HMRC have today reached a settlement of their claim for compensation from Electronic Data Systems Ltd. (EDS) and Electronic Data Systems Corporation for the problems experienced with the IT system developed by EDS to support the launch of the Tax Credit system in 2003 and the subsequent operation of Tax Credits.

The aggregate settlement is £71.25 million (seventy-one million, two hundred and fifty thousand pounds) including an up front payment and payments of additional amounts over time. Details of the settlement are commercially sensitive and therefore bound by a legal confidentiality agreement as is normal in agreements of this nature.

I have written to the Chairman of the Treasury Committee to inform him of this settlement and David Varney, as Chairman of HMRC, has written in similar terms to the chairman of the Public Accounts Committee and the Public Administration Committee. Copies of all three letters have been placed in the House of Commons Library.

My right hon. Friend the Secretary of State for Education and Skills chaired the EU Education and Youth Council held in Brussels on 15 November. I represented the UK during the Education Council and Peter Peacock, Scottish Minister for Children and Young People, represented the UK during the Youth Council.

There were four substantive items on the Education agenda in the morning:

Ministers adopted a partial political agreement on the Lifelong Learning Programme, which involved agreement on all parts of the programme without budgetary implications. Ministers supported a Presidency compromise deal to allow Member States involvement in selecting projects that receive over €l million from the programme, and all outstanding reserves were lifted.

Ministers adopted a Resolution on enabling higher education to make its full contribution to the Lisbon Strategy. There was also an informal discussion on universities over lunch, reflecting on the questions posed at the Informal Summit at Hampton Court. Member States focussed on relations between business and universities and discussed a variety

of methods to stimulate these. All agreed on the need to promote excellence but differed on how to achieve it; some favoured competition between universities, others building up high standards for all.

Ministers also adopted Conclusions on the role of the development of skills and competences in taking forward the Lisbon agenda, which call for the Commission to look at sectoral approaches to skills development. These conclusions build on discussions at the Informal meeting of Education Ministers in London on 12/13 July and are a Presidency initiative but fit within the ongoing Education and Training 2010 work programme.

There was an exchange of views on the direction that the "Education and Training 2010" Work Programme should take over the next two years and priorities for the Joint Interim Report 2006. Ministers called for greater emphasis on Higher Education following the Hampton Court discussions. The importance of teacher training, adult education and reducing school dropout rates was also emphasised. Many agreed that more effective investment in education and training should be prioritised. Increasing mobility, not just at the level of HE, was a priority for many. Some delegations felt the most important point was to drive forward the priorities already established.

At the Youth Council after lunch:

Ministers adopted a partial political agreement on the Youth in Action programme. As with the Lifelong Learning programme this involved agreement on all sections of the text without budgetary implications.

Ministers agreed a Resolution on implementing the European Pact for Youth and promoting active citizenship.

Ministers discussed how the EU should address the concerns of young people and be brought closer to its young citizens. They stressed the need to show young people how they benefit from the EU, through information campaigns, in order to build a sense of European identity. They also stressed the need to involve young people in developing policies that will affect them, and in decision making. Consideration of the needs of disadvantaged young people and the promotion of social inclusion and integration were also highlighted by many. Some delegations suggested establishing EU wide events involving young people, and the Commissioner mentioned European Youth Week in December as an opportunity for young people to discuss European issues.

The night before the Council, my right hon. Friend the Secretary of State for Education and Skills hosted jointly with Commissioner Figel a meeting of the EU-level social partners and the extended troika of current, previous and future Presidencies. This gave the social partners the opportunity to offer their views on the issues to be discussed at the following day's Council.

In accordance with schedule 2, paragraph 11 (5) of the Health and Social Care (Community Health and Standards Act 2003, Monitor's review and consolidated accounts of National Health Service foundation trusts 2004–05, HC 622, was laid before Parliament today. Monitor's statutory name is the Independent Regulator of NHS foundation trusts. Copies of the document are available in the Library.

I have today placed in the Library of the House copies of the National Reducing Re-Offending Delivery Plan, which the Government are launching today. The Delivery Plan builds on the Reducing Re-Offending National Action Plan, which was published in July last year and it includes updates on the 60 plus action points that were agreed across Government at that time.

The Delivery Plan charts the real progress National Offender Management Service (NOMS) and its partners have made over the last 18 months in delivering services to offenders that address the reasons why they re-offend. For example, the proportion of offenders released from prison without accommodation to go to has dropped by a third in the last year, the number of educational awards offenders have achieved has risen by 40 per cent. and the number completing a drug treatment course in prison or a drug testing order in the community is up by a third. The Delivery Plan also sets out the key actions the Government intend to take over the next 18 months towards the delivery our target of reducing re-offending by 10 per cent. by the end of the decade.

The Delivery Plan acknowledges that this is only the beginning and it reaffirms our commitment to build on what we have put in place. Key to delivering our target will be continuing to work with our partners nationally, but also to develop further regional and local partnerships that include business, civic society and voluntary and faith sector contributors as the most significant driver of progress. The Delivery Plan will be built upon in the NOMS five-year strategy that is being developed.

