Written Ministerial Statements
Thursday 25 March 2010
Business, Innovation and Skills
Insolvency Service Performance Targets (2010-11)
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Ian Lucas): I have today agreed to the publishing of "The Insolvency Service's Corporate Plan" for the period 2010-11.
As a result of changes in public behaviour, with individuals increasingly opting for voluntary insolvency and bankruptcy procedures, the Insolvency Service is planning in 2010-11 to deal with a level of new compulsory insolvency cases within a range of 71,500 to 80,000, significantly less than was predicted in 2009.
The service is also planning to deal with a range of 120,000 to 150,000 redundancy payments and other insolvency-related claims during 2010-11.
The service's "Enabling the Future" programme, a major programme of IT-led investment, and its service transformation plan to implement online services and improve its customers' experience, will deliver significant savings for the service and its customers over the next five years. In 2010-11 the service will review its long-term fees strategy, with a view to reducing its bad provision and the use of BIS funding to cover working capital. This will enable the service to achieve a real-terms reduction in insolvency case administration fees of 2.5 per cent.
Action will continue to be taken against bankrupts and company directors in respect of financial misconduct or dishonesty and the service will continue to investigate the affairs of companies in the public interest. In 2009 the service undertook a new stakeholder satisfaction survey for confidence in its enforcement regime, achieving an overall confidence level of 68 per cent. I have asked the service at least to maintain this level during 2010-11 and I have also set a target in relation to the timeliness of instigating disqualification proceedings in appropriate cases.
I have set targets in relation to the timeliness of releasing reports to creditors in bankruptcy and insolvency cases, and of processing claims for redundancy payments. Also, a target has been set in relation to the overall satisfaction levels of the service's users.
The corporate plan will be available from 1 April 2010 at: http://www.insolvency.gov.uk/aboutus/Corporate Plan.pdf
The service will also look to build upon its charter mark accreditation (held since 1999) by obtaining customer service excellence accreditation in 2010, and will work towards Investors in People re-accreditation in 2011-12.
In addition to these targets the service is required to meet centrally promulgated targets relating to replying to correspondence from hon. Members, and making payments to suppliers.
| Other Targets | 2009-10 Target | 2010-11 Target |
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Reply to correspondence from Members of Parliament within 10 days | ||
The Government have also instructed Departments and agencies to maximise levels of payment of undisputed invoices within eight days.
National Minimum Wage
The Minister for Business, Innovation and Skills (Mr. Pat McFadden): In June 2009 the Government asked the Low Pay Commission to produce their next report on the national minimum wage by the end of February 2010. I would like to thank the Commissioners for all their hard work.
The Low Pay Commission's 2010 report
The main recommendations put forward by the Low Pay Commission concern the rates of the minimum wage and an apprentice minimum wage. The Commission have recommended that the adult hourly rate of the minimum wage should increase from £5.80 to £5.93. They have also recommended increasing the development rate (which will cover workers aged 18-20 years) from £4.83 to £4.92 and that the rate for 16 to17-year-olds moves from £3.57 to £3.64. They recommend that these changes take place in October 2010.
The Commission has also recommended that there should be a single apprentice minimum wage rate of £2.50 per hour for those apprentices currently exempt
from the national minimum wage; that is, all those under the age of 19 and those aged 19 and over in the first 12 months of their apprenticeship.
The Government accept these recommendations.
In addition, the Government accept the Commission's recommendations that there should be specific guidance on the national minimum wage for the entertainment sector; and that HMRC investigates whether contract and agency cleaners in the hotel sector are receiving their entitlement under the national minimum wage for their hours worked.
The Government note the Commission's recommendation that there should be a commitment, as a minimum, to maintaining current funding in real terms for monitoring and enforcement of the national minimum wage until at least March 2014.
Government's response to individual recommendations in the Low Pay Commission's 2010 report:
We recommend that the adult minimum wage rate should increase from £5.80 to £5.93 from October 2010.
We recommend that the youth development rate should increase from £4.83 to £4.92 and that the 16 to 17-year-old rate should increase from £3.57 to £3.64 from October 2010.
We recommend that the accommodation offset should increase from £4.51 to £4.61 per day from October 2010.
We recommend that non-employed apprentices are excluded from the apprentice minimum wage and continue to be exempt from the national minimum wage.
We recommend that the apprentice minimum wage be applied as a single rate to those apprentices currently exempt from the national minimum wage. That is, all those under the age of 19 and those aged 19 and over in the first 12 months of their apprenticeship. The wage should cover both those employed on traditional contracts of apprenticeship and employed apprentices on Government-supported level 2 and 3 schemes.
We recommend that all hours of work and training (relating to both on-the-job and off-the-job) under an apprenticeship should be counted as hours for which the apprentice wage must be paid. All hours should be paid at the same wage rate.
