Tuesday 22 February 2005

Northern Ireland has made the following Written Ministerial Statement.

Subject to parliamentary approval the Northern Ireland Office (NIO) will be taking a 2004–05 spring Supplementary Estimate. The effect this will have is to increase the NIO's DEL by £47,954,000 from £1,236,190,000 to £1,284,144,000. Within the DEL change, the impact on resource and capital is as set out in the following table.

intelligent contribution to the debate around parades in Northern Ireland. Although I am not adopting his recommendations, my thinking has been greatly influenced by his work and I am indebted to him for his insightful and intelligent contribution to the debate around parades in Northern Ireland.

I shall be laying an Order in Council to amend the law on parades. The order makes clear that the Parades Commission can make determinations that include supporters and followers. Some doubts have been raised about the commission's remit. The police and NIAC have asked me to put the matter beyond doubt before the summer.

At the same time, I intend to take on board Quigley and NIAC's recommendation that parades and related protests should be considered by the same body. The order will bring protestors within the remit of the Parades Commission. I have been persuaded that the time is right for the Parades Commission to take on this function.

I am also launching a wide-ranging consultation exercise on mediation. I think there is a great deal of potential for mediation to help defuse the tensions surrounding parades and I firmly believe that agreed outcomes are the best way to resolve disputes. However, there has not been agreement about how best to deliver mediation. I have today published a consultation paper on these issues. The consultation will close on 23 May 2005.

The NIAC's report contained other recommendations about how the Parades Commission could make the way it carries out its work more effective. I am aware that the commission is examining these and I look forward to hearing their response.

The 27th report of the Review Body on Senior Salaries, which makes recommendations about the pay of the Senior Civil Service, senior military personnel and the judiciary, is being published today. Copies are available in the Vote Office and the Libraries of the House. The Government are grateful to the chairman and members of the review body for their work.

The main recommendations of the review body for the Senior Civil Service are:

An uplift from 1 April 2005 of 2.5 per cent to the pay range minima and target rates for each of the Senior Civil Service pay bands below Permanent Secretary and a 3 per cent uplift to the pay range ceilings;

Individual base pay awards to range from 0 to 9 per cent depending on contribution with an average award of 4.2 per cent;

The bonus pot to increase by 1 per cent to 5 per cent of pay bill and that the minimum non-consolidated bonus payment to remain at £2,500;

The Permanent Secretaries' new range is to be £130,350 to £264,250;

Further information should be collected on the reasons why senior civil servants leave the service.

The main recommendation of the review body for the senior military is:

An increase from 1 April 2005 of 2.5 per cent in the incremental pay scales for senior military officers.

The main recommendation of the review body for the judiciary is:

An increase from 1 April 2005 of 3 per cent in judicial salaries.

The Government accept these recommendations. Their cost will be met within existing departmental expenditure limits.

Pay increases for Members of Parliament and Ministers are linked automatically to the movement of the mid point of the pay bands for the Senior Civil Service. Their salaries will therefore increase by 2.8 per cent from 1 April 2005.

^* Depreciation. which forms part of the resource DEL, is excluded from the total DEL. since capital DEL includes capital spending and to include depreciation of those assets would lead to double counting.

The change in the resource element of the DEL arises from:

Voted

A partial draw down of £10,000,000 of administration costs end year flexibility, as set out in the Public Expenditure 2003–04 Provisional Outturn White Paper (Cm 6293), for the administration of development programmes, humanitarian assistance, systems to improve efficiency, and the administration costs of the new Post-Conflict Reconstruction Unit.

A full draw down of £153,092,000 of other resource end year flexibility, as set out in the Public Expenditure 2003–04 Provisional Outturn White Paper (Cm 6293), for development programmes in sub-Saharan Africa and Asia and for programmes contributing to multiple objectives, and for the programme costs of the new Post-Conflict Reconstruction Unit.

A claim on the reserve of £25,000,000 in respect of humanitarian assistance following the earthquake and tsunami in south-east Asia.

A transfer of £500,000 from the Department for Environment, Food, and Rural Affairs for development projects in Russia and the Ukraine.

A transfer of £24,000 of administration costs from the Cabinet Office relating to DfID's use of the Parliamentary Counsel's Office.

A transfer of £6,500,000 from the Foreign and Commonwealth Office for planned programme activity on global conflict prevention.

A reduction of £1,038,000 in respect of a transfer to the Foreign and Commonwealth Office for planned programme activity on conflict prevention in Africa.

A reduction of £16,000,000 relating to a transfer to the capital DEL of subscription costs for the European Bank for Reconstruction and Development.

A reduction of £35,000,000 relating to the reclassification of the costs of DfID's investment in CDC Group plc from the DEL to annually managed expenditure.

Non-voted

A reduction of £7,000,000 relating to transfers of Africa conflict prevention unallocated provision to the Ministry of Defence (£2,920,000) and the Foreign and Commonwealth Office (£4,080,000).

