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Written Statements

Volume 502: debated on Wednesday 16 December 2009

Written Ministerial Statements

Wednesday 16 December 2009



The Economic and Financial Affairs Council was held in Brussels on 2 December 2009. The following items were discussed:

Regulations establishing three European supervisory authorities

Ministers agreed general approaches on draft regulations establishing three European Supervisory Authorities (ESAs): the European Banking Authority, the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority.

The UK secured significant additional safeguards for both crisis and mediation decision-making by the ESAs, including language in line with the June European Council conclusions that decisions taken would not impinge in any way on the fiscal responsibilities of member states.

Ministers agreed that ECOFIN would retain the power to call a crisis and therefore activate any ESA powers. Ministers will vote by simple majority on safeguard clauses applying to crisis powers of a member state seeking an opt-out as well as any ESA decisions on mediation. Member states seeking an opt-out would have the option to refer the matter to the European Council.

The Government welcome the outcome, which complements existing national regulation and should tighten up the European regulatory system. The presidency will now start negotiations with the European Parliament with a view to enabling adoption of the texts at first reading.


a) VAT: Draft Directive on reverse charge on emission allowances and certain goods.

The Council agreed a general approach on the draft directive that would allow member states to implement, on an optional and temporary basis, a reversal of liability for the payment of VAT on greenhouse gas emission allowances. The Council will continue to work on other elements of the proposal as regards the application of the reverse charge mechanism to mobile phones and electronic circuit devices, with a view to reaching an agreement as soon as possible.

b) VAT treatment of postal services

ECOFIN agreed to discuss the VAT treatment of postal services further before the implementation of the third postal directive enters into force on 1 January 2011 (1 January 2013 in some member states). The forthcoming Spanish and Belgian presidencies were invited to explore all options and report back to Council by December 2010 at the latest.

Implementation of the Stability and Growth Pact

ECOFIN agreed Council recommendations calling on Belgium and Italy to reduce their deficits below the 3 per cent. of GDP threshold by 2012, the Czech Republic, Germany, Spain, France, the Netherlands, Austria, Portugal, Slovakia and Slovenia to do so by 2013, Ireland by 2014 and the UK by the 2014-15 financial year. It also adopted a decision acknowledging that Greece’s response to its April 2009 recommendation has been insufficient. These recommendations are in line with recent agreements at ECOFIN and the European Council on the EU’s framework for fiscal exit strategies.

Preparations for the 10-11 December European Council

a) Financial supervision

The Council took stock of progress made on the legislative proposals aimed at reforming the EU framework for the supervision of financial services following the global financial crisis. The Swedish presidency will report on progress to the December European Council, taking into account the results of the Council deliberations on both the micro and macro-supervisory elements of the package, enabling Heads to sign off the complete package as planned.

b) Contribution from ECOFIN to the discussion on the post-2010 Lisbon agenda

Ministers agreed a set of conclusions on the direction of a successor to the Lisbon strategy. The Government support the conclusions, which help build momentum towards the December European Council, where EU Heads will discuss a set of principles for a new European strategy for jobs and growth.

c) Exit strategies

Ministers agreed conclusions on exit strategies from support to the financial sector. The UK is content with the conclusions, which recognise the importance of starting to design the strategy for the phasing out of support schemes, but emphasised that implementation should wait until markets have fully recovered. ECOFIN will return to this issue in February 2010.

Financial stability and crisis management

ECOFIN agreed conclusions on financial stability, focusing on improvements in cross-border crisis management in the banking sector. The conclusions recognised the value of co-ordination among member states and with external partners, and endorsed the principles of firm-specific recovery and resolution plans.

Equitable Life

I can today provide an update to the House on the progress of Sir John Chadwick’s work in advising the Government on the establishment of an exgratia payment scheme for Equitable Life policyholders.

Sir John published his first interim report on 18 August 2009. He has since received a range of representations on the questions he has raised, and is today publishing a second interim report, which sets out:

The scope of the work that will be required following his revised terms of reference, which were issued on 27 November.

The case for adopting a “flexible” approach to calculating policyholders’ relative loss. Sir John considers that this approach is fairer, easier to calculate, and quicker to deliver than other potential approaches.

The list of questions that he will need to address in his final advice.

Sir John would welcome further representations and comments from all parties on the issues raised in his latest report by 29 January 2010.

The Government are committed to establishing a fair payment scheme as quickly as possible. We expect Sir John to submit his final report in spring 2010, and will announce details of a payment scheme to follow, also in spring 2010.

I will update the House further in due course.

Investment Banks

Today the Government are publishing a consultation document on investment bank resolution. Copies of the document entitled, “Establishing resolution arrangements for investment banks” have been deposited in the Libraries of the House and will be available on the HM Treasury website at:

House of Lords Select Committee on the Barnett Formula (Government Response)

The Government are today publishing their response to the House of Lords Select Committee report on the Barnett formula (CM 7772). This paper and the evidence referred to in it also meet the Government’s commitment to produce a factual paper on the Barnett formula.

