National Audit Office refuses to sign off Government accounts because of "unreliable" data from English Councils

Daily Business News

The Government’s spending watchdog, The National Audit Office, is refusing to sign off on the Government’s 2022-23 accounts - the first time it has ever done so - because of “unreliable data” from England’s local Councils. The NAO says only 43 of England’s 426 local authorities submitted reliable accounts; 187 did not submit any data at all; and the rest submitted only unaudited accounts. Hence, it said, the shortcomings in the accounts submitted by local authorities were “so large and pervasive” that it was unable to form an overall judgement on budgets and had to “disclaim” the whole of government accounts for the year. Gareth Davies, head of the NAO, said in a statement: “It is clearly not acceptable that delays in audited accounts for English local authorities have made it impossible for me to provide assurance on the Whole of Government Accounts for 2022-23”. A Treasury spokesperson said: “We are working with local authorities to improve reporting and transparency and ensure the accounts are as detailed as possible, while making significant additional disclosures to the National Audit Office to address any missing data.”

Business Secretary Jonathan Reynolds has confirmed yesterday there will be a ‘fast-track’ review of the Government’s zero emission vehicle (ZEV) mandate, in an appearance before MPs on the Business and Trade Committee. He admitted that the mandate was not “working as anyone intended,” saying: “We have to accept and have to analyse whether the environment in the UK for automotive manufacturing is one that’s going to get us to the destination, in a way which keeps those jobs and industry in the UK. The move follows numerous warnings from carmakers on how the rules are putting their industry’s future at risk, and an announcement from Vauxhall yesterday afternoon saying it plans to close its Luton factory, which employs 1,100 people, after 120 years of manufacturing at the site. Vauxhall’s parent company, Stellantis, made it clear that decision was made “in the context of the ZEV mandate”. It added it would “offer relocation and support to facilitate” staff wishing to transfer from Luton to its Ellesmere Port factory. Previously, Ford has said it will cut 800 UK jobs as it reduces EV production, and Nissan has said it could leave the UK altogether. The ZEV mandate requires carmakers to hit a 22% target for sales of electric cars, and 10% of electric van sales this year, rising 80% for cars by 2030, when a ban on new petrol and diesel cars comes into force, a ban Reynolds committed to yesterday. If manufacturers fail to meet ZEV targets, they are fined £15,000 for every petrol or diesel car sold over quota. The problem is, not enough motorists want to buy electric cars, hence the major headache for carmakers. Last week, pension funds warned against changing the mandate, warning doing so would undermine support for their investments in net zero and infrastructure projects.

Investment bank Peel hunt is suggesting that Chancellor Rachel Reeves’ new 20% Inheritance Tax (IHT) levy on stocks listed on London’s junior AIM market in her Budget is likely to deprive the Treasury of more than a billion in revenue. Previously exempt from IHT, the Government estimates taxing AIM stocks will raise £92.5m, based on calculations from the 2021/22 tax year, but Charles Hall, Peel Hunt’s head of research says the problem is that: “There will be a clear incentive for IFAs (independent financial advisers) to move the existing £6bn of AIM inheritance tax funds into private vehicles”. He added he understood that “IFAs are already recommending this due to the negative perception of AIM from the budget changes.” Consequentially, he warned, more than £600m will be pulled from AIM every year, with new money flowing into the junior market for inheritance tax purposes “very limited”.

The John Lewis Partnership has again flagged how “worried” it is about the impact of the Budget on employment costs. John Munnelly, head of distribution at John Lewis, admitted to being concerns about the impact of the National Minimum Wage increase, given the firm employs 85,500 workers. “We are. We’ve got to be honest. Everybody out there is worried about the National Minimum Wage and the Real Living Wage and being able to accommodate that,” he said. Meanwhile, Naomi Simcock, the John Lewis operations director, said of this and extra costs linked to the hike in employer National insurance contributions: “This is additional pressure in a market which is quite challenging at the moment.” Previously, CEO Nish Kankiwala labelled the Budget as a “two-handed grab” because taxes were rising while a Business Rates overhaul has been delayed.

The UK’s largest firms have contributed more than £90bn to the economy in tax for the first time, PwC estimates. Firms in the so-called 100 Group, consisting mainly of FTSE 100 companies and other large unlisted UK firms, contributed £93.3bn to the Exchequer in the 2023/24 financial year, amounting to just under 10% of total Government revenue. This is up from £89.8bn last year, reflecting the increase in Corporation Tax which came into effect last April, PwC said. Andy Agg, chair of the 100 Group’s tax committee, said the survey showed the “significant contribution that large companies make to the public finances as well as to the wider economy”. The figures led Shadow Business Secretary Andrew Griffith to highlight how “private businesses create the wealth to pay for an ever increasing public sector cost”. “No one’s pockets can be picked infinitely if we wish to have a globally competitive economy,” he told City AM.