We will also shortly be publishing, with colleagues in the Department for Education and Skills and the Department for Work and Pensions, a Green Paper, "Reducing Re-offending Through Skills and Employment". We have been developing proposals for embedding skills and employment for offenders as key tenets of the broader national delivery plan for reducing re-offending which we are announcing today. We look forward to publishing a document which will be the start of a constructive dialogue with our partners about how in the future we can most effectively equip offenders for employment and with the basic skills needed for law-abiding adult life, engage employers fully in design and delivery of programmes for offenders and drive improvement in the quality of the programmes offered to offenders.

I have today laid in draft before Parliament the Proceeds of Crime Act 2002 and Money Laundering Regulations (Amendment) Order 2005.

The draft Order brings to a conclusion an informal consultation exercise which the Home Office conducted last year on whether the law on the duty of accountants, auditors and tax advisers to report money laundering under the Proceeds of Crime Act 2002 needed to be changed to bring it fully into line with European Community law, and if so how. This followed representations from the Institute of Chartered Accountants in England and Wales that the current legislation discriminated unfairly against accountants, auditors and tax advisers, contrary to the second EC Money Laundering Directive (2001/97/EC.)

The consultation exercise resulted in over 40 responses mostly from the accountancy and legal professions. For the most part the accountancy profession argued that UK law was not compliant with the Directive and needed to be amended whereas the legal profession argued that there was no need for a change in the law.

In response the Government have decided to amend section 330 of the Act to provide for the defence to the "failure to disclose" offence, which currently applies to professional legal advisers in certain circumstances, to be extended to include accountants, auditors and tax advisers who satisfy certain conditions. The equal treatment between these professions, which the draft Order provides for, will apply only to the very limited extent that they are carrying out effectively the same functions in relation to legal advice. The exemption from the obligation to report money laundering to the appropriate authorities is therefore a narrow one which should only apply in specified and appropriate circumstances.

It should be noted that the limited exemption from the requirement to report money laundering does not extend to all accountants, auditors and tax advisers. It will apply only to those who are members of a professional body which requires a test of competence as a condition of membership and the maintenance of professional standards, including sanctions for non-compliance with those standards.

The amendments to the Proceeds of Crime Act made by the Order also provide a defence for a person who is employed by, or is in partnership with, a professional legal adviser or other relevant professional adviser, as defined in the Order.

The Money Laundering Regulations 2003 (S.I. 2003/3075) also give effect to the second EC Money Laundering Directive. In addition to amending section 330 of the Proceeds of Crime Act, the Order also amends the Money Laundering Regulations 2003.

The principal purpose of the EC Directive is to combat money laundering. The Government support the measures in the Directive and is folly committed to working with the financial services industry to maintain strong defences against money laundering. The amendment to the Proceeds of Crime Act, to which the Order gives effect, will help reduce the regulatory burden on accountants, auditors and tax advisers in certain circumstances without damaging the effectiveness of the money laundering reporting regime.

On 19 November, my hon. Friend the Parliamentary Under-Secretary of State attended the Pakistan earthquake donor conference in Islamabad. The United Nations, represented by the Secretary-General, Kofi Annan, all major donor countries and international financial institutions attended.

The Government of Pakistan proposed a range of reconstruction activities for which international community funding was needed to help the people affected by the recent earthquake. Reconstruction will be directed and led by the Government of Pakistan through the Earthquake Reconstruction and Rehabilitation Authority (ERRA).

In addition to the terrible human cost of the earthquake, the "Preliminary Damage and Needs Assessment" prepared for the Government of Pakistan by the World Bank and the Asian Development Bank estimates that Pakistan will need $5.2 billion for relief and reconstruction. This is made up of $1.7 billion for continuing relief and to restore livelihoods and $3.5 billion to replace damaged and destroyed buildings and infrastructure.

My hon. Friend announced at the conference that the United Kingdom would contribute £70 million, or over $120 million, over three years for the reconstruction effort. This money will be used to support the Government of Pakistan's reconstruction programme, which includes the rebuilding and repair of schools, hospitals, electricity and water supplies, houses, and support for restoring people's livelihoods. In conjunction with the Government of Pakistan, United Nations, other donors, international non-governmental organisations and civil society representatives we will agree how this support will be disbursed.

The total amount pledged for both relief and long-term reconstruction is now around $5.8 billion. This includes US$1.9 billion (around £1 billion) in cash grants and assistance in kind, with the remaining US$3.9 billion (£2.3 billion) in concessional loans.

The European Commission announced a new total of $110 million, with increased pledges by most EU Member States. Contributions from Germany and France are each now expected to exceed $100 million. The United States and Saudi Arabia each announced total pledges exceeding $500 million. Pledges from the International Financial Institutions—the World Bank, Asian Development Bank and Islamic Development Bank—now exceed $2.5 billion in total, with the majority offered through concessional loans.

We will need to work closely with the Government of Pakistan to ensure that effective governance structures are in place to ensure proper financial management of these funds and to ensure these pledges make a difference on the ground.

