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Mr. Christopher Leslie (Shipley): Last but not least, may I also thank my right hon. Friend for the many millions of pounds extra that he has announced in the settlement for the Bradford district? In particular, will he confirm that one of the most significant aspects of his announcement is the three-year planning period, which will encourage efficiency and modernisation of local services? At last we will be able to get that long-term planning into local government finance.

Mr. Prescott: I very much agree with my hon. Friend. Our judgment was that a three-year expenditure programme would be a lot easier for local authorities, and I think that they generally feel that they can now plan over three years. Although that is a longer period, it gives considerable time to examine area cost adjustments, educational needs and those other matters that we are concerned with on SSAs.

I recall--I chance my arm on this--that the authority that my hon. Friend represents has shown that, under the new criteria, it will get less in some of these areas, under the formulae on children. There has been argument about north versus south, but a southern authority and a northern authority will both be affected by the criteria--which belies the assumption that this is a simple north-south issue.

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Millennium Compliance (Quarterly Review)

4.38 pm

The President of the Council and Leader of the House of Commons (Mrs. Margaret Beckett): Since the previous quarterly review, which I announced on 9 September, we have continued to monitor closely the progress that is being made by Departments and agencies in tackling the millennium bug. We have also taken steps to improve the quality of information about those key parts of the wider public sector which, for the first time, we included in the review last time. I have arranged for all completed questionnaires to be placed in the Library of the House and published on the internet.

The Government are leading by example in making public our plans, and our openness on the issue has been much welcomed by business and other organisations that need to prepare for the bug themselves.

It is important to recognise that the millennium bug is not simply an information technology issue, but has to be approached and managed as a business issue--a threat to every organisation's ability to deliver its core services and carry out its core functions. Failures in external suppliers or partners could have an impact on Departments and agencies, and that needs to be recognised and taken into account in planning for 2000.

Over the past quarter, we have been placing increasing emphasis on business continuity, including supply chain issues and contingency planning. To reinforce the importance of the issue, I have asked all Departments to ensure that they have initial business continuity plans, including contingency plans, in place by January 1999.

Slightly more than a year has passed since the Government first published details of Departments' and agencies' plans for tackling the bug, and this is the fourth quarterly review of those plans. It is clear that steady and determined progress is being made by the Government as a whole in tackling the bug, particularly in respect of business-critical systems. The overall cost estimate remains stable at about £400 million.

Three quarters of Departments and agencies have now completed 50 per cent. or more of the necessary correction work on business-critical IT systems. That figure is up from half the Departments and agencies in the last quarter. Two fifths have completed 90 per cent. or more of the work, which doubles the figure for the last quarter. I am pleased in particular by the quality of the programmes and the progress of the Department of Social Security, the Department for Education and Employment, the Ministry of Agriculture, Fisheries and Food, and Her Majesty's Customs and Excise. I am encouraged that a number of the smaller agencies are reporting completion of all the necessary correction and testing of their business-critical IT systems.

Despite the generally good progress that is being made across central Government, and the overall quality of Departments' year 2000 programmes, the review has highlighted a few organisations that have individual systems with late completion dates or whose targets have slipped. They are the Medicines Control Agency, the Inland Revenue, the Driver and Vehicle Licensing Agency, and the Departments of Finance and Personnel and Health and Social Services within the Northern Ireland Office. I have written to colleagues to raise these concerns.

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In view of the importance of the armed forces to national security and the wider public interest, their rectification programmes are a particular priority. It is vital that the progress made to date be sustained.

The last review highlighted concern about progress in tackling problems in telecommunications and embedded systems. Considerable progress has been made in those areas over the past quarter, and almost all Departments and agencies have now completed their inventories of these systems. The target completion dates for work on business-critical telecommunications systems are now comparable to those for critical IT systems in most Departments. However, the target completion dates for critical embedded systems are slightly later on average, mainly because of the difficulty in identifying all vulnerable systems, and the reliance of Departments on suppliers to provide solutions. I shall be raising this issue with colleagues.

In most cases, Departments and agencies have also had assessments of their year 2000 programmes carried out by their own internal auditors. Some of the larger Departments--for example, the Department of Social Security and the Ministry of Defence--have also used independent external consultants as a further check.

