25/10/2013 Newsnight


25/10/2013

An exclusive report into a troubled free school, Britain's growing economy and the paternity of Maria.


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The flagship free school where the numbers don't seem to add up and

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where the questions about discipline are directed not at the pupils but

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at how the school is run. You have big aspirations here, that's great.

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The Prime Minister was a big fan. But we have an exclusive report on

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allegations of mismanagement, nepotisim and possible fraud at the

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Kings Science Academy. Britain is growing and bouncing back is the

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story of the latest figure, why isn't everything plastic fantastic

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in Sheffield. The work has picked up, but I think some companies have

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to sacrifice how much they are sell it for to how much they make. We

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will hear from three chief executives of big British companies.

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And the mystery of Maria has been solved, the family of the blonde

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Roma girl, who has made the front pages all around the world has been

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traced. We hear from Athens. Good evening, all schools can face

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problems, but the Government's flagship free schools are under

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greater scrutiny, most because their very existence is part of a huge

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political debate about the direction of education policy. Tonight

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Newsnight can reveal that a whistleblower sounded the alarm

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about Kings Science Academy, a free school in Bradford. It has been the

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subject of an internal audit which questions where large sums money has

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gone amid allegations of nepotisim, misGetah and fraud. A new day begins

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at one of Britain's highest profile free schools. This is Kings Science

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Academy in Bradford. It is celebrated By a Prime Minister and

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his Education Secretary as one of the new free schools. How do you

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find having a longer day? A bit tiring, but you don't mind getting

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up earlier if you are getting a good education. Like all free schools it

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is state funded, but outside Local Education Authority control. The

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policy is designed to help communities take charge of their

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children's education. But we have discovered that financial management

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at Kings Science Academy has been out of control. There have been

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allegations of serious mismanagement, nepotisim and even

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fraud. The Kings Science Academy was set up by a young dynamic Oxford

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graduate, the son of a Bradford bus driver. On paper it was the ideal

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project, social mobility and better education. More than two years after

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it is open the complaints have come in. And this is the result, an audit

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report that contains devastating criticisms of financial management

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at the school. The leaked report is a draft internal audit, written by a

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body called the Education Funding Agency of, the EFA, it is part of

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the Department of Education. Newsnight can reveal a whistleblower

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contacted the Government last year with serious concerns about

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management and governance at the school. The report alemmings that 86

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-- alleges that ?86,000 of lead-in funding was cued for purpose it was

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not intended It is unbelievable if true. We are

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talking about here fraud on a pretty serious scale. The question of the

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appropriateness of qualifications is one thing in terms of what was this

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person, the right person, a fit person to run a school. A

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publicly-funded school. This is the man at the heart of the story. Sajid

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Raza, the principal, who set up Kings Science Academy two years ago.

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Kings Science Academy is certainly well connected. Alan Lewis is

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described as executive patron and a key begin factor -- Benny factor,

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he's a successful business man and Conservative Party vice chairman. We

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spoke to a former member of staff about his time at the school. He

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feared his career would be damaged if he spoke publicly, so we agreed

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to protect his identity. It is the flagship free school. I think it is

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fair to say it has huge political backing in the current political

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atmosphere, at least. From that point of view it is highly, highly

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protected. As a result of that it is hard to hold someone to account if

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you have got that much protection. The school opened in 2011, the audit

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document says the new building was given public funds of over ?10

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million. Alan Lewis gave a helping hand. It is built on land leased

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from Mr Lewis's company at a cost of ?296,000 a year for 20 years. About

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?6 million. In Bradford there were high hopes for the school. But some

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were uneasy. In Bradford word soon got out that the principal was

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employing many members of his own family. This document lists them.

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His brother was on the governing body, his sister was a senior

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teacher at the school, his wife worked there too and his father

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drove the school minibus. To outsiders it was beginning to look

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like a family business. The EFA report says:

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We spoke to the school's former Finance Director, Daud Khan. Did you

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ever have any concerns that there were so many family members

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associated with this school? At the time, to be honest with you we

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thought they had all gone through the interview process and somebody's

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interview them. Afterwards we found out that certain people were

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recruited without being interviewed. Would you say that is wrong? That is

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totally wrong, because we are dealing with public money. Free

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schools are accountable to the Education Funding Agency, the EFA.

