To receive and consider the recommendations of the Cabinet (Minute 22) as an amendment to the following Notice of Motion submitted previously to the Council by Councillor Aves and referred thereto in accordance with Standing Order 8(2), namely:
The Council notes:
That local residents are asking Devon County Council to sign up to the Councils for Fair Tax Declaration.
The Fair Tax Mark has developed the Councils for Fair Tax Declaration in collaboration with UK cities, counties and towns who believe they can, and should stand up for responsible tax conduct. Councils-for-Fair-Tax-Declaration.pdf (fairtaxmark.net)
As recipients of significant public funding councils should take the lead in the promotion of exemplary tax conduct. Polls have found that 63% of the public agree that the government and local councils should consider a company’s ethics and how they pay their taxes as well as value for money and quality of service, when undertaking procurement. That three-quarters of people would rather shop or work for a business that can prove it is paying its fair share of tax.
Fair Tax Mark said there was “a pressing need for action”, claiming that research it commissioned had discovered that 17.5% of UK public procurement contracts commissioned by local and national government over the period 2014-19 were won by businesses with connections to a tax haven, with a combined value of £37.5 bn.
Billions are missing from our public purse because some companies choose to avoid paying their corporation tax - the same companies who have since benefited from taxpayer support through this crisis or have asked for bailouts.
This means we have less money available for the vital public services we all rely on, and that the smaller, local businesses in our county can’t compete because it’s not a level playing field.
That other Councils around the UK have already signed up to the Councils for Fair Tax Declaration including Peterborough City, Oxford City, Oldham, Cannock Chase, and the Royal Borough of Greenwich.
The Council believes:
Councillors across the UK work hard to serve their local communities and help direct the delivery of essential public services. The Coronavirus pandemic has exposed major weaknesses in our economy and deep-seated inequalities in our society. To Build Back Better we must tackle tax avoidance and Councils can pioneer the promotion of responsible tax conduct through:
· Leading by example on their own tax conduct
· Demanding greater transparency from suppliers
Having gone through a decade of austerity and reduced council spending caused by government reductions in grants, where funds have not kept up with demands of inflation and extra demands of new legal statutory duties, we’re now living through an era of unprecedented public spending due to the pandemic.
As a council, we have seen first-hand the challenge that a funding squeeze created for crucial frontline services. Local government has a proud history of standing up for responsible public sector conduct, ranging from paying the real Living Wage to promoting Fairtrade.
The Council resolves to:
1. Approve the Councils for Fair Tax Declaration Councils-for-Fair-Tax-Declaration.pdf (fairtaxmark.net)
2. Lead by example and demonstrate good practice in our tax conduct right across our activities
3. Require greater transparency from suppliers
4. Consider a company’s ethics and how they pay their tax as well as value for money and quality of service provided, when undertaking procurement
5. Promote Fair Tax Mark certification for any business in which we have a significant stake and where corporation tax is due
6. Support Fair Tax Week events in Devon and celebrate the tax contribution made by responsible businesses who say what they pay with pride
7. Demonstrate good practice including:
· ensuring contractors implement IR35 robustly and pay a fair share of employment taxes;
· not use of offshore vehicles for the purchase of land and property, especially where this leads to reduced payments of stamp duty,
· ensuring that there is clarity on the ultimate beneficial ownership of suppliers and their consolidated profit & loss position,
· undertaking due diligence to ensure that not-for-profit structures are not being used inappropriately as an artificial device to reduce the payment of tax and business rates; and
· supporting calls for urgent reform of EU and UK law to enable councils to revise their procurement policies and better penalise poor tax conduct and reward good tax conduct.
Having had regard to the aforementioned, any factual briefing/position statement on the matter set out in Report (CSO/21/11) and other suggestions or alternatives considered at that meeting the Cabinet subsequently resolved that:
(a) the County Council is committed to supporting the principles and ethos relating to fair tax. This commitment is enacted through the Council’s Financial Regulations and procurement policies. These regulations and policies align with statutory requirements and the Cabinet Office supplier accreditation standards and ensure best practice, adherence to regulations and ensuring those regulations are maintained;
(b) the Council already applies many of the considerations within this motion, wherever possible in the course of its work. For supplier qualification, the Council is required to apply Cabinet Office procurement policy which sets national standards for tax compliance as part of supplier qualification criteria for public contracts; and
(c) Council continue to support fair tax principles through the application of its financial regulations and procurement policies, however in order to remain aligned with Cabinet Office national policy for supplier qualification, Council be recommended not to formally sign the Declaration itself.
Decision:
(Councillor Cox declared a personal interest in this matter by virtue of being member of the co-operative group who were responsible for the initiating the fair tax motion)
(a) the County Council is committed to supporting the principles and ethos relating to fair tax. This commitment is enacted through the Council’s Financial Regulations and procurement policies. These regulations and policies align with statutory requirements and the Cabinet Office supplier accreditation standards and ensure best practice, adherence to regulations and ensuring those regulations are maintained;
(b) the Council already applies many of the considerations within this motion, wherever possible in the course of its work. For supplier qualification, the Council is required to apply Cabinet Office procurement policy which sets national standards for tax compliance as part of supplier qualification criteria for public contracts; and
(c) Council continue to support fair tax principles through the application of its financial regulations and procurement policies, however in order to remain aligned with Cabinet Office national policy for supplier qualification, Council be recommended not to formally sign the Declaration itself.
The Motion in the name of Councillor Hart was then put to the vote and declared CARRIED.
