Labour will learn it can't balance the books on the backs of pensioners
Over the years, however, successive reforms have meant the system no longer seems to reflect those original social aims. Regardless of how long you have paid in, and whether or not you can genuinely keep working because of ill-health or caring duties, the Government expects you to just keep working longer before starting your state pension.
Currently 66, by 2028, SPA will be 67. Further increases to 68 are already planned. There are widespread worries that the demographic pressures of many more over-60s and fewer younger people will place unsupportable pressures on the public purse. This leads policymakers to conclude that rising the average life expectancy justifies expecting everyone to longer. But this ignores important elements of modern Britain.
Not everyone can manage to keep waiting longer for basic retirement support. Of course, people with other pensions, (including officials and politicians who make the policy decisions) will have money to tide them over for years until their state pension starts. But what about those who are not so fortunate? Many will be plunged into penury, trying to manage on meagre out-of-work benefits, despite having decades-long NI contribution records.
I believe average life expectancy is not an appropriate indicator of whether or not everyone can keep working longer. By definition, half the population will be below the average. Their circumstances shouldn't be ignored.
This new review's remit covers fairness between generations and state pension sustainability. So it must consider more factors than just starting age. It should include proper recognition of the enormous twenty-year differential in healthy life expectancy across the country. The worst-off groups are already in poor health before their sixties, but the best-off stay fit and healthy into their early-seventies. Since the pandemic and subsequent NHS dislocations, many older workers' health has worsened, making it vital to consider fairness within generations, not just worrying about younger versus older people.
Studies have shown that increasing SPA to 66 resulted in a significant rise in poverty among 65-year-olds. The least healthy are also less likely to have other income. Future pensioners are also facing lower pensions as traditional employer-guaranteed income is replaced, for private sector workers, by pension funds that are dependent on investment success and potentially vulnerable to tax raids.
Of course, continually jacking up SPA is a marvellous money-saving mechanism for any government. It's the easiest policy lever to pull to save money on pensioner support. However, there are other ways to cut state pension costs.
Currently, just 35 years of NI qualifies for a full state pension. This is nowhere near a full working life. People with health or caring issues, and a 50-year NI record, still cannot receive a penny of state pension before age 66.
Just forcing people to keep working longer, for less pension, is not sustainable. Ill-health early payments should be considered for people in poorer health, including heavy manual labour workers, with no private pension and decades-long NI records.
Providing early access to pension credit, or early retirement payments for carers and those in poorest health, would still save money, while also recognising those at the bottom of the health and wealth distribution in their sixties, who have so far been abandoned.
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Telegraph
4 minutes ago
- Telegraph
Bono linked to special needs schools facing government crackdown
Bono is in line to make money from special needs schools largely funded by the UK taxpayer, a Telegraph investigation can reveal. The U2 frontman is an investor in Outcomes First, which owns 71 privately operated schools in the UK for more than 4,200 pupils with special educational needs and disabilities (Send). Hundreds of such private schools have opened up in recent years because of a surge in pupils diagnosed with special needs and a shortage of state-run places. The private schools get most of their income from British taxpayers, at an estimated cost of more than £2.4bn a year. The Government has pledged to crack down on 'excessive profit-making' in the Send sector amid concerns that private companies are making millions off the growing special needs crisis in Britain. Outcomes First charges as much as £157,000 a year for pupils with complex special needs. The business is racing to expand its operations after a post-Covid surge in the number of Send pupils entitled to publicly-funded school places. It has converted deserted office blocks in urban business parks into Send schools as part of this rush to expand, with some head teachers still not hired weeks before schools are due to open. Bridget Phillipson, the Education Secretary, said: 'We inherited a broken Send system failing to meet the needs of children and families, and it's appalling that some companies are capitalising on this crisis. 