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The EFA visited the school in December 2012 as part of a routine

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inspection of its financial management. That visit highlighted

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significant witnesses in the academy's governance. The academy

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had reported its own financial management as "good", the EFA team

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found it was "inadequate. The EFA passed the case to the audit team to

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look for accounting irregularities. There was an historical review of

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the school's finances. Their work highlighted serious concerns.

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Benefactor and Conservative vice chairman, Alan Lewis, told us it was

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his recommendation to bring them in. Reading the EFA report, the message

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that comes out loud and clear is that there was chaos in terms of

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financial control and management of the academy. Is that your experience

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when you were there? I think certainly as classroom teach e I

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think things had been constantly things had been changed on a daily

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basis. It is that level of chaos could be down to just incompetence

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based on inexperience. That is one way of viewing it. I think the other

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way of viewing it is it is because they were unaware essentially of how

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to run the school, it was almost being made up as they go along.

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Sajid would do a lot of things behind closed doors, he wouldn't get

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me or anybody he else involved. I don't know how much he was telling

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the governors, even if he was telling them, the majority were all

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their friends any way. They would back him up. The most eye-catching

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conclusion though is not all invoices submitted to the Government

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for payment could be justified. The report states that the principal, Mr

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Raza has admitted some of the invoices submitted to the department

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to support the claim for lead-in grant, were fabricated invoices. He

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blames Daud Khan for fabricating six invoices from Mr Lewis's company.

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Have you seen these invoices? I don't know anything about it. It is

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stark reading. In one passage in the document it says "further follow-up

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with Mr Raza clarified that all six invoices, supposedly from the Trust

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were raised by Daud, you, the former Finance Director so rent could be

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claimed from the Department of Education as part of the grant

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claim. They are trying to put the blame on you? That is rubbish, I was

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recruited for book keeping, banking reconciliation and other tasks. I

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was responsible for financial accounting not management. Any

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invoices that were passed they were passed on from Razpash, he would be

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responsible for opening all the post. David Ward MP sits on the

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Education Select Committee, a school governor for 30 years, he has long

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been a critic of the free school policy. It sounds, and I I think it

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sounds like a complete disaster and a financial nightmare. If this is

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true, we must ensure this is made public. Because this is such a

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flagship policy for the Government, there is always a suspicion that

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anything that is critical of free schools will not be made public and

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that is not simply in terms of the academic performance of the school,

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but actually the governance, quality and integrity of the governance

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procedures as well. We also tried to speak to Conservative vice chairman

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Alan Lewis, the former executive patron at the school, his company

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spokesman We also asked the principal about

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governance, the schools lawyers told us. .

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The Department of Education told us there is a plan for the school to

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pay back ?76,000 after expenditure couldn't be justified. The

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department stress both the EFA and the school had taken action when

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problems were revealed. Six months after the report was drafted,

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knowing we were about to broadcast for the investigation, the

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Department of Education published the report on its website. A

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spokesman said. D.. People in Bradford will be left

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wondering about the future of their free school. But the Department of

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Education says there are more scandals in conventional state

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schools. Both the academy and the Department of Education say that

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governance and financial management are much improved.

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Richard is with me now, what has been going on this week since you

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started this investigation? It is the timing that is very curious. We

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got hold of this leaked draft report about a week ago, beginning of the

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week. By Tuesday we had interviewed our own sources on this, we have put

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the allegations to the people being criticised. By Wednesday the

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principal of the school was telling me the draft report was only a draft

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and it won't be published until January next year. That changed very

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quickly indeed, because today, well yesterday, then the Department of

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Education said, look, we are going to publish this, but they didn't

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want to give a timetable for it, they said several weeks. Today, of

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course, they publish it on their website a few hours before we go to

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air. I should pension mention one other thing that I think came out of

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the Department of Education today, which is actually very interesting.

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That is there is a reference in their statement to the fact that

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they refer it to the police in April this year but the police chose to

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take no further action. We contacted the Department of Education but

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nobody was available to come on the programme tonight.

