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Written Ministerial Statements

Thursday 24 May 2012

Business, Innovation and Skills

Law Commission Review (Unfair Contract Terms)

The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Norman Lamb): In preparation for a proposed overhaul of consumer rights, I have asked the Law Commission and Scottish Law Commission to review and update the recommendations they made in 2005 on unfair terms in contracts and in particular to reconsider their recommendations in relation to ancillary and contingent charges in the light of recent court judgments. The terms of reference are as follows:

to review and update the recommendations made by the two Law Commissions in their 2005 report on unfair terms in contracts (Law Com No. 292; Scot Law Com No. 199) in so far as they affect contracts made between businesses and consumers:

in particular to examine article 4(2) of the Council directive 93/13/EEC on unfair terms in consumer contracts on terms exempt from review in the light of recent case law; and

following full consultation with relevant stakeholders, to advise BIS on how best to implement article 4(2), bearing in mind the following:

a. the need to ensure that the UK meets its minimum harmonization obligations;

b. the desirability of a single consumer regime to incorporate both the Unfair Terms in Consumer Contracts Regulations 1999 and the Unfair Contract Terms Act 1977, without reducing the existing level of consumer protection; and

c. the need for clarity.

The Law Commissions aim to open consultation by the end of July 2012 and publish their full advice by the end of March 2013. I will inform Parliament on both these occasions and place copies of the Law Commissions’ consultation paper and final report in the House Library. Further details will also be available from the Law Commission website at http://lawcommission.justice.gov.uk/

EU Competitiveness Council

The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Norman Lamb): The EU Competitiveness Council will take place in Brussels on 30 and 31 May 2012. I shall represent the UK on internal market and industry issues on 30 May, and David Willetts, Minister of State for Universities and Science, will represent the UK on research issues on 31 May.

The internal market and industry substantive agenda items on 30 May will be: a partial general approach on a programme for the competitiveness of enterprises and small and medium-sized enterprises (COSME); an orientation debate on mutual recognition of professional

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qualifications; an orientation debate on public procurement; adoption of conclusions on the digital single market and governance of the single market; general approaches on alternative dispute and online dispute resolutions; and political agreement on the unified patent court.

Three AOB points will be discussed: state aid reform, which will be information from the Commission; information from the Lithuanian delegation on the recent like-minded group meeting in Vilnius; and the work programme of the upcoming Cypriot presidency.

The research substantive agenda items on 31 May will be: a partial general approach on the proposal for a regulation establishing Horizon 2020; progress reports on the proposed regulation laying down the rules for participation and dissemination in Horizon 2020, the Council decision establishing the specific programme implementing Horizon 2020 and the Council regulation on the research and training programme of the European Atomic Energy Community complementing Horizon 2020; progress reports on the proposed decision on the strategic innovation agenda for the European Institute of Innovation and Technology and amending regulation establishing the European Institute of Innovation and Technology; and adoption of Council conclusions on European innovation partnerships.

The research AOB items will comprise: the state of play from the strategic forum for international scientific and technological co-operation, including on an EU/MS-India strategic agenda on research and innovation; results of research-related presidency conferences and ministerial meetings; and work programme of the incoming Cypriot presidency.

The Government’s objectives for the Council are:

To contribute to discussions on public procurement and mutual recognition of professional qualifications;

Confirm agreement with Council conclusions on the digital single market and governance of the single market;

Agree to a partial general approach on COSME;

Agree to the general approaches for alternative and online dispute resolution;

To ensure that details of the patent proposal deliver the most effective arrangements for UK business and their representatives who will use the unified patent court. We want to see a Europe-wide patent system that brings real benefits for innovative businesses, consumers and the economy;

Agree to a partial general approach on the regulation establishing Horizon 2020;

Confirm agreement with Council conclusions on European innovation partnerships.

High Cost Credit

The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Norman Lamb): I have today published a progress update which BIS has received from the University of Bristol Personal Finance Research Centre into the impact of a variable cap on the total cost of high-cost credit.

The research team have completed a targeted review of previous evidence and mapped the key findings against the research objectives. Fieldwork on the business survey has also been completed. This comprised qualitative in-depth telephone interviews with representatives from five high-cost lender trade associations and 24 lenders.

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The topics covered in the trade association interviews were: market size and trade association coverage; the concept of a cap on the total cost of credit; how a cap on the total cost of credit might be structured; the level of a cap on the total cost of credit; profitability; problems said to be associated with these markets

The topics covered in the lender interviews were: background information about the business; loan product details; customers; risk assessment and management; costs and profitability; capping the total cost of credit; default charges

The consumer survey of 1,500 customers of payday loans, home credit and pawnbroking covered the following topics: general views and attitudes towards the high-cost credit sector used; shopping around for the loan; repaying the loan; satisfaction and self-reported impacts; other high-cost borrowing; financial circumstances and other borrowing; socio-demographic characteristics. This survey is being supplemented by around 15 qualitative in-depth interviews with consumers who have used high-cost credit.

We expect to publish the final report of this research during the summer and use its findings to help us develop policy.

We are placing copies of the progress update in the Libraries of both Houses.


Taxation of Unauthorised Unit Trusts

The Exchequer Secretary to the Treasury (Mr David Gauke): HM Revenue and Customs (HMRC) are today publishing a second consultation setting out detailed proposals for changes to the taxation of unauthorised unit trusts and their investors.

This follows an initial consultation document published in June 2011 that set out options for change and asked for stakeholders’ views. HMRC have also subsequently met with interested parties. The initial consultation was issued following publication of the “Tackling Tax Avoidance” document at Budget 2011, which announced a number of tax policy areas that would be subject to consultation with the aim of preventing tax avoidance before it occurs to protect the Exchequer and increase certainty for taxpayers.

The second consultation includes a summary of responses to the first consultation. It asks for interested parties’ views on the new detailed proposals and their expected impact by 20 August. HMRC welcome further direct engagement with interested parties on the proposals, in particular during the period of the consultation. The consultation will be available on the HMRC website.

Communities and Local Government

Fire and Rescue Service

The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill): On 9 February I reported to the House on the Heads of Agreement on the firefighters’ pension scheme to be introduced in 2015, which set out the Government’s final position on the main elements of scheme design.