The Remittance Basis

I am announcing today the Government’s intention to present to Parliament proposed changes to the capital gains tax rules which will be legislated as part of Finance Bill 2010. These changes prevent the creation of capital gains tax losses which arise in certain circumstances from transactions of foreign currency bank accounts and will be effective from 16 December 2009. HM Revenue and Customs will publish on their website at:, precise details of the changes as soon as possible.

The changes affect individuals who are liable to tax on their foreign income and gains on the remittance basis. These individuals are liable to income tax on the sterling value of the amount remitted at the time of remittance. If the remittance takes the form of a transfer from a bank account in a foreign currency, they will simultaneously dispose of a corresponding part of that account and a capital gain or loss might arise as a consequence.

Associated with this change, I can confirm that HM Revenue and Customs accept that an existing capital gains tax rule in section 37 of the Taxation of Chargeable Gains Act 1992 removes any element of double tax charge in this situation. The income remitted is fully taxable (subject to any exemption which might apply), but a double charge to tax is avoided by this rule which excludes the income amount from the disposal proceeds used to calculate the capital gain or loss.

It is now clear that the rule goes beyond preventing a charge to capital gains tax and does not produce a fair outcome. Where the remittance is all treated as income, the rule creates capital gains tax losses that are far in excess of any real loss which the individual incurs. Where the remittance is partly income, the rule either creates an excessively large loss or reduces the taxable gain below the real level of gain.

The proposed legislative change will correct this defect in the current rules. Where a remittance comprises wholly income, the change will eliminate the loss arising under the current rule. Where a remittance comprises only partly income, the loss attributable to the income element of the remittance will again be eliminated. In addition, the allowable cost attributable to the non-income element of the remittance will be adjusted to ensure it corresponds to the amount of that part of the remittance. Where necessary, the allowable cost of the bank account will also be adjusted to ensure it corresponds to the amount remaining in the bank account after the remittance.

The result of these changes will be that a double tax charge will be avoided and no relief will be given where no actual loss has been incurred.

Cabinet Office

Government and Third Sector in England (Compact)

I am pleased to announce that the refreshed Compact, which outlines how the Government will work together with the third sector, has been launched today. The new Compact is clearer, shorter and easier to use and is a clear symbol of the Government’s continued commitment to working with the third sector. It will be a valuable tool in helping to build partnerships in the years to come.

Copies of the Compact have been placed in the Library and on the Cabinet Office website: www.cabinetoffice.

EU Education and Youth Council

Jane Hutt, Minister for Children, Education, Lifelong Learning and Skills in the Welsh Assembly Government, represented the UK at the Education and Youth Councils, on behalf of DCSF and BIS.


Ministers adopted conclusions on the professional development of teachers and school leaders; the role of education in a fully-functioning knowledge triangle; and the education of children with a migrant background. All three sets of conclusions are consistent with UK domestic policy, and we were able to support them.

The latter conclusions also formed the theme of a policy debate between delegations. While clear that there was a wide variation in the levels of migration in each member state, all were in close agreement on the approach set out in the conclusions.

There was a second policy debate on quality assurance in higher education. This was based on a Commission discussion paper which argued for early improvements in higher education quality assurance and further development of transparency tools. The UK supported the approach set out in the Leuven Communiqué of April 2009, stressing the need to embed current improvements before going further and that the issue should be reviewed at the Bologna HE summit in 2012. This was supported by the majority of member states, who wanted a measured approach, working through the Bologna process.

Under any other business, the Commission presented the draft joint interim report on the education and training 2010 work programme, and the Spanish presidency briefly noted their upcoming presidency schedule.

The Council included a lunch debate on the role of education in the post-2010 Lisbon strategy. This discussion was informed by presidency questions, but also the recently released Barroso EU2020 paper.


Youth Council adopted a Council resolution on a renewed framework for European co-operation in the youth field (2010-2018). A policy debate followed on the short-term implementation and future aspirations for the framework. All member states supported the strategy, with the majority citing youth unemployment and disadvantaged youth as key issues. The UK pressed for member states commitment to the open method of co-ordination process at all levels, noting the need to avoid burdensome reporting structures.

Children, Schools and Families

Lamb Inquiry

Today I welcome the publication of the final report of the Lamb inquiry on parental confidence in the special educational needs (SEN) system.

The Lamb inquiry was established as part of the Government’s response to the House of Commons Education and Skills Committee report “Special Educational Needs: Assessment and Funding”. The inquiry, under the chairmanship of Brian Lamb, the chair of the Special Educational Consortium, was tasked with investigating a range of ways in which parental confidence in the SEN assessment process might be improved. We specifically asked that the inquiry:

commission and evaluate innovative projects;

draw on the evidence of other work currently commissioned by the Department; and

take into account the evidence of the submissions to the two Select Committee reports in 2006 and 2007.

