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

The Financial Secretary to the Treasury, Paul Boateng, and the Environment Minister, Michael Meacher, today launched a consultation on possible changes to the Landfill Tax Credit Scheme (LTCS).

The consultation paper seeks views on the priorities for funding as well as potential funding mechanisms for the scheme, ranging from retaining it in its current form to replacing it with a public spending programme.

Paul Boateng said:

“Consulting on the landfill tax credit scheme allows us to benefit from the views and experiences of the waste industry, environmental groups, local people and other interested stakeholders. The Government is very interested in hearing the views of all who have an interest in this scheme. We are seeking views on what the priorities for funding should be from the revenue currently going through the scheme. These could include sustainable waste management, local community projects or other wider Government objectives. We also want opinions on the best way of delivering these objectives.”

Mr Meacher said:

“The landfill tax credit scheme has funded local environmental projects as well as work on sustainable waste management.  This consultation seeks views on how we can enhance the environmental benefits of this funding still further.”

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

Derek Wanless today published his Final Report – ‘Securing Our Future Health: Taking A Long-Term View’.  This is the first ever evidence-based assessment of the long-term resource requirements for the health service in the UK.

The Report builds on the Review’s Interim Report published on 27 November 2001, which set out the main trends affecting health care over the next 20 years and was followed by a period of consultation in both the UK and around the world.

Announcing publication of the Final Report, Mr Wanless said:

“If our health services are to meet people’s expectations and deliver the high standards over the next 20 years, we need to devote a significantly larger share of our national income to health care.  But money on its own is not enough and provides no guarantee of success – it is essential that resources are efficiently and effectively used.

Resources and reform must go hand in hand – both are vital. Neither will deliver without the other.”

The Final Report describes the Review’s vision of a high quality health service in 2022.  Patients are at its heart, demanding and receiving safe, high quality treatment, fast access and comfortable accommodation services.  This is an ambitious goal for the present health service and a huge challenge to deliver.

The Report sets out the Review’s projections of resources required over the next 20 years to deliver a high quality health service, recognising a range of possibilities for the future in three scenarios.  The projections show the UK spending between 10.6 and 12.5 per cent of GDP on health care by 2022-23, compared to 7.7 per cent today.  The average annual real terms growth rate in UK NHS spending is between 4.2 and 5.1 per cent over the 20 year period.

The projections are in five year blocks. These show the highest growth in spending in the early part of the Review period – an average of between 7.1 and 7.3 per cent a year in real terms over the first five years.  This reflects the need for significant investment to allow the NHS to ‘catch up’ to standards elsewhere and to create the capacity essential to expand choice in future.  The Report stresses that the pace of growth must be considered within the context of the service’s capacity. The Review notes that its projections are therefore at the upper end of what should be sensibly spent.

Mr Wanless said:

“I believe that it is right that there should be substantial investment quickly: there is an unacceptable gap in performance between the reality of the NHS today and what will be expected and needed in the future. But this investment must not be more than can be sensibly spent. My projections reflect this balance, but represent a very considerable management challenge.”

Growth moderates during the second decade as the NHS increasingly “catches up”, so that in one of the scenarios health spending at the end of the 20 year period is growing broadly in line with GDP.

The Report also makes a number of observations about the effective use of resources.  Mr Wanless said:

“The right incentives must be in place to ensure money is spent at the right time, in the right place and in the right way. There must be clear standards of quality, greater local flexibility in delivery and independent audit of all spending.

We must also encourage greater public engagement in the service in order to increase levels of health awareness and to establish a more effective partnership between the public and the health system.”

The Report also stresses the need for a “whole systems” approach to care – and in particular the importance of integrating thinking about investment in social care with health care.

NOTES FOR EDITORS

1. Budget 2001 announced that Derek Wanless, former Group Chief Executive of NatWest Group, would undertake a review of the technological, demographic and medical trends over the next two decades that will affect the health service.

2. The terms of reference for the Review were:

(1)      To examine the technological, demographic and medical trends over the next two decades that may affect the health service in the UK as a whole.