'Through our Plan for Change, we're building a system where all children can achieve and thrive. That requires all schools to be firmly focused on improving children's outcomes – not excessive profit-making.' The number of pupils receiving Send support has swelled over the past decade, largely driven by an increase in diagnoses of autism, ADHD and mental health problems. This has resulted in skyrocketing numbers of education, health and care plans (EHCPs) being handed out. These are legally binding documents which spell out individual teaching requirements for Send children that a local authority must pay for. They can include places at private specialist schools. A record 639,000 children in England held an EHCP in January, up 11 per cent on the previous year. The number of children with EHCPs at private Send schools increased by 17,000 between 2018-19 and 2023-24. Outcomes First, the largest operator of private Send schools, had a turnover of £264m last year. A majority stake in the company was acquired in 2023 by The Rise Fund, a private equity firm co-founded by Bono. As an investor in the firm, the U2 singer also has an investment in Outcomes First, meaning he personally stands to make money if it is sold for a profit. The exact sum will depend on several factors including the sale price of the company and the amount of investors owed money. TPG, The Rise Fund's parent group, declined to say how much Bono had invested in the fund or how many investors it had in total. A spokesman for Bono did not comment. One source suggested any potential gain from a sale of Outcomes First would represent a small part of his overall investment in The Rise Fund. Outcomes First was valued at around $1bn (£740m) at the time of its sale to The Rise Fund, according to Bloomberg. The group has increased the number of schools it owns by more than a quarter since then, and plans to open eight more in the coming year to cater for the increased demand. 'No-nonsense investors' The Rise Fund promises investors 'strong financial returns' while helping 'address various societal challenges globally'. It said in 2023 it hoped the purchase of Outcomes First would 'achieve quantifiable impact and positive outcomes alongside strong business performance'. The fund's latest annual accounts show an average gross return on investor capital of 80 per cent. A source close to the company said: 'The Rise Funds, if they sold for profit, could make a considerable gain for both the fund and its investors, which also includes Bono.' It has invested around $12bn into more than 85 companies in the decade since it was founded. The Telegraph understands Bono is not involved in direct decision-making over the fund's investments, with appointed fund managers instead responsible for this. The singer, who has built a post-U2 career as a philanthropist, said last month he launched the fund because 'I didn't want a warm-and-fuzzy concessional capital. I wanted to work with proper, no-nonsense investors'. Bono co-founded the fund alongside Jeff Skoll, the former eBay chairman, with help from its parent company TPG. Other board members include Sir Richard Branson, founder of the Virgin Group. Asked in a YouTube interview in June for his response to claims that his philanthropy is 'tokenistic', Bono said: 'People are right to be cynical. They are correct. We should be very, very suspicious of public philanthropy and we should ask hard questions of it. And so I'm with people that ask those hard questions. 'In a way, it's a promotional vehicle for somebody like me and anything you do in public, if it makes you look good in public, you should be a little suspicious of it.' Private equity swoops in Private equity firms have begun buying up independent Send school chains in recent years and pumped millions into helping them expand so they can later be sold for a profit. Analysis shows operating profits at the six largest private Send school providers jumped more than 38 per cent between 2022 and 2024, as they opened new schools to meet demand. Part of the attraction is that local authorities are legally obliged to pay for children to attend private Send schools if they pass a special assessment, meaning almost all of their income is guaranteed by UK taxpayers. Companies analysed by The Telegraph underlined the legal requirement for councils to pay for private Send education in their latest financial accounts, with some referring to local authorities as their main 'customers' or 'primary revenue stream'. The groups also highlighted their exemption from Labour's VAT raid on private schools, with one stating that 'our customer base is predominantly local authorities who will have the mechanism to reclaim the VAT that is charged'. Ms Phillipson is concerned that private Send schools are ultimately failing to improve results for vulnerable children despite 'vast sums' of taxpayer money being spent on them. The number of private Send schools has nearly doubled over the past decade, rising from 456 to 803. Outcomes First, which largely caters for children with autism, ADHD and social, emotional and mental health needs, has boasted about its ability to 'scale quickly' to serve new areas of need across the country. Outcomes First plans to open Penny Tree School in September, a new Send school in Birmingham for autistic pupils aged four to 19. Until at least July last year the school's building, which backs onto an A road next to the local cross-city rail station, served as an office block for a construction firm. Options Autism, owned by Outcomes First, listed an 'urgent' advert for a deputy head teacher for Penny Tree School earlier this year and was still recruiting a headteacher to lead it as of June. Fees 'triple those charged by state schools' Average fees at some of the largest private Send school chains are more than triple the annual bill at their state-backed equivalents, according to analysis of Ofsted reports. Special schools owned by Outcomes First charge an average fee bracket of between £57,989 and £88,989, with prices increasing according to the complexity of a child's needs. The figure is significantly higher at some schools including Outcomes First-owned Red Moor School in