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Written Statements

Volume 520: debated on Monday 13 December 2010

Written Ministerial Statements

Monday 13 December 2010

Business, Innovation and Skills

Local Enterprise Partnerships

I, together with the Minister of State with responsibility for decentralisation, my right hon. Friend the Member for Tunbridge Wells (Greg Clark), would like to inform the House that today we have written to the proposed black country, new Anglia (covering Norfolk and Suffolk), and Worcestershire local enterprise partnerships inviting them to put their governance arrangements in place.

Local enterprise partnerships see a real power shift away from central government and quangos and towards local communities and the local businesses who really understand the barriers to growth in their areas. This announcement brings the total number of partnerships so far invited to put their governance arrangements in place to 27. We will continue to work with other areas with a view to establishing further local enterprise partnerships across England.

Communities and Local Government

Business Rates

This Government are clear that helping small shops and businesses grow is a crucial part of rebalancing and rebuilding the economy.

We have already taken action through the business rates system to support that aim.

We have doubled small business rate relief for one year. That measure is currently saving approximately half a million businesses £390 million in taxes, with over a third of a million ratepayers paying no rates at all for a year.

We are also waiving £175 million of backdated business rates demands levied on businesses, including some in ports. Thanks to that action many companies across the country will now be able to move forward confidently, unburdened by these unexpected debts. We will bring forward the necessary legislation to achieve that through the Localism Bill.

The Localism Bill will also simplify the process for claiming small business rate relief and give local authorities powers to provide business rates discounts which may be used, for example, to provide targeted support for local services or to help kick start regeneration schemes.

In addition, our proposals to enable councils to retain locally-raised business rates and deliver tax increment finance for local authorities will be taken forward through the local government resource review.

We fully appreciate the problems caused by the previous Government’s reforms of empty property rates. We have therefore given careful consideration to empty property rates and the inflation linked (based on the September 2010 rate of RPI) increase for next year’s bills.

Our ability to take action on those matters needs to be balanced against the targeted support that we have already provided on business rates, the high costs involved—we estimate it would cost £400 million to continue with the temporary empty property rates measure—and the overriding need to reduce public expenditure and support the economy generally by reducing the deficit.

Unfortunately, taking those matters into consideration, any further help in the short term is currently unaffordable.

The empty property rates threshold will therefore revert to £2,600 from 1 April. The provisional small business non-domestic multiplier will be 42.6 p and the provisional non-domestic multiplier—which includes the supplement to fund small business rate relief—will be 43.3 p.

However, while we have no immediate plans to reverse the reforms, we will keep this under review and we want to work constructively with the property industry on this inherited problem.

We are determined to continue providing the support that businesses need.

Council Housing Finance

For far too long, councils have been frustrated in their efforts to meet the housing needs of their tenants by a discredited system for financing council housing. The spending review and our recently published “Local decisions: a fairer future for social housing” confirmed our intention to replace this financing system with a new approach that devolves power and sufficient resources to councils to enable them to offer a better service to their tenants. This delivers a commitment in the coalition agreement.

Under the current system, Whitehall makes a series of complex annual decisions about what councils should raise in rents and what they should spend on their homes. On the back of this, Government redistribute income between councils. The result is that councils have no certainty about future income, no ability to plan long term, and in practice few incentives to drive up efficiency.

We will replace this opaque, centralised system with one that provides a direct link between the rents councils charge, the money they spend, and the services they deliver. Under this system, tenants and local taxpayers will be able to hold their landlord to account for the cost and quality of their housing. We also estimate moving to self-financing would produce over £6 billion of efficiency savings over 30 years as councils are able to plan more effectively for the long term.

The Localism Bill will take powers to repeal the existing subsidy system and replace it with powers for the Secretary of State to introduce self-financing. Implementing these changes via legislation ensures all councils start on the same basis at the same time. Our intention is to bring about these changes from April 2012, subject to parliamentary approval. For 2011-12 we will continue to run the present system and have recently published draft determinations for each council for consultation.

This statement sets out the basis on which Government intend to implement these reforms. We are satisfied that self-financing is the right approach and represents a good deal for all authorities over the longer term. However, the success of self-financing depends on a fair valuation of their housing business that guarantees all councils receive a sustainable level of debt that they can afford. As such we will continue to finalise the precise details of the settlement over the next year to ensure they take account of any relevant changes in economic circumstances. The Government will then confirm that the settlement is fair and sustainable and should be implemented next year.

We propose to adopt the basic method for calculating the debt reallocation consulted upon in March, based on a 30-year notional business plan of income and expenditure for each landlord. A payment to or from each council will then be made to reflect the difference between the value of the business and the housing debt currently supported under the HRA. The income assumptions built into the valuation will be based on the existing social rent policy for councils that their rents should “converge” with standard housing association rents in 2015-16.

We will publish a policy document in the new year setting out how these proposed reforms are envisaged to work in practice, together with the underpinning model which will include updated indicative numbers per council. This much more detailed information will provide Parliament and local authorities with the opportunity to assess these proposals and their likely impact at the same time as they scrutinise the powers proposed to support them during passage of the Bill.

This policy document will set out the updated methodology in more detail and will incorporate the following parameters:

a discount rate of 6.5% for calculating the net present value of each council’s housing business;

providing for realistic expenditure for management, maintenance and major repairs as identified in independent research published last year, increasing the costs used in the valuation by an average of 11.7%;

£116 million of extra funding each year for councils to pay for disabled adaptations to their stock;

funding for Treasury management costs and to reflect planned demolitions;

Government continuing to pay subsidy to local authorities for the PFI schemes currently funded through the HRA;

75% of net receipts from any right-to-buy sales continuing to be returned to the Exchequer. Estimates of the loss of income from RTB sales will be built into the valuation of each council’s housing business. Receipts from other disposals will continue to be held locally to spend on affordable housing or regeneration; and

council landlords being subject to a cap on overall housing borrowing for each local authority. This cap will be linked to the opening debt level under self-financing.

Using today’s figures, economic assumptions and these parameters, the net receipt to the Exchequer from these transactions is projected at approximately £6.5 billion. These will be updated in the model issued alongside the policy document and before the implementation of self-financing using the latest data and economic assumptions.

This projected receipt includes £1.2 billion attributable to the decision to continue funding PFI separately. Local authorities with PFI schemes will share this extra amount but will continue to receive subsidy. This was the option preferred by all local authorities with PFI schemes.

This is a reform intended to endure for the long term. In order to ensure it continues to be viable the Government are committed to assessing over the long term the impact of policy changes that may affect landlord income and the case to make good any losses or address any gains. The Localism Bill contains a power for the Secretary of State to make a further adjustment to the debt allocated to local authorities if a future policy change has a significant material effect on their costs or income. This is designed to protect both councils and the Exchequer.

Some council may be considering taking forward housing transfer proposals with their tenants in advance of or post self-financing. In order to agree a transfer in future, the financial terms of any proposals will need to be clearly comparable with what self-financing would provide. The Government will consider transfer proposals against the costs under self-financing. This will include dealing with backlogs, the costs of future management, maintenance and major repairs and the costs of essential regeneration works due to be undertaken through the proposed transfer. There will be an expectation that councils must provide significant financial support for the transfer, and no assumptions of financial benefit should be made where some measure of Government support may be required. Proposals will be subject to a rigorous value-for-money assessment.

