Thursday 15 March 2018
Baseline Profit Rate 2018-19
I am today announcing that I have set the baseline profit rate for single source defence contracts at 6.81%, in line with the rate recommended by the Single Source Regulations Office (SSRO). I have also accepted the methodology used by the SSRO to calculate this figure.
I am also announcing new capital servicing rates and an SSRO funding adjustment as recommended by the SSRO, which can be found at table 1 below. These rates have also been published in the London Gazette, as required by the Defence Reform Act 2014.
All of these new rates will come into effect from 1 April 2018.
Table 1: Recommended Rates agreed by the Secretary of State for Defence.
Element 2017 rates 2018 rates Baseline Profit Rate (BPR) (% on contract cost) 7.46% 6.81% Fixed Capital Servicing Rate (% on Fixed Capital employed) 4.84% 4.38% Working Capital Servicing Rate (% on positive Working Capital employed) 1.37% 1.21% Working Capital Servicing Rate (% on negative Working Capital employed) 0.59% 0.53% SSRO Funding Adjustment -0.025% -0.024%
Baseline Profit Rate (BPR) (% on contract cost)
Fixed Capital Servicing Rate (% on Fixed Capital employed)
Working Capital Servicing Rate (% on positive Working Capital employed)
Working Capital Servicing Rate (% on negative Working Capital employed)
SSRO Funding Adjustment
School Condition Allowance
My hon. friend the Under-Secretary of State for the School System (Lord Agnew) has made the following written ministerial statement:
Today, I am announcing the allocation of £1.4 billion in 2018-19 to maintain and improve the condition of the education estate. Investing in our school buildings is a key part of the Government’s plan to ensure that every child has the opportunity of a place at a good school, whatever their background.
For the financial year 2018-19, the £1.4 billion of funding includes approximately:
£0.7 billion for local authorities, voluntary aided partnerships, larger multi-academy trusts and academy sponsors, to invest in their own condition priorities.
£0.5 billion for academies and sixth-form colleges through the condition improvement fund—the outcomes of bids to this fund will be announced later this year.
£0.2 billion of devolved formula capital to be allocated directly to schools later in 2018.
To provide stability for schools while we review the approach to capital funding for 2019-20, we have continued the existing capital funding approach for the financial year 2018-19.
In addition, £100 million of revenue generated from the soft drinks industry levy will be provided in 2018-19 for the healthy pupils capital fund. This fund is intended to improve children’s and young people’s physical and mental health—for example, by improving playgrounds and sports facilities, or kitchens, dining or medical facilities. The healthy pupils capital fund is being allocated alongside 2018-19 school condition funding.
Details of today’s announcement will be published on the gov.uk website, and copies will be placed in the Library of the House.
Foreign and Commonwealth Office
Hong Kong: Sino-British Joint Declaration
The latest six-monthly report on the implementation of the Sino-British Joint Declaration on Hong Kong was published today, and can be found as an on line attachment. It covers the period from 1 July to 31 December 2017. The report has been placed in the Library of the House. A copy is also available on the Foreign and Commonwealth Office website: www.gov. uk/government/organisations/foreign- commonwealth-office. I commend the report to the House.
Attachments can be viewed online at: http://www.parliament. uk/business/publications/written-questions-answers-statements/written-statement/Commons/2018-03-15/HCWS544/.
Commission for Countering Extremism
I am today confirming Ms Sara Khan’s appointment to the role of lead commissioner of the Government’s new Commission for Countering Extremism. All necessary pre-employment checks have been completed.
Ms Khan’s appointment follows a rigorous and transparent competition carried out in accordance with the Cabinet Office’s governance code on public appointments. I am delighted that Ms Khan will drive forward the vital work of the Commission for Countering Extremism. Ms Khan’s extensive experience in countering extremism and defending the rights of women and girls, and her determination to confront and challenge extremism wherever it resides makes her ideally suited to this role.
