Tag: 2001

The press release issued by HM Treasury on 27 February 2001.

The Treasury is seeking private investors for a 51 per cent stake in Partnerships UK, the wholly owned government company set up to develop and implement more efficient public private partnerships (PPPs) and to promote the development of Wider Markets projects, Chief Secretary Andrew Smith announced today.

By selling a 51 per cent stake, the Treasury plans to raise a minimum of £22.5 million of equity by private placement with qualifying institutions. Prior to completion of the Offer, it is expected that Partnerships UK will have a capital base of £45 million. Each potential qualifying investor will be invited to invest between £1 million and £5 million.

Speaking about the announcement to dispose of a majority shareholding to the private sector Andrew Smith said:

“The opening up of the market in this way is a significant development in the PPP sector in what is becoming an increasingly mature market place.

By turning Partnerships UK into a public private partnership the Government is creating a key market opening for private sector shareholders, keen to seize the opportunity to help the public sector deliver modern, high quality public services.

Partnerships between the public and private sectors are the cornerstone of the Government’s modernisation programme. With Partnerships UK already pioneering a business model in a strong private sector market they are well positioned to play a pivotal role in developing and expanding the PPP market and to bring private sector disciplines to bear on public sector procurement.

PPPs bring with them new challenges that require specialist skills and a high level of expertise. With their high calibre management team and skilled practitioners with significant public and private sector experience and their public sector mission, I expect Partnerships UK to remain at the cutting edge of project improvement and development for years to come.”

Derek Higgs, Non Executive Chairman of Partnerships UK said:

“This move marks a major stepping stone in Partnerships UK’s business plan. Having access to new capital will accelerate the fulfilment of PUK’s public sector mission in driving forward successful PPPs.

The initial response has shown that interest in investing in Partnerships UK is high and we look forward to working with our public and private shareholders to make the business a success.”

James Stewart, Chief Executive of Partnerships UK said:

“Partnerships UK is already fully operational and working on a wide range of PPP projects. The move to a PPP and the raising of capital will be the springboard to develop the business further.

We are confident that we can drive forward the Government’s ambitions to see effective public private partnerships. Partnerships UK will strive to be at the forefront of the development and implementation of better, faster and stronger PPP transactions, helping to deliver value for money public services and efficient utilisation of public sector assets.”

The Private Placement offer will close on 27 March 2001. The basis of allocation under the offer is expected to be announced at the end of March. Following the completion of the Offer, Partnerships UK will be 51 per cent owned by the private sector and 49 per cent owned by the public sector.

N M Rothschild & Sons Limited is acting as Placement Agent for and financial adviser to the Treasury in connection with the offer for sale by the Treasury to certain qualifying institutions. Partnerships UK’s financial targets will be to achieve a rate of return of its investors which is commensurate with the risks of its activities.

Following completion of the Offer, Partnerships UK will become a public private partnership : a joint venture with the public sector owning a minority interest and the private sector owning a majority. The governance structure is designed to balance private sector disciplines with Partnerships UK’s public sector mission. A majority of board members will come from the private sector and the public sector will be represented by two non-executive directors appointed by the Treasury. The wider public interest will be represented through an Advisory Council made up of representatives from Government departments, Devolved Administrations, local authorities and other public bodies from amongst Partnerships UK’s clients.

As the successor to the Treasury Taskforce, Partnerships UK will aim to make PPPs a success, working in partnership with public bodies. Partnerships UK has been set up to help the public sector deliver:

• fast and efficient development and procurement of PPPs
• strong PPPs that build stable relationships with the private sector;
• savings in development costs;
• better value for money.

Partnerships UK plc has entered into a Framework Agreement with the Treasury for up to five years under which Partnerships UK will continue the work of the Treasury Taskforce, providing general support to the Treasury, the Office of Government Commerce and other parts of the public sector.

The press release issued by HM Treasury on 28 February 2001.

The IMF has “commended” the UK Government “for the continued strong performance of the UK economy”.