The inquiry began in March 2008, and has made a range of recommendations, which we have accepted and acted upon. In December 2008, in response to early findings calling for a greater focus on outcomes achieved by children with SEN and disabilities (SEND), we announced a £38 million package of measures aimed at addressing this. At the heart of that was Achievement for All pilots, which are now taking place in 10 areas, involving 460 schools to demonstrate how to: raise achievement for children with SEND; better engage their parents; and address issues such as bullying and participation in school life1. In April, I committed to ensuring that our 21st Century Schools White Paper mainstreamed the needs of parents of children with SEND. Since the inquiry’s two reports in August, the Children, Schools and Families Bill has been introduced to Parliament. It proposes a new duty on Ofsted to report on the progress of children with SEND in school inspections, now and in future, and gives parents who have had their child’s statement reviewed but not amended, an additional right to appeal.

The Government welcome the inquiry’s final report. The inquiry has found that, whilst the SEN framework functions well for the majority of parents, within the same legislative framework there are parents who have been poorly served and have had to battle to get the needs of their child identified and met. This varied picture must be redrawn so that it is common practice to have access to skilled professionals who understand the needs of children and who have high expectations of what children can achieve.

I have written to Brian Lamb today to thank him for the inquiry and to outline the Government’s immediate response, which focuses on the concerns of parents who have least confidence in the present system:

Work will begin immediately on establishing a national special educational needs helpline which will provide independent, expert advice and information to parents directly over the phone and through dedicated online support.

The Government will move quickly to strengthen parent partnership services by ensuring all advisors are trained in SEN and disability law. We will work with the national parent partnership network, based at the Council for Disabled Children, to deliver this training in 2010.

We will work with professional bodies to make clear that the advice professionals provide to local authorities should not be fettered because of concerns about capacity to deliver.

Start-up funding will be provided to the local government ombudsman, to take on parental complaints on SEN about local authorities from January 2010.

Statutory guidance to governing bodies and independent appeals panels on exclusions will be strengthened to require a review of whether the head teacher had regard to the guidance on special educational needs and disability.

Tomorrow, we are inviting local authorities and voluntary sector organisations to bid for a further round of innovative projects to improve parental confidence. These will include more transparency in LA decision-making and greater independence of assessment, using different service models for providing educational psychology advice.

The inquiry makes a number of recommendations about strengthening the operation of the first-tier tribunal (SEN and Disability). We agree that guidelines should be issued on the provision of professional and expert evidence by March 2010. It is important that we improve access to justice and so we will work with the Ministry of Justice and key stakeholders to review the exceptional funding scheme for providing legal aid for tribunal hearings and will also aim to re-launch this scheme by March.

We know that bullying is a particular issue for children with SEND and we have published guidance on how to prevent and tackle it. We will be investing further in a project starting early in 2010, led by the Anti-Bullying Alliance and working with key organisations, to identify best practice in tackling SEND-related bullying and how schools can be supported to address it.

In total the inquiry has made 51 recommendations; the implementation plan which we will publish in the new year will set out a full response to each of these recommendations and provide details on how the Government will take them forward. The implementation plan will say how we will be:

Putting Childrens Outcomes at the Heart of the System

The inquiry is clear that parental confidence is strongest where aspirations for children are high and there is a real focus on progress and outcomes. Our implementation plan will show how we will help schools develop skills and capacity within their workforce and parents will be able to access specialist expertise. The Government’s pupil and parent guarantees will also make a commitment to all pupils and their parents, including those with SEND, that their schools will have effective policies in place to prevent and tackle all forms of bullying.

Ensuring a greater voice for parents in the system

The importance of good communication is well evidenced by the inquiry: communication between parents and schools and better partnerships between parents and professionals. The implementation plan will explain how the principles of the Aiming High for Disabled Children Core Offer will be further embedded for children with SEN and how we will see improvements in the information that parents can expect to receive from all levels of the system.

Establishing a local system in tune with children’s needs

The Inquiry has shown that local authorities can and do make a difference to outcomes for children with SEND. The system works best where schools, local authorities and parents operate in a true partnership. We will build on this good practice. Our implementation plan will detail how we will build the system’s capacity to provide this level of partnership with all parents. This will include further training for children’s services leaders and support for better models of commissioning services. We will also offer guidance and training to those drawing up statements to help build partnership and trust with parents.

Building accountability around childrens progress

The final report is clear about the importance of accountability in ensuring parental confidence in the system. Our implementation plan will explain how guidance and training for school governors, school improvement partners and appeal panel members will be taken forward. I am committed to ensuring that we bring about an end to systematic failures to fulfil statutory duties and will work with bodies who have information on non-compliance to take firmer action to address failure.

The implementation plan will also detail how the tribunal will review and develop the information that it gathers and publishes and arrangements for the guidance and training for tribunal chairs on telephone and face-to-face hearings.

The inquiry has recommended remedying the exclusion of schools from the duty in the Disability Discrimination Act to provide auxiliary aids and services. We accept this in principle and will look for a suitable legislative opportunity.

I am immensely grateful for all that Brian Lamb and his expert advisers have achieved through the inquiry. I would also wish to thank them for the thorough way in which the inquiry has consulted a wide range of experts and practitioners and for the way in which the voice of parents and children and young people has been brought to the fore. I also note the knowledge that has been developed through the innovative projects and thank the local parents, teachers and officers who have been testing out new ways of ensuring greater parental confidence.