(2)      In the light of (1), to identify the key factors which will determine the financial and other resources required to ensure that the NHS can provide a publicly funded, comprehensive, high quality service available on the basis of clinical need and not ability to pay.

(3)      To report to the Chancellor by April 2002, to allow him to consider the possible implications of this analysis for the Government’s wider fiscal and economic strategies in the medium term; and to inform decisions in the next public spending review in 2002.

The report will take account of the devolved nature of health spending in the UK and the devolved administrations will be invited to participate in the review.

3. The Interim Report on Derek Wanless’ Review was published on 27 November 2001, together with the proceedings of a Health Trends Conference held in London on 18-19 October 2001.

4. Mr Wanless’ Final Report is published today, together with an international comparative study, “Health care systems in eight countries: trends and challenges”, commissioned by the Review.

5. All four documents are available on the Review’s website.

6. The Final Report, in the light of consultation responses, confirms the main trends that will affect health care over the next 20 years, first set out in the Interim Report:

• rising patient and public expectations;
• delivering a ‘world-class’, high quality service;
• changing health needs of the population (including demography);
• technological and medical advance; and
• use of the workforce and other productivity changes.

The Final Report considers the impact each of these will have on resource requirements.

The press release issued by HM Treasury on 15 April 2002.

Britain must encourage more young people to study science and engineering or face a future skills shortfall, according to a new report published today.

The Roberts Report, commissioned by the Treasury, Department of Education and Skills, and the Department of Trade and Industry examines the supply of scientists and engineers in the UK.

It finds emerging shortages in the supply of high-level mathematics, physics, chemistry and engineering skills – due to increasing demand by employers for these skills and due to fewer students choosing to take these subjects at A level, and also later at university.

Sir Gareth Roberts, President of the Science Council, also identifies particular issues in schools, further and higher education, and in the attractiveness of jobs in research and development that are contributing to these shortages.

Handing over the report to the Government today, Sir Gareth said:

“The UK has a strong scientific tradition. In the past it has not always translated this into economic benefit. To do this effectively we need highly skilled scientists and engineers capable of matching the best in the world. My recommendations are designed to ensure that we achieve this. They constitute a serious challenge to all with an interest in science, engineering and innovation, especially the Government, employers and those in the education system.”

Welcoming the report on behalf of the Government, Lord Sainsbury, Minister for Science and Innovation, said:

“We are making steady progress in turning our world-class science into innovation which benefits our economy and quality of life.  It is essential that this progress is not held back by a shortage of science and engineering skills.  This means that we must attract and train more world-class scientists and engineers.  I welcome this report, which will help us to understand the challenges we and others face in ensuring a strong supply of such scientific and technical talent.”

Margaret Hodge, Minister for Lifelong Learning and Higher Education, said:

“We are committed to promoting better opportunities for young people – including the chance to develop the up to date science and engineering skills that this report shows are in demand.

We will look to build on our progress so far in tackling the challenges posed by Sir Gareth’s report but our work to improve and promote science education has been acknowledged. Standards of achievement are rising. We have introduced golden hellos and training bursaries to recruit the teachers we need. Science Year is helping to spread awareness of the opportunities available in science and engineering and we are working to widen access to higher education to make the most of the nation’s talents.”

Paul Boateng, Financial Secretary to the Treasury, added:

“The Government has done much to foster innovation and science in the UK, including increased investment in university research and tax breaks for businesses carrying out research and development. Sir Gareth’s report is important in identifying further ways of boosting the contribution science can make to improving productivity and growth. The Government will consider Sir Gareth’s recommendations in the context of the forthcoming Spending Review.”

The press release issued by HM Treasury on 20 May 2002.

The Government is considering amending the Money Laundering Regulations 2001 in order to:

• Require firms that are regulated by the Financial Services Authority (FSA) to inform them if they carry on Money Service Business activity; and
• Require all money remitters to include originator information – the name, address (and, where applicable, the account number) of the customer – on all money transfers sent from the UK, both abroad and within the UK.