Humanitarian Assistance

The Government of Pakistan's latest figures report over 73,000 deaths and some 69,000 injured in Pakistan-administered Kashmir and in North West Frontier Province. Some 3.5 million people are affected. 2.5 million have lost their homes. 200,000 people are living in remote and cut-off areas above the snow line. In India over 1,300 died and 4,500 were injured. The immediate priority is to ensure that those who survived the disaster are supported through the winter months.

DFID is working, alongside the United Nations, the Red Cross and non-governmental organisations, to help meet the immediate survival needs of the affected population. We will continue this support for as long as necessary. To date, we have allocated £33 million (around $57 million) of assistance for the immediate relief effort. Over £30 million has been disbursed. We are prepared to contribute further.

We have provided over £10 million of direct and in-kind assistance to the United Nations, including logistics support by the United Kingdom military. This included supplying three Chinook helicopters, the airlifting of two helicopters from Spain and rations and water from Kabul using a C130 aircraft. £2 million was contributed for the NATO Air Bridge to transport priority relief items from UN warehouses, such as tents and blankets.

In addition, in support of charitable organisations, DFID has provided £6 million towards their relief programmes and funded 80 flights for the United Kingdom's Disasters and Emergency Committee at a cost of over £3.9 million.

I am today announcing the outcome of the Review of Public Administration in Northern Ireland. This review was launched by the Northern Ireland Executive in June 2002, but since the suspension of the Northern Ireland Assembly in October 2002 has been taken forward under Direct Rule. Discussions have been held with the Northern Ireland political parties at regular intervals as the review progressed, and Ministers also received advice from the high level panel of independent experts that were appointed by the Northern Ireland Executive to work alongside the review team and provide an important independent element to the process.

The objective was to review the existing arrangements for the accountability, development, administration and delivery of public services in Northern Ireland, and to bring forward options for reform which are consistent with the arrangements and principles of the Belfast Agreement, within an appropriate framework of political and financial accountability.

I am also conscious that the reduction in the number of local authorities will have a direct impact on policing structures, and on the arrangements for improving community safety through community safety partnerships. We will take forward changes in these areas in parallel with the work to implement the RPA, in partnership with the PSNI, Policing Board and other stakeholders who play an important part in the CSP arrangements.

The scope of the review was wide-ranging covering the 26 Local Councils, all the health and social service structures, all the education support structures, all other public bodies and the functions of the 11 central Government Departments.

The review has been conducted in an open and inclusive manner. It has been highly consultative, with considerable engagement with the full range of stakeholders from the outset, and two public consultations. The most recent consultation, which sought views on specific proposals for health and social services, education, local and public bodies, ended on 30 September 2005 with over 1,000 responses being received. The panel of independent experts worked very closely with the review team throughout the consultation process, participating in a significant number of the meetings with key stakeholder groups and ensuring that there was an agreed understanding about the key messages coming from the consultation.

There has also been an extensive programme of research including academic papers, study visits, surveys and focus groups. All of this evidence, including all of the responses to both consultations, has been published on the review website at www.rpani.gov.uk and copies of the research papers have been placed in the Libraries of both Houses as they have been published during the course of the review. Today an integrated analysis of relevant equality, social need, good relations and rural issues has been published and placed in the Libraries of both Houses along with copies of the two consultation documents.

I and my Ministerial team have been considering all of this considerable body of evidence, including the equality analysis, over the past few weeks before reaching final decisions.

In an ideal world Northern Ireland politicians in a local Executive would be taking the decisions on the outcome of this review. However, it has been impressed upon me that the need for reform is urgent. We need to press ahead but do so in the expectation that there will be a return to devolution and that the new structures will work in that context. The changes I am announcing today will take a number of years to implement, and I would hope that there will be a return to devolution in Northern Ireland in the not too distant future that would allow local politicians to take ownership of and shape the implementation process.

The decisions I am announcing today have been taken in the context of four guiding principles that emerged from the consultation processes. These principles are:

Subsidiarity, or the balance between local democracy and efficiency and effectiveness;

Equality;

Common Boundaries; and

Strong Local Government.

These principles underpin a two-tier model within which all public services in Northern Ireland will operate. In future, the regional tier, which largely comprises central Government Departments, will concentrate mainly on policy development, strategic planning and setting and monitoring standards. At this level also those services that are essentially regional in character will be delivered either by departments or regional authorities. The sub-regional tier, that will have local government at its core, will be the main vehicle for delivery of local public services. This will result in the transfer of many service delivery functions from central Government to local government. However, whether local government delivers a service directly or not, it will have a greater influence over the planning and delivery of services within its boundaries through a community planning process which councils will lead.

Within this model there will also be formal arrangements to facilitate good cooperation between central and local government, the detail of which will be developed during implementation.