The change in the capital element of the DEL arises from:

Voted

A draw down of £6,528,000 of capital end-year flexibility, including £6,064,000 vired from other resource, as set out in the Public Expenditure 2003–04 Provisional Outturn White Paper (Cm 6293) for investment in improvements to management information and financial systems, acquisition of equity in Actis Capital 11p, and the initial capital costs of the new Post-Conflict Reconstruction Unit.

An increase of £16,000,000 relating to a transfer from the resource DEL of subscription costs for the European Bank for Reconstruction and Development.

The change in the adjustment for depreciation arises from forecasts being lower, by £4,500,000, than the total included in the main estimate.

^* Depreciation, which forms part of resource DEL, is excluded from the total DEL since capital DEL includes capital spending and to include depreciation of those assets would lead to double counting.

The change in the resource element of the DEL arises from:

RfR1

RfR2

The change in the capital element of the DEL arises from:

We are grateful to Lord Carlile for his work and I am sure that this view will be widely shared.

We are pleased to note that he is again satisfied that certifications have been made only in appropriate cases. He has also made a number of other helpful recommendations which will provide a useful contribution to the debates on Part 4 and the proposed alternatives.

An increase of 6 per cent to the maxima and minima of the pay scales for senior operational managers;

No change to local pay allowance rates from 1 April 2005. These remain at:

£4,000 per annum for the "top" rate (mainly London)

£3,100 per annum for the "high" rate

£2,600 per annum for the "middle" rate

£1,100 per annum for the "lower" rate

Required hours addition for operational managers to be increased by the basic award figure (2.5 per cent);

Healthcare specialist allowance increased by 2.5 per cent but all others frozen at current rates; and

All other allowances (tornado, bedwatch, on call, dirty protest, etc) increased by 2.5 per cent except for the care and maintenance of dogs allowance to be increased by 1 per cent.

^* Depreciation, which forms part of resource DEL, is excluded from the total DEL since capital DEL includes capital spending and to include depreciation of those assets would lead to double counting.

The change in the resource element of the DEL arises from:

Transfers totalling £383,000 from the Northern Ireland Office (£101,000) and from the Northern Ireland departments (£282,000) as their share of the national meteorological programme and Weather Warning Service costs under a pan-government agreement;

A transfer in from the Cabinet Office of £102,000 in respect of future funding arrangements with the Office of the Parliamentary Counsel;

A transfer out from the MoD to the Department for Constitutional Affairs of £62,000 in respect of legal services provided to the MoD;

An increase in resource appropriations in aid of £185,000 from receipt of a special dividend from the Hydrographic Office;

An increase in resource appropriations in aid of £4,600,000 relating to revenue associated with government training provided under the Indian Air Force BAe Hawk contract;

An increase in resource appropriations in aid of £1,445,000 relating to revenue received from the Learning and Skills Council;

An increase in RfR2 resource of £805,426,000 to reflect the costs of peacekeeping in Iraq and Afghanistan;

A transfer in of £88,978,000 resource from the Foreign and Commonwealth Office to the MoD in respect of the Global Conflict Prevention Pool for Balkans programme costs;

A transfer in of £2,200,000 resource from the Foreign and Commonwealth Office to the MoD in respect of the Global Conflict Prevention Pool for rest of the World programme costs;

A transfer in of £2,920,000 resource from the Department for International Development to the MoD in respect of the Global Conflict Prevention Pool for sub-Saharan Africa programme costs;

An increase in resource (non-budget) grants in aid of £241,000 to the National Army Museum for refurbishment costs.

The change in the capital element of the DEL arises from:

The take-up of remaining end-year flexibility from 2003–04 of £6,000,000 capital to cover capital spending;

A transfer out from the MoD to the Home Office of £5,500,000 as reimbursement for an advance made by the Home Office for the former RAF Newton in 2003–04, the site no longer being required by the Home Office;

An increase in capital appropriations in aid of £54,301,000 arising from the early redemption of preference shares held by the MoD in QinetiQ;

An increase in RfR2 capital DEL of £222, 129,000 to reflect the costs of peacekeeping in Iraq and Afghanistan;

A transfer in of £1,022,000 capital DEL from the Foreign and Commonwealth Office to the MoD in respect of the Global Conflict Prevention Pool for Balkans programme costs.

The changes to CDEL and RDEL will lead to an increased net cash requirement of £ 1,109,613,000.

^* Depreciation, which forms part of resource DEL, is excluded from the total DEL, in the table above. since capital DEL includes capital spending and to include depreciation of those assets would lead to double counting.

Within the administration cost limits changes, the impact is set out in the following table:

Resource DEL

The change in the resource element of the DEL of £423,701,000 arises from a £ 101,530,000 increase in the voted element of the resource DEL and an increase of £322,171,000 in the non-voted element of the resource DEL mainly to the department's non-departmental public bodies.

