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Project Aquatrine Package C

The Parliamentary Under-Secretary of State for Defence (Mr. Ivor Caplin): I am pleased to announce that the Ministry of Defence has awarded a contract for project Aquatrine, package C, to Coast to Coast Water Ltd. (C2C), a consortium comprising Severn Trent Water plc and Costain. This contract covers the operation and maintenance of the Department's water and wastewater assets and infrastructure in the north and east of England.

The contract forms one of three such packages of project Aquatrine, a 25-year arrangement worth £2.3 billion across three packages that cover the MOD's estate in Great Britain. The project is one of the Government's most significant public-private partnership (PPP) projects, and will enable the transfer of environmental risk to those in the private sector who are best placed to manage it. This will enable the MOD to focus on its core activities.

Following a pre-commencement period, Coast to Coast Water Ltd. will commence services in March 2005.


Three-Year Revenue and Capital Settlements

The Minister for Local and Regional Government (Mr. Nick Raynsford): The Government introduced three-year settlements for central Government Departments in the comprehensive spending review in 1998. For the full benefits of three-year plans to feed through into improved public service delivery, it is important that they are cascaded from Departments to executive agencies and other budget holders.

We are today issuing a consultation document seeking views on the Government's proposals for the implementation of three-year revenue and capital settlements for local government in England. It fulfils a commitment in the Government's 2004 spending review to consult on these proposals with local government and other stakeholders with a view to agreeing local authority finance settlements for 2006–07 and 2007–08 during 2005.
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It is proposed that authorities will be given three-year allocations of grant, which will be reviewed every two years in line with the Government's own spending reviews. This will apply to grant distributed through the general formula as well as to specific grants and capital grants, unless there are overriding reasons why this is not desirable or possible

The distribution of grant will therefore need to be fixed three years in advance. This can be done either by using the same formulae and data for each of the three years or by making forward projections of at least some of the data. The paper consults on the Government's proposals for doing this.

In order to maintain the stability of the new system, it is proposed that functional changes should be planned around the spending review cycle, so that resource reallocations do not disrupt the planning certainty that authorities have been given.

Three-year revenue and capital allocations provide certainty of income, but the real world does not remain static. Account also needs to be taken of major changes such as council tax revaluation that are foreseen, but which do not necessarily fit a three-year cycle.

Since authorities will have a sound basis on which to plan their budgets, they should also be able to give council tax payers and central government greater certainty about future budgets and the impact on council tax levels. The paper explores ways of achieving this.

Copies of the consultation paper are available in both Libraries of the House and are available on the Office of the Deputy Prime Minister's website The consultation period ends on 11 March 2005.

Planning Delivery Grant 2005–06

The Minister for Housing and Planning (Keith Hill): Today I am launching a consultation on the allocation criteria for £170 million of planning delivery grant (PDG) in 2005–06. The consultation paper will enable local authorities to calculate a high proportion of their grant entitlement, subject to any changes which may result from the outcome of the consultation. I am also launching a further consultation on increases to planning fees.

Planning delivery grant is aimed at providing additional resources to local planning authorities to support fundamental changes we want to see in the system to help deliver sustainable communities. The main principle underlying design of the grant is to reward performance in a range of planning activities.

For 2005–06, the total amount of grant available will be £170 million. Later in this statement I will outline how proposed further planning fee increases will bring additional resource to authorities for planning.

For 2005–06 and for the two subsequent SR04 years, we propose to allocate PDG on the basis of a 75/25 per cent. split between resource and capital, in line with the expectation that LPAs should use PDG to continue to invest in systems that will improve the efficiency and
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delivery of their planning services. The split is based on the level of PDG that was identified by research into the 2003–04 grant as spent on IT and capital improvements.

The consultation document, which shall go to all planning authorities in England, sets out proposals for rewarding planning performance improvement in the following areas: development control, development plans, enterprise areas, delivery of housing in areas of high and low demand, and provision of a quality service through e-planning.

Authorities and stakeholders are invited to comment on the criteria for awarding the grant, which, as in 2004–05, have been devised to reward good performance and to incentivise further improvements. The package also includes measures to assist regional planning bodies, the planning inspectorate, and the Greater London Authority in their support for local authorities in bringing about planning reform. A small element of the grant has been top-sliced to support national initiatives such as the planning advisory service, and the scheme of postgraduate planning bursaries.

I will carry forward mechanisms for withholding grant where there are concerns about the reliability of data, and also to sharpen the abatement of grant where the rate of appeals upheld against the authority's decision to refuse far exceeds the national average, to make sure that the grant rewards quality decision-making on applications as well as timeliness. Once again, there will be no minimum allocation.

