Written Answers to Questions

Wednesday 10 January 2007


Public Finance Contracts

Mr. Hayes: To ask the Solicitor-General what the total liability to the Law Officers’ Departments would be in circumstances of immediate termination of all (a) public-private partnerships and (b) public finance initiative contracts. [109300]

The Solicitor-General: Of my Departments, only the Crown Prosecution Service is affected by this question. The CPS has a 10-year public finance initiative partnership with LogicaCMG.

The contract with LogicaCMG covers the provision, support and refresh of the hardware and software applications used by the CPS.

The cost of terminating this contract is currently estimated to be £85.3 million. This estimate excludes any costs associated with the Department’s contractual responsibility regarding redundancy or Transfer of Undertaking (Protection of Employment) Regulations 1981 (TUPE) as it would be possible to calculate these costs at a disproportionate cost.

Mr. Hayes: To ask the Solicitor-General what (a) public-private partnerships and (b) private finance initiative contracts have been entered into by the Law Officers Departments; what assets were transferred to the private sector as part of each deal; what the value of these assets was; what the total cost is of each contract; and what estimate was made of the cost to the Law Officer’s Departments of traditional procurement over the life of each contract. [109342]

The Solicitor-General: The CPS is the only one of my Departments covered by this question. The CPS started a 10-year private finance initiative (PFI) partnership with LogicaCMG in 2001.

The contract with LogicaCMG covers the provision, support and refresh of the hardware and software applications used by the CPS. At the start of the contract all CPS owned IT assets were transferred to LogicaCMG. The value of the assets transferred was £21 million. The total service cost of this contract over the 10-year period is forecast to be £250 million. This is a projection of the supplier. The unitary charge payment is conditional on the performance of the supplier. The unitary charge payments cover the cost of service provision, capital repayment, technical refresh and inflation.

The business case for the procurement of this contract compared two feasible options (a) a PFI/public-private partnership (PPP) approach. This meant that there was a single prime contractor for all ICT infrastructure and case management services and
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expenditure would be transaction and business outcome based and (b) a public sector comparator (PSC) approach. This was based upon a prime contractor for IT infrastructure services, a prime contractor for case management system services, a prime contractor for wide area network services, and a prime contractor for consultancy services. Expenditure would have been a mix of capital investment and running costs.

A cost comparison of the two approaches showed that the total service costs (undiscounted) for the PFI approach was similar as the PSC approach (£327 million) because the PFI option total cost of £359 million contained a total of £31 million for contingency, and to account for transfer of the CPS’s IT assets to LogicaCMG.

One of the major benefits of the PFI approach was that risks would be transferred to the supplier. When risk allocations were taken into account, the PFI approach (£359 million) was estimated to save £41 million over the risk adjusted PSC approach (£400 million).

Trade and Industry

Enterprise Insight

Mr. Carmichael: To ask the Secretary of State for Trade and Industry which of the five places selected for Enterprise Insight's local campaign hubs is not in the lowest 20 per cent. for deprivation. [106421]

Margaret Hodge: The local campaign hub, that has been selected and is not in the worst 20 per cent. for deprivation is Lowestoft. It ranks 113th out of 354 local authorities in terms of deprivation. However, there are fewer VAT registrations in Lowestoft than in any other area covered by the local campaign hubs, except for Redcar.

Lowestoft was chosen as a hub to build upon existing enthusiasm for positive change in enterprise among the key local organisations that have had successful influence elsewhere.

The hub manager will work closely with these organisations, which include Enterprise Lowestoft, North Waveney Enterprise Service, Shell UK and East of England Development Agency, to help make the hub a success.

IT Projects

Dr. Cable: To ask the Secretary of State for Trade and Industry how many information technology projects within the responsibility of his Department, its agencies and their predecessors have been cancelled since 1997; what the total cost was of each project at cancellation; and if he will make a statement. [105479]

Jim Fitzpatrick: Since 1997 the Department of Trade and Industry (excluding agencies) has cancelled one significant Information Technology project.

Personnel records system project:

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An estimate of costs was made as part of a settlement agreed with the supplier which is subject to a confidentiality agreement. The release of details related to the agreed settlement would prejudice commercial interests.

We are not able to provide information about the agencies as to do so would incur disproportionate costs.

