Norman Lamb: I repeat that we will be publishing amended regulations within days and that the Government’s reforms are about putting the clinician centre stage in decisions about how money is spent, rather than unaccountable bureaucrats, as happened in primary care trusts up and down the country. The reforms are

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also about ensuring that the patient’s interests and patient care are always uppermost in the minds of everyone making decisions about the use of money in the NHS.

Bill Esterson (Sefton Central) (Lab): As my constituent Terry Eastham told me, the regulations, as they stand, make privatisation of the NHS swift and inevitable. The Minister says that he is confident that his changes will guarantee that private companies will not be able to challenge CCGs to demand full and open competition. Will he give that assurance now and explain how the changes he is proposing will make absolutely certain of that?

Norman Lamb: It is absolutely not the case that the regulations, as currently drafted, drive the privatisation of the NHS. As the hon. Gentleman will discover in the next few days, the amended regulations will make it abundantly clear that CCGs will be in the driving seat—the letter from the former Secretary of State made that clear back in 2012. They will take into account the importance of co-operation, integration and putting the patient’s interest first.

Barbara Keeley (Worsley and Eccles South) (Lab): On competition and integration, my hon. Friend the Member for Walsall South (Valerie Vaz) and I spent some time this morning talking to academics from Sweden, who told us how competition and fragmentation were preventing them from moving ahead with integration. The Minister should be concerned about the integration of health care and social care, so will he address that point? We will certainly never make progress on integrating health care and social care if we move ahead with all this privatisation, which will lead to a lot more fragmentation. Leaving that aside, 70 of my constituents also think this is just the wrong way to go.

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Norman Lamb: This Government will ensure that there is no unfair competition, such as existed under the previous Government, whereby private providers got handed guaranteed income on a plate, irrespective of whether or not they did the work. I am clear that nothing in our legislation will prevent a real drive towards integrated care, to which the hon. Lady and I share a commitment.

Valerie Vaz (Walsall South) (Lab): Will the Minister say whether there was a mistake in the instructions given to parliamentary counsel in drafting these regulations? Will he also tell us which Minister signed them off?

Norman Lamb: This comes down to a question of the legal drafting and a legitimate concern that the regulations did not meet the policy objectives set out clearly in the Health and Social Care Act and during the course of the debates on it in Parliament. We simply want to ensure that that objective is faithfully met.

Alex Cunningham (Stockton North) (Lab): Professor Steve Field, who chaired the NHS Future Forum and is now deputy medical director of the NHS Commissioning Board, has said that the Government must make it clear how the regulations are “consistent with the commitments” they gave him. He said that he was clear that there must be “no backtracking” by the Government on the commitments that they gave the NHS Future Forum. The Minister suggested that he will satisfy those demands, and the demands of commissioners and doctors across the country. Is he really guaranteeing to do that today?

Norman Lamb: I thank the hon. Gentleman for the question. I spoke directly to Steve Field about this yesterday and I am absolutely satisfied that the amended regulations will totally meet the commitments made during the passage of the Bill in the other place.

Mr Speaker: I am grateful to the Minister and to colleagues.

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Army Basing Plan

1.47 pm

The Secretary of State for Defence (Mr Philip Hammond): With permission, Mr Speaker, I would like to make a statement on the future basing of the British Army. To assist right hon. and hon. Members in understanding the detail of the changes I shall announce and the effects on their constituencies, I have placed in the Libraries of both Houses, and on the Ministry of Defence website, documents setting them out. I understand that copies of the documents will, with your permission, Mr Speaker, be distributed in the Chamber during the course of this statement.

In 2010, we set out in the strategic defence and security review the configuration of forces that the UK would require to meet the future threats, and we committed to have completed the return of UK troops from Germany by 2020. Last summer, I announced to the House the structure of the Regular Army component of Future Force 2020. Today, I can announce the future pattern of basing of the Regular Army in the UK, so that our servicemen and women, and their families and the communities that host Army units, have clarity about where they will be based in the future and when moves are likely to occur.

As the House will recall, in July 2011 the then Defence Secretary set out our initial plans for the future of the MOD estate, on which we will accommodate, train and prepare our armed forces. Those plans have been significantly refined over the intervening 18 months and reflect the fully developed military advice on the optimum affordable basing lay-down to accommodate the Army in the future strategy. This announcement honours our commitment to bring all our troops home from Germany by 2020, with all but the 4,400 troops of 20 Brigade home by Christmas 2016. It supports the Army 2020 structure, the integrated reserves training model and the generation of the Army’s future military capability. It also delivers a £1.8 billion investment in the UK economy in infrastructure and accommodation, and annual savings of £240 million in reduced costs and in improved efficiency of training and maintenance operations, on top of the £100 million-plus annual saving generated by the previously announced moves from Germany.

