Tuesday 22 June 2021
Sale of Cabinet Office Stake in Axelos Ltd
I am pleased to announce that the Cabinet Office has conditionally agreed to sell its 49% stake in Axelos Limited to PeopleCert International Ltd, a member of the PeopleCert group. This is part of a joint sale with Capita of the whole of Axelos. Subject to the timely satisfaction of conditions the sale is expected to complete in July.
Sale of the Cabinet Office stake will generate cash proceeds of approximately £175 million. The Cabinet Office has also received cash dividends of approximately £10.7 million this year making total cash receipts of some £185.7 million.
As part of the sale, the Cabinet Office will also receive accelerated settlement of outstanding deferred consideration (currently worth some £24 million) owed to it by Axelos dating from the formation of the joint venture.
The sale values the business at £380 million on a cash free, debt free basis.
Axelos staff and senior management will be transferring with the business.
Rationale and timing
The Axelos joint venture was established with Capita in 2013 to commercialise certain best practice methodologies (principally ITIL and Prince2) previously developed by HM Government. The Cabinet Office chose to retain a 49% stake on the formation of the business with a view to delivering better value for money through a future sale.
The sale followed a strategic review triggered by Capita’s desire to sell its majority stake. The Cabinet Office concluded that a joint sale was likely to attract greater interest and generate a higher price per share than a separate sale of the Cabinet Office’s 49% stake; it also offered the opportunity to share in the premium typically available on the sale of a controlling stake.
The sale was conducted through a public auction process and the sale proceeds exceed the Cabinet Office’s retention value.
The sale terms include standard sale indemnities and an indemnity by the Cabinet Office for 49% of Axelos’ share of the deficit in the Capita Group’s defined benefit scheme, calculated on the basis set out in section 75 Pensions Act 1995, to the extent that it exceeds the allowance already made for it. Any liability under the indemnity is not expected to exceed £300,000 and is expected to be settled during this financial year.
On this occasion, due to the sensitivities surrounding the commercial negotiation of this sale, it was not possible to notify Parliament of the particulars of the contingent liability in advance of the sale announcement. Instead, the Cabinet Office notified the chairs of the Public Accounts Committee and the Public Administration and Constitutional Affairs Committee.
More information on this contingent liability has been set out in a departmental minute that has been laid before the House alongside this statement.
The impact on the fiscal aggregates, in line with fiscal forecasting convention, are not discounted to present value. The net impact of the sale on a selection of fiscal metrics are summarised as follows:
Metric Impact Sale proceeds £175 million Hold valuation The price achieved is above retention value. Public sector net borrowing The sale reduces public sector debt. All else being equal, the sale will reduce future debt interest costs for Government. The reduction in Government’s shareholding means it will not receive future dividend income that it would otherwise have been entitled to through these shares. Public sector net debt Improved by £213.9 million Public sector net liabilities Improved by £50.5 million Public sector net financial liabilities Improved by £50.5 million
The price achieved is above retention value.
Public sector net borrowing
The sale reduces public sector debt. All else being equal, the sale will reduce future debt interest costs for Government. The reduction in Government’s shareholding means it will not receive future dividend income that it would otherwise have been entitled to through these shares.
Public sector net debt
Improved by £213.9 million
Public sector net liabilities
Improved by £50.5 million
Public sector net financial liabilities
Improved by £50.5 million
Report of the Select Committee on the Armed Forces Bill
The Ministry of Defence welcomes the Select Committee’s report on the Armed Forces Bill (HC1281). I am grateful for the Committee’s support of the endeavours to improve the lives of our Service personnel, veterans and their families. I will address the Committee’s recommendations in turn.
I look forward to engaging with Members across the House as the Bill makes progress.
Beginning with the Committee’s recommendation that Select Committee scrutiny should continue to be the convention for Armed Forces Bills, I believe that the appointment of a Select Committee, with its ability to produce a report and to make recommendations, ensures transparency and proper scrutiny of the Armed Forces Bill and the legislation in question. I therefore thank the Committee for their work and report and readily welcome the Committee’s recommendation.
