Tag: 2002

HISTORIC PRESS RELEASE : Public Service Pension Age [December 2002]

The press release issued by HM Treasury on 17 December 2002.

As part of proposed reforms to reflect improved longevity, modern working patterns, and practice in most private sector pension schemes, future civil servants, teachers and NHS staff may need to work until 65 rather than 60 to get their full pension. The proposed changes would be made by 2006. Present public service employees’ pension rights already earned will be fully protected and existing staff will still be able to retire at 60 years if they wish.

The proposals, set out in the Green Paper “Simplicity, Security And Choice: Working And Saving For Retirement”, would raise the pension age in the civil service and other public service pension schemes from 60 to 65.

It is likely that individual schemes will wish to introduce the new pension age as part of a package of measures for their members, which may offer benefit improvements and can take advantage of new flexibilities and simplification proposed in the Green Paper.

Schemes will consult on how and when the higher pension age and any associated enhancement to benefits could be extended to existing employees, while protecting rights already built up before the change and ensuring that all existing members will be able to receive a pension from the age they currently expect.

The reviews of the public service schemes will be the subject of consultation with unions and staff representatives and are likely to take a few years to complete, but once introduced the higher pension ages would apply to all new entrants.

In many areas there is a demand from employees to work for longer, and it is appropriate to encourage and reward that accordingly. The change would help the financial sustainability of public service schemes.

January 2, 2023
Paul Boateng – 2002 Speech to the Charities Taxation Reform Group

The speech made by Paul Boateng, the then Financial Secretary to the Treasury, in London on 15 January 2002.

The principle of voluntary action has a long history in the UK. It was the great philanthropists of the 19th Century that drove social reform and whose charity moved the mountains of illiteracy, ill health and poverty. Here in London, as in other towns and cities across the country, there is a tradition of philanthropy, self-help and mutualism ingrained among the people. We can see it in the tens of thousands who volunteer of their time, their money and their expertise.

The sector still thrives: in 2000 the overall amount donated by the general public stood at £5.76bn – a return to the high levels of the early 1990s. The challenge now is to broaden the base of charitable giving, and encourage even more people to start donating of their time and their money – helping your organisations to play a bigger part in the delivery of public services and the renewal of the public space.

We are committed to reducing the burden of taxation, ameliorating the administrative cost, and helping you to play a proper part in the renewal of the public spaces we all inhabit. To achieve this objective it is vital that we work closely with your organisation: after all, you are the experts. I know that Mike Eland from Customs and Dave Hartnett from Inland Revenue spoke at your last AGM and I’m delighted to be here today to reaffirm the relationship. Our shared aim must be to build a new partnership between government and the ‘third sector’ – using your strengths to challenge, compliment, and reinforce government policy.

Strengths of the voluntary sector

The strengths of the voluntary sector lie in its:

Local character;
Flexibility to innovate;
Personalised approach;
Capacity to strengthen citizenship; and
Running through all of these, the ability to reach out to isolated and marginalized groups.

The local character of the voluntary sector is perhaps its most important quality. It is from understanding of the local community that the strength of the voluntary sector flows. Where the state is sometimes remote and inflexible the voluntary sector is always there, close at hand, in the street, the neighbourhood or the town.

This local character gives the voluntary sector the strength to be flexible and develop innovative solutions to social problems. Where the government sets down the national standards, the voluntary sector can develop the local capacity, local skills, and local amenities necessary to translate the standards into the experiences of local people.

This flexibility means that the voluntary sector can develop highly individual responses to different problems; enabling the opportunities offered by the state to be inflected into the language of local communities. The government sees the total number unemployed, responds with the New Deal and helps get half a million back to work. The Rainbow Refugee Network sees wasted potential in the refugee communities here in London, provides advice on welfare benefits, education, and employment, and helps build a bridge between Asian, African and East European asylum seekers and the mainstream of social opportunity.

The voluntary sector does not replace the state, indeed it is the capacity of the voluntary sector to challenge the government, stimulate policy debates, promote a pluralist society and enhance democracy that makes it so valuable. In building a partnership with the voluntary sector we are acknowledging that it is organisations like Help the Aged, OXFAM, and MENCAP, as well as smaller organisations operating here in London like Enfield Community Transport scheme or the Stonebridge Training and Education Project in my own constituency, that enable people to engage more effectively with the government, fulfil their true potential, and grow into better citizens.

Measures to help voluntary sector

We want to forge a new partnership with the voluntary sector. To enable your organisations to continue running innovative schemes on a local, national and international level, we want to help raise the level of charitable giving.

For too long the voluntary sector has been held back by archaic rules, bad laws, and poor tax legislation. As experts in charity finance you know that the voluntary sector needs a fair and sympathetic legal and economic framework within which to operate: with your help we have begun to build it. This is a collaborative process – where we have moved forwards, it has been through dialogue and consultation. Over 50% of the ideas proposed by the CTRG on the recent Review of Charity Taxation were accepted and implemented by this government – we do listen and we do act.

But perhaps we need a more structured approach to our dialogue to further build on the good relationship between charities and the Government. I am therefore asking officials to put in place more formal arrangements for regular meetings – perhaps half yearly – where the sector can come together with Treasury, Customs and Excise and Inland Revenue, and engage in constructive dialogue. Regular meetings would allow us to reflect together on what works, where guidance may be improved and how we can move forward on particular issues of concern to the sector.