Extremism causes a wide range of harms, including the promotion of hatred and division, discrimination against women and girls, the encouragement of isolation, and the rejection of our democratic system and the rule of law. The Commission for Countering Extremism will have a clear remit to identify extremism in all its forms, whether online or in our communities.
As we consider new approaches to tackling extremism, I believe that there is much that can be learnt from how society sought to tackle racism in the last century. In particular how the state and civil society worked together to take on and challenge a set of attitudes and beliefs that have no place in this country.
I have agreed with Ms Khan that her early priorities will include:
Engaging widely and openly on extremism and Britain’s values across the public sector, communities, civil society, and with legal and academic experts.
Producing a strategic assessment of the threat we face from extremism, and the current response.
Advising Ministers on the Commission’s future structures, work programme and the appointment of further commissioners. This advice will in part be informed by the lead commissioner’s engagement with stakeholders.
The Commission will also produce an annual report on its work.
Alongside this statement, I have today published a charter for the Commission, which sets out its relationship with the Government and the public. The Commission for Countering Extremism will initially be established as a non-statutory expert committee of the Home Office. It will operate independently, at arm’s length from Government.
The Commission will play a crucial role in supporting the Government and their partners to tackle the scourge of extremism and stand up for the shared values of the mainstream majority. I look forward to working with Ms Khan on this shared agenda.
Justice and Home Affairs: Post-Council Statement
The EU Justice and Home Affairs Council of Ministers met on 8 and 9 March in Brussels. I represented the UK for Interior day.
Interior day (8 March) began with a discussion on co-operation between common security and defence policy operations and EU JHA agencies. Ministers endorsed an initiative to more effectively co-ordinate the activity and improve the exchange of information between JHA agencies and EU security and defence missions in third countries.
This was followed by an exchange of views on the implementation of the directive on the use of passenger name record (PNR) data. Member states provided updates on progress of their implementation. I intervened to reiterate the UK’s existing capability for processing PNR data, and offered to share expertise with other member states.
Ministers then discussed co-operation with the western Balkans on security and counter-terrorism, with reference to the European Commission’s western Balkans strategy, which was published in February. The Government is supportive of the EU’s efforts to building stronger co-operation in this region. The Government are committed to working closely with European partners on this issue and will be hosting the western Balkans summit 2018 in July, at which security will form a strong element.
Over lunch, Ministers discussed progress made on combating the threat posed by terrorist use of the internet, including engagement with industry and the work of the EU internet forum. The Government remain committed to preventing terrorist use of the internet and are supportive of both the EU internet forum and the Global Internet Forum to Counter Terrorism in tackling this issue. I conveyed the Government’s development, announced by the Home Office in February, of new technology to automatically detect terrorist content on any online platform and offered to share the tool with European partners.
In the afternoon, there was a discussion on the increasing role of JHA agencies in counter-terrorism with a focus on the potential future strategic direction of these agencies. The Government welcome the growing role of JHA agencies in helping member states counter terrorism and recognise the need to maximise the effectiveness of existing systems. I reiterated the UK’s commitment to appropriate data sharing with Europol and supported improved co-operation between JHA agencies and third countries, as long as human rights and data protection safeguards are in place.
Ministers then discussed the proposed regulation on establishing a framework for inter-operability between EU information systems for enhancing external border management and internal security. Member states agreed to aim for conclusion of Council negotiations by the end of June to allow agreement with the European Parliament by the end of 2018. I intervened to underline the importance of all EU member states and Schengen states having access to information from all EU databases under this system.
On migration, member states generally agreed with the presidency’s priorities on the way forward, including strengthening the external border, improving returns and co-operation with third countries. I announced that the UK will be resettling up to 100 of the most vulnerable refugees evacuated from Libya, and that the UK has also now resettled over 10,000 vulnerable refugees affected by the Syrian crisis since 2014. I also announced that the Government have renewed our offer to continue specialist deployments to Greece.