The return of the British Army from Germany marks the end of an era and I want to put on record the huge debt of gratitude we owe to the German Government and the German people for the support, both moral and material, they have shown our armed forces over more than six decades.

In fact, that return has already begun. In 2010, 20,000 British service personnel were based in Germany, together with their dependants and civilian staff. Already that number of service personnel has been reduced to fewer than 16,000, with significant force elements having already relocated, such as Headquarters Allied Rapid Reaction Corps, which has moved to Innsworth, Gloucestershire. Planning for completion of the return is well advanced. We are on track to reduce our presence in Germany by more than 70% by 2015 against our SDSR target of 50%. The long-term retention of a small training presence in Germany, utilising NATO training facilities, is under active consideration, but we will be closing all major unit locations.

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This is not just about rebasing the Army from Germany. It is about providing a basing plan for Army 2020 in the UK that will allow the Army to generate its military capability in the optimal way. As the plan has developed, two key principles have emerged to inform it. First, the armoured infantry brigades of the reaction force should coalesce around a single location. We have concluded that Salisbury plain training area is the only place in the country where we have the capability to carry out the complex and demanding training exercises that they need to conduct. Having all three brigades located in close proximity around the plain will enable them to train and fight more effectively and will present significant opportunities for efficiency in equipment support and people management. Secondly, the Army should retain a UK-wide footprint, maintaining the vital link to civil society, fostering closer links between reserve units and their partnered regular units and supporting nationwide recruitment and engagement.

Guided by those two principles, the Army has identified the lay-down that represents the best value for money in the utilisation of existing estate and the minimisation of running costs. The focus will be on increasing consolidation around seven centres: at Salisbury plain training area, where we will invest over £800 million; in the north-east of England, centred on Catterick; at Aldershot; around Edinburgh and Leuchars; at Colchester and Swanton Morley in the east of England; in the west midlands around Stafford and Donnington; and in the east midlands, focused on Cottesmore and North Luffenham, where £180 million will be invested. We will do all that while maintaining a regional presence in other parts of the country.

Consolidating around the seven centres will significantly reduce the need for moves, ending the culture of routine UK rotation and giving Army personnel and their families greater certainty about where they will live and work with real benefits in terms of increased stability, access to long-term spousal employment opportunities, continuity in schooling for Army children and the chance to set down roots and access the benefits of home ownership.

The announcement will maintain the broad pattern of Army activity in Scotland, Wales and Northern Ireland. With 45 Commando Royal Marines remaining in Arbroath for the foreseeable future, the measures announced today will see an increase of about 600-plus in total regular armed forces numbers north of the border against the July 2011 baseline, even as the armed forces reduce in size by about 17% overall. In both Wales and Northern Ireland, overall numbers will reduce by approximately 400.

The announcement sets out our firm plans for the lay-down of the British Army, subject of course to gaining the necessary planning, environmental and other regulatory approvals. They are underpinned by a capital investment from the defence budget of £1.8 billion, including £1 billion of investment in new living accommodation to provide 7,800 single living spaces and 1,900 new and refurbished units of family accommodation. The investment will provide a welcome stimulus to the UK construction industry and, taken together with the significant purchasing power currently going into the German economy that will be diverted to the UK, will help to create jobs across the regions and nations of the UK.

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The Ministry of Defence plays a major role in the Government’s public land release programme and will be looking to release additional land and surplus service family accommodation where it is no longer needed. Under the plan, the armed forces will be leaving a number of locations. The disposal plans will be subject to further detailed work and will also be subject to the completion of the plans for the reserve estate in due course. However, I can confirm that we plan to dispose of Howe barracks in Canterbury, Claro barracks in Ripon and parts of Copthorne barracks in Shrewsbury. In Scotland, we will be disposing of Craigiehall barracks, as well as elements of Redford barracks and Forthside barracks in Stirling. Kirknewton will not now be developed as an Army base but Dreghorn will remain as one.

The MOD also intends to close Cawdor barracks at Brawdy in Wales, which is no longer fit for purpose, with 14 Signal Regiment relocating to St Athan, not before 2018, as part of a regional consolidation of the defence presence on that site that will also allow commercial development and job creation by the Welsh Assembly Government, with whom we are working collaboratively, in support of the enterprise zone.

The local communities in each of those areas have been hugely supportive of the military presence over many years. The loss of historic ties will be much regretted and, on behalf of the Army, I want to thank those communities for their generous hosting.