It is worth taking a moment to recall how much has been achieved.

The Gift Aid changes, introduced in Budget 2000, mean that for every pound a UK taxpayer donates to charity the government is prepared to contribute to that charity an additional 28 pence. People and companies can donate listed shares to charity, without having to pay any capital gains tax, and get extra tax relief for the full value of the shares.

We have abolished the ceiling on how much money employees can give through the pay packet – payroll giving can now be any sum an employee chooses. Until April 2003, we are offering a special 10 per cent supplement on all payroll donations to charities. So for every pound contributed through payroll giving, the government will contribute up to 50 pence worth of tax relief. I know that the CTRG has suggested extension of this 10% supplement and this is an idea that we will give careful consideration.

We are already beginning to see the results from the changes we have made: donations through payroll giving rose by more than £18 million in 2000/2001.

In the PBR we set out further measures to support charities, including:

An Inland Revenue consultation on whether to allow tax payers to donate directly to charities on the annual tax form – and gain tax relief for doing so. I hope that the CTRG will play an important role in the consultation process;

The abolition of football pools tax – so every charity or local sports club who run pools based competitions will see this tax liability abolished; and

The Chancellor has re-stated the fact that charities collecting donations of unwanted foreign coins from taxpayers could benefit from the 28% tax top up through Gift Aid.

I know that Lee Jones [Deputy Chair of the Charity Finance Directors Group] welcomed the Chancellor’s statement – predicting that it would lead to an increase in income for your organisations. We recognise that charities are becoming the ‘third sector’ and we are committed to take further action, where possible , to simplify the tax structure – driving costs down and donations up.

Budget 2002 will provide another opportunity to consider the tax burden on charities and on charitable giving. I know that the CTRG has made a number of proposals on irrecoverable VAT; on relaxation of the rules governing trading activities by charities; and on reducing the administrative burden that the tax system imposes. Obviously I can’t tell you what measures Budget 2002 will actually contain – but all of these suggestions will receive careful consideration.

Performance and Innovation Unit Review

To help us improve the capacity of voluntary organisations to provide their vital services, and to underline the importance of the partnership between government and charities, we have established two review teams.

In the Cabinet Office the Performance and Innovation Unit are developing proposals for modernising the legal and regulatory framework for charities and the voluntary sector. The aim is to enable existing organisations to thrive and grow, encourage the development of new types of organisation, and ensure public confidence in the voluntary sector. We want a legal and regulatory framework that stimulates, rather than stifles, social enterprises.

The review team are engaging in extensive consultation with the sector. So far they have run six major consultation events around the UK. I know that the Charity Finance Directors Group have responded positively to the consultation – calling for strong self-regulation measures, and opportunities for the charities themselves to measure performance and improve transparency. We do listen to what you have to say and it will be reflected in the final report when it is published in spring of this year.

Cross cutting review

Alongside the work of the Performance and Innovation Unit the Treasury has launched a cross cutting review of policy. We are re-examining the ways in which the ‘third sector’ is involved in overseeing and delivering services. The aim is to understand more fully how the government can work effectively with the voluntary sector to deliver high quality services, taking account of your key role in strengthening civil society and building capacity in communities. We are:

Mapping the many ways in which the voluntary sector is already involved in overseeing and delivering services.

Examining best practice in effective partnership between the voluntary sector and the public sector – suggesting practical ways of improving the relationship and spreading good ideas; and

Breaking down the barriers to voluntary involvement in delivering better public services: working to ensure that the fiscal and regulatory framework create a level playing field on which charities can operate on the same terms as local government and private sector providers.

This is an opportunity for you to tell us what works, what doesn’t, and how existing resources can best be used to help your organisations participate in the delivery of high quality public services. It is about making existing resources work better for all of us.

As charity tax and finance experts you have a wealth of experience, commitment and insight about what works. This is exactly the kind of information we are trying to capture in the review, and so we want you to bring your knowledge to the fore.

Whether you work locally, regionally or nationally, we want to hear from you. Over the coming days and weeks we will be collecting and collating views from experts all over the country. I am determined that your views will make a real difference to the final report – which will be produced later this year.

Of course one of the reasons the CTRG exists is to work with government – at all levels – and ensure that the voice of the voluntary sector is heard on tax issues. Earlier this week I met with Nick Kavanagh to discuss other issues of mutual concern. The foundations are in place; we have the basis of a strong working relationship.

We won’t always agree on all issues. I know that you have concerns about irrecoverable VAT, about EU legislation, and about tax relief on buildings used for charitable purposes. You know that sometimes our views differ, and that whilst we will always lend a sympathetic ear sometimes we will not agree with all your conclusions. The important thing is to keep the channels of communication open – so the voice of the voluntary sector is not a voice crying out in the wilderness but a voice at the heart of government, echoing down the corridors of power, resonating in European negotiations, and reflected in the policies of this government.