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My officials have continued discussions with the firefighter unions and the Local Government Association over the remaining details of the firefighters’ pension scheme.

The Government pay tribute to the importance of the work undertaken by our fire and rescue service and the bravery, dedication and professionalism of the men and women who work within it. The Government are committed to providing public service pensions that are sustainable, fair and effective.

Building on the proposals brought forward by Lord Hutton, the proposed final agreement aims to strike a balanced deal between public service workers and the taxpayer. They will ensure that public service workers continue to have access to good pensions, while taxpayers benefit from greater control over their costs.

Public sector pensions will remain among the very best available—a guaranteed level and inflation proofed. Only one in 10 private sector workers have access to such schemes.

I can now report to the House that discussions on the design parameters for the firefighters’ pension scheme in England to be introduced in 2015 have been concluded. This sets out our final position on proposed scheme design, which we are asking unions to take to their Executives as the outcome of negotiations.

The headline elements of the proposed final agreement are set out below. The Government intend to maintain constructive dialogue with the firefighter unions and the Local Government Association as detailed work goes forward.

There will be full statutory protections provided in the new scheme for the accrued rights of existing scheme members:

all benefits accrued under final salary arrangements will be linked to the members’ final salary, in accordance with the rules of the members’ current schemes, when they leave the reformed scheme;

full recognition of a members’ expectation to double accrual for service accrued under the Firefighters’ Pension Scheme 1992 (“the 1992 scheme”), so that a member’s full continuous pensionable service upon retirement will be used to calculate an averaged accrual rate to be applied to service accrued under the 1992 scheme;

members to be able to access their 1992 scheme benefits when they retire at that scheme’s “ordinary pension” age (i.e. from age 50 with 25 or more years pensionable service), subject to abatement rules for that scheme. Pensionable service for the purpose of calculating the ordinary pension age will include any continuous pensionable service accrued under both the 1992 scheme and the 2015 scheme;

members of the 1992 scheme will continue to have access to an actuarially assessed commutation factor for benefits accrued under that scheme.

There also will be transitional statutory protections for qualifying, existing members:

all active scheme members who, as of 1 April 2012, have 10 years or less to their current normal pension age will see no change in when they can retire, nor any decrease in the amount of pension they receive at their current normal pension age. This protection will be achieved by the member remaining in their current scheme until they retire, which could be beyond 31 March 2022.

there will be a further four years of tapered protection for scheme members. Members who are up to 14 years from their current normal pension age, as of 1 April 2012, will have limited protection so that on average for every month of age they are beyond 10 years of their normal pension age, they gain about 53 days of protection. The last day of protected service for any member will be 31 March 2022.

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The core parameters of the new scheme are set out below:

a. a pension scheme design based on career average revalued earnings;

b. an accrual rate of 1/58.7th of pensionable earnings each year;

c. there will be no cap on how much pension can be accrued;

d. a revaluation rate of active members’ benefits in line with average weekly earnings;

e. pensions in payment and deferred benefits to increase in line with price index (currently CPI)

f. member contribution rates in the 2015 scheme from 1 April 2015 will average 13.2%, equal to the expected average of contribution rates in the 1992 and 2006 schemes on the 31 March 2015. However, as announced by the Chief Secretary to the Treasury on 20 December 2011, the Government will review the impact of the proposed 2012-13 contribution changes, including the effect of membership opt-outs, before taking final decisions on how future increases will be delivered in 2013-14 and 2014-15, and in the new scheme. Interested parties will have a full opportunity to provide evidence and their views to the Government as part of the review;

g. without prejudice to the outcome of that review, tariffs for the 2015 scheme are likely to provide for lower rates for new recruits, with some tiered progressive increases for middle, high, and higher income earners;

h. flexible retirement from the scheme’s minimum pension age of 55, built around the scheme’s normal pension age of 60, with members able to take their pension from the scheme’s minimum pension age, as follows:

for all active members who are aged 57 or more at retirement, 2015 scheme benefits taken before normal pension age will be actuarially reduced with reference to the 2015 scheme’s normal pension age, rather than the deferred pension age;

all other members will have their 2015 scheme benefits actuarially reduced on a cost neutral basis from the scheme’s deferred pension age.

i. authority initiated early retirement for members of the 2015 scheme, from age 55, to be in accordance with the arrangements set out in part 3, rule 6 of the new firefighters’ pension scheme 2006;

j. the normal pension age will be subject to regular review. These reviews will consider the increasing state pension age and any changes to it, alongside evidence from interested parties, including unions and employers. It will consider if the normal pension age of 60 remains relevant, taking account of the economical, efficient and effective management of the fire service, the changing profile of the workforce and the occupational demands of, and fitness standards for, firefighting roles;

k. this regular review will be informed by research to be carried out, within the auspices of the Firefighters’ Pension Committee, which will monitor and collate scheme data and experience;

l. late retirement factors for members retiring from active service to be actuarially neutral from normal pension age;

m. a deferred pension age equal to the individuals’ state pension age;

n. an optional lump sum by commutation at a rate of £12 for every £1 per annum of pension foregone in accordance with HM Revenue and Customs limits and regulations;

o. abatement in existing schemes to continue;

p. ill-health retirement benefits to be based on the arrangements in the 2006 scheme;

q. all other ancillary benefits to be based on those contained in the 2006 scheme;

r. members rejoining after a period of deferment of less than fire years can link new service with previous service, as if they had always been an active member;

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s. members transferring between public service schemes would be treated as having continuous active service;

t. an employer contribution cap with a symmetrical buffer.

The scheme actuary has confirmed that this scheme design does not exceed the cost ceiling set by the Government on 2 November. Copies of the proposed final agreement and scheme actuary verification have been deposited in the Library of the House.

Culture, Media and Sport

Telecommunications Council

The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey): The Telecommunications Council will take place in Luxembourg on 8 June under the Danish presidency. The deputy UK permanent representative, Andy Lebrecht, will represent the UK at this Council.