These proposed changes will affect banks, money remitters, some bureaux de change and informal remitters such as hawala.  The Government is keen to receive views from all interested parties.

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

New £40 million investment funds to boost enterprise in disadvantaged communities by increasing access to finance for local entrepreneurs opened for business today.

The Bridges Community Development Venture Funds, supported by £20m of Government money and £20m from private investors, will only invest in businesses that will regenerate local economies in the most deprived areas of England. The Funds are launched today as new figures from the British Venture Capital Association show a record rise by 24% of investment in UK start-up companies.

Speaking at a breakfast event for investors co-hosted in Downing Street by Trade and Industry Secretary Patricia Hewitt, Chancellor Gordon Brown said:

“Britain needs an economy that must work not just for some people some of the time, but for all of the people all of the time; too many people are left out of the British success. Even at a time of record investment in start-up businesses by venture capital, we can and must do better.

The key to neighbourhood renewal is not more benefit offices but more businesses, which is why these new Funds are crucial to opening up opportunities and encouraging and rewarding enterprise. They will help dynamic and fast-growing enterprises to prove that deprived areas are not no-go areas for business but sources of future growth and entrepreneurship”.

Trade and Industry Secretary Patricia Hewitt said:

It is essential that Government meet the challenge of enterprise with new incentives to reward entrepreneurship. Small businesses are the key to future growth everywhere, and nowhere more important than in high unemployment areas.

These new funds will enable entrepreneurs in deprived areas to maximise access to all of the opportunities that the UK economy presents.”

The funds will be run as commercial operations by a newly established management team of professional venture capitalists, operating on standard venture capital principles. This means that they will look to provide capital to businesses that will be successful and grow strongly, bringing deprived areas the growth-enhancing benefits of the venture capital model.

The press release issued by HM Treasury on 2 May 2002.

Barracks and prisons to be replaced by business and prosperity

The Government today announced a new £200m economic settlement for Northern Ireland, in addition to the transfer of military and security buildings for community use. Details were unveiled during a visit to Belfast by the Prime Minister Tony Blair and the Chancellor Gordon Brown.

The package, put together by the UK Government and the offices of the First Minister and Deputy First Minister on behalf of the Executive, includes:

• New powers for the Northern Ireland Executive to borrow up to £125m over two years;
• A further £75m made available from the Executive’s unallocated resources;
• Free transfer of the Maze Prison, Crumlin Road Goal, Ebrington Barracks and army bases at Magharafelt and Malone Road Belfast to devolved control for community use;
• A new strategic investment body for Northern Ireland to offer a strategic and coordinated approach to infrastructure investment in public services.

Speaking during a visit to the Odyssey Centre, the Chancellor said:

“Ex-army bases and prisons scar Northern Ireland’s landscape and symbolise the period of conflict. We want these sites to symbolise peace and prosperity and become the engine of economic and social regeneration in local areas. In place of the symbols of the old conflict and despair, there will be symbols of the new progress and hope – barracks and prisons of the past replaced by business and prosperity for the future.

The Northern Ireland Executive will have for the first time, new powers to borrow on its own account, raising spending power and offering greater economic freedom to make important decisions about new investment in infrastructure and public services. And we will help the Executive to develop a Strategic Investment Body for Northern Ireland to bring together the best expertise available to help to raise growth and competitiveness to the benefit of the people and business community of Northern Ireland.

This new momentum for reinvestment must be matched with reform, through more efficient use of resources and better managed services, delivering best value for money and high quality investment.

The economic settlement is a concrete demonstration of what can be achieved with devolution and offers faith in the future: the chance to build peace with prosperity and create an economy of opportunity for all.”

The press release issued by HM Treasury on 26 June 2002.

The Prime Minister has announced today the appointment of Gus O’Donnell as Permanent Secretary to the Treasury in succession to Sir Andrew Turnbull, recently appointed Cabinet Secretary and Head of the Home Civil Service.

