Written Statement of 2 December 2004

  Equatorial Guinea
  The Minister of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean)
  In his Written Answer to the Question from the right honourable Member for Devizes (Mr Michael Ancram) of 17 November (Official Report, Commons, col. 1548W), my right honourable friend the Secretary of State for Foreign and Commonwealth Affairs (Mr Jack Straw) set out what Her Majesty's Government knew of reports of a planned coup in Equatorial Guinea earlier this year. This Statement informs the House more widely of the position. At all times we acted properly, promptly, and entirely in accordance with international law.

  The United Kingdom has normal diplomatic relations with the Government of Equatorial Guinea, which is a former Spanish colony. We have no embassy in the country. Our High Commissioner in neighbouring Cameroon is accredited as Ambassador to Equatorial Guinea and has responsibility for relations with Equatorial Guinea. There is a British community of some hundreds, many involved in the energy sector. We have an honorary consul and a commercial attaché in the capital, Malabo.

  The country has in the past suffered political instability. Rumours of upheaval and further instability are common. For example, there were reports picked up by BBC Monitoring in October 2003 of an imminent planned coup. These appeared not to be accurate; certainly, there was no coup.

  On 29 January this year, the Foreign Office received an intelligence report of preparations for a possible coup in Equatorial Guinea. The report was the first intelligence we had received. It was not definitive enough for us to conclude that a coup was likely or inevitable. It was passed by another government to us on the normal condition that it not be passed on. There were, coincidentally, reports on Spanish radio, and in both El Pais and El Mundo on 30 January, making similar suggestions that a coup was being planned in Equatorial Guinea, and reporting that Spanish naval vessels were sailing towards the country.

  British newspapers have this week reported that a South African national, Johann Smith, is claiming to have passed to contacts in British intelligence in December 2003 and in January 2004 a note setting out in detail plans for a coup. We have no record of this information being passed to British officials at any time before May 2004.

  The Foreign Secretary received a submission (dated 30 January) from FCO officials on the weekend of 30 January/1 February which summarised both the media and intelligence reports and made recommendations to me. He considered the case and agreed that the FCO should approach an individual
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  formerly connected with a British private military company (mentioned in the report of 29 January), both to attempt to test the veracity of the report and to make it clear that the FCO was firmly opposed to any unconstitutional action such as coups d'état. A senior Foreign Office official did so within days. The individual concerned claimed no knowledge of the plans.

  On 3 February we changed our travel advice to reflect our latest assessment. This read "visitors should expect … isolated incidents of political unrest" in Equatorial Guinea, particularly as "legislative elections are scheduled for the first quarter of 2004".

  In anticipation of these elections our ambassador in Yaoundé was due to visit Malabo in early February. We instructed him to continue with his planned visit. He found the situation calm. But, as a precaution, our consular crisis plan for Equatorial Guinea was reviewed. Given our limited British representation, it had not been recently updated.

  We did not pass the report of 29 January to the Equatorial Guinea Government. It had been passed to us on the condition that it not be passed on to any third party. But there were two considerations of substance which led us to this judgment in any event: first, because there had been media reports about preparations for a possible coup which the Equatorial Guinea government would already have seen; and, secondly, because it was not definitive enough for us to conclude that a coup was likely or inevitable. Indeed, we went back to the originating government and to another government who had also received the report to check their belief in the veracity of the report. Their responses gave no certainty. The fact that the rumours were in the public domain suggested in any event that a successful coup was growing less likely.

  There have been some suggestions in the press that the British Government were under a legal obligation to act differently. We do not condone or support unconstitutional action including a coup d'état of any kind in other countries. But my understanding is that governments are under no legal obligation to pass on information which they may receive about such possible action.

  On 9 March we learned that the Zimbabwean authorities had arrested a number of individuals in Harare, alleged to be on their way to effect a coup in Equatorial Guinea. A number of individuals were also arrested in Malabo in connection with the alleged coup plot. Over the following months, the names of a number of others allegedly involved appeared in the media.

  On 28 August the Foreign Office press office was asked by the Observer if the Government knew before March that a coup was going to happen. It replied, correctly, that the FCO did not. As the Foreign Secretary told the right honourable Member for Devizes on 9 November he had first heard reports of possible coup planning in late January this year. And this he followed up with a fuller account for the House in his answer to the right honourable Member's question on 17 November.

  Iraq: UK Forces in Multinational Division (South-East)
  The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Bach)
  My right honourable friend the Minister of State for Defence (Mr Adam Ingram) has made the following Written Ministerial Statement.

