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Written Statements

Volume 541: debated on Monday 27 February 2012

Written Ministerial Statements

Monday 27 February 2012

Business, Innovation and Skills

Classification of Colleges

I am writing to inform the House that the Office for National Statistics (ONS) has recently reviewed the classification of colleges and notified HM Treasury on 23 February 2012 that both further education colleges and sixth-form colleges will be reclassified to the private sector upon commencement, in April 2012, of the relevant parts of the Education Act 2011.

On 14 October 2010, I informed the House of the decision by the ONS to reclassify general further education colleges as part of central Government for the purposes of national accounts. FE colleges had previously been classified as part of the private sector. On the same date ONS announced that sixth-form college corporations were classified as local government entities for national accounts purposes.

Confirming the Government’s commitment to reduce burdens on further education colleges and to give them freedoms to make their own decisions on how best to manage their affairs for the benefit of learners, employers and wider communities, I pledged to work to challenge the original classification.

Through the Education Act 2011, the Department for Business, Innovation and Skills and the Department for Education have removed a wide range of restrictions and controls on further education and sixth-form college corporations, putting them on a similar footing to charities operating within the independent/private sector.

Having reviewed the changes we have made, the ONS has concluded that they are sufficient to remove public sector control over these corporations, and they will consequently be reclassified to the private sector. This reclassification is provisional upon ensuring that there are no other public sector controls in other documentation, such as the funding agreements, and keeping under review the use of remaining Government powers within legislation.

I am today writing to the Association of Colleges to inform it of this achievement. Lord Hill is similarly communicating with the sixth-form colleges’ sector.

Apprenticeships

Apprenticeships are now providing a record number of opportunities for individuals and employers, and the benefits that programme delivers can be felt across every community in our country and every sector in our economy. Apprenticeships deliver strong wage returns for individuals and boost their career progression; deliver higher productivity and a motivated workforce for employers; benefit communities by supporting social mobility and employment opportunity; and help to build a workforce equipped with the skills needed to compete globally.

Apprenticeships are delivering results, and the momentum that has been created will continue to reap rewards in terms of future growth in the programme. Delivering these results for individuals and employers depends upon ensuring that the value, impact and brand of apprenticeships remains strong and continues to be strengthened, raising the status of vocational learning and so for vocational learners. In this way the real and perceived value of apprenticeships impacts upon the self-worth of those that complete them and the view that others have of their achievement. So it is right that we now look to build upon this growth and momentum with a renewed and relentless focus on quality—to help ensure all apprenticeships are as good as the best, to identify and root out any instances of poor quality provision, and to raise the bar on standards.

Last year, statutory standards for apprenticeships came into effect for the first time. Following which I announced a series of further measures to improve the quality of the programme, and asked the National Apprenticeship Service to develop a comprehensive quality action plan. Now I want to direct you to the progress that has been achieved so far and the next steps.

In delivering these improvements, we will work closely with the FE and skills sector, who are best placed to drive up quality, and continue to strive to give the sector the freedoms and responsibility to tailor their provision to meet learner and employer need.

Short duration

First, an apprenticeship must involve significant new learning and time spent achieving competence and confidence in the job, which is why I am taking steps to ensure all apprenticeships are of a sufficient length to allow this learning to be embedded. Following my announcement in December, the National Apprenticeship Service will shortly publish the detail of a new 12-month duration requirement for all 16-18 year olds. This will come into effect for all starts from August 2012, although we expect many providers to change their delivery models before then.

NAS and the agency are pressing ahead with their comprehensive review of all short duration programmes:

87 training organisations providers, subcontractors and directly funded employers delivering apprenticeships of short duration (six months or less) warranted review by the agency and NAS.

29 cases have been brought to a satisfactory conclusion. These will continue to be monitored to ensure that issues do not occur and in preparation for the new requirements on duration from August 2012.

Where cases have been concluded, providers have changed their delivery models to be fully compliant or ended the delivery of frameworks that do not meet the requirements.

Most providers have revised their programmes to meet the challenge in quality standards that are required.

So far, the review has identified 10 primary contractors and three subcontractors where the agency and NAS have significant and unresolved concerns. NAS and the agency will work closely with these providers to conclude a full investigation of the specifics of the cases and identify suitable resolutions, including improving, adapting or, if necessary, withdrawing provision.

Following major reviews, in the case of three subcontractors, prime contractors have decided to end their contractual relationship.