I am very aware that authorities need as much information as possible at this time of year to help them with their budget setting arrangements. For that reason, I am taking the step of including in the consultation actual intended allocation amounts where the statistics to make these are centrally available, and where they are not, I will give sufficient information to authorities to enable them either to work out the remainder of the allocation, or to provide; them with an indicative range or a minimum amount. Using this information, authorities should be able to reach good estimates of their possible allocations for next year.

The consultation will end on 27 January 2005. Allocations of grant will be made in February 2005.

Today I am also launching a further consultation on increases to planning fees. The initial consultation, which ended on 9 December, proposed fee increases totalling £30 million for next year, but the measures on which I now wish to consult would raise fees to provide £68 million in total. So the total average increase in fees would be 39 per cent. not 17 per cent. as previously consulted on. This would give authorities an important opportunity to help meet the costs of delivering their planning services.

It has become clear from the consultation already in progress that many respondents do not think the proposed increases are sufficient to enable them to carry out their planning functions. Developers have indicated that they would be prepared to see fee increases where they could be ensured of a quality service. I want to be able to give authorities the proper resources to provide
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the services the community needs. Once again, the proposed increases will be spread proportionately—the fees for householder applications will rise from £110 to £135, while the maximum fee for a major development will rise from £11,000 to £50,000.


Diplomatic Representation

The Secretary of State for Foreign and Commonwealth Affairs (Mr. Jack Straw): In December 2003, in the White Paper: "UK International Priorities: a Strategy for the FCO" (Cm 6052), I set out the Government's international priorities for the next 5–10 years and the Foreign and Commonwealth Office's strategy for delivering them in a world of new challenges, opportunities and threats.

On the basis of that strategy and the outcome of the 2004 spending round, we have been completing a reorganisation of the FCO in London and considering changes to our overseas network in order to align our resources more effectively to our priorities.

This statement concerns changes to the overseas network, aimed at enhancing our effectiveness in representing British interests abroad, and helping to deliver an efficient service on behalf of the British taxpayer.


The FCO's overseas network currently comprises:

Since 1997 we have made a series of changes in the overseas network to respond to changing priorities. UK-based staff numbers have grown by 9 per cent. from about 5,600 in 1997 to about 6,100 now. We have opened 18 new sovereign and subordinate posts with UK-based staff since 1997, along with 13 locally staffed posts. Some 10 posts have been closed over the same period (excluding the announcements in this statement). By comparison France, with a network of almost identical size to our own, has since 2000 opened nine new posts and closed three. Germany today has 11 fewer posts than in 1997.

In the past three years the UK has opened major new missions in Baghdad, Basra, Kabul and Pyongyang (North Korea) in response to changing needs.

This statement sets out some further changes to our overseas network. As with changes in the past, they reflect changing demands and challenges, and the need better to align our resources with our priorities, to maximise efficiency, and to ensure that the UK has a cost-effective and flexible network of overseas representation.
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Sovereign Posts

We intend to close eight sovereign Posts with UK-based staff, and one locally staffed post (Tarawa, Kiribati). Details are set out in the following table:
PostPlanned change
Asia Pacific
Port Vila (Vanuatu)Close. Appoint Honorary Consul. Cover from Suva (Fiji)
Nuku'alofa (Tonga)Close. Cover from Suva (Fiji)
Dili (East Timor)Close. Appoint Honorary Consul. Cover from Jakarta. (Indonesia)
Tarawa (Kiribati) (currentlya locally staffed post)Close. Cover from Suva (Fiji)
Asuncion (Paraguay)Close. Appoint Honorary Consul. Cover from Buenos Aires (Argentina)
Nassau (Bahamas)Close. Appoint Honorary Consul with additional local staff support for consular work. Cover from Kingston (Jamaica)
Maseru (Lesotho)Close. Appoint Honorary Consul. Cover from Pretoria (South Africa)
Mbabane (Swaziland)Close. Appoint Honorary Consul. Cover from Pretoria (South Africa)
Antananarivo (Madagascar)Close. Appoint Honorary Consul. cover from Port Louis (Mauritius)

All these cover arrangements are subject to confirmation and agreement with the host governments concerned.

Separately, in Europe, there is no question of closing down our embassy to the Holy See. However, we have concluded that we will be able to maintain our interests if we widen the pool of potential candidates as ambassador to beyond the FCO when we look for a successor to the present incumbent next summer.