The key to making this model work is greatly enhancing the role and influence of local government. All of the evidence has pointed to the need to have a smaller number of much larger councils in order that those councils have both the critical mass and the capacity to take on a greater range of functions and exert influence on the full range of service delivery bodies in their areas. I am therefore announcing that the current 26 local authorities in Northern Ireland will be reduced to seven, and that each council will have a maximum of 50 councillors. I intend to appoint a local government Boundaries Commissioner in the New Year to draw up the boundaries of the new councils. I intend to bring forward legislation to direct the Commissioner to use as a starting point the existing Councils in the following groupings:

New Councils

In addition to community planning and a new power of well-being I propose that the new councils will have new or enhanced responsibility for:

Planning

Local Roads

Conservation of natural and built heritage

Local economic development

Local tourism

Urban and Rural regeneration

Rural development

Future European programmes

Environmental services

Application of building regulations

Environmental Health

Leisure and recreation

Arts and Culture

Community development

Community relations

Emergency planning

Maintenance of the public realm

Functions that are transferred to local government will be accompanied by an equivalent transfer of funding. To achieve this, a new system of local government financing will be developed.

A significant number of people expressed some concern about the way in which new councils will exercise their new powers. Taking account of these concerns and the calls for a robust system of checks and balances to ensure transparent decision-making, fair and equitable treatment for all and the protection of minority rights I am announcing that such a system will be included in legislation. However, this is a very complex and sensitive issue as we need to ensure that the system put in place achieves its objective without stifling innovation and the decision-making process within councils. Further work on the detail will be undertaken in the coming months, and I will want to consult further with the political parties that will be required to work the system.

I recognise that, with the reduction in the overall number of councillors resulting from these proposals, many councillors who have served their communities in Northern Ireland well through very difficult years may chose not to stand under the new arrangements. I have therefore decided that there will be a severance scheme to facilitate the reduction in the number of councillors. There will also be more appropriate remuneration for councillors in recognition of the responsibilities they will take on. Both these issues are being addressed by a Department of the Environment working group and I will take account of its report before deciding the details of the arrangements.

The consultation document also raised the issue of how to facilitate local involvement so that communities do not feel isolated from larger councils, and to ensure that the views of local communities are taken into account in council deliberations. It was suggested that this might be facilitated through an enhanced form of area committees (or "civic councils") in which the committees would have some form of civic role in their areas. I have decided that this should be a matter for the new councils, but will consider whether the legislation establishing the new councils should place a duty on the councils to develop a system to ensure that the views of communities are taken into account in council deliberations.

I am also announcing proposals for major changes to the Health and Social Service structures in Northern Ireland. In place of the current four boards and 19 trusts, having taken account not only of the evidence from this review but also the recent report from Professor Appleby on performance management within the Health and Personal Social Services sector, I am proposing a single Regional Health Authority to commission services, five Trusts plus the Ambulance Service Trust, the reduction of other support bodies from five to three, and the reduction of Health and Social Services Councils from four to one.

The Regional Health Authority will not only replace the four Boards, but will also take on several key functions currently undertaken by the Department of Health, Social Services and Public Safety. It will have seven local commissioning groups that will cover areas that are co-terminous with the new council areas to facilitate joint working, thus allowing councils to influence the planning of health and personal social services within their council areas to meet the needs of their constituents. My colleague, Shaun Woodward, Minister for Health and Social Services in Northern Ireland, will make a separate statement on the detail of the Health and Social Services proposals.

On Education I am proposing a single Education Authority in place of the current five Education and Library Boards. It will also take on education support functions currently delivered through a range of other education bodies including the Department of Education. The consultation document sought views on whether Youth Services and Libraries should be transferred to local government. Having considered the views expressed on these issues during the consultation, I have decided that neither of these functions should transfer. My colleague Angela Smith, Minister for Education in Northern Ireland will make a statement on the detail of the proposals for education.

The decisions I have announced today in Health and Social Services, Education and local government will reduce the total number of public bodies in these sectors from 67 to 20.

The review also considered the future of executive agencies and other public bodies in Northern Ireland and variety of views were expressed in the consultation. Work is underway to decide on the future of these bodies and I will make a further announcement on public bodies and their functions before the end of March 2006, when I have had time to consider all of the evidence and make considered decisions. As a result of this work I also expect to announce the transfer of significant extra functions to local government.

Separately and in the light of the current reform of the Tribunal system in England and Wales, a working group with members drawn from the Northern Ireland Courts Service and those NI Departments which sponsor tribunals has been established to examine the implications of these reforms for NI. As part of this work this group will review the current tribunal system in Northern Ireland in terms of efficiency, service delivery and independence, and also the judicial structures which support it, and consider the implications for the establishment of any new tribunals. The group is expected to report next year.

All of my decisions have been underpinned by detailed consideration of the implications for equality, social need, good relations and rural communities. There are clear expectations that my decisions will lead to improved accessibility to public services—particularly for those most vulnerable in our society, improvements in the diversity of people who participate in public life, and fair treatment for staff. I believe that these three issues should be a central part of the decisions taken within organisations, sectors and across the public sector as a whole during implementation.