  As part of the routine management of UK forces in the Multinational Division (South-East) (MND(SE)) in Iraq, we intend to conduct a roulement of forces involving the replacement of 40 Commando Royal Marines with the 2nd Battalion the Princess of Wales' Royal Regiment.

  The Secretary of State for Defence announced on 17 June (Official Report, Commons, col. 48) that 40 Commando would deploy to MND(SE) during June and July, both to provide support to Iraqi security forces and to provide the capacity for some other tasks, including the protection of essential infrastructure. The general officer commanding MND(SE) has concluded that there will be a continuing requirement for these tasks beyond elections in Iraq planned for 30 January. Based on this advice, we have decided that 2nd Battalion the Princess of Wales' Royal Regiment should replace 40 Commando when their six-month deployment in Iraq comes to an end in January 2005.

  Since 1 November, 2nd Battalion the Princess of Wales' Royal Regiment has been acting as the very high readiness reserve (VHRR), at 10 days' readiness to deploy to Iraq. In January the responsibility for VHRR will pass from 2nd Battalion the Princess of Wales' Royal Regiment to the 1st Battalion the Royal Scots.

  The roulement is currently planned to take place from early January 2005, with handover to 2nd Battalion the Princess of Wales' Royal Regiment complete by mid January. We expect that the number of Armed Forces personnel in theatre will remain broadly the same as a result of these changes, with the other major UK units currently in Iraq unchanged. These units are as follows:

  4 Armoured Brigade Headquarters and Signal Squadron,

  The Queen's Dragoon Guards,

  The Royal Dragoon Guards,

  4th Regiment Royal Artillery,

  1st Battalion Scots Guards,

  1st Battalion Welsh Guards,

  1st Battalion The Duke of Wellington's Regiment and

  21 Engineer Regiment.

  I would emphasise that these are routine adjustments to UK forces in MND(SE). We continue to consider, with our partners in the multinational force, the levels and dispositions of forces required in Iraq in the months ahead, to support the sovereign Interim Government of Iraq through the process leading to the election of an Iraqi Transitional Government and Assembly in
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  January 2005 and full constitutional elections in December 2005. If we judge that further changes to the UK military contribution in Iraq would be appropriate to support this process, we will of course inform the House at the earliest opportunity. At present, however, no such decision has been made.

  Employment, Social Policy, Health and Consumer Affairs Council: December 2004
  The Parliamentary Under-Secretary of State, Department of Health (Lord Warner)
  My right honourable friend the Minister of State for Health (Mr Hutton) has made the following Written Ministerial Statement.

  The next meeting of the Employment, Social Policy, Health and Consumer Affairs Council will be on 6 and 7 December. Items on the agenda relating to health will be covered on 6 December.

  Items for discussion are: a co-ordinated approach to combat HIV/AIDS in the European Union and its neighbourhood; European Commission proposals for a regulation of the European Parliament and of the Council on medicinal products for paediatric use; and the proposal for a regulation of the European Parliament and of the Council on nutrition and health claims made on foods. I will attend for the United Kingdom.

  Health Ministers will have a public debate on HIV/AIDS, where they will be asked to focus on next steps for both European Community and national level action. This will be followed by a first Council discussion of the European Commission proposal on paediatric medicines, which aims to encourage the development of medicines for children. There will be a presentation by the European Commission, followed by interventions from some member states.

  There will be an exchange of views on the proposal to regulate health and nutritional claims on food labelling. Discussion will be structured around the Dutch presidency questions on the key issue of nutrient profiling, the proposed method to identify foods or categories of foods which will be permitted to make claims. Ministers will be asked to adopt the draft Council conclusions on a European response to emerging zoonotic diseases. The UK can agree to adopt these conclusions as currently drafted.

  Under "Any Other Business", the Dutch presidency will report on progress made to establish the Council's public health working party meeting on a high official level, which had its first meeting on 23 November 2004. The European Commission will also present the interim report of the High Level Group on Health Care and Medical Services.

  At lunch on 6 December, health Ministers will also discuss pandemic preparedness planning.

  Teenage Pregnancy: Independent Advisory Group
  The Parliamentary Under-Secretary of State, Department for Education and Skills (Lord Filkin)
  My right honourable friend the Minister for Children (Margaret Hodge) has made the following Written Ministerial Statement.

