every year. Examples of fraudulent applications that have been uncovered include: A driver with a poor credit rating who tried to use an alias to buy motor cover; An applicant who failed to disclose four previous claims and an unspent motoring conviction which had led to a three-year prison sentence;  A motorist who attempted to alter his driving licence to remove the driving convictions. An ABI spokesman said initiatives such as the Insurance Fraud Register – the first industry-wide database of known insurance fraudsters, which went live at the end of 2013 – and the soon-to-be-available MyLicence initiative, which is aimed at tackling the non-disclosure of motoring offences, would make it harder for people to use deception to try to obtain cheaper motor cover. GUARDIAN