As part of our continued scrutiny of the central London estate, we will be pursuing options to vacate Hyde Park barracks and re-provide for the Household Cavalry Mounted Regiment elsewhere within central London, allowing for disposal of that prime development site, provided that the regiment’s requirements can be met and it proves value for money to do so.

Those disposals, and other planned disposals, will bring substantial receipts which have already been factored into the MOD’s future budgets and will significantly reduce the operating costs of the MOD estate.

I have focused on the future basing of the regular Army but I am conscious that many right hon. and hon. Members will also be interested in the reserves and in our plans for reserve basing, as well as the future basing plans for the other services, the training estate and logistics operations. My right hon. Friend the Minister for the Armed Forces will be making announcements shortly concerning other routine changes elsewhere in the MOD estate across the UK and I will update the House before the summer recess on the future basing plans for the reserves.

This announcement represents a costed and funded plan to bring our Army back from Germany, deliver the basing lay-down for Army 2020 and provide the accommodation our troops deserve, fulfilling our commitments to consolidate the Army estate and providing certainty to Army personnel and their families about where they will be based in the future. It is a plan that is driven by the Army’s requirement to generate military capability in the most effective and efficient way as it reconfigures for contingent operations based almost entirely in the UK. It represents a significant step forward towards the achievement of Future Force 2020 and delivers substantial year-on-year savings to defence

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in the future and a significant boost to the UK economy, and to the construction industry in particular, right now. I commend the statement to the House.

1.58 pm

Mr Jim Murphy (East Renfrewshire) (Lab): I thank the Secretary of State for providing advance sight of his statement earlier today. While the strategic defence review did not survive its first contact with world events, the assumptions within it did not survive contact with the Secretary of State. The country remembers that the Government were elected on a promise of a bigger Army. The SDSR promised five multi-role brigades and cut 7,000 troops. Army 2020 is based on a cut of 20,000 troops and promises seven infantry brigades.

In that context, we welcome a steady, costed withdrawal of UK troops from Germany. Today’s announcement will impact on Army deployability, our ability to meet planning assumptions, service families’ livelihoods and the integration of service personnel with local communities. That is why I want to ask some detailed questions of the Secretary of State about how to make these measures successful.

On Germany, the right hon. Gentleman says the total cost of returning troops from Germany is £1.8 billion. Will he spell out specifically where this money has been found and say whether any cuts to the MOD non-equipment budget are being made as a result? Undisclosed underspends cannot be the gift that keeps on giving for the Secretary of State, and all those in the military who have recently lost their jobs will want to know that today’s announcement has not been funded at their expense. Will he say how much is allocated to each of the RAF bases being converted to make them fit for the Army, and for each of them, when the conversion will be completed? The public will also want specifics on how the £240 million savings will be achieved and in which year they will begin to accrue.

It is vital there is a positive impact on the local communities to which our forces and their dependants will be returning. How many new homes for soldiers and families will be ready by 2016? It is hard to see this being achieved in the time frame set out. Given that MOD figures show there are 7,000 service children currently being educated in Germany, will the Secretary of State say what will happen to those whose new homes will not be built in time? There will be an expectation that the Secretary of State can today guarantee that no one returning will be forced to take on expensive private rented accommodation because the specified new accommodation is not ready.

It is essential that local services can provide for our military families. Will the Secretary of State say what assessment he has made about the local impact of returning military families specifically in the areas surrounding the seven permanent bases referred to today, and what discussions he has had with his counterparts in the Department of Health and the Department for Education, as well as the devolved Administrations? With the grant to local government falling by a third over the current spending review period, which Department will meet the additional costs to local authorities?

Can the Secretary of State confirm that he has had the requisite discussions with German authorities about these plans? What will the cost be of redundancy of the

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civilian force in Germany? Although there is much less strategic need for our forces to be based in Germany, it can still play an important role in providing training facilities. How does he envisage this function being supplemented if it is no longer available there?

With reference to lay-down, there will be real disappointment at closures across the UK today, from Canterbury, Ripon and Shrewsbury to Brawdy, where historic bonds are being broken. The Secretary of State says that his disposal plans will bring in substantial receipts, which have already been factored into future MOD budgets. After the Government’s 4G debacle, he will forgive the public if they wait for further details before taking that assertion at face value.

The armed forces remain crucial to Scotland’s future but today the Government have reneged on their promise. Although there is positive news about the return of the Royal Scots Dragoon Guards and the Royal Marines staying in Arbroath, a previous pledge of thousands more troops to Scotland has become a plan for just hundreds. This is a real blow to Scotland and will not be forgotten.