I note the Committee’s recommendation that more time be allocated for the conduct of its business. The Government are committed to giving Select Committees adequate time to undertake their work. However, the timing available for primary legislation is ultimately a matter for the business managers. The primary purpose of Armed Forces Bills is the quinquennial renewal of the legislation that governs the Armed Forces. Armed Forces Bills must reach Royal Assent before the Armed Forces Act 2006 would expire. Additional time for the Select Committee could compress the time available for other stages of the Bill, impact the wider parliamentary programme and delay the Bill’s passage, placing undue pressure on the deadline to renew the Armed Forces Act 2006. Furthermore, time is also given for further scrutiny of the Bill, as it is considered by a Committee of the whole House as well as by the Select Committee.
The Committee’s keen interest in the Armed Forces Covenant reflects members’ universal support for our Service personnel—both regulars and reserves—veterans and their families. While there remains a difference of view on some issues, I welcome the Committee’s assertion that questions in the annual continuous attitude surveys would help to ascertain whether the Covenant has had a positive or negative impact on the defence community. For that reason, the armed forces and families continuous attitude surveys already include a Covenant-related question on whether the Service person or Service family feels advantaged or disadvantaged compared to the general public in specific areas, such as housing, education and healthcare. This provides a measure of whether Service life is having a positive or negative impact and is therefore of use as a measure of the Covenant.
I acknowledge the Select Committee’s concern over how the duty to have ‘due regard’ would function in practical terms and its recommendation that the Government should conduct a review of this after 24 months of operation. We recognise the importance of understanding the impact of the new duty, and how that can be measured will form an important part of our ongoing work in helping our Covenant stakeholders as they begin to implement the new Covenant duty. We are always happy to work with the House of Commons Defence Committee, and the Government will of course continue to report on the progress of the Armed Forces Covenant, including the new duty, annually to Parliament. As part of the Armed Forces Act, the new Covenant duty would also be subject to the quinquennial parliamentary renewal process.
Further, I thank and appreciate the Committee’s conclusions on our efforts to reform the Service Justice System. The Bill addresses a small part of that work, and we are implementing a number of recommendations following the Service Justice System review that will ensure the Service Justice System is more effective, efficient and provides a better service to those who use it, in particular victims and witnesses. A key means of underpinning that assurance will be the establishment of a Defence Serious Crime Capability. We are making progress to build a stronger, more effective and collaborative approach to policing across Defence, building a means of maintaining the capability and skills of the Service Police along with further joint working with the civilian police forces.
On another note, I thank the Committee for welcoming Defence’s efforts to speed up the Service Complaints process, though the Committee still has concerns as to possible delays to appeals and has suggested that priority should be given to implementing all the recommendations of the Wigston review within six months. However, let me reassure the Committee that Service Complaints Reform aims to tackle the main areas of delay in the Service Complaints system, through increased efficiency and other measures aimed to increase confidence in the system.
The ability to set a reduced appeal timeframe where it is appropriate to do so will further align the SC system with other public sector and the MOD’s civilian grievance system timeframes. Regulations will continue to ensure that those who need extra time due to the unique elements of service life will continue to have access to the system, by allowing extra time where it is just and equitable to do so. We will work closely with the Service Complaints Ombudsman on the detail of the regulations that will be brought forward.
Defence is committed to delivering the Wigston recommendations. As set out in the Gray review, out of the 36 Wigston recommendations, 34 had either been implemented or were in progress. The remaining recommendations are in progress and being prioritised, with some linked to the reform of the Service Complaints system and implementation dependent on the AF Bill being passed.
I welcome the Committee’s finding that the experience of people in the Armed Forces with protected characteristics has improved. I also recognise there is more to be done. While the Committee recommends that a metric be added to the annual report on the Armed Forces Covenant to report on the experience of those with protected characteristics, we report on this in other ways. I wish to assure the Committee that we continue to explore how better to identify the issues affecting our people, and this remains a central issue for Defence. The recent Defence Command Paper set out our intent to tangibly, rapidly and significantly improve the lived experience of all those working in Defence, including those with protected characteristics. The MOD already reports progress against this intent through departmental performance and risk reporting processes, as well as mainstream Defence feedback mechanisms and regular localised climate assessments, all of which is subject to regular review by the Chief of Defence Staff and the Permanent Secretary. Diversity is a source of strength for the Armed Forces, and we welcome and encourage absolutely a more diverse Armed Forces.