I have asked Brian to monitor progress against the actions we have announced today, and those in the implementation plan we will publish in the new year, and report back to me in April 2010.

The Government share the inquiry’s call for much greater ambition for the nation’s most vulnerable children and the best possible engagement with their parents. Through our response to the inquiry, and the implementation plan early in 2010, I am committed to ensuring all parents have a shared experience of a system that operates in partnership for the benefit of their children.

I am placing a copy of the report and our response in the Libraries of both Houses.

1Your child, your schools, our future: building a 21st century schools system (CM 7588), DCSF, June 2009

Communities and Local Government

Sustainable Homes

Tackling the huge challenge of climate change is one of this Government’s highest priorities. The Government have committed to ambitious emissions reduction plans and have set in legislation a target to reduce UK carbon emissions by 80 per cent. against 1990 levels by 2050. In the UK, nearly half of our carbon emissions come from buildings—27 per cent. of these are from our homes and a further 17 per cent. from other non-domestic buildings. Reducing emissions from our homes is therefore an important part of the UK’s transition to a low carbon economy.

Code for Sustainable Homes

The Code for sustainable homes aims to improve the overall sustainability of new homes by setting a single national standard for England, Wales and Northern Ireland within which the home building industry can design and construct homes to higher environmental standards, and giving new home buyers better information about the environmental impact of their new home and its potential running costs. It helps people to cut their carbon emissions and to lead a more sustainable lifestyle in general and provides practical experience to support future regulatory steps to help achieve the challenging commitment of requiring all new homes built from 2016 to be zero-carbon.

Since its introduction in 2007, over 300,000 homes have been registered to be built to Code standards, and nearly 2,000 certificates have been issued for completed homes. We now have our first set of Code level six homes.

But while practical experience of working with the Code is informing the development of other aspects of sustainability policy (for example the development of surface water management proposals in the current Floods and Water Management Bill), it has also established some questions over existing standards and the processes for assessment. We also now need to revise the Code to incorporate the new regulatory standards we have and are putting in place, and plan for more stretching energy efficiency standards, including our 2016 zero-carbon standard. To ensure the Code can continue to play a central role in supporting more cost effective sustainable housing development in future, we propose to revise the Code.

I am therefore launching a consultation today on the revisions I propose to the Code for sustainable homes. The consultation is focused on three broad aims for changes:

Aligning the Code with the latest developments in the zero-carbon homes policy—to enable it to continue to reflect the future regulatory trajectory and provide practical experience for developers and inform the development of detailed regulatory proposals for 2013 and beyond. This includes consulting on the new energy efficiency standard to be required of zero-carbon homes;

streamlining the standard and processes—learning from experience to date, to ensure that the Code is focused on the issues of greatest significance and that we eliminate unnecessary bureaucracy; and

resolving problems that have arisen in use seeking to find practical solutions to barriers that have arisen in the use of the Code so far, balancing sustainability policy aims with the practicalities of house building in the current economic climate.

Zero-Carbon Homes

In my written ministerial statement of 16 July 2009, I confirmed our commitment and approach to zero-carbon homes. A zero-carbon home is one with a high standard of energy efficiency, a minimum level of on-site carbon reduction and whose remaining emissions are addressed via a range of further carbon reduction measures known as ‘allowable solutions’.

On 24 November 2009, I set out a further written ministerial statement announcing the minimum fabric energy efficiency standard that we would require in zero-carbon homes and that we would consult on this as part of the revision of the Code for sustainable homes. The Code consultation published today therefore seeks views on the fabric energy efficiency standards that should apply to all new homes from 2013 and 2016.

Work continues to put in place the practical arrangements that would be required to permit allowable solutions to be put in place to ensure that standards are achieved in practice and on setting a guideline maximum price we expect industry to bear in implementing allowable solutions. We will seek, in line with the Chancellor’s pre-Budget report, practical ways of reducing the costs.

The Government will take full account of the views received in refining the Code and the zero-carbon definition. The consultation will close on 24 March 2010.

I am publishing the following documents for this consultation, which together will help the Government take forward the Sustainable Buildings programme.

“Sustainable New Homes: The Road to Zero Carbon (Consultation on the Code for Sustainable Homes and the Energy Efficiency standard for Zero Carbon Homes)”. This is available on our website:

“The Draft Code for Sustainable Homes Technical Guide”. This is also available on our website later this week.

“The Code for Sustainable Homes Impact Assessment and the Zero Carbon Homes Impact Assessment (Updated 2009)”. These will be available on our website later this week.

I am placing copies of the consultation paper in the Library of the House, and will also do so with the “Draft Code Technical guide and Impact Assessments” later this week.


On my written ministerial statement, 30 June 2009, Official Report, column 7WS, I announced proposals to reform the current system of council house finance and replace it with a devolved system of responsibility and funding.