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Today's growth figures, the best for three years, were hailed by the

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Chancellor, George Osborne, as demonstrating that Britain was on

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the path to prosperity. Before the band could strike up a chorus of

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Happy Days Are Here Again, George Osborne was reminded that people are

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squeezed, energy prices are up way beyond inflation, and inflation has

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been significantly higher than wage increases. We're in Sheffield to

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find out what 0. 8% growth in the last quarter means in the real

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world. Sheffield is a city that still trades on its past, metals and

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heavy industry. The decline of the steel works forced the city to

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reinvent itself. Now these slabs at ?20,000 each are being used to make

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something different, Sheffield plastic.

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We were within a month of going under. It was as close as that, we

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had already, if you like, made arrangements with banks to say look

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we are going to have to pull the plug. At the height of the recession

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this company was on the brink, but orders started to come back, four

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years later it feels like things are looking up. We're confident that we

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have turned the corner, I'm confident that we will move ahead,

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we are going to invest in more people and more equipment, we

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believe the economy is on the up, the automotive industry, Aerospace

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are growing, we don't see why the UK can't take advantage of this growth.

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This latest set of GDP figures is starting to paint a picture of what

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looks like a solid recovery. All sectors of the economy grew together

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in the third quarter. Industrial output was up 0. 5%, helped by a 0.

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9% rise in manufacturing. The service sector grew another 0.7 per

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cent, constructiontruction is bouncing back helped by an increase

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in house building. A quarterly growth of 0. 8% is the highest for

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three years. I think Britain's hard work is paying off. We see that in

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these economic numbers today. It shows we are on the path to

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prosperity. Lots of risks remain, we have to stick with the economic plan

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that has got us this far. What the Chancellor is after is some

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Dragons Den-style innovation. You are harming the environment by a

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bottle you say is here, it is a terrible invention, ludicrous but

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I'm out. Ducan Bannatyne might not have liked the idea, but this

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factory has now churned out half a million collapsable bottles for its

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British inventor, many going for export. To some of the well known

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companies we are churning out 10,000 a month each for the big companies

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for their customers. It is really good. How much money are you making

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on something like this? Not enough. You are not going to tell us are

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you? But even after today's positive growth figures the economy is still

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two-and-a-half 2. 5% smaller than at its peak in 2008. There are

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constraints on the recovery, banks are still reluctant to end, the

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fiscal squeeze is still there and real pay is falling. We are seeing

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the recovery broaden out and become much stronger. Well today's data

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might look good on paper, the reality for most workers here is a

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squeeze on wages and the cost of living. Money-wise you do feel, you

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don't feel as though it is getting a lot better. In the last couple of

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years. Are you starting to feel better off, do you feel that there

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is better times ahead or is that still a long way away? They say it

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is, but if it is it is all down south, not up north. No I don't

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think so. So the economy might be on the mend, growth might be picking

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up, the Government's next task is to make these workers feel they are

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part of it. I'm joined by three CEOs from three top British companies,

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Lisa Thomas of the advertising agency, Saatchi, and Paul Waits and

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Paul Dunn from 02. The construction figures were good, what is driving

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that, is it just confidence is back or Help To Buy or those kinds of

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things? The principal driver of stronger growth in construction in

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this quarter, has been the increase in house building, private

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residential house building, a little bit of increase in infrastructure,

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still a long way to go to get the industry back to where it was five

:18:06.:18:10.

years ago. Do you worry about it in the south-east, it is in London and

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also do you worry about it could be a bubble? I think there is no doubt

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that the economy in London and the south-east is considerably stronger

:18:19.:18:22.

than the rest of the UK. And that there is investment needed to

:18:23.:18:26.

rebalance the economy to get some stronger growth and employment

:18:27.:18:30.

opportunities outside the greater London area. That's quite

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interesting, that kind of reflects what we heard from Sheffield there.