I welcome the Committee’s recommendation that the Government urgently set out how their plans to meet targets for the Transition, Intervention and Liaison Service, Complex Treatment Services and Improving Access to Psychological Therapy. The Government remain wholly committed to their ambitions set out in the NHS long term plan to expand and transform mental health services in England and to invest an additional £2.3 billion a year in mental health services by 2023-24. This will give 380,000 more adults access to psychological therapies by 2023-24. All but one of the four regional areas are meeting or exceeding targets for the Transition, Intervention and Liaison Service, and activity is already in hand to further improve performance in those few areas where targets are not yet being met. The number of days that a patient waits from initial referral to being offered an assessment for referral in 2020-21—up to the end of January 2021—-was on average 12 days, which falls within the 14-day target. All four regional areas are meeting this target, and it is an improvement from the waiting times in 2019-20. Following an assessment, a patient is offered an initial clinical appointment, if the outcome of the assessment is to be seen within the Transition, Intervention and Liaison Service. The target for this is also 14 days, and in England on average so far in 2020-21 this target is being met. Only one regional area is not currently meeting the target, but it has seen a reduction in average wait of 11 days since 2019-20.
Launched in 2017, the Transition, Intervention and Liaison Service, the Complex Treatment Services, and more recently the High Intensity Service, have been offering support to serving personnel, veterans, and their families dealing with complex mental health issues. These services have now been brought together under the collective name Op COURAGE, providing a single point of entry for veterans looking to access support for their mental health needs.
We are doing our utmost to ensure that our mental health services are there for everyone who needs them during the pandemic. Talking therapies are being made available remotely so people can access help safely from home. The NHS is working to ensure that the option of face-to-face support is provided to people with serious mental health illnesses across all ages where it is clinically safe to do so.
This leads me on to the Committee’s next recommendation that further work must be done to ensure that the principle of “priority treatment” is better understood by both veterans and service providers. In 2018, the MOD/UK Department of Health’s Partnership Board established the Priority Treatment Working Group. The group’s membership is made up of both patient and clinical representatives from all four nations, MOD, Office for Veterans’ Affairs and the Service Charities sector. The group continues to meet to share best practice of priority treatment and will discuss the action from the Committee—to address the lack of clarity and understanding amongst veterans, family members, and service providers and develop methods to improve understanding.
Within its report, the Committee has recommended that work be undertaken to minimise variation in the level of services across the UK, with specific reference to Northern Ireland to deal with the challenges faced by veterans attempting to access mental health services there. We believe that, by improving awareness and understanding of the Covenant among public bodies, our proposed legislation will help to reduce disadvantage to the Armed Forces Community and minimise variation in service across UK.
The unique circumstances in Northern Ireland mean that delivery is approached in a different way from the rest of the UK. The Government are making good progress in delivering the Covenant in Northern Ireland. For example, the first Northern Ireland Veterans Commissioner has been appointed and will jointly chair—with the Chief Executive of the Northern Ireland Reserve Forces and Cadets Association—a Mental Health Committee, bringing together key statutory and third-sector providers of mental health services and support. The Northern Ireland Veterans’ Support Office, which has been provided with additional funding by Her Majesty’s Government to assist in delivery of the Covenant, continues to work directly with the Armed Forces Covenant Fund Trust to ensure that all funding programmes in support of veterans’ mental health are fully promoted and accessible to the widest range of eligible, trusted organisations, in order to enhance those services available statutorily.
The Ulster Defence Regiment and Royal Irish (Home Service) Aftercare Service includes provision of mental health support. The Government have committed, as set out in the New Decade New Approach agreement, that the MOD will consider whether this should be widened to cover all veterans living in Northern Ireland. In addition, projects that benefit the Armed Forces Community in Northern Ireland received over £1.6 million last year from the Armed Forces Covenant Fund Trust.
I turn to the recommendation of the Committee that work should be undertaken to improve data collection with regard to the numbers of serving personnel and veterans requiring treatment for addiction and other mental health illnesses. I wish to reassure the Committee that the MOD is committed to the mental health and wellbeing of its Service personnel and provides dedicated and comprehensive services, including support for alcohol, drugs and gambling-related disorders. Serving personnel requiring any form of healthcare, including treatment for drug and alcohol addiction, are cared for within the Defence Medical Services establishment.