  The Independent Advisory Group on Teenage Pregnancy has published its third annual report today, 11 November 2004. This is a very thorough and considered report which continues to build on the group's previous two annual reports. We commend the independent advisory group for the notable contribution it has made since it was formed. We welcome the advisory group's acknowledgement of the significant progress made to date nationally, regionally and locally on implementing our teenage pregnancy strategy. We recognise that we are at a critical point of this 10-year strategy, the goals of which can be achieved only by sustaining the drive and energy we have demonstrated so far. Our continued commitment to addressing this key inequality and public health issue is signalled by our PSA jointly held with the Department of Health. Reducing teenage pregnancies and supporting young parents is central to our change for children programme with its aim of improving the life chances for all young people.

  The report contains eight recommendations on potential areas for further action. Each recommendation will receive our full and careful consideration and a detailed government response will be published by March 2005. A copy of the independent advisory group's third annual report has been placed in the House of Commons Library.

  Agriculture and Environment Biotechnology Commission
  The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville)
  My right honourable friend the Secretary of State for Trade and Industry (Ms Hewitt) has made the following Written Ministerial Statement.

  A report on the review of the Agriculture and Environment Biotechnology Commission (AEBC) has been published today. The review has been conducted by an independent reviewer, Dr Neil Williams, in line with the Cabinet Office guidance for reviewing non-departmental public bodies. Its main recommendation is that the AEBC should be wound up by the end of the current financial year.

  Ministerial colleagues involved in the funding of the AEBC and I are grateful for this report. We accept the advice of the review committee, that the report should be published as soon as possible and with minimal comment from Ministers. We would like to express our thanks and support for work that the AEBC has carried out since its creation four years ago. We acknowledge the dedication of its members. The contribution of its chairman, Professor Malcolm Grant, has been key to everything the commission has so far achieved.
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  We now intend to consider the recommendations of the independent review very carefully, and aim to reach a decision shortly. We will, however, ensure that we engage with stakeholders prior to making decisions on the future of the AEBC or a successor body.

  I have written to the chairman of the AEBC asking the commission to continue to carry out its current work programme but to bear in mind the review's recommendations.

  The Science and Technology Select Committee, the Environment, Food and Rural Affairs Select Committee and the Environmental Audit Select Committee have been sent copies of this report. It has also been sent to the chair, deputy chair and members of the AEBC, learned societies and other stakeholders and I have placed copies in the Libraries of both Houses. An electronic version of the report has been placed on the Office of Science and Technology website at: http://www.ost.gov.uk/policy/bodies/review.htm).

  National Insurance Contributions 2005–06
  The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord McIntosh of Haringey)
  My right honourable friend the Paymaster General has made the following Written Ministerial Statement.

  I have completed the annual review under Section 141 of the Social Security Administration Act 1992. I propose the following changes to take effect from 6 April 2005. These rates and limits will also apply to national insurance contributions in Northern Ireland.

  Employers and Employees

  In line with the Social Security Contributions and Benefits Act 1992, the lower earnings limit for primary class 1 contributions is to be raised to £82 a week. It is set at the level of the basic state pension for a single person from April 2005 and rounded down to the nearest pound.

  The primary and secondary thresholds for class 1 contributions will continue to be aligned with the weekly amount of the income tax personal allowance, which will be increased to £4,895 from April 2005. The primary and secondary thresholds will therefore be increased to £94 a week. This means that no tax or class 1 contributions will actually be paid on earnings below this level. The upper earnings limit for primary class 1 contributions will be raised to £630.

  The self-employed

  The rate of class 2 contributions will be raised to £2.10 a week. Self-employed people with earnings below the annual small earnings exception can apply to be exempted from paying class 2 contributions. This limit will be raised by £130 to £4,345 in line with inflation. The annual lower profits limit for liability to class 4 contributions will increase to £4,895 a year (in line with the income tax personal allowance). The upper profits limit will increase by £1,040 to £32,760, to maintain the link with employees' earnings liable to Class 1 contributions.
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  Class 3

  The rate of Class 3 voluntary contributions will be increased by 20p to £7.35 a week.

  Share, fishermen

  The special rate of class 2 contributions for share fishermen, which allows them to build entitlement to contributory jobseeker's allowance in addition to the other contributory benefits available to the self-employed, will be increased to £2.75 a week.

  Volunteer Development Workers

  The special rate of class 2 contributions for volunteer development workers, which entitles them to the full range of contributory benefits, will be increased by 15p to £4.10 in line with the statutory formula of 5 per cent of the primary class 1 lower earnings limit.