Cornwall, where fees for one high-needs pupil were £157,253 a year at its latest inspection. By contrast, a place at a state-run Send school costs around £24,000 per pupil, according to the National Audit Office (NAO). A spokesperson for Outcomes First said its fees placed it 'among the best value providers nationally' and that 99 per cent of its schools in England are rated good or outstanding by Ofsted. Average fees at the Witherslack Group – the second-largest private Send school chain – range between £77,547 and £104,853 per pupil and can hit as much as £130,752 in some schools. Meanwhile, a specialist autism school in Somerset, which is owned by Aspris, a private Send chain, charges up to £120,150 in annual fees per pupil. North Hill House school in Frome was rated 'inadequate' at its latest standard Ofsted inspection last February – the lowest possible rating. An additional Ofsted inspection last November said it had since improved standards. Aspris said a further inspection by Independent School Standards in January 2025 found the school met the required quality checks. Pay rises for directors Directors of some private Send school groups also paid themselves large salaries last year, The Telegraph can disclose. The boss of Aspris, which is ultimately owned by Waterland Private Equity, handed themselves a 43 per cent pay rise in 2024 to hit £885,000. Aspris said this was not awarded to Charles Coney, its chief executive, adding that his salary was 'significantly lower'. It refused to disclose the name of the director awarded the 'extreme high' pay rise for the year, but said they had left the company. The highest-paid director at Cavendish Education, which owns 11 private Send schools, saw their pay increase by 39 per cent last year to hit £393,000, according to its latest financial accounts. Horizon Care and Education, which owns around a dozen private specialist schools, boosted remuneration for their chief director to £290,200 in 2024 – a rise of 22 per cent compared to the year before. The money, paid through parent company Range Topco, excluded around £11,000 in pension contributions. Since private Send schools get the majority of their income from local authorities, these salary rises are likely to be taxpayer-funded. Lucrative business opportunity The Telegraph has seen evidence that investors are now being advised that private Send education poses a lucrative business opportunity – and one subject to less scrutiny than independent children's care. A 2024 market report by Mansfield Advisors, a consulting firm specialising in healthcare, social care and education, analysed the 'children's services market and the opportunities it presents for investors'. It said: 'While the independent children's care sector has been subject to high scrutiny, this is not likely to have a significant impact on providers in the special education sector. 'It is clear the increase in demand is outstripping the growth in supply, providing a clear opportunity for investors to meet this gap. 'Investing in the specialist education sector not only offers some shielding from wider economic downturns, but also the potential for good return through the robust demand increases for those with an appetite to look beyond the perceived risks.' The report added that it expected local authority spending on private Send schools would continue to soar, but warned that 'it is unclear how Labour will respond' to concerns about the industry. Mansfield Advisors highlighted high sale prices attached to many chains that have been bought by private equity, with sovereign wealth funds now among those pouring money into the sector. The Abu Dhabi government owns the Witherslack Group, where turnover rose by a fifth last year to reach more than £208m. Witherslack was bought in 2021 by Mubadala Capital, an asset management arm of Abu Dhabi's sovereign wealth fund. It has more than tripled the number of pupil places at its private Send schools to over 2,150 since 2017 and plans to open further schools in the coming months. Witherslack Aggregator, the holding company that owns Witherslack and all its Send schools, said in its latest financial accounts that 'the ultimate controlling party is the Government of the Emirate of Abu Dhabi'. Mubadala Investment Company, which owns Mubadala Capital, is chaired by Sheikh Mansour bin Zayed, an Emirati royal and the current vice president and deputy prime minister of the United Arab Emirates (UAE). Its six further board members are all Abu Dhabi royalty or UAE government officials, including Khaldoon Al-Mubarak, the chairman of Manchester City Football Club. The Telegraph has seen evidence of Mubadala officials visiting private Send schools in Britain to stress the company's footballing links. During a trip to a private Send school in Windsor in 2023, Mubadala representatives showed pupils a TV presentation about Manchester City FC, under the caption 'Examples of companies w e back' and alongside a picture of Sheikh Mansour bin Zayed. Witherslack said the representatives were from Mubadala Capital, not Mubadala Investment Company. Mubadala Capital as a subsidiary has no direct links to Manchester City FC, nor Sheikh Mansour bin Zayed. A spokesman said the visit was part of a workshop 'to broaden students' horizons and encourage students to consider careers by connecting their education to real-world opportunities'. Labour's reform plans Labour is considering introducing measures to restrict profits for companies running private special schools amid concerns that many Send children would fare just as well in conventional education. Ms Phillipson said in