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House of Commons Hansard
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Written Statements
20 March 2018
Volume 638

Written Statements

Tuesday 20 March 2018

Business, Energy and Industrial Strategy

Competitiveness Council

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The Competitiveness Council (Internal Market and Industry) took place on 12 March in Brussels. I represented the UK.

EU industrial policy

Ministers had a wide-ranging discussion on the future of EU industrial policy and the need for European industry to adapt to changes in the global economy and the digital revolution. The UK noted that its recently published industrial strategy identified many of the same challenges and drivers of growth, and stressed our commitment to an open, liberal market economy based around fair competition and high standards. Commissioner Bieńkowska updated Ministers on the first meeting of the “Industry 2030” High Level Roundtable which took place in February. The roundtable would work towards a future vision for EU industry. Ministers also agreed the draft Council conclusions (doc. 2793/18).

The UK also raised concerns at the recent announcement by the US Administration to introduce tariffs on steel and aluminium imports. The UK stressed that unilateral tariffs were not the right way to tackle global overcapacity. Other member states stressed the need for a solution that respected the role of the WTO which Commissioner Bieńkowska supported in her response.

Digitalisation of the EU economy

Ministers considered how to better focus national reform efforts and funding decisions, to seize the opportunities presented by digitalisation for European industry and citizens. There was wide agreement on the need to boost digital skills, to provide clear regulatory frameworks, and to see SMEs and the public sector as potential beneficiaries as well as large businesses. Member states considered that both private sector and EU funding should be easier to access and complement existing national investment in infrastructure.

Single Market

Ministers held a policy debate on the single market to mark the anniversary of the yreaty of Maastricht. A number of member states, including the UK, called for better enforcement of single market rules and an analysis of barriers to the services market to realise the single market’s full potential.

Commissioner Bieńkowska hoped that member states would reflect their aspirations for the single market in responding to Commission legislative proposals. The UK underlined our continuing interest in the success of the single market and support for ongoing efforts to reduce barriers, and reiterated the Prime Minister’s call for an ambitious UK-EU partnership.

Other items

Commissioner Bienkowska set out the key elements of the Commission’s plastics strategy and highlighted the objectives of a review of the REACH regulation. On better regulation, the presidency presented work to highlight the role of scientific evidence in the EU’s regulatory decision making. Belgium presented a short note to highlight the risk of start-ups and scale-ups being captured by the rescue and restructuring guidelines in the state aid rules. Under the regular “Competitiveness Check-up” Commissioner Bieńkowska gave a presentation on the link between services reforms and productivity in manufacturing. Commissioner Jourova updated Ministers on the forthcoming package of consumer protection proposals which are due in April.

[HCWS564]

Corporate Governance

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The Government are launching a consultation on improving the corporate governance framework to ensure the highest standards of behaviour from those who control companies.

The UK is already recognised as having a leading international reputation for corporate governance. After consulting last year, the Government are preparing secondary legislation to implement a range of reforms that build on and enhance the current framework in relation to executive pay, strengthening the employee and wider stakeholder voice in the boardroom, and corporate governance in large privately held businesses.

Today’s consultation takes this essential work further by improving the corporate governance of firms when they are in or approaching insolvency, and seeking views on a number of areas where our existing rules and processes may need updating. This consultation seeks to respond in a balanced and proportionate way to reinforce public trust and confidence in business, so that the vast majority of responsible companies do not have their reputation besmirched by a small few.

The consultation considers:

The sale of businesses in distress: The consultation explores potential changes to ensure that directors responsible for the sale of an insolvent subsidiary of a corporate group take proper account of the interests of the subsidiary’s stakeholders. The proposals seek to ensure fair outcomes when major companies get into difficulties, but to avoid putting barriers in the way of credible business rescue efforts.

Reversal of value extraction schemes: The Government want all creditors to be treated fairly in an insolvency situation and is seeking views on potential changes to how certain transactions, or a series of transactions, entered into before insolvency can be challenged and clawed back if unlawful.

Investigation into the actions of directors of dissolved companies: There are difficulties caused when companies are dissolved with outstanding debts or allegations of director misconduct, which the insolvency service does not currently have the necessary powers to investigate.