UK defence planning assumptions rely on doubling our number of reservists by 2018. Despite this, there is uncertainty over employer engagement, workplace protections and missed recruitment targets. It is disappointing that today we heard little of where reserve units will train or of the fate of existing units. The Army 2020 plan on which today’s announcement is based remains in jeopardy while these issues are unresolved.

In conclusion, UK troops have been stationed in Germany for almost 70 years and we support their return home, but this will, as I know the Secretary of State would expect, be matched by detailed scrutiny. So I hope he will be able to outline further the implications of today’s announcement for personnel and their families, as well as for local communities, which will, I am sure, give our returning troops a warm and patriotic welcome upon their return.

Mr Hammond: I hope the document that has been distributed will answer some of the right hon. Gentleman’s questions, particularly about providing the certainty that personnel and their families will want in terms of where they are going and when they are going to go there. I note that his references at the beginning of his remarks about multi-role brigades and the subsequent evolution of the Army force to match the resources available made no reference whatever to the legacy that we inherited from the previous Government, which has been one of the key drivers in our efforts to deal with the challenges ahead.

Let me try to deal with some of the right hon. Gentleman’s perfectly legitimate questions. He asked me about the £1.8 billion capital spend. Essentially, he sought assurance that this money had not been found at the expense of the budget for employing our forces. It is, of course, a capital budget quite separate from the resource departmental expenditure limit budgets of the Department and it is largely a budget that was in the Defence Infrastructure Organisation’s capital spend programme, supplemented by some of the capital underspend from last year, which we have been allowed to carry forward.

Mr Kevan Jones (North Durham) (Lab): It will be taken away from Army housing.

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Mr Hammond: I have just told the House that we are investing £1 billion in Army housing. That will be alongside the existing programme of refurbishment of Army housing, which will continue.

The right hon. Member for East Renfrewshire (Mr Murphy) asked me about the pattern of investment in RAF bases. There will be very substantial investment in both Leuchars and Cottesmore. I am happy to write to him with the precise estimated figures for both bases, but he will understand that this is subject to contractual negotiations as we develop the detailed plans for those individual bases.

The right hon. Gentleman asked when the £240 million annual savings start to accrue. They reach that full level by 2019 but they start to accrue immediately, within the next year, and they build up steadily to the 2019 figure. [Interruption.] The hon. Member for North Durham (Mr Jones) says they cannot. The savings start to accrue as soon as we start to close down infrastructure in Germany—[Interruption.] The hon. Gentleman has been in government. One would think he would understand the difference between a capital expenditure programme and the accrual of resource savings, which will begin as soon as we start drawing down infrastructure in Germany.

The right hon. Member for East Renfrewshire asked me quite legitimately about the phasing of the development of accommodation, the supporting local infrastructure and the timing of relocation. This, of course, has been a major driver of the programme that is set out in the document circulated. In most cases new accommodation will be provided before units relocate. In some cases, as he will see from the document, it will be necessary for a returning unit to locate temporarily in another facility while the ultimate destination is fully completed, with the infrastructure and the accommodation that it requires. He will notice as well that the most substantial move to the Salisbury plain—20th Armoured Brigade—is the last move to take place, in 2018-19. That reflects the fact that substantial infrastructure investment will be required—£800 million of MOD investment, together with investment by the Department for Communities and Local Government, the Department of Health and the Department for Education to provide the supporting local infrastructure.

The German authorities have been fully informed throughout the process. I spoke to my German counterpart yesterday. He expressed his regret at the decision but he is understanding of it. My right hon. Friend the Minister for the Armed Forces spoke this morning to the Minister-Presidents of the German Länder affected. The right hon. Gentleman asked about training in Germany. As I think I said, we are pursuing the option of taking up a very generous invitation by the German Government to continue using training estate in Germany to train with the Bundeswehr and other NATO allies. The current plan envisages about 100 personnel remaining in Germany as the core of a residual training presence.

Of course I accept that there will be disappointment in the towns and communities where there are to be base closures, but if we are to deliver the armed forces that this country needs within the budgets that are available to support them, we have to deliver that military capability efficiently, and isolated single bases do not allow us to do that. The lay-down that I have set out in

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these documents is the optimum value-for-money strategy that will allow the military to deliver the capability that we require.

In Scotland, it is indeed good news that the Royal Scots Dragoon Guards will go to Leuchars and that 45 Commando Royal Marines will remain at Arbroath. The right hon. Gentleman mentioned the reference to thousands of additional troops going to Scotland. That was when we were still talking of a 94,000-strong Army. The end result in dealing with the legacy that we inherited from the Labour party was an 82,000-strong Army, which is affordable and sustainable, and can be properly equipped and supported, unlike the forces that the previous Government fielded.