The Council has two substantive items on the agenda that are both orientation debates (an exchange of views steered by the questions from the presidency). The first item covers the proposal for a directive of the European Parliament and of the Council amending directive 2003/98/EC on re-use of public sector information (First Reading). Here we will say that the approach as set out in the Commission’s proposal is broadly in line with existing UK initiatives and best practice and the UK recognises the potential economic benefits that flow from the removal of barriers. We also believe that opening up data can lead to greater transparency and political and social engagement. We will also note, however, that it is important to ensure that excessive burdens and costs are not placed on the public sector.

The second item covers the proposal for a regulation of the European Parliament and the Council on guidelines for trans-European telecommunications networks and repealing decision no 1336/97/EC (First Reading). Here we will say that we are broadly supportive of this proposal. In particular, the UK agrees with the objective of supporting projects that contribute towards meeting the EU targets for broadband roll-out and take-up which are broadly consistent with our own approach and policy in this area. We are also supportive of a number of the digital service infrastructure projects covered by the proposals. I will also say that we are also exploring the potential for the proposed use of innovative financial instruments (IFIs) for these projects, but would support them only where these substitute, rather than supplement spending in the EU budget. Finally, we will also note that budgetary restraint is paramount, and the UK is seeking reductions.

Any Other Business

There are only three items under AOB. We currently do not foresee the need to intervene on any of these items. The first item is an update from the presidency on the proposal for a regulation of the European Parliament and of the Council amending regulation (EC) No 717/2007 on roaming on public mobile networks within the Community.

The next item on the agenda is a presentation by the Commission on a communication entitled “Trust and Confidence in electronic transactions in the internal market”, which will be published on 4 June.

Finally the Cypriot delegation will inform the Council of the priorities for their forthcoming presidency.

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Defence Infrastructure Organisation

The Secretary of State for Defence (Mr Philip Hammond): In taking forward our work to develop a new operating model for defence in line with the changes recommended in Lord Levene’s defence reform report, the Defence Infrastructure Organisation (DIO) was established on 1 April 2011, bringing together all aspects of infrastructure asset management and facilities management under one organisation. The two-year DIO transformation programme, initiated in April 2011, will determine over the next 12 months both the future operating model and the most appropriate corporate structure for DIO to deliver best value for money and achieve maximum operating cost savings.

Earlier this year DIO undertook a soft market testing exercise to explore prospective roles for the private sector, test some of the commercial principles being considered by DIO and understand likely levels of interests from industry in partnering with the DIO. The output from this process indicated that industry has a substantial interest in being involved in DIO’s transformation and confirmed that the involvement of a strategic business partner in DIO’s transformation should be pursued. To this end, DIO will now commence a procurement process to assess whether the involvement of a strategic business partner in its transformation offers the best value for money solution for defence.

The competition will shortly be announced through an advertisement in the Official Journal of the European Union. A successful conclusion of this procurement will enable DIO to make a significant contribution to the savings which the Department needs to make as set out in the 2010 strategic defence and security review.

Service Complaints Commissioner (Fourth Annual Report)

The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan): I am pleased to publish today the MOD’s formal response to the Service Complaints Commissioner’s (SCC) fourth annual report on the fairness, effectiveness and efficiency of the service complaints system. A copy will be placed in the Library of the House.

The formal response sets out the work undertaken by MOD and the services in 2011, and the further work planned to review the service complaints process, including as part of that work consideration of recommendations made by the SCC in her 2010 and 2011 reports which fall within the scope of the review.

MOD and the services are committed to ensuring members of the armed forces and their families have a complaints system which is fair, effective and efficient and is one in which they can have confidence. We have made good progress and will continue to learn from our experiences of the process and identify where and how we can make further improvements to the manner in which we handle complaints.

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Children Who Perform

The Parliamentary Under-Secretary of State for Education (Tim Loughton): Today I am launching a consultation on proposals to update the legislation to protect children who take part in performances and related activities.

We want to increase the opportunities for children to take part in activities that they enjoy and can benefit from. The current legislation is nearly 50 years old. The rules are detailed and hard to relate to modern-day activities. This makes it difficult for parents and producers to understand what is required of them, and for local authorities to process approvals efficiently and consistently. We intend to get rid of unnecessary bureaucracy and put in place an appropriate framework that helps keep children safe while allowing them greater opportunity to have fun, to learn, and to explore and develop their talents.

This is a joint consultation with the Welsh Government. A copy of the consultation document “Safeguarding children: proposed changes to child performance legislation” has been placed in the Libraries of both Houses.

School Funding

The Secretary of State for Education (Michael Gove): In tackling the challenges we face on school building I have been determined to use the capital funding at my disposal to best effect, seeking value for money and efficiency from every pound spent. Sebastian James’s review of capital recommended a complete overhaul of the system for allocating capital investment so that we can focus on the repair and refurbishment of schools in the greatest need alongside meeting the pressure for new, good school places.

Over the past two years we have allocated £2.7 billion to local authorities to support the provision of new school places and £2.8 billion for the maintenance of the school estate to meet the needs of maintained schools and academies. Over the spending review period, total capital investment will be over £17 billion.

In addition, last year I invited bids to a new programme from schools in need of urgent repair. Some 587 schools applied for the programme on the basis of their condition need. Today I can confirm that 261 schools will be rebuilt, or have their condition needs met through the priority school building programme (PSBP) and a copy of the list has been placed in the House Libraries. Officials have today written to all schools who applied for the programme to confirm whether their application has been successful. Work will begin immediately and the first schools will be open in 2014.

I recognise that many of the schools that applied to the PSBP and have been unsuccessful will also have significant condition needs. Some of those will have their needs addressed through the other funding we have made available for maintenance. Where that is not the case, I will use the information from the national programme of surveys we are currently conducting to ensure that, subject to funds available in the next spending review period, those schools which need renovation will

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have their needs addressed as quickly as possible. By next autumn we will have details about the condition of every school in the country. Information on the condition of all schools was last collated centrally in 2005.

I know that many schools will be disappointed not to be included in the programme. We have had to take difficult decisions in order to target spending on those schools that are in the worst condition. In order to ensure that the process was robust and fair, a qualified surveyor has visited every school for which an eligible application was received to verify the condition of the buildings. This was necessary to make sure the schools being taken forward are those with the greatest overall condition need.