I am reassured that there is little evidence of a serious, widespread IT skills shortage across central Government. Only nine of the 80 returns reported skills shortages, and those were smaller agencies on the whole. A number of Departments have taken practical steps to retain staff where necessary, in the form of a recruitment and retention allowance.

There has been real progress in tackling supply chain issues. A large majority of Departments have now identified and contacted their key suppliers, and report an improved level of response from their suppliers.

Over the last quarter, we have also been working with organisations within the wider public sector to improve the quality of information in their returns. I am particularly pleased with the returns for the BBC, British Nuclear Fuels, and the police and fire services, which give us a far more accurate picture of preparations in these key areas. The returns for British Nuclear Fuels, the BBC, the Civil Aviation Authority, including National Air Traffic Services, London Transport, the Bank of England, and the Post Office show that all are continuing to make good progress.

The Environment Agency has a key role in flood defence and pollution prevention and control. The agency is particularly dependent on embedded systems, but its current return shows that work on two of its critical systems is not scheduled to be completed until the second half of 1999. This is a cause for concern, and I have written to the Secretary of State for the Environment, Transport and the Regions to raise this issue.

Reports by police forces in England and Wales show that, on the whole, progress is satisfactory. However, in a number of cases, completion of work on business-critical systems is not expected before the last quarter of 1999. The Home Office will be working with the Association of Chief Police Officers and the Police Information Technology Organisation to see to what extent these target dates could be brought forward. In addition to the

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cumulative report that we are publishing today, each force is also publishing today its response to our questionnaire on the United Kingdom police website. Police forces in Scotland are also making satisfactory progress, and all work on business-critical systems should be completed by the end of the third quarter 1999. ACPO Scotland will be publishing the returns from individual forces on its website.

Her Majesty's inspectorate of fire services has set up a task group to lead work in addressing the bug throughout the service and to ensure that brigades take the necessary action. It will urgently address the needs of those brigades that are giving the most cause for concern. Fire brigades in Scotland are well advanced and all compliance work should be completed in good time.

The details of the most recent quarterly monitoring returns from all NHS trusts and health authorities in England are being published on the internet today. The returns show that steady progress continues throughout the NHS as a whole. However, the review also showed that a few trusts and authorities are lagging behind in their preparations for the bug. Again, that causes concern and is being followed up urgently by the NHS Executive regional offices.

The estimated cost of dealing with the year 2000 problem in the NHS now stands at about £320 million, a slight increase on the previous quarter's estimate of £310 million. The NHS in Scotland and Wales is also making satisfactory progress. Quarterly reports of progress throughout the Scottish health service are available on the Scottish Health website.

The results of the latest NHS review are consistent with the Audit Commission's recent analysis of progress throughout the NHS, which was published on 11 November and entitled "Time Marches On." The Audit Commission's report commented that many NHS organisations have made "significant progress" over the past six months, but noted that a small number were lagging behind.

The Audit Commission also reported on the progress of local government throughout England and Wales in "Time Marches On." That is expanded on in analysis that it published today as part of this quarterly report. It shows that, although authorities that were already making steady progress are continuing to catch up on the benchmark, the proportion of authorities that have not completed an inventory of their IT and embedded systems is unchanged from the previous statement.

That is a source of considerable concern. The Local Government Association and Local Government Management Board have increased their efforts to engage local authorities at all levels through regional meetings and guidance. The Department of the Environment, Transport and the Regions will discuss with them and the Audit Commission how best to target assistance to areas that are the highest priority and where the greatest difficulties are being experienced, particularly as shown in the report on district councils. The appointment of a full-time year 2000 co-ordinator by the Convention of Scottish Local Authorities in October is helping to ensure that Scottish local authorities are making consistent progress.

Looking at the overall picture, I believe that good progress continues to be made throughout central government and the wider public sector in tackling the

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millennium bug. However, I have identified a number of areas where there are key concerns. The Government will pursue progress rigorously in those areas over the coming quarter.

The Government continue to take the millennium bug extremely seriously. Little over a year remains until the century date change and we will maximise our use of the remaining time to ensure that we are in the best possible shape to meet the millennium. We have pursued that objective since we took office; we will continue to do so.

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