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In terms of advertising, whose who is advertising, where is the growth

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coming from there? Not surprisingly in terms of the development of

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digital, the growth is coming, there is advertising, but it seems to be

:18:45.:18:48.

the majority of spend is on digital and a huge increase in mobile as

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well. That seems to be up considerably. Do you see any

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evidence of overall rebalancing of the economy, the Government made it

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quite clear what they wanted was more manufacturing, less on

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financial services and more export-driven economy. You sound as

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if you are talking about advertising the exact opposite of that? The

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service businesses seem to be driving forward, advertising is

:19:11.:19:15.

growing. I'm not sure where the growth is coming from but it would

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suggest it is not from manufacturing, yes. I suppose the

:19:19.:19:22.

overall point that people are thinking about, it may be good for

:19:23.:19:25.

the economy, that is great, but is it good for me? What we have seen is

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people talking about this crisis of living standards. It is not

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filtering through in increased wages? Certainly we're seeing it is

:19:33.:19:35.

mostly small businesses that are seeing some pig-up now in our

:19:36.:19:41.

customer base. What we are trying to make sure is by launching our 4 G

:19:42.:19:44.

services in places like Yorkshire, we are trying to make sure it is a

:19:45.:19:47.

broader-based economy growth. I think digital skills and the digital

:19:48.:19:51.

economy will be part of how it seeps through to the general consumer.

:19:52.:19:55.

That might be the good news in a couple of years time. Just right

:19:56.:19:59.

now, Grangemouth has been in the news this week, without the ins and

:20:00.:20:03.

outs of the dispute, a lot of people who look at it there are workers

:20:04.:20:08.

taking pay cut to keep a job, that reflects how a lot of people feel

:20:09.:20:12.

about their own jobs? There is huge cost pressure in the economy, trying

:20:13.:20:16.

to keep a cap on prices is really tough, in our sector we are seeing

:20:17.:20:20.

prices trop in real terms, but we know that average households are

:20:21.:20:23.

seeing a lot of their other costs going up in utilities, I think it

:20:24.:20:27.

will be a while, and I think it is the overall growth in the economy

:20:28.:20:32.

that will help to see Anne crease in real wages. Do any of you see that

:20:33.:20:40.

any time soon -- an increase in real wages, do you see that any time

:20:41.:20:44.

soon? We are faced with global competition, for many of our

:20:45.:20:47.

products and services and they have to compete on a global stage.

:20:48.:20:51.

Getting the overall strength in the economy will take some time. The

:20:52.:20:54.

Chancellor said, we have to stick to the plan, it is incredibly important

:20:55.:20:58.

that for a lot of these investments that there is cross-party support,

:20:59.:21:02.

so we have continuous growth in the economy. Not the stop-start we have

:21:03.:21:06.

had in recent year That is interesting, cross-party support,

:21:07.:21:09.

that came up in a different aspect there. Both the Prime Minister and

:21:10.:21:12.

Deputy Prime Minister effectively had a go with Labour and said we

:21:13.:21:18.

need you not to go wobbly on HS 2, presumably your industry would

:21:19.:21:22.

benefit greatly if that goes ahead? The vital thing about HS 2 is it is

:21:23.:21:27.

one of the best investments r getting a rebalanced economy in the

:21:28.:21:32.

UK, it brings eight to ten cities closer to London. That has to be

:21:33.:21:36.

good for the economy overall. It won't gain momentum if investors

:21:37.:21:40.

can't be confident if it will have the support of all parties over the

:21:41.:21:43.

long-term. Would you put ?50 billion into that if you had ?50 billion as

:21:44.:21:48.

a Government to spend. Is it that important for the economy? It is key

:21:49.:21:53.

to invest in the infrastructure to support the economy. We need

:21:54.:21:56.

transport and communications infrastructure, at the moment there

:21:57.:21:59.

is a lot of investment going on. Our business alone will invest one

:22:00.:22:02.

billion a year and our sector ?5 billion. At this important stage in

:22:03.:22:06.

the economy's recovery we have to commit to long-term investment,

:22:07.:22:09.

stable policy and stable regulation and then companies will invest on

:22:10.:22:12.

the back of the Government's investment. Not necessarily HS 2, we

:22:13.:22:16.

still haven't seen the business case up for it? I think connectivity is

:22:17.:22:20.

