CAST has been piloting an accelerator model that pairs a top tech team with a charity in order to help them use their sector knowledge to build new and, crucially, useful tools.
The cash will be used to support 12 organisations through the Fuse programme over three years, as well as creating a set of best practice tools to help share knowledge.
Fuse has already helped Oxfam with the development of a digital payment service for people “on the cusp of food poverty” and supported Breast Cancer Care with the development of community app BECCA.
Speaking to Jo Wolfe, assistant director of digital at Breast Cancer Care, in June, she told NS Tech: “Yes, we need a response to digital in charities, but change can be more gradual. It needs to be sustainable, meaningful and long-lasting, because there are so many people who rely on us.”
Third sector organisations have been hugely affected by central government funding cuts, but are also facing increasing demand from people affected by shrinking local services.
Doing more, better, using digital could be the thing that keeps charities online in uncertain times.
Applications for the accelerator programme will open later this year.
Written as editor of the New Statesman’s NS Tech and first published here.
Earlier this week, for the first time in history, the world’s top five companies by stock market value were all US global technology firms. Apple, Alphabet (Google), Microsoft, Amazon and Facebook, to be more precise.
Hailing our ‘new tech overlords’, Bloomberg even created a handy graphic to show what a profound change this represents in what is starting to look a truly borderless digital world.
Unfortunately, the names of our new rulers have also become pretty synonymous with dubious tax arrangements in recent years.
That’s a fact that has not escaped MPs reporting this week on the future of the global tax system on our web-powered planet.
The Responsible Tax report takes a deep dive into the efforts currently being made by the Organisation for Economic Co-operation and Development (OECD) on country-by-country tax reporting.
And the ‘digital economy’ is the only industry that’s singled out as a key challenge to creating a responsible global tax regime.
And it’s no wonder:
Apple
In December 2015, the US Government claimed that Apple uses a “sophisticated scheme” to avoid paying tax on $74 billion (£496.5 billion) of revenues held overseas.
Tim Cook, Apple CEO, dismissed the claim as “total political crap”.
Apple was found to be using Irish tax laws that allow companies to be incorporated in the country without being tax resident.
Google
In January 2016 Google struck a deal to pay £130 million in back taxes after an “open audit” of its accounts by the UK tax authorities.
The payment covers money owed since 2005 and followed a six year inquiry into the company by HMRC.
A spokesperson at Google said: “Governments make tax law, the tax authorities enforce the law and Google complies with the law.”
Microsoft
In June 2016 it was reported that Microsoft avoided up to £100 million a year in UK corporation tax by routing its sales through Ireland.
The corporation has sent more than £8 billion of revenues from computers and software bought by British customers to Ireland since 2011, as part of a deal with HMRC.
Amazon
In June last year, it was revealed that the Amazon’s UK branch paid £11.9 million in tax on £5.3 billion worth of sales.
Facebook
In 2014, Facebook paid just £4,327 in corporation tax in the UK.
Facebook said it made a loss of £28.5 million in Britain in 2014, after paying out more than £35 million to its 362 staff in a share bonus scheme.
Indeed, Amazon and Google even get special mentions in the MPs’ report, for unfair competition with local booksellers and the UK’s bodged ‘Google Tax’, respectively.
“The globalisation of business and changes created by digitalisation make it difficult to determine where value is created and which country should obtain the tax revenue,” the report says.
It states that a tax system designed almost 100 years ago cannot take into account the diffuse nature of sales being made by multinationals to customers living all over the world.
Although the report praises the OECD’s progress on building “international consensus” on creating new global tax rules, it says the current strategy “will fall short of creating the fair and transparent global system that is needed to tackle global tax avoidance”.
Despite the fact that 94 countries are now working together on specific areas of the OECD’s plan, tax havens like the British Virgin Islands and even the United States, are failing to get involved.
“The US is fiercely protective of their global companies and their corporate tax revenue. There are fears that in the wake of the BEPS Action Plan multinational companies will be tempted to move their businesses away from the US with their high corporation tax rate to Europe with its low corporate tax rates…
“Or that aggressive EU countries will lay claim to tax revenues that should belong to the US. The evidence, however, indicates that the US itself is by far the biggest loser of revenues due to the avoidance of US multinationals.”
As well as huge criticism of the UK government for saying one thing and doing another, there is also:
a lack of agreement on making the tax data publicly available;
an issue around how the complexity of the new rules will disadvantage poorer countries, which depend more on corporation tax;
a lack of legally binding rules;
a high bar to qualify for OECD tax reporting (£586 million in group revenue), meaning many multinationals will be exempt.
So, what to do?
As well as making recommendations to beef up the OECD’s current plan, which it calls a “sticking plaster”, the report makes a rather radical proposal based on the evidence it received:
“There was broad support for a unitary based tax system with formula apportionment overseen by a global body such as the OECD or the United Nations whereby each company would submit one report of consolidated accounts for the global group.
“The report would specify the group’s assets, the size of the workforce and sales. The overall profits would be then divided up among jurisdictions according to an agreed formula based on these factors. This would reflect the reality that subsidiaries of companies are not separate entities that trade with one another, but are actually all parts of one global company.”