I want to pay tribute to all those who work and have worked in the public sector in Northern Ireland and who have delivered public services through the past difficult years. I know I can count on them to continue to provide dedicated services to the public. I recognise that the changes I am announcing today will give rise to concern amongst staff about their future in the public sector. With this in mind, I propose to establish an independent advisory public sector commission to ensure the smooth transfer of staff to new organisations and to advise Government on guiding principles which would apply to all sectors. Further work is being undertaken to finalise the details of the composition and remit of this Commission.

Although the terms of reference of this review, drawn up by the former Northern Ireland Executive, precluded the number and configuration of the Northern Ireland departments, the decisions I have announced will have significant implications for Departments. I will, therefore, be including departmental structures and responsibilities in my further discussions with all the political parties in Northern Ireland.

The Government in Northern Ireland is today publishing its decisions on the Review of Public Administration (RPA) consultation. My right hon. Friend the Secretary of State for Northern Ireland has already made a written statement today in the House setting out the broad range of change across the entire Northern Ireland public sector. This statement sets out decisions relating specifically to education and how the change process will be managed.

I want to thank those who have responded to the consultation process, and to acknowledge the significant contribution which these responses have made to the consideration of the RPA proposals. Some 687 responses, two thirds of the total responses received, were related to the education proposals and as such demonstrated the interest, energy and commitment of respondents to the change process.

The analysis of the responses revealed that there was broad support for radical reform, for re-focusing the role of DE, for the establishment of a single education body, for reviewing advice services, for enhanced local involvement and for the better provision of services at the front-line.

Concerns were also raised, including the perceived absence of a clear vision for education, the implications of creating two education bodies, the threat to the ethos and autonomy of individual schools, the impact of change at local level and the possible dangers of a strong centralised administration system.

All the responses received have been considered carefully against the Government's plans for a modern, accountable and responsive framework within which education policy can be developed, implemented and monitored more effectively, in the interests of improved services for all.

The changes I am announcing today are substantial and will impact upon staff in all parts of the education service. Despite the unavoidable upheaval, I know that through the period of change we can continue to rely on their professionalism and commitment in shaping the future in the interests of young people and their families.

Against this backcloth I have made the following decisions.

Changing the Department of Education

The Department of Education will undergo significant change to enable it to focus more effectively on strategy, policy development and on the translation of policy into improved outcomes at the front line. The Department will set the overall strategic direction of the education and youth sector. Its future relationships with others will be focused on clear accountability and improving standards, with performance and quality indicators established from the outset, giving strategic direction to the delivery of services. Funding allocations will be linked closely to policy priorities and performance improvement. In future, there will be a clear separation between policy formulation and operational delivery, resulting in the transfer of certain functions from the Department to the proposed new Education Authority.

This refocusing of the Department's role will require significant internal change, with closer alignment of the strategic planning, policy making, accountability and resource allocation functions and a stronger focus on the information and evidence base needed to inform policy decisions.

These changes to DE will present challenges for the Department and its staff. I recognise the concerns of staff and trades unions about the transfer of functions and jobs out of the NICS to a new Education Authority . I am satisfied, however, that the weight of the argument is in favour of transferring a number of operational activities from DE. I have asked DE to carry out an immediate internal review to confirm those functions which will transfer and to put in place appropriate transition arrangements, in co-operation with staff and their relevant unions.

In reshaping the role of DE I am mindful that education, alone, will not be able to deliver the improvements needed and I will be putting in place effective arrangements to enable DE to work collaboratively and constructively with other Departments, agencies and institutions in the interests of children and young people.

Changing Education Support

Having considered carefully the diverse views expressed about the nature and purpose of the support arrangements I have decided that there will be a single Education Authority (EA) and not two bodies, as suggested in the consultation document. The Education Authority will have responsibility for the functions performed currently by the Education and Library Boards, the Council for the Curriculum Examinations and Assessment (CCEA) and the Regional Training Unit (RTU). It will also have responsibility for the front-line support and related functions currently undertaken by the Council for Catholic Maintained Schools (CCMS), the Northern Ireland Council for Integrated Education (NICIE) and Comhairle na Gaelscolaiochta (CnaG). The Education Authority will become the employing authority for all teaching and other staff employed in grant-aided schools. With regard to the Staff Commission, the creation of the Education Authority will mean that some of its function will be absorbed into the Authority while others will no longer be required.

The responses to the consultation reflected a concern that the proposals had the potential to undermine the ethos and status of schools. I appreciate fully the strength of feeling on this matter. I want to assure everyone involved that the new arrangements do not weaken or undermine the role of governors. Nor do they alter the ethos of individual organisations or schools. For me, ethos is developed within the organisation and is influenced by the values of governors, staff, parents, pupils and the local community.

Under the new arrangements Boards of Governors will largely retain the role they currently play in relation to the selection, appraisal, promotion and dismissal of teachers and other school-based staff. They will continue to make the key decisions regarding the appointment and management of staff. The role of the Education Authority will be to ensure that decisions are taken within a framework which is consistent across all schools and is driven by the need to raise standards, and which reflects best practice in people management within the terms of existing employment legislation.

