To ask the Secretary of State for Communities and Local Government for what reason the real discount rate used by local authorities to calculate the unfunded net present value of the cost of (a) police and (b) firefighters' pensions was cut from 3.5 per cent. as at 31 March 2004 to 2.4 per cent. as at 31 March 2005; and if she will make a statement. (144631)

The relevant code in the 2003 Statement of Recommended Practice (SORP) by the Chartered Institute of Public Finance and Accountancy specified a rate of return of 3.5 per cent. real in respect of calculating benefit scheme liabilities. The relevant code in the 2004 SORP changed this. It specified the use of an equivalent current rate of return to that of a high quality corporate bond of equivalent currency and term to the scheme liabilities rather than a specific percentage figure. This reflects the Financial Reporting Board Standard 17 issued by the Accounting Standards Board, part of a general move for local authorities to comply with standard accounting practice.