The condition need of some schools is so severe that urgent action is necessary. I have decided to make a limited amount of capital grant available to address the needs of the highest priority schools in the programme. Some 42 schools—those in the very worst condition and all special schools included within the programme—will be taken forward straight away using capital grant. It is right that the condition needs of special schools—where some of our most vulnerable children are educated—are met as quickly as possible.

This limited capital funding has become available by taking a more disciplined approach to managing my Department’s capital budgets. Savings have been made by driving down the cost of new schools, shortening procurement times and challenging contractors to look for savings in all areas. These savings mean that more schools will benefit from the programme.

The PSBP will build on the progress we have already made in delivering a more efficient, faster, less bureaucratic approach to building schools. We are determined to reduce the wasteful processes of the past. That is why we have developed new baseline designs which will speed up the process and increase efficiencies and we are reducing the regulations and guidance governing school premises. This will encourage lower-cost build processes to be designed-in from the start.

I have previously expressed my strong support for the Government’s agenda on reforming the PFI model and we are working closely with the Treasury to ensure the PSBP is aligned with this model in providing cost effective and more transparent delivery of services. Schools will have greater flexibility with soft facilities management services, such as cleaning, catering, security and some grounds maintenance being managed and controlled by schools themselves.

In addition to targeting spending on those schools which are in the worst condition, my priority in spending capital has been increasing the number of new school places in order to correct previous failures to meet that need. Since announcing the PSBP last July, the Government has allocated £1.1 billion in additional funding to address the need for new school places.

Environment, Food and Rural Affairs

Gangmasters Licensing Authority (Red Tape Challenge)

The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice): The Gangmasters Licensing Authority (GLA) has been considered under the employment theme of the Government’s red tape challenge. Last December, we announced that the red

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tape challenge ministerial star chamber had endorsed the need for the GLA to continue to enforce protection for vulnerable workers, while requiring it to look at reducing burdens on compliant operators. The GLA has been further considered within the red tape challenge and I am today announcing the outcome of that process.

The GLA has done a great deal of valuable work since it was formally constituted on 1 April 2005 with cross-party support. Seven years on, it is a good time to see where improvements can be made so that the authority can become more focused on the worst excesses in the areas it regulates and work more closely with other agencies that tackle crime. I therefore propose to bring forward measures, including where necessary legislation, subject to public consultation, which will:

Ensure GLA targets suspected serious and organised crime by working more closely with the Serious Organised Crime Authority and other specialist law enforcement agencies;

Ensure that evidence of worker exploitation by unlicensed gangmasters or licence holders will contribute effectively to continued successful investigation and prosecution of organised crime groups and assist in the earlier identification of the victims of human trafficking;

Reduce the burden on compliant labour providers and labour users and focus forensically on gross abuse of workers by unscrupulous gangmasters—whose crimes include tax evasion, trafficking, health and safety negligence and other serious crimes;

Streamline the process for issuing licences and remove the general requirement for an application inspection and associated fee, aim to reduce fees and charges and extend the licensing period from twelve months to two years or more for highly compliant businesses;

Remove from scope of the GLA, activities or sectors which are low risk, including:



cleaning contractors;

land agents; and

voluntary workers.

Provide for those with exclusive rights to use the seashore for shellfish cultivation to be able use their workers to grade and gather shellfish stock without needing to be licensed as a gangmaster. This measure would leave fully in scope of the Act activities such as the gathering of cockles from public shellfish beds;

Introduce administrative fines and penalties for low-level and technical minor offences, including a measure similar to a repayment order to achieve rapid reimbursement to an exploited worker of wages or other payment which has been removed;

Adopt an approach in respect of a labour user who uses an unlicensed gangmaster proportionate to the circumstances of the offence, for example the financial advantage gained and whether or not there has been abuse of the workers; and

Amend the structure of the board of the GLA and introduce a smaller board to provide clear strategic leadership and direction to the GLA.

These changes will free up resources within the GLA to provide for greater effort to be focused on identifying and eliminating criminality in those sectors and activities covered by the authority, such as food processing, where exploitation of the most vulnerable workers is known to exist. In addition it will remove an estimated 150 current licence holders from the scope of the GLA, saving around £60,000 a year, and potentially reduce annual inspection charges from £300,000 a year to zero.

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Foreign and Commonwealth Office

Afghanistan (Monthly Progress Report)

The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague): The UK is engaged in Afghanistan as part of a 50-nation coalition to prevent international terrorists, including al-Qaeda, from again using Afghanistan as a base from which to operate, threatening our security and that of the region.

The Government have committed itself to keeping Parliament informed about developments in Afghanistan on a monthly basis. This 17th report covers progress in April 2012. It reflects the combined assessment of the Foreign and Commonwealth Office, the Ministry of Defence and the Department for International Development.


At the NATO joint Foreign and Defence Ministers meeting on 18 April, the UK announced a contribution of £70 million per annum to help fund the Afghan national security force (ANSF) for a period after our forces withdraw from their combat role at the end of 2014. Developing strong and capable Afghan security forces that will help foster enduring stability in the country is critical to our long-term strategy in Afghanistan. Their continued viability is in our national interest and that of our partners. We must ensure that Afghanistan can never again be used as a safe haven for terrorist groups, such as al-Qaeda, to plan and launch attacks against the UK and our allies. This contribution is aligned with international objectives for the Chicago summit and underlines our enduring commitment to a stable and secure Afghanistan after 2014.

G8 Summit

At the G8 summit on 18 May, Heads of State endorsed the Tokyo conference process that will produce a blueprint for Afghanistan’s sustainable economic development for the “Transformation Decade” (2015-2024). Heads of State looked forward to making long-term commitments at Tokyo, and emphasised mutual accountability and governance improvements, building on the agreements reached at the Bonn conference last year. The G8 also agreed to support efforts to encourage private sector investment in Afghanistan and the region, and to increase regional integration and trade.

We now look forward to the Tokyo conference in July when the international community and the Government of Afghanistan must agree long-term mutual commitments for the transformation decade, with concrete pledges from donor partners for at least the period 2015-17. It is vital that we and our international partners help to provide continuity through to the point of transition and immediately beyond.

The UK continues to provide support for Afghanistan’s development needs, including for women and girls. In April the UK provided funding for 15 women’s organisations working on improving access to justice, conflict resolution and peace building through the Tawanmandi strengthening civil society programme which the Secretary of State for International Development launched last year. UK support to the Zardozi project has also had a major impact, increasing the monthly incomes of women participating in the project by 123%.