Commenting on the appointment, the Chancellor Gordon Brown said:

“Sir Andrew Turnbull is an outstanding public servant and his promotion to Cabinet Secretary is very well deserved. Sir Andrew has played a crucial role over the past four years in helping raise the level of professionalism and expertise in the Treasury and strengthening the department’s capacity, working alongside other Government departments, to push forward public sector reform. I am delighted to welcome Gus O’Donnell, who has been a first-rate Managing Director of Macroeconomic Policy and International Finance, as the new Permanent Secretary to the Treasury.”

Gus O’Donnell said:

“I am delighted and honoured to have been appointed Permanent Secretary. It is a privilege to be taking over from Sir Andrew Turnbull. I look forward to building on his achievements in making the Treasury a more professional and diverse department, and in working with other Government departments to deliver better public services, a higher sustainable rate of economic growth and rising prosperity and improved employment opportunities for all.”

Gus O’Donnell’s successor as Managing Director, Macroeconomic Policy and International Finance will be Jon Cunliffe, currently Managing Director, Finance Regulation and Industry. Jon Cunliffe’s successor will be appointed in due course by open competition.

Notes to Editors

The new appointments will take effect from next month.

2. Gus O’Donnell will remain Head of the Government Economic Service. As Managing Director, Macroeconomic Policy and International Finance (MPIF), Jon Cunliffe will be the G7 Deputy and the UK Government’s representative on the EU’s Economic and Finance Committee. As before, the Permanent Secretary and Managing Director MPIF will share responsibility for being the Treasury representative on the Monetary Policy Committee and the OECD’s WP3 Committee. As before, the Head of MPIF and the Chief Economic Adviser to the Treasury, Ed Balls, will sit on the International Monetary and Financial Committee Deputies’ Committee, with Mr Balls as the Chairman. Ed Balls will continue to be the G20 Deputy.

3. Gus O’Donnell, 49, has been Managing Director, Macroeconomic Policy and International Finance since 1999. From 1998-9 he was Director of Macroeconomic Policy and Prospects, and from 1997-98 was the UK’s Executive Director to the IMF and World Bank. He has been Head of the Government Economics Service since 1998. Mr O’Donnell studied economics at the University of Warwick and Nuffield College Oxford. He joined the Treasury as an economist in 1979, having spent four years as an economics lecturer at the University of Glasgow. Subsequent posts in Government included being Press Secretary to the Chancellor of the Exchequer (1989-90) and Press Secretary to the Prime Minister (1990-94). Mr O?Donnell is married with one daughter. His interests include football, cricket, golf and tennis.

4. Jon Cunliffe, 49, has been Managing Director, Finance Regulation and Industry, since 2001. He was previously Director, Macroeconomic Policy and International Finance, leading Treasury work on the international financial system, its institutions (IMF, World Bank etc), the G7 summit and non-EU economies. Previous jobs in the Treasury have included leading the Treasury’s work on operational independence of the Bank of England and on European Monetary Union, management of the Government’s foreign currency reserves, UK Alternate Director at the European Bank for Reconstruction and Development and Public Sector Pay. Mr Cunliffe joined the civil service in 1980 and spent the early part of his career in the Departments of Environment and Transport.

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

The Chancellor has appointed Alan Cook as the new Chief Executive of National Savings and Investments (NS&I).

In announcing this appointment Ruth Kelly, Financial Secretary to the Treasury said:

“I look forward to working with Alan Cook. He brings a wealth of relevant financial services experience to the post. I am confident that he is the right man to lead the Agency into the future and to build on the successes of his predecessor, Peter Bareau.

“Mr Bareau achieved a lot in his six years as Chief Executive. He has overseen a critical period for the NS&I, leading it through a period of considerable, but vital, change. This has made NS&I better placed to compete in the market place and to assist in the cost-effective financing of the government debt. I am very grateful to Mr Bareau for his significant contribution.”

Notes for Editors

1. Alan Cook has been appointed Chief Executive, and Director of Savings, of the National Savings and Investments Agency. This appointment is subject to the usual pre-appointment checks and to signature of contract. He is being appointed on an initial five-year contract. He will take up his position on 30 September.

