At its meeting of 14 March 2006 the Economic and Financial Affairs Council adopted a key issues paper on economic reform to contribute to the European Council on 23–24 March.

The Council adopted a report to contribute to the Spring European Council on proposals by the European Investment Bank for promoting growth and employment in the EU.

The Council held an exchange of views on progress under the EU's better regulation initiative. It took note of progress made by the Commission and of a note from the presidency on reducing the administrative costs of Community programmes and measures and on experiences at national level.

ECOFIN noted a joint report on social protection and social inclusion, which had been previously adopted by the Employment Council.

The Council adopted opinions on the stability programmes of Germany, Greece, Spain, France, Italy, Ireland, the Netherlands and Portugal and on the convergence programmes of Cyprus, Lithuania, Malta, Poland and the United Kingdom.

The Council adopted a decision, under article 104(9) of the treaty, concerning the German excessive deficit. ECOFIN also agreed Conclusions endorsing progress made by Italy in correcting its excessive deficit.

ECOFIN approved a recommendation, to be forwarded to the European Parliament, on the discharge to be given to the Commission for implementation of the EU's general budget for 2004.

The Council adopted Conclusions regarding the preparation of the EU's General Budget for 2007.

The Economic Secretary to the Treasury, my hon. Friend the Member for Bury, South (Mr. Lewis), represented the UK.

I would like to inform the House about progress with Project Allenby/Connaught. This private finance initiative (PFI) project will allow for the redevelopment of large areas of the estate in Aldershot garrison and garrisons in the Salisbury plain area, and for the provision of a wide range of support services. It is key to the delivery of strategic defence review barrack plot and is the largest estates based PFI project the Ministry of Defence has ever undertaken.

Funding of the project will be through the marketing of two series of bonds on the financial markets, and I am pleased to report that this phase has now started with the issuance of a preliminary prospectus. This process is expected to take two to three weeks and I will make a further statement to the House once financial close, the point at which funding for the project has been secured, and the contract with our preferred bidder, Aspire Defence Ltd. takes effect.

We are announcing today the names of those authorities who have been awarded beacon status in round seven of the scheme. Sixty one applications from 85 authorities have been successful across 10 different themes. Ministers made their decisions following recommendations from the independent Advisory Panel on Beacons. Full details of round seven beacons and information on their excellence can be found in the publication "New Light", copies of which have been placed in the Libraries of the House. Beacon status is awarded for excellence and innovation in service delivery in specific themes and successful authorities receive a share of £3 million to help them work with other authorities to transfer their best practice.

We are also launching round eight of the scheme which invites authorities to apply for beacon status in 10 new themes that reflect the priorities of local and central government and communities across the country.

The application brochure, copies of which have been placed in the Libraries of the House, sets out these themes and instructions on how to apply, including the detailed criteria that will be used to assess applications, and what being a beacon will mean. Following a rigorous assessment process including visits to shortlisted authorities, the Advisory Panel on Beacons will make recommendations to Ministers early next year and beacons will be announced in March 2007.

The beacon scheme provides a remarkably popular and successful way of both celebrating and promoting best practice in local government. It is an important element of the local government modernisation agenda—helping to deliver high quality public services. Beacons work with the Improvement and Development Agency to ensure other authorities across the country can learn from their excellence.

Jim Rose has today published the final report of his review into the teaching of early reading, which I invited him to undertake in June 2005. It builds on the interim report published on 1 December 2005.

I am very grateful to Mr. Rose and his team for providing such an authoritative analysis of these complex issues, and for distilling them into a set of recommendations that enable us to help schools and settings move forward with confidence and clarity. The report sets out clearly the importance of high-quality and enjoyable systematic phonics instruction, on which the great majority of children can make a good start by the age of five. It emphasises the need for a carefully managed programme of training to ensure that we have a school and early years work force that is fully equipped to deliver phonics instruction of the high quality our children deserve. The report states that the most important way to raise standards is through "quality first" teaching, but that schools need to back this up with a systematic approach to interventions to make sure that they can intervene early to prevent children from falling behind.