So when the Treasury’s Cross Cutting Review is completed – it will reflect your views; in Budget negotiations – your submission will receive the attention it deserves; and in negotiations on the EU VAT Directive we will carry your concerns with us to Brussels. This is the basis of a new and constructive relationship between an open government and an independent voluntary sector. As we remake our public services we want you to be full partners, that is why we launched the cross cutting review, that is why I am taking a close personal interest, and that is how we will deliver on our shared social objectives.

Our vision is of a strong, independent voluntary sector, operating within a modern, efficient taxation and regulatory system – working closely with government to deliver the public services people expect and demand. Working together, we can make that vision a reality.

Thank you.

January 2, 2023
HISTORIC PRESS RELEASE : White Paper sets out vision for European Economic Reform [February 2002]

The press release issued by HM Treasury on 28 February 2002.

A White Paper on European Economic Reform was published today by Chancellor Gordon Brown and Trade and Industry Secretary Patricia Hewitt.

Realising Europe’s Potential sets out a blueprint for economic reform in Europe over the next decade, ahead of the Barcelona European Council next month. It outlines a vision of the EU as a dynamic, job creating and socially inclusive economy and considers the challenging reforms of product, labour and capital markets needed to achieve this vision.

Key proposals include:

– Reforming Europe’s labour market policies to regain the conditions for full employment and tackle social exclusion
– Modernising competition policy and reforming state aid
– Creating a single financial services market and improving access to venture capital.
– Opening up EU energy markets
– Reform of the Common Agricultural Policy
– Boosting innovation by forging closer links between industry and academia

Gordon Brown said:

“Each continent must play its full part in restoring world growth. We can all do more. America by keeping markets open. Japan by radical banking reform. Europe by the reform of capital, labour and product markets we recommend today. These are vital to facing the challenges of global competition, EU enlargement and eight per cent EU unemployment.

“EU enlargement will happen – we welcome it. But we must ensure that it takes place in a way that increases trade, stability and prosperity within the EU, rather than slowing it down.

“At the European Summit in Barcelona next month we must make headway on the economic reform agenda – all member states must play their part.

“At the Lisbon summit two years ago Europe acknowledged that it was not living up to its potential. A ten year goal was set to become the most competitive and dynamic knowledge based economy in the world. Its foundations will be comprehensive reforms to product, capital and labour markets.

“Some progress has been made since Lisbon. Five million new jobs, agreement on a new regulatory framework for communications, rapid progress in increasing internet use liberalising of postal services and a start to reforming state aids.

“But we still have a long way to go. If the EU matched US productivity we would be better off by an average of £5000 per person.

“The White Paper we are publishing today underlines our vision of the EU as a dynamic, job-creating and socially inclusive economy. It sets out challenging reforms of product, labour and capital markets that we believe are needed to realise that goal.”

Patricia Hewitt added:

“A prosperous UK depends on a prosperous Europe. Driving forward the Lisbon agenda is the key to securing this and the EU’s ultimate goal of creating 20 million new jobs in Europe by 2010.

“Key to this ambitious job creation process is better regulation across Europe. This White Paper sets out our commitment to slashing red-tape. We are determined to encourage more intelligent regulation that stimulates enterprise amongst our own business community and attracts investment from across the globe.

“We have made substantial progress at home, but there is a great deal of work to be done across Europe. If we succeed in meeting the ambitious objectives we agreed at Lisbon, then every business stands to benefit financially.

“Today’s White Paper represents an action plan that will deliver huge rewards for our business community – rewards which will deliver every EU citizen a better quality of life.”

January 2, 2023
HISTORIC PRESS RELEASE : Making a difference in Public Services [February 2002]
The press release issued by HM Treasury on 26 February 2002.

Maintaining the commitment of public services managers and staff will be central to delivering continuing improvement in public services, according to a Public Services Productivity Panel (PSPP) report published by the Treasury today.

The report ‘Making A Difference – Motivating People To Improve Performance’ looked at qualitative research carried out in eight high-performing organisations in both private and public sectors to identify factors behind their success in delivering recognized high-quality services to clients and customers.

The report highlights a number of effective techniques and practices that management and staff have used to raise levels of motivation within their own organisations. But it also warns that its central recommendations – that organisations regularly assess the motivation of their staff and the skills of their managers and act on both – are minimum requirements: to achieve a step change in the quality of public service delivery, managers need to take a co-ordinated and strategic approach to motivating their staff.

The report was prepared by Sir Andrew Foster (Controller, Audit Commission), Greg Parston (Office for Public Management) and John Smith (Finance Director, BBC) for the PSPP, reporting to Treasury Chief Secretary Andrew Smith.

Welcoming the report, Mr Smith said :

“Informed, valued and motivated staff are central to improving services in both the public and private sectors. The best organisations in both sectors recognise this and have developed positive, effective management strategies to attract and retain staff who can deliver to users the services they expect and deserve.

“The PSPP report looks at some of the best of these approaches, strategies that have shown results already. I want to see them studied and adopted by management across the public sector as an important part of the drive to improve public services”.

Sir Andrew Foster said:

“Some of the places we visited would appear on first sight to be as different as chalk and cheese – a trendy ad agency and a Northern council. In truth, the thing that stood out was the quality and motivation of their staff, their switched-on line management and the time, effort and focus top management gave to these issues.