In my statement, I confirmed that transferring council-owned stock to a registered social landlord remained an option for local authorities. However, I was clear that there should be equity in the terms of public funding whether council homes are transferred or retained in the future under self-financing.

I also said that those local authorities who had existing places on the Housing Stock Transfer programme at 30 June should continue with their transfer proposals. Those local authorities were Plymouth, Rutland, Lambeth (Ashmole), Lewisham (Excalibur) Lambeth (Latmos), Manchester (West Gorton), Merton, Harrow (Mill Farm Estate) Lewisham (Forest Hill), Lewisham (Catford) and Lewisham (Rushey Green). They should ensure that their housing transfer is completed within the requisite two-year period. In my statement, I also undertook to continue to work with councils whose tenants had voted for transfer at that date. Plymouth and Rutland have now transferred their housing stock to a registered social landlord.

At the date of my statement at 30 June, the following local authorities, Warrington, Oldham, Bolton, Stockton, Dacorum and Hull (North Bransholme), had significant contact and developed discussions with the Department or the Homes and Communities Agency (HCA) or both. These authorities had also undertaken preliminary consultation with their tenants.

These councils have continued to develop their options including for council stock transfer and by today, December 16, all had submitted a full transfer application. I can confirm that I am instructing the HCA to offer the option of a place on the Housing Stock Transfer programme to these authorities. From this date the transfer process, if it is pursued, should be completed within the required two-year period.

On 21 July, I published a consultation document on the reform of Council Housing Finance which proposed the dismantling of the Housing Revenue Account subsidy system and replacing it with a devolved system of responsibility and funding.

Consultation closed on these proposals on the 27 October. We are carefully considering all the detailed responses received, but there was overwhelming support for the principle of self-financing. Local authorities will retain all their rental income, all their capital receipts, and have a sustainable level of debt based on a significant increase in the scope to spend on housing services and standards. Self-financing will increase local responsibility for long-term planning, asset management, and for meeting the needs of local people. It will enable local authorities to improve the management of their homes and services to tenants, to continue to deliver Decent Homes, and to secure greater efficiencies through being able to plan ahead with greater confidence.

Our work on establishing the structure and detail of a self-financing offer to local authorities with social housing and a housing revenue account is progressing well. In February I expect to be able to confirm the progress we have made and set out in detail the parameters of the changes we plan. This should enable local authorities to make a more informed assessment about what self-financing might mean for future financing, sustainability and housing standards with the continued ownership of their housing stock.

Self-financing will offer an affordable retention option for all local authorities. If it is generally accepted by local government then I would expect that self-financing could be in place for authorities for 2011-12. This would offer a clear alternative to stock transfer within a clear time scale that is comparable to the two-year period allowed for concluding stock transfer.

The six local authorities offered the option of a place on the Housing Stock Transfer programme should fully consider the self-financing proposals and assess all of the options carefully. They should spell out the options available, in clear terms, as part of any consultation with their tenants.

The HCA in approving the offer document for the six authorities for the stage 1 consultation exercise will ensure that the terms of both the full consultation and any subsequent ballot are balanced, neutral and factual, and that the options available to local authorities, and more importantly their tenants, which have been considered, include the potential for self-financing.

The underlying principle is that tenants and others in the local authority area concerned must have accurate and full information on the clear options available in order to be fully consulted and be in a position to make their views known.

In the light of my statement of 30 June, I am now minded to announce a change in policy for all other local authorities who may currently be developing transfer proposals, but do not have a place on the Housing Stock Transfer programme.

I am proposing that those local authorities who had not met the above criteria by today will not be considered for a place on the Housing Stock Transfer programme until we publish the self-financing offer and as a consequence, they should reconsider their transfer proposals in the light of the outline for this new self-financing system.

This will be a very significant opportunity for local authorities to consider. Most importantly, it will be an opportunity for tenants to consider and they should have all the options in front of them when they are asked for their views.

I invite the views of local authorities on the proposed changes to the Housing Stock Transfer programme. I expect to receive representations by 15 January 2010 which I will consider fully. And, I will report to the House further on these matters.

Park Homes (Transfer of Dispute Resolution)

Further to the statement by the Under-Secretary of State for Children, Schools and Families, my hon. Friend the Member for Hartlepool (Mr. Wright) on 30 May 2009, in which he announced the Government’s intention to transfer most of the functions of county courts to residential property tribunals under the Mobile Homes Act 1983 (as amended), I am today announcing that, subject to parliamentary consent, the residential property tribunal’s new jurisdiction will come into force on 6 April 2010.

The aim of the transfer of the jurisdiction is to provide residents of mobile homes (including caravans) and the owners of sites on which they are located, with a level playing field in the resolution of disputes, by providing access to a dedicated, low-cost specialist (housing) tribunal, which can deal with cases quickly and without the parties needing to be legally represented.