Minutes:
(Councillor Cox declared a personal interest in this matter by virtue of being member of the co-operative group who were responsible for the initiating the fair tax motion)
Pursuant to County Council Minute 17 of 27th May 2021 relating to the Notice of Motion set out below as previously submitted and formally moved and seconded by Councillor Aves that:
The Council notes:
That local residents are asking Devon County Council to sign up to the Councils for Fair Tax Declaration. The Fair Tax Mark has developed the Councils for Fair Tax Declaration in collaboration with UK cities, counties and towns who believe they can, and should stand up for responsible tax conduct. Councils-for Fair-Tax-Declaration.pdf (fairtaxmark.net)
As recipients of significant public funding councils should take the lead in the promotion of exemplary tax conduct. Polls have found that 63% of the public agree that the government and local councils should consider a company’s ethics and how they pay their taxes as well as value for money and quality of service, when undertaking procurement. That three-quarters of people would rather shop or work for a business that can prove it is paying its fair share of tax.
Fair Tax Mark said there was “a pressing need for action”, claiming that research it commissioned had discovered that 17.5% of UK public procurement contracts commissioned by local and national government over the period 2014-19 were won by businesses with connections to a tax haven, with a combined value of £37.5 bn.
Billions are missing from our public purse because some companies choose to avoid paying their corporation tax - the same companies who have since benefited from taxpayer support through this crisis or have asked for bailouts.
This means we have less money available for the vital public services we all rely on, and that the smaller, local businesses in our county can’t compete because it’s not a level playing field.
That other Councils around the UK have already signed up to the Councils for Fair Tax Declaration including Peterborough City, Oxford City, Oldham, Cannock Chase, and the Royal Borough of Greenwich.
The Council believes:
Councillors across the UK work hard to serve their local communities and help direct the delivery of essential public services. The Coronavirus pandemic has exposed major weaknesses in our economy and deep-seated inequalities in our society. To Build Back Better we must tackle tax avoidance and Councils can pioneer the promotion of responsible tax conduct through:
· Leading by example on their own tax conduct
· Demanding greater transparency from suppliers
Having gone through a decade of austerity and reduced council spending caused by government reductions in grants, where funds have not kept up with demands of inflation and extra demands of new legal statutory duties, we’re now living through an era of unprecedented public spending due to the pandemic.
As a council, we have seen first-hand the challenge that a funding squeeze created for crucial frontline services. Local government has a proud history of standing up for responsible public sector conduct, ranging from paying the real Living Wage to promoting Fairtrade.
The Council resolves to:
1. Approve the Councils for Fair Tax Declaration Councils-for-Fair Tax-Declaration.pdf (fairtaxmark.net)
2. Lead by example and demonstrate good practice in our tax conduct right across our activities
3. Require greater transparency from suppliers
4. Consider a company’s ethics and how they pay their tax as well as value for money and quality of service provided, when undertaking procurement
5. Promote Fair Tax Mark certification for any business in which we have a significant stake and where corporation tax is due
6. Support Fair Tax Week events in Devon and celebrate the tax contribution made by responsible businesses who say what they pay with pride
7. Demonstrate good practice including:
· ensuring contractors implement IR35 robustly and pay a fair share of employment taxes;
· not use of offshore vehicles for the purchase of land and property, especially where this leads to reduced payments of stamp duty,
· ensuring that there is clarity on the ultimate beneficial ownership of suppliers and their consolidated profit & loss position,
· undertaking due diligence to ensure that not-for-profit structures are not being used inappropriately as an artificial device to reduce the payment of tax and business rates; and
· supporting calls for urgent reform of EU and UK law to enable councils to revise their procurement policies and better penalise poor tax conduct and reward good tax conduct.
and having had regard to the advice of the Cabinet set out in Minute 22 of 14 July 2021:
Councillor Hart MOVED and Councillor McInnes SECONDED that the Cabinet’s advice be accepted and that;
(a) the County Council is committed to supporting the principles and ethos relating to fair tax. This commitment is enacted through the Council’s Financial Regulations and procurement policies. These regulations and policies align with statutory requirements and the Cabinet Office supplier accreditation standards and ensure best practice, adherence to regulations and ensuring those regulations are maintained;
(b) the Council already applies many of the considerations within this motion, wherever possible in the course of its work. For supplier qualification, the Council is required to apply Cabinet Office procurement policy which sets national standards for tax compliance as part of supplier qualification criteria for public contracts; and
(c) Council continue to support fair tax principles through the application of its financial regulations and procurement policies, however in order to remain aligned with Cabinet Office national policy for supplier qualification, Council be recommended not to formally sign the Declaration itself.
The amendment in the name of Councillor Hart was then put to the vote and declared CARRIED.
Councillor Aves then MOVED and Councillor Atkinson SECONDED that the motion be amended by the addition of (d), highlighted in red below:
(a) the County Council is committed to supporting the principles and ethos relating to fair tax. This commitment is enacted through the Council’s Financial Regulations and procurement policies. These regulations and policies align with statutory requirements and the Cabinet Office supplier accreditation standards and ensure best practice, adherence to regulations and ensuring those regulations are maintained;
(b) the Council already applies many of the considerations within this motion, wherever possible in the course of its work. For supplier qualification, the Council is required to apply Cabinet Office procurement policy which sets national standards for tax compliance as part of supplier qualification criteria for public contracts; and
(c) Council continue to support fair tax principles through the application of its financial regulations and procurement policies, however in order to remain aligned with Cabinet Office national policy for supplier qualification, Council be recommended not to formally sign the Declaration itself.
(d) the County Council will promote Fair Tax Week in 2022 and the Fair Tax Mark to all businesses, and, will push for an improved Cabinet Office procurement policy that will encourage businesses we work with to pay their Fair Tax. This would increase the tax we receive as a council and, as a result, hugely help to improve our public services to benefit our residents.
The amendment in the name of Councillor Aves was put to the vote and declared LOST.
The Motion in the name of Councillor Hart was then put to the vote and declared CARRIED.