April: 'We are spending vast sums of money on a system where parents have lost confidence, where children are not getting what they deserve. [Reform] will involve more mainstream inclusion.' The Department for Education (DfE) said earlier this year that private Send schools are putting 'massive strain on local authority finances whilst failing children with Send and their families'. It added: 'Schools should be focused on ensuring children are supported to achieve and thrive, there is absolutely no place for excessive profit-making.' In August 2024, 87 per cent of private Send schools were judged either good or outstanding by Ofsted, compared to 90 per cent of state-run special schools, according to the DfE. The total taxpayer bill for private special schools reached £2.4bn in 2024, in addition to around £1.8bn spent on taxis to ferry children to and from them. The Government is concerned that soaring spending on specialist Send schools is pushing many local authorities to the brink of going bust and driving up the annual special-needs budget, which hit £11bn this year. Ministers recently announced a two-year reprieve before councils must balance the books on their bulging Send deficits following concerns an initial March 2026 deadline could have caused many to buckle. Parliament's Public Accounts Committee (PAC) said last month that local authority overspending on Send provision could reach between £2.9bn and £3.9bn per year by 2027/28. A Government white paper outlining reform of the sector is expected to be published in autumn. Ms Phillipson said: 'We're engaging with parents and experts to make sure that high-quality places are available across the country to meet all children's needs, and have already started driving change with our £740m capital investment to encourage councils to create more specialist places in local mainstream schools.' A spokesman for Outcomes First said: 'We are backed by a social impact investment fund which differs significantly from traditional private equity. The Rise Fund is driven by a core mandate to deliver positive and sustainable social impact alongside sustainable growth. 'Every decision is aligned with a long-term commitment to improving the lives of children with Send and ensuring that growth and reinvestment are purpose-driven and helping to meet rising demand while maintaining a high-quality service. 'As a responsible provider committed to positive social impact and sustainable growth, we reinvest any surplus into developing new services while improving quality and increasing capacity to ensure that more children with Send can access the support they need and our concern is what would happen to the thousands of children if organisations like ours were not able to scale and meet that demand.' A Witherslack spokesman said the company was 'the UK's leading education provider for neurodiverse young people, with the highest proportion of outstanding schools in the sector'. They added: 'The group offers exceptionally high-quality schools for pupils whose complex needs, and often challenging behaviour, cannot be met in maintained special or mainstream schools. 'Witherslack Group is proud to make a life-time commitment to helping young people find employment through its sector leading futures programme.' A spokesman for Horizon Education said: 'We are proud to support hundreds of children and young people with Send across the country, helping them to thrive through tailored, therapeutic education they may not otherwise receive. 'The vast majority of our services are rated good or outstanding by Ofsted, reflecting our commitment to high-quality provision. We are constantly striving to improve standards across all our settings. 'We recognise the pressures Local Authorities are under and are actively engaging with stakeholders across the country, including local authorities, Members of Parliament, and the Department for Education to ensure that funding is sustainable and fair for everyone, and that those pupils who require support the most have access to it.' A spokesman for Aspris said: 'We tailor care and education to meet the diverse needs of children and young people ensuring they always receive the right support at the right time in the right setting. 'We are proud of the proven positive difference we make in the lives of children and families. This is why our work often involves highly specialist, personalised care and support – which, understandably, sometimes brings additional costs.'
BreakingNews.ie
4 minutes ago
- BreakingNews.ie
Michael O'Leary criticised for ‘drive-by commentary' on Dublin metro
Ryanair chief executive Michael O'Leary has been criticised for his 'insulting' comments on a metro for Dublin, which he called a 'waste' of taxpayer money. The 18.8km rail line, most of which will be underground, is to run from north of Swords to Charlemont in the south of Dublin city centre. Advertisement Various metro projects for the capital have been proposed in recent decades, but none have proceeded to the building stage. On Tuesday, the Government announced that the MetroLink project would get a €2 billion boost in funding as part of the national development plan, in what Taoiseach Micheál Martin said was 'a very definitive commitment to the metro'. While Finance Minister Paschal Donohoe indicated the latest estimated cost for the MetroLink was €11 billion, Mr O'Leary claimed it would cost €20 billion, 'so about a billion a kilometre'. 