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NATO Summit, Chicago

At the NATO Chicago summit on 20 and 21 May, the international community demonstrated its enduring support to Afghanistan beyond the end of security transition. Plans were discussed for future funding of the ANSF and NATO’s post-2014 role was agreed. This sent a clear message to the Afghan people that we will not abandon them, and a clear message to the insurgency that they cannot wait us out. We will provide fuller details in our May report.

On 13 May, the Afghan Government announced the areas to be included in tranche 3 of the transition process. This tranche includes Nahr-e-Saraj, which is in the area of UK operations. We will be reporting more fully on the detail of the tranche 3 announcement in our May report.


Reconciliation and Reintegration

Salahuddin Rabbani was appointed as the new chair of the High Peace Council on 14 April. We welcome this and hope that it will bring fresh momentum towards an inclusive political settlement in Afghanistan. The Taliban’s suspension of talks over the proposed political office in Qatar continued through April, but this does not alter our support for efforts to promote a political process to help bring peace and stability. Nationwide, over 4,000 insurgents have now enrolled on the formal reintegration programme, which is closely supported by the UK.

Strengthening the Afghan State

Rule of Law


The Criminal Justice Task Force (CJTF) is an Afghan-led facility which provides a national detention, investigation, prosecution and judicial capability for the most serious narcotics cases. In April it convicted 27 individuals for narcotics offences including prison sentences of up to 20 years. They also seized over 4 kgs of heroin, 633 kgs of opium, 186 kgs of morphine, 942 kgs of hashish and about 100 litres of chemical precursor.

April saw the finalisation of preparations for an international police conference scheduled for May in Kabul. The conference will start consultation on the role, structure and professionalisation of the Afghan national police, the reform of the Ministry of the Interior and the links between the police and the justice system.


In April, the new chief judge for the province was sworn in and started work in Lashkar Gah. Sixty-two judges, prosecutors, defence lawyers, police investigators and civil society members attended 10 days of training on tackling crime.

Long-running friction between the Marjah district governor (DG) and district community council (DCC) over claims of DG corruption led to the resignation of the DCC chairman after Governor Mangal rejected a complaint that was without substantive proof. Fourteen Nad-e Ali district community councillors were referred to the Attorney-General’s office for alleged misappropriation of wheat seed donated by the Indian Government for distribution to poor families.

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Economic and Social Development

The UK continued to work with the Afghan Government to prepare for the Tokyo development conference in July. Along with international partners, we are working to develop a “mutual accountability framework”, to be endorsed at Tokyo, that will set out our joint commitments to the people of Afghanistan up to transition in 2014 and beyond. The long-term peace and stability of Afghanistan will depend on continued financial support from the international community to help meet security and development needs after international forces withdraw. For their part the Government of Afghanistan must continue to make progress against the IMF programme benchmarks, as well as other vital economic and governance reforms to ensure that our support delivers lasting results.

The UK-funded forensic audit looking at the Kabul bank fraud was completed in April. The auditors delivered a final report to the Ministry of Finance and the Central Bank of Afghanistan. President Karzai subsequently issued a decree stating that Kabul bank debtors who do not repay their loans by 4 June will be prosecuted before a special court. The forensic audit report will provide evidence for such prosecutions.

Economic Development

UK assistance to the Ministry of Mines helped the Ministry to develop a new minerals law, which will help ensure the people of Afghanistan benefit from the country’s mineral wealth. The law addresses ownership of land and mining rights, including tenure and transferability. This is important for private investment. It also clarifies the role of the Government, reinforcing transparent licensing processes for mining activity and making provisions for adequate environmental protection. The Ministry is currently consulting on the final draft of the law and expects to take it to their Cabinet in early June.

UK support to the Zardozi project, which seeks to increase income opportunities for women producers and entrepreneurs, has had a major impact. The monthly income of women joining the project towards the end of 2011 was Afs 446 (US $ 9.49). Since then, average monthly income has grown to Afs 994 (US $21.15), an increase of 123%.

The UK funded Helmand growth programme was revised in April. This included shifting some activities to the national level ahead of security transition in 2014. The revised programme also focuses more on building the capacity of local institutions, such as the Afghan Investment Support Agency and Helmand Business Association, to ensure they can support implementation of the new Bost agricultural business park. When complete, the park will provide a base for local business development.

Research into how the Government and donors can help add value to the production and sale of agricultural produce in Helmand continued with a successful meeting on the dairy sector. This brought together dairy producers and retailers in Lashkar Gah. The second round of meetings with nomadic Kuchi farmers identified grazing patterns, vaccinations and artificial insemination to improve breeding as possible areas for interventions. This work will help to boost farmers’ incomes in a province where agriculture is the backbone of the economy.

The contract for construction of the Marjah Five Ways Junction bridge in Helmand has been awarded.

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The project will contribute to linking a key agricultural area to the provincial capital, so that farmers have better access to markets for their produce.

Social Development

A total of 27 organisations—15 of them women’s organisations—received funding in April from the UK’s Tawanmandi programme for strengthening Afghan civil society, which the Secretary of State for International Development launched last year. These organisations will now take forward a range of projects focusing on improving justice, conflict resolution and peace building.

In Helmand, the UK-funded Kartelagan comprehensive health centre and Lashkar Gah medical training centre were officially handed over to the Department of Public Health and training materials were delivered to enable courses to begin. The contract was also signed for the construction of the UK funded Qaleh Bost basic health centre, which is due for completion in 2013. These projects will help to boost the Afghan Government’s capacity to offer reliable and sustainable health services to local people in Helmand.

Counter Narcotics

The UN Office on Drugs and Crime (UNODC) released its 2012 opium risk assessment survey on 17 April. The report predicts likely opium cultivation levels in Afghanistan this year. The report predicted that there is unlikely to be an increase in poppy cultivation in Helmand or Kandahar and that Kandahar may see a further decrease in cultivation. The provinces together produce the vast majority of Afghanistan’s opium. The report predicts a more mixed picture in other parts of the country. Actual cultivation levels in 2012 will not be known until UNODC publishes its annual opium survey later this year.

