There is continuation funding for recruits under the Crime Fighting Fund and Community Support Officers who are playing an important role reassuring the public on our streets; more funding from the Street Crime Initiative that has seen street crime reduce by an estimated 7 per cent. in England and Wales in April—June 2003 compared with the same period last year; Basic Command Unit funding to deal with policing problems most effectively at local level; continuation of the Rural Policing Fund to improve policing for communities with the most widespread populations; funding from the DNA Expansion Programme and other schemes to allow forces to make the most of new technology.

In this statement, I want to outline the wider provision for support for the police service in England and Wales.

THE POLICE GRANT SETTLEMENT

We propose to distribute the settlement as follows:

Police funding proposals within the Local Government finance system are being announced by my right hon. Friend Ministerial title the member for Greenwich and Woolwich today, and by the Welsh Assembly Government.

Provisional general policing grants (ie Home Office Police Grant, Revenue Support Grant and National Non Domestic Rates) for English and Welsh police authorities in 2004–05 compared with 2003–04 are given in Table 2.

METROPOLITAN POLICE FUNDING

Grant for the MPA will increase from £1,764.1 million to £1,822.3 million; a cash increase of 3.25 per cent. in line with all other police authorities. I have increased the formula provision for the MPA national and capital city functions from £202 million to £207 million to keep the formula up to date so that the MPA will receive appropriate benefit in future years. The MPA will receive separately provision for counter-terrorism, continuing funding made available this year. Details will be announced at a later stage. £15 million will also be made available to fund 750 CSOs recruited since 2002. The MPA will be eligible for specific grants from the Crime Fighting Fund, the Basic Command Unit Fund and the Street Crime Initiative.

SPECIFIC GRANTS FOR POLICE AUTHORITIES

In addition to increased general grant, police authorities will continue to receive extra funding through several specific grants for particular schemes. Targeted grants were introduced as a direct response to what the police service and the public told us they wanted. Specific grants enable us to target funds to the areas where they are particularly needed.

The measure of the success of specific funding is now clear. We have record police numbers helped by the Crime Fighting Fund; increased support for those living in rural areas; the Street Crime Initiative has helped reduce street crime; recruitment problems in London and the South East have been tackled through increased or new allowances for officers; the presence on our streets of Community Support Officers is providing the public with reassurance.

Provision for specific grants in 2004–05 will be £657 million, a little lower than in 2003–04. This has enabled us to maximise general grant which may be spent at the discretion of police authorities.

THE MAIN SPECIFIC GRANTS ARE:

Crime Fighting Fund: £277 million will be provided to forces in 2004–05. This Fund has been a remarkable success. With the help of this Fund the Home Secretary's target of 132,500 officers by March 2004 was exceeded by nearly 4,000 this August. We will continue to pay for the 9,000 police officers recruited between April 2000 and March 2003 through the Crime Fighting Fund. I intend to pay for 60 per cent of the cost of the further 650 officers recruited under the Fund in 2003–04. The scheme will not be expanded further in 2004–05.

Counter Terrorism: As last year, we will continue to provide additional funding to the Police Service to enable it to respond to the increased threat from international terrorism. This funding will be provided to both the Metropolitan Police Service and provincial forces in England and Wales and is in addition to existing funding streams for Counter Terrorism and Security.

Basic Command Unit (BCU) funds: £50 million will be provided for BCUs. These are at the forefront of local policing. The grant is targeted towards forces with BCUs in high crime areas to help reduce crime in partnership with Crime and Disorder Reduction Partnerships, The money is directed so that all forces in England and Wales receive a proportion of the pot.

Special Priority Payments: The pay and conditions package agreed by the PNB in May 2002 introduced new elements into police pay such as payments for the most experienced officers who can demonstrate a high level of professional competence and extra rewards for officers in

the most difficult and demanding posts. I have split the allocation for 2004–05. £50 million will be available as a specific grant for special priority payments in 2004–05. A further £9 million has been rolled back into general grant.

Community Support Officers (CSOs): £41 million funding will be available to support the costs of CSOs who free up police officer time, play a crucial role in providing reassurance and who have some powers to deal with low level crime and anti-social behaviour. The provision will continue to fund CSOs recruited in 2002–03 and 2003–04.

Rural Policing Fund: £30 million is again provided for the particular needs of the 31 forces with the most widespread populations.

Street Crime Initiative: Additional funding of around £25 million is being made available to support continued police operations against street crime. Distribution will be determined in December 2003.

We will, as well, make available funding for the following:

Seventy five per cent. of the cost of the London and South East Allowances (£49 million).

Funding support for the cost of free travel for Metropolitan and City of London officers (£3.2 million).

Promotion of volunteering within the Police Service (£7 million).

Workforce Modernisation Implementation Fund. We have allocated £5 million in 2004–05 to support forces in developing an effective skills mix of police staff and police officers.

The Home Secretary is committed to the DNA Expansion Programme and the benefits that it is delivering. Funding is provided for the continuation Programme.

POLICE AUTHORITY CAPITAL

The Home Secretary and I intend to allocate provision of capital grant for 2004–05 in December.

In addition capital grants for the introduction of Airwave will be made available to those authorities taking up the radio communications service in 2004–05.

There will be capital provision for the case and custody project of the Criminal Justice IT system. This will be supported by resource funding.

£40 million is being provided for the capital costs of developing the Metropolitan Police Authority's Command Control and Communications Information (C3i) System. In total £140 million is being provided towards this project.

CENTRAL SPENDING ON POLICING

Central spending on policing will total £706 million. The main specific items are the DNA expansion programme, the National Strategy for Police Information Systems and the Airwave contractor's core charges. In addition, provision is made for the costs of organisations supporting policing, mainly the Police Information Technology Organisation (PITO), Centrex (the Central Police Training and Development Authority), National Criminal Intelligence Service/ National Crime Squad and scientific and technical facilities.