We recommend that the apprentice minimum wage be set at an hourly rate.
We recommend the apprentice wage is set at a rate of £2.50 per hour and is introduced from October 2010.
We recommend that in England transitional arrangements are put in place so that current apprentices retain a contractual entitlement to at least £95 per week for the remainder of their apprenticeship or until they are entitled to the national minimum wage.
We recommend that the Government include the review of the apprentice minimum wage rate and arrangements in our annual terms of reference.
We recommend that the Government produce, in conjunction with interested parties, sector-specific guidance on the national minimum wage for the entertainment sector.
We recommend that HMRC investigates whether contract and agency cleaners in the hotel sector are receiving their entitlement under the national minimum wage for their hours worked.
We recommend that the Government commit, as a minimum, to maintaining current funding in real terms for monitoring and enforcement of the national minimum wage until at least March 2014.
The Government will consider the level of funding for national minimum wage monitoring and enforcement as part of the wider next spending review settlement discussion and will announce a decision on this at the same time as the settlement. We have today published our National Minimum Wage Compliance Strategy which highlights how we aim to maximise our compliance impact and emphasises the importance that the Government place on our enforcement activities
Copies of the Low Pay Commission's 2010 report and the National Minimum Wage Compliance Strategy have been placed in the Libraries of both Houses.
Communities and Local Government
Council House Finance
The Minister for Housing (John Healey): I am publishing today for consultation a prospectus setting out our detailed plans for reforming council housing finance in England. My objective in doing this is to dismantle the Housing Revenue Account Subsidy system which was introduced in 1935 and has operated in its current form since 1989. I want to replace it with a devolved system of responsibility and funding for council housing.
I want to provide more flexibility in finances and more transparency in the operation of the system. I want to devolve control from central to local government. And, in return, I want to increase local responsibility and accountability for long term planning and housing management to meet the needs of local people.
The current redistributive Housing Revenue Account Subsidy system has a long history and a clear rationale. Councils have different spending needs and different capacities to raise income. Without redistribution, some councils would have to charge higher rents or deliver lower quality services. But the annual uncertainty of subsidy decisions has inhibited long-term planning and asset management and it has meant that council landlords are less accountable to their tenants.
On 30 June 2009 I announced the Government's proposals for replacing the centralised annual subsidy system with a devolved self-financing system. Under this, councils will finance their own housing from their own rents, in exchange for a one-off redistribution of housing debt to make the settlement financially neutral between central and local government. Freeing councils from the annual funding decisions in the current system will enable them to plan long-term, secure greater efficiencies and improve the management of their homes and the quality of service to their tenants. This reform involves 1.8 million homes, 177 councils and a total annual budget of over £6 billion.
The consultation on our broad proposals ended on 27 October 2009. We received 223 responses showing strong support for our proposed system of self-financing, which many in local government have been calling for over many years. Since then we have worked closely with local authorities, experts and representative bodies in a Government-led project group to develop soundly based and detailed proposals. I am grateful to all those who have contributed to this work.
The detailed plans I am publishing today for local self-financing and management mean 4.2 million people living in council homes will have landlords with more money to maintain their homes and neighbourhoods. This reform will guarantee tenants whose homes have been upgraded through the Government's Decent Homes programme that their homes will be maintained at least to this standard for the future.
I can confirm the detailed principles and terms on which our plan for this self-financing settlement is based. These include:
All councils will have at least 10 per cent. more each year to spend on managing, maintaining and repairing their homes-the equivalent of over £500 million more per year nationally. This deals with the underfunding for maintenance which was identified in the review of Council Housing Finance last year.
There will be a one-off distribution and allocation of debt between local authorities in order to put all councils in an equal position to support their stock from their future income without the need for annual subsidy. The total debt that is supported in the current system will be around £21.48 billion by April 2011. The value of the stock under self-financing using our lead option of a 7 per cent. discount rate is £25.13 billion. This means there will be a net receipt for Government of around £3.65 billion at the point of the self-financing settlement, making this settlement neutral between central and local government.
All rents and receipts from sales of houses and land within the HRA will be retained in full by the local authority. By ending the national pooling of all capital receipts, we will support local authorities in creating full asset management strategies covering both capital and revenue.
No local authority will have a proposed allocation of housing debt which is not sustainable for the long-term.
Rental income assumed in the calculation of debt is based on current rental policy which is designed to keep rents affordable and limit annual increases to tenants.
Funding capacity created for a new generation of council house building.
Since the late 1980s, councils have effectively been unable to build new council houses for their communities. I have now made social housing grant available to local authorities and released funding for two rounds of local authority new build schemes. As a result, we have underway this year, with the first round funding, schemes to build over 2,000 new council houses, the largest council house building programme for nearly two decades. In total over 87 councils, led by all political parties, will start more than 4,000 homes over this year and next.
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