Eradication of opium poppy continues. By 23 April 6,257 hectares had been eradicated compared with 2,243 hectares at the same point in 2011. In Helmand, where eradication concluded on 26 April, UNODC figures indicate almost 4,000 hectares of poppy have been eradicated since operations began on 6 March 2012, an increase of over 50% on 2011.


Afghan National Security Forces (ANSF) Growth and Capability

On 18 April the Defence Secretary announced that from 2015 the UK will provide £70 million a year to help fund the ANSF in the years after our combat role ends. This funding will be kept under review and will contribute to a wider $4.1 billion fund that is being raised by the Afghans and the wider international community. The majority of contributions are expected to be announced in the coming weeks. The UK’s contribution will be provided in addition to our lead supporting role at the Afghan National Army Officer Academy.

Table One: ANSF Growth to 30 April 2012
  Objective (30 November 2012) Target Strength (30 April 2012) Actual Strength (30 April 2012) April Target Met











ANA Officers:





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Table Two: ANSF Attrition Rates
  Target Monthly Attrition Actual Monthly Attrition April Target Met









Uniformed Police




Border Police




National Civil Order Police




Violence Levels

Now that spring has arrived, insurgent activity across Afghanistan has continued to increase. This is in line with historic and seasonal norms. While violent incidents in April were comparable with April 2011 levels, it is significant that year-to-date figures remain lower than in 2011. These trends remind us that there is still work to be done, but also reflect the high tempo of operations in the country as the Afghans, supported by ISAF, continue to exert pressure on the insurgency.

Regional Command (South West), which includes Task Force Helmand in the UK’s area of operations, saw a steady increase in insurgent activity in the first half of April. However, in the second half of the month enemy activity decreased due to the onset of the poppy harvest.

This temporary lull in activity is expected to last into early May, after which point we can expect to see a gradual increase in violent incidents, with activity peaking during the summer months.

In Helmand province, insurgents conducted an attack on the Musa Qal’eh District Police headquarters on 11 April. The attack resulted in the deaths of nine members of the ANSF and injured the district chief of police. The incident is the latest in a series of attacks and assassination attempts on Government and security officials across Afghanistan and illustrated insurgent intent to target those who most threaten their campaign.

Kabul Attacks

After a break of 168 days(1) the insurgency finally succeeded in their efforts to launch a high-profile attack in the Afghan capital. On 15 April, insurgents carried out co-ordinated attacks against a number of high-profile targets within the city including the British embassy. Additional and associated complex attacks took place simultaneously elsewhere in Afghanistan. The ANSF responded quickly and efficiently to the attacks with only limited assistance from International Security Assistance Force (ISAF). Their performance demonstrated their increasing professionalism and showed improvements in their capability since the last insurgent “spectacular” attacks in Kabul in September 2011.

Tactically the attacks, which were claimed by the Taliban, were not successful and did not demonstrate a new or improved level of insurgent capability. High-profile, “spectacular” attacks are deliberately targeted to distort

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evidence of campaign progress and affect perceptions of security among the Afghan population and the international community.

Although the Afghan National Directorate of Security has successfully disrupted a number of threats to Kabul in recent months, the fact that these attacks were able to happen is nevertheless damaging and has contributed to speculation of an intelligence failure. Continuing improvements to ANSF capacity and particularly intelligence capability should improve the situation but will not guarantee that all attacks on the capital can be prevented.

The 15 and 16 April attacks should be viewed in context. Kabul, as capital city, is home to 20% of the population, has a large number of high-profile targets and has a symbolic significance for the insurgents. But it experiences less than 1% of all violent incidents. This gap in high-profile attacks was the longest since 2009.

While the attacks had only a minimal tactical impact, they illustrate the insurgents’ intent to conduct a campaign of violence in Afghanistan and remind us that there is still a job to do. As the insurgents attempt to regain the campaign momentum over the summer months, it is likely that they will continue to attempt to carry out similar attacks to sustain their relevance. The ANSF, supported by ISAF, are prepared for this, but we must expect further challenges ahead.

(1)Excluding the sectarian Ashura attacks in December 2011.

Transfer of Authority

Transfer of authority from 20 Armoured Brigade to 12 Mechanised Brigade took place on 20 April officially marking the end of Herrick 15.

UK Force Levels

On 26 April in a statement to the House, the Defence Secretary explained how the UK would reduce its conventional force levels in Afghanistan by 500 to 9,000 by the end of the year. This follows a commitment made by the Prime Minister in July 2011. The majority of the 500 will be made up of combat troops, reflecting the increasing capability of the ANSF. This reduction in our force levels is consistent with the transition process and the decisions have been made using military advice.

Table Three: Security Incidents
Type of incident Definition Change from March 2012 Comparison with April 2011

Security incidents

Enemy action and explosive hazards, both executed attacks and “potential” attacks (e.g. an IED found and cleared)

Rise in attacks

No significant change

Enemy initiated attacks

Attacks executed by insurgents (This does not include “potential” attacks)

Rise in attacks

No significant change

Complex attacks

Attacks conducted by multiple hostile elements employing at least two distinct classes of weapon

Rise in attacks

Fall in attacks

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Table Four: International Contributions to ISAF
Country Contribution % of Total































Others (38 nations)



Current Total



Above numbers are indicative of troop contributions as at 18 April 2012, actual numbers fluctuate daily. Source: ISAF

Friends of Yemen Ministerial Meeting

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Alistair Burt): I am pleased to inform the House that on 23 May in Riyadh, I co-chaired, with my right hon. Friend the Minister of State for International Development, a successful meeting of the Friends of Yemen. This was the first meeting at ministerial level for nearly two years. It confirmed the strong political commitment of the international community to support Yemen through its process of transition, leading to elections in 2014. Key announcements were also made on humanitarian aid to Yemen and the date of a Yemen donor conference.

Monday’s appalling terrorist attack in central Sana’a underlines the security challenges and instability facing President Hadi and his Government as they seek to rebuild Yemen following last year’s political upheavals and years of under-development. Friends expressed their condolences to victims and their families and reaffirmed our commitment to helping Yemen tackle the shared threat of insecurity and violent extremism. Supporting political and economic reform and tackling Yemen’s deepening humanitarian crisis requires equal determination and will be vital to Yemen’s long-term stability and security. This meeting was an opportunity to take stock of Yemen’s achievements to date, reaffirm our support, review Yemen’s transition plans, and plan for concrete forms of assistance and future action.