Localism Bill

I am today introducing the Localism Bill to Parliament. The legislation will set the foundations for the big society by radically transforming the relationships between central government, local government, communities and individuals. The provisions will devolve greater power and freedoms to councils and neighbourhoods, establish powerful new rights for communities, revolutionise the planning system, and give communities much more control over housing decisions.

The Bill will expand councils’ freedom to act in the interest of their local communities through a new general power of competence. This long-awaited new power will mean that rather than needing to rely on specific powers, councils will have the legal reassurance and confidence to innovate and drive down costs to deliver more efficient services.

Powers for councils will be accompanied by greater powers for local people to hold their local authorities to account and to shape their local area. There will be a new right to challenge to take over services; a new right to bid to buy assets of community value such as libraries, public houses and shops; and a new right to veto excessive council tax rises through a referendum.

The Bill also contains significant reform of the planning system. It will replace the Infrastructure Planning Commission with an efficient and democratically accountable system for major infrastructure. It will enable regional planning to be swept away and, in its place, neighbourhood plans will become the new building blocks of the planning system with communities having the power to grant planning permission if a majority of electors are in favour.

The Bill will return decision-making powers on housing to local councils, giving them much greater control over allocation and tenure of social housing and the flexibility to use their social housing stock to the maximum effect and reduce waiting lists. It will enable a new national home swap scheme that will make it easier for social tenants to relocate. The housing revenue account subsidy system will be replaced with a more transparent system that serves local communities. The Tenant Services Authority will be abolished but its vital economic regulation functions will be preserved.

The Bill will create powerful incentives for economic growth by allowing local authorities to grant discretionary business rate discounts. Its provisions will also make small business tax breaks easier to take advantage of and give affected businesses a greater say in rate supplements.

Finally, the Bill will take forward a new settlement for London which will devolve significant power to the Greater London authority and London boroughs and streamline the plethora of agencies in London’s public sector landscape.

Taken together, the measures in the Bill will give local government the freedom and powers to deliver the key front-line services people rely on and make important savings.

Education

Education Spending

Today I am announcing local authority allocations for their Dedicated Schools Grant (DSG) and capital for 2011-12 and for the Early Intervention Grant in 2011-12 and 2012-13.

Schools

I can confirm that, as proposed in our consultation, we will continue with the current distribution method for funding local authorities.

As signalled in the consultation, we are simplifying the funding system by mainstreaming relevant grants into the DSG on the same per pupil distribution as this year. 2011-12 guaranteed units of funding (GUFs) are therefore the sum of 2010-11 GUFs and the per pupil grant allocations. This means that at local authority level allocations for school funding are flat cash per pupil for 2011-12.

To protect those local authorities that have falling pupil numbers I have put in place arrangements so that no authority will lose more than 2% of its budget in cash terms compared with 2010-11.

Following this announcement, local authorities will now be able to work with their schools forums to produce 2011-12 budgets for their maintained schools. This will include resources from grants mainstreamed into DSG. Local authorities will be required to take account of the previous level of these grants in constructing their settlement for schools. This is to prevent turbulence for those schools who have previously received funding through grants that we are mainstreaming. Although the overall schools budget before the addition of the pupil premium will stay at the same level per pupil, the actual level of budget for each individual school will vary. It will depend on local decisions about how best to meet needs. This does mean that some individual schools may see cash cuts in their budgets—either because they have fewer pupils or because changes are made within local authorities to the distribution of funding. I have, therefore, decided to apply a national protection arrangement for schools—the minimum funding guarantee—and have set it so that no school will see a reduction compared with its 2010-11 budget (excluding sixth form funding) of more than 1.5% per pupil before the pupil premium is applied. The guarantee applies to a school’s overall 2010-11 budget including grants that have been mainstreamed into DSG.

Capital

The capital settlement for my Department was extremely tight, with a 60% reduction in 2014-15 compared to the historic high of 2010-11. I know that there are schools in need of refurbishment which have missed out from previous Government capital programmes, and who feel they have therefore been treated unfairly. I will continue to invest in the school estate. Indeed we are investing £15.8 billion of capital over the spending review period, and the average annual capital budget over the period will be higher than the average annual capital budget in the 1997-98 to 2004-05 period. However, over the next few years our priority is to reduce this country’s budget deficit. This is essential, as the amount we are currently spending on debt interest payments could be used to rebuild or refurbish 10 schools every day. However, I realise that in the short term it will be difficult for schools to adjust to reduced capital funding.

The recommendations from the Sebastian James review of DFE’s capital programmes will inform the allocation of capital from 2012-13. But schools and local authorities need information now on capital for 2011-12 so that they can begin to plan. I am today announcing the allocation of £2,137 million1 of capital funding for schools in 2011-12.

There are two particular pressures we face which have informed how I have allocated this funding. First, I have inherited substantial forward commitments for the Building Schools for the Future, academy and myplace projects which I did not stop in July. Energetic efforts are being made by local authorities, contractors and others to reduce the cost of these projects, but I expect the cost of these commitments to remain significant over the spending review period. If the Building Schools for the Future programme had not been stopped there would have been no additional funding for schools outside that programme or for urgently needed primary school places.

Secondly, there are significant pressures for additional school places, particularly at primary age, in many areas of the country because of rising birth rates and changed migration patterns. In 2011-12, £800 million will be available to local authorities to address the need to provide additional school places. I have doubled the amount to be spent on what is called basic need from the levels spent by the previous Government. I recognise that this issue needs to be addressed and I am supporting local areas to do so.

Even where funding is tight, it is essential that buildings and equipment are properly maintained, to ensure that health and safety standards are met, and to prevent a backlog of decay building up which is very expensive to address. Therefore, in 2011-12, £1,337 million will be available for capital maintenance for schools2, with over £l billion being allocated for local areas to prioritise according to maintenance need. The voluntary aided sector will receive its fair share of this as I have decided to retain the Locally Co-ordinated VA Programme for a further year.

In addition, £195 million will be allocated directly to schools3 for their own use. This is a much lower rate than previously. The Audit Commission criticised the allocation of large amounts of funding to schools that was not targeted to building need. Therefore, in view of the need to prioritise, I have balanced the bulk of maintenance funding to local authorities, to support local prioritisation and larger projects, with co-ordinated and efficient procurement.

Details of the allocations of basic need and maintenance funding to each authority, and indicative amounts of the capital allocations for their schools, are being sent to local authorities today and published on the website. I shall also make copies available in the parliamentary Libraries.

I know that for longer-term planning, local authorities would welcome further security on their capital funding from 2012-13. As I have said, the capital review will inform funding from 2012-13. However, while the methodology of allocation and management of the capital funding may change, I can confirm that the headline annual amounts of funding for basic need and for maintenance will for 2012-13 until 2014-15 be in line with the amounts I have announced today for 2011-12.