The ownership of the controlled schools estate, currently with the Education and Library Boards, will transfer to the Education Authority. This decision will not confer advantages to schools in the controlled sector nor disadvantage any other grant-aided school. The legislation which I will be bringing forward will explicitly ensure that the Education Authority will provide funding, services, advice and support to all grant-aided organisations on an equitable basis, irrespective of ethos or ownership considerations. The Education Authority's relationships will be consistent and support governors and staff in their work. The Department will ensure that all necessary controls are in place to deal with potential conflicts of interest and to ensure fair and equitable treatment for all.

In reshaping the delivery of support, I am determined to ensure that the Education Authority achieves no less than the very highest standards of service provision. In monitoring and evaluating the performance of the Authority, its services will be benchmarked against best practice.

The Education Authority will be fully and directly accountable to the Department of Education, in particular for the delivery of effective and efficient services. The Authority will be governed by a Board, appointed in accordance with the principles set out by the Office of the Commissioner for Public Appointments.

I am conscious of the need to ensure that the Education Authority is given sufficient flexibility to determine its own internal structures and working arrangements. However, there are three areas in particular which should be built into the organisational framework from the outset. These are:

The appointment of a Director of Children's Services to co-ordinate the Education Authority's responsibilities for children;

The close alignment of functions currently undertaken by the Council for the Curriculum, Examinations and Assessment, the Curriculum Advisory Support Service, Classroom 2000 (c2k) and the Regional Training Unit within the Education Authority; and

An effective interface between the Education Authority and other owners of the schools' estate to ensure that school provision is strategically and effectively planned.

I am mindful of the uncertainty and genuine concerns of staff employed in the Education and Library Boards and the other bodies affected by these changes. It will be important that staff concerns are identified and addressed at the outset, and of course education staff are not alone in this regard. With this in mind my Ministerial colleagues and I have agreed to establish a Public Service Commission to advise on the principles and steps necessary to ensure the smooth transfer of staff to new organisations in a fair and consistent manner.

Changing Inspection, Monitoring, Research and Advice

The inspection and monitoring of all education and training establishments and services will be the direct responsibility of the Education and Training Inspectorate, which will be operationally independent of all service providers and users. The Inspectorate will evaluate the impact of these services for the key purposes of promoting improvement in learning and teaching and of informing policy discussions and decisions. Evidence from inspection will be used to assure Government and the public on the quality and standards of services.

The Education and Training Inspectorate will continue to provide inspection services for DE, the Department of Employment and Learning (DEL) and the Department of Culture, Arts and Leisure (DCAL). The Chief Inspector or nominee will be an integral member of Departmental Boards at which all strategic Departmental and policy issues are discussed. On all education policy initiatives, the Inspectorate will provide an independent professional assessment of the effectiveness of the existing or proposed new policy. The Inspectorate will plan and implement its programme of work operating through a Service Level Agreement agreed with each Permanent Secretary. The Minister or a Permanent Secretary may, from time to time, invite the Inspectorate to carry out special assignments, as appropriate. The Minister will meet with the Chief Inspector to receive regular reports across the range of professional educational issues.

A new statutory Education Advisory Forum will be established to act as a unified advisory interface between the Department and the education sector. Its membership will include representatives from the Transferors and Trustees, as well as the Integrated and Irish Medium sectors and Voluntary Grammar Schools. Members of the Advisory Forum will provide on-going advice to the Department. The Forum will also meet the Minister for Education on a regular basis.

The establishment of the Education Advisory Forum will provide new, more effective mechanisms through which the Department can commission and receive advice. The statutory advisory role of CCEA and CCMS will be repealed and there will also be fundamental changes to the relationship between the Department and other organisations providing advice. Consequently, DE will review existing arrangements to streamline and improve coordination. This will improve decision making and strengthen the local advisory role, as set out in the consultation report. The review will help to inform the constitution, roles and responsibilities of the Advisory Forum. It will give specific consideration to the most effective ways of providing a voice for parents and young people in influencing decision-making on education.

The review will consider the Department's wider engagement of education stakeholders within a social partnership model, with the aim of strengthening the channels of communication with the teachers' unions and other interests. This review will lead to more direct engagement with Boards of Governors, school principals and teachers to ensure that their views are considered.

Changing Youth Services

DE will continue to be responsible for youth service policy and strategy, but will link this increasingly to wider education priorities. In strengthening the relationship between youth provision and formal education, youth services administration will be placed within the Education Authority, as will the functions of the Youth Council. A Northern Ireland Network for Youth will be established to strengthen the direct voice of young people in all relevant aspects of government provision. The role of District Councils in youth service provision will be strengthened also through new District Youth Networks.

Changing Procurement

Earlier this year, the Department conducted a review of the arrangements for planning, procuring and delivering school building projects. The aim was to improve the efficiency and effectiveness of the processes involved. The review concluded that there was a strong case for a single education infrastructure procurement service which would bring together the specialist skills required in support of the education sector. It would be dedicated to delivering a fit for purpose estate, to ensure that the significant investment to be made transforms our schools estate, and that planning is undertaken within a wider strategic context.