'Dublin Airport doesn't need it, Dublin Airport passengers won't use it – they're already well-served by buses,' he told RTÉ Radio on Wednesday, while claiming that less than a third of the airport's passengers use buses. Advertisement He said that while the tube in London runs from Heathrow and through 'all of London', the Metro will only serve a section of Dublin city's residents – around 100,000 people, he claimed. 'Here's the madness of this. This thing is going to start at Stephen's Green in the morning. If you want to get to our first wave of departures, which leave at about 6.30 in the morning, you need to be at the airport at 5.30am. 'Are you seriously going to drive into the centre of Stephen's Green, where there's no car parking, to get this metro to get to Dublin Airport for 5.30 in the morning? No, you're not. 'Let me give you the alternative scenario: for €100 million, this year we could buy 400 buses, and 400 buses would provide exactly the same capacity as this metro from Dublin Airport, in through Ballymun, in through Drumcondra, on bus lanes that already exist.' Advertisement He claimed the plan had not been properly costed and hit out at the Government's handling of public finances. 'This Government wasted €330,000 on a bike shed, imagine what they do with an 18-kilometre underground train from an airport?' Micheál Martin announced two billion euro funding for the metro project (Phil Noble/PA) He also criticised comments by Mr Martin, who said the Irish capital will not be sustainable without a metro. 'Does he not understand that the buses actually will all be electrified by the end of this decade, which will actually be greener than light rail?' Advertisement Labour TD Duncan Smith said Mr O'Leary's criticisms of public infrastructure were as sure 'as night follows day'. 'Dubliners are stuck in daily gridlock. MetroLink is their best chance at affordable, reliable transport that serves communities, not corporate profits. 'As a consistent advocate for MetroLink in Swords, I find it insulting to hear this kind of drive-by commentary from someone who clearly doesn't rely on public transport to get to work. 'Dublin deserves better than a transport plan from a billionaire whose only experience with buses is when he is pretending to be one.' Advertisement When asked about his endorsement of Enterprise Minister Peter Burke and junior minister Robert Troy during the general election campaign, Mr O'Leary claimed 'they're not in government' and criticised Mr Martin again. 'I endorsed Peter Burke, who actually topped the poll despite the criticism. I also endorsed Robert Troy – and they're not the government.'
Times
4 minutes ago
- Times
Goldman Sachs boss: City's status is at risk
London's position as a global financial centre is 'fragile', the head of Goldman Sachs has warned. David Solomon, 63, said a combination of Brexit and not retaining increasingly mobile talent and capital put the City's status at risk. 'The financial industry is still driven by talent and capital formation. And those things are much more mobile than they were 25 years ago,' Solomon told The Master Investor Podcast. • Rachel Reeves refuses to rule out wealth tax despite fresh warnings Solomon is one of the world's most powerful investment bankers and has been chief executive of Goldman Sachs, which has about 6,000 employees in the UK, since 2018. He said he was 'encouraged by some of what the current government is talking about in terms of supporting business and trying to support a more growth-oriented agenda. But if you don't set a policy that keeps talent here, that encourages capital formation here, I think over time you risk that.' On July 15, Rachel Reeves unveiled a number of measures aimed at cutting red tape in Britain's financial services sector as part of attempts to kickstart the economy. The chancellor said in her Mansion House speech that Labour placed financial services, one of eight key growth sectors under the industrial strategy, 'at the heart of this government's growth mission'. However, there has been speculation the Treasury could target profits in the banking sector, which have been boosted by higher interest rates, with tax rises to help bolster the government's fiscal position. Reeves with Solomon and his Goldman Sachs co-CEOs Kunal Shah, left, and Anthony Gutman, right, in Wednesday's meeting SIMON WALKER/HM TREASURY Reeves is facing pressure over reforms to the non-dom tax regime, with research by New World Wealth, an intelligence firm, recently suggesting Britain has lost 18 billionaires over the past two years, more than any other country in the world. In the podcast, Solomon said: 'Incentives matter. If you create tax policy or incentives that push people away, you harm your economy.' Reeves also pledged in her speech last week to make 'meaningful reforms' to ringfencing, rules brought in following the 2008 financial crisis which forced lenders to legally separate their high street businesses from riskier investment banking divisions. • Why is the FTSE 100 so high when the UK economy is stuttering? Solomon pressed the chancellor, with whom he met in 11 Downing Street on Wednesday along with his co-CEOs Kunal Shah and Anthony Gutman, to 'follow through', saying: 'It's a place where the UK is an outlier, and by being an outlier, it prevents capital formation and growth. 'What's the justification for being an outlier? Why is this so difficult to change? It's hard to make a substantive policy argument that this is like a great policy for the UK. So why is it so hard to change?' The ringfencing regime has also faced criticism from the bosses of some of Britain's biggest banks, who called on the chancellor in April to abolish the rules, arguing that they were inefficient and had been superseded by other reforms.