Yemen has made significant progress in implementing the initiative brokered the Gulf Co-operation Council, not least the inauguration of its first new Head of State in 33 years. We have also seen the forming of a power-sharing Government, the beginning of a process of national dialogue, and plans for Yemeni-led military and economic restructuring.

The deepening humanitarian situation was rightly high on the agenda and we expressed a clear commitment to addressing acute need in Yemen. The UK announced an additional £28 million of aid towards the UN humanitarian appeal, which will provide emergency food to up to 250,000 people, life-saving nutrition for 150,000 children and safe water to 68,000 people affected by conflict. And collectively over £2.5 billion of economic assistance was announced. The Kingdom of Saudi Arabia pledged almost £2 billion. It is important that the group now meets the expectations of Yemenis by providing

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necessary support resulting in real improvements to their lives, including basic services, employment, security, good governance, and political inclusion. The group welcomed the agreement by the kingdom of Saudi Arabia to host a donor meeting in Riyadh at the end of June. The Friends decided to meet again in September in New York.

General Affairs Council

The Minister for Europe (Mr David Lidington): I will attend the General Affairs Council in Brussels on 29 May.

The focus of the meeting of the General Affairs Council, which will be chaired by the Danish EU presidency, will once again be the multi-annual financial framework (MFF). The other items on the agenda are preparation for the European Council of 29-30 June 2012, the G20 summit in Mexico (18-19 June, Los Cabos) and, at our request, a discussion of Croatia’s progress in the accession process following the recent publication of the Commission’s monitoring report.

On the MFF, there will be an orientation debate in which the Danish presidency would like Ministers to address the key issues in negotiations. For the first time, the discussion will be held on the basis of a negotiating box that covers all parts of the negotiation: all areas of spending, all headings, horizontal aspects of the financial framework (such as what should be kept on, or taken off the budget) and the system of own resources, including the UK rebate and other correction mechanisms.

As with previous meetings of the General Affairs Council, my overriding objective for the discussions on the MFF will be for the negotiating box to reflect a restrained EU budget, limited to a real-terms freeze. I will defend the UK rebate and press for the language on new own resources to be removed from the negotiating box.

On the June European Council preparation, the General Affairs Council will have a short discussion on the agenda set out by President Van Rompuy which currently covers economic policy (specifically growth), the MFF and justice and home affairs (specifically Schengen, asylum policy and the abuse of the free movement directive).

Finally, the Council discussion and conclusions on the Commission’s interim report on Croatia’s continued progress towards accession provides an opportunity for the EU, and the UK, to maintain political focus on the pre-accession monitoring process and the importance of Croatia delivering against all of their commitments ahead of accession. Croatia has already responded with a detailed action plan to follow up the report’s recommendations.

Home Department

G6 Meeting

The Secretary of State for the Home Department (Mrs Theresa May): The informal G6 group of Ministers of the Interior from the UK, France, Germany, Spain, Italy, and Poland held its most recent meeting in Munich, Germany on 17 and 18 May 2012.

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The meeting was divided into three working sessions over one day, with a dinner the previous evening. It was chaired by the German Minister for the Interior, Hans-Peter Friedrich, and I represented the UK. The other participating states were represented by: Manuel Valls (France), Anna-Maria Cancellieri (Italy), Jacek Cichocki (Poland) and Jorge Fernández Diaz (Spain). The US Attorney-General, Eric Holder and the Secretary for Homeland Security, Janet Napolitano, attended as guests for the final session.

The first working session was on north Africa and Syria. Ministers considered the need to work with new Governments in the area to build stability and tackle the risk of terrorism and illegal migration. I emphasised the importance of working with countries in sub-Saharan Africa, and with Turkey, as well as those in the immediate region. I also urged continued support for the Annan plan on Syria, while noting that the Syrian Government were not presently complying with their obligations, and highlighting the need for the opposition to refrain from violence and distance themselves from terrorist elements.

The second session focused on the European Commission’s recent draft directive laying down data protection rules for the police and judicial authorities. Ministers questioned the need for the directive and called for more flexibility in it. They were particularly concerned about proposals that would govern the processing of data within individual member states, and with the proposed requirement to renegotiate existing agreements for the sharing of data with countries outside the EU. I supported these concerns, arguing that member states should seek fully to implement the existing data protection framework decision.

The third session covered the movement of terrorist networks across borders, both within the EU and more widely (e.g. to training camps in Africa or Asia). Member states, and the US representatives, emphasised the importance of exchanging information on suspicious movements effectively, adding that data protection rules, while important, need to recognise the day-to-day reality of law enforcement work. I stressed the need to identify suspicious patterns of movement, and the important contribution that the provision of passenger name records can make to this.

The US representatives explained that their electronic system for travel authorisation (ESTA) had, in their view, been a great success, enabling them to detect a number of potential terrorists seeking to travel to the USA. They also expressed their appreciation for the recent approval of the new agreement on passenger name records between the EU and the USA.

I also held separate bilateral meetings with other heads of delegations.

The next meeting of the G6 is expected to be held in the UK in November.

Report on Corruption in the Police Service in England and Wales

The Secretary of State for the Home Department (Mrs Theresa May): Today I am laying before the House and publishing the second report by the Independent Police Complaints Commission (IPCC) on their experience of police corruption.

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The Government are currently considering the findings of this report.

The document will be available on both the official documents and IPCC websites and copies will be available from the Vote Office.


Legal Aid, Sentencing and Punishment of Offenders Act 2012

The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly): The Legal Aid, Sentencing and Punishment of Offenders Act 2012 received Royal Assent on 1 May 2012. The Government have already announced that the provisions in part 2 relating to civil litigation funding and costs will come into force in April 2013. However, there are two exceptions to that.

First, the provisions in relation to sections 44 and 46 (recoverable success fees and insurance premiums) will not come into effect in relation to mesothelioma claims until a review has been undertaken and published in accordance with section 48. The Ministry of Justice will set out further details of the timing and contents of the review in due course.