“Good effective management is not a given, but needs to be worked at. For those organisations that do so, the future it seems is very bright”.

The report concluded that the three requirements for a highly motivated workforce are:
- A strategic framework that includes vision, transparent values, effective measures of performance, and HR functions that are central to the business.
- A supportive culture that allows delegation, recognition, communication and mutual respect.
- A strong emphasis on the inter-personal skills of line managers who are clearly connected to the organisation’s leadership and can translate these values for their staff.
The research found no significant differences between what motivates staff in the public and private sectors, and that so-called ‘soft’ management issues, such as good line management, setting clear objectives and inviting and recognizing staff contributions to success, are at least as important – if not more so – than pay and benefits. It also finds that motivated employees do not appear by chance, that active ‘interventionist’ personnel polices are required to develop and reward them, and that there are very real costs to any organisation which does not invest in this way.

Organisations involved in the qualitative research were: Clatterbridge NHS Trust; The Employment Service; Microsoft UK; Ministry of Defence Policy Unit; Stockton-on-Tees Borough Council; Suffolk County Council; Tesco; West Middlesex Hospital NHS Trust .
January 2, 2023
Andrew Smith – 2002 Speech to the OGC IT Annual Conference
The speech made by Andrew Smith, the then Chief Secretary to the Treasury, on 21 February 2002.

I am delighted to be able to speak to you.

The information age presents new challenges to government. IT and other innovations have raised expectations of the public services – creating a consumer culture where everything is available instantly, at the touch of a button. Too often, in the past, expectation of the public sector has exceeded reality. So the challenge is to use the technology that has raised people’s expectations to raise the standards of public services – incorporating IT innovation into everything we do.

As the Prime Minister said in his speech to the CBI for all the talk of a new economy, we have one economy, all of which is affected profoundly by developments in technology. As IT is at the heart of the economy, so it must be at the heart of government: helping us meet rising expectations and deliver services designed around the needs of users.

To place IT at the heart of government we need an effective partnership with the IT industry. Our track record has not always been as good as it could be. The Immigration and Nationality Directorate, Passport Office, and Benefits Agency all suffered under the weight of poorly procured and badly designed IT systems.

The OGC was established to help us to overcome these problems. They are working to enhance the operation of the public sector – delivering efficiently procured, effectively operating facilities – built around the needs of the customer.

This amounts to a cultural revolution in the operation of the public services. In procurement, that means new partnerships between the public and private sector. And it means an improved relationship driven by:
- The Gateway review programme;
- The SPRITE programme;
- Senior Responsible Owners;
- The Senior IT Forum;
- The work of the OGC in developing Best Practice Toolkits; and
- The Supplier Management Team – opening up the government market to all enterprises.
The Gateway review programme is a technique for delivering procurement projects based on proven private sector practices, designed to ensure value for money improvements.

Through the Gateway experienced senior staff, independent from the projects, consider their development at crucial stages – helping to guarantee systems that are fit for purpose, and delivered on time. So far 104 projects – or £18bn of Government investment – have benefited from the Gateway programme.

We believe the scheme has the potential to deliver significant benefits in the IT procurement process.

The SPRITE programme flowed from a major Cabinet Office led review of IT-enabled business change projects. The aim is to improve the success rate by hardwiring best practice into the procurement process. The OGC now have responsibility for implementing the review’s recommendations.

We have reached the point where virtually all government IT projects have appointed a Senior Responsible Owner. The role of the SRO is pivotal to the successful outcome of IT enabled schemes. The OGC and the CSSA are striving to enhance their expertise and extend their ability to deliver.

It is all about building capacity within government to engage with our partners in the private sector.

Partnership is so important. It is central to the procurement of IT projects. Building capacity within government, and a commensurate duty to reform within the private sector, will enable us to achieve significant value for money savings and enhancements in the design and operation of IT systems.

I see the Senior Forum as an important part of this partnership process, an opportunity for government and the IT industry to come together to identify, and address, joint systemic issues.

Progress has been made. Government and industry members have established constructive working relationships: exploring the issues that endanger successful delivery of IT-enabled business change. We have begun to build open relationships: sharing objectives, constraints, financial targets and performance measurements.

Partnership, at the heart of the Senior Forum, must be at the heart of our IT agenda. In the past we have not always got it right. The capacity in the public sector has not been there. IT companies in the private sector have not always deployed the staff and the resources to ensure the right result. All that is beginning to change.

In the work of the OGC I see the potential for wholesale reform – a revolution in government procurement. In the IT industry I see a new spirit of co-operation – a willingness to work with us as equal partners. And in the work of the Senior IT Forum I see the mechanism to make that partnership work – a new relationship between government and the IT industry – based on shared objectives, openness, and trust. IT is the future of government services, and partnership is the future of IT. The expectations of the public have been raised – it is time to deliver the results.

Thank you.
January 2, 2023
HISTORIC PRESS RELEASE : Business and Industry leaders welcome Davies’ Report published today [14 February 2002]

The press release issued by HM Treasury on 14 February 2002.

Howard Davies’ report on ‘Enterprise and the Economy in Education’ was published today at a press conference in No 11 Downing Street, and received strong support from business and industry leaders.