At least one case has been referred to the agency’s special investigations unit.

It has been made clear to providers that contracts which meet funding requirements technically but fail to meet the more comprehensive quality standards we expect of apprenticeships are not acceptable. The agency will significantly tighten the contract and funding guidance from August 2012 to eliminate poor practice.

The reviews of the majority of the cases that remain will be finalised by April 2012.

Provider management and Subcontracting

Secondly, in order to ensure that all those who are being funded to deliver apprenticeship training are fit for purpose and fulfilling their responsibilities in a proper manner, I have asked the National Apprenticeship Service, working with the Skills Funding Agency, to strengthen monitoring, reporting and subcontracting arrangements to ensure quality concerns are thoroughly and systematically identified and managed routinely:

A new “enquiry panel”, which will report directly to me, will manage contractual and quality weakness as it is identified, outlining the shape and scale of any investigations being undertaken.

The agency will ensure that the contracting system is strengthened to remove any ambiguity and to protect the quality and standards of the apprenticeship programme through the funding rules, policies and contractual obligations of training organisations and employers.

A new contractual clause will be introduced to ensure training organisations and employers act within both the stated policy intent as well as the regulations of the system. Failure to uphold standards will constitute a breach of contract.

The agency will publish clear guidance on the funding that can be drawn down when an apprentice has prior learning—ensuring a clear link between delivery and investment by the Government. New funding guidance will clearly stipulate these requirements.

Effective immediately, all subcontractors over a value of £500,000 will be required from now on to pass the same due diligence test that we apply to lead providers; meaning that subcontractors will be regulated through the Register of Training Organisations. We will work to extend this condition to all subcontractors by December 2012.

From February, the agency will publish the list of all subcontracted provision that amounts to over £100,000.

The agency will publish the list of training organisations that breech its terms and conditions once all legal action and recovery of funds has been completed.

The agency will enforce minimum levels of performance on all apprenticeship providers. We are currently reviewing these to ensure that the thresholds that apply to apprenticeships are suitably rigorous.

Lead providers are now contractually required to publish details of subcontractors. We will withhold payments to any lead provider that fails to do so.

Wider next steps

Taken together, this strong and decisive action is already having a positive impact on the overall programme. But constant vigilance is necessary to ensure that every aspect of the apprenticeship programme is recognised as meeting the high quality standards I have set; to protect the taxpayer’s investment; and most importantly to ensure the greatest impact on young people, employers and the wider economy.

So over the coming months, still further measures will include:

Taking steps following our commitment to introduce minimum durations for apprenticeships for under 19-year-olds, to ensure adult apprenticeships are also of sufficient length to deliver and embed learning.

An NAS review of a number of apprenticeship frameworks and models of delivery which have been identified as needing quality improvements.

Published revised guidance on the application of SASE, and a commitment to review SASE periodically to ensure its currency and relevance

Publication of a revised quality delivery statement by NAS setting out how apprenticeship framework content should be delivered, and including final details on the new delivery and funding rules.

Confirmation of our commitment that all apprentices who do not have level 2 in English and maths should have the opportunity to progress towards this.

As these detailed measures set out, we will take every necessary step in the months ahead to protect and improve the quality of the apprenticeship programme, so that we can be confident that, as more people than ever have the opportunity to undertake an apprenticeship, they will receive the high quality training that learners and employers deserve.

Treasury

Tax Measures

The Government are fully committed to tackling tax avoidance and will take necessary steps to protect the Exchequer and maintain fairness in the tax system.

The Government are therefore acting today to tackle two aggressive tax avoidance schemes that have been disclosed by a bank to HM Revenue and Customs. By acting immediately, the Government will ensure the payment of over half a billion pounds in tax, protect further billions of pounds of tax from being lost and maintain fairness in the tax system.

Debt buybacks

The first scheme seeks to exploit corporation tax rules that apply to releases of debt. Normally a debtor company is taxed on the profit that arises when a liability is released for less than the amount borrowed, but special rules apply to connected companies. In such cases, a tax charge arises where a company connected to the debtor company buys the debt from the original creditor, or where debt is held between companies that become connected. These rules were amended in Finance Act 2010 to block schemes under which banks bought back their issued debt that was trading at a discount in the market. When closing these previous attempts by companies to profit from buying back their own debt without being taxed, the Government at the time made it clear in two written ministerial statements that they expected such profits to be subject to corporation tax.