Local Authority Early Intervention Grant

In challenging times the Government are freeing local authorities to focus on essential front-line services, and to invest in early intervention and prevention to produce long-term savings and better results for children, young people and families. A key element of this approach is the creation of a new early intervention grant for local authorities in England, worth £2,212 million in 2011-12 and £2,297 million in 2012-13. It replaces a number of former funding streams, which are listed in a note on my Department’s website. In a tight funding settlement, some reduction in central government support was inevitable. In 2011-12, the amount to be allocated through EIG is 10.9% lower than the aggregated 2010-11 funding through the predecessor grants. The new grant will however provide a substantial funding stream, with new flexibility to enable local authorities to act more strategically and target investment early, where it will have the greatest impact.

Universal as well as specialist services have an important role to play in identifying and supporting families who need extra help before problems escalate, and helping them get more intensive support if needed. Our schools, health services, police and other services should all be concerned to spot and support the most vulnerable families early. There are great examples of effective partnerships which already do this across the country.

I want to draw attention to two important aspects of the new grant. The first is the Government’s commitment to trusting professionals and creating local flexibility. Greater freedom at local level, to pool and align funding will help local authorities and their partners achieve better results. That is why we have scrapped top-down performance management, and why we are reducing radically the number of ring-fenced grants. The spending review signalled a power shift between central and local government—ensuring local communities have a greater say in the issues that affect them. The EIG is not ring-fenced, giving local authorities the flexibility to respond to local needs and drive reform, while supporting a focus on early intervention across the age range.

The second key point is the Government’s commitment to investment and reform in early intervention at a time of financial constraint. Against the background of greater flexibility to decide priorities locally, there are key areas of early intervention where the Government are ensuring that the overall grant provides support:

Sure Start Children’s Centres. There is enough money in the EIG to maintain the existing network of Sure Start Children's Centres, accessible to all but identifying and supporting families in greatest need. Local authorities continue to have duties under the Childcare Act 2006 to consult before opening, closing or significantly changing children's centres and to secure sufficient provision to meet local need and Together for Children will be ready to assist LAs in making plans to keep centres open. Important new investment through Department of Health budgets to provide 4,200 extra health visitors, working alongside outreach and family support workers, will enable stronger links with local health services.

2-year olds. Evidence shows that early education is particularly beneficial for the most disadvantaged, for whom gaps in attainment start to appear as early as 22 months. We want to make sure that the poorest two year olds are given the best start, and subject to parliamentary approval have committed to extending free early education with an entitlement for disadvantaged two year olds from 2013, funded by an additional £300 million a year by 2014-15. £64 million and £223 million will be available through the EIG over the next two years so that authorities can build capacity and quality. Local authorities must still have regard to their statutory duties under the Childcare Act 2006 to provide information, training and advice to all providers of early education; quality matters and a highly skilled workforce is critical if we are to have a positive impact on social mobility.

Short breaks for disabled children. Providing respite to the most vulnerable families improves their outcomes and reduces the cost of care. That is why we have included within the EIG £198 million/£202 million, at the same time as investing directly in the voluntary and community organisations that support this work.

The early intervention grant is of course not limited to these areas. The grant underpins creative local approaches to local priorities, across the whole field of services for children, young people and families. Most Department for Education funding for services for young people will flow through EIG. As we maintain the commitment to raise the participation age to 18 by 2015, the grant will help local authorities to support vulnerable young people to engage in education and training, intervening early with those who are at risk of disengagement. This could include preventing young people from taking part in risky behaviour, like crime, substance misuse or teenage pregnancy, supporting young people at risk of mental health problems, and helping young people who have a learning difficulty or disability to participate and achieve. The grant will support transitional arrangements to ensure that young people have access to impartial careers guidance in advance of the all-age careers service being fully operational. EIG also provides an opportunity for local areas to pursue greater coherence of local services for families with complex needs who face the poorest outcomes and pose the greatest cost to local services. Local authorities will want to consider using EIG funds to support local action in support of the national campaign to improve outcomes for families with multiple and complex problems and reduce costs to welfare and public services.

We look forward to Graham Allen’s report on early intervention, which will identify best practice and suggest ways to make it more widespread, including through new funding mechanisms. We recognise that making the transition from the old grant regime, and investing in early intervention at a time when budgets are under pressure, will be demanding. We want to work in partnership with local government to make the case for investment in these vital areas of early intervention. To that end, we will continue to work with the sector, including organisations like C4EO, to develop and disseminate the evidence base. We will promote transparency by working with the sector to measure the key outcomes and incentivise reform and effectiveness through payment of local authorities and providers by results, working with a number of authorities to develop a fair and effective methodology.

I am writing to local authority chief executives, directors of children’s services, head teachers and chairs of governing bodies with details of this announcement. Copies of these letters with details of individual school and local authority allocations have been placed in Libraries of both Houses.

Other Area-Based and Specific Grants

This Government’s decision to prioritise and protect front-line spending on schools and to target local authority spending on vulnerable and deprived children, young people and families has meant that we have had to make some hard choices. As part of the local government announcement we have confirmed that we are ending a number of education related area-based and specific grants. The ending of these grants does not mean that we do not see a future role for local authorities in relation to schools. The White Paper , “The Importance of Teaching”, which I recently published makes clear that local authorities continue to have an important strategic role to play. Local authorities will need to prioritise services and look at opportunities for delivering services more cost effectively including through working in conjunction with other local authorities.

In other areas, although the current grants are ending, we do expect to continue to provide funding. The White Paper made it clear that we are committed to improving music education. Darren Henley is currently conducting a review of music and we will make announcements about future music funding in the light of recommendations which arise from the review.

We want all families to be able to choose the right school for their child. We are therefore reviewing home to school transport so that we can better meet the needs of not only disadvantaged families, but all families, ensuring transport is properly targeted to those that need it most. In relation to the grant which supports extended rights for free home to school travel, we will be announcing transition funding in the new year to enable local authorities to continue to deliver their duty in this area for the rest of this academic year, pending the outcome of the review.

1This includes all taxpayer funded schools, including in the VA sector, academies, city technology colleges and non-maintained special schools. The figure for local authority and voluntary aided schools is £2039 million.

2This includes all taxpayer funded schools, including in the VA sector, academies, city technology colleges and non-maintained special schools. The figure for local authority schools is £858 million and for voluntary aided schools, £196 million. Local authority maintenance allocations also include funding for maintenance of Sure Start children’s centres.

3This includes all taxpayer funded schools, including in the VA sector and academies. The figure for local authority and voluntary aided schools is £185 million.

School Funding (Pupil Premium)

I can today confirm that the total funding available for the pupil premium will be £625 million in 2011-12, rising each year until 2014-15 when it will be worth £2.5 billion. The pupil premium, a key coalition priority, will target extra money at pupils from deprived backgrounds—pupils we know under-achieve compared to their non-deprived peers—in order to support them in reaching their potential.

In 2011-12, the pupil premium will be allocated to those pupils eligible for free school meals. We have chosen this indicator because it directly targets pupils and because the link between FSM eligibility and low attainment is strong. However, we aim from 2012-13 to extend the reach of the premium to those who have previously been on free school meals.

The level of the pupil premium will be £430 per pupil and will be the same for every deprived pupil, no matter where they live. The Coalition’s objective is to reform the underlying funding system to ensure that over time deprived children in every part of the country receive the same level of support. We will consult on how best to meet this objective.