Strengthening corporate governance in pre-insolvency situations: Whether steps should be taken to improve governance, accountability and internal controls within complex company group structures;

whether there are further opportunities to strengthen the role of shareholders in stewarding the companies in which they have investments, while the payment of dividends should remain for the directors to decide, having regard to their obligations and guidance, whether the legal and technical framework within these decisions are made could be improved and made more transparent;

whether the commissioning and use of professional advice by directors is done so without a proper awareness of their duties as directors; and whether and how a supply chain and other creditors can be better protected in the event of a major insolvency, while preserving interests of shareholders.

Today I will be placing copies of the consultation document in the Libraries of the House.

[HCWS561]

Digital, Culture, Media and Sport

Digital Economy Act 2017

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This statement is to inform the House that regulations were made on 15 March 2018 to bring into force specified provisions in parts 5 and 6 of the Digital Economy Act 2017 (“the Act”). The part 5 provisions, also known as the “Digital Government” provisions, provide powers enabling public authorities and other persons to share information for particular purposes, as well as introducing new powers of access to information for the UK Statistics Authority to assist it in exercising its functions.

The Digital Government provisions in part 5 of the Act allow information sharing in the areas of public service delivery, civil registration, debt, fraud, research and statistics. Between 21 September and 2 November last year, the Government carried out a public consultation and obtained the views of statutory consultees on draft codes of practice and other guidance which support these provisions, and on draft regulations which set objectives for the public service delivery provisions. The Government expect to lay the draft codes and regulations for consideration by Parliament shortly.

The research and statistics provisions (at chapters 5 and 7 of part 5) will be brought into force in Northern Ireland as well as in England, Wales and Scotland. Some of the purposes for which information may be shared under part 5 are devolved with respect to Northern Ireland.

Although it was intended that a legislative consent motion (LCM) would be sought from the Northern Ireland Assembly during the passage of the Act, the Assembly was dissolved before the motion itself could be passed. With that in mind, the Government have sought to keep open the ability to commence the provisions separately in Northern Ireland, in the hope that a restored Executive could seek legislative consent from the Assembly before the provisions were commenced.

In the light of the ongoing absence of a Northern Ireland Executive, however, a point has been reached whereby a decision on whether to commence the research and statistics provisions cannot be further deferred. The UK Government have therefore decided to proceed with UK-wide implementation on a limited basis for those provisions, taking into account representations from officials and other stakeholders in Northern Ireland. This decision has not been reached lightly. Not commencing these specific provisions UK-wide at this time would undermine the comprehensiveness and consistency of statistics about society and the economy for both the UK as a whole, and for Northern Ireland in particular. It could also affect the ability of bodies in Northern Ireland to access essential statistical data and to make policy on the basis of relevant research. In both respects it would impact on the ability to make effective, timely and evidenced decision-making at the local and national levels. Given this, and noting the support the measures commanded from the previous Executive (with a legislative consent motion laid in the Assembly albeit not passed) and as part of a public consultation which included Northern Ireland, we assess that now is the right time to move forward with commencement.

When an Executive has been restored, we will write to Northern Ireland Ministers to confirm that they are content for the commenced provisions to remain in place. We will also consider carefully any further representations from stakeholders in Northern Ireland to commence other provisions in the Digital Economy Act 2017, while recognising the broad support that these measures have commanded previously.

[HCWS567]

Health and Social Care

NHS Planning in 2018-19

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I am today updating the House on the outcome of the General Medical Services (GMS) contract negotiations with the General Practitioners Committee of the British Medical Association and NHS Employers on behalf of NHS England.

The GMS contract for 2018-19 comprises a pay uplift together with a CPI uplift of 3% to expenses totalling £102.9 million, as part of the overall investment of £256 million. The investment includes £60 million which has been allocated to cover increased indemnity costs incurred in the past financial year.

Other key parts of the contract include:

An agreement that will pave the way to general practitioners no longer issuing paper prescriptions, instead using the NHS electronic prescription service.

The roll out of the NHS e-referral service into general practice. NHS England has allocated £10 million to facilitate GPs uptake of the electronic referral service.

An agreement with the GPC to work with DHSC and NHSE to establish the extent and reasons behind locum use and cost.

We understand that NHS England will apply the provision to personal medical services and alternative provider medical services where appropriate.