Secondly, the provisions in relation to sections 44 and 46 will not come into effect until April 2015 in respect of insolvency proceedings. Insolvency cases bring substantial revenue to the taxpayer, as well as to other creditors, and encourage good business practice which can be seen as an important part of the growth agenda with wider benefits for the economy. These features merit a delayed implementation to allow time for those involved to adjust and implement such alternative arrangements as they consider will allow these cases to continue to be pursued. Success fees and insurance premiums will therefore remain recoverable beyond April 2013 in respect of these two classes of case only (in addition to insurance premiums in respect of expert reports in clinical negligence cases provided for by section 46 of the Act), although the fixed recoverable success fees in respect of employer’s liability disease claims in section V of part 45 of the civil procedure rules will continue to apply in respect of mesothelioma proceedings for the time being.

The Government have asked the Civil Justice Council for further advice in relation to detailed aspects of implementation by the end of June in relation to qualified “one way costs shifting” (QOCS).

The Ministry of Justice will also continue to engage with key stakeholders and the senior judiciary and will announce further details of the policy position by the summer recess. Changes to the civil procedure rules (CPR) will be considered by the CPR Committee in the autumn, in order for the necessary changes to come into effect for April 2013. Updates are provided on the judiciary website at: http://www.judiciary.gov.uk/publications-and-reports/review-of-civil-litigation-costs


Infrastructure (Roads)

The Secretary of State for Transport (Justine Greening): As part of the spending review settlement in October 2010, the then Secretary of State agreed to commission

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an independent review to examine whether Government have the right approach to operating, maintaining and enhancing the strategic road network. Alan Cook, the non-executive chairman of the Highways Agency, led this review and his report “A Fresh Start for the Strategic Road Network” was published in November 2011. I am very grateful to Alan for his work on the study, and to the many stakeholders who offered advice and supported this process.

Today I am publishing my response to this review. I am also publishing the terms of reference for the study which the Prime Minister has asked my Department and HM Treasury to carry out, into the feasibility of new ownership and financing models for the strategic road network. This will build on the evidence provided in Alan Cook’s report on the efficiency savings which have been made in the regulated utilities, and will test whether similar savings can be made through a different structure for managing the road network. The study will develop options for bringing more private sector involvement into the strategic road network, generating increased investment and driving further efficiencies in the network.

Nevertheless, we do not need to wait for the conclusions of the feasibility study before making progress on a specific set of reforms as recommended by Alan Cook, which are both worth while in their own right and essential precursors to any future structural reform.

My announcement today constitutes the first stage in an ambitious integrated programme for reforming the road network to ensure that ultimately we deliver a more effective and efficient strategic road network, which enhances the experience of motorists and puts the road users and communities which rely on this network at its very heart.

I have carefully considered Alan’s recommendations and solutions and my response sets out how the Government intend to take these forward in parallel with the feasibility study. I am accepting, in detail or in principle, many of the actions which Alan recommends that I or the board of the Highways Agency should take. At this stage, the area where I am not progressing Alan’s recommendation is on the question of changing the status of the agency within the public sector. I do not propose to make decisions on the agency’s status ahead of the feasibility study concluding and the Government taking decisions on the future reform of the roads network.

In my response to Alan’s report, I set out a programme of work to transform the agency into a best-in-class executive agency by:

Delivering a long- term strategy and setting an outcome performance specification for the strategic road network, providing far greater clarity about what Government wants, as well as a basis for consistent and transparent challenge to the Highways Agency to deliver against this specification.

Championing the road user. I am determined to ensure that the voice of the user is listened to and championed. I will be bringing a stronger “consumer focus” to the concerns of users and to respond to those through the setting of the performance specification.

A much smarter approach to planning through the production of route-based strategies. These documents will set out investment plans to inform our decisions for the next spending review and will support much greater participation in planning for the network from local and regional stakeholders.

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Work towards smarter financial relationships with Government. We are not accepting in full Alan’s recommendation about funding certainty and ending annuality, but we do propose to work closely with the Highways Agency and HM Treasury to consider the evidence for embedding greater certainty and flexibility into the funding regime of the strategic road network. This will help to inform any future decisions we may make on changes to the funding regime in any operating or ownership model for the network.

In advance of the conclusions of the feasibility study on ownership models, this immediate programme of work will deliver real progress towards a better performing strategic road network, with a clear strategic purpose, transparent expectations on performance, locally grounded investments plans, and a real consumer-focused culture.

My response and the feasibility terms of reference can be found on the Department for Transport website: www.dft.gov.uk and electronic copies have been lodged with the House Library.

Local Sustainable Transport Fund

The Parliamentary Under-Secretary of State for Transport (Norman Baker): I am pleased to announce today that the Department is awarding a further £112.941 million to support authorities in delivering local economic growth while cutting carbon emissions from transport.

On 24 February 2012, the Department received 53 bids to tranche 2 of the local sustainable transport fund from 48 lead authorities.

Proposals were assessed against the criteria as published in the “Guidance on the Application Process”, which was published on 19 January 2011. Successful proposals were those judged to perform well against the twin objectives of supporting the local economy and facilitating economic development, while reducing carbon emissions. They were also scored on their potential to deliver wider social and economic benefits, to improve safety, to bring about improvements to air quality, or to promote increased levels of physical activity.

Proposals were required to demonstrate financial sustainability with benefits enduring beyond the life of the fund, to incorporate a credible delivery plan, and to include a commitment to make a local contribution towards the overall costs.

In line with the published guidance, an assessment of value for money was undertaken. The Department is confident that the overall package of proposals approved in this second round represents high value for money.

I have decided to announce funding for 30 proposals in this round today, with a further announcement regarding the status of 18 more bids to be made soon. Twenty-six proposals will be funded in full and a further four proposals will be funded in part. The list of decisions made today regarding tranche 2 bids is attached.

On 20 December 2011, the Department received 13 business cases for larger projects (requiring up to £50 million funding from DFT). I intend to announce by the end of June which of those authorities have been successful.

I am very pleased that all eligible local authorities across England have applied for funding to the local sustainable transport fund, either as a lead bidder, or as a partner authority to a large project. The fund has been well received by local government and I am confident that it will be effective in addressing the two key objectives of creating growth and cutting carbon.