EFFICIENCY

The settlement continues to take account of the Home Secretary's commitment to improve efficiency and effectiveness in the police service. Guidance on efficiency plans for 2004–05 will be issued shortly. Future Police Grant allocations will be considered in the light of police authorities meeting the current target for 2 per cent. efficiency improvements. The efficiency target will be examined during the Spending Review 2004. Targets reflecting each authority's circumstances may be more appropriate than a universal one. We shall also be considering the balance between cash releasing efficiencies and those which are the result of service improvements.

CONCLUSION

We are continuing to invest substantially in the police service to ensure delivery of an effective and efficient police service that has the support and confidence of all communities. We have listened carefully to the concerns of police authorities in determining this settlement. We have ensured that all forces will receive an increase of 3.25 per cent. in general grant which is well above general inflation of 2.6 per cent. This settlement provides the resources to help the police do their job more effectively, building on a strong platform of record police officer numbers, a growing policing community and reduced levels of crime.

However, modernisation does not mean a gambling free for all and reform must not be allowed to generate an upsurge in problem gambling. The provisions published today combine a managed relaxation of outdated restrictions with the strongest protections for children and the vulnerable. Following reform, there will be greater choice for adults but there will remain important limitations on what types of gambling are available and where they can be located.

INVESTOR IN PEOPLE

In A Safe Bet for Success (published in March 2002, Cm 5397) we accepted the vast majority of the Gambling Review's recommendations. Since then, we have been working closely with the interested industries, representatives of groups encouraging responsible gambling, local authorities, consumer groups, other Government Departments and the devolved administrations to prepare draft legislation that would give effect to this new system of regulation.

The proposals published today build on and subsume the draft clauses published in July 2003. They will simplify regulation by establishing a single regulator for commercial gambling. The Gambling Commission will have wider functions, greater flexibility to act and stronger enforcement powers than the Gaming board that it will replace. Local authorities will license all types of gambling premises, to ensure that local people have a say in where gambling outlets are sited. The draft Bill will keep crime out of gambling and protect the industry's reputation for integrity and excellence. The Gambling Commission will be a strong, effective regulator and will root out illegal gambling; its staff will have statutory powers of entry, search and seizure.

The draft Bill also removes unnecessary restrictions on the ability of business to meet consumers' wishes. The rule allowing casinos to be established only in designated parts of the country will be abolished, as will the rule requiring membership of a casino or bingo club at least 24 hours before playing. Remote gambling, for example on the Internet, interactive TV and through mobile telephones, will be licensed and regulated effectively in Great Britain for the first time.

The published clauses also strengthen safeguards protecting children and the vulnerable. The current minimum age limits for access to gambling products will be retained and enforced strongly. The draft Bill also includes reserve powers for a statutory levy on gambling operators. These powers will be used if the gambling industry does not keep its promises to contribute to a charitable trust funding research, prevention and treatment programmes for problem gambling.

A Joint Committee of both Houses has been convened to examine the Government's draft proposals. I am confident that what they will scrutinise is a set of mature proposals that will achieve a sensible reform of the law on gambling. Such scrutiny will improve the legislation and build parliamentary understanding and public confidence, enabling us to strike the right balance between deregulation and the protection of young and vulnerable people.

I intend to publish the remaining sections of the draft Bill early next year.

Meeting Operational Medical Equipment and Materiel Requirements

To build and deliver, to schedule and within budget, all modules on the Operational Build programme as agreed with our key customers, the Defence Medical Services Department (DMSD), and to meet all authorised operational requirements for equipment, medical consumables and blood products.

KEY TARGET 2

Meeting the Medical Equipment and Materiel Requirements for the in-vear Exercise and Training Programme

To build and deliver, to schedule and within budget, all modules on the Exercise and Training Build Programme as agreed with DMSD, and to meet all authorised requirements for equipment, medical consumables and blood products.

KEY TARGET 3

Meeting Customer Requirements

To meet demands for Category B items (commonly used items with a unit cost of less than £100 and approved by DMSD) from units and authorised demanders in the UK and overseas within the MSA Charter Response Times (Next Day, 3 Days), as follows:

KEY TARGET 4

Procurement of Medical Equipment

Develop and implement a strategy to improve medical equipment and materiel Whole Life Management with our customers.

KEY TARGET 5

MS A Change Programme

To work with our customers and stakeholders with the objective of delivering the key elements of the MS A Change Programme which will deliver significant improvements in the effectiveness and efficiency of the medical supply chain, contribute to CDL's strategic objectives, and improve delivery to our customers.

Initial research indicates that the incorrect interpretation of the regulations is likely to have affected Royal Air Force compensation payments since soon after 1973, and Army and perhaps some Royal Navy claims since 2000.

We do not know how many pensioners are likely to have been affected or the likely cost. However, a substantial number of pension award decisions will need to be reviewed to ensure that all those at risk are identified. At present, we expect it to take around a year to complete this review. Payments will be made as soon as possible. We will also be using appropriate advertising to publicise to the ex-Service community those categories of pensioner who might be affected and how claims can he lodged. We will consider these as quickly as possible. The judgement does not affect the benefits paid under the War Pension Scheme.

The Department will abide fully by the Court of Appeal decision with respect to claims from the past or where a decision is still pending. However, I have decided that, for the future, as soon as the relevant changes can be made to secondary legislation, the Department should establish the right of AFPS administrators to take a second decision on attributability, using the balance of probabilities standard of proof. This is the standard of proof used for other public service occupational schemes, as well as for decisions in the civil courts and for the recently proposed new Armed Forces Compensation Scheme.