I have also today published a paper setting out the Government’s response to the May 2009 consultation “Further consultation on termination provisions in the Mobile Homes Act 1983 (as amended)”. The response paper sets out the reasons for the Government’s decisions not to transfer the “fact finding” role of county courts to residential property tribunals in respect of termination cases involving a breach of an agreement, or a claim that the resident of the park home is no longer occupying it as his only or main residence, but to do so in respect of claims relating to the detrimental condition of the home to the amenity of the site. A copy of the response paper has been placed in the Library of the House and is available on the Communities and Local Government website at: terminationprovisionsresponse

Sustainable Communities Act 2007

On 28 October I committed to reporting on the future development of Local Spending Reports. That report is being published today on the Department for Communities and Local Government website at: Copies will be placed in the Library of the House.

Our aim is to deliver better public services which also offer increased value for money. In order to do that, we need to ensure that information about how public money is spent is clear, accessible and useful. This will make it easier for service providers, potential providers, and citizens themselves to look at how that money is being spent, identify evidence of duplication or waste, develop alternative solutions and hold service providers to account. More fundamentally, ensuring that citizens have the information they need about public organisations is essential to empower communities, make sure their voice is heard, and that they have control over the services they receive.

Local Spending Reports are an important part of the way in which we will increase the transparency, visibility and accountability of local public spending. They help ensure that local authorities, their partners, and citizens have easy access to the information they need about public spending in their area, all in one place. The first Local Spending Report was published in April 2009, when we committed to developing these reports further.

The report we are publishing today sets out how we plan to make Local Spending Reports more useful and informative, by increasing the range of information they cover; and more practical and accessible, by ensuring that Local Spending Reports can be viewed by anyone on the web in a broader context of quality, performance, efficiency and value for money. They will form part of the Local Data Exchange which Communities and Local Government is developing as a way for local authorities to better share information among each other and with their partners and citizens. It also sets out how we will ensure that Local Spending Reports offer value for money and are not overly costly or burdensome for local authorities and their partners.

Local Spending Reports are just one element of our ambitions to make sure that citizens are better informed about the services in their area and how they are performing. Since the Sustainable Communities Act 2007 became law, there have been other important developments which will complement and strengthen how they work— first, the Government’s wider work to make public data available to common standards on the internet, led by Tim Berners-Lee and Nigel Shadbolt; secondly, our proposals to strengthen the capacity of local authorities to scrutinise local public spending; and thirdly, the development of Total Place, where local authorities bring together all the partners responsible for public spending in an area, challenging how that money is being spent. Most recently, “Putting the Frontline First: Smarter Government” set out a plan to drive up standards by strengthening the role of citizens and civic society, to free up public services by recasting the relationship between the centre and the frontline, and to streamline the centre of Government, saving money for sharper delivery. Local Spending Reports are one step towards these broader goals.

The next Local Spending Report will contain more up-to-date data, across a wider range of sources. In the new year, I will publish a consultation paper to discuss the issues with organisations who will be affected by the arrangements. We also want to make sure that the next Local Spending Report easily links across to the sources of the original data wherever possible, so that those interested in the detail of the report can quickly find out more. This will make Local Spending Reports more “alive”: easier to use and more valuable to the user. My intention is to publish the next Local Spending Report (after the consultation) in the summer 2010.

Foreign and Commonwealth Office

Private Military and Security Companies (Standards of Conduct)

On 24 April 2009, the Foreign and Commonwealth Office (FCO) launched a 12-week public consultation on the Government’s proposed policy to promote high standards of conduct in the Private Military and Security Companies (PMSCs) industry internationally.

Our overarching aims are to (a) promote high standards of conduct by PMSCs internationally; and (b) reduce the risk that PMSC activities might give rise to human rights or international humanitarian law concerns, assist internal repression, or provoke or prolong internal or regional tensions.

Our preferred option involves promoting high standards of behaviour by the industry in the UK through a code of conduct, agreed with and monitored by the Government, using our leverage as a key buyer to raise standards, together with an international agreement on standards covering all aspects of PMSC operation and organisation worldwide.

We received 25 responses to the consultation. The FCO is today publishing on its website a summary of responses to the consultation, including a Government response to the contributions. We will be able to integrate many of the suggestions into our follow-up work.

The following key findings emerged: (a) there was no conclusive evidence to demonstrate that the Government’s preferred option of promoting high standards of conduct internationally was not the best way of meeting achieving our aims and (b) the appropriateness and capacity of a trade association to combine the compliance auditing and monitoring of a code of conduct with trade promotion activities would require careful consideration.

The Government remain convinced that their preferred approach is the most viable option, but accept that further work remains to be done in certain respects. Specifically, we will now take forward work in consultation with the industry, non-governmental organisations and others to determine detailed arrangements for the effective monitoring/auditing of compliance with a code of conduct. We will aim to publish our thinking on the way ahead, taking into account this work and the key findings of the consultation, by March 2010.

In parallel, my officials will continue to work with partners for an effective international standard supported by an accountability mechanism. We aim to agree these within the next two years.


NHS Operating Framework

The NHS Operating Framework for 2010-11 was published today. A copy has been placed in the Library of the House and copies are available to hon. Members from the Vote Office.