Voted Resource DEL

The £101,530,000 increase in the voted element of the resource DEL arises from a £171,074,000 increase in The additional cost to the defence budget will be £216 million. This will be met within existing departmental expenditure limits.

The AFPRB's recommendations are to be accepted in full, with implementation effective from 1 April 2005.

Administration Cost Limits

The £16,424,000 increase in the administration cost limit arises from the take up of £17,274,000 end year flexibility to fund the departmental restructuring programme; transfer from the Department of Health £418,000 for children's services and protection of vulnerable adults; the transfer from the Cabinet Office £309,000 for the funding of the Parliamentary Council Office; the net transfer out to the Office for the Deputy Prime Minister £1,577,000 for Government Office Accommodation and Regional Co-ordination Unit costs and local public service agreements.

Non-voted Resource DEL

The £322,171,000 increase in non-voted resource DEL arises from the movement of £295,356,000 from voted resource DEL; the take up of £12,467,000 end year flexibility; the movement of £5,942,000 from departmental unallocated provision to voted support for children and families; the transfer from the Department for Work and Pensions £5,750,000 for Adult Learning Inspectorate, inspections of Jobcentre Plus; the transfer to the Department of Health £2,845,000 for teachers' pension costs and clinical scientists; the net reclassification of capital to capital grants within resource of £ 17,385,000 from school credit approvals to support for scientific research and innovation.

Capital DEL

The change in the capital element of the DEL of £34,800,000 arises from a £276, 874,000 increase in the voted element of capital DEL and a decrease of £242,074,000 in the non-voted element of the capital DEL.

Voted Capital DEL

The £276,874,000 increase to the voted element of capital DEL arises from a £ 253,689,000 increase in RfR1; from the movement of £247,689,000 from non-voted capital DEL; the take up of £10,000,000 end year flexibility; the reclassification of capital to capital grants within resource of £4,000,000 to support teachers' television from other capital programmes.

A £23,185,000 increase in RfR2 from the take up of end year flexibility.

Non-voted capital DEL

The £242,074,000 decrease to the non-voted element of capital DEL arises from the movement of £247,689,000 from non-voted to voted capital DEL; the take up of £27,000,000 end year flexibility; the net reclassification of £17,385,000 from schools credit approvals to support for scientific research and innovation; £4,000,000 from schools credit approvals to support teachers' television capital to voted capital DEL.

Introduction

The 14th report of the School Teachers' Review Body is being published today. It covers a range of matters referred to the review body in July 2004. Copies are available in the Vote Office and in the Library of the House of Lords and at www.teachernet.gov.uk

In making its recommendations, the review body was required to have regard to the matters set out in the remit letter of 22 July 2004. The fourteenth STRB report deals with some very important and technical issues affecting teachers' pay and I am most grateful to it for the careful and detailed attention it has given to these complex matters. The STRB recommendations are set out below (in italics) followed in each case by my response.

I am seeking consultation comments on the report and my response by 18 March 2005.

Payments for additional responsibilities for teaching and learning

The STRB has recommended the following:

We recommend that the following criterion and factors for awarding teaching and learning responsibility (TLR) payments be adopted:

The criterion is as follows:

A teaching and learning responsibility payment may only be made to a teacher who is accountable for a significant, specified responsibility focused on teaching and learning, that is not required of all classroom teachers, clearly defined in the job description of the teaching and learning responsibility payment holder, and requiring teachers' professional skills and judgement. The TLR payment should be for a sustained responsibility in the context of the school's staffing structure needed to ensure continued delivery of high-quality teaching and learning.

The factors are as follows:Impact on educational progress beyond the teacher's assigned pupils;

Leading, developing and enhancing the teaching practice of others;

Having accountability for leading, managing and developing a subject or curriculum area or pupil development across the curriculum; and (for the upper value TLR)

Having line management responsibility for a significant number of people.

We recommend that there should be guidance on the review of staffing structures and implementation and that it should include advice to assist schools/LEAs in deciding: how to address their head of year and "pastoral" responsibilities in the new system; what type of TLR should be payable for specific line management posts; and the application of TLRs to unattached teachers.

We recommend that:

From 1 September 2005, the value of TLR2 be a minimum of £2,250 with a maximum of £5,500, and the value of TLR1 be a Minimum of £6,500 with a maximum of £11,000;

Teachers be paid a spot rate on the appropriate TLR range for specific posts as decided and published by the school in its pay policy;

Differentials between payments within each range within specific schools should be significant—a minimum of £1,500; and

The guidance on the review of staffing structures and implementation contains advice to support schools in deciding what level of spot rate payment to award TLR posts.

We recommend that the circumstances in which the payment of TLRs should cease, should be as follows:

Payments should not be portable front one school to another;

Payments should be withdrawn where a teacher declined to perform the responsibilities attached to the payment; or lost the responsibilities as a result of poor performance (as a result of capability procedures); and

Payments could also be withdrawn when responsibilities were restructured, subject to transitional/safeguarding arrangements applied nationally.

