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Written Ministerial Statements

Tuesday 8 December 2009

Business, Innovation and Skills

Financial Support (Students)

The Minister for Higher Education and Intellectual Property (Mr. David Lammy): This year Government are spending more than £5 billion on student support in England, underpinning our commitment that finance should not be a barrier to higher education. The number of undergraduate entrants to higher education has increased by 19 per cent. since 1997, and the 20 most deprived constituencies have shown higher than average growth in student numbers over that period.

Students need a simple and straightforward application service when they are applying for student support. As I said to the House on 14 October, this year's problems have had an unacceptable effect on individual students and their families. Even when they have not led to financial hardship, they have undoubtedly caused worry and frustration. It is clear that there were serious lapses in the customer service provided by the Student Loans Company (SLC).

At the beginning of September I became aware that, in this first year of operating the new service, there were delays in processing, customers were unable to speak to the company, and some documentary evidence could not be traced. I ordered that a number of actions be undertaken to enable the company to accelerate the processing of applications and to increase the number of calls being answered.

These issues are why, together with the recently appointed chair of the Student Loans Company, I commissioned Professor Sir Deian Hopkin to provide external scrutiny to the review of lessons to be learned from this year's processing problems. Professor Sir Hopkin has now provided his report and I am very grateful to him for carrying out his work so swiftly.

While at the time of this statement the Student Loans Company has paid 801,000 students, it is clear that this year the service has fallen short of expectations. The report says that:

The Department accepts in full all the recommendations in Professor Sir Hopkin's report and, as I would expect, the board of the Student Loans Company has also accepted the recommendations in their entirety.

I am now clear that decisive action is required to change the service and that the key to this is strengthening the leadership of the company and ensuring that the customer is at the heart of everything the company does. The chair of the Student Loans
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Company has confirmed that the senior management team of the company will be strengthened and reorganised.

I expect the chair to ensure that the company transforms how it communicates with its customers so that they know what to expect from the service, what is expected of them, and that risk management, contingency planning and staff training are all significantly improved.

I have asked my officials to consider the best practice in other public sector organisations to enable us to better challenge and scrutinise the company's performance. But there must be no confusion about roles: it is for the Student Loans Company board to hold the executive to account and to ensure it has the capacity and capability to deliver the service.

Key to moving forward and improving the service next year is early engagement with customers and stakeholders in the higher education sector. I have therefore asked the company to establish a stakeholder forum which will include representation from the National Union of Students, Higher Education Institutions and UCAS. This will help the company to develop Student Finance England, including implementation of the recommendations in Professor Sir Hopkin's report and should mean, with stakeholders more closely involved in the company, that many of the issues experienced this year can be identified earlier and swift action be taken to avoid them in the future.

We have invested significantly in a substantial programme of improvements which are designed to transform the way the student support service works for customers. Over the next few years, the centralised service-which takes over from applications to local authorities where the level of service was variable-will allow students to apply online; they will no longer need to send in their passports to verify their identity; and their sponsors will not need to send paper evidence of family income.

I acknowledge that some of the improvements will take time to implement, but I have received assurance from the chair that improvements in the way the service is managed will be made quickly. As the report says, the highest priority at the moment is to successfully complete this year's application cycle. There remain problems with disabled students' allowances and I have asked the Student Loans Company to engage directly with universities and assessment centres to speed up the process, and to increase staffing resource for these activities.

The chief executive and chair of the Student Loans Company have publicly apologised for the difficulties customers have suffered. As the Minister responsible for higher education, I too have expressed regret for the unacceptable service parents and students have experienced.

Customers must also play their part, and take responsibility for applying for their student support in good time if we are to ensure the service has the best chance of operating efficiently.

A copy of the report and a letter from the chair of the Student Loans Company are being deposited in the Libraries of the House and paper copies of the report will be placed in the Vote Office and Printed Paper Office.