Full details of the agreement can be found at: http://www.nhsemployers.org/GMS201819.

[HCWS565]

General Medical Services Contract Negotiations 2018-19

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I am today updating the House on the outcome of the general medical services (GMS) contract negotiations with the General Practitioners Committee of the British Medical Association and NHS Employers on behalf of NHS England.

The GMS contract for 2018-19 comprises of a pay uplift together with a CPI uplift of 3% to expenses totalling £102.9 million, as part of the overall investment of £256 million. The investment includes £60 million which has been allocated to cover increased indemnity costs incurred in the past financial year.

Other key parts of the contract include:

An agreement that will pave the way to general practitioners no longer issuing paper prescriptions, instead using the NHS electronic prescription service.

The roll out of the NHS e-referral service into general practice. NHS England has allocated £10 million to facilitate GPs uptake of the electronic referral service.

An agreement with the GPC to work with DHSC and NHSE to establish the extent and reasons behind locum use and cost.

We understand that NHS England will apply the provision to personal medical services and alternative provider medical services where appropriate.

Full details of the agreement can be found at: www.nhsemployers/GMS2Q1819.

[HCWS565]

Home Department

Fire Reform

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Improving firefighter diversity is a key priority for the Government’s ambitious fire reform programme. The most recent 2017 operational data, published on 26 October, showed that only 5.2% of firefighters in England are women and 3.9% are from an ethnic minority group. This is unacceptable and needs to be significantly improved so that firefighters are representative of the communities they serve.

While in 2017 we did see movement in a positive direction in terms of new joiners to the firefighter role: 8.7% were women and 5.1 % from ethnic minorities, there is still further to go. This is why the Home Office will shortly be launching a national campaign with a focus of ‘Join the Team; Become a Firefighter’ to raise awareness of the role of a modern firefighter and help improve diversity.

The campaign, which is being supported by the National Fire Chiefs Council (NFCC), Local Government Association (LGA) and Inclusive Fire Service Group (IFSG) will:

(i) target those from under-represented groups that may not have previously been interested in the role;

(ii) provide information on the breadth of role across prevention, protection; and response; and

(iii) produce guidance and toolkits to help those interested in the role overcome any challenges they face during the recruitment rounds. The campaign will enhance and not duplicate the work already being undertaken by fire and rescue services in England to improve diversity.

[HCWS570]

Housing, Communities and Local Government

Local Government Finance

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The current 50% business rates retention scheme for local government is yielding strong results. Local authorities estimate that in 2017-18 they will keep around £1.3 billion in business rates growth, which we expect will be at least maintained into 2018-19 and 2019-20. On top of the 50% business rates retention scheme which is in place for all local authorities, in 2017-18 the Government established pilots of 100% business rates retention in five areas of England and extended business rates retention to 67% in London. The pilot programme will be expanded further in 2018-19 to cover an additional 10 areas.

My officials have worked through the necessary calculations to prepare for the extension of the piloting programme in 2018-19. In doing so, an historic error has been identified in the methodology used to calculate the sums due to pilots. An adjustment is therefore required to the methodology, which will reduce the amount due to these local authorities for participating in the pilot programme to the correct level. This adjustment does not affect the local government finance settlement nor the core spending power of the local authorities concerned. The relevant local authorities have been informed today.

Background

Under the business rates retention system, local authorities retain a percentage of the business rates they raise locally. Since 2014-15, locally-raised business rates have been lower than they would have been because Government have under-indexed the business rates multiplier in each of 2014-15, 2015-6 and 2018-19. To compensate local authorities for their loss of income, therefore, the Government have calculated the extent of the loss caused by under-indexation and paid that amount as a grant under section 31 of the Local Government Act 2003.

The compensation to be paid to local authorities is paid on account during the course of a year, based on estimates made by authorities before the start of that year. It is then adjusted once outturn figures are available, following the end of the year.

When on account compensation payments were calculated for the six 2017-18 pilot areas, the methodology used to adjust tariffs and top-ups contained an error. This resulted in 27 local authorities and the Greater London Authority being over-compensated by £36 million.