The funding for the pupil premium is in addition to the underlying schools budget, which will be at the same cash per pupil level for 2011-12 as this year. This means there will be an additional £430 for every child known to be eligible for free school meals in any school from next year. This is clear additional money to help the very poorest who were let down by the last Government.

This additional funding will be passed straight to schools and because we have not ring-fenced it at school level, schools will have freedom to employ the strategies that they know will support their pupils to increase their attainment.

In allocating the pupil premium, we have also recognised that looked after children face additional barriers to reaching their potential, so these pupils too will receive a premium of £430. The premium for looked after children will rise in subsequent years, in line with the premium for deprived pupils.

For both looked after children and deprived pupils in non-mainstream settings we will pay this funding to the authority that has the responsibility of care for the child and will give local authorities additional freedoms to distribute the funding in the way they see best for the provision of support for these pupils. The pupil premium will be paid to academies and free schools by the YPLA.

Last week, the Prime Minister announced that we are also providing a premium for the children of armed services personnel. Service children—many of whose parents are risking their lives for their country—face unique challenges and stresses. The premium will provide extra funding to schools with service children to support the schools in meeting these needs. We expect the focus of expenditure from the premium to be on pastoral support. Today I am pleased to announce that the level of this premium will be £200 in 2011-12.

Energy and Climate Change

Post-EU Energy Council

Andy Lebrecht, Deputy Permanent Representative to the EU, represented the UK at the Energy Council in Brussels on 3 December.

Ministers at the Energy Council adopted Council conclusions on a consumer energy policy and on the Commission’s recent communication on the safety of offshore oil and gas activities. Commissioner Oettinger commented on the conclusions that he wanted to raise EU standards on offshore oil and gas activities to those of the best.

The main focus of the Energy Council was a debate on the recently published Commission documents, the “Energy 2020” strategy and the communication on energy infrastructure priorities. Commissioner Oettinger presented the two communications and outlined the Commission’s priorities, including ensuring energy savings, speeding up authorisation procedures for infrastructure; and stressing the need for the EU to speak as one when dealing with its primary supply markets in the middle East, the Caspian and Russia.

Ministers broadly agreed with the Commission’s documents. There was a strong consensus on the need for progress on energy efficiency although a number of member states argued against the idea of national binding targets. Member states agreed with the Commission on the crucial need for large investments in energy infrastructure but while broadly accepting the need to explore how planning and authorisation procedures, particularly for cross-border projects, could be improved, some, including the UK, noted that these were matters for member states. The UK and several other member states emphasised the importance of implementing the Third Package of internal energy market rules to facilitate the development of infrastructure. There were conflicting views on the financing of new infrastructure with some member states supporting the Commission’s ideas of co-financing while others objected to the idea of EU funding. The UK and a number of other member states raised concerns over the idea of harmonising renewable support schemes. On external relations, most member states took a cautious approach to the Commission’s proposals for a greater role for the EU.

The UK noted the opportunity of the European Council in February (where energy is planned to be a major item) to set a vision for a low-carbon, energy-secure, competitive EU by 2050 and the direction of EU energy and related policies to secure the necessary transformation, highlighting energy efficiency, technology, infrastructure and external policy as the key issues for Heads to discuss. In summing up, the presidency noted a level of consensus on the broad priorities in the Commission documents and the key issues for the February Council.

Commissioner Oettinger then updated the Council on a number of international energy relations events—the EU-US Energy Council, the EU-Russia energy dialogue and Belarus-Russia developments on gas.

In the morning of the Council, the UK and representatives from Germany, France, Belgium, the Netherlands, Sweden, Ireland, Luxembourg, Denmark and Norway signed a memorandum of understanding on the North sea’s offshore grid initiative, which sets out a programme of work to facilitate the development of offshore wind resources in the region.

Foreign and Commonwealth Office

Parliamentary Written Question (Correction)

I regret that the answer I gave to the right hon. Member for Rotherham (Mr MacShane), to parliamentary question 22801, Official Report, 11 November 2010, Vol. 518 column 435W, on diplomatic immunity was incomplete.

The answer originally published was as follows:

Mr Bellingham: Whether a visiting Minister of a foreign Government is entitled to immunity from arrest in the UK will depend on the status of the person concerned, whether they are travelling on official Government business, as well as on other considerations. By virtue of their office, immunities will attach to visiting Heads of State, Heads of Government and Ministers of Foreign Affairs, as well as, by extension, other Ministers who travel by virtue of their office. The extent to which such immunities may attach to other visiting senior officials will fall to be determined case-by-case depending on their status and the reasons for their visit to the UK.

The answer should have been preceded by the following additional information:

There are various forms of immunity that may operate in proceedings before UK courts, including, State immunity, diplomatic immunity and special missions immunity. State and diplomatic immunity are addressed in legislation; special missions immunity derives from customary international law. Each of these aspects of immunity have been addressed in UK court judgments, to which reference must be made when determining whether immunity applies in any given case.

Home Department

Police Authority Grants (England and Wales)

I have today placed in the Library my proposals for the aggregate amount of grant to police authorities (referred to in the report as the Police Core Settlement) in England and Wales for 2011-12, for the approval of the House. I have also given an indication of how I intend to allocate Home Office funding for the years 2012-13 to 2014-15, for which approval will be sought at a later date. My intention in doing so is to provide police forces with the best possible information to support their financial planning.

My right hon. Friend the Secretary of State for Communities and Local Government has today also set out his proposals for police funding for the next two years. For the second two years, in England, the Local Government Resource Review may have implications for how the wider funding of local government is allocated for police authorities. The review will conclude in July 2011 and will signal the Government’s intentions for the future.

The Welsh Assembly Government are also setting out today their proposals for the next two years of funding for the four police authorities in Wales.

To ensure a simple, transparent and equal share of reductions to the Police Core Settlement, funding from the Department for Communities and Local Government and from the Welsh Assembly (which together comprise the majority of Government funding to police authorities), these allocations have been damped in 2011-12 and 2012-13 at the level of the average reduction.

This means that every police authority will see a cash reduction in this funding of 5.1% in 2011-12 and 6.7% in 2012-13. I understand that the police service is already planning on this basis and—as in previous years—I will ensure that Welsh forces receive equal damping treatment to their English counterparts. When funding for specific grants is added to this, the total cash reduction in core Government funding to the police remains 4% in 2011-12 and 5% in 2012-13, as announced on 20 October.

Damping levels for the last two years of the settlement will be decided at a later date.

These reductions will be challenging but the Government are clear that forces can make the necessary savings while protecting the front line and prioritising the visibility and availability of policing.

The Government will play their part through continuing work with authorities and forces on value for money, including more effective procurement at national level, greater collaboration between force and other partners, and better use of comparative information; through the removal of unnecessary bureaucracy which adds costs and impedes a sharp focus on front-line policing; through its policy for public sector pay; and through careful consideration in due course of the recommendations from Tom Winsor’s current independent review of police remuneration and conditions.

In order to give greater local freedom and flexibility over how resources are deployed locally there will be a significant reduction in the funding allocated by means of specific grants. Specifically, the Rule 2 Grant, Crime Fighting Fund and the Basic Command Unit Fund have all been absorbed within the Police Main Grant.