We recommend that all the main parties be included, without pre-conditions, in formulating guidance for schools on the review of staffing structures and implementation.

Subject to the timely provision of guidance and budget information to schools, we recommend specifically that:

Schools be required to review their staffing structure in consultation with staff and their representatives, and to publish their revised structure, with a timetable for implementation (as an annex to the pay policy of the school), by 31 December 2005;

TLR payments be available to be awarded from 1 September 2005 and new awards of management allowances cease front 31 December 2005;

The transition period for each school starts from the date of publication of its staffing structure, lasts for three years and ends by 31 December 2008; and

Teachers who would otherwise incur a reduction in salary as a result of the implementation of changes in responsibilities in the revised staffing structure of the school, have their salary cash safeguarded for the duration of the three year period of transition, the safeguarding to cease in the following circumstances.

The teacher accepts a new level of payment;

The teacher moves post;

The teacher's salary (through annual increment, movement to a higher salary scale or receipt of a higher level of TLR payment) excluding the management allowance, is higher than the total of his/her current salary including the management allowance; or

The teacher unreasonably refuses to undertake responsibilities required of a new post offered to him/her.

Our recommendations should be applied to Wales in accordance with constitutional responsibilities.

I welcome these recommendations. I believe that they represent a genuinely constructive opportunity for schools to organise their teaching and learning responsibilities in a new way, focusing on the professionalism of teachers and enabling reward to be given for significant tasks which have an impact on the educational progress of pupils and the professional practice of other teachers. I am particularly glad to recognise the flexibilities, within an overall framework, recommended within the new teaching and learning responsibility payments system, and the emphasis on openness through the pay policy, which would give schools the freedom to establish the arrangements which suit their own needs, while openly justifying their decisions.

However, I am anxious that all schools should have sufficient time to prepare and consider what staffing structure is most appropriate for them before implementation of these pay changes. To promote clarity and consistency I propose that all schools' transition periods should begin on I January 2006, at which point TLR payments should be available and management allowances would cease to be awarded.

I also welcome the focus on restructuring, which will be key to enabling the transition from the existing management allowance system to be managed. Action on school restructuring in Wales will, of course. be for the Welsh Assembly to determine.

I agree that guidance to schools on restructuring, transition and the new TLR payments system will be very important. However, I believe that the guidance should not be restrictive or suggest different levels of TLR payment for different tasks or responsibilities. I believe that the detailed criteria and factors for the payment of TLRs should be the focus for schools' (and in the case of unattached teachers, LEAs') decisions, and that this should be sufficient to enable them to take appropriate decisions within the context of their own individual published structures. All parties will, as usual, be consulted on the development of statutory guidance.

I agree that the arrangements for the award of TLRs also require provisions for their future cessation and the recommendations of the STRB are sensible and helpful.

I welcome the proposed arrangements for transition from management allowances to TLRs, and the proposed provisions giving protections for teachers who would otherwise incur a reduction in salary, which are fair and reasonable.

Safeguarding arrangements for pay

We recommend that:

The framework for the operation of safeguarding that we describe below be adopted to apply to both current and future safeguarding arrangements:

Framework for the operation of safeguarding

A. Overarching principles

B. Cases where safeguarding will operate

Subject to the basic principles in A above and the provisions in C below, safeguarding will apply in circumstances where:

C. Cases where safeguarding will not apply, or will cease to apply

Safeguarding will not apply, or will cease to apply, where any of the following circumstances occur:

We also recommend:

That the framework be the vehicle within which the Secretary of State should deal with the safeguarding consequentials of future changes to the pay system; and

That the three-year time-limiting for safeguarding of current arrangements be applied to operate concurrently with the three-year period for the transitional arrangements to introduce revised school structures.

The issue of safeguarding has been flagged up by the STRB on successive occasions in the past, and it has previously requested evidence on it. I very much welcome the careful and detailed consideration which the STRB has now been able to give to this matter, in the light of evidence received. The proposed safeguarding provisions set out are reasonable and balanced and I support them.

I recognise the difficulties and sensitivities which exist in the context of bringing change to this area of the teachers' pay system, and the framework proposed will enable existing and future safeguarding to be handled on a fair, uniform and predictable basis. Moreover, the framework as proposed will ensure that teachers are protected from sudden drops in total salary which would otherwise occur through no fault of their own, for a suitable period. I also welcome the recommendation of the STRB that these detailed matters are handled in future using my subsidiary powers, within the context of the framework established, which seems to be entirely appropriate.