  Treasury Grant

  I need to ensure that the fund can maintain a prudent working balance throughout the coming year. In accordance with Section 2(2) of the Social Security Act 1993, I propose to do so by prescribing that the maximum Treasury grant which may be made available to the fund in 2005–06 shall not exceed 2 per cent of the estimated benefit expenditure for that year. Similar provision will be made in respect of the Northern Ireland National Insurance Fund. I shall be laying a draft re-rating order before Parliament in due course. This will accompany a report by the Government Actuary to myself and my right honourable friend the Secretary of State for Work and Pensions which we shall jointly present to Parliament.

  The following table sets out the rates, earnings limits and thresholds for national insurance contributions proposed for 2005–06.

  National insurance contributions, proposed re-rating, April 2005:

  Item

  2005–06

  Lower earnings limit, primary class 1

  £82

  Upper earnings limit, primary class 1

  £630

  Primary threshold

  £94

  Secondary threshold

  £94

  Employees' primary class 1 rate

  11 per cent from £94.01 to £630 plus 1 per cent above £630

  Employees' contracted-out rebate

  1.6 per cent

  Married women's reduced rate

  4.85 per cent from £94.01 to £630 plus 1 per cent above £630

  Employers' secondary class 1 rate

  12.8 per cent on earnings above £94

  Employers' contracted-out rebate, salary-related schemes

  3.5 per cent

  Employers' contracted-out rebate, money-purchase schemes

  1.0 per cent

  Class 2 rate

  £2.10

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  Item

  2005–06

  Class 2 small earnings exception

  £4,345

  Special class 2 rate for share fishermen

  £2.75

  Special class 2 rate for volunteer development workers

  £4.10

  Class 3 rate

  £7.35

  Class 4 rate

  8 per cent from £4,895 to £32,760 plus 1 per cent above £32,760

  Class 4 lower profits limit

  £4,895

  Class 4 upper profits limit

  £32,760

  Private Finance Initiative
  Lord McIntosh of Haringey
  My right honourable friend the Chief Secretary to the Treasury (Paul Boateng) has made the following Written Ministerial Statement.

  Enclosed below are the latest figures reported by departments on their private finance initiative (PFI) activities. The submission of this information is in accordance with departments' obligation to disclose PFI information to Parliament on a biannual basis.

  Table 1 shows the estimated private sector investment in public services resulting from signed PFI contracts over the period 2004–05 to 2006–07. Table 2 shows the estimated total capital value of PFI contracts that are currently at the preferred bidder stage of procurement. Tables 1 and 2 are both presented on a departmental basis.

  Table 3 shows a forecast of the estimated payments for services flowing from signed PFI projects. It should be noted that procuring authorities pay only when they receive the high quality services specified in PFI contracts. If such services are not received then deductions can be made from anticipated payments. This table is presented in aggregate form and covers the period 2004–05 to 2029–30.

  Table 1: Departmental estimate of capital spending by the private sector (signed deals)1,2

  Department

  Projections (£ millions) 2004–05

  2005–06

  2006–07

  Education and Skills3,4

  87

  4

  1

  Health

  556

  689

  476

  Transport5,6

  1,450

  1,497

  1,411

  Office of the Deputy Prime Minister

  54

  55

  101

  Home Office

  104

  6

  0

  Constitutional Affairs

  33

  29

  8

  Defence

  865

  458

  304

  Foreign and Commonwealth Office

  6

  5

  5

  Trade and Industry

  5

  5

  2

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  Department

  Projections (£ millions) 2004–05

  2005–06

  2006–07

  Environment, Food and Rural Affairs

  69

  46

  24

  Work and Pensions

  41

  44

  34

  Scotland

  172

  78

  7

  Wales

  58

  18

  0

  Northern Ireland Executive

  2

  4

  16

  Chancellor's Department

  46

  38

  34

  Cabinet Office

  6

  1

  0

  Culture, Media and Sport

  5

  13

  9

  Total

  3,559

  2,990

  2,432

  1 Investment in assets scored on the public sector balance sheet also scores as public sector net investment. Figures are for investment under PFI-type contracts only.

  2 PFI activity in local authority projects is included under the sponsoring central government department.

  3 Excludes private finance activity in educational institutions classified to the private sector.

  4 Figures reported for non-IT projects relate to the amount of PFI credits awarded. Includes estimates of the capital expenditure for the London Underground Limited (LUL) public/private partnership PFI contracts in the years that investments are expected to take place.