At a discussion in Washington on 23 February, the IMF said that “plans to increase public investment in infrastructure and human capital are justified in light of the evidence” and welcomed the Government’s efforts “to enhance competition, innovation and entrepreneurship”.

The Directors agreed that “sound fiscal and monetary policies, underpinned by transparent medium-term policy frameworks as well as sustained implementation of structural reforms” have contributed to the strength of the economy in recent years. They also “expected output growth would remain robust” while “prospects for inflation remain benign”.

Against this benign inflation outlook, the Directors noted that “even after taking into account recent spending decisions, the fiscal position remains sound and fully consistent with the authorities medium-term fiscal framework”.  The Chancellor agrees entirely with the Directors’ conclusion that “additional fiscal stimulus would limit the room for further interest rate cuts”. That is why he has made clear that he intends in the Budget to lock in the tough fiscal stance set out in the pre-Budget report and Budget 2000.

Commenting on the IMF’s report, the Chancellor, Gordon Brown, said:

“I welcome the IMF’s report. It outlines the importance of economic stability and the contribution of the Government’s macroeconomic framework to the ongoing success of the UK economy.  Moreover, it highlights the contribution of our prudent and cautious approach to managing the public finances to these successes in recent years.

I agree with the IMF that boosting UK productivity performance is a key priority to achieving higher long-term growth and sustained increases in living standards.  Our approach recognises the importance of economic stability and strong policy frameworks, combined with microeconomic reforms and policies to enhance competition, innovation and entrepreneurship, for building long-term economic strength, high levels of productivity growth and rising living standards for all.”

As was the case last year, at the request of the UK Government the IMF is today publishing its Article IV staff report on the UK economy in full, along with the record of the IMF board discussion, and the UK’s statement in the board meeting.

Commenting on publication of the Article IV and associated papers, the Chancellor said:

“The publication of the IMF’s report on the UK economy clearly demonstrates our commitment to open up the IMF’s scrutiny process.  Making available clear independent information on policy is an essential part of the new international financial architecture.”

The press release issued by HM Treasury on 6 March 2001.

Paul Myners today published his report on institutional investment, commissioned by Chancellor of the Exchequer Gordon Brown in his Budget speech on 21 March 2000.

In response, the Treasury said :

“This is an important report. The Chancellor will respond in tomorrow’s Budget. The Government will also publish a joint DSS/HMT document on the future of the MFR.”

HM Treasury and DSS announced the publication of a consultation document and joint review of the future of the minimum funding requirement (MFR), which applies to most occupational pension schemes, on 14 September 2000.

Paul Myners published his views on the MFR ahead of his main report on institutional investment in a letter to Gordon Brown and Social Security Secretary Alistair Darling on 8 November 2000. This was to enable respondents to the joint review to take account of Mr Myners’ views during this consultation, which closed on 31 January 2001. The Treasury and DSS will take account of all views received in its announcement on the outcome of the joint review.

The press release issued by HM Treasury on 12 March 2001.

Help with debt and easier access to mortgages for the financially excluded will be available from 1 April under measures to boost credit unions, Economic Secretary Melanie Johnson announced today.

Savers, including young people, will also benefit from steps towards deregulation of credit unions. These include :

• increasing the savings limits for young people to £5000 – the fixed limit for adults.
• enabling all credit unions to offer secured loans for seven years and unsecured loans for three years, helping members with debt problems.
• enabling credit unions meeting stricter regulatory requirements to offer secured loans for 12 years and unsecured loans for five years, helping members seeking longer loans, eg for house purchase.

More flexible loan periods permit credit unions to offer easier repayment arrangements to their members. This should assist some of the larger credit unions to offer more substantial loans and increase their capacity to offer mortgages.

Welcoming implementation of the proposals on 1 April, Miss Johnson said :

“This is good news for everyone, but particularly the financially excluded, for whom credit unions offer alternative access to financial services. These measures mark an important step towards improving the service which credit unions are able to offer savers and borrowers.