The NHS Operating Framework for 2010-11 describes a stable financial settlement to operate within and makes clear what the NHS needs to do to deliver the priorities agreed as part of the comprehensive spending review 2007, and be in the best possible position to move into the new Spending Review period beyond 2011.

The priorities for the NHS in 2010-11 continue to be:

improving standards of cleanliness and tackling healthcare associated infections;

improving access to care through the achievement of the 18-week referral to treatment pledge and improving access to GP services, including at evenings and at weekends;

improving the health of adults and children and reducing health inequalities, by focusing on improving care for cancer and stroke, and paying particular attention to children’s health, and maternity and neonatal services;

improving patient and staff experience, satisfaction and engagement;

and preparing to respond in a state of emergency, such as an outbreak of pandemic influenza.

In addition to the national priorities, primary care trusts (PCTs) need to continue to improve at understanding the particular needs of their local populations and take concrete steps to address them. In order to meet their own local needs, PCTs will need to work in step with local government through local area agreements that focus on improving health and well-being.

Local priorities will build on evidence about current PCT performance and regional variation, and also plan for the future by incorporating work being done in local service reviews.

By the end of 2010-11 we expect to see NHS organisations that have adapted to reflect the quality and productivity challenge while maintaining improved delivery and financial discipline.

The NHS must meet the needs of its patients and their families, the expectations of the public and the aspirations of its staff. At all times, the NHS must be safe, effective, personalised and fair. The more responsive and personalised the NHS gets, the better the care it will provide and the more confidence the health service will inspire.

The NHS Operating Framework for 2010-11 should be read in conjunction with the NHS 2010-15 document.

International Development

Civilian Stabilisation Capacity

I am pleased to announce that the stabilisation unit has now recruited over 1,000 high quality individuals with the right skills and experience to deploy and help rebuild countries emerging from conflict. They come from both the public and private sectors, including 200 civil servants. This delivers the commitment made by the Prime Minister last year in his launch of the national security strategy.

The stabilisation unit currently deploys 70 civilians and 35 police officers either in hostile environments such as Afghanistan, Iraq, Sudan and DRC, or on secondment to international peace-building missions such as Kosovo and Georgia. These trained and experienced individuals are making a valuable contribution to improving security, governance and promoting peace in countries affected by violent conflict. This has been most evident in Helmand province in Afghanistan where the unit’s ability to find high quality personnel willing to work in the forward operating bases has been a major factor in the success of the UK-led provincial reconstruction team in expanding the reach of the Government of Afghanistan to the majority of the population.

The creation of the 1,000 strong civilian stabilisation capacity will enable the unit to increase the number of civilians deployed at any one time up to 200 if required. The unit is also working with UK police forces in increasing the number of serving senior ranking police officers who are able to deploy.

This enhancement of the stabilisation unit’s capability is one of a number of ways in which DFID, FCO and MOD are strengthening the unit. It is also increasing its ability to support cross-Government planning and identify and disseminate lessons relating to conflict.


Ethiopia remains one of the poorest countries in the world. Recently, it has faced additional challenges, including a chronic humanitarian situation and the impact of the global economic downturn.

Despite these additional challenges, the Government of Ethiopia continue to make impressive progress in expanding the availability and quality of health, education, water, sanitation and agriculture services across Ethiopia, with support from international donors. Progress in these areas is building the foundations for faster growth and greater food security. The UK helps support this progress through the protection of basic services (PBS) programme, alongside complementary activities.

PBS has a proven track record of providing essential services for millions of very poor Ethiopians. In the next two to three years, our latest £60 million contribution will help:

provide an extra 150,000 trained teachers

get 2.8 million more children in school

train 6,000 new health workers

equip 1,280 health centres with emergency obstetric care

vaccinate 4 million babies against killer diseases

make sure that 400,000 more children survive to the age of five; and

provide access to water for 6 million more households.

We are aware of allegations that some aid provided through the Ethiopian authorities—including through PBS—is being distorted at the local level for political purposes. We take all allegations of this nature very seriously. PBS was deliberately designed to include a range of rigorous checks, including regular financial and impact audits, surveys of the intended beneficiaries to check our support is reaching them, field visits, and evaluations to monitor progress.

In addition to these in-built safeguards in PBS, we have raised our concerns with Prime Minister Meles and are taking additional steps to make sure that our aid is being used for its intended purpose. These steps include jointly commissioning work to look for any evidence of systemic or widespread distortion within PBS and the other programmes concerned.


Succession and Wills (Commission Proposal)

The Government have today decided not to opt in to the European Commission’s proposed regulation on succession and wills. This means the UK will not be bound by this regulation.

Hundreds of thousands of UK citizens live and work in other EU member states, and millions of others enjoy holidays in the EU. The diversity of rules and systems that apply to succession in different member states can make for considerable complications where a person owns property across borders. In principle therefore, efforts to simplify and clarify the rules that apply to international successions could produce huge benefits for UK citizens, and the Government are strongly supportive of the project in principle. However, there are potentially significant problems identified with the proposal that the EU Commission has published. These were set out in a public consultation document, copies of which are available in the Libraries of both Houses.