I am pleased to accept all of the recommendations in the report, and I will ensure that they are implemented through a programme of training for teachers over the next two years, revising the framework for teaching literacy, and the professional standards for teachers and the wider workforce. I also want to ensure that both the foundation stage and key stage 1 curricula make clear that synthetic phonics should be the prime approach used in teaching all children to read, as Mr. Rose has recommended, and I will consult on how to remove any ambiguity in them. I am very pleased that Mr. Rose has agreed to help me assess how well the recommendations he has made are being implemented, by offering his advice on progress from time to time.

Implementing the report's recommendations will form part of the Government's drive to raise standards in literacy yet higher through effective personalised learning for all children. Personalised learning is at the heart of our effort to raise standards in both primary and secondary education, and will be the focus of the "Teaching and Learning 2020" review, led by Christine Gilbert, that was launched last week.

Mr. Rose's report is a timely reminder of how important learning to read is for children's educational, social and emotional development. Great improvements have been made in the teaching of reading since the introduction of the Government's national literacy strategy, and more children than ever before are reaching the expected standard at the end of primary school: 84 per cent. last summer compared to 67 per cent. in 1997. The report says that this happened because the national literacy strategy,

"engaged schools in developing a structured teaching programme of literacy that included not only what phonic content should be taught but also how to teach it".

I am proud of what has been achieved, but we must not stop raising standards. The report provides compelling support for the argument that raising standards and helping more children to read should be the first priority of every primary school, which requires strong leadership from the governors, head teachers and senior managers.

The report shows clearly that learning to read can and should be fun, through a programme of high quality phonics teaching. It points to much evidence of good practice in schools and early years settings, including in the early reading development pilots that I announced alongside Jim Rose's review. It is clear that good teaching means fidelity to a systematic programme of phonics teaching, using multi-sensory approaches to learning and placing this within a rich language curriculum. I am grateful to Mr. Rose for the proposals for a new "simple model of reading" to put these ideas into effect and will ask the primary national strategy to implement this through the forthcoming revised framework for teaching literacy.

Mr. Rose's analysis makes it clear that children should start phonics by the age of five, and that those who are ready to start earlier should do so. He states that the introduction of phonic work is a matter for professional judgment based on structured observations and assessments of children's capabilities. The early reading development pilots are already showing that systematic phonic instruction by the age of five can be done successfully in schools and early years settings exploiting the power of play, story, songs, rhymes and drama. I will ensure that the conclusions of the review are reflected in the new early years foundation stage.

I agree with the report's conclusion that these changes will require a carefully managed programme of training for teachers and the wider school and early years workforce. The Training and Development Agency for Schools (TDA) is already revising the professional standards for teachers, and developing standards for the wider workforce, with supporting guidance and requirements. These will reflect the review's recommendations and set the requirements which training must meet. Mr. Rose has acknowledged the excellent contribution that the primary national strategy has made to improving the teaching of reading and the use of systematic phonics. I will ensure, through the strategy, that teachers' training is enhanced in accordance with the report's recommendations and the new framework for teaching literacy over the next academic year. The quality of initial teacher training (ITT) has also improved significantly, with 80 per cent. of trainees showing good or very good subject knowledge in English. But I, and the TDA, share Mr. Rose's view that ITT providers need to look again at how to equip newly qualified teachers with the skills to teach phonics. The TDA and the primary national strategy will ensure that support is available for ITT providers to help them implement the new standards over the next two years, and I will ask Ofsted to review the quality of training in the teaching of reading that ITT providers offer at the end of that period.

Although by far the majority of children reach the expected standard in reading at the end of primary school, there remains a significant group who do not, and who need extra help to achieve the expected standard. I agree with the report's conclusion that for most children, the most important thing their school can provide them with is "quality first" whole class teaching. Alongside this the report also endorses the primary national strategy's approach to the deployment of a range of "wave 2" and "wave 3" interventions to support those children who find it more difficult to learn to read, or who have more serious learning disabilities. I am pleased that Mr. Rose found that some of the leading edge interventions and associated training currently offered to schools are of a very high quality. In particular he praised the training for teachers offered by programmes such as reading recovery and those provided by the Dyslexia Institute. We will continue to support schools with guidance on how best provision and practice are matched to different types of SEN. As they implement the new teaching frameworks, every school will need to think through their approach to interventions, ensuring that it is founded on quality first teaching, that interventions are carefully managed as part of the wider curriculum, and that the school takes a systematic approach to identifying and meeting the needs of children who are at risk of falling behind before this happens.