Enabling them to save more will encourage young people to join credit unions and get used to planning and managing their finances sooner. Greater loan flexibility will make it easier for credit unions to help members overcome personal debt problems and to compete for mortgage business.

Credit unions are an effective way of widening access to affordable credit and savings opportunities to those who cannot or do not want to deal with mainstream financial services providers. The movement is growing and there are now around 700 credit unions in Britain with assets of over £200 million.

We wish to see the movement grow and to realise its potential. But individual credit unions must be effectively managed and offer appropriate safeguards to make them attractive to those looking for better ways to manage their money and financial affairs.

The measures which will come into force next month will ease the regulatory burden and help the credit union movement to grow further and faster and attract more members.”

The press release issued by HM Treasury on 15 March 2001.

Trustees of occupational pension schemes will benefit from the removal of a barrier to investment in venture capital later this year, Economic Secretary Melanie Johnson announced today.

The measure implements one of Paul Myners’ recommendations, as part of his review of institutional investment in the UK, to reform the law on investment in limited partnerships whose purpose is to undertake investments in private equity.

Miss Johnson said :

“This is a change which will be welcomed by the occupational pensions industry. It is a significant and useful measure that will make it easier for pension funds to consider investment in private equity.

It is fully in line with the Government objective of encouraging greater investment in private equity as part of the drive to increasing UK productivity.”

The change will be implemented at the same time as other key provisions of the Financial Services and Markets Act 2000 (FSMA).

Miss Johnson also announced today that the target date for the commencement of these provisions, known as N2, will be no later than the end of November 2001. The actual date will be confirmed as soon as it is possible to do so.

The press release issued by HM Treasury on 22 March 2001.

The radio spectrum is a key resource for many new and developing high-tech industries. The management and development of the spectrum will play an important role in creating a knowledge driven economy.

The Chancellor announced in Budget 2001 that Professor Martin Cave, Vice Principal at Brunel University, will lead the independent review of spectrum management.

The review will publish an issues paper in May 2001, setting out initial areas of interest.

Professor Cave said:

“The radio spectrum is a key resource for many new and developing high-tech industries that are important to the future growth and productivity of the UK. Ensuring spectrum is managed in the best interests of the economy will mean we fully benefit from these new technologies. Consultation by the review will be wide and extensive, and involve many interested parties in industry, academia and government.”

The review will ensure that the spectrum management framework is at the forefront of change. It will advise on the principles that should govern spectrum management and what more needs to be done to ensure that all users, including non-commercial users, are focussed on using their spectrum as efficiently as possible. The review will consider the use of spectrum management tools such as spectrum valuation, trading and pricing.

The review will report to the Chancellor and the Secretary of State for Trade and Industry by the end of the year. It will address issues early where its advice will be relevant to the institutional framework for spectrum management proposed in the Communications White Paper.

The press release issued by HM Treasury on 28 March 2001.

A new Framework to improve the quality of performance information in the public sector was launched today. This will help to provide the good quality information essential for the public, Parliament and other bodies scrutinising public services and seeking continuing improvement in their delivery.

‘Choosing the Right FABRIC:  a Framework for Performance Information’, sets out principles for good performance information agreed between the Treasury, Cabinet Office, National Audit Office, Audit Commission and Office for National Statistics. All five bodies were represented at the launch of this significant collaborative initiative.

Welcoming the new Framework, Chief Secretary Andrew Smith said:

“To ensure that programmes are working as effectively as possible – and to identify opportunities for further improvement – we need high quality, reliable information about how public sector bodies perform.

The new Framework for Performance Information sets out agreed principles that will make it easier to set clear, transparent targets for their organisations to deliver public service improvements that we all want to see.”

Cabinet Office Minister Ian McCartney said:

“This Government has launched the biggest investment programme in public services in modern times.

But resource must be matched with reform and a responsibility to use those resources effectively and listen to what customers want.  The initiative launched today will help us do just that.”