I will continue to provide a specific Neighbourhood Policing Fund for the first two years of the settlement period. This recognises that neighbourhood policing provides a dedicated, consistent and visible presence in communities. From 2013-14, the new directly elected Police And Crime Commissioners will have full discretion over this funding, recognising their accountability to the communities they serve. In London, the Metropolitan police authority will have full autonomy over this funding from 2011-12, in recognition of the role the Mayor of London and the Deputy Mayor, Policing, already play.

I will also be keeping specific funding for counter-terrorism policing and have provided relative protection to this budget to ensure that critical national counter-terrorism capabilities are maintained. Authorities and forces will receive more details of their specific counter-terrorism allocations in January.

In addition to the Police Core Settlement, the Olympic safety and security budget has been prioritised. These provisions are detailed below.

I have set aside £50 million in 2012-13 to fund the first elections of Police and Crime Commissioners in that year. This amount was specifically included in the police settlement for this purpose and has therefore had no impact on allocations to forces. I have likewise set aside funding for the continuation of police private finance initiative projects.

My right hon. Friend the Secretary of State for Communities and Local Government will today make a statement on his approach to council tax increases and capping next year. He will also announce details of the outstanding capping action to be taken against Greater Manchester and Nottinghamshire police authorities.

The Police Grant Settlement 2011-12 to 2014-15

I have set out below how I propose to allocate the police settlement between the different funding streams for the next four financial years.

Table 1: Police revenue funding—proposed figures for 2011-12 and indicative figures for 2012-13 to 2014-15

2011-12

2012-13

2013-14

2014-15

£m

£m

£m

£m

Total Formula Funding:

comprising

Home Office police main grant

4,579

4,251

4,515

4,429

National, international and capital city grant (MPS only)

200

189

185

183

DCLG general grant

3,345

3,138

3,0931

3,0511

WAG general grant

161

151

149

147

Total Specific Grants

comprising

Welsh top-up

13

13

20

20

Neighbourhood Policing Fund (NPF)

340

338

-

-

Counter-terrorism specific grant

567

564

563

562

Council tax (2011-12) freeze grant

75

75

75

75

PCC election funding

-

50

-

-

PFI grants

54

54

60

79

Total Government Funding

9,3412

8,8302

8,660

8,546

% cash change in total Government funding

-4%

-5%

-2%

-1%

1How this funding is paid to the police may change as a result of potential changes to the retention of business rates.

2This includes a small amount of funding that will form part of a contingency fund, which is not shown in the table above.

Indicative allocations of these grants (with the exception of counter-terrorism funding) for each force in England and Wales for 2011-12 and 2012-13 are set out in table 3, and for 2013-14 and 2014-15 are set out in table 4.

Police Allocation Formula

I have taken into consideration representations made as part of the public consultation into the Police Allocation Formula. As a result, I have made three technical changes. These are the consolidation of Rule 2 grant; the inclusion of bar density data at CSP level; and the use of more up-to-date data to determine activity based costings. Details of these changes will be given to all forces with their allocations.

Specific Grants

Indicative amounts of these grants are set out in table 3.

Neighbourhood Policing Fund

The Neighbourhood Policing Fund specific grant will continue until directly elected police and crime commissioners are in place. Funding totalling £340 million in 2011-12 and £338 million in 2012-13 will be made available. Approximately 90% of the grant will be ring-fenced for PCSOs—contributing up to 75% of their salary costs. The remaining 25% will need to be match-funded by the police, councils, businesses and other organisations. This will not apply to the Metropolitan Police Authority who will have full discretion on the spending of this funding from 2011-12. From 2013-14 this fund will be consolidated into the Police Main Grant.

Counter-Terrorism

Counter-terrorism has been prioritised to ensure that the police will have the necessary resources to respond to the changing demands posed by the terrorist threat. We have allocated £567 million to support counter-terrorism policing in 2011-12.

Forces will be notified of their individual allocations in early January. For security reasons, these allocations will not be available in the public domain.

Private Finance Initiatives Grant

Specific funding will be given to cover the costs of private finance initiative projects which are currently operational and where grants are being paid in 2010-11, and for projects that become operational in 2011-12. The Home Office will continue to support projects that are currently in procurement.

National, International and Capital City Grant

The National, International and Capital City Grant will continue to recognise the unique additional duties performed by the Metropolitan police service. In 2011-12 the funding will be £200 million. It will be reduced in subsequent years on the same basis as the Police Main Grant.

Council Tax Freeze

Funding was made available in the police spending review settlement to help police authorities deliver a council tax freeze in 2011-12. Should every authority participate in the freeze, it is estimated that they will receive a total of around £75 million in each of the next four years to compensate for income that they would otherwise have raised from council tax. Funding for this was included in the police settlement, and has been set aside accordingly.

Other Funding

Police Capital

I am today also setting out capital allocations for forces over the next four years. Police capital will be at 55% of its current level by 2014-15. In 2011-12 more pressing capital priorities within the Home Office mean that it will be reduced to 40% of its level this year, however I have ensured that the police service will be compensated through an increase in capital funding in the following financial year.

I intend to allocate the majority of this funding directly to police authorities/PCCs, who will all receive the same % change in funding, as set out in table 5. I will also continue to support the National Police Air Service and maintain a capital contingency.

Table 2: Division of police capital between funding streams

2011-12

2012-13

2013-14

2014-15

£m

£m

£m

£m

Capital Grant

85

125

115

115

National Police Air Service

4

4

4

4

Special Grant Capital

1

1

1

1

Total

90

130

120

120

Olympic Safety and Security

Safety and security for the 2012 Olympics and Paralympics is a priority for this Government. Safety and security planning is well advanced and on schedule.

In accordance with the commitment made by the then Minister for the Olympics in 2007, the Government will make up to £600 million available, if required, for the Olympic safety and security programme. Since 2007 the Home Office has identified significant financial savings and the Government believe that it will be possible to continue to make further savings without creating additional risk. At this stage, with almost two years before the games begin, we estimate that it should be possible to deliver the core cross-Government safety and security programme for about £475 million.

Beyond the £134 million which will have been spent by the Home Office by the end of the current financial year, the Home Office will be providing £107 million in 2011-12 and £192 million in 2012-13, primarily for the police service, to meet the Olympic safety and security costs. This funding is in addition to the core police funding detailed above and the contributions being made by other Government Departments. Home Office funding includes a very substantial financial provision for contingencies.

We assess this funding will be sufficient to meet the anticipated cost of delivering the capability and capacity that will be required to ensure a safe and secure Olympics and Paralympics. A further Olympic contingency of around £500 million is available for cross-programme issues, including a material change in circumstances relating to Olympic safety and security.

Venue security is a shared responsibility of the London Organising Committee of the Olympic and Paralympic Games (LOCOG), as the event organiser, and the Government, as the guarantor of security for the International Olympic Committee (IOC) and a further investment of about £280 million will also be made available for the specific purpose of supporting the (LOCOG) in their responsibilities to secure Olympic venues before and throughout the games.