  5 Excludes estimates of capital expenditure on the Channel Tunnel Rail Link (CTRL).

  Table 2: Estimated aggregated capital value of projects at preferred bidder stage

  Department

  Projections (£ millions) 2004–05

  2005–06

  2006–07

  Education and Skills7

  870

  0

  0

  Health

  1,613

  1,200

  0

  Transport

  28

  0

  0

  Office of the Deputy Prime Minister

  35

  60

  55

  Home Office

  91

  26

  0

  Constitutional Affairs

  0

  0

  0

  Defence

  378

  106

  198

  Foreign and Commonwealth Office

  0

  0

  0

  Trade and Industry

  0

  0

  0

  Environment, Food and Rural Affairs

  0

  0

  0

  Work and Pensions

  0

  0

  0

  Scotland

  183

  203

  224

  Wales

  5

  57

  0

  Northern Ireland Executive

  50

  32

  20

  Chancellor's Department

  0

  0

  0

  Cabinet Office

  0

  0

  0

  Culture, Media and Sport

  46

  33

  11

  Total

  3,299

  1,717

  508

  7 Figures reported relate to the amount of PFI credits awarded.

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  Table 3: Estimated payments under PFI contracts: December 2004 (signed deals)8

  Year

  Projections (£ billions)

  Year

  Projections (£ billions)

  2004–05

  5.7

  2017–18

  5.9

  2005–06

  6.2

  2018–19

  3.9

  2006–07

  6.6

  2019–20

  3.9

  2007–08

  6.6

  2020–21

  4.0

  2008–09

  6.4

  2021–22

  3.7

  2009–10

  6.5

  2022–23

  3.8

  2010–11

  6.4

  2023–24

  3.8

  2011–12

  6.3

  2024–25

  3.7

  2012–13

  6.3

  2025–26

  3.7

  2013–14

  6.3

  2026–27

  3.4

  2014–15

  6.2

  2027–28

  3.2

  2015–16

  6.3

  2028–29

  2.9

  2016–17

  6.3

  2029–30

  2.6

  8 The figures between 2004–05 and 2017–18 include estimated payments for the LUL PPP contracts. These contracts contain periodic reviews every 7.5 years and therefore the service payments are not fixed after 2009–10.

  Finance Bill
  Lord McIntosh of Haringey
  My right honourable friend the Paymaster-General has made the following Written Ministerial Statement.

  This Government are determined to ensure that all employers and employees pay the proper amount of tax and NICs on the rewards of employment, however those rewards are delivered. Despite the efforts of successive governments, we continue to be presented with ever more complex and contrived attempts to avoid paying tax and NICs on rewards from employment, particularly in relation to bonuses in the City.

  In the most recent year for which we have figures, well rewarded individuals receiving bonuses of at least £1.5 billion in total sought to avoid paying their fair share of tax and NICs.

  The disclosure rules in the Finance Act 2004 have revealed that this kind of avoidance is still rife. Without prompt and decisive action we think there could be up to £2 billion paid this year in bonuses on which the amount of tax and NICs properly due is at risk, as a result of increasing ingenuity and inventiveness of the tax avoidance industry.

  We cannot allow avoidance on this scale to continue. It is only right that everyone who should pay tax and NICs does pay and that they pay their fair share when it is due. The overwhelming majority of employers and employees do pay their fair share. But for too long some employers and employees with the benefit of sophisticated tax advice have sought to avoid their responsibilities and to pass more of a burden on to the rest of us.

  Early attempts at avoidance in this area took the form of paying bonuses and salaries in gold bullion, diamonds and fine wines. When these routes were closed, employers started to pay bonuses through shares and share options to reduce the amount of NICs they had to pay, avoid their obligation to operate

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  PAYE and reduce employees' tax bills. When, in 1998, assets readily convertible into cash were brought within PAYE, and NICs, avoidance schemes moved on to more complex arrangements.

  Despite extensive reforms to the tax legislation in 2003, employers and their advisers are continuing to devise and operate evermore contrived avoidance schemes. One such example of which Inland Revenue has learnt involves payment of a bonus to an employee in the form of dividends on shares in a specially constructed company. This avoids tax at 40 per cent and employer and employee NICs.