Pay arrangements for secondary mathematics and science advanced skills teachers

We recommend that:

In line with its policy of expanding the AST grade, the department looks at ways of getting more mathematics and science teachers with AST accreditation, but not in an AST post, into such posts, including, where appropriate, the creation of additional AST posts in these subjects;

This message be reinforced in the guidance to schools, primary and secondary, on the review of their structures which will take place as part of the transition to the new TLR system; and

Schools be encouraged to make greater use af the flexibilities they already have to set AST pay for these two subjects;

Paragraph 27.3 of the STPCD be amended so that the factors to which the relevant body has to have regard in setting the range for an AST's pay expressly include his or her being a teacher of a shortage subject or a subject where there is a particular need to raise the quality of teaching and learning.

The remit to the STRB invited it to consider the salary levels of secondary mathematics and science advanced skills teachers. The evidence backed this up by proposing that the cap on the pay of these teachers be removed, and to set a minimum level of salary of £40,000. This was proposed as part of the Government's approach to overcoming the national under-achievements in these two subjects and their impact on the economy, as identified in the reports of Professor Adrian Smith and Sir Gareth Roberts.

The STRB has reflected carefully on this but has concluded that at present it will not make recommendations along the lines proposed. It has indicated that this could be considered further in a future remit, in the wider context of teachers' remuneration as a whole. I continue to see benefits in making changes to the pay arrangements for these teachers in these important subject areas. I therefore am content to return to this matter in my next remit.

It has also made some specific pay-related proposals which I propose to accept. I will reflect further on the STRB's proposals relating to getting more mathematics and science teachers with an AST accreditation, but not currently in an AST post, into such posts.

Excellent Teacher Scheme

We recommend that the scheme should be introduced from September 2006, distinct from the main and upper pay scales. The scheme should be post-based and should be for exemplary classroom teachers with an established record of sustained high-quality teaching and of supporting colleagues within the school. Like ASTs they should be unable to hold TLRs, but unlike ASTs they should have no outreach function. They should:

• Continue to maintain high standards;
• Demonstrate a commitment to develop themselves professionally;
• Provide an exemplary role model for staff through their professional expertise; and
• Have a distinctive role in achieving improvements in teaching across the school.

In addition to their normal classroom duties the specific expectations of an Excellent Teacher should be:

• Induction of newly qualified teachers;
• Professional mentoring of other teachers;
• Sharing good practice through demonstration lessons;
• Helping teachers to develop their expertise in planning, preparation and assessment;
• Helping other teachers to evaluate the impact of their teaching on pupils;
• Undertaking classroom observations to assist and support the performance management process; and
• Helping teachers improve their teaching practice including those on capability procedures.

However, we also recommend the following;

The expectations of the role set out above should reflect more strongly an emphasis on general pedagogic experience and on coaching and mentoring, and reduce the apparent overlap with the AST grade and with TLR payments;

That teachers should be able to seek accreditation regardless of whether or not an ETS post is envisaged for their school and that the title of Excellent Teacher (though not the associated salary) should be granted once accreditation has been achieved; and

Serious consideration should be given to a separate name for the post associated with the scheme, and to our suggestion of "Principal Teacher".

We recommend that the criteria for accessing the scheme should be as follows:

The scheme should be based on written application. To qualify, the teacher should have to have been paid on U3 for at least two years, be willing to meet the expectations of an Excellent Teacher, and have their application endorsed by their head teacher. They would also need to provide evidence of work during their period on the upper pay scale that had addressed the identified needs of a particular group or groups of pupils; and successfully pass a procedure of external assessment against national standards;

A separate national (England and Wales) standard should be developed for the scheme, building on a common core of excellence with the AST standard, to take account of the distinctive profile and features of the scheme; subject to discussion with the Welsh Assembly Government, this standard might be based on the three themes of new professionalism in teaching¹ and the requirements of an Excellent Teacher should reflect more closely the three themes of new professionalism in teaching, again subject to discussion with the Welsh Assembly Government;

The admission criteria for the scheme should include demonstration of a sustained record of continuing professional development throughout the teacher's career;

The arrangements should be clarified for movement between the scheme, ASTs and the leadership group; and

The scheme be open to any teacher who meets the criteria and has their head teacher's support, not just those in schools which have or envisage a post under the scheme.

The salary for the scheme should be a spot salary. We recommend the following baseline rates for the scheme, as at 1 September 2005: £35,000 in England and Wales, £35,988 in the fringe, £37,832 in outer London, and £41,745 in inner London. We do not think it appropriate at this stage to set a salary for September 2006.

We recommend that the basic structure of this reformed career system remain in its present form the medium term.

¹ "New Professionalism" as set out in the department's five year strategy, sets out the proposal that career progression and financial rewards should be for those who are:

making the biggest contributions to improving pupil attainment;

continually developing their own expertise; and helping to develop expertise in other teachers.

We recommend a targeted communications exercise to ensure teachers are aware of the reformed career structure and the implications for them.

We recommend that the department monitors actively the bedding down of the ETS and how the ETS and AST schemes are used so the review body can revisit it in three years after the scheme's introduction.