For those accessing Defence Medical Services care, we already collate and publish statistics on those accessing specialist mental healthcare for substance abuse—alcohol and drugs. These figures are published annually in the mental health official statistics, where we make specific reference to those assessed with alcohol-related substance abuse.
In the strategy for our veterans, the Government committed to improve the collection and analysis of data on veterans’ needs and experiences to inform future policy and services. The Government are developing a veterans’ data strategy which will achieve this across a wide range of topics, such as veterans’ health and wellbeing, mental health, employment, housing and relationships.
Wherever they live in the UK, all veterans are able to receive specialist support if they need it. Each devolved Administration provides support in a way that best suits their region. The majority of veterans access the same healthcare support as the general population through NHS services.
In England, each part of the country now has specialist mental health services designed for Service leavers, ex-Service personnel, Reservists and their families through the recently launched Op COURAGE - the Veterans Mental Health and Wellbeing Service. This is the new overarching name for the Veterans’ Mental Health Transition, Intervention and Liaison Service, Veterans’ Mental Health Complex Treatment Service and Veterans’ Mental Health High Intensity Service. Op COURAGE provides a single front door to dedicated services for veterans and makes it easier for veterans and their families to get help.
Further, I observe that the Committee touched upon the area of service housing and in its conclusions felt that the Government might wish to consider adding service accommodation to the list of functions to which the duty of due regard under the Armed Forces Covenant applies. While I thank the Committee for its well-intended suggestion, we feel this is unnecessary. The purpose of the Covenant duty is to raise awareness among providers of public services relating to housing, education and healthcare of how service life can disadvantage the Armed Forces Community in accessing those key public services. The MOD is fully aware of the issues impacting the Armed Forces Community and works with other Departments and Devolved Administrations to raise awareness across all service providers. Accommodation forms part of the Secretary of State’s annual statutory report to Parliament on the Covenant and is included in the Armed Forces, Reserves and Families Continuous Attitude Surveys conducted each year.
The provision of high-quality subsidised accommodation remains a fundamental part of the overall MOD offer to Service personnel and their families and is supported by annual improvement programmes and 24/7 repair and maintenance services. Over the last decade, £1.2 billion has been invested in construction and upgrades of MOD Service accommodation. There is continued investment in a range of new-build and renovation projects. All accommodation at the point of occupancy meets the decent homes standard as a minimum, with the vast majority exceeding this. In addition, we are developing the future accommodation model to give Service personnel more choice over where, with whom and how they can live, reflecting modern family life, with entitlement based on need, not rank. This model is currently being piloted at three sites. We recognise that many Service personnel seek stability for their families. A key part of this is helping personnel buy their own home. The Forces Help to Buy Scheme, first launched in 1 April 2014, is open to new applicants until 31 December 2022.
Health and Social Care
Indemnity for the Independent Review into Issues Raised at West Suffolk NHS Foundation Trust
It is normal practice, when a Government Department proposes to undertake a contingent liability in excess of £300,000 for which there is no specific statutory authority, for the Minister concerned to present a departmental minute to Parliament giving particulars of the liability created and explaining the circumstances; and to refrain from incurring the liability until 14 parliamentary sitting days after the issue of the minute, except in cases of special urgency.
I have today laid a departmental minute proposing the provision by NHS England and NHS Improvement of an indemnity that is necessary in respect of an NHS England and Improvement non-statutory, independent review of whistleblowing at West Suffolk NHS Foundation Trust.
This review follows widely reported events arising from an anonymous letter that was sent in October 2018 to the relative of a patient who had died at the trust. The purpose of the review is:
to consider the appropriateness and impact of the actions taken in response to the issues raised by/connected with the October letter by the trust and other relevant bodies; and
to produce advisory recommendations and learnings.
The indemnity will cover any sums, including any legal or other associated costs, that members of the review team are liable to pay in relation to legal action brought against them by a third party in respect of liabilities arising from any act done, or omission made, honestly and in good faith, when carrying out activities for the purposes of the review. The indemnity will apply to any work carried out from the commencement of the review to its completion in 2021, in accordance with the review terms of reference. The indemnity will cover the contingent liability of any legal action in the run-up to and following the publication of the review report, and for two years after that date. If the liability is called, provision for any payment will be sought through the normal supply procedure.