International Development

Aid: Conditionality

Mr. Pelling: To ask the Secretary of State for International Development what action has been taken since the publication of “Partnerships for poverty reduction: rethinking conditionality” to persuade the International Bank of Reconstruction and Development and the International Monetary Fund to change practice on conditionality. [112800]

Mr. Thomas: At the last replenishment of the International Development Association (IDA), the UK agreed to provide an additional £100 million if the World Bank made progress on harmonisation and conditionality. The first £50 million was linked to the bank carrying out a thorough review of its practice and current thinking on conditionality. In September 2005 the bank's governors endorsed this review, whose five new good practice principles for the use of conditions accord well with the principles underlying the UK policy on conditionality.

Bank management agreed to report to the board on implementation after the first year. The first progress report did not provide sufficient information. In September 2006, we told the bank that we would withhold our second contribution of £50 million until we saw clear evidence that the principles were being applied. President Wolfowitz agreed to produce a fuller report, which was discussed by the bank's board on 5 December. In our view, this thorough and candid report provided the evidence that the bank has made the satisfactory progress on conditionality that is required to release the second £50 million contribution.

The report reiterates bank management's strong commitment to make further improvements in its use of conditionality. Its several recommendations include:

Benchmarks set out the steps that a Government will take in implementing their policies and plans. They are not equivalent to conditions and do not affect disbursement. However, there is much misunderstanding and misinformation surround them. Feedback from developing country governments suggests that they do not always distinguish between benchmarks and conditions. Part of the bank’s response should therefore be to ensure greater understanding of the nature and purpose of benchmarks.

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Further progress on conditionality will be a central consideration in our funding of the next replenishment of IDA, which begins in March. We asked the Bank to produce their next report on conditionality later this year and to consult with developing country governments in order to hear their views on how things are changing.

The International Monetary Fund (IMF) has a set of conditionality guidelines that are aligned with the principles adopted by the Bank. The IMF's most recent internal review demonstrated an improved focus of conditions within its area of core competence on macroeconomics. In addition a detailed report by the Fund's Independent Evaluation Office is currently being finalised. This will examine the IMF's use of conditions in areas such as privatisation and trade liberalisation.

Mr. Pelling: To ask the Secretary of State for International Development to which countries he has considered (a) reducing and (b) interrupting UK aid because of (i) movement away from agreed poverty reduction objectives or outcomes, (ii) violation of human rights and (iii) risk of misuse of funds in each year since 2005. [112856]

Hilary Benn: The provision of direct development support by DFID to a partner Government is dependent on a number of conditions, including commitment to poverty reduction, human rights and accountability. Compliance with these conditions is assessed regularly.

However, DFID endeavours not to let the poor suffer by reducing our development assistance as a consequence of their Governments’ political choices or shortcomings. We will not put money directly through Government systems in countries where we have concerns about accountability or governance. We will, however, stay engaged in such countries where we believe our assistance can have a positive impact on poverty reduction. In these instances we will channel funds through NGOs or other development agencies instead.

There have been a number of cases since 2005 where events have caused DFID to review its bilateral engagement in certain countries.

In the case of Uzbekistan, where there were serious concerns about human rights, we took the view that our small programme was unlikely to have significant impact on poverty reduction in the current political environment. We therefore closed the bilateral programme in January 2006, but continue to support a Central Asia regional programme on HIV and AIDS that includes Uzbekistan. We also support the continued engagement there of multilateral agencies.

In Rwanda DFID considered interrupting UK aid at the beginning of 2005. This was a consequence of threats by the Government of Rwanda to send troops into the Democratic Republic of the Congo to attack the bases of hostile militia. After careful monitoring and assessment indicated that such attacks had not occurred, UK aid was provided without any reduction in 2005.

In several other cases we have not reduced funding but delayed it, chosen not to proceed with planned increases, or altered the channel through which we support poverty reduction.

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Ethiopia—In June 2005 DFID put on hold a proposed increase in direct budget support from £30 million to £50 million in the light of human rights abuses, which occurred following the general election. In November the same year, we suspended all direct budget support to Ethiopia. DFID did not reduce the overall levels of aid to Ethiopia and has developed alternative programmes for delivering assistance to poor people.

Uganda—Of £50 million allocated by DFID as direct budget support to the Government of Uganda in the Ugandan financial year 2005-06, £15 million was not disbursed, following concerns about delays in political transition, the continuation of state financing for the ruling party, events surrounding the arrest and trial of the leader of the main opposition party, and a significant overrun in public administration expenditure. The £15 million was reallocated as humanitarian assistance in conflict affected areas of northern Uganda. Of the £35 million balance, £5 million was initially held back and linked to the conduct of multi-party elections; this sum was subsequently disbursed following the holding of these elections.