Despite these clear statements, the bank has now entered into a scheme using contrived arrangements that once again seeks to ensure that the profit on a buyback of such debt is not subject to corporation tax and therefore that a substantial amount of tax, of around £300 million, is avoided.

The Government will amend these rules in Finance Bill 2012, effective from today, so that the legislation in question cannot be circumvented in future. It will also make retrospective amendments to the legislation in relation to debt acquisitions on or after 1 December 2011 to ensure the bank, and any other company that has engaged in a similar scheme in the same period, is taxed as it should be on this transaction. This is not action that the Government are taking lightly. But the potential tax loss from this scheme and the history of previous abuse in this area, means that the Government believe that this is a circumstance where action to change the legislation with full retrospective effect is justified to ensure that the system is fair for all and that those who seek to benefit from this aggressive avoidance do not get an unfair advantage.

The bank has adopted the code of practice which contains a commitment not to engage in tax avoidance. The Government are clear that this not a transaction that a bank that has adopted the code should be undertaking.

The protocol on unscheduled announcements of changes in tax law published by the Government at Budget 2011 states that

“changes to tax legislation where the change takes effect from a date earlier than the date of announcement will be wholly exceptional”.

The Government view the avoidance outlined here and the circumstances as being a “wholly exceptional” case as envisaged by the protocol.

The draft legislation, explanatory note and technical note published today will form part of Finance Bill 2012 and will be available on the HMRC website.

Authorised Investment Funds

The second avoidance scheme seeks to exploit provisions of the authorised investment fund (AIF) regulations to generate the repayment of tax (whether directly or through set off against other liabilities) that has never been paid.

Legislation to block this scheme, which is effective from today’s date, has been made by regulations and will be available at legislation.gov.uk.

The Government have acted on a number of occasions in the past to block avoidance schemes exploiting both these areas of the law. The previous action and this Government’s action in the present case makes it clear that the Government consider that certain contrived arrangements—these are arrangements involving financial products designed to create tax credits that can be repaid or offset against a bank’s other income where the tax in question has not been paid, or to avoid being taxed on profits on buyback of the bank’s own debt—are wholly unacceptable, against the intentions of Parliament and the spirit of the law.

Ministers will consider closing any future avoidance schemes involving such arrangements with full retrospective effect to ensure that the system is fair for all and that those that seek to benefit from this aggressive tax avoidance do not get an unfair advantage.

Cabinet Office

National Citizen Service 2012

As previously published, the Government will deliver 30,000 national citizen service (NCS) places in 2012.

I am very pleased to be able to provide information about the location of national citizen service places available during summer 2012. Further places will be available in the autumn.

The places are listed by local authority, with the names of the organisations providing the places. NCS places are available in 95% of English local authorities.

These figures may be subject to amendment as preparation for delivery and recruitment progresses.

This information is included in the table below.

Region

Local Authority Name

Total Places in Local Authority

Providers in Local Authority

North East

Darlington

260

Safe in Tees Valley;

North East

Hartlepool

260

Safe in Tees Valley;

North East

Redcar and Cleveland

260

Safe in Tees Valley;

North East

Middlesbrough

260

Safe in Tees Valley;

North East

Stockton on Tees

260

Safe in Tees Valley;

North East

Newcastle upon Tyne

243

Catch22; Future Foundations Training Ltd; Vinspired

North East

North Tyneside

135

Catch22; Vinspired

North East

Sunderland

195

Catch22; Vinspired

North East

South Tyneside

90

Vinspired;

North East

Gateshead

75

Catch22;

North East

Durham

180

Vinspired; Academy of Youth

North East

Northumberland

75

Catch22;

North West

Blackpool

80

Fylde Coast YMCA;

North West

Bolton

450

Bolton Lads & Girls Club;

North West

Cumbria

576

Connexions Cumbria Ltd;

North West

Liverpool

386

Catch22; Sefton CVS

North West

St Helens

184

Transitions Plus UK; Fylde Coast YMCA

North West

Salford

205

Salford Foundation; The Challenge Network

North West

Sefton

237

Catch22; Sefton CVS

North West

Warrington

154

Vinspired; Transitions Plus UK; National Youth Agency

North West

Manchester

270

The Challenge Network;

North West

Blackburn with Darwen

125

The Challenge Network;

North West

Rochdale

150

Catch22; The Challenge Network

North West

Wigan

205

The Challenge Network;