The Treasury has approved the proposal in principle. If, during the period of 14 parliamentary sitting days beginning on the date on which this minute was laid before Parliament, a member signifies an objection by giving notice of a parliamentary question or by otherwise raising the matter in Parliament, final approval to proceed with incurring the liability will be withheld pending an examination of the objection.
A copy of the attachments can be viewed online at: Written statements - Written questions, answers and statements - UK Parliament
Draft Health and Care Data Strategy
I would like to inform the House that the draft strategy “Data Saves Lives: Reshaping health and social care with data” has been published today by NHSX and builds on the ground-breaking use of data during the pandemic.
Over the last 18 months, when facing this country’s greatest public health emergency for generations, one of the most powerful tools at our disposal has been the power of data. Data helped us to identify those who are most vulnerable to coronavirus and ask them to shield; the NHS covid-19 data store we set up was pivotal to our day-to-day response; and it powered vital research that helped us discover new treatments that saved lives across the world.
Under these proposals to deliver truly patient-centred care, everyone in England will be given better access to their own healthcare records and detailed information about exactly how they are used. Patients will be able to access test results, medications, procedures and care plans from across all parts of the health system. They will be able to have confidence that health and care staff have up-to-date information, regardless of the care setting, so they will no longer have to repeat details unnecessarily. By improving their access to data, people will also be able to manage appointments, refill medications and speak remotely, not just face to face, with health and care staff when needed.
This strategy not only seeks to bring people closer to their data, it will also support the NHS in creating a modernised system. The public need to be confident to share their data with the NHS, which will hold it securely on their behalf. These protections reflect the strict parameters for the use of data and security standards set out by the national data guardian for health and care. Today’s new strategy commits the NHS to going even further with a commitment to publish the first transparency statement setting out how health and care data has been used across the sector by 2022. Modern use of patient data saves lives and maintains the highest levels of privacy. The two goals are complementary, not contradictory.
We are publishing this today in draft form so that we have the opportunity to engage with the public and right across the health and care system. The learning from this will be included in a final version to be published in the early autumn.
I will deposit a copy of the draft strategy in the Libraries of both Houses.
Comprehensive and Progressive Agreement for Trans-Pacific Partnership: Launch of Accession Negotiati
The UK will today launch negotiations with 11 countries belonging to a free trade area, in a landmark moment for the UK as an independent trading nation. Joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) hitches the UK to some of the world’s biggest current and future economies populated by half a billion people and with a joint GDP of £9 trillion.
It would secure our businesses and British exports superior access to these dynamic markets, with 65% of the world’s 5.4 billion middle class consumers expected to be in Asia by 2030. UK exports to CPTPP nations would increase by 65% —£37 billion—until 2030 and, in addition to this growth, comparative static analysis shows an additional increase in trade by £3.3 billion as a result of UK accession.
Membership of CPTPP would build on the FTAs we have now signed with 67 countries plus the EU, and opens new markets for our services sectors, lowers tariffs on goods like cars and whisky, and creates new opportunities for UK farmers. The historic trade deal agreed in principle with Australia on 15 June will mean iconic British products will be cheaper to sell into Australia, boosting UK industries that employ 3.5 million across the country. This agreement, and others with CPTPP members including Japan, Singapore and Mexico, are a gateway into the fast-growing Indo-Pacific region and will boost our bid to join CPTPP.
CPTPP members represent 13% of global GDP, growing to 16% if the UK joins. Joining CPTPP would put the UK at the heart of this dynamic group of countries, deepening our ties with some of the world’s biggest and fastest-growing countries, as the world economy increasingly centres on the Pacific region.
Joining CPTPP is expected to boost this growth even further, and that means supporting even more UK jobs. It is an advanced and ambitious agreement which goes deep in areas of UK interest such as services and digital trade.
The Indo-Pacific is the world’s growth engine: home to half the world’s people; 40% of global GDP; and some of the fastest-growing economies that are at the forefront of new global trade arrangements. By entering into a free trade agreement with these countries, the UK can benefit from this growth. Acceding to the CPTPP would help the UK engage more deeply with the region, and help us secure increased trade and investment opportunities, diversify our trading links and supply chains, and embed open trade.