The Olympic safety and security operation will depend heavily on the existing substantial investment which the Government have made in counter-terrorism policing and infrastructure. We are committed to providing £567 million in 2011-12 and £564 million in 2012-13 for counter-terrorism policing capabilities: much of this capacity will be devoted to the Olympics in 2012.

Table 3: Provisional and Indicative revenue allocations for English and Welsh Police Authorities for 2011-12 and 2012-13

Police Authority

2011-12

2012-13

HO Core

NPF

Welsh Top up

WAG

CLG

HO Core

NPF

Welsh Top up

WAG

CLG

£m

£m

Avon and Somerset

120.9

7.4

0.0

0.0

64.3

112.7

7.3

0.0

0.0

60.2

Bedfordshire

43.9

2.8

0.0

0.0

29.3

40.8

2.7

0.0

0.0

27.4

Cambridgeshire

53.7

3.7

0.0

0.0

29.7

50.0

3.6

0.0

0.0

27.8

Cheshire

69.5

4.8

0.0

0.0

53.2

64.3

4.8

0.0

0.0

50.2

City of London

31.6

1.3

0.0

0.0

29.9

30.2

1.3

0.0

0.0

27.3

Cleveland

51.4

3.0

0.0

0.0

46.3

47.5

2.9

0.0

0.0

43.6

Cumbria

33.1

2.3

0.0

0.0

36.1

30.5

2.3

0.0

0.0

34.0

Derbyshire

70.2

3.7

0.0

0.0

45.8

65.0

3.7

0.0

0.0

43.2

Devon and Cornwall

118.9

7.5

0.0

0.0

72.3

110.5

7.5

0.0

0.0

67.9

Dorset

45.9

3.3

0.0

0.0

21.0

42.4

3.2

0.0

0.0

20.0

Durham

47.8

3.3

0.0

0.0

44.4

44.3

3,3

0.0

0.0

41,7

Dyfed-Powys

34.3

1.6

6.5

17.1

0.0

32.1

1.6

6.3

15,7

0.0

Essex

117.6

7.2

0.0

0.0

6507

109.5

7.2

0.0

0.0

61.5

Gloucestershire

39.1

3.2

0.0

0.0

22.4

36.2

3.2

0.0

0.0

21.1

Greater London Authority

1,127.7

101.9

0.0

0.0

897.8

1,051.6

101.3

0.0

0.0

838.2

Greater Manchester

248.5

17.4

0.0

0.0

220.0

230.2

17.3

0.0

0.0

206.9

Gwent

48.2

3.0

0.0

35.1

0.0

44.7

2.9

0.0

33.0

0.0

Hampshire

138.0

7.6

0.0

0.0

74.3

128.1

7.6

0.0

0.0

69.9

Hertfordshire

79.5

5.3

0.0

0.0

44.5

73.9

5,3

0.0

0.0

41.8

Humberside

74.8

4.8

0.0

0.0

55.5

69.5

4.7

0.0

0.0

52.1

Kent

117.9

8.1

0.0

0.0

81.6

109.5

8.0

0.0

0.0

76.6

Lancashire

114.3

8.2

0.0

0.0

92.7

105.7

8.2

0.0

0.0

87.5

Leicestershire

72.4

4.7

0.0

0.0

48.0

67.3

4.7

0.0

0.0

45.0

Lincolnshire

42.9

2.9

0.0

0.0

24.6

39.8

2.9

0.0

0.0

23.1

Merseyside

137.8

9.9

0.0

0.0

133.5

127.0

9.8

0.0

0.0

126.1

Norfolk

57.7

4.0

0.0

0.0

33.1

53.7

3.9

0.0

0.0

31.0

North Wales

49.6

3.3

6.5

27.0

0.0

46.2

3.3

6.5

24.8

0.0

North Yorkshire

47.2

3.4

0.0

0.0

31.7

43.9

3.4

0.0

0.0

29.8

Northamptonshire

48.6

3.0

0.0

0.0

28.8

45.2

3.0

0.0

0.0

27.0

Northumbria

124.3

9.0

0.0

0.0

126.7

115.0

8.9

0.0

0.0

119.2

Nottinghamshire

86.8

5.5

0.0

0.0

57.0

80.7

5.5

0.0

0.0

53.5

South Wales

100.6

6.7

0.0

81.9

0.0

92.7

6.7

0.0

77.6

0.0

South Yorkshire

110.8

6.6

0.0

0.0

94.5

102.7

6.6

0.0

0.0

88.8

Staffordshire

74.2

4.5

0.0

0.0

48.9

68.6

4.5

0.0

0.0

46.2

Suffolk

45.9

3.1

0.0

0.0

27.3

42.8

3.1

0.0

0.0

25.5

Surrey

70.0

4.4

0.0

0.0

35.3

65.0

4.4

0.0

0.0

33.2

Sussex

109.0

7.2

0.0

0.0

65.9

101,1

7.2

0.0

0.0

62.0

Thames Valley

158.2

9.2

0.0

0.0

89.4

147.0

9.1

0,0

0.0

84.0

Warwickshire

35,2

2.8

0.0

0.0

20.1

32.7

2.8

0.0

0.0

18.9

West Mercia

74.1

5.4

0.0

0.0

52.1

68.6

5.3

0.0

0.0

49.1

West Midlands

272.9

16.0

0.0

0.0

224.9

252.9

15.9

0.0

0.0

211.5

West Yorkshire

192.7

14.3

0.0

0.0

150.9

179.3

14.3

0.0

0.0

141.2

Wiltshire

41.6

2.8

0.0

0.0

25.3

38.7

2.8

0.0

0.0

23.8

Total England and Wales

4,779.1

340.0

13.0

161.0

3,345.0

4,440.1

338.0

12.8

151.0

3,138.0

Table 4: Provisional and Indicative revenue allocations for English and Welsh Police Authorities for 2013-14 and 2014-15

Police Authority

2013-14

2014-15

HO1

HO1

£ m

£ m

Avon & Somerset

120.1

118.3

Bedfordshire

43.4

42.7

Cambridgeshire

53.3

52.4

Cheshire

68.0

66.5

City of London

32.9

33.0

Cleveland

50.2

49.1

Cumbria

32.3

31.5

Derbyshire

69.0

67.6

Devon & Cornwall

117.4

115.2

Dorset

44.9

43.9

Durham

46.9

45.9

Dyfed-Powys

31.1

30.5

Essex

116.7

114.9

Gloucestershire

38.4

37.7

Greater London Authority

1,102.3

1,084.1

Greater Manchester

244.1

239.0

Gwent

46.0

44.9

Hampshire

136.1

133.6

Hertfordshire

78.5

77.1

Humberside

73.8

72.4

Kent

116.4

114.2

Lancashire

111.8

109.2

Leicestershire

71.6

70.3

Lincolnshire

42.3

41.5

Merseyside

133.9

130.5

Norfolk

57.2

56.2

North Wales

44.7

43.7

North Yorkshire

46.6

45.7

Northamptonshire

48.2

47.5

Northumbria

121.7

119.0

Nottinghamshire

85.7

84.2

South Wales

106.9

105.0

South Yorkshire

109.0

106.9

Staffordshire

72.6

71.0

Suffolk

45.6

44.9

Surrey

69.1

67.8

Sussex

107.4

105.3

Thames Valley

156.2

153.4

Warwickshire

34.7

34.1

West Mercia

72.6

71.0

West Midlands

268.1

262.6

West Yorkshire

190.9

187.8

Wiltshire

41.1

40.4

Total England and Wales

4,699.7

4,612.3

1From 2013-14, the Neighbourhood Policing Fund will be rolled into the Police Main Grant.