Finally, on the question of reserves, we will be publishing a White Paper shortly, and following that I will make a further statement to the House about the reserve estate.

Dr Liam Fox (North Somerset) (Con): I congratulate my right hon. Friend on completing a difficult jigsaw puzzle that Labour was never able to manage, and ensuring that the Ministry of Defence spending is boosting economic activity in this country, not on the continent. Does he agree that the ability to spread this force footprint across the United Kingdom and the large sums involved, fatally undermines the case of the Scottish nationalists that Scotland would ever be better off trying to fund its own armed forces?

Mr Hammond: I do agree with my right hon. Friend, and we will no doubt hear in a moment from the representatives of the Scottish National party. I find their posturing on this slightly incredible when their agenda is about taking Scotland out of the United Kingdom, removing our Army, our Air Force, our Navy and our marines completely from Scottish soil.

Jenny Chapman (Darlington) (Lab): My constituency of Darlington is very close to Catterick garrison and we are proud to help to accommodate and educate Army children in our town, but the right hon. Gentleman will understand that at times that can put pressure on local services. What specific discussions will he have with local authorities near the seven bases that he has referred to to try to make sure that these children are welcomed back from Germany in the way that we would want?

Mr Hammond: We have had discussions with colleagues from the Departments for Education and Communities and Local Government and the Department of Health, and we believe that on the time scales set out here, the additional infrastructure required, which is relatively modest with the exception of the Salisbury plain area that receives more than 4,000 additional troops, will be deliverable over the time scales set out in the document that I have circulated.

Sir Menzies Campbell (North East Fife) (LD): You know, Mr Speaker, that my interest in these matters is directly related to the fate of Royal Air Force Leuchars in my constituency. You may also be interested to know that I almost need not have attended the statement since full details are contained in this morning’s edition of the Dundee Courier, a daily newspaper circulating in my constituency.

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Let us make no mistake and let us be in no doubt, the decision to transfer Typhoons from Leuchars to Lossiemouth is a political decision, and I do not repent of my view that to base air defence aircraft away from centres of population and away from sensitive installations, such as nuclear power stations, is both operationally and strategically inept. I hope that we never have cause to regret doing so.

I assure my right hon. Friend that the local community of Leuchars will go out of its way to establish a warm and co-operative relationship with the Army. But does he also understand that the considerable disappointment there is that the numbers announced today are significantly less than those that were promised before? When will the Army be fully deployed at Leuchars, and will there be any gap between the departure of the Air Force and the arrival of the Army? Today, will he give us, and in particular my constituents, his guarantee that the damaging uncertainty of the last 20 months is now at an end?

Mr Speaker: There are many questions there for the Secretary of State. If he thinks, in attending to them, that he can throw any light upon what appears on the face of the observation of the right hon. and learned Gentleman to be a leak of Government policy, I am sure we shall all be immensely obliged to him.

Mr Hammond: It does indeed appear to be a leak in the Dundee Courier; I have its front page here. It is an inaccurate leak: the headline refers to a tank regiment. Of course, the Royal Scots Dragoon Guards is not a tank regiment.

I assure my right hon. and learned Friend that there will be no gap in the drawdown between RAF personnel and the build-up of Army personnel at Leuchars. This will take place in stages throughout 2015. By the end of 2015, the Army will be fully in place and the RAF will have vacated it.

My right hon. and learned Friend will also be interested to know that the plan provides for the runway at Leuchars to be maintained as an operational runway with a contingent of about 50 RAF personnel remaining on the base. This will operate as a diversionary runway for the Typhoon squadrons at Lossiemouth. That does mean that the air show will go ahead this year and that the runway will be there in future to make flying from Leuchars possible.

Hugh Bayley (York Central) (Lab): How many military and civilian personnel will move to York as a result of a welcome decision to move Headquarters 1st Division to York? How many will be lost as a result of the decision to move 15 Brigade to Catterick? Will the Secretary of State clarify whether he means York Outer or York Central? For instance, he says that 2 Signal Regiment is currently based in York Outer; in fact it is based at Imphal barracks in York Central. I would like clarification on those points.

Mr Hammond: There are some detailed questions there. I hope that the retention of Imphal barracks in York puts to rest a concern that I know there has been in the city. There will be a marginal increase in the numbers of Army personnel at Imphal as a result of this statement. If the hon. Gentleman will allow me, I

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will check the figures on the other bases he mentioned in surrounding constituencies and drop him a note later this afternoon.

Mr James Gray (North Wiltshire) (Con): I very much welcome the extra stability that the announcement will make in the lives of service personnel and their families. The people of Wiltshire will very much welcome the extra 4,000 soldiers to come there and the resulting investment in the infrastructure. Will the Secretary of State take this opportunity to reconfirm that the tri-service technical training base, which is due to move into RAF Lyneham by 2015, will go ahead as planned?