Sir Alan Sugar said:

“This Government, more than any other I can remember, continues to actually do something to promote the understanding of business enterprise in the school and lecture room. I tour schools and universities throughout the UK promoting the concept that starting your own business is not only possible, but also rewarding personally and fun. I have found a genuine interest and excitement among the students I have met. Today’s announcement underlines the Government’s commitment to foster and fund enterprise capability within the education sector and this is good news for young people and the country in general.”

George Cox, Director-General of the Institute of Directors, said:

“I am delighted with the proposals. I believe business will be more than ready to play its part in putting them into effect. The report answers a vital need, mapping out a clear agenda for Government, business and schools to help equip the workforce of tomorrow with the enterprising skills – and attitudes – that it needs”

“It is vital both to the individual and to the nation’s future prosperity that we develop a genuine “enterprise culture” in the UK, which means making young people aware of what enterprise really means. It’s a huge task. I am delighted that the report has got to grips with the real issues on the right scale. Many people are already active in this area: businesses, schools and voluntary bodies. The problem is matching the scale of their effort to the scale of the need. The proposals show the way this can be done.”

Digby Jones, Director-General of the CBI, said:

“The CBI welcomes the Review’s proposals as a step in the right direction. The proposals to give all young people enterprise experience should help ensure that young people gain a positive attitude towards work and the skills to enable them to fulfill their potential”

John Monks, General Secretary of the TUC said:

“The TUC supports the Davies Review’s aim to energise enterprise activity in schools, building on existing good practice. Teachers are key to this work and we very much welcome the Review’s recognition that continuous professional development of teachers and new teaching and learning materials are essential. We also very much support the Davies recommendations that businesses need to commit time and resources to enterprise activity in schools on a systematic basis.”

Sir Ken Jackson, General Secretary of Amicus-AEEU, said:

“British kids are full of imagination and potential. We need kids to be excited about industry and innovation from an early age if British business is going to lead the world.

“I’m glad the Government is encouraging all children to develop their business skills while still at school. Everyone should have the chance to find out what business is about.”

Kathy Heaps, Principal of John Kelly Girls Technology College, said:

“I think that all young people should have the opportunity to engage in real-life business experience while still at school. This is particularly true for young people from disadvantaged backgrounds. I therefore welcome the report’s proposal to offer all young people the chance to take part in enterprise activities.”

Larry Hirst, General Manager of IBM UK Ltd, said:

“This report is a very positive step. In IBM’s work with companies of all sizes throughout the UK, we see that entrepreneurship is key to business success. IBM believes that it is vital for the IT industry to support the DTI and the DfES, ensuring that school children have as many opportunities as possible to develop their entrepreneurial skills. For example, the courses IBM runs with Businessdynamics provide many children with first-hand experience of the business world. We look forward to supporting the Government in helping young people develop the best possible skills for the world of e-business.”

David Irwin, Chief Executive of the Small Business Service, was also firmly in favour of the proposals. He said:

“I warmly welcome this report, its recommendations and the constructive dialogue it has created about how our schools and colleges can help prepare young people to meet the challenges of working life and achieve their dreams. We are living increasingly in a society where people expect to have two, three or even more careers during their working life, and, if our young people are to play a full part in the enterprise society we want to create in the UK, it is essential that they have the opportunity to develop enterprise skills and capabilities. It’s not all about starting up your own business. It’s about showing young people how they can develop the skills needed to drive forward change and achieve results, whether in large organisations or small, in business or in the not-for-profit sector.”

Anthony Goldstone, President of the British Chambers of Commerce, said:

“The foundations of an enterprise economy are built early in life, when children are acquiring their perceptions about business as a future career. Therefore, applying children’s learning to the business world is vital to their development and the wider needs of our economy. This should not be a practice that is limited to the best schools and teachers, but should be available to all. We unequivocally support the attention the Government is giving to this issue and Howard Davies’ drive to develop a coherent national strategy.”

January 2, 2023
HISTORIC PRESS RELEASE : ´From the classroom to the boardroom´, Davies Review of enterprise and the economy in education [February 2002]
The press release issued by HM Treasury on 14 February 2002.

Proposals to train Britain’s next generation of entrepreneurs were welcomed by business leaders at a Downing Street press conference today.

“Enterprise and the Economy in Education”, an independent review into enterprise and education conducted by Howard Davies, chairman of the Financial Services Authority, found that, although links between schools and industry are good in areas, fewer than 30 per cent of young people gain any experience of enterprise.

The review recommends that every pupil spends five days gaining experience of enterprise, has the chance to set up and run their own mini-company and carries out specific projects in local companies with real experience of designing, marketing, pricing and selling products.

The report also recommends that the two-weeks work experience fifteen and sixteen year-olds currently undertake, provides more enterprise and business experience, and proposes that every school links up with local businesses, with business people spending time encouraging pupils to pursue careers in business.

Howard Davies’ recommendations include:
- An £56 million contribution from Government and £30 million contribution from business, with Government piloting a range of different approaches;
- Special emphasis should be given to young people in economically deprived areas where existing links with business may be less well developed; and
- New teaching materials should be developed for enterprise learning and personal finance education.
Chancellor Gordon Brown said:

“Budget 2002 will send a message to entrepreneurs in every part of the country that this Government wants to open up the opportunities of enterprise to all. If we are to have a deeper and wider entrepreneurial culture we must start in our schools and colleges.