It believes that country-by-country reporting is just part of a longer process towards “radical reform” that should ultimately see multinationals, powered by the internet, paying tax.
The OECD estimates that up to 10 per cent of global revenues from corporation tax is lost each year because companies shift their profits between jurisdictions. That’s roughly $240 billion.
A change like this could make a huge difference to those companies now dominating global investment markets – and the lives of people across the world too.
Written as editor of the New Statesman’s NS Tech and first published here.
This week, the Business, Innovation and Skills Committee launched a call for evidence on Theresa May’s new (old) Industrial Strategy launched post-Brexit.
The new strategic approach to the economy was of such importance when it was announced the news even made the big screens over in New York’s Times Square.
The committee will consider the approach taken by previous governments “unseen since Margaret Thatcher” so said Bloomberg a few weeks ago, as well as looking at other countries’ efforts.
But what is an Industrial Strategy today without digital?
“We touched upon digital business, skills, talent and infrastructure in our Digital Economy inquiry,” the committee’s chair Iain Wright MP told NS Tech.
“However, given the importance of this agenda, and how I’m keen to see a UK industrial strategy provide coordination across areas like skills and infrastructure, I anticipate that we will certainly look at this.”
What does the Government mean by industrial strategy, and what does the private sector want from one?
How interventionist in the free market should Government be in implementing an industrial strategy, for example in preventing foreign takeovers of UK companies?
What tensions exist between the objectives of an industrial strategy and the objectives of other policies, and how should the Government address these tensions?
What are the pros and cons of an industrial strategy adopting a sectoral approach
Should the Government proactively seek to ‘pick winners’?
What criteria should be used to identify which sectors are supported?
Should the Government prop up traditional industries that it considers to be in the national interest?
If not a sectoral approach, should the industrial strategy have a broader objective, such as improving productivity?
Should the industrial strategy have a geographical emphasis?
How should an industrial strategy link with devolution initiatives aimed at devolving taxation and decision making away from Westminster?
What examples are there of interventions from central Government that have successfully supported economic growth away from London and the South East of England?
How should the industrial strategy work with local authorities and Local Economic Partnerships, reconciling a U.K.-wide strategy and local, regional and devolved nations’ priorities?
What would you include in a plan to create the modern, innovative and competitive UK economy we so desperately need?
Written as editor of the New Statesman’s NS Tech and first published here.
Pensions are certainly not the most exciting conversation starter, but when you finally realise you should get on top of yours, Lady Barbara Judge is your woman.
She currently sits as the first female chair of the Institute of Directors and just stepped down from the Pension Protection Fund (PPF), the arms-length government body that helps save your retirement pot if something goes wrong.
Lady Judge helped bring pensions auto-enrolment onto the statute book, designed to get the millions of people in the UK without a private pension to start putting money aside.
Speaking to NS Tech, she says she was “delighted” that the government enacted auto-enrolment, but admits that many companies have found the new process a “pain in neck”.
That’s why she’s now offering her expertise and connections, which saw her make the Woman’s Hour Power List 2014, to HR platform Hibob as its new chairman.
“Auto-enrolment really takes a lot of work, particularly for SMEs, who’ve found it extremely difficult to set up the schemes, and to do all the paperwork and administration,” she says.
“Employees don’t understand it either. Most people just don’t think about having a pension, but people born today will live to 100 and many certainly won’t save for that.
“Instead of working out really well, it’s been quite problematic and I’m extremely concerned about what all this means.”
Lady Judge believes Hibob, which sadly won’t win any awards for the best startup name, is a way to solve that problem.
The platform is a cloud-based, data-driven HR platform designed for SMEs where they can onboard new starters, engage staff in the workplace, manage time off, and sort out benefits like healthcare, insurance and, of course, pensions.
Co-founder Andy Bellass explains that, to date, many employers and employees have seen automatic pension enrolment as “just another tax” and the lack of enthusiasm for it has seen many people opt out as early as possible.
“The general perception that the government will provide is increasingly difficult to believe,” Bellass says. “But most people have no idea where they stand on their pension and that’s a huge problem.
“The fundamental vision is to create an experience for the employer that the employee will be totally engaged with. Maybe we don’t even call it a pension.
“If we can start helping people understand where they are versus the norm, it starts to be something they can visualise and be proud of sharing.”
Bellass says Hibob has conducted research with SMEs that found huge swathes of them are using a series of humble spreadsheets to manage their people, which becomes pretty onerous the larger the company gets.
“We’re already working with more than 300 companies, up to around 1,000 people each, and it’s literally a case of dragging an Excel into the platform to let it suck out all the data. That takes about 90 seconds.”
You can automatically order a computer before new starters arrive, quickly pull management reports, integrate with relevant healthcare or insurance providers, and tailor staff benefits to the data they input around interests and hobbies.
Part of Hibob’s secret sauce is its’ company culture’ indicators created from that data, how many other mums you’re working with, how many people do yoga and more.