I welcome the proposed creation of the post-based Excellent Teacher scheme, and believe that the arrangements set out give a firm basis for progress in its introduction. There are, however, some specific matters which require further consideration and on which I would invite particular comment.

I note the recommendation that the expectations of the role should be revised and I am happy to consider this further in the light of consultation responses and further discussions. The same applies to the proposal to develop a separate ETS standard taking account of new professionalism. It is certainly our intention to see the ETS—as well as standards for other teachers—in this light.

I believe that the proposal to enable widespread assessment for ETS, regardless of whether a post is available, should be a matter for further consideration and discussion, taking account of the necessity for effective implementation of the scheme. I do, however, have greater concerns about the STRB's concept of naming a teacher as an Excellent Teacher if they have passed assessment, if they are not in a post, while giving a new and separate name to those in post, and suspect that this may cause undue confusion. I would welcome views on this.

I note the initial salary outlines recommended, which provide a very helpful steer for the future. I shall refer this matter to the STRB in my next remit, in the context of a request for general consideration of salaries from September 2006.

Local approaches to pay and other matters

On localised approaches to pay we see no difficulty in postponing further consideration of this issue.

I accept this and, as indicated in evidence, will return to the matter in the context of my next remit.

We recommend that the National Employers' Organisation publishes the result of the LEA survey on unattached teachers and any additional steps to be taken to deal with the concerns about unattached teachers by the end of March 2005 so that we can consider progress and make any further recommendations we consider appropriate.

This is a helpful steer, which I shall ask NEOST to consider. I shall also seek to ensure that the framework and guidance on the implementation of the pay changes recommended here take as full account as possible of the position of unattached teachers.

We recommend that all the main parties be included in the process (on linking teaching and learning reviews to continuing professional development and career progression) as outlined in the remit letter of 22 July 2004.

I remain committed to the process with partners referred to in the 22 July remit. All parties will have the opportunity to respond to statutory consultation.

Next steps

I am now initiating consultation on these recommendations and my proposed response with the employers' organisation, the teacher unions and other interested parties.

Concurrently with this, I am consulting, as required under Section 126 of the Education Act 2002, on a pay order for introduction on 1 April 2005, the main purpose of which is to reform the safeguarded position of the small number of teachers on former points 4 and 5 of the upper pay scale, in line with the safeguarding principles set out above.

^* Depreciation, which forms part of resource DEL, is excluded from the total DEL since capital DEL includes capital spending and to include depreciation of those assets would lead to double counting.

The change in the resource element of the DEL arises from increases in gross administration costs, mainly, £61,544,000 met from the central reserve to enable the GOGGS East building to be brought on to the department's balance sheet. A further increase of £ 29,000,000 and £3,400,000, which is also being met from the central reserve for continued work on Child Trust Fund and for Team Bonus payments, respectively. HM Treasury is to transfer £99,000, for the cost of capital in respect of the GOGGS East building. Cabinet Office will be transferring £1,790,000, due to the change in funding arrangements for the Parliamentary Counsel Office; and, Department for Work and Pensions is transferring £1,661,000, for child benefit work on the Payment Modernisation Programme and the Child Benefit Cheque Payment Service. These transfers are partially offset by a transfer of £2,964,000 to HM Treasury to meet the costs of the transfer of tax policy work for the first half of the financial year.

The change in the capital element of the DEL arises from an increase of £97,477,000 from the central reserve to enable the GOGGS East building to be brought onto the department's balance sheet. This increase is partially offset by an accounting adjustment of £ 58,364,000, in relation to the assets transferred to CapGemini, the department's new IT service provider.

^* Depreciation, which forms part of resource DEL, is excluded from the total DEL since capital DEL includes capital spending and to include depreciation of those assets would lead to double counting.

The change in the capital element of the DEL arises from the partial draw down of capital end-year flexibility (EYF) of £130,000. This is required to meet the costs arising from the replacement of pension's valuation software and the implementation of a document management system.

^* Depreciation, which forms part of resource DEL, is excluded from the total DEL since capital DEL includes capital spending and to include depreciation of those assets would lead to double counting.

The change in the resource element of the DEL arises from:

An increase in total Treasury administrative costs of £7,883,000 resulting from:

The Treasury's offices at 1 Horse Guards Road being held at a valuation based on commercial property market rents. There are indications of a fall in market rents in the Victoria/ Whitehall area during 2004–05, which would give rise to an accounting charge. To cover the estimated charge, £9,000,000 will be drawn from a fund of end-year flexibility (EYF) ring-fenced for the purpose;

The Treasury's Spending Review 2002 settlement set in-year administration funding at a level lower than forecast spending, anticipating that the shortfall would be met from a draw down of EYF. The projected shortfall in 2004–05 is up to £3,000,000, which will be drawn from EYF accordingly;