The report makes clear that schools and teachers have the capacity to implement its recommendations, and that many are already doing so, supported by materials from the primary national strategy and others. I am confident that with appropriate training and support from the strategy, all schools will be able to teach reading to the standards of the best observed in the course of this review.

I am delighted to announce that, on 1 April 2006, FCO Services will become an Executive Agency of the Foreign and Commonwealth Office. Mr Christopher Moxey, formerly Director of Global Implementation Projects for Financial Network Services, has been appointed as its Chief Executive.

FCO Services will continue to supply the FCO with a broad range of products and services covering IT, communications, technical and protective security, estate and project management, logistics and purchasing, language translation, interpreting and training, VIP visits and organisation of major conferences both in the UK and overseas. FCO Services will employ approximately 1,200 permanent staff, many of whom are specialists, including about 100 staff serving at FCO Missions overseas.

FCO Services' long-term aim is to continue to improve the services it offers and the value for money provided to its principal customer, the FCO, while also broadening its customer base within government and the private sector. FCO Services will continue to improve productivity by streamlining work processes, standardising operating procedures, and improving staff utilisation rates.

FCO Services' key performance targets from its launch will be:

Financial

FCO Services will aim to recover the full cost of its operations including an appropriate allowance for the cost of capital.

Efficiency

FCO Services will continue to improve productivity by streamlining work processes, standardising operating procedures, and improving staff utilisation rates. As a result, the average utilisation rate target will improve by 10 per cent. during 2006–07.

Growth in income from wider markets

A major element of FCO Services' strategy is to increase wider market sales in order to reduce costs to and improve service delivery to government. Its target is to achieve 5 per cent., 5 per cent. and 10 per cent. cumulative growth in its wider market business over the next three years.

Overall quality measure identified from independent customer survey results

FCO Services aims to monitor improvements in service delivery through feedback from customer surveys. It aims to achieve a customer satisfaction rating of either good or excellent for over 70 per cent. of its work.

FCO Services will report to Parliament on its success against these targets through its Annual Report.

Copies of the Framework Document will be placed in the Library of the House. A copy will also be available on the Foreign and Commonwealth Office website: www.fco.gov.uk.

Further to my written statements on 6 February and 3 March, I should like to make a statement to report progress on the review of police force structures.

The review was announced in September 2005 and followed the publication of HMIC's report, Closing the Gap, which revealed stark shortcomings in the current arrangements' ability to meet the policing needs of the early 21st century.

My statements of 6 February and 3 March set out the way forward for Wales and three English regions, the north-east, the north-west and the west midlands. I now have the professional policing and financial assessments to enable me to identify which options will be of the greatest benefit to three more regions, namely the east midlands, south-east and eastern. I am therefore today meeting representatives from the police forces and authorities in these areas. I will be inviting them to engage closely with me to consider taking forward the option for policing that I believe will be of greatest benefit to their communities. I will be inviting the police authorities concerned to respond by 7 April. I shall then make a final decision on how to proceed in these areas.

My vision for the police service in the 21st century is that it should be close, responsive and accountable to the communities it serves, supported by larger forces with the capacity and specialist expertise to protect the public from wider threats such as serious and organised crime. The roll out of neighbourhood policing across the country by April 2008 is, with the creation of strategic forces, the key to achieving that vision.

I shall make a further report to the House about the way forward for forces in the Yorkshire and the Humber and the south-west shortly.

Options proposed at this stage as suitable for progression:

East Midlands

Merger of Derbyshire, Leicestershire, Lincolnshire, Northamptonshire and Nottinghamshire.

South-east

Merger of Surrey and Sussex;

Hampshire, Kent and Thames Valley reconfigured as strategic forces.

East

Merger of Cambridgeshire, Norfolk and Suffolk; Merger of Bedfordshire, Essex and Hertfordshire.