North West

Bury

125

The Challenge Network;

North West

Wirral

210

Catch22; Vinspired; Transitions Plus UK

North West

Trafford

120

Salford Foundation;

North West

Halton

75

Catch22; Vinspired

North West

Tameside

140

The Challenge Network;

North West

Lancashire

610

Catch22; The Challenge Network; Fylde Coast YMCA

North West

Knowsley

75

Catch22;

North West

Stockport

130

The Challenge Network;

North West

Oldham

75

The Challenge Network;

North West

Cheshire West & Chester

90

Vinspired;

North West

Cheshire East

90

Vinspired;

Yorkshire and Humber

Barnsley

126

Envision; Football League Trust

Yorkshire and Humber

Sheffield

246

Catch22; Future Foundations Training Ltd; Football League Trust

Yorkshire and Humber

York, City of

72

Your Consortium Ltd;

Yorkshire and Humber

Kirklees

186

Academy of Youth; Envision

Yorkshire and Humber

Leeds

268

Envision; Future Foundations Training Ltd; Vinspired

Yorkshire and Humber

Bradford

198

Envision; Vinspired

Yorkshire and Humber

Rotherham

90

Football League Trust;

Yorkshire and Humber

Calderdale

66

Catch22; Envision

Yorkshire and Humber

North Yorkshire

192

Envision; Your Consortium Ltd

Yorkshire and Humber

East Riding of Yorkshire

90

Catch22; Football League Trust

Yorkshire and Humber

Doncaster

60

Catch22;

Yorkshire and Humber

North Lincolnshire

30

Football League Trust;

Yorkshire and Humber

North East Lincolnshire

30

Football League Trust;

Yorkshire and Humber

Kingston upon Hull

30

Football League Trust;

Yorkshire and Humber

Wakefield

36

Envision;

E Midlands

Rutland

60

Lincolnshire & Rutland EBP;

E Midlands

Leicestershire

504

Transitions Plus UK;

E Midlands

Nottingham, City of

176

Future Foundations Training Ltd; New College Nottingham

E Midlands

Lincolnshire

456

Lincolnshire & Rutland EBP; Football League Trust

E Midlands

Derby, City of

141

Catch22; New College Nottingham

E Midlands

Derbyshire

249

Catch22; New College Nottingham

E Midlands

Nottinghamshire

234

Catch22; New College Nottingham

E Midlands

Leicester City

96

Future Foundations Training Ltd;

E Midlands

Northamptonshire

150

Academy of Youth;

W Midlands

Solihull

215

The Challenge Network;

W Midlands

Coventry

253

Future Foundations Training Ltd; The Challenge Network

W Midlands

Birmingham

799

Future Foundations Training Ltd; The Challenge Network

W Midlands

Warwickshire

405

Catch22; The Challenge Network

W Midlands

Sandwell

210

Catch22; The Challenge Network

W Midlands

Herefordshire

120

Engage4Life;

W Midlands

Wolverhampton

145

Catch22; The Challenge Network

W Midlands

Walsall

165

The Challenge Network;

W Midlands

Telford and Wrekin

90

Engage4Life;

W Midlands

Dudley

155

The Challenge Network;

W Midlands

Shropshire

120

Vinspired; Engage4Life

W Midlands

Staffordshire

210

Vinspired;

W Midlands

Worcestershire

120

Engage4Life;

W Midlands

Stoke on Trent

45

Groundwork UK;

East

Luton

180

Luton Culture;

East

Peterborough, City of

64

Young Lives;

East

Southend on Sea

45

Catch22;

East

Cambridgeshire

128

Young Lives;

East

Thurrock

30

Catch22;

East

Essex

255

Catch22;

East

Hertfordshire

180

Vinspired; Football League Trust

East

Norfolk

120

Football League Trust;

East

Suffolk

90

Catch22;

London

Islington

405

Changemakers; Catch22; The Challenge Network

London

Wandsworth

305

The Challenge Network;

London

Merton

305

The Challenge Network;

London

Hounslow

345

The Challenge Network;

London

Ealing

425

The Challenge Network;

London

Southwark

315

The Challenge Network; Global Action Plan

London

Richmond upon Thames

265

The Challenge Network;

London

Sutton

315

The Challenge Network;

London

Kingston upon Thames

215

The Challenge Network;

London

Westminster, City of

150

The Challenge Network;

