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Written Ministerial Statements

Wednesday 13 July 2005


Cash Ratio Deposits

The Chief Secretary to the Treasury (Mr. Des Browne): Under the cash ratio deposit (CRD) scheme, banks and building societies place non-interest bearing deposits at the Bank of England. The Bank invests these deposits and uses the income earned to fund the costs of the Bank's sterling liquidity, monetary policy and financial stability operations, which benefit sterling deposit-takers. The Bank of England Act 1998 placed the scheme on a statutory footing with effect from 1 June 1998.

As a result of significant changes the Bank of England will make to its operations in sterling money markets from next year, in particular the introduction of remunerated voluntary deposits which banks and building societies will be able to place with the Bank, the Treasury proposes to amend the definition of eligible liabilities for CRDs.

These proposed amendments principally seek to ensure that voluntary deposits would not count as an offset within the calculation of eligible liabilities on which CRDs are based thereby avoiding an unnecessary reduction in the Bank's CRD income.

The proposal requires a change to secondary legislation under the Bank of England Act 1998 and also requires the Treasury to consult those who are likely to be materially affected by the change and other persons it sees fit. This consultation has begun as of today and will conclude at the end of September.


Judicial Diversity

The Parliamentary Under-Secretary of State for Constitutional Affairs (Bridget Prentice): My right hon. and noble Friend, the Secretary of State and Lord Chancellor, Lord Falconer of Thoroton, has made the following written ministerial statement in the other place today, 13 July 2005:

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Awards for All Grants

The Secretary of State for Culture, Media and Sport (Tessa Jowell): Following the discovery by the Big Lottery Fund of irregularities in certain grant applications in September 2004, the investigations team of the fund, the police and the Charity Commission have conducted extensive investigations into suspected multiple application fraud. Lottery funds were safeguarded by immediately suspending payments on suspect grants.

A number of arrests have been made and both criminal and civil proceedings are likely to follow. It would not be appropriate, therefore, for me to describe in detail the nature of the alleged fraud. However, I can say that what is suspected is a systematic fraud targeting a number of charitable and public grant makers, including the Awards for All programme operated by the former community fund on behalf of six lottery distributors.

Although the scale of the suspected fraud is uncertain and will not be clear until the end of the investigation, I have now been provided with sufficient financial information to make a statement to Parliament.

The current best estimate of the amount of grants at risk awarded through the Awards for All programme on behalf of each distributor is as follows:
Arts Council England£297,000
Community fund£1,005,000
Heritage Lottery fund£202,000
Millennium Commission£21,000
New Opportunities fund£584,000
Sport England£498,000

The Big Lottery fund has reviewed its systems and put in place additional controls which will significantly reduce the risk of similar fraud in future. The fund will strike an appropriate balance between preventing abuse of lottery funds and running an application process which minimises delays and bureaucracy for small community organisations seeking funding.

The knowledge gained in this investigation is being shared with other funders and the Charity Commission.

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