In the Ugandan financial year 2006-07, DFID’s direct budget support remained at £35 million due to governance and public expenditure concerns, rather than increase to a potential £55 million previously indicated to the Government of Uganda. Again, overall levels of UK aid were not affected.

Sierra Leone—in 2006, DFID withheld £2.5 million out of a £15 million allocation of direct budget support (£10 million baseline and £5 million performance-linked) following weaker than expected progress against mutually agreed benchmarks. The funds remained within the DFID programme for Sierra Leone and were reallocated as support to the election process.

Nepal—In February 2005 following King Gyanendra’s declaration of a State of Emergency and imposition of direct rule, I agreed new criteria for deciding on our aid programme in Nepal. In March 2005, projects that had been supporting the Police, Prime Minister’s Office and Prison Service as part of the Enabling State programme were stopped on effectiveness grounds. All other parts of the Nepal programme continued and funding for 2005-06 was maintained at 2004-05 levels.

It was decided that support through Government systems would continue in health and education, but individual payments would require ministerial scrutiny to reflect the high level of risk. As a result, the way funding was given to the Rural Access programme and Livelihoods and Forestry programme was revised and payments were made through direct support to these programmes rather than financial aid through the Government of Nepal’s budget.

We welcome the signing of the Comprehensive Peace Agreement on 21 November by the Seven Party Alliance Government and the Communist Party of Nepal (Maoist) and the subsequent Agreement on the monitoring of Arms and Armies on 28 November. The agreements are a major step forward and the UK stands ready to help support implementation. DFID is reviewing its strategy and programme in the light of
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recent developments to ensure that we continue to respond effectively to the changed political and conflict environment.

Palestinian Territories—Following the election of Hamas in January 2006 the Quartet (US, EU, UN and Russia) set out three principles for the new Palestinian Government: renouncing violence, recognising Israel’s right to exist and signing up to previous peace agreements. As a result of Hamas’s failure to comply with these principles the UK, alongside most of the international community, withdrew direct financial and technical assistance to the Palestinian Authority.

DFID has not, however, stopped or reduced its support to the Palestinians, but is disbursing funds in a different way. This includes a commitment of up to £12 million channelled to the EU-led Temporary International Mechanism (TIM). This provides aid directly to the Palestinian people to help meet their basic needs in areas such as health. DFID has also provided £15 million this year for Palestinian refugees across the Middle East, through the United Nations Relief and Works Agency. DFID is satisfied with the arrangements put in place to ensure its current contributions to the TIM and previous budget support contributions to the World Bank-managed reform trust fund are used for the purposes intended.

Further information on programmes where we have reduced or interrupted our development assistance can be found in table 6a of DFID’s departmental report 2006, (please note this only covers the period between April and December 2005), a copy of which is available in the library and on DFID’s website at the following address; http://www.dfid.gov.uk/pubs/files/departmental-report/2006/default.asp


Lynne Featherstone: To ask the Secretary of State for International Development what the (a) job titles and (b) nationalities were of people employed as consultants by his Department since 2003. [113194]

Mr. Thomas: Details of contracts issued on a consultancy basis from April 1999 to March 2005 are held in the Library of the House. We do not maintain a central record detailing nationalities of people engaged as consultants, and this information could be obtained only at disproportionate cost.

Democratic Republic of the Congo

Fiona Mactaggart: To ask the Secretary of State for International Development if he will review whether the arrest of former presidential candidate Marie-Thérèse Nlandu should lead to changes in the aid programme to the Democratic Republic of the Congo; and if he will make a statement. [112879]

Hilary Benn: The British ambassador in Kinshasa has spoken to the Interior Minister of the Democratic Republic of the Congo (DRC) and advisers to President Kabila on several occasions regarding the detention of Marie Therese Nlandu. We and European partners raised our concerns that Mme Nlandu's human rights, particularly her access to legal
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representation, were not being respected. The British embassy in Kinshasa continues to monitor the situation closely.

The UK's development programme is focused on improving the lives of poor people in DRC and preventing a return to the violence that has blighted progress there. About half of our £62 million programme is spent on meeting urgent humanitarian needs. The other half is used to promote longer term development, for example, we have supported distribution of anti-malaria bednets to protect one million people and supported mobile courts to deliver justice in some areas unserved for many years. It is important that this DFID support, including reform of the judiciary, continues.

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