critical. I think the balance of the economy will be supported by the

:22:21.:22:24.

right sort of transport links and communications links, so we have a

:22:25.:22:29.

broader economy. I think it is important as was said

:22:30.:22:36.

to build the connectivity and build the closeness between the north and

:22:37.:22:41.

south. You talked about the north being left behind, that connectivity

:22:42.:22:44.

through the country is very important, and investing in

:22:45.:22:49.

infrastructure is critical for us. The other interesting thing from the

:22:50.:22:53.

report, you have the businessman being asked, how much are you

:22:54.:22:56.

making, and not enough. It is not just wages being squeezed but

:22:57.:22:59.

profits too for the small businesses? Margins across the

:23:00.:23:02.

economy have been squeezed everywhere, I think what we have to

:23:03.:23:05.

try to make sure is there is enough money left for the investment. Now,

:23:06.:23:09.

one other issue which has come up again today, David Cameron has been

:23:10.:23:14.

in Europe, do you worry as some business people do that the

:23:15.:23:17.

uncertainty, whatever your views are, how people should vote if there

:23:18.:23:20.

is a referendum, do you worry about the uncertainty? As the head of a

:23:21.:23:24.

British business that's owned by a European parent, I think it is

:23:25.:23:27.

really important for me to make the case for investment in the UK. I

:23:28.:23:31.

think that case can be made much more strongly when the UK is playing

:23:32.:23:35.

a leading role inside Europe. What do you think of that, is that

:23:36.:23:38.

something you worry about or not? It is vital for the success of the UK

:23:39.:23:42.

in the long-term to be at the centre of a strong and better Europe and

:23:43.:23:45.

that's a far better forward than being an outsider on the periphery.

:23:46.:23:51.

Agreed? Definitely. And just one final point, one other question

:23:52.:23:56.

about Grangemouth, it came up very, very strongly from Ineos themselves

:23:57.:24:01.

who basically said this is a very difficult market and not place in

:24:02.:24:05.

which we can compete, we can go somewhere else and make it for less,

:24:06.:24:09.

it goes back to your question about the global race, David Cameron also

:24:10.:24:12.

talks about that? The fundamental challenge for the UK in the

:24:13.:24:15.

long-term is to be internationally competitive, and that means from the

:24:16.:24:18.

talent and skills that we generate through to the products and services

:24:19.:24:21.

we manufacture and deliver. We have to compete on a global basis,

:24:22.:24:26.

investors always have choice as to where they can put their money. Do

:24:27.:24:30.

we compete in the global basis? There was also a lot of figures

:24:31.:24:35.

about talent, lack of, educational standards, looking at 24 different

:24:36.:24:40.

countries, England comes about 2 #st and 22nd in terms of basic

:24:41.:24:46.

arithmetic skills. It is not great? The Government are behind t they are

:24:47.:24:50.

investing, the investment in apprentice schemes and in skills and

:24:51.:24:56.

in equipping the youth to deal with the new digital world has been

:24:57.:25:00.

impressive. I think we are doing what we can to develop that talent

:25:01.:25:04.

and I know all of our businesses are investing in young people, bringing

:25:05.:25:08.

in graduate, training them for the new skills and the new world that we

:25:09.:25:15.

need. Thank you all very much. Her face has been on newspaper front

:25:16.:25:18.

pages and the hunt for her real parents has been intense. It led to

:25:19.:25:22.

some people drawing parallels with the stories of Madeleine McKin and

:25:23.:25:28.

Ben Needham. The blonde girl detained in Greece is actually the

:25:29.:25:37.

child of another Roma couple from Romania. What does it tell us about

:25:38.:25:42.

the Roma and how they are viewed in countries like Greece.

:25:43.:25:47.

For more than a week her story mystified the world, and appeared to

:25:48.:25:52.

feed some old prejudices. How come Maria, found under a blanket at a

:25:53.:25:57.

