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Written Ministerial Statements

Friday 18 March 2005


Funding of Horseracing

The Minister for Sport and Tourism (Mr. Richard Caborn): It remains the Government's view that commercial agreements between the relevant parties provide the appropriate long-term basis for the funding of racing. However, in the light of a judgment by the European Court of Justice last September it has become clear that the British Horseracing Board is not in a position to proceed immediately with its plans to fund racing by the sale of database rights in place of the current statutory levy. Following consultations with the Horserace Betting Levy Board, the British Horseracing Board and the Association of British Bookmakers, I have therefore accepted the interim recommendations made by the independent review group, chaired by Lord Donoughue, that more time is needed to develop the commercial options and that it is in the public interest in the well-being of the sport that the levy arrangements should therefore remain in place for a further limited period. We will accordingly be making an order under part 2 of the Horserace Betting and Olympic Lottery Act 2004 to end the levy on 31 March 2009, and to close the levy board six months later.

I welcome the agreement of the parties that Lord Donoughue's group should continue to explore the commercial options, considering all areas relating to the funding of racing which it believes are relevant to establishing appropriate post-levy arrangements, with a view to preparing a final report this autumn. It will then be for the British Horseracing Board and the other parties to work towards putting agreed arrangements in place to meet the above timescale.

In the meantime it is important that racing continues to take forward the modernisation of its structures, with priority being given to the establishment of an independent regulatory authority.

It is also important that, both now and after the ending of the levy arrangements, there continues to be proper financial support for the advancement of veterinary science and education and for the improvement of breeds of horses, which are the levy board's other statutory purposes. I have therefore made clear the Government's wish to see the board, while it continues in being, take over the funding commitments previously given by the British Horseracing Board in respect of the Equine Fertility Unit and the equine genome project; to maintain support for veterinary science and education at 2.5 per cent. of levy income and for breed societies at no less than current levels; to take forward consideration of the establishment of a university chair in the field of equine veterinary science; and to complete the grant to the National Stud, for
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which budget provision was previously made, on the stud's proposed re-establishment as an independent charitable trust.

I wish to place on record my appreciation of the work of the members and staff of the levy board, who have been contending with an extended period of uncertainty, and of their commitment to running the levy arrangements effectively for longer than had previously been expected.

I am aware that other sports, particularly football, have also been affected by the ECJ judgement. I have met with representatives from the football industry and I look forward to working with them, as I have done with racing, as they develop their own solutions to the funding difficulties arising from this ruling.


Local Air Pollution Control

The Minister for the Environment and Agri-environment (Mr. Elliot Morley): Charges to cover the costs of local enforcing authorities in regulating processes which are subject to part I of the Environmental Protection Act 1990 (Local Air Pollution Control (LAPC)) were introduced in April 1991. Interim charges for installations which are subject to the Pollution Prevention and Control Act 1999 (Local Air Pollution Prevention and Control (LAPPC) and Local Authority—Integrated Pollution Prevention and Control (LA-IPPC)) were introduced in August 2000.

With the approval of the Treasury to the extent required, and following consultation with local authority associations and industry, myself with my right hon. and noble Friend the Minister for Farming, Food and Sustainable Energy have made revised schemes in respect of the Environmental Protection Act and in respect of the Pollution Prevention and Control Act. The schemes specify the scale of fees and charges to take effect from 1 April 2005.

There will be a 37 per cent. increase to the LA-IPPC application fees (plus any increase in the EA fees for 2005–06) and a 5 per cent. increase to all other LAPC, LAPPC and the LA-IPPC fees and charges for 2005–06. The basis of these increases is set out in the regulatory impact assessment which is available on the Defra website: http://www.defra.gov.uk/environment/airquality/lapc/charges/default.htm.

Some minor amendments to the schemes have also been made in the light of consultation with local authorities and industry.

The schemes have been laid today before both Houses and copies placed in the Libraries.


Gibraltar Exempt Companies Scheme

The Minister for Europe (Mr. Denis MacShane): On 21 January 2005, the European Commission proposed terms for the continuation of the Gibraltar exempt companies scheme under certain conditions leading to its phasing out by 31 December 2010. These terms have been the subject
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matter of intensive negotiations and agreement between the Commission, the UK Government and the Government of Gibraltar.