London

Hammersmith and Fulham

120

The Challenge Network;

London

Lewisham

230

The Challenge Network; Global Action Plan

London

Tower Hamlets

190

The Challenge Network; Global Action Plan; Football League Trust

London

Redbridge

295

The Challenge Network; Jewish Lads and Girls Brigade; Football League Trust

London

Newham

210

The Challenge Network; Global Action Plan; Football League Trust

London

Lambeth

160

The Challenge Network; Global Action Plan

London

Waltham Forest

170

The Challenge Network; Football League Trust

London

Greenwich

170

The Challenge Network; Global Action Plan; Football League Trust

London

Barking and Dagenham

155

The Challenge Network; Catch22

London

Hackney

155

The Challenge Network; Football League Trust; Catch22

London

Brent

165

The Challenge Network;

London

Harrow

175

The Challenge Network; Vinspired

London

Croydon

265

The Challenge Network;

London

Camden

125

The Challenge Network; Catch22

London

Bexley

170

The Challenge Network; Football League Trust

London

Bromley

210

The Challenge Network;

London

Hillingdon

170

The Challenge Network;

London

Haringey

115

The Challenge Network;

London

Barnet

210

The Challenge Network;

London

Havering

155

The Challenge Network;

London

Kensington and Chelsea

75

The Challenge Network;

London

Enfield

170

The Challenge Network;

South East

Southampton

141

Catch22; Future Foundations Training Ltd

South East

Portsmouth

150

Catch22; Partnership Network Ltd

South East

Kent

1,066

Catch22; Football League Trust; National Youth Agency

South East

Slough

60

Groundwork UK;

South East

Reading

60

Groundwork UK;

South East

Hampshire

660

Catch22; Partnership Network Ltd

South East

Isle of Wight

60

Partnership Network Ltd;

South East

Windsor and Maidenhead

60

Groundwork UK;

South East

Surrey

325

Catch22; The Challenge Network

South East

South Buckinghamshire

150

Catch22; Groundwork UK

South East

Oxfordshire

165

Transitions Plus UK; Oxfordshire County Council

South East

Milton Keynes

60

Football League Trust;

South East

Brighton and Hove

45

Catch22; Football League Trust

South East

East Sussex

30

Catch22;

South East

West Sussex

15

Football League Trust;

South West

Plymouth, City of

270

Young Devon; Football League Trust

South West

Bath and North East Somerset

123

Future Foundations Training Ltd; Engage4Life

South West

Devon

540

Petroc; Young Devon

South West

Torbay

75

Young Devon;

South West

Bristol, City of

165

Young Devon;

South West

North Somerset

90

Petroc;

South West

Somerset

240

Petroc; Young Devon

South West

Cornwall

210

Young Devon;

South West

Gloucestershire

180

Petroc; Young Devon

South West

Poole

30

Petroc; Football League Trust

South West

Bournemouth

30

Petroc; Football League Trust

South West

Wiltshire

75

Catch22; Petroc

South West

South Gloucestershire

90

Petroc;

South West

Dorset

150

Young Devon; Petroc

South West

Swindon

90

Petroc;

Foreign and Commonwealth Office

EU-Central America Association Agreement

I wish to inform the House that the Government has opted in to the following measures:

(i) the Council decision relating to the proposal on the signature and provisional application of an association agreement between EU and central America.

ii) the Council decision relating to the proposal on the conclusion of the association agreement between the EU and central America.

The EU proposes to enter into an association agreement with central America. The UK supports the agreement, which covers all aspects of the bi-regional relationship. Its objectives are to strengthen political dialogue and co-operation on issues of common interest, and to boost respective trade flows and investments.

The agreement will contribute to UK security and prosperity, and to the further development of the UK’s bilateral relationships with the countries of central America and the region as a whole. Its measures are in line with the Government’s trade policy objectives on liberalisation of services and investment, as well as with the Government’s wider policy towards central America.

Following signature, those parts of the agreement in which the EU has exclusive competence will be provisionally applied. These areas are contained in part IV, the trade part. With regard to part IV, the agreement aims to eliminate high tariffs, tackle technical barriers to trade, liberalise services markets, protect EU geographical indications, open up public procurement markets, include commitments on the enforcement of labour and environmental standards and offer effective and swift dispute settlement procedures. Its measures go beyond WTO commitments and ensure a level playing field with competitors in the region. It includes robust clauses on human rights, sustainable development and international labour standards, any of which can be invoked as reason for suspension of trade preferences.