  The Inland Revenue will be challenging such arrangements in the courts where it is appropriate to do so. We cannot, however, await the outcome in the courts before taking action. We intend that from today both tax and NICs legislation should achieve our objective of subjecting the rewards of employment to the proper amount of tax and NICs, however the rewards are delivered. Taxpayers who contribute their fair share have a right to expect that others will also do so. We also want to make it plain that to the extent that legislation may still not achieve our objective in the face of continuing avoidance, we will ensure it does.

  To that end we will be including legislation in FB 05, effective from today, to close down the avoidance schemes we know about. A technical note explaining what we intend to do in FB 05 will be published today. We will also ensure that NICs are charged on these schemes with effect from today.

  However, experience has taught us that we are not always able to anticipate the ingenuity and inventiveness of the avoidance industry. Nor should we have to. Our objective is clear and the time has come to close this activity down permanently. I am therefore giving notice of our intention to deal with any arrangements that emerge in future designed to frustrate our intention that employers and employees should pay the proper amount of tax and NICs on the rewards of employment. Where we become aware of arrangements which attempt to frustrate this intention we will introduce legislation to close them down, where necessary from today.

  This action will not affect employers and employees who organise their affairs in a straightforward and ordinary way—the vast majority. In particular, genuine employee share schemes and share option plans will not be affected. We continue to believe these make an important contribution to the Government's productivity agenda.

  Financial Services and Markets Act 2000: Review
  Lord McIntosh of Haringey
  My honourable friend the Financial Secretary to the Treasury (Mr Stephen Timms) has made the following Written Ministerial Statement.
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  A paper giving details of the outcome of the two-year review of the Financial Services and Markets Act 2000, which the former Financial Secretary to the Treasury announced on 4 November 2003 (Official Report, Commons, col. 28WS), is available in the Vote Office and the Library of the House, and is accessible at: www.hm-treasury.gov.uk.

  Supporting People Programme
  The Minister of State, Office of the Deputy Prime Minister (Lord Rooker)
  My right honourable friend the Minister for Local and Regional Government has made the following Written Ministerial Statement.

  The Government are today announcing the allocation to administering authorities of £1.715 billion for the supporting people programme in 2005–06: These grants are awarded to authorities to enable them to provide housing-related services to over 1.2 million vulnerable people in our society.

  The supporting people programme was successfully launched in April 2003. Since then authorities have made good progress in managing the programme but there is work still to do. Findings from an independent review, inspections by the Audit Commission and other research work have shown that there are considerable opportunities for authorities to make efficiency savings in their programme and that some services are not delivering the quality of support that clients deserve.

  We are addressing these concerns by requiring authorities to complete reviews of individual services by April 2006 and ensure that these offer value for money and are of good quality and strategically relevant. In partnership with local stakeholders, authorities are developing five-year strategies for their programmes and these will examine critically the services delivered and focus them on local need and strategic priorities.

  Additionally, we are providing help and advice through capacity building programmes, and monitoring and support to authorities and providers. This includes projects to develop and disseminate best practice, a benchmarking programme, web-based support through Hub Services, and support to authorities struggling with their administration of the programme. We will also continue to work with authorities and providers to ensure that administration of the programme is effective and does not create unnecessary burdens.

  As a preventive programme, supporting people contributes to a range of key government targets and objectives. The Office of the Deputy Prime Minister will be working closely with colleagues across government to ensure that the supporting people programme is better integrated with other support packages.
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  Throughout 2005–06, we will be developing the monitoring arrangements for the programme including measuring performance against three key supporting people performance indicators. We will use this data to establish baseline performance and will then look to authorities to deliver continued improvement in outcomes over time.

  Early next year we will consult on the revised needs-based distribution formula which will provide the basis for allocating supporting people grant in the future. In the long run this could give rise to significant changes in current pattern of allocations between authorities and I recognise this cannot be achieved quickly. We have previously announced that under the spending review 2004 settlement the funding for supporting people in 2006–07 and 2007–08 will be around £1.7 billion. To
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  provide some further assurance to authorities about the pace of change I have decided that no authority should face a reduction of funding of more than 5 per cent or an increase of more than 10 per cent in either of these years.

  This Government's ongoing commitment to the supporting people programme and our continued support to authorities and other stakeholders in the delivery of the programme will ensure the continued improvement in value for money and better use of resources in 2005–06 and beyond.

  The Office of the Deputy Prime Minister is also beginning today a consultation on the grant conditions for supporting people in 2005–06, which we are proposing to keep broadly the same as 2004–05. The consultation ends on 11 February 2005. We are writing to local authorities to inform them of their allocations.