These local authorities will have been operating on the understanding that this funding has already been secured and, at this this late stage in the year, a sudden reduction in their funding could potentially have an impact on the delivery of the objectives agreed as part of their devolution deals. Therefore, although the rules of “Managing Public Money” indicate that the Department should recover the overpayment, I have issued a direction requesting that the permanent secretary does not do so in this extraordinary circumstance. My correspondence with the permanent secretary will be published on the Department’s website.

In respect of the payments due to 2018-19 business rates retention pilot authorities, my Department will use the corrected methodology to calculate the section 31 grant compensation due to authorities. Local authorities will shortly be notified of these amounts.

Review

In recognition of the importance of the business rates retention system to the sustainability of local government, I am also today announcing an independent review of the internal processes and procedures that underpin the Department’s oversight of business rates and related systems. This should include modelling and analytical work, how officials manage the interface with policy decision making, and resourcing and skills.

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International Development

Safeguarding in the Aid Sector: Update

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Following the safeguarding issues exposed through the case of Oxfam in Haiti, I am updating the House on three key areas of work DFID has undertaken.

Statements of assurance from UK charities and follow up on cases

All UK charities that I wrote to on 12 February have replied and provided me with a clear statement of their assurance on their organisations’ safeguarding environment and policies, organisational culture, transparency and their handling of allegations and incidents.

This exercise has delivered results in terms of increasing reporting of live and historic cases to the relevant authorities. As of 5 March, 26 charities funded by DFID had made serious incident reports to the Charity Commission, concerning some 80 incidents. There has also been an increased level of reporting of safeguarding concerns into DFID’s “Reporting Concerns” hotline and inbox.

I cannot provide information on live investigations, but will keep the House informed on developments with partners and with regard to DFID’s internal case review.

Writing to UK charities was the first stage in a broader process, which also includes requesting assurances from our top 30 suppliers, 43 multilateral organisations and other partners. Assurances received are a first step, but do not constitute a final conclusion by my Department on the quality of safeguarding. We will test this further through the measures I announced at the safeguarding summit held on 5 March and set out below.

A high-level summary of the returns from UK charities and a list of organisations we have written to will be published on gov.uk today. It can be found at:

https://www.gov.uk/government/publications/high-level-summary-safeguarding-assurance-returns-from-uk-charities.

Safeguarding summit follow up

On 5 March, DFID co-hosted a safeguarding summit with the Charity Commission where I challenged UK charities to drive up standards and ensure that the aid sector protects the people it serves. As a result a number of actions were agreed. These include immediate short-term measures and longer term initiatives.

Four working groups, including civil society and independent experts, have been established and are meeting this week to refine and test ideas further. They will report back on concrete actions in time for the international safeguarding conference that the UK will host this autumn. The working groups are taking forward the following areas:

Accountability to beneficiaries and survivors—prioritising those who have suffered and survived exploitation, abuse and violence, and designing systems of accountability and transparency that have beneficiaries at their centre;

How the aid sector can demonstrate a step change in shifting organisational culture to tackle power imbalances and gender inequality;

Ensuring that safeguards are integrated throughout the employment cycle, including work on the proposal for a global register/passport; and

Ensuring full accountability through rigorous reporting and complaints mechanisms, and make sure that concerns are heard and acted upon.

At the summit, I announced new, enhanced and specific safeguarding due diligence standards for all organisations that work with DFID. A pilot of these new standards starts this week and they will be rolled out shortly. No new funds will be approved to organisations unless they pass these new standards, which will be integrated into DFID’s due diligence assessments, supply partner code of conduct and ongoing programme management and compliance checking processes.

Major UK charities, the Charity Commission and DFID agreed on initiatives to be taken forward to improve safeguarding standards—including immediate short-term measures, and longer term initiatives to be developed in the coming weeks and months. These include:

Exploring options for an international safeguarding centre to support organisations to implement best practice on safeguarding and maximise transparency in the sector. This work could include conducting safeguarding reviews, offering guidance and support to organisations, and a deployable team of experts on sexual exploitation and abuse who can advise organisations on the ground.

Carrying out an urgent review of referencing in the sector. At the summit, it was agreed that vetting and referencing standards are required for: UK-based staff; international staff and locally employed staff—to ensure no offender can fall through the cracks.

Planning for a systematic audit of whistleblowing practices across the sector to ensure individuals feel able to report offences, and developing and implementing mandatory standards which would make organisations accountable to beneficiaries—ensuring those receiving aid are able to identify and raise concerns.