Just Eat Takeaway is to delist from the London Stock Exchange. It will keep its primary listing on Amsterdam’s Euronext exchange. The food delivery giant blames the “complexity and costs associated with the disclosure and regulatory requirements of maintaining the LSE listing” as well as “low liquidity and trading volumes”.

Smithfield Market, London’s oldest meat market is set to close after 900 years. Yesterday, the market’s owners, the City of London Corporation, voted not to proceed with a £1bn plan to help relocate its traders to a new site in Dagenham Dock, because of cost overruns, but to close the market for good instead. The same committee also voted not to support moving Canary Wharf’s Billingsgate fish market to the east-end suburb. In a statement, the Corporation said traders will continue their operations at both Smithfield and Billingsgate until at least 2028, during which time it would help support the markets’ traders to identify new sites, and provide compensation in the region of £300m, according to The Times. The Guardian explains that both Smithfield and Billingsgate markets are governed by Acts of Parliament, fixing the markets to their existing sites and imposing certain rights, restrictions and obligations as to the use of the land. Now a Bill, which will be laid before Parliament on Wednesday, will ask to repeal that legislation, and enable the land of the existing sites to be used for other purposes. Smithfield’s origins can be traced back as far as the tenth century, and the City of London Corporation has run it since 1327, when Edward III gave it the right to operate food markets.

The Groucho Club has been forcibly closed down by having had its licence suspended following a police investigation that alleges “a serious crime may have taken place at the premises in circumstances linked to a breach in the premises licencing conditions". The club, a favourite celebrity haunt, was founded in 1985 and named after comedian and actor Groucho Marx, who reportedly once said he would refuse to join any club that would have him as a member. The police have not given any details as to the alleged nature of any crimes committed.

The Financial Conduct Authority (FCA) has fined Macquarie Bank’s London branch £13m for “serious failings” which allowed one of its employees to record 400 fictitious trades between June 2020 and February 2022. Travis Klein, who was based at Macquarie Bank Limited’s (MBL) London metals and bulks trading desk, recorded and made efforts to conceal over 400 fictitious trades in the bank’s internal system in an attempt to hide his losses, but the fake trades were not detected earlier due to “significant weaknesses” in MBL’s systems and controls. The FCA said the bank had been made aware of some of these weaknesses previously but “failed to put effective and timely plans in place to fix them”. Klein has been banned him from the financial services industry but escaped a £27,000 fine because of financial hardship.

The Campaign for Real Ale (Camra) is accusing the Carlsberg Marston’s Brewing Company (CMBC) of “wiping out” its British brewing heritage. The Danish brewing giant is withdrawing 11 classic British beers, including Bombardier, from pubs by the end of the year, leading to a further backlash: CMBC has already shut down Cumbria-based Jennings Brewery, sold the Eagle Brewery to Spanish beer maker Damm and announced the closure of Wolverhampton’s Banks’s Brewery in its 150th year. Gillian Hough, vice chairman of Camra, said: “This is another example of a globally owned business wiping out UK brewing heritage. I hope that this change will mean space on the bar for licensees to stock guest beers from local independent breweries, but realistically, I suspect this isn’t what CMBC plans”. “This loss of consumer choice is the inevitable outcome of a brewing conglomerate run by accountants and the bottom line. This is a sad and disappointing decision that puts both the history and the future of British brewing in jeopardy,” she said. However, CMBC blamed falling demand for axing the beers, which also include Banks’s Mild, Jennings Cumberland Ale and Ringwood Boondoggle. Carlsberg took full control of CMBC in July after Marston’s, which had brewed beer in Derbyshire for 186 years, sold its remaining 40% stake in the venture for £206m. A CMBC spokesman told the Telegraph: “Understandably, where demand has sadly declined we do have to make the difficult choice to delist beers. We continue to invest in and launch new cask ales as well as support popular traditional cask ales ranging from Banks’s Amber Bitter to Marston’s Pedigree.”

Merlin Entertainments’ CEO Scott O’Nell is stepping down after two years’ in the job, Sky News reports, citing sources as saying he is taking an undisclosed role elsewhere. Merlin owns Legoland and Alton Towers.