Table 5: Provisional capital allocations for England and Wales

Capital Grant

Force

2011-12

2012-13

2013-14

2014-15

£m

£m

£m

£m

Avon & Somerset

1.9

2.7

2.5

2.5

Bedfordshire

0.8

1.1

1.1

1.1

Cambridgeshire

0.9

1.4

1.3

1.3

Cheshire

1.2

1.8

1.6

1.6

City of London

0.7

1.0

0.9

0.9

Cleveland

1.0

1.4

1.3

1.3

Cumbria

0.7

1.0

0.9

0.9

Derbyshire

1.2

1.7

1.6

1.6

Devon and Cornwall

2.0

3.0

2.8

2.8

Dorset

0.8

1.1

1.0

1.0

Durham

0.9

1.4

1.2

1.2

Dyfed-Powys

0.6

0.9

0.8

0.8

Essex

1.7

2.5

2.3

2.3

Gloucestershire

0.7

1.0

0.9

0.9

Greater Manchester

4.3

6.3

5.8

5.8

Gwent

0.8

1.2

1.1

1.1

Hampshire

2.1

3.2

2.9

2.9

Hertfordshire

1.1

1.6

1.5

1.5

Humberside

1.3

1.9

1.7

1.7

Kent

2.0

2.9

2.7

2.7

Lancashire

2.0

3.0

2.7

2.7

Leicestershire

1.3

1.9

1.7

1.7

Lincolnshire

0.7

1.1

1.0

1.0

Merseyside

2.5

3.7

3.4

3.4

Metropolitan

22.5

33.1

30.5

30.5

Norfolk

1.0

1.5

1.3

1.3

North Wales

0.9

1.3

1.2

1.2

North Yorkshire

0.8

1.2

1.1

1.1

Northamptonshire

0.8

1.2

1.1

1.1

Northumbria

2.3

3.4

3.2

3.2

Nottinghamshire

1.4

2.0

1.9

1.9

South Wales

1.8

2.7

2.4

2.4

South Yorkshire

2.0

2.9

2.7

2.7

Staffordshire

1.3

1.9

1.7

1.7

Suffolk

0.8

1.2

1.1

1.1

Surrey

1.1

1.7

1.5

1.5

Sussex

1.7

2.5

2.3

2.3

Thames Valley

2.7

4.0

3.7

3.7

Warwickshire

0.8

1.2

1.1

1.1

West Mercia

1.4

2.0

1.8

1.8

West Midlands

4.6

6.7

6.2

6.2

West Yorkshire

3.3

4.9

4.5

4.5

Wiltshire

0.8

1.1

1.0

1.0

Total

85.0

125.0

115.0

115.0

English Language Students (Entry Clearance)

Under tier 4 of the points-based system, institutions are currently required to ensure their students have a prior knowledge of English at a minimum of B1 level on the common European framework of reference for languages. Competence in English language is a key indicator of a student’s ability and motivation to follow a course of study. In the consultation on the reform of the student immigration system, the Government therefore propose that minimum level for tier 4 is raised further to B2—an upper-intermediate level of competence.

I recognise these current arrangements, as well as those proposed, do not meet the special needs of the English language sector. These lower-level courses can be offered through the student visitor route. Leave under this route is limited to six months. The English language sector has represented to me that in some cases, they wish to offer courses of longer duration.

Therefore I have agreed to put in place a temporary measure that will allow English language students on a longer-duration course to be given leave to enter as student visitors for a period not exceeding 11 months.

To enter under this route for the extended period, English language students will need to obtain entry clearance at a British mission overseas in advance of travel, whether they are a visa national or non-visa national, and furnish evidence of the duration of the course. Other requirements, entitlements and restrictions will remain the same as the current student visitor visa. Students will not be entitled to work, sponsor dependants or switch into other routes including tier 4 of the points-based system. Students will have to satisfy the entry clearance officer that they genuinely intend to study, to leave the UK at the end of their studies and can support themselves during their stay. Full details of the route and how students can qualify will be published in guidance on the UK Border Agency website. Students will be able to apply from 10 January 2011.

This concession is intended to create flexibility to allow legitimate English language colleges to continue to offer opportunities to genuine students. I shall monitor closely the practical impact to ensure that it does not become a loophole, and take a decision on making it permanent in due course. English language students will continue to be able to study under tier 4 of the points-based system, as now, where they meet the requirements.

Transport

EU Transport Council

I attended the second Transport Council of the Belgian presidency in Brussels on 2 December.

The Council discussed air cargo security. Following the recent discovery of explosive devices in air cargo, a high-level group produced a report on strengthening air cargo security, for both Council meetings on 2 December (Transport and Justice and Home Affairs). The presidency presented this report, which sets out ways to strengthen the security regime around air cargo coming into the EU.

The UK broadly welcomed the report and the associated action plan and provided the Council with some details of the recent air cargo incident. The presidency concluded orally that the Council had a “positive appreciation” of the report, and asked the Commission and member states to ensure a speedy implementation of the action plan. The Commission was asked to report back to the Council on progress made. A parallel discussion took place in the JHA Council.

The presidency updated the Council on progress with negotiations on the draft directive on cross-border enforcement in the field of road safety. The proposed directive aims to improve cross-border enforcement of certain road safety offences by facilitating exchange of data between authorities. The UK and Ireland supported a proposal to change the legal base for this proposal to Justice and Home Affairs, and emphasised that this change engaged our right to decide whether or not to opt in to the directive. We reserved our position on the substance, pending formal consideration of our stance and consultation with Parliament during the permitted three-month period. Both countries tabled minute statements to this effect.

All member states were in favour of the change of treaty base. The Commission has however made it clear that it does not support a JHA legal base. The presidency concluded that there was consensus on the text of the draft directive, but did not seek confirmation of a political agreement. They acknowledged the UK’s rights under protocol 21 to have the necessary period to consider whether or not to opt in.

The Commission presented its recent proposal to recast the 2001 first rail package, which set the initial framework for a single European rail market. The presidency gave an account of early discussions on the proposal. The discussion in the Council concluded that the publication of national rail infrastructure development strategies was a good approach. The UK broadly supported the proposal, in particular endorsing the need for adequately resourced and properly independent regulatory bodies, in order to facilitate market entry and competition. However, I highlighted the importance of effective enforcement of the existing directive if we are to see real progress on opening up rail markets across Europe to cross-border competition. Discussions will continue under the Hungarian presidency.

The presidency reported on progress in discussions on a proposal for a decision on the public regulated service (PRS) of the Galileo programme. The decision would set out controls over access to the high-accuracy positioning signal from Galileo. The UK noted the lack of an impact assessment and expressed disappointment at the lack of visibility on costs. We expressed concern about handling of security and stressed that common minimum standards needed to be defined by the GNSS (Global Navigation Satellite System) Security Board. Discussions will continue under the Hungarian presidency.