The funding consequences of the transfer of tax policy functions from the Inland Revenue and HM Customs and Excise to the Treasury. These were partly dealt with in the winter Supplementary Estimate, but a further £4,235,000 of funding in relation to the first part of 2004–05 remains to be transferred to the Treasury in order properly to account for the transfer, in accordance with the Resource Accounting Manual;

A transfer of £184,000 from HM Treasury to the Inland Revenue and HM Customs and Excise for the cost of capital on GOGGS East land following its transfer to said departments;

The completion of the refurbishment of 1 Parliament Street (the east end of the building formerly known as Government Offices Great George Street), required the Treasury to transfer assets relating to 1 Parliament Street from its books to the books of the Inland Revenue and HM Customs and Excise. There is an accounting profit of £8,168,000 to the Treasury on the disposal;

An increase in the Office of Government Commerce (OGC) appropriations in aid (A in A) of £725,000 and a matching £725,000 increase in expenditure for the engagement of consultants on behalf of other bodies;

An increase in A in A programme of £300,000 and a matching £300,000 increase in spend for the Office of Paymaster General to bring the estimate in line with forecasts;

An increase in A in A programme of £240,000 and a matching £240,000 increase in spend for Pool Re renegotiation costs;

A DEL neutral switch of £1,390,000 programme from non-voted to voted for Request for Resources 3 from the OGC's Efficiency Challenge Fund allocation; and

A decrease in A in A programme of £875,000 and a matching £875,000 decrease in spend due to the transfer of the Whitehall systems¹ from OGC to OGCbuying.solutions.

The change in the capital element of the DEL arises from:

A partial draw-down of capital EYF of £22,433,000 and the subsequent transfer of that funding to Inland Revenue and HM Customs and Excise for the transfer of the 1 Parliament Street assets referred to above. These changes net to zero; a partial draw down of EYF of £1,500,000 by HM Treasury for the purchase of information systems software and hardware;

An increase in non-operating A in A of £11,550,000 and a loan of £8,550,000 both related to the transfer of the Whitehall systems from OGC to OGCbuying.solutions.

¹ The Whitehall systems are backup heating and electricity power systems, previously operated and accounted for by OGC. Responsibility for them is being transferred to OGCbuying.solutions. OGC is surrendering its funding for cost of capital charges. OGCbuying.solutions is paying £11.55 million for the assets, £3 million in cash and £8.55 million via a loan from OGC.

^* Depreciation, which forms part of resource DEL, is excluded from the total DEL since capital DEL includes capital spending and to include depreciation of those assets would lead to double counting.

The change in the resource element of the DEL arises from:

Administration costs increases of £53,168,000 from the central reserve to enable the GOGGS East building to be brought onto the department's balance sheet; a transfer of £85,000 from HM Treasury for the cost of capital charges in respect of GOGGS; and a transfer of £36,000 from the Office for National Statistics in respect of data development work. These are partially offset by a transfer of £ 1,271,000 to HM Treasury to meet the costs of the transfer of tax policy work for the first half of the financial year and virement from administration costs to programme expenditure of £18,000,000; and

Programme expenditure changes relating to virement from administration costs to programme expenditure of £18,000,000; and a transfer to the Home Office to meet additional costs of anti-terrorism work of £600,000.

The change in the capital element of the DEL arises from increases of £84,210,000 from the central reserve to enable the GOGGS East building to be brought onto the department's balance sheet; and £70,000 from the Office for National Statistics in respect of data development work.

^* Depreciation which forms part of resource DEL, is excluded from the total DEL since capital DEL includes capital spending and to include depreciation of those assets would lead to double counting.

The change in the resource element of the DEL arises from end-year flexibility being drawn down to support expenditure on major project commitments. Such projects include the work being carried out for compliance with evidence of identity requirements, Internet development work and also for some of the savings accounts implementation. There have also been some planned increases in the level of direct marketing expenditure that is being carried out to ensure that net financing targets are being met.

There is no change in the capital element of DEL.

^* Depreciation. which forms part of resource DEL, is excluded from the total DEL since capital DEL includes capital spending and to include depreciation of those assets would lead to double counting.

The change in the resource element of the DEL arises from the draw-down of £4,679,000 administration costs end-year flexibility as set out in the Public Expenditure Outturn White Paper (Cm 6293). This is partially offset by a transfer of £207,000 in total to other government departments in relation to work to develop the Neighbourhood Statistics programme. The transfers comprise £171,000 to the Home Office and £36,000 to HM Customs and Excise.

The change in the capital element of the DEL arises from the draw-down of £8,229,000 capital end-year flexibility as set out in the Public Expenditure Outturn White Paper (Cm 6293). This is partly off-set by a transfer of £70,000 to HM Customs and Excise in relation to work to develop the Neighbourhood Statistics programme.

The administration costs limit will be increased by £4,472,000 from £152,990,000 to 157,462,000.