The protection of children is a matter that I and other Ministers in Northern Ireland take extremely seriously and an area in which we have prioritised action. There have been a number of high profile child protection cases and inquiries in Northern Ireland, the Republic of Ireland and Great Britain, all of which have demonstrated the need for system improvement. Ministers are committed to ensuring the highest levels of protection are afforded to children in Northern Ireland. The purpose of this statement is to set out a package of child protection measures and initiatives that we intend to bring forward.

It is not possible to separate protection of children from prevention and support for parents, safe systems, funding and a range of inter-related Government policies. On children's issues this administration has taken a number of bold steps to build on the work of previous Ministers and the Northern Ireland Executive. Recently I appointed Jeff Rooker as the Minister for children and young people to bring greater co-ordination to children's policy and legislation across Government. This builds on the work of previous Ministers in the Northern Ireland Executive which established the Commissioner for Children and Young People to safeguard the rights and best interests of children and young people in Northern Ireland.

We will shortly publish a 10-year strategy for children and young people. This strategy will set out what will be done across Government to improve the lives of children and young people in Northern Ireland. It will contain high level outcomes and indicators against which we will measure progress.

Allied to this are the new funding arrangements we have put in place for improved children's services. The children and young people's funding package will make £61 million of additional funding available over the next two years and is aimed at removing barriers to learning, reducing underachievement and improving the life chances of disadvantaged and marginalised children and young people. The range of measures it includes will help schools in these areas extend the traditional school day and offer a range of activities and services to children and their families before, during and after school hours, wherever possible on the school site.

In addition to all of this we are today announcing a range of measures to strengthen the child protection system.

I would like to emphasise that the protection and safeguarding of children is everyone's business: Ministers, Government Departments, local government, and the statutory, voluntary and community sectors. The public also clearly has an important role to play. There is a need to ensure that collective responsibilities are reflected in our systems and structures and that the protection and safeguarding of children is on everyone's agenda. Therefore we intend to take the following action.

We will strengthen inter-agency co-operation on child protection through the establishment of a new Northern Ireland safeguarding board. This will ensure co-operation on child protection and safeguarding arrangements at the highest level within Government Departments, local government and in the statutory, voluntary and community sectors. It will have an independent chair and clear accountability lines to Ministers. The board will be established in shadow form by the end of this year. We will publish a consultation paper on arrangements and structures underpinning the safeguarding board which will be given statutory basis.

The Department of Health and Social Services and Public Safety will shortly begin piloting a multi-agency, multi-discipliniary assessment framework aimed at ensuring that the needs of vulnerable children and young people are assessed on a consistent basis across Northern Ireland. Allied to this, front line child protection services will be enhanced and reorganised over the next 12 months to ensure a more expert, more consistent and faster response when assessing children in need and responding to child protection concerns.

The Department of Health and Social Services and Public Safety will shortly issue a consultation document on a regional child death review protocol. This will implement one of the key recommendations arising from the Lewis Inquiry and the case management review into the death of David Briggs. These arrangements will apply to the unexpected deaths of all children under 18 years of age and will ensure that all relevant information about a child's death is brought together at an early stage. The protocol will acknowledge that the vast majority of children who die tragically do so for natural or for reasons that can be explained. It will also help ensure that bereaved parents will receive a more co-ordinated response.

New structures are important. However, they also require a change of thinking, practice and culture. We will look at ways in which this can be facilitated. For example, we will consider a new statutory duty to co-operate to improve well being. This would take account of current structural arrangements and those proposed under the reform of public administration. We will also consider how this might be complemented by a statutory duty to make arrangements to safeguard and promote the welfare of children, a duty which school boards of governors now have, but which would be placed on a wide range of agencies and organisations. It is our intention to consult on these new statutory duties in the near future.

I am keen to ensure that safeguarding the welfare of children remains a high priority for all, particularly at a time of considerable administrative reform, and that the risk of children falling between stools is minimised. I intend to commission all Departments, executive agencies and non-departmental public bodies to conduct an audit of existing child protection arrangements to determine how these might be strengthened. I also intend to ask those inspectorates and regulatory bodies with responsibility for children to assist with audit exercises, by offering professional input. As recommended by the Commissioner for Children and Young People, I will ask all Departments and relevant executive agencies and non-Departmental public bodies to appoint a senior official with responsibility for child protection. Nominated officials will receive the necessary training, will be the custodians of child protection policy and will ensure that systems are in place, which provide assurances that policy is being appropriately applied.