Making annual reports more transparent, with specific information published on safeguarding including the number of cases. Also carrying out mandatory inductions on safeguarding for all staff to ensure any issues are identified and acted upon.

Establishing clear guidelines for referring incidents, allegations and offenders to relevant authorities—including the National Crime Agency.

Those in attendance at the summit agreed a joint statement which has been published on the Bond and gov.uk websites.

DFID is now building on the 5 March summit outcomes and working with a wide range of stakeholders, including other nations, to shape and deliver an ambitious agenda for the safeguarding conference to be held later this year.

Driving up standards in the UN and multilateral organisations

I have written jointly with the Foreign Secretary and with the support of other donor countries to the UN Secretary-General.

Last week, I was in New York to speak at the Commission on the Status of Women to highlight that we will only prevent sexual exploitation and abuse and achieve the sustainable development goals, if we deliver our commitments on gender equality.

I hosted a roundtable and held meetings with senior UN partners, calling for a step change across all constituent parts of the UN to ensure they put beneficiaries first, shift their organisational culture, integrate safeguards throughout the employment cycle and ensure that there are robust systems for reporting, complaints and whistleblowing. I challenged the UN to set out concrete actions to take this forward.

I will take this message to other multilateral organisations at the spring meetings next month.

A donor group has been established to capitalise on our collective leverage to deliver changes across the international aid sector at the safeguarding conference.

I am determined that the UK will continue to lead this agenda to drive up safeguarding standards across the sector and keep people safe from harm.

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Justice

Justice Update

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The Government are today introducing into the House of Lords legislation through the Civil Liability Bill to make important changes to our system of compensation for personal injury.

As announced in the Queen’s Speech on 21 June 2017, the Civil Liability Bill will reform the law relating to whiplash claims. We will introduce a new fixed tariff of compensation for pain, suffering and loss of amenity for whiplash claims with an injury duration of up to two years. The tariff will be set in supporting regulations. We will also introduce a ban on seeking or offering to settle whiplash claims without medical evidence.

The Civil Liability Bill will also make changes to the way in which the personal injury discount rate for England and Wales is set under the Damages Act 1996. The principal changes we are making are that: the discount rate will be set by reference to expected rates of return on a low risk diversified portfolio of investments rather than a return on very low risk investments as under the present law; in setting the rate, the Lord Chancellor will consult an independent expert panel chaired by the Government Actuary, with HM Treasury remaining a statutory consultee; and the discount rate will be reviewed promptly after the legislation comes into force and, thereafter, at least every three years.

I am also publishing today the Government’s response to the Justice committee’s report, “Pre-legislative scrutiny: draft personal injury discount rate clause”, published on 30 November 2017.

I am also placing the delegated powers memorandum and accompanying impact assessments in the House libraries.

I notified the market of the Civil Liability Bill earlier today through the London Stock Exchange group.

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Transport

Rail Update

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I have today launched an invitation for investors who want to invest in rail infrastructure to bring forward proposals for the new southern rail link to Heathrow. In addition they are being invited to propose schemes around the country that could enhance and expand the rail network. Promoters and investors now have two months to start working up proposals which are financially credible without Government support.

This Government are already making the biggest investment in the railway since the Victorian era, delivering better journeys for passengers across the network. However, I want to go further by unlocking new private sector funding to invest in railway infrastructure across the country. This will be in addition to the Government’s significant commitment to invest £48 billion in railway infrastructure in the next funding period.

Governments do not have a monopoly on good ideas for the railways. I have been clear that I want the knowledge and expertise of investors and local partners to contribute to delivering new connections, more services and better journeys for passengers.

This approach has already proved effective on a number of roads schemes in the UK. By encouraging innovative ideas and new investment on our railways, we can relieve the burden on taxpayers and fare payers with schemes that match our transport needs, support our economic and housing aspirations and ensure everyone benefits from an enhanced rail network.

Heathrow is a perfect example of how this approach can make a real difference. The Department is continuing to work on a western rail link to Heathrow. The proposed southern rail link to Heathrow is an exciting opportunity to harness new and innovative ideas from the private sector and there are already a number of consortia looking to construct it. I am certain that there are other opportunities nationwide for third parties to work with the Government to improve the railway.