The Council decisions extend the UK’s commitments in mode 4, thus triggering the UK Justice and Home Affairs opt-in. The agreement contains obligations which fall within the scope of title V (Area of Freedom, Justice and Security) of the treaty on the functioning of the EU (TFEU), specifically those in article 49(4) on readmission. The provisions within this article, on the temporary movement of natural persons for business purposes (known as “Mode-4” trade-in services), trigger the opt-in. I believe it is in the UK’s interest to opt in to these measures, which are an integral part of our wider approach on trade and support our other commitments in services and investment liberalisation.

London Conference on Somalia

This statement is also published in the names of the Home Secretary and the Secretary of State for International Development. On 23 February the UK hosted the London conference on Somalia. When he announced this initiative in November, our right hon. Friend the Prime Minister spoke of the real and pressing need to pull together the international effort on Somalia. The conference brought together 55 delegations representing over 40 countries, the United Nations, African Union, Intergovernmental Authority on Development, Organisation of Islamic Cooperation and other international organisations to discuss how the international community could reinvigorate its approach towards Somalia. Somali leaders, including President Sheikh Sharif, Prime Minister Abdiweli, President Farole of Puntland and President Silanyo of Somaliland also took part.

The conference took place at a key moment in Somalia’s history. Somalia is emerging from the worst humanitarian crisis in the world. African and Somali troops have pushed Al Shabaab out of Mogadishu and other areas. The transitional institutions come to an end in August 2012, and the people of Somalia want clarity on what will follow. The situation remains precarious, and in urgent need of support from the international community.

Decisions on Somalia’s future rest with the Somali people. The Somali political leadership must be accountable to the people. The international community’s role is to facilitate Somalia’s progress and development: our strength is in unity and co-ordinated support to Somalia. The conference noted the importance of listening to and working with Somalis inside and outside Somalia, and welcomed their engagement in the run-up to this conference.

The conference focused on the underlying causes of instability, as well as the symptoms (famine, piracy, and terrorism). The international community agreed: to inject new momentum into the political process; to strengthen the African Union Mission in Somalia (AMISOM) and help Somalia develop its own security forces; to help build stability at local level; and to step up action to tackle pirates and terrorists.

More specifically, the conference agreed practical measures in seven areas:

Political process—Agreement that the transition must end in August 2012, and that the political process must be broad-based and inclusive, building on agreement at the Garowe consultative meetings; the establishment of a joint financial management board to increase the transparency and accountability of transitional federal Government, and future Government, spending.

Security and justice—Agreement to create a framework for international support to develop Somali security and justice capacity.

Piracy—Agreement on the need to address the causes of piracy on land, and to build judicial and imprisonment capacity in the region; welcome for the establishment of a regional anti-piracy prosecutions intelligence co-ordination centre in the Seychelles. Ministers also signed bilateral memorandum of understanding with Tanzania on transferring suspected pirates for prosecution, with the Netherlands and Seychelles on the regional anti-piracy prosecutions intelligence coordination centre, and a regional burden-sharing statement of principles. Our right hon. Friend the Prime Minister also announced the creation of an international taskforce on piracy ransoms and welcomed the announcement from the shipping industry of funding for the UN development programme (UNDP) coastal community projects in Puntland.

Terrorism—Agreement to build capacity to disrupt terrorism in the region, including disrupting terrorists’ travel to and from Somalia and terrorist finances.

Humanitarian—The conference was preceded by a separate meeting on the humanitarian situation, chaired jointly by the International Development Secretary, Baroness Amos (United Nations Office for the Co-ordination of Humanitarian Affairs) and the United Arab Emirates Foreign Minister. Prominent themes included the continuing fragility of the humanitarian situation in Somalia and the need to create the conditions for voluntary return of refugees and internally displaced people.

Stability and recovery—Launch of a new stability fund to channel development support, such as for basic services, jobs, security and justice, to emerging areas of stability across Somalia. Founder members are the UK, the Netherlands, Norway, the United Arab Emirates and Denmark. Agreement to a set of principles for local support.

International co-ordination—Welcome for the international contact group on Somalia’s decision to consider restructuring to improve its effectiveness, and a recommendation to establish working groups on the political process, security and justice, and stability and development. The creation of a core group of engaged countries to drive progress in support of United Nations, African Union and Intergovernmental Authority on Development efforts.