The review identified that many of the specialist activities required are currently split between the Department and the education sector bodies. These activities are important to ensure that the estate is planned and delivered effectively and will need to relate closely to the work of the Department. The allocation of these specialist functions between the Department and the Education Authority will be confirmed in due course.

Supporting Education at local level

Bringing together, in a regional Education Authority, the functions of five Education and Library Boards with specific geographically defined responsibilities is likely to raise concerns about the loss of local sensitivity in service provision. However, by their very nature, schools and youth services are delivered at local level. The relationship with the local community is strengthened in many ways including local involvement through Boards of Governors, volunteering, shared facilities and joint initiatives. The growth of the extended school model will continue to enhance the role of schools as learning communities within their localities.

I am committed to reinforcing the links between education and the local community under the new arrangements. This will be achieved by:

Ensuring that the organisation structures and activities of the Education Authority support a strong local presence and promote engagement at community level, drawing lessons from best practice across the public sector;

Active participation of the education sector in community planning; and

Education working jointly with others to maximise the opportunities for providing shared services at local level.

Relationship with other Government Departments

The transformation of administration which the RPA will bring forward will take place in the context of increasing recognition of the inter-dependence of public service provision.

The appointment of a Director of Children's Services is a clear recognition of this. There are other key interfaces which Departments must take into account in planning service delivery under the new arrangements. These include:

DE and DEL working closely together to agree the responsibilities of the Education Authority in relation to the 14–19 agenda and teacher education. I intend to see how there will be better integration of skills and education between the functions which are overseen by DE and DEL. A key aspect of this is how best we deliver the 14–19 curriculum but I believe that there are wider areas which may be worth examining. We will reflect further on this.

DE and DCAL agreeing the relationship between the new Regional Library Authority and the Education Authority. This will include consideration of the links between school and public library provision and wider opportunities for shared service provision.

Moving Forward

The new structures represent a fresh start for the administration and delivery of education services. They are not simply a reorganisation of current bodies, but rather a new and fundamentally different approach.

Within this model, the Department of Education will establish the strategic direction for education, setting policy, priorities and standards for schools and youth services, and ensuring the effective and efficient delivery of services by the new Education Authority. The Department will set clear standards for the delivery of support and this will be the basis of its commissioning and funding through the new Education Authority. Across the entire education and youth service there will be clear links between the funding provided by the Department and the anticipated outcomes.

The Department's decision-making will be informed by:

The Department's own research, evaluation and monitoring processes;

Independent advice and inspection evidence provided by the Education and Training Inspectorate;

Advice from the Education Authority, particularly in relation to curriculum and professional development; and

Advice from the new Education Advisory Forum.

Giving effect to these changes means that virtually all existing education legislation will need to be amended or repealed.

The legislation will ensure that Boards of Governors continue to exercise a large measure of autonomy in the day to day management of their schools. I fully recognise and support the distinctiveness and ethos that Boards of Governors and staff help foster within schools. I pay tribute to the role of School Governors and will protect their influence in these new arrangements.

To assist with the change process and to ensure an effective transition, the Department of Education will:

Undertake bilateral discussions with those most affected to consider the impact of changes; and

Establish a programme board, chaired by the Department, to co-ordinate implementation of the RPA in co-operation with central RPA implementation arrangements.

The role of the programme board will include:

Establishing project teams to take forward the work streams arising from RPA implementation. The individual project teams will draw on the expertise of staff within existing organisations to ensure that their knowledge and experience is used effectively;

Defining and managing arrangements to ensure the smooth transition to the new structures; and

Developing and managing an RPA communications strategy.

The programme board will report to the Permanent Secretary of the Department of Education and will be supported by an RPA advisory group, comprising representatives from across the education sector.

Transition

The legislative changes will determine the timeframe for putting in place shadow arrangements for the new body. However, I expect that all those involved in education administration will now move quickly to adopt joint working arrangements in preparation for the changes that will result from the RPA implementation.

Conclusion

Today's announcement signals a new beginning in how we, in education, conduct our business. We are already in the process of transforming education to meet the needs of young people in a rapidly changing world. It is entirely appropriate that the administration of education should be modernised to ensure that it can provide effective support and improve the delivery of front-line education services. The new arrangements will be more streamlined and corporate than at present and will bring greater coherence and consistency in practice.

To do less than the programme of change I have outlined today would be to do a disservice to future generations of young people and their families. Together we can make a real difference, and I urge everyone involved to work collaboratively with DE to ensure a better education service for all.

I am today announcing my plans for future health and social care structures in Northern Ireland. The Secretary of State for Northern Ireland's announcement on the Review of Public Administration in Northern Ireland sets out the background to the Review, reflects on the consultation process and sets out the key changes for public administration in Northern Ireland.

The current organisation of health and social services in Northern Ireland is too cumbersome, too bureaucratic and hugely inefficient. It produces inequalities and unacceptable delays for treatment.