Following the informal meeting of EU Transport Ministers held in Antwerp in September, the Council adopted conclusions on the integration of waterborne transport into the EU logistics chain. The conclusions are acceptable to the UK.

The Council also adopted conclusions following the Commission’s communication entitled “Towards a European road safety area: policy orientations on road safety 2011-2020”. The conclusions state that any new EU legislation must be proportionate and supported by robust impact assessments, and the UK was able to support their adoption.

Among AOB items, the Commission gave a presentation of its recent proposal to revise the regulation which established the European Maritime Safety Agency and to bring the agency’s tasks into line with more recent legislation. The UK supported a statement by Germany, which expressed concern about any increase in EMSA’s budget and staffing.

Local Sustainable Transport Fund

I wish to inform the House of the plans to publish next month detailed guidance on the operation of the Local Sustainable Transport Fund, for which £560 million has been set aside in the four-year period to 2014-15. Coupled with the funding local authorities will receive through the Integrated Transport and Highways Maintenance Blocks, which I am announcing today, this represents almost £5 billion funding for small local transport schemes over the next four years.

The establishment of the LSTF reflects the importance the Government attach to helping build locally a strong economy and addressing at a local level the urgent challenge of climate change and the commitment made in the coalition agreement to promoting sustainable travel initiatives.

The guidance will invite local transport authorities in England (outside London) to apply for funding to support the cost of a range of sustainable travel measures. Packages might, for example, include measures that promote walking and cycling, encourage modal shift, manage effectively demands on the network, secure better traffic management, improve road safety and improve access and mobility for local communities.

The guidance will also set out the criteria against which decisions on the allocation of funding will be taken. The criteria will include meeting the core objectives of supporting economic growth and reducing carbon. Bids will also need to demonstrate value for money, deliverability and affordability of package proposals.

We have set aside the following LSTF funding over the next four financial years:

£m

2011-12

2012-13

2013-14

2014-15

Total

Resource

50

100

100

100

350

Capital

30

40

60

80

210

Total

80

140

160

180

560

We wish to support as many local transport authorities as possible through the fund.

This fund will also support Bikeability training in each financial year and the following projects in 2011-12 only in order to maintain momentum on sustainable travel while local authorities prepare their proposals:

£13 million for Links to Schools, Bike Club and walking to school initiatives;

£1 million for Transport Direct cycle journey planner; and

£250,000 to take forward business to business initiatives on alternatives to travel.

Authorities will be able to bid for small packages of under £5 million and larger packages of up to £50 million over the fund period, but will only be able to be successful with one bid.

The application process is being designed to be as simple and straightforward as possible with the flexibility to deal with proposals to the fund of different complexity and scale. Local authorities will also be given a choice as to when to apply to the fund in recognition that they will be at different levels of readiness to submit proposals, with two rounds of bidding; one closing in April, the other at a later date.

I am writing today to local transport authorities in England (outside London) inviting them to start preparing and developing their proposals and to consider what skills and resources they will require. Bids from local transport authorities will be particularly welcome if they can demonstrate support from, and the involvement of, voluntary and community organisations, and the private sector. The ability to lever in financial contributions from external sources will also be taken into account in assessing value for money.

Local Transport Capital Blocks Settlement

Following the spending review on 20 October 2010, which included the England-wide totals for future transport grants, I have today placed in the Libraries of the House details of the local transport capital settlement for individual local authorities in England.

This includes over £3 billion over the next four years for local highways maintenance. With limited resources available, it is essential that highways maintenance continues to be prioritised, reflecting the economic and social importance to local communities, the need to safeguard the largest single local public asset and the liabilities for future years that can be created from short-term cuts in maintenance.

The Department is also providing over £1.3 billion for small transport improvement schemes, reflecting the contribution these schemes make to improving road safety, stimulating local economies by reducing congestion, and delivering social justice to local communities.

Funding allocations are calculated according to needs-based formulae that are developed with local authorities. The funding is not ring-fenced, and local authorities are free to spend their allocations in accordance with their priorities. All funding will be supplied as capital grant, and not as supported borrowing. The figures provided include final allocations for 2011-12 to 2012-13, and indicative allocations for 2013-14 to 2014-15.

This announcement follows a recent consultation on local transport capital funding. A summary of responses and the Department’s proposed next steps are available on the Department’s website at: http://www.dft.gov.uk/localtransportfunding

and have been placed in the Libraries of the House.

The Department is separately setting aside £560 million over the four year period to 2014-15 for the local sustainable transport fund. I am announcing today in a separate statement to the House plans for publishing guidance on the operation of this fund.

Work and Pensions

Pension Schemes (Default Investment Options)

Today we will publish a consultation on default investment options for those people who are automatically enrolled into defined contribution pension schemes.

Automatic enrolment into workplace pensions will see millions of individuals newly saving for their retirements. Many of these people will not choose to make an active investment choice and it is therefore important that suitable default options are available to them.

To this end the Government have developed guidance on the design, governance, communication and review of default options.

This consultation provides the opportunity for the Government to work with interested and knowledgeable parties to ensure that this guidance is balanced and appropriate and that members’ interests are protected.

The guidance will be published in spring 2011.

The consultation document is available on the Department’s website at: www.dwp.gov.uk/consultations.

Independent Living Fund

In June 2010, following the closure of the Independent Living Fund (ILF) to new applicants for the remainder of the 2010-11 financial year, the coalition Government announced that they would work closely with the trustees of the fund to consider settling the future of the fund.

The Government are firmly committed to disability equality and the development of a personalised approach providing full choice and control for disabled people. The 2007 independent review of the ILF recommended reform to ensure long-term sustainability. We believe there is a strong and principled case for reform and for the social care support needs of all disabled people to be delivered equitably as part of local authorities’ broader independent living strategies in line with local priorities and local accountability.

The ILF is a discretionary trust and payments from the fund do not take precedence over the responsibility of the local authority to make an assessment of a user’s needs. Local authorities already have a statutory responsibility to provide social care support to its residents and as part of this responsibility, local authorities will need to consider the requirements of clients who may otherwise have received an additional ILF package.

Having reviewed the role of the Independent Living Fund, and consulted informally with disability organisations, local government representatives and colleagues in the Department of Health, working with the fund’s trustees, we have concluded that the model of the ILF as an independent discretionary trust delivering social care is financially unsustainable. The Independent Living Fund will, therefore, remain closed permanently to new applications and the trustees support this decision.

It remains the priority of the Independent Living Fund and the Government to safeguard the position of the existing recipients of the fund and we will:

In 2011, following the publication of the report by the Commission on the Funding of Care and Support, carry out a formal consultation. This will inform decisions on determining how best to continue to support existing users of the ILF in to a social care system based on the principles of personalised budgets, the findings of the commission and recognising the importance of the support that ILF users have built their lives around. We will consult fully with disabled people, particularly current users of the Independent Living Fund and their families, local authorities and other interested parties, including the devolved Administrations;

Support the ILF to continue to administer existing awards throughout this Parliament; and

Fully protect the programme budget for existing recipients of the Independent Living Fund within DWP throughout this Parliament.