We have placed copies of the Communiqué agreed by international partners at the conference and the conclusions of the separate humanitarian meeting in the Libraries of both Houses.

Health

Health Select Committee Report on Public Expenditure (Government Response)

I have today laid before Parliament the Government response to the House of Commons Health Committee’s report “Public Expenditure: Thirteenth Report of Session 2010-12” (Cm 8283). The Committee’s report was published on 24 January 2012.

The modernisation and efficiency challenges we are seeking across health and social care are exceptional; ones that are vitally necessary to secure sustainable and improving services. They are also inextricably linked and mutually supportive. These changes are critical to bringing about a modern care system that is fit to deliver the high quality, responsive, personalised services wanted by people today. As a part of these reforms, we are protecting funding for the NHS and allocating additional funding for social care.

Home Department

Passenger Name Records

The coalition Government are firmly committed to protecting the security of UK citizens and to defending civil liberties. Our experience is that both security and privacy are possible. We must resist trading one off against the other as some would wish us to do.

We are firmly committed to consistency in our approach to civil liberties and will seek to translate our domestic agenda to the EU level—this includes purpose limitation; rigorous evidence-based arguments; the principles of necessity and proportionality; stringent data protection safeguards, especially when handling sensitive personal data; independent data protection oversight; and, of course, full compliance with EU law and the EU treaties.

We fully recognise the importance of working with partners outside the EU given that the threats we face are global in nature and, in common with other EU member states, we view the US as a key partner.

The UK, in common with many other EU member states and third countries, places considerable value on the collection and analysis of passenger name record (PNR) data (that data collected by carriers in the exercise of their business) for the purpose of preventing terrorism and serious crime. The appropriate use of PNR data is vital in keeping the public safe.

In line with this view, the Government continue to press for an EU PNR directive that includes provision for intra-EU flights. The Government also believe that clear PNR agreements between the EU and third countries play a vital role in removing legal uncertainty for air carriers flying to those countries, and help ensure that PNR information can be shared quickly and securely, with all necessary data protection safeguards in place. It is for this reason the Government have opted in to the EU-US agreement on the exchange of passenger name record data, notifying the President of the Council on 9 February 2012.

This agreement replaces the EU-US PNR agreement which has been applied provisionally from July 2007. The European Parliament postponed its vote on that agreement and asked the Commission to come forward with a single model for international agreements before it took a final vote. On 21 September 2010 the European Commission published a communication on the global approach to transfers of PNR data to third countries, together with a package of draft negotiating mandates for PNR agreements with Australia, Canada and the United States. In response to this, the Council presented a draft Council decision to authorise the Commission to open negotiations for PNR agreements with Australia, Canada and the US, together with draft negotiating guidelines (collectively referred to as the negotiating mandates). The UK opted in to these negotiating mandates in December 2010 and announced this decision to Parliament on 20 December 2010.

I listened very carefully to what hon. Members had to say during the scrutiny process and am pleased that the Committee agreed with the Government’s recommendation to participate in this agreement.

The agreement:

Restricts the purposes for which data can be processed to the prevention of and combating of terrorist offences and serious trans-national crime;

Makes express provision for data security;

Requires data to be masked after six months and transferred to a dormant database after five years. Data may be retained in the dormant database for a period of up to 10 years, during which additional controls will apply (including a more restricted number of personnel authorised to access it as well as a higher level of supervisory approval required).

Provides that masked data can only be re-personalised in connection with an identifiable case, threat or risk. After five years in the dormant database (10 years in total) data can only be re-personalised for the purpose of preventing and combating terrorist offences;

Provides that sensitive personal data must be filtered out and may only be accessed in exceptional circumstances where the life of an individual may be imperilled or seriously impaired;

Provides for independent review and oversight by departmental privacy officers with a proven record of autonomy, such as the Department of Homeland Security’s Chief Privacy Officer;

Sets out rights of access, rectification and erasure and redress;

Regulates the transfer of PNR data to other US Government authorities;

Only permits onward data transmission to a third country on a case-by-case basis and for the purposes outlined above.

The Council decisions to sign and conclude the agreement were deposited on 28 November 2011. These can be found at the following links:

Council Decision to Sign:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do? uri=COM:2011:0807:FIN:EN:PDF.

Council Decision to Conclude:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do? uri=COM:2011:0805:FIN:EN:PDF.