Subordinate Posts

We also plan to streamline UK representation in subordinate posts (primarily in OECD countries) in line with UK Trade and Investment's (UKTI) new approach to trade promotion in developed countries (see below), while expanding our honorary consul network world-wide. Experience for example in our posts in Italy has shown that fully localised posts are able to deliver services in a cost-efficient, professional and effective way under the strategic direction of the superintending embassy; and our plans extend that model elsewhere. We expect political work to be carried out mainly in capitals, except in large, federal countries like the USA.

We propose moving to locally engaged staff only in eleven posts. And we plan to close ten subordinate posts altogether. Changes are set out in the following table, together with details of how the network in each country will look after these changes have been made.
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CountryPlanned changeNetwork after change
BrisbanePerthLocalise. Cover from Sydney.Localise. Cover from Sydney.UK based: Canberra, Sydney, Melbourne. Local: Brisbane, Perth, Adelaide.
New Zealand
AucklandLocalise. Cover consular cases from Wellington, and UKTI work from SydneyUK Based: Wellington.Local: Auckland.
FukuokaClose. Cover from Osaka.UK based: Tokyo, Osaka, Nagoya.
Vientiane (Laos) (Trade Office)Close. Cover from Bangkok.No post in Laos: covered from Bangkok.
United States
SeattleMiamiPhoenixDallasSan Juan (Puerto Rico)Localise. Cover from San Francisco.Localise. Cover from Atlanta.Close. Cover from Los Angeles.Close. Cover from Houston.Close. Cover from Atlanta.UK Based: Washington, Atlanta, , Boston, Chicago, Houston, Denver, Los Angeles, BCG New York, San Francisco.Local: Miami, Seattle, Orlando
BordeauxLyonLocalise. Cover from Paris.Localise. Cover from Paris.UK Based: Paris, LilleLocal: Bordeaux, Lyon, Marseilles.
MunichHamburgFrankfurtLeipzigStuttgartLocalise. Cover from Dusseldorf.Localise. Cover from Dusseldorf.Close. Cover from Dusseldorf. Close. Cover from Berlin.Close. Cover from Dusseldorf.UK Based: Berlin, Dusseldorf.Local: Hamburg, Munich.
PalmaBilbaoLocalise. Cover from Madrid.Localise. Cover from Madrid.UK Based: Madrid, Barcelona Local: Alicante, Malaga, Santa Cruz de Tenerife, Bilbao, Palma, Ibiza, Las Palmas.
OportoClose. Cover from Lisbon.UK Based: Lisbon.
DoualaClose. Cover from Yaounde.UK Based: Yaounde.

In Aden, we will retain the services of our local consul, but move from the existing consulate to smaller premises with a view to establishing an honorary consulate.

UK Trade and Investment

The Foreign and Commonwealth Office has worked closely with UKTI in formulating these proposals. UKTI is focusing its overseas resources where its commercial teams can make the most impact. This includes strengthening our work to attract inward investment to the UK, and reinforcing support for British businesses in important emerging markets, like China, where government support makes a real difference to business, and where very strong economic growth means enormous opportunities. My right hon. Friend the Chancellor of the Exchequer's recent announcement of the establishment of an Asia task force will build on this strategy.

To provide the resources for these new activities, UKTI has decided to take a number of steps better to match resources to demand. Commercial services in a number of smaller markets are being re-organised. In the UK's smallest overseas markets, UKTI services themselves in FCO posts covering these markets will be withdrawn, although support and advice from UKTI's website and from its teams in London will still be available. And, importantly, political support and
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lobbying by ambassadors and high commissioners in support of British business in these markets will continue to be available everywhere.

Timing and Savings

We plan to have implemented all these changes before the end of 2006. The main savings from the package will be in staff and running costs, including rentals. There will be some one-off costs, including for redundancy. But once these have been met, overall savings should amount to around £6 million per annum as a contribution to the FCO's overall efficiency target of £86 million. (A further £0.5 million of savings are part of our efficiency plan for the 2002 spending review). There will be some revenue from asset sales, although these will take time to realise.

The savings made will help to underpin higher-priority work in line with the FCO's strategic priorities, including on counter proliferation, counter terrorism, energy and climate change. Some of the savings will also be redeployed to strategic priority work within certain regions where we are closing posts. In Africa, for instance, we plan to create new jobs to cover these issues across the region, with a new post in Nairobi to help support our work on climate change, one in Nigeria to cover energy, and one in Pretoria to cover regional issues more generally as well as covering Maseru and Mbabane.
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