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Northern Rock PLC

The Chancellor of the Exchequer (Mr. Alistair Darling): Earlier this year, the Government announced that Northern Rock would be restructured, subject to state aid approval from the European Commission. That approval was received on 28 October 2009 and the Government welcome the European Commission's decision as an important step in restoring Northern Rock to viability.

Legislation to give effect to the restructuring-The Northern Rock plc Transfer Order 2009-will be made and laid before both Houses of Parliament today.

Under the order the restructuring of the company will take place on 1 January 2010. Part of Northern Rock's business will be transferred to a new company, also wholly owned by the Treasury:

The intention is that the companies will be renamed in conjunction with the transfer, such that the new company will be named "Northern Rock plc" and the old company will be named "Northern Rock (Asset Management) plc".

On restructuring the guarantees covering the liabilities of Northern Rock will be replaced by separate guarantee arrangements for Northern Rock (Asset Management) plc and Northern Rock plc. All retail deposits in Northern Rock plc continue to be guaranteed in full, and guarantees will not be lifted with less than three month's notice. Full details of the guarantee arrangements are available on the Treasury website (www.hm-treasury.gov.uk).

Both entities will continue to be wholly owned by the Government and operate at arms' length from Government on commercial principles. UK Financial Investments (UKFI) will take on management of the Government's shareholdings in these two companies. The restructuring will enable Northern Rock to increase its new lending and support the economic recovery.

Full details of the financial support provided by the Government to support the restructuring will be set out next month.

The Treasury has also made the Northern Rock plc (Tax Consequences) Regulations 2009. These regulations make provision to neutralise unintended tax consequences that could otherwise be triggered by transfers of assets and liabilities between these two companies wholly owned by the Government.

Communities and Local Government

Local Government (Unitary Proposals)

The Minister for Regional Economic Development and Co-ordination (Ms Rosie Winterton): My right hon. Friend, the then Minister for Local Government, the
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Member for Wentworth (John Healey) told the House on 6 February 2008, Official Report, column 66-68WS, that we were requesting the Boundary Committee under section 4 of the Local Government and Public Involvement in Health Act 2007 to advise on certain matters respectively relating to the unitary proposals made by Exeter city council, Ipswich borough council, and Norwich city council. We originally requested the advice by 31 December 2008, which, on account of litigation brought by certain local authority against the Boundary Committee, we subsequently extended to 8 December 2009.

The Boundary Committee has now provided its advice, copies of which have been placed in the Library of the House.

In its advice the Boundary Committee has, pursuant to its powers in section 5(3) of the 2007 Act, made alternative unitary proposals covering the counties of Devon, Norfolk, and Suffolk, and recommended, on the basis of the evidence available to it, that the original unitary proposals made by Exeter city council, Ipswich borough council, and Norwich city council are not implemented.

There is now a period of six weeks until 19 January 2010 for representations to be made to the Secretary of State about the Boundary Committee's advice, and for any further representations to be made about any of the three original proposals.

Thereafter, the Secretary of State intends to take his statutory decisions under the 2007 Act as to whether to implement, with or without modification, any of the unitary proposals-the alternative proposals made by the Boundary Committee and the original proposals-before him, or to take no action. Before taking his statutory decisions he will consider carefully the Boundary Committee's advice, all the representations he receives, and all other relevant information available to him. Under the 2007 Act no proposal can be implemented unless Parliament has approved an Order giving effect to the Secretary of State's decision.

We recognise the need to end uncertainty and intend to move forward as quickly as practicable. Our priority is to ensure that the people of Devon, Norfolk, and Suffolk will have the councils that are best able to play their part at the heart of providing innovative and better value public services across the counties, providing strong strategic leadership, engaging effectively with their most local communities, and delivering efficiencies and service improvements.