Sir John Bourn, Comptroller and Auditor General said:

“Good performance information is a crucial component of better management and improved accountability to Parliament and the public.  The Framework for Performance Information provides a set of criteria for the coherent development of better performance information across government, and hence better public services.”

Andrew Foster, Controller of the Audit Commission said:

“Performance measurement is a vital tool in helping to improve public services and the Audit Commission is very pleased to be bringing its experience in this area to the table.

“It ensures that poor performance is challenged and best practice shared. But it also ensures that the providers of public services are accountable by making information available to the public in an accessible and meaningful way.”

Len Cook, National Statistician said:

“For the public to have confidence in government statements about its objectives and targets, trusted information is critical. I have been pleased to play a role in this Framework, which recognises the importance of high quality National Statistics.

My job, under this Framework, is to help meet the objective Sir Winston Churchill set when he established the Central Statistical Agency in 1941 – that arguments should be about what should be done, not about what are the right figures.”

Also launched today is the Government Strategy for Performance Information. This was developed in response to the Performance and Innovation Unit’s ‘Wiring It Up’ report on the management of cross-cutting issues. The Strategy outlines a number of initiatives, including both existing and new work, such as the Framework, that are helping the public sector to improve the way it produces and uses performance information.

The press release issued by HM Treasury on 3 April 2001.

Andrew Smith, Chief Secretary to the Treasury, today announced that the drive for better value for money in government procurement has produced its latest ‘quick win’, in the area of hotel accommodation and conferencing, with the Office of Government Commerce (OGC) delivering £18million savings to the taxpayer over three years.

The OGC initiative under which the Department of Social Security (DSS) took the lead on behalf of Government in the tendering exercise and award of contract to Expotel, provides a single contract to Government at competitive rates to drive down the cost of hotel rooms and external conferences, minimising paper based transaction charges and eliminating government re-tendering costs.

Speaking in London at Public Sector Expo, OGC’s ‘One Year On’ conference, Andrew Smith said: “This latest quick win initiative for hotel accommodation and conferencing is another example of how the OGC is working with departments to make a real difference in the way Government does business.  The £18 million savings demonstrate what can be achieved by optimising the purchasing power of government.

There are clear benefits for Government in entering strategic partnerships with major private sector providers of government services and products.

This is excellent news for the taxpayer because for every pound saved in procurement an extra pound can be spent on front line public services.”

Peter Gershon, Chief Executive of the OGC said:

“One year on, OGC’s pursuit of value for money improvements and our strategic approach to the purchase of key procurement commodities and services is making a real difference to the way the Government and its departments are able to develop their commercial activities.

This innovative DSS led contract is available to the whole of the public sector and is further proof that the OGC is making a real difference both in disseminating best practice and in delivering value for money improvements.”

The main features of the contract with Expotel include:

• A Guaranteed Average Room Rate, dependent upon subsistence rates, which equates to a saving of approx £5.50 per night to the DSS;
• A booking agent rebate of 63 per cent equivalent to approx £3.50 per room;
• A £30 process cost reduction through on-line booking;
• £30,000 savings for each department from unnecessary re-tendering.

The potential annual spend in hotel accommodation and conferencing costs across central civil government averages around £60m each year and the contract provides scope delivering further savings on conference facilities.  The newly negotiated DSS contract with Expotel gives a high priority to reducing transaction costs in the booking service by establishing an on-line booking facility in the drive to meet Government’s commitment to do business on line.

Currently Departments operate individually negotiated contracts for hotel accommodation.  By using the Expotel contract, negotiated by DSS, the need for Departments to incur further tendering costs is negated.

The contract with Expotel will run for three years and there is the scope for the contract to be extended for a further two years if there is clear evidence that further savings can be achieved.

The agreement is another in a series of initiatives arranged by the OGC following up its ‘quick wins’ on the Vodafone and Watermark contracts, the introduction of the Gateway Review process and introduction of best practice procurement guidance.