Northern Ireland

Northern Ireland Security Situation

In July 2011, when I laid the final report of the IMC before the House, I made a commitment to provide twice yearly updates summarising the threat. This statement is the first such update and represents our assessment of the current position.

During the past six months all the dissident republican groups have remained active in Northern Ireland, and the threat level in Northern Ireland remains at severe meaning an attack is highly likely.

The threat level in Great Britain is substantial, meaning that an attack is a strong possibility.

There have been 13 attacks against national security targets in Northern Ireland since 1 August 2011. These have included attacks on police officers as well as small bombs deployed against a bank in Newry and the city of culture offices in Londonderry. The most recent attacks have included the attempted murder of a soldier on 5 January 2012, a pipe bomb recovered at the scene of a fire in West Belfast on 17 January 2012 and two pipe bombs set off in Londonderry on 19 January 2012.

Many other potential attacks have been prevented by the actions of security and law enforcement agencies on both sides of the border.

While there were fewer attacks in 2011 than in 2010, the intent and capability of dissident republican terrorists remains high. At present, the threat appears to have stabilised as a result of the activities of security and law enforcement agencies. However, there remains a high level of underlying terrorist activity and planning.

The most active groups at present are:

The Real IRA (RIRA);

The Continuity IRA (CIRA);

Óglaigh na hÉireann (ONH).

In addition, there are a number of unaffiliated terrorists who are also active. All of these groups are dangerous and pose a real threat—primarily to police officers but also, through their actions, to the wider public.

The UDA and UVF leaderships remain committed to their ceasefires, although there has been unsanctioned violent activity by members of both groups.

Both loyalist and republican groups continue to be involved in a wide range of acts of criminality. Both also continue to carry out paramilitary style assaults and shootings.

I am grateful to the Police Service of Northern Ireland, An Garda Síochána and the Security Service for their tireless efforts to address the real and severe threat posed by terrorists in Northern Ireland.

I am confident that the national security arrangements are operating in line with the principles set out in annex E to the St Andrew’s Agreement. As I informed the House on 19 December 2011, Official Report, column l45WS, Lord Carlile’s recent report on the operation of arrangements for handling national security matters in Northern Ireland expressed satisfaction that there are no difficulties of any significance in the inter-operability between the PSNI and the Security Service. He concluded that their sound working partnership should be commended. Lord Carlile said that he believed that, compared with 2010, 2011 saw more success in containing and stabilising the threat and noted that there were fewer incidents and fewer major attacks.

As this House is well aware, tackling terrorism in all its forms and within the rule of law remains the highest priority for this Government. We will continue to work as closely as possible with our strategic partners in the PSNI, Northern Ireland Executive and the Irish Government to counter this threat.

Transport

Government Car and Despatch Agency

On 16 January 2012, I announced the significant operating cost reductions we have made in running the Government Car and Despatch Agency (GCDA) since May 2010. The previous Government had ministerial cars for most Ministers, costing £6.8 million in 09-10. We are now spending just £3.8 million or 55% percent of that, and the number of Ministers requiring cars has reduced by around half

Today, I am announcing our plans for the coming year in which we expect to deliver further operating cost savings of around one third. This is part of our ongoing commitment to driving efficiency and improving value for money and transparency for taxpayers. It will also allow us to start to reduce the overhead costs associated with the service.

To reflect the Government’s approach to providing vehicles for Ministers’ official travel while maintaining adequate levels of security, I am taking this opportunity to identify a better taxpayer value service, reduce the vehicle fleet and maximise driver and vehicle utilisation. This approach will enable us to reshape the agency and its estate to deliver a leaner and substantially smaller organisation.

We are working closely with Departments to deliver the main elements of this efficiency and reform programme which are:

the phased closure of the Government mail despatch service by the end of the year. I expect current users to make alternative, cost-effective arrangements with their existing service providers or to utilise existing Government frameworks to secure new services from the private sector;

a 50% reduction in the GCDA fleet with a new approach that gives greater control over management of the resource to Departments;

a review of estate options;

a review of the GCDA’s agency status and whether, in the light of the much smaller scale of the operation, that continues to offer the best value for money.

The GCDA is working with Departments to help manage the transition to new arrangements. Subject to those discussions, I expect the changes to the car service to be fully operational by April this year and the transition to new mail arrangements to be completed by the end of the year.