“I want every young person to hear about business and enterprise in school; every college student to be made aware of the opportunities in business, even to start a business; and every teacher to be able to communicate the virtues of business and enterprise.

“Providing this opportunity for young people, and especially for those in disadvantaged areas, is critical if we are to build a Britain where every community celebrates and rewards enterprise and where the chance to start and succeed in business is genuinely open to all.

“I welcome the Davies report as an important step in making this happen and spreading the spirit of enterprise from the classroom to the boardroom.”

Howard Davies said:

“The time is right for a step change both in enterprise activities, and in the promotion of economic and financial literacy. The reorganisation of the 14-19 curriculum offers an opening to revisit the place of enterprise learning in schools.”

Estelle Morris said:

“This is an interesting, independent review which makes some valuable observations about the development of enterprise, knowledge and understanding of the economy in our education system. But we need to consider the recommendations within the broader outcomes of the current Spending Review, and our other priorities in the education system. The review reflects our approach, published this week in our 14-19 Green Paper, of delivering good quality vocational learning and supporting work-based learning for all our young people.”

Patricia Hewitt said:

“Entrepreneurs are the lifeblood of a rich, thriving economy and it is vital that we nurture the talent and business flair of all our students by getting enterprise on the education agenda. Britain already leads the way in Europe in supporting budding entrepreneurs. A recent Commission report singled Britain out for our low business start-up costs and speedy registration.

“Today’s proposals will instil in our students the self-belief and confidence to achieve their ambitions of becoming entrepreneurs of the future.”

Business leaders today gave the proposals strong support. Details of their comments can be found in the attached paper.

The Chancellor, Estelle Morris and Howard Davies this morning visited IBM offices in London, and met pupils from the Aylwin School, Southwark, who have been involved in an enterprise project organised by businessdynamics and IBM.
January 1, 2023
Andrew Smith – 2002 Speech to the Institute of Actuaries Seminar

The speech made by Andrew Smith, the then Chief Secretary to the Treasury, on 6 February 2002.

Introduction

I am very pleased to be here today.

2. Thanks very much to the Institute of Actuaries and the Institution of Civil Engineers for organising this conference.

3. Now is the time for reform in our public services. Reform means new relationships: new relationships within government between the policy makers and the frontline professionals who deliver our services; new relationships between the public and the private sector. But we are determined to match that reform with increased investment.

4. So it is crucial to the success of our programme that the public and the private sector – the leaders in the boardroom, the finance directors, and their counterparts in government can come together, share expertise, and agree on the way forwards.

Investment

5. When this Government came to power, the public services were run down. Confidence in the public services had been eroded by years of under investment. Confidence within the public services had been eroded too by years of some bad faith and some bad practice.

a. Public sector net investment had fallen from a high of 5% of GDP in 1963-64 to a low of 0.5% in 1997-98.
b. It fell by an average of almost 16% each year during the last Parliament of the previous administration.

6. Under investment is irresponsible – storing up problems for future generations. When we came into office we faced around a £7bn backlog of repairs in schools, £19bn in social housing, £3.5bn in the NHS. Schools, houses, hospitals, the infrastructure of our country – eroded by neglect.

7. We are committed to reversing the legacy of under-investment in our public services. The 2000 Spending Review set out ambitious plans.

8. We set ourselves the target of more than doubling public sector net investment between 2000/01 and 2003/04. The latest figures show that we are on course to meet that target – Public Sector Net Investment was £6.3bn in 2000/01 and is forecast to reach £18.6bn by 2003/4.

9. This means that with this Government, between 2000/1 and 2003/4, public sector net investment will rise by an average of 40% each year in real terms.

10. This is investment in our priority areas as a government and as a nation. Investment in our homes, hospitals, schools, and transport system.

11. The damage done to our capital infrastructure from years of neglect cannot I think be underestimated. Reversing it will take time – but we are already starting to see results.

a. 68 major hospital development projects worth over £7.3 billion given go ahead since May 1997 in England alone.
b. £31billion allocated to local authorities to eliminate the backlog in local road maintenance.
c. By March 2002, 17,000 schools will have received funding for repairs.

12. We are determined to sustain these levels of investment in our national infrastructure. It is investment that is affordable: after all we base our plans on the most cautious of assumptions. Of course in the current economic climate there will be tough choices to be made – competing priorities, but the focus will continue in this year’s Spending Review.

Reform

13. This investment must be matched by reform in the way in which public services are delivered. The Prime Minister has set out four principles of public service reform:

a. High national standards and full accountability;
b. Devolution to the local level – encouraging diversity and creativity;
c. Flexibility at the front line to support modern public services – intervention in inverse proportion to success, freedom for the nurses, doctors, teachers and managers who have proved they can deliver;
d. The promotion of greater choice and alternative providers – a new focus on the citizen as customer.