Roma settlement in central Greece looked nothing like the couple she

:25:58.:26:01.

lived with. They were charged with anduction and Maria dubbed "the

:26:02.:26:09.

blonde angel", taken into care. Tot today a Bulgarian Roma couple were

:26:10.:26:16.

confirmed by DNA tests to be her biological parents, her mother said

:26:17.:26:23.

exactly what Maria's parents said, she gave up her little girl in

:26:24.:26:26.

Greece because she couldn't afford to look after her. Her biological

:26:27.:26:30.

grandmother said the same thing. TRANSLATION: She left the child and

:26:31.:26:35.

booked tickets home to her other children. It is not clear whether

:26:36.:26:39.

money was involved, both sides say not. The Greek charity looking after

:26:40.:26:43.

her had earlier suggested it was not simply a case of altruistic

:26:44.:26:51.

adoption? It shows that the combined effort of these people to buy and

:26:52.:26:55.

sell chirp, and when they have a good commodity, they like this one

:26:56.:26:58.

they are trying to find a better price. Today he was asked in a

:26:59.:27:02.

Newsnight interview whether he still stood by that. The story is more or

:27:03.:27:07.

less as the Greek Roma couple said it was, why was all this hysteria

:27:08.:27:13.

whipped up about abductions, about kidnappings, children as

:27:14.:27:18.

commodities? This was an illegal act one way or another. What we were

:27:19.:27:23.

saying then we are saying now. Whatever happened it was an illegal

:27:24.:27:28.

act. People that are using and manipulating the system, the Greek

:27:29.:27:35.

system to make false statements, so again, still it is an illegal act.

:27:36.:27:39.

Don't you think that the remarking you made fed into some existing

:27:40.:27:45.

stereotypes? No, it is me that made the remarks, it is a problem with

:27:46.:27:48.

the Europe that the Government don't respect the Romas and they let this

:27:49.:27:53.

situation of people who are using the Romas for this exploitation.

:27:54.:27:59.

Some Roma people. And I always say "some" Roma people. I have to be

:28:00.:28:04.

very specific and I'm very careful. In Ireland this week in apparent

:28:05.:28:09.

response to events in Greece, there were two separate cases where the

:28:10.:28:13.

police took a child away from Roma parents because they looked

:28:14.:28:16.

different. Tests later proved there was nothing amiss. It has been a

:28:17.:28:21.

week that has reminded us just how marginalised and precarious the

:28:22.:28:25.

position of Europe's 10 million Roma is. The debate that has been

:28:26.:28:31.

reignited, largely without their participation, has barely changed in

:28:32.:28:35.

decades if not centuries. Are the Roma an oppressed minority, victims

:28:36.:28:41.

of entrenched stereotypes, or a threat to the rest of society.

:28:42.:28:44.

Responsible at least in part for their own misfortune. Some are

:28:45.:28:48.

shocked that debate is still taking place at all. In Greece, as across

:28:49.:28:54.

Europe, any progress towards integrating Roma into society is

:28:55.:28:58.

being set back by economic austerity and will be set back even further by

:28:59.:29:02.

the case of Maria. Even though I'm an educated Roma, it

:29:03.:29:07.

had an impact, a negative impact on me, I was afraid to go outside. It

:29:08.:29:13.

has shattered the image of the Roma. It was negative, scapegoat, thieves,

:29:14.:29:20.

things like that. It became worse, because now we have also the blame

:29:21.:29:26.

that Roma people steal children. This is only case of illegal

:29:27.:29:30.

adoption. What happened doesn't apply to the rest of our society.

:29:31.:29:37.

Maria's future now still depends on further investigation of her story.

:29:38.:29:40.

But whatever the exact facts, attitudes to Roma are so polarised

:29:41.:29:44.

that many will have already drawn their own conclusions.

:29:45.:29:48.

Now tomorrow morning's front That's all we have time for, this

:29:49.:30:42.

weekend we are expecting the biggest storm since 1987. For those of you

:30:43.:30:46.

dreaming of warmer climb, we leave you with the singer Manuelo Escobar,

:30:47.:30:58.

here he is in happier times with catchy songs, he is mourned today in

:30:59.:31:03.

Spain. # VIVA he is spannia

:31:04.:31:19.

V ivaEspanga.

:31:20.:31:22.

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