The terms are as follows:

New exempt companies can be formed up to 30 June 2006. This will be on the following basis:

The UK Government (as the member state responsible for Gibraltar's external affairs) accepted these terms on behalf of the Government of Gibraltar on 18 February 2005. On the same day the Government of Gibraltar issued a press statement indicating how it would implement the appropriate measures. Copies of this press statement are being placed in the Library of the House.


Arm's Length Bodies

The Secretary of State for Health (Dr. John Reid): On 30 November 2004, Official Report, columns 24–27WS, I announced the publication of an implementation framework for reconfiguring the Department of Health's arm's length bodies (ALBs) and achieving its three overarching objectives:

The ALB change programme is part of a wider programme to improve efficiency and cut bureaucracy in the management of the National Health Service. The aim of these activities is to reduce the burden on the front line and free up more resources for the delivery of front-line services to patients and users. This wider programme is to ensure that the increased investment in the NHS—42 per cent. in real terms from 2003–04 to 2007–08—is accompanied by modernisation that cuts out waste.
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Today I am announcing the achievement of a further milestone towards the ALB change programme's key objectives. In November 2004 we made the following commitment as a first step towards our savings target on ALB expenditure:

I am pleased to report that I am today setting budgets for the operating costs of ALBs for 2005–06 which will reduce Department of Health funding by in excess of £150 million compared with 2003–04. This is despite the fact that in 2004–05 the ALB sector assumed new functions agreed by Parliament that increased the sector's costs substantially. A significant proportion of the savings generated in Department of Health funding will be redeployed for investment in front-line healthcare. We have additionally provided some £50 million to fund one-off identified costs in ALBs. This includes initiatives which will deliver savings in future years and enable us to continue the downward trend in operating costs for the ALB sector when we set budgets for 2006–07 and 2007–08.

In setting the 2005–06 budgets, we have:

Alongside these savings, we are also on course for ALBs to generate very substantial savings for the NHS front line by improving the efficiency of the services they provide centrally on behalf of the NHS.

We expect to generate further savings of over £100 million in 2005–06 from new national framework agreements let by the NHS purchasing and supply agency (PASA) alone. This follows savings of over £25 million in 2004–05. PASA is on target to achieve savings of £240 million per annum by 2007–08 for the NHS. Work is also under way to deliver efficiencies in the services offered by other ALBs. Taken together, this puts us well on course to meet or exceed our commitment to deliver £250 million to the front line by the end of 2007–08 through efficiencies generated by ALBs, as promised in the 30 November 2004 implementation framework.

The major reconfiguration of individual ALBs is also on course. The total number of ALBs will have reduced from 38 in 2003–04 to 34 on 1 April and is on course to reduce further to 31 by 1 October this year. The changes are:

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Following is a table showing the 2005–06 recurrent operating costs budgets for 33 of the ALBs which will exist on 1 April this year. The total of those budgets includes £1,107 million grant in aid from the Department of Health, as well as income from other sources, such as fees charged to industry. The total grant in aid provided by the Department in 2003–04 was £1,265 million. Therefore the 2005–06 grant in aid is over £150 million less than that included in 2003–04 operating costs. We have additionally funded £50 million one-off costs in order to enable further recurrent savings in later years.

These changes are only the first part of our plan for reconfiguring the ALB sector. Over the coming year we will:

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The ALB budgets we are setting for 2005–06 will reduce Department of Health funding by more than £150 million compared with 2003–04. The resulting savings will contribute to our overall investment in NHS front-line healthcare. Taken together with growing efficiencies in services provided by ALBs to the wider NHS they place the sector on a firm footing to achieve the target of £500 million savings by the end of 2007–08.
ALB Recurrent Operating Costs 2005–06
17 March 2005
Operating costs 05–06 excluding non-recurrent elements
ALB name£000
HC 1 78,732
CSCI 1 144,260
Public Welfare
Central Services
NBA (inc. BPL)401,700
NHS LA14,095
NHS AC5,981
NHS 1A/HSCIC42,900
NHS PA22,066
NHS PASA22,081
NHS LOGS70,658
NHS PROF31,000
NHS EST1,000

1. Operating costs exclude capital charges but include income from other sources, such as fee income, as well as DH funding.
2. NHS Estates to be dissolved by 1 October 2005—one-off DH funding of £17.9 million. Operating costs are transfers to other ALBs.

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