14. I want to focus for a moment on the last of these – the consumer of public services.

15. Customers and clients have higher expectations of public services than they used to – and rightly expect improvement in the outcomes that really matter to them. We are determined to deliver these improvements and we have put in place a strategy to do it – to bridge the gap between expectation and reality:

a. We have set out challenging PSA targets – yoking investment to reform by holding departments accountable for the delivery of improvements – indeed the first ever attempt by a British government to set out clear targets against which they would be judged. The National Audit Office has commented that “The Introduction of Public Service Agreement targets, and in particular the move to outcome-focused targets, is an ambitious programme of change which puts the United Kingdom among the leaders in performance management practice.”
b. We have established the Office of Public Services Reform – reporting directly to the Prime Minister – to strengthen the capacity and to improve the performance of our public services.
c. The Office of Government Commerce is spreading best practice around government and helping to ensure value for money on the tax payers investment, its no exaggeration to say the work of OGC is revolutionising government procurement in this country;
d. I launched the Gateway review process – a technique for delivering procurement projects based on proven private sector practices, designed to ensure value for money improvements in major Government projects. So far 104 projects – or £18bn of Government investment – have benefited from the Gateway process.
e. We established Partnerships UK in June 2000 to build on the work of the Treasury Taskforce in helping the public sector to deliver modern, high quality, public services. Their focus is on helping us to deliver Public Private Partnerships that are developed quickly and efficiently; built on strong, stable relations with the private sector; with savings in development costs on both sides.

16. Working together, we can reform the relationship between the government, the public sector staff, and the private sector institutions that will deliver the reforms we all want to see.

Partnership

17. The role of the private sector – organisations represented here today – in this agenda has excited greatest interest. There have been suggestions that private sector money raised through Public Private Partnerships will be used to replace public sector investment.

18. Let me make one thing clear. Money raised from the private sector through arrangements like PPP is not used as a replacement for public sector investment. In fact private sector investment will amount to less than 13% of total investment in our public services this year.

19. The key thing is this 13% represents an additional £4bn investment in our public services – it is a valuable addition, not a replacement. To regard extra money flowing into our programme of public sector investment and reform as somehow a bad thing would, to my mind, be perverse.

20. Investment is important but, on its own, it is not enough. Public Private Partnership is and always has been about more than funding – it is about developing new ways of working and improving the efficiency of public services for the user. Additional investment from the private sector – in some cases from your organisations – will bring with it the expertise, ingenuity and rigour of private sector practices.

21. So we need PPPs to help us manage increased investment efficiently, and to make the money we invest go further. We need PPPs to create the incentives to innovate, to manage risks effectively, and to deliver projects on time and on budget. You only have to look at the Jubilee line extension – almost two years late and £1.4 billion over budget – to realise that the public sector can’t always do this on its own.

22. That is why we need to harness the efficiency and management skills of the private sector. We have got big plans for our schools, our hospitals and our transport infrastructure. To realize our ambitions we need turn the powerful discipline of the markets to the service of the public good. We need private sector management and employees to challenge inefficiency, and to develop imaginative approaches to delivering public services and managing state-owned assets.

23. Now businesses of course need to generate a return – they are forced to innovate and look for ways to enhance the service offered to customers. By forging partnerships between the private sector and the state, at all levels, we can turn this innovation towards the improvement of our public services.

24. There are some who claim that private sector involvement is somehow at the expense of front line staff and service delivery. This is simply not the case – when you look at public staffing levels they have risen by 140,000 between 1997 and 2000 – more people in jobs not less, with plans to employ even more doctors, nurses and teachers. In fact private sector profits flow from an ability to innovate, consider the whole life costs of projects, and to manage risk effectively. It is where the private sector are better at managing risk that we can redistribute the risks associated with delivering large and complex procurement projects.

25. Where the average over-spend on London underground schemes was 22% the taxpayer had to carry that extra burden. Where schools and hospitals were completed over time and over budget it was the citizen who suffered and the taxpayer who picked up the bill. But where the private sector has capital at stake there is the incentive to deliver on time and to budget, and if they fail, they must meet the costs. Transferring risks to the private sector frees the taxpayer from unnecessary burden, creates the incentive for the Private sector to deliver, and when they do, benefits the citizen and the service user. To give a few examples:

a. Carlisle hospital opening several months early; Dartford and Gravesham ready in 44 months – well ahead of what the public sector could have achieved alone;
b. Over 160 Local Authority projects approved since 1997 – 40 fully operational delivering important services to local people; and
c. The Barnhill Community high school opening a year after the contract was signed, providing state of the art facilities to educate 1450 pupils. Ian Marshall – the Headmaster – said the partnership of the private sector allowed the Local Education Authority ?to think about being ambitious, to think about a learning environment that is second to none?.

26. So PPPs are a means by which the Government is seeking to bring together the best of both sectors – aiming to deliver a higher quality of public service than is possible through the public sector alone. Aiming to deliver public services that are indeed second to none.

27. So this is the key. We are boosting the quantity of public sector investment – not, as our predecessors have done, substituting private investment for public responsibility, but using the private sector to boost the quality of that investment too.

Conclusion

28. Expectations of the public sector have been raised. It is the service ethic in the best of organisations – private and public sector – that has raised them. We have to go beyond offering a basic standard and deliver public services around the needs of consumers and clients. To do so we have to increase investment, of course. But alongside investment must come reform:

a. Reform within the public sector – driven by the Office of Public Sector Reform, the PSA targets, and the framework of national standards with the power to deliver devolved opportunities to motivated frontline professionals;
b. Reform of relationships with the private sector – OGC and PUK building capacity within government to act as an effective partner, private sector efficiency driving improvement and innovation in a flexible, customer orientated public sector.