Mr Hammond: I can assure my hon. Friend that it is going ahead as planned. It is under way now. As I said in my statement, my right hon. Friend the Minister for the Armed Forces will be making an announcement in due course about other moves on the technical training estate.

Thomas Docherty (Dunfermline and West Fife) (Lab): I join the right hon. and learned Member for North East Fife (Sir Menzies Campbell) in saying that the Royal Electrical and Mechanical Engineers and the Royal Scots Dragoons will get a warm Fife welcome when they arrive, but may I press the Secretary of State to say why the decision has been taken not to proceed with MOD Caledonia?

Mr Hammond: As I think the hon. Gentleman is aware, Caledonia will remain as a naval facility without any Army presence. The Army plan has been looked at from the bottom up by the Army. The considerations are particularly around patterns of training activity, so that units that need to train together are located together. Because we are severely capital constrained, we have had to look at how to make the best use of the existing estate infrastructure, which in some cases has meant not going ahead with proposals that would have involved significant new capital investment. But this is an Army-designed, military-led plan that will allow us to generate our military capability at the best value to the taxpayer.

Julian Smith (Skipton and Ripon) (Con): The closing of Claro barracks in Ripon is an extremely sad day for the city, which since around 1914 has provided to British troops a tremendous support and morale boost at all times, whether they are at conflict or at home. I pay particular tribute to the cathedral in Ripon and to the city council, which has given freedom of the city to a large number of our troops. Will my right hon. Friend meet me in the coming weeks to discuss how we can make the most of the military site in Ripon economically, and to see whether there are areas of military presence that we can retain there?

Mr Hammond: I am very happy to meet my hon. Friend. I should reassure him that despite the closure of Claro barracks, the adjacent defence training estate site, Deverell barracks, and the associated training areas in Laver Banks and Ripon park will not be affected by this announcement.

On the disposal of the Claro barracks site, as with all the sites that are wholly or partially for disposal, the Defence Infrastructure Organisation will engage with local stakeholders and local planning authorities and endeavour to dispose of them in a way that maximises

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the receipt to defence, but also protects the interests of the local community and maximises the beneficial economic impact of development on those sites.

Angus Robertson (Moray) (SNP): I thank the Secretary of State for advance sight of his statement, welcome the return of troops from Germany and pay tribute to them for their decades of service there and to the German communities that hosted them, but the statement marks the breaking of a raft of defence promises in relation to Scotland. Will he clarify that the UK Government are not returning 6,500 to 7,000 troops from Germany to Scotland, as promised, that they are not building new barracks at Kirknewton, as promised, that they are not opening a new training area, as promised, and that they are not delivering the Army personnel levels promised for Leuchars, but that they are closing the Sterling headquarters of 51st Infantry Brigade and HQ Scotland? The Ministry of Defence has acknowledged that over the past decade there has been a 28% cut in the number of defence personnel in Scotland, compared with an 11% cut across the UK as a whole. The Army return to Scotland was supposed to offset the loss of the RAF and increase the defence footprint, so will the Secretary of State confirm that across the services, and taking into account the RAF changes, there will in fact be fewer personnel, not more, and certainly fewer than the 15,000 planned for an independent Scotland?

Mr Hammond: We have already discussed the story in The Couriertoday, “Tank regiment rolls into Leuchars base”, and the story in The Scotsman, “Scotland to keep Royal Marines base at Arbroath”. One would think that the hon. Gentleman might have something positive to say about that. When my right hon. Friend the Member for North Somerset (Dr Fox) made his statement in July 2011, the hon. Gentleman, as he might remember, accused the Government of planning to remove the Royal Marines from Scotland completely and close Fort George, neither of which has happened. It is true that the decision has been taken not to develop Kirknewton, but the balancing factor is the retention of Dreghorn as an Army barracks. The hon. Gentleman’s assertion about personnel numbers in Scotland is incorrect. My right hon. Friend the Member for North Somerset made his statement on 18 July 2011, and I have checked the numbers against that baseline. The total number of armed forces personnel in Scotland will be just over 600 higher than the baseline. I have also made a little calculation of the proportion of our armed forces personnel who will be based in Scotland, compared with the proportion of the population of the United Kingdom in Scotland. By my calculation, 8.39% of the UK population is in Scotland and 8.65% of our armed forces will be in Scotland by the end of this programme.

Penny Mordaunt (Portsmouth North) (Con): I welcome the certainty that the statement will give regular Army personnel and their families. I hope that the Secretary of State will further enhance his reputation as the champion of good return on investment for the defence budget by confirming that any new building will be good quality and built to provide comfortable homes for decades to come. Historically that has not always been the case.