Knowing more about what you have in common with coworkers, Hibob thinks, helps create those ‘great place to work’ vibes that younger workers in particular are yearning for.
One of the key features on the horizon is pension data monitoring, so users will be able to move their money easily, see how they compare to peers and up their contribution if they want to.
It’d be crazy if the company didn’t start helping advertisers connect with workers to sell in their various wares – but this has to be done without straying into creepy territory.
Hibob has received $7.5 million of investment in a round led by Silicon Valley’s Bessemer Venture Partners, which shows it’s already being considered as a pretty serious business. An early backer was Saul Klein, founding Skype exec team member, serial investor and now government adviser on GDS.
The cold, hard pension figures are pretty scary, even for those people who have saved, as companies like BHS, Tata and BT grapple with have huge black holes in their schemes.
It’s no secret, then, that pensions as we’ve known them no longer exist and young people are facing a poorer old age if they don’t start paying as much attention to this as they do Snapchat. So this is a problem – of course – but is it a problem that tech alone can solve?
Both Bellass and Lady Judge admit that part of the next challenge is getting the pensions conversation out into the wider public, but she’s enthusiastic: “Once people see Hibob, they will not fail to understand that it’s offering very important social contribution to our country.”
Hibob is by no means the first tech-powered HR department, but the combination of a slick user experience, with the team’s drive to help defuse the ticking pensions time bomb, is a pretty interesting combo. “If it’s ugly and horrible, nobody uses it,” Bellass agrees.
Let’s hope inertia and lack of time don’t allow this genuine and mounting problem to continue to swirl out of control for Britain’s workforce.
Written as editor of the New Statesman’s NS Tech and first published here.
All does not appear well over at the Government Digital Service, which is overseen by the Cabinet Office, as it welcomes its second new leader in less than a year.
Stephen Foreshew-Cain (pictured) is to be replaced with immediate effect by the Department for Work and Pensions’ digital lead Kevin Cunnington, just as the new minister Ben Gummer takes over at the Cabinet Office from Matt Hancock.
Foreshew-Cain had only taken over as executive director from GDS founder Mike Bracken nine months ago, with his former boss heading to work as chief digital officer at The Co-op.
Writing on Medium, Foreshew-Cain thanked Francis Maude for his efforts on setting up GDS back in 2010, with GOV.UK designed to replace the previous Directgov service. The GDS project was prompted by an inquiry led by tech entrepreneur Martha Lane Fox.
In his post, Foreshew-Cain said of his team and the culture created at GDS:
“Individually you set the example of how to challenge the status quo and by your example, show (not tell) it was possible that users’ hearts shouldn’t sink whey they needed to do something that meant dealing with government; that government services could be simple, could be clear, and could be fast…
“What we really mean is that we want to transform people’s lives. And to transform the services that improve people’s lives, we have to transform some entrenched government practices. And we can only really do that in a lasting way by transforming the culture of service delivery.”
Unfortunately, this transformation of civil service culture now appears to be in jeopardy. Tom Watson, deputy leader of the Labour Party and former Minister for Digital Engagement, has called it a “classic Whitehall power grab”.
“The Home Office has already quietly removed its most senior digital leader and similar positions in the Cabinet Office, DWP and HMRC are reportedly under threat. The mandarin machine is taking advantage of the summer hiatus to launch a minor coup, with the Sir Humphreys of Whitehall effectively trying to repatriate powers to their respective departments. The new cabinet office minister, Ben Gummer, must not allow them to succeed.”
This point is echoed by former GDS team member Andrew Greenway:
“It‘s easy to dismiss this as office politics. But it matters. For GDS’ faults — and there are plenty — it has been responsible for a new generation of bright, committed people into central government. It made a career in public service relevant to people who grew up with the internet.
“Many of these people will not stay, because there are few other places for them to go in government. They’ll be fine — there is no shortage of companies desperate to hire their talents. Whitehall will suffer. So will everyone reliant on public services delivered by a second-class bureaucracy.”
The Treasury reckons that GDS helped government save £4.1 billion over four years, with leaps and bounds made across agile product development, cross-department collaboration and transparency.
On Twitter, former head of GDS Mike Bracken gave particular nods to the (not overwhelmingly loved, but good efforts of) Verify, Notify, Pay and GDS Renewal services.
Foreshew-Cain’s civil servant boss John Manzoni has highlighted (among other things) his achievement in securing four years’ funding for GDS.
In the 2015 Spending Review, £450 million was set aside for GDS, as part of £1.8 billion put towards government digital transformation as a whole.
This appears to be secure, as it was flagged as a key part of the new hire announcement from the Cabinet Office. So what now?
Tom Watson said: “Theresa May’s new Government must renew the Digital Service’s political mandate for this Parliament and beyond. If it does so, I guarantee that Labour will continue to support its work.
“Government services shaped by the needs of citizens should never be at the mercy of the whims of Whitehall mandarins.”
That (likely) needs to be argued for by Civil Service CEO John Manzoni. No easy task when you’re one of the only people who’s been around more than five minutes!
Kirsty Styles 