Dept of Energy & Climate Change fails taxpayer: £16.6bn of Renewable
Energy contracts awarded without competition
The government's decision to award billions of pounds of renewable
energy contracts without a proper tendering process has left consumers out of
pocket, said MPs on the Public Accounts Committee. The five offshore wind and
three biomass project contracts were awarded without competition to avoid
delays. But MPs said Decc's own case showed
no benefits to awarding contracts early. They added that it was not clear if
the early contracts were needed in order to meet 2020 renewable energy targets.
The contracts involved a guaranteed "strike price" that the renewable
energy producers would receive for the energy that they produced. This strike
price was linked to inflation, with consumers picking up the bill if inflation
rose when the projects were completed. The MPs criticised the government for
failing to challenge developers' claims that the projects would not go ahead
without consumers taking on part of the risk. "By awarding contracts worth
up to £16.6bn to eight renewable electricity generation projects without price
competition, Decc failed to adequately secure best value for customers,"
said committee chairwoman Margaret Hodge. "Yet again, the consumer has
been left to pick up the bill for poorly conceived and managed contracts." BBC NEWS
Supermarkets charge suppliers
£80,000 just to get new products on store shelves, fuelling a third of profits
Supermarkets are making as much as
a third of their profits from suppliers by demanding the type of charges that
have led to the accounting scandal at Tesco. Tesco has admitted that it has
overestimated its half-year profit by up to £250million and the overstatement
is said to relate directly to the miscalculation of the commercial charges
imposed on suppliers. The scale of such ‘commercial income’ – as it is known in
the industry – is not spelt out in the financial results of supermarkets and
its crucial importance has only begun to emerge in the wake of the Tesco
fiasco. The fees include penalty charges for late or incomplete shipments,
bonuses for hitting sales targets, refunds for promotional discounts and
one-off payments for a multitude of reasons such as launching new products. The
fees are lumped in on top of simple retail profits and they can grow to huge
sums when large supermarkets are able to negotiate more lucrative deals with
their suppliers. It has also come to light that Tesco was rapped at the end of
last year by supermarkets watchdog the Groceries Code Adjudicator for unfairly
using its size to demand that suppliers pay extra fees to secure the best
positions on its shelves. Adjudicator Christine Tacon warned Tesco last
December that it should not have been asking for such payments. The ruling followed
a formal complaint from trade body the British Brands Group about the charges.
A spokeswoman for the Adjudicator said eight out of ten suppliers complained
they had experienced issues that could be in breach of the supermarkets’ code
of conduct. Supermarkets could face hefty fines – as well as a huge fall in
total profits – if widespread abuse is uncovered. DAILY MAIL
Wonga writes off £220m in debts
for 330,000 customers
Wonga was required to write off
the debts because the industry regulator, the FCA, found that it had granted
the loans without checking people could afford the repayments. The checks were
found to be so poor that many borrowers had no chance of ever repaying the loan
because of their dire financial circumstances, with many living on unemployment
or disability benefits. The company, which charges annualised interest rates of
up to 5,853% a year and has been accused by MPs of “legal loan sharking”, said
it would entirely wipe out loans to 330,000 people, and scrap interest and
charges owed by a further 45,000 customers. Some of the loans are understood to
be more than a year old and have ballooned from a few hundred pounds to
thousands. Wonga’s new chief executive, Andy Haste - who has been brought in to
overhaul the tarnished brand – apologised and said Wonga lacked experienced
credit professionals and “lent to people we should not have lent to”, adding:
“The checks were not sophisticated enough and not strong enough.” Haste
replaced Wonga’s founder Errol Damelin, who quit the firm in June. Damelin
described Wonga’s interest rate as a “great deal.” The lender, he claimed, used
sophisticated algorithms to ensure it did not lend to people who couldn’t
afford to repay. Damelin, who founded Wonga in 2006, had hoped to collect a
£100m windfall from floating Wonga on the stock market at a suggested £1bn
valuation. Sources at the company said plans for a float have been scrapped.
Wonga warned investors, already reeling from a 53% fall in profits announced on
Tuesday, that the changes will lead to “a material drop in the number of loans
to new and existing customers”. GUARDIAN
British homebuyers at back of
queue for local flats marketed in Hong Kong
They are just the type of starter
homes many first-time buyers are looking for. Priced from £180,000, Galliard
Homes is building studio and one-bed apartments minutes from local shops and
only a half-hour tube journey from central London. But if you are British, you
may find yourself at the back of the queue: Galliard put the flats on sale to
investors in Hong Kong one week before they go on sale in the UK – despite a
written promise by the developer to give British buyers at least an equal
chance.