Mr Hammond: Of course, new build and refurbished accommodation will be to the highest grade 1 standard of military accommodation. With respect to my hon.

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Friend, I suspect that part of our problem with accommodation is that some of it was originally built to last rather too long, so we are struggling to refurbish and patch up old buildings, some of which are around 100 or 150 years old. Building new building to modern standards is the way forward to provide the kind of accommodation that our troops deserve and that our covenant promises them.

Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): This is indeed an historic announcement. The British troops and their families will be greatly missed by the German people. My understanding is that the original treaty required two years’ written notice of the intention to withdraw and a commitment to pay for any environmental clean-up. Has the Secretary of State given that written notice, and what calculation has he made of the environmental clean-up costs?

Mr Hammond: I cannot give the hon. Lady a definitive answer on the written notice, but my discussions with the German authorities make it clear that they have been aware of our intentions for many years. They are completely comfortable with what we are doing, although of course they regret the fact that we are leaving Germany. We will of course be responsible for remediation of the barrack sites being handed back to the German federal authorities and work is already ongoing with the German authorities on scoping for exactly what is required, which will be different according to the intended future use of the locations.

Daniel Kawczynski (Shrewsbury and Atcham) (Con): Shrewsbury, the county town of Shropshire, has a long and proud tradition of hosting the Army, so this news comes as a great disappointment to me and to the people of the town. Will the Secretary of State meet me and the leader of the town council, who represents Copthorne, to discuss how the site, which is in the centre of town, can be used to bring maximum prosperity to the people of Shrewsbury? Will he assure me that everything will be done to ensure that there will be provision for Territorial Army reservists at Copthorne barracks?

Mr Hammond: We expect to release part of the Copthorne site for disposal. The final details will be announced once we have completed the reserves basing review. It is possible that part of the site will be required for the Territorial Army’s reserve estate. As with all sites for disposal, the Defence Infrastructure Organisation will engage with local stakeholders. I will be happy to meet my hon. Friend and the leader of his local authority. It is in our interests, as well as those of the local communities, to ensure there is an appropriate future use for the bases that are closing in order to maximise local prosperity and jobs.

Sarah Champion (Rotherham) (Lab): Will the Secretary of State clarify whether the move from Germany represents a shift in strategy for the UK’s international footprint? If so, what are the implications for the UK personnel based in Cyprus and Northern Ireland?

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Mr Hammond: None whatsoever is the simple answer. The withdrawal of our forces from Germany represents the logical conclusion of the ending of the cold war some 20-odd years ago. Keeping a large standing force in Germany is expensive and no longer serves its original strategic purposes. As our Army becomes smaller, the diseconomies of scale of having two separate centres for armoured vehicle training, for example, and consequently two separate centres for armoured vehicle maintenance, become unsupportable. This is a logical final move following the conclusion of the cold war era.

Mr Julian Brazier (Canterbury) (Con): The closing of Howe barracks is clearly a blow to the local community, as the 5th Battalion the Royal Regiment of Scotland made a huge contribution to the community, and indeed a number of its members have given life and limb. Nevertheless, the logic of my right hon. Friend’s announcement is clear. In looking to part 2 of his statement, which will be made before the summer recess, may I urge him to consider two things? First, it is very important that the TA is based where it has historically recruited and where it can recruit and that that is not distorted by pairing arrangements with regular units, important though they may be. Secondly, it is critical that we keep our training areas going, particularly the smaller ones, because otherwise we will find that the new model will become unviable.

Mr Hammond: First, today’s announcement says nothing about the training estate. If announcements about the training estate need to be made, my right hon. Friend the Minister for the Armed Forces will make them. I recognise the tension my hon. Friend outlines between the need to have reserve accommodation in the areas where we recruit and the need to enable joint training for regulars and reserves, which is at the heart of our new model for the reserve forces. I can assure him that resolving that tension is at the core of the work going on and will inform the reserve basing review, which I will announce to the House before the summer recess.

Dr William McCrea (South Antrim) (DUP): Northern Ireland has a long history of providing our Army with a lot of recruits. Will the Secretary of State reconsider the reduction of approximately 400 in the overall number of armed personnel in Northern Ireland proposed in the announcement, and recognise Northern Ireland as a part of the consolidation process? Army personnel and their families have found Northern Ireland a great place in which to live and educate their children. We have a lot of capacity, and at a time of financial restraint it is surely wise to use that.