Afghanistan (Aircraft Deployment to ISAF)

The Secretary of State for Defence (Mr. Bob Ainsworth): The House will know that the NATO-led International Security Assistance Force has expanded substantially over the course of the last year and is continuing to grow in size. Air operations in support of the force have become more complex and NATO has identified a need for improved air traffic control.

I have therefore agreed a NATO request to commit two Boeing E3D Sentry aircraft and some 200 personnel from 8 Squadron, Royal Air Force, to fill this role as part of our standing contribution to the NATO Airborne Early Warning and Control Force. The detachment will
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be based in the Middle East. It is separate from the British deployment in Afghanistan announced by my right hon. Friend the Prime Minister on 30 November 2009, Official Report, column 835, and the size and structure of the latter will not be affected. On current plans, the detachment should begin to deploy shortly. It will recover to its home base at RAF Waddington by 28 February 2010.


"Healthy Children, Safer Communities" Strategy

The Minister of State, Department of Health (Phil Hope): I am pleased to announce that "Healthy Children, Safer Communities", the Government's joint strategy to promote the health and well-being needs of children and young people in contact with the youth justice system, is being published today.

This strategy will work to improve the health and well-being of children and young people in contact with the youth justice system to ensure that children and young people are safer, healthier and stay away from crime and that communities will be safer too.

In particular, the strategy:

The key elements of the strategy and related work for young people in contact with the youth justice system are:

A copy of the strategy has been placed in the Library and copies are available to hon. Members from the Vote Office.

Home Department

Justice and Home Affairs Post-Council Statement

The Secretary of State for the Home Department (Alan Johnson): The Justice and Home Affairs (JHA) Council was held on 30 November and 1 December
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2009 in Brussels. My right hon. Friend the Secretary of State for Justice, the Under-Secretary of State for Justice, Lord Bach, the Scottish Lord Advocate, Elish Angiolini, and I attended on behalf of the United Kingdom. The following issues were discussed at the Council:

The Council, in Mixed Committee with non-EU Schengen states, received an update from the presidency on the current state of play on the implementation of the regulation establishing the Visa Information System (VIS). As a result of testing delays in both the central and national databases the roll-out of VIS will now take place, subject to no further problems, in December 2010. The UK does not participate in the regulation.

The presidency then updated Ministers on arrangements for the first milestone test for the second-generation Schengen Information System (SIS II) noting that the test should take place by 29 January 2010. If the Council deemed the first milestone test to have failed it would then have two months to decide whether to switch to the contingency plan. The UK stressed the need to distinguish between technical and contractual elements of the project highlighting the importance of the milestone test in this respect. The UK could not accept a delayed milestone test being equated with non-compliance; if the test could not happen in January then the Council should be consulted on the next steps. This was reflected in Council conclusions adopted following the Mixed Committee.

The presidency sought the Council's views on the need for an IT agency and its potential scope, inviting applications from those wishing to host it before the end of the year. It concluded that there was broad support for the agency, which would manage SIS, VIS and the Eurodac systems, and the details would be further discussed at working level. The UK supported the need for an agency and wishes to take part in the adoption and application of this proposal to the extent we participate in the relevant IT systems.

The Council adopted amendments to the common visa list lifting visa requirements for Serbia, Montenegro and the Former Yugoslav Republic of Macedonia. Their citizens will no longer require a visa to enter the Schengen area. Albania and Bosnia Herzegovina were urged to work towards full completion of the benchmarks required for visa liberalisation. While the UK does not participate in the EU visa regime, we maintain an interest in all visa issues.

Under any other business Switzerland gave an update on the national referendum on the building of minarets and asked Schengen partners for their support to help free two Swiss businessmen detained in Libya since 2008.

Following Mixed Committee, the Council approved the A points list. Of note the Council endorsed the suspension of negotiations on the Council regulation and Council decision on the establishment of an evaluation mechanism to verify the application of the Schengen acquis. The Commission has been invited to review the texts and devise next steps, due to the European Parliament's rejection of the text and the entry into force of the Lisbon treaty.

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