2. Mr Cook is currently Chief Operating Officer (UK and Europe) of Prudential. He has had a long career in the financial services market. Previous posts have included Chief Executive of Insurance Services, and Managing Director of Retail Insurance Operations at Prudential. He is a fellow of the Chartered Insurance Institute.

3. Mr Cook is 48 and is married with three children. Mr Cook succeeds Mr Peter Bareau CBE, who has served two full terms.

4. National Savings and Investments is a government department and an Agency of the Chancellor. Its principal objective is to assist in the financing of the government’s debt, by borrowing in the retail market at an overall cost that is cheaper than the wholesale market.

5. Through its partnerships with Siemens Business Services (SBS) and Post Office Limited (POL), National Savings and Investments markets and sells a range of savings products to the public. There is currently about £62bn invested in National Savings and Investments products, which accounts for about 20% of net government debt.

6. National Savings and Investments employs about 120 staff, who are mostly located at its head office in London.

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

Adjudicator for National Savings and Investments

Mr Roger Yeomans MA has been appointed under Section 84 of the Friendly Societies Act 1992 to be the independent Adjudicator for National Savings and Investments.

Press Office
HM Treasury
Parliament Street
London
SW1P 3AG
020 7270 5238

1. Mr Yeomans, aged 42, succeeds Mr David Farrington, who served two full terms. He is an Ombudsman in the Banking & Loans Division of the Financial Ombudsman Service, and was the Building Societies Ombudsman until 1 December 2001. He is a solicitor whose earlier career was in private practice, after which he worked as a Corporate Lawyer with Alliance & Leicester Building Society.

2. Under the terms of Section 84 of the Friendly Societies Act 1992, the Treasury has the power to appoint an independent adjudicator to hear disputes between National Savings and Investments customers and the Director of Savings. The power of the Adjudicator to hear disputes derives from Section 10 of the National Savings Bank Act 1971, Section 5 of the National Debt Act 1972 and in a number of Statutory Instruments.

3. The legislation provides for disputes between investors and the Director of Savings to be referred to the Adjudicator, in writing, only where a claim has been made on, and declined, by the Director.

4. The Adjudicator is supported by a secretariat. Their address is: Secretary to the Adjudicator for National Savings and Investments, 1st floor, South Quay Plaza, 183 Marsh Wall, London, E14 9SR.

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

A new government initiative designed to encourage public sector buyers to consider the potential benefits of tendering with smaller suppliers was announced today by Paul Boateng, Chief Secretary to the Treasury and Nigel Griffiths, DTI’s Minister for Small Business.

The publication ‘Smaller Supplier… Better Value?’ is part of the ‘Think Small First’ drive which urges all parts of government to think about their role in supporting the enterprise society.

Published jointly by the Office of Government Commerce (OGC) and the Small Business Service (SBS), the booklet seeks to raise awareness of the greater competition and better value small and medium-sized enterprises (SMEs) can bring to the marketplace.

Paul Boateng said:

“Increasing awareness of the potential benefits of doing business with SMEs helps to increase their share of government business.  The increased competition generated should improve value for money in public sector purchasing.”

Nigel Griffiths added:

“My priority as Small Business Minister is to increase access to tendering.  Small businesses have so much value to offer, through greater innovation, increased responsiveness, greater flexibility, better quality of service and specialist skills.

“We’ve already published a guide for small businesses on how to approach tenders and this companion will help square the circle by urging public sector buyers to look at the potential benefits of offering tenders to small business suppliers.”

Peter Gershon, Chief Executive of the Office of Government Commerce said:

“Smaller suppliers can often offer better value for money than larger companies.  Public sector purchasers always try to obtain value for money.  I want them to ask themselves regularly whether a smaller supplier may offer the best solution.”

The booklet refers to the challenges that SMEs often face when bidding for government business, such as finding it difficult to learn about opportunities, believing that bidding processes are complex and costly, or because they think they are too small to cope with the capacity of many of the advertised contracts.

Along with each of these challenges, the booklet puts forward best-practice solutions as to what departments could do to help, such as publicising opportunities through Business Links, keeping tender documentation jargon-free and dividing contracts into lots where appropriate.