I have already begun a rapid programme of reform and modernisation. By March 2006 people will wait no more than 12 months for in-patient and day case operations and from March 2006 the targets for replacement hips and knees will be no more than nine months, for cardiac surgery no more than six months and for cataracts no more than six months. I am also driving a £2.2 billion investment programme across the health and social services with developments at all major hospital sites and across the primary and community sector.

The next step is to put in place structures, which are patient-led, patient-centred and patient responsive and which will free resources for investment in front line health and social services.

I will replace the four Health and Social Services Boards and create a new statutory Strategic Health and Social Services Authority which will be responsible for performance managing the health and social services, ensuring that services are accessible, responsive, high quality and efficient.

Some of the functions currently exercised by the Department of Health Social Services and Public Safety will transfer to the new Authority. The Department's primary function will be to set policy and targets and it will be a significantly smaller, more tightly focused body.

Seven primary care-led Local Commissioning Groups will be established, patterned on the proposed areas of the seven new District Councils. Acting as local offices of the Strategic Health and Social Services Authority, the Local Commissioning Groups will work in conjunction with local primary care practitioners and the Authority to commission services from Trusts. These commissioning arrangements will be developed in consultation with primary care professionals and could evolve to primary care-led commissioning arrangements along the lines of proposals currently under development in England.

Five new integrated Health and Social Services Trusts will replace 18 of the 19 existing Trusts bringing the total number of Trusts to six, including the Northern Ireland Ambulance Service, which will continue to provide a regional ambulance service. As a result of having a greater critical mass these Trusts will create and develop new linkages between hospital and community-based services.

I will replace the four Health and Social Care Councils with a powerful single Patient and Client Council which will engage with people and communities to promote health and wellbeing, and ensure that services are responsive and patient-centred and that decisions reflect public priorities.

I also intend to incorporate the Health Promotion Agency into the new Strategic Health and Social Services Authority and the Regional Medical Physics Agency into one of the new Trusts, thus reducing the number of regional service delivery bodies to three. The remaining regional service delivery bodies will be the Central Services Agency, the Guardian Ad Litem Agency and the Blood Transfusion Agency.

I am content for now that there is a case for retaining in their present form the remaining smaller NDPBs which did not fall within the remit of the Review of Public Administration but I expect them to work closely with other health and social services organisations to reduce their management costs.

I will sympathetically consider the case for locating the new Strategic Health and Social Services Authority and the new Patient and Client Council outside the Belfast area.

These new structures will be put in place as quickly as possible. With immediate effect groups will be identified to lead the development of the new Trusts which will require subordinate legislation and which will become fully operational by 1 April 2007. Over the coming months we will develop our model of a Strategic Health and Social Services Authority, which will require primary legislation, and the new primary care commissioning arrangements. This will be done in consultation with health officials, doctors, pharmacists, social workers, dentists, nurses and other health and social services professionals with a view to having these formally in place by 1 April 2008.

We will also explore ways in which we can devolve commissioning power to local primary care-led groups in advance of the Strategic Health and Social Services Authority and the Local Commissioning Groups being established.

The speed of this reorganisation will understandably give rise to concerns among people working in health and social care services and indeed in my Department. I am however committed to ensuring that every reasonable effort is made to avoid compulsory redundancies while at the a same time taking into account the legal rights of staff in the context of fundamental change to terms and conditions of employment and work location.

I am satisfied that implementation of these proposals will ensure that the health and social services in Northern Ireland become genuinely patient centred and more accessible. They will also be more effective and efficient with a greater proportion of expenditure devoted to front line service delivery and development.

Waterways Ireland is a cross border implementation body established by agreement between the British and Irish Governments dated 8 March 1999. The body has responsibility for the management, maintenance, development and restoration of the inland navigable waterways of Ireland, principally for recreational purposes.

The Sponsor Departments for the body are the Department of Culture, Arts and Leisure (DCAL) in Northern Ireland and the Department of Community, Rural and Gaeltacht Affairs (DCRGA) in the Republic of Ireland.

As DCAL Minister I have discussed accountability arrangements for the body with the DCRGA Minister and the Chief Executive of Waterways Ireland. We have agreed the Business Plan for 2006 and we have also agreed that the Chief Executive will report to Ministers on the outcome of performance targets for 2005, these include:

(i) To ensure the continued delivery of the highest standard of corporate governance in Waterways Ireland and to ensure that the Internal Audit process is carried out in a proper manner and that the recommendations of these audits are implemented in a timely manner.

(ii) To ensure the completion of an independent review of the practices and policies relating to bullying in Waterways Ireland.

(iii) To deliver a written policy on recruitment and promotions in Waterways Ireland.

(iv) To progress the procurement of suitable new accommodation for staff.

(v) To implement the Marketing Strategy of Waterways Ireland.

The Chief Executive also has specific responsibility for meeting the plans, objectives and targets set out in the current year's Business Plan.

Together with officials in our Departments I will continue to work with the DCRGA Minister and the Waterways Ireland Chief Executive to ensure the body is fully accountable for meeting the terms of its Performance Agreement 2005.