^* Depreciation, which forms part of resource DEL, is excluded from the total DEL since capital DEL includes capital spending and to include depreciation of those assets would lead to double counting.

The change in the resource element of the DEL arises from; (i) utilisation of £2,000,000 from the unused balance of the department's end-year flexibility entitlement to meet the increased requirement for resources particularly in the regions and on inward investment.

Expenditure Limits

Subject to parliamentary approval of the necessary Supplementary Estimate, the Department of Trade and Industry's DEL will be increased by £204,689,000 from £5,493,803,000 to £5,698,492,000 and the administration costs limit will be reduced by £39,392,000 from £436,805,000 to £397,413,000.

Within the DEL change, the impact on resources and capital is as set out in the following table:

^* Depreciation, which forms part of resource DEL is excluded from the total DEL since capital DEL includes capital spending and to include depreciation of those assets would lead to double counting.

The change in the resource element of the DEL arises from:

RfR1

Other Non-voted

There is also take-up of end-year flexibility by regional development agencies of £6,500,000 to provide for bad debts related to broadband aggregation bodies and £10,000,000 for write-downs of stock related to regeneration properties, an increase of £42,000 to reflect a transfer from the Department for Environment, Food and Rural Affairs for the Sustainable Consumption Round Table, and surrender of £30,000,000 relating to the non-fossil fuel obligation which is no longer required.

RfR2

Also within the change to resource DEL, the changes to the administration costs limit are (RfR1):

Office of the Deputy Prime Minister Main Estimate

(i) utilisation of £90,000,000 of the department's 2005–06 departmental expenditure limit for European Regional Development Fund expenditure borne of the Office of the Deputy Prime Minister's estimate under the procedures for anticipating future years' expenditure that apply to this budget.

The change in the capital element of the DEL arises from:

RfR1

RfR2

(i) reclassification of £1,000,000 from voted expenditure to non-voted expenditure, to reflect co-funding from the Department for Environment, Food and Rural Affairs of the Biotechnology and Biological Sciences Research Council.

The Parliamentary Under-Secretary of State, Department of Health (Lord Warner): My right honourable friend the Secretary of State for Health has made the following Written Ministerial Statement.

Subject to the necessary Supplementary Estimate, the Department of Health's element of the departmental expenditure limit (DEL) will be increased by £14,855,000 from £72,298,859,000 to £72,313,714,000 and the administration cost limit will be increased by £23,218,000 from £257,970,000 to £281,188,000. The Food Standards Agency DEL remains unchanged at £152,478,000. The overall DEL including the Food Standards Agency will increase by £14,855,000 from £72,451,337 to £72,466,192. The impact on resource and capital are set out in the following table.

^* Depreciation, which forms part of resource DEL, is excluded from the total DEL since the capital DEL includes capital spending and to include depreciation of those assets would lead to double counting.

The change in the DEL arises from net transfers from the Department for Education and Skills of £1,394,000 (£418,000 administration costs) for pension costs, clinical scientists, conferences and the Care Standards Tribunal, offset by funding for children's trusts, children's service teams, costs of the vulnerable adults scheme and a contribution towards the funding of the recommendations of the Richard inquiry. A transfer from the Home Office off £14,691,000 for the pooled drug treatment budget and funding for prison healthcare. A transfer from DHSS Northern Ireland of £523,000 (£10,000 administration costs) for out of area treatments and a contribution to the national screening committee. A transfer to the National Assembly for Wales of £2,229,000 mainly for cross-border flows and high security psychiatric services. A transfer from the Cabinet Office of £546,000 (administration costs) for funding services provided by the parliamentary counsel. A net transfer to the Office of the Deputy Prime Minister of £6,000 (£80,000 increase in administration costs) for a contribution towards long-term social services support through partnership arrangements, offset by funding local public service agreements. A transfer to the Department of Trade and Industry of £64,000 for review body pay awards.

The administration cost limit has increased by £23,218,000 from £257,970,000 to £281,188,000 mainly for change management costs and transfers detailed above.

There are no changes to the Food Standards Agency's departmental expenditure limit and administration cost limit.

These recommendations are bing accepted in full and without staging.

^* Depreciation, which forms part of resource DEL, is excluded from the total DEL since capital DEL includes capital spending and to include depreciation of those assets would lead to double counting.

The change in the resource element of the DEL arises from a machinery of government transfer of £370,000 to the Office of the Deputy Prime Minister for the Internal Audit Service, transfer of £8,489,000 Parliamentary Counsel Office funding to other government departments, draw-down of end-year flexibility of £5,000,000 to cover anticipated cost pressures, transfer of £45,000 to the security and intelligence agencies (SIA) to cover resource cost of a modernisation project and the transfer of £49,000 from the countries at risk of instability (CRI) budget back to the Foreign and Commonwealth Office.

The change in the capital element of the DEL arises from the transfer of £2,000,000 capital to SIA towards a modernisation project.