As part of CPTPP, our analysis shows that every nation and region of the UK is expected to benefit. Each region of the UK already exported over £1 billion worth of goods to CPTPP members in 2019, including £3.1 billion from the East Midlands, £2.4 billion from Scotland, and £2 billion from the North West. Membership could deliver a £1.8 billion boost to UK GDP in the long run and to increase take-home pay for British workers by £800 million.
Accession could see 99.9% of UK exports being eligible for tariff-free trade with CPTPP members. Joining would secure lower tariffs for exports such as whisky and cars, which are in high demand in the Pacific region; 65% of the world’s 5.4 billion middle class consumers are expected to be in Asia by 2030.
CPTPP also greatly benefits the UK as the world’s second-largest services exporter. It makes travel easier for businesspeople moving between CPTPP countries, and goes further in areas of key UK interest, with advanced provisions that facilitate digital trade and modern rules on data that would help the UK’s cutting-edge tech sector go global, and enable more financial and professional services markets to be opened up.
CPTPP also sets modern rules for digital trade across all sectors of the economy, supporting UK businesses seeking new opportunities in member markets. Digitally delivered services from the UK to CPTPP, such as making online international bank transfers, selling an e-book from an online marketplace or giving legal advice over Zoom, were worth £18.7 billion in 2019.
The more CPTPP expands, the greater the benefits to the UK. Economies including the Philippines, Thailand, Taiwan, and Republic of Korea have all expressed interest in joining. By having a seat at the table as the first new member, the UK can help shape CPTPP’s future development as it grows.
Today, the Department for International Trade has published four documents, copies of which have been placed in the House Library:
Our outline approach to negotiations, setting out our objectives for the negotiations.
A response to the public consultation on membership of CPTPP, setting out how it has informed our policy.
Our geostrategic vision for trade with the region.
A scoping assessment, providing a preliminary economic assessment of the impact of membership.
On Wednesday 2 June, CPTPP nations agreed to the UK’s bid to begin the accession process to join CPTPP. The UK will continue to work closely with Japan, as this year’s chair of the CPTPP commission, alongside the other CPTPP nations to progress negotiations as quickly as possible. As in all negotiations, we are committed to upholding our high environmental, labour, product and food safety and animal welfare standards in our negotiations with CPTPP member states, as well as protecting the national health service (NHS).
CPTPP has high standards in areas including the environment and labour. Its rules commit members, for example, to protecting the minimum wage, freedom of association, the elimination of forced and child labour and, crucially, enforcing their own laws in these areas. CPTPP also affirms the UK’s right to regulate in our national self-interest, rather than forcing harmonisation on its members, complementing the UK’s system of strong rule of law coupled with the freedom to set our own regulations.
This Government are committed to transparency and will ensure that parliamentarians, UK citizens and businesses have access to information on our trade negotiations. The written ministerial statement of 7 December 2020 set out our transparency and scrutiny commitments, including regular updates to Parliament and engagement with Select Committees, which will apply to the UK’s process of accession to CPTPP.
Work and Pensions
Extending Covid-19 Local Support Measures
Throughout the covid-19 pandemic, this Government have provided an unprecedented package of support for individuals, families, communities and businesses who need financial help at this critical time.
The Covid-19 Local Support Grant—previously known as the Covid-19 Winter Grant Scheme—has enabled local authorities in England to support families across the country who are struggling with the cost of food and utility bills as a result of the coronavirus pandemic. The scheme has run from 1 December, with a total investment of over £269 million so far. Between 1 December and 16 April, local authorities had made almost 6.3 million awards under the scheme.
The Covid-19 Local Support Grant arrangements will be extended for a final time, with a further investment of £160 million, to cover the period up to 30 September. This temporary support is being extended beyond the planned ending of restrictions, to help families get back on their feet as the economy recovers and the vaccine rollout continues. Well-paid work is the best route out of poverty and that is why we have a plan for jobs.
The Covid-19 Local Support Grant is in addition to the £220 million Holiday Activities and Food (HAF) programme, which has been scaled up to cover the whole of England across the major school holidays in 2021—including this summer. The HAF will provide disadvantaged children across the country with healthy meals and enriching activities.