Local government clearly plays an important role in the lives of children and young people in Northern Ireland. It is absolutely essential that local government has robust protective arrangements in place. Lord Rooker, in his dual role as Minister for Children and Young People and Minister of the Environment, has undertaken to engage with district councils to promote an acceptable standard of child protection practice.

It is essential, when there are child protection concerns, that there is certainty and confidence about how those concerns are reported. To help create greater certainty, I have asked the Department of Health, Social Services and Public Safety to prepare short guidance on child protection, which will set out what steps need to be taken when there are concerns about the safety of a child. This guidance will be widely distributed through Government and, with the assistance of the four area child protection committees, local government, the statutory, community and voluntary sectors.

I would like to turn to the matter of vetting arrangements for those who work with children. This is a matter which is of great concern to parents and the public. We must ensure our systems are safe, robust and reliable and, most importantly, that they have the confidence of the public. The tragic events in Soham act as a constant reminder.

In Northern Ireland vetting arrangements have recently been strengthened by Government. My colleague, the Under-Secretary of State for Northern Ireland, my hon. Friend the Member for Basildon (Angela E. Smith) announced a wide ranging review of vetting and recruitment for staff in the education sector on 18 January. New measures have now been introduced which will strengthen the pre-employment checking for all new recruits to work in schools or in support of schools and will provide clear guidance to employers and schools. A programme to promote full vetting coverage of all staff already working in or in support of grant aided schools and the vetting of governors will provide reassurance to the public, and parents in particular, about the safety of the environment in which children are educated. Procedures for the engagement of substitute teachers and other temporary staff have been tightened, as have the arrangements for training members of selection panels. We are implementing Part 5 of the Police Act 1997 to ensure the Police Service of Northern Ireland has a statutory basis to disclose relevant non-conviction data on posts that involve work with children. We continue to work with the Commissioner for Children and Young People, who recently conducted a review of vetting arrangements in Northern Ireland. The review endorsed the Government's work in this area. Recommendations arising from the review are currently being implemented and we have provided the Commissioner with an update on progress. We will also provide the Commissioner with a timetable for the completion of outstanding actions and will cooperate fully with his planned follow-up review later this year.

Sir Michael Bichard's Inquiry and subsequent report, following the Soham tragedy, provides a route map for system improvements that have United Kingdom-wide applicability, particularly his recommendation, which will be lead to the creation of a new vetting and barring scheme. New legislation, the Safeguarding Vulnerable Groups Bill, will shortly be introduced in Parliament.

I am confirming today that the new vetting and barring scheme will apply in Northern Ireland and Departments will be working in close collaboration to take forward the implementation of the new legislation. Our aim is to ensure that Northern Ireland keeps pace with developments both in the United Kingdom and the Republic of Ireland.

Parliament enacted the Protection of Children and Vulnerable Adults (POCVA) Order in 2003. This legislation brought Northern Ireland into line with developments in England and Wales with the creation of a new statutory list of those banned from working with children and a new offence of applying to work in certain post whilst disqualified. There is a unique provision in POCVA relating to "accreditation arrangements". The Order allows non-child care organisations such as churches, uniformed and sporting bodies in Northern Ireland to become accredited by the Department of Health, Social Services and Public Safety. Once accredited, those organisations will acquire a statutory duty to carry out vetting and to report staff moved or dismissed for harming children. To become accredited, organisations will have to demonstrate that they meet specific child protection standards, including the need to have in place a child protection policy and a code of conduct for staff.

Accreditation will, in effect, "kite mark" organisations and will assist in improving child protection arrangements in voluntary and community organisations. We will shortly be publishing a consultation paper on the future shape of accreditation arrangements and are aiming to see the situation where all organisations, which work with children, do so within a framework that ensures the highest standards for children.

When the Sexual Offences Act was made by Parliament in 2003 a number of new child sex offences were not extended to Northern Ireland. We intend to ensure that children in this jurisdiction will receive the same protections as those in England and Wales. My colleague, the Minister of State, Northern Ireland Office, the hon. Member for Delyn (Mr. David Hanson) will shortly be announcing more detailed proposals on a review of sexual offences law in Northern Ireland. This will see the creation of new offences and increased tariffs for those who harm children.