I have published my guidance for market-led proposals to provide clarity on what Government are looking for from these ideas and the process by which it will consider them. I have also published the “Rail Network Enhancements Pipeline”.

When I published my high level output specification and statement of funds available for the railway in England and Wales for the next investment period, I made clear that the Government were developing a new process for rail enhancements—the “Rail Network Enhancements Pipeline” provides this. This is designed to ensure that future rail projects are planned and scrutinised to deliver maximum value and benefit to rail users and taxpayers.

Taken together this provides a clear framework for how we will improve the way we enhance our railway.

The changes I have outlined today lay the foundations for improving rail access to Heathrow. They also set in motion ambitious proposals on new rail schemes that could deliver significant improvements for passengers across the network and to maintain the record levels of investment this Government are delivering in our railways.

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Work and Pensions

Access To Work Scheme

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In March 2015, as part of a package of improvements to access to work, the former Minster for Disabled People, Health and Work, my right hon. Friend the Member for Forest of Dean (Mr Mark Harper), announced the introduction of an annual limit on the amount of an access to work grant of 1.5 times average salaries in order to encourage better use of public funds and to enable Access to Work to support more people—particularly traditionally under-represented groups. The cap has been in place since October 2015, but a period of transitional protection was granted to enable those who were spending above the level of the cap on introduction time to adjust to the new limits.

During this transitional period for people to adjust to the need to source their support within a limit, we have seen considerable progress. The average spend among the remaining transitionally protected customers has fallen from around £57,000 each to around £45,000 each. This suggests that it is achieving the intended incentive effects on individuals and employers to make best use of funding as well as freeing over £2 million per year, to support growing numbers of people benefiting from the scheme, alongside the extra resources provided in the spending review. I am therefore persuaded that the principle of the cap is sound, balancing the need to provide support to the largest number of people, and at a significant level for some, with the need to make the best use of public funds.

At the same time, the Government have always said that we would also use this time to monitor the impact of the cap on individuals and work with customers and other stakeholders to see if any further practical mitigations could be applied to those whose needs still remain above the cap. This includes emphasising the duties that employers have to play their part and make reasonable adjustments under the Equality Act 2010. At the same time it was agreed that we would lead a review of communication support for deaf people, which we published last year.

I am therefore pleased to announce that as a result of this engagement—particularly with the UK Council on Deafness (because the majority of capped customers are deaf), but also with others groups and individuals that as of April 2018, the cap will not rise to £43,100 in line with 1.5 times average earnings. Instead it will rise to £57,200, double average earnings, and will be up-rated annually on that basis. This means that considerably fewer British sign language users now remain affected by the cap. I believe it is important to retain this link to average earnings so that high-value awards, which are overwhelmingly used to purchase human support, retain their purchasing power over time.

Alongside this change, existing capped customers will, where applicable, have their needs considered against this new limit when their awards are due for their annual review.

As we continually seek to improve Access to Work, which last year approved provision for 8% more people than in 2015/16—including 13% more people who were deaf or had hearing loss—we will introduce the following measures:

extra support to customers with high-value awards via automatic workplace assessments promoting available technology and reasonable adjustments and voluntary cost-share from employers as well as signposting to advice and guidance provided by third parties;

working with stakeholders to co-produce guidance and share best practice as well as continued monitoring of the impacts on the cap;

discretion in exceptional cases of multiple disability, to consider award limits averaged over a longer period—for example where a customer’s on-going need for a support worker may be below the cap but when coupled with a periodic need for, say, a wheelchair, would exceed the cap in that year;

introduction of managed personal budgets to enable greater choice and control for customers in the way grants are spent;

taking applications 12 weeks ahead of a job start date rather than the current six weeks to allow more time for support to be agreed and put in place;

continuing to invest in our digital improvements such as developing the facility to submit invoices online;

allowing more flexibility in how people can use Access to Work to support short periods of work experience where there is a likelihood of a paid job in the near future; and

encouraging uptake of technological solutions that can both reduce costs and promote independence, we will allow risk free trials of technological solutions so that customers can revert to their old award if they wish, and also introduce a “Tech Fund” that will mean the mandatory cost-sharing contributions from employers for such items are waived where their use will save the taxpayer money.

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