Justice day (9 March) began with a discussion on the recast of the Brussels IIa regulation, which focussed on how to best ensure adequate resourcing of central authorities, which play a key role in judicial co-operation on matters of parental responsibility. The presidency concluded, in line with the position taken by the UK and a majority of member states that adequate resourcing for central authorities was important, but that the level of resourcing should be left to the member states.
A general approach was reached on the proposed directive on combating fraud and counterfeiting of non-cash means of payment. The UK has not opted in to this directive.
There was an update on the preparatory steps needed to be taken to ensure that the European public prosecutor’s office (EPPO) becomes operational in 2020. The UK is clear that it will not participate in the EPPO.
There was also a policy debate on work to improve law enforcement access to cross-border e-evidence. The Commission will publish a legislative proposal in April. The discussion focused on ensuring that EU and US law is complementary and member states supported the exploration of an EU-US agreement on e-evidence. The UK intervened to recognise the importance of addressing the obstacles to obtaining e-evidence.
Over lunch, representatives from member states discussed radicalisation in prisons, agreeing on the importance of continuing to share experience and best practice.
The Commission also presented recommendations concerning illegal content on online platforms that were published on 1 March and highlighted the link with the code of conduct on countering illegal hate speech online.
Housing, Communities and Local Government
On 9 January, I announced to the House the appointment of Max Caller CBE as inspector to conduct an independent inspection of Northamptonshire County Council (NCC) to better understand the NCC’s compliance with its best value duty.
The inspector has today sent me his report which he has also copied to the council. I am placing a copy of that report in the Libraries of both Houses and a copy can be found online at:
The report contains challenging findings:
The inspector has identified that the council has failed to properly comply with its best value duty for some time. This is not because of lack of funds: as the report states, the council’s “Mind the Gap” analysis
“does not demonstrate that NCC has been particularly badly treated by the funding formula”.
The report sets out in some detail the governance failings which have culminated in the council’s chief finance officer issuing a section 114 notice to stop new spending and KPMG’s advisory notice on the council’s budget. It concludes
“living within budget constraints is not part of the culture of NCC”.
These findings appear very serious indeed both for the council and its residents. The inspector has made recommendations for how improvement can be secured. He rules out the option of an internally led strategy and suggests that commissioners should be appointed in the short term to ensure the proper running of the council and delivery of services for its taxpayers, while proposals for restructuring are developed as a longer term solution.
I am grateful to the inspector and his team for the thoroughness of their work and the clarity of their conclusions. I will now consider in detail their report’s findings and proposals for the future. I will make another statement to the House setting out my proposals for next steps, including whether or not to exercise my powers of intervention under section 15 of the 1999 Act, in due course.
Work and Pensions
Employment and Support Allowance
On 14 December 2017 my predecessor provided a statement to the House on how the Department will be undertaking work to correct underpayments that may have occurred as a result of how a proportion of incapacity benefit claims were transitioned to employment and support allowance between 2011 and 2014. I wanted to take this opportunity to update the House on how this work is progressing.
My Department will be reviewing close to 300,000 cases, of which just under a quarter have been underpaid. We have begun contacting individuals and making payments. We are actively recruiting staff and have scaled up the team undertaking the work from 10 to 50 in December last year, which will grow further to 400 from April, allowing us to deal with the situation at pace.
I know many Members will want to provide reassurance to their constituents who think they may have been affected. I can assure the House that my Department will be contacting all those identified as potentially impacted. We have been engaging with external organisations that often provide support and advice to our claimants, so that they too can be confident that we have a robust process in place, and can provide individual advice should they be contacted.
Today I can confirm that, based on departmental analysis, we will be prioritising any individuals whom we know from our systems to be terminally ill. Thereafter we will work through the cases identified as most likely to have been underpaid according to our systems. We have also undertaken an equality analysis to support this prioritisation approach.
Once an individual is contacted, and the relevant information gathered, they can expect to receive appropriate payment within 12 weeks. I can also confirm that once contacted, individuals will be provided with a dedicated free phone number on which they can make contact with the Department.
Like my predecessor, I am committed to ensuring that all cases are reviewed and paid by April 2019.