That consultation document highlighted two key problems. The first, and most difficult of those, was “clawback”, which describes a legal mechanism where gifts made during a person’s lifetime can be recouped after their death. The introduction of this concept into the UK could create major practical difficulties, particularly for the recipients of such gifts including charities.

The second key concern was the proposal’s reliance on “habitual residence” as the sole connecting factor, that is, the factor of a person’s circumstances which determines when the regulation’s other rules apply. Using “habitual residence” in isolation in this way could mean that the relatives of anyone who lived abroad for a relatively short period of time and then died there, would find their estate was subject to a law with which they had no real connection. That could lead to unforeseen and unfair outcomes.

The Ministry of Justice’s recent public consultation confirmed that these issues are widely considered to be of very significant concern. A report of that consultation will be published in due course.

The Government have concluded that the potential benefits of this proposal are outweighed by the risks and have therefore decided that the best course of action is not to opt in to the proposal and the UK will therefore not be bound by the outcome.

The Government intend, however, to engage fully with the forthcoming negotiations between member states on this proposal, with the aim of removing the points that currently cause concern and to deliver further improvements for citizens with links and assets in more than one country. If that can be achieved, the Government could then decide to seek to adopt the final regulation. That will be considered and consulted upon as appropriate at that time.

Legal Aid

My noble friend, the Parliamentary Under-Secretary of State, Lord Bach, has made the following written ministerial statement.

Following a consultation process, the Government intend to introduce a number of reforms that aim to rebalance the legal aid budget to ensure that the £2.1 billion currently spent every year goes as far as possible in favour of civil help for those who need it most.

The reforms are outlined in the Government’s response to the consultation paper “Legal Aid: Funding Reforms”, which the Ministry of Justice will be publishing later today. The reforms are intended to make better use of the criminal legal aid budget and include changes that rationalise payment structures.

The reforms will:

Contain the cost of legal aid representation at police stations by reducing police station fees in the most expensive and oversubscribed areas.

Reform the current fee arrangements that remunerate litigators for preparation for committal hearings. Litigators will be paid a fixed fee for committals, which will be paid as part of the litigators graduated fee scheme.

End the anomaly by which practitioners in criminal cases receive a fee for file reviews which does not apply in civil cases.

It is estimated that approximately £23 million in savings will be made through the reforms to police station fees, changes to committal fees and the removal of the file review payments over the course of 2010-11.

In addition to these reforms, the Ministry of Justice will issue a second consultation paper to explore reforms to advocates fees in the Crown court.

Copies of the response to consultation and the consultation paper “Legal Aid: Reforming Advocates Graduated Fees” will be placed in the Libraries of both Houses, the Vote Office and the Printed Paper Office.


Liverpool Cruise Terminal

The Liverpool cruise terminal is owned and operated by Liverpool city council. It receives port of call visits from major cruise lines. The construction of this terminal was funded by grant from the European regional development fund and the North West Development Agency. The original grant decision was made on the basis of the benefits to local tourism from port calls, normally lasting a day. It was assessed that there was unlikely to be any significant distortion to competition in the market for port of call cruise services resulting from the provision of grant. It was however judged at the time that changing the use of the terminal to permit turnaround cruises to operate from that location could raise competition issues in relation to other ports operating in this market. Accordingly a condition of the funding was that change of use could only be permitted with the agreement of the right hon. and noble Friend the Secretary of State for Transport.

Earlier this year Liverpool city council sought advice from Department for Transport on the possibility of such a change of use to permit turnaround cruises and the Department undertook a further competition assessment. The Department has now completed this further assessment and has concluded that the proposed change of use would be likely to have an unfair and adverse effect on competition between Liverpool and other cruise ports. Officials have informed Liverpool city council of this decision.

In making the competition assessment, account was taken of information from a number of other ports which provide cruise opportunities on a similar scale to Liverpool and serve overlapping customer markets within Britain. The evidence demonstrates that it would be unfair to allow one port to benefit from a publicly funded development when competitors have found, or would have to find, private money to achieve the same objective.

Liverpool city council has had considerable success in developing its cruise terminal to attract some of the largest cruise ships in the world. I hope this business continues to thrive. The market for supplying turnaround cruises is, however, a different and highly competitive one. It is right that that business within this market should go where customers get best value without distortion of the market by subsidy. It is for the port of Liverpool to consider whether there are options to develop the turnaround cruise business at Liverpool on a purely competitive basis.

Work and Pensions

Correction (Statement)

During the debate that followed the uprating statement on 10 December 2009, in response to a question from my hon. Friend the Member for Walsall, North, (Mr. Winnick, I said:

“we have raised the basic state pension above prices every year since 1998-99.” [10 December 2009, Official Report, column 521].

The correct answer is as follows:

“Between 1997 and April 2010 pensioners will have benefited from above-inflation increases in the basic state pension, with pensioners better off by £10 or 12 per cent. in real terms in their basic state pension.”

I apologise to the House for the inadvertent error.