The Government will also seek to bring forward legislation to strengthen the interagency arrangements that exist, currently on a procedural basis, for the assessment and risk management of sex offenders. These arrangements, known as MASRAM (multi agency sex offender risk assessment and management), were launched in 2002. While they have worked well, it is our intention to give MASRAM arrangements statutory force and to ensure that risk assessment and management arrangements are extended to violent offenders. As with new child protection arrangements we will seek to underpin the operation of assessment and risk management of sexual and violent offenders with a duty on agencies to co-operate with the police, prison and probation services.

I conclude by saying that the proposed measures I have announced today represent a firm foundation for the protection of children from those intent on causing them harm. I recognise that we can never be complacent and we will seek to continually build on and strengthen and improve arrangements to ensure that all of our children and young people are afforded a high standard of protection, comparable to that afforded to children and young people living in other parts of the United Kingdom.

I am pleased to announce that I have approved the appointment of the right hon. Sir Peter Gibson as Intelligence Services Commissioner under the terms of section 59 of the Regulation of Investigatory Powers Act 2000.

The appointment will commence on 1 April 2006 and will run for three years.

I am pleased to announce that I have approved the appointment of the right hon. Sir Paul Kennedy as Interception of Communications Commissioner under the terms of section 57 of the Regulation of Investigatory Powers Act 2000.

The appointment will commence on 11 April 2006 and will run for three years.

The Government asked the Low Pay Commission last summer to produce their next report on the national minimum wage by the end of February 2006. The Government are today publishing the Commission's 2006 report and I would like to take this opportunity to thank the nine Commissioners for their work on the report and in particular to thank the Chair, Lord Turner of Ecchinswell for his stewardship of the Commission over the last four years.

The main recommendations put forward by the Commission concern the rates of the minimum wage. The Commission have confirmed their earlier recommendations, made in their 2005 report, that the adult rate of the minimum wage should be increased from £5.05 to £5.35 in October 2006, and that the development rate, which covers workers aged 18 to 21, should be increased on the same date from £4.25 to £4.45. The Commission have also recommended that the Government should increase the 16–17 year old rate from £3 to £3.30, again from October 2006.

The Government have accepted these recommendations. The Commission has also made a number of other recommendations. The Government:

accepts the recommendation that salary sacrifice schemes, including those for childcare vouchers, should not count towards the minimum wage;

accepts the recommendation that the Government should update guidance on the accommodation offset. However we will need to consider carefully their recommendation on the need for possible tightening of the legislation;

will consider the recommendation that the Commission be invited to review the apprenticeship exemptions in 2008 when preparing their 2007 remit;

will take into account their recommendation that enforcement should be stepped-up in sectors that employ migrant workers when considering sectors for targeted enforcement action in the future.

Copies of this statement, the report from the Low Pay Commission, the Government's individual response to the Commission's recommendations and our draft regulatory impact assessment have been placed in the Libraries of both Houses.

I am pleased to announce these changes to the permitted work rules. Research has shown that almost a quarter of people trying permitted work have found jobs. We aim to make improvements to the current arrangements to enhance the attractiveness of this provision, with a better structure of information, support and guidance to assist more people on incapacity benefits to progress to full time work. The accompanying changes to the rules will allow all participants an initial 52 week period of permitted work earning up to £81 a week. In addition people with advanced, progressive conditions which severely limit their capacity for work will be able to earn up to £81 beyond the 52 week limit.

The notice requirements for permitted work are removed by these changes to provide a simplification of the rules and people preparing for self-employment through the test trading scheme will no longer be subject to the permitted work earnings limits but will instead be treated as undertaking training.

In addition the Government are also making changes to improve the operation of the linking rules which protect the rate of benefit for people who return to incapacity benefits having become incapable of work after attempting work or training. These changes ensure that people who notify a return to work in advance or are entitled to the same protection as those who provide notification after the event and that people who receive statutory sick pay before incapacity benefit are eligible for protection after six months of incapacity in the same way as incapacity benefit recipients now.