29. For investment in the public sector, public service reform, and Public Private Partnerships this is really just the beginning. In the spirit of co-operation that exists between government, hard working staff in our hospitals, schools, and local authorities, and the innovators in the private sector, there is the chance to build a truly world class public sector. Our shared vision must be of the highest quality public services, focused on the needs of customers, and providing for the taxpayer a decent return on their social investment; delivered by efficient public and private sectors, working together through a common commitment to the idea of public service. Working together – I know this is a vision we can achieve.

30. Thank you.

January 1, 2023
HISTORIC PRESS RELEASE : New Fund to give Commonwealth children the best start in life [February 2002]

The press release issued by HM Treasury on 5 February 2002.

A new Government pledge of £10m to kick-start a Commonwealth Education Fund was announced by Chancellor Gordon Brown and International Development Secretary Clare Short today, as a new pamphlet on globalisation was published.

Speaking at a seminar in Downing Street attended by key NGO’s, the Chancellor and Ms Short gave details of the Commonwealth Education Fund, launched this year to mark the Golden Jubilee year, which will highlight the need to achieve universal primary education in the Commonwealth.

Alongside the £10 million, the Government will match contributions by business, pound for pound including tax relief. Money raised by this year’s Comic Relief ‘Sports Day’ earmarked for education in Commonwealth countries will also be matched pound for pound, including tax relief, by the Government.

Chancellor Gordon Brown said:

“It is a tragedy that 75 million children in the Commonwealth don’t complete their basic schooling. The Fund can help us support work with the most vulnerable and disadvantaged children – getting street children into schooling, or helping child soldiers start a new life with counselling and education, or supporting mobile schools for nomadic children. It can also help promote public participation in education planning and delivery in the Commonwealth.

“The Fund will ensure that more children in the Commonwealth get a decent start in life as we approach our target of primary education for all.”

Ms Short said:

“Clearly the education needs of developing countries are enormous, and that is why we and the international community have invested so heavily in this in recent years. This Fund will further stimulate this work and strengthen the voice of the poor to demand their right to a decent education.”

Save the Children said:

“Save the Children welcomes an innovative way of increasing resources to ensure that more girls and boys can enjoy their basic right to a decent education. We believe children in this country would support action that allows their contemporaries in Commonwealth countries to attend school.”

Kevin Cahill, CEO of Comic Relief, said:

“Sport Relief is a new fundraising campaign organised by Comic Relief and the BBC to help give vulnerable and disadvantaged children at home and across the world the chance of a brighter future. We are delighted that the Government is matching the international efforts of Sport Relief to give an education to some of the world’s poorest children who would otherwise simply be forgotten and missed out.”

The Chancellor also set out the four key proposals for action needed to ensure that all countries benefit from the new global economy. The pamphlet ‘Tackling Poverty: A Global New Deal’ launched today proposes:

Reform of economic government in developing countries, with agreed codes and standards for fiscal and monetary policy;

New corporate standards for business;

Opening of markets; and

Up to $50 billion a year in additional aid.

The Chancellor will put his proposals for a global new deal to tackle poverty to this weekend’s meeting of G7 finance ministers in Ottawa.

January 1, 2023
HISTORIC PRESS RELEASE : Enterprise Neighbourhoods – Boosting enterprise in disadvantaged communities [March 2002]

The press release issued by HM Treasury on 28 March 2002.

Chancellor Gordon Brown today took forward the Pre-Budget Report consultation on a series of measures to support small businesses in deprived areas and so create 2000 enterprise neighbourhoods in Britain.

The measures for consultation include:

A Community Investment Tax Credit (CITC), which will stimulate enterprise in disadvantaged communities through tax relief for investment in enterprises in disadvantaged areas. Draft legislation has been published today for consultation;

Improvements to the disadvantaged areas stamp duty relief, which will extend relief for commercial transactions to contracts incorporating 6 or more dwellings and commercial leases – this will encourage investment in residential property and support small businesses who are more likely to occupy leased premises;

Introduction of the VAT flat rate scheme to firms with a turnover of £100,000. 540,000 businesses will be eligible, significantly cutting compliance costs by up to £1000 a year.

Speaking at the TGWU ‘Manufacturing Matters’ conference in Leeds, the Chancellor said:

“The small firms of today are the big firms of tomorrow. I want people in disadvantaged communities to see that the enterprise culture too often restricted to the elite is open to them – not least in high unemployment communities where employment for too long has passed by.

The Government has a special responsibility to remove the barriers that hold small firms back and create a level playing field in which small firms have an equal opportunity to succeed and grow, so we are delivering a more favourable environment with special incentives, particularly in our high unemployment areas, to create 2000 enterprise neighbourhoods across Britain.

Genuine equality of opportunity means that no matter your background or area, no matter your wealth, you should have the chance if you have the talent and initiative to turn your ideas into a successful business – making Britain a more dynamic, vibrant, job-creating, wealth-creating economy.”

January 1, 2023