Mr Hammond: I am grateful to the hon. Gentleman for his comments. He will recognise that part of the reductions in the 2020 numbers for armed forces personnel in all four countries of the Union results from the civilianisation of the search and rescue service. When we talk about reductions of 400 personnel in Wales and Northern Ireland, we must recognise that a significant proportion of that number is represented by the transfer of search and rescue services to a civilian contractor.

Sir Bob Russell (Colchester) (LD): Clearly, I welcome the inclusion of Colchester as one of the seven centres where the Army is to be consolidated. The Secretary of

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State refers to investing £1 billion in new living accommodation, but the refurbishment of the existing houses has simultaneously been halted. Will he lift that moratorium?

Mr Hammond: Some additional money has been provided by the Chancellor in, I think, the last Budget, and a refurbishment programme is continuing with that finance. The £1 billion is in addition to the baseline programme of Defence Infrastructure Organisation maintenance and upgrading, which has a two-year pause partly ameliorated by the Chancellor’s additional contribution. Those two programmes will run in parallel.

Jonathan Edwards (Carmarthen East and Dinefwr) (PC): Will the Secretary of State confirm that of the 165 Army units listed in the basing review, only one will be located in Wales? How much of the £1.8 billion MOD relocation fund will be spent in Wales?

Mr Hammond: I do not think that is right; I am conferring with my right hon. Friend the Minister for the Armed Forces. I am happy to write to the hon. Gentleman to confirm to him, as set out in the document, exactly what the lay-down will be in Wales after the completion of this move.

Dr Julian Lewis (New Forest East) (Con): May I welcome the Defence Secretary’s recent statement to the Treasury that it should stop basing its tanks on the MOD lawn? May I congratulate him on an entry in the basing plan that seems to suggest that Marchwood military port in New Forest East will continue as the military port for the Army for the indefinite future?

Mr Hammond: I would not want to encourage my hon. Friend to draw that conclusion. Marchwood military port is scheduled for disposal, and—this is not part of this announcement, of course—it may well still be used by the Army but under the ownership of a civilian contractor.

Stewart Hosie (Dundee East) (SNP): The Secretary of State said that the consolidation of the Army bases in Scotland would be around Leuchars and Edinburgh. He also made the welcome announcement that 45 Commando would remain in Arbroath, presumably at RM Condor. He then went on to say that the decisions on the training estate would be announced by the Armed Forces Minister later. May I urge him to ensure that those decisions are taken logically, and gently remind him that the excellent base and range at Barry Buddon in my constituency sits between Leuchars and Condor and ought to remain a very valuable part of the training estate in future?

Mr Hammond: I welcome the hon. Gentleman’s contribution to this debate. I have to say it is a delight to be in a Parliament where Members are arguing for military establishments in their constituencies. Many of my colleagues in NATO and EU countries do not enjoy that same level of parliamentary and public support for the armed forces. I am grateful to all Members of the House for that.

Mr Ben Wallace (Wyre and Preston North) (Con): I welcome my right hon. Friend’s announcement that once again, Fulwood barracks will be home to a regular unit as the site of 3 Medical Regiment. These new units

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will need not only housing and barracks but training areas. Is my right hon. Friend looking for further training areas on top of the existing military estate?

Mr Hammond: We do not expect, in overall terms, to be looking for additional training areas. Clearly, the Army and the armed forces are getting smaller, and one would expect us to be consolidating training rather than expanding it. I would therefore not encourage my hon. Friend to think in terms of expansion of training areas.

Sammy Wilson (East Antrim) (DUP): I am sure the Minister appreciates that the countries representing the fringe of the United Kingdom will feel they have been somewhat abandoned in this announcement. May I ask him about the cost of all this? Given that, as a result of the legacy of Operation Banner in Northern Ireland, there has been substantial investment by the military, especially in family housing and so on, why has he turned his back on some of the investment that is already available in Northern Ireland and not decided to relocate some of the units at Palace barracks or Thiepval barracks?

Mr Hammond: The hon. Gentleman is right that there is some vacant accommodation at Thiepval, and the Army looked very carefully at the possibility of further location at Lisburn. However, the equation is complex. It is about not only utilising existing estate but the operational cost of having troops on that estate—the cost of getting them to the training areas where they need to operate. Overall, the value for money case points to the solution I have set out, even though that means that some vacant accommodation will remain at Thiepval.

Mike Crockart (Edinburgh West) (LD): In July 2011 I described the plans announced for the Edinburgh estate as “historical vandalism”, so I welcome today’s partial retreat, while still being saddened by the continued closure of Craigiehall in my constituency. Will my right hon. Friend say more about the help to be given to the communities and individuals affected by closures, such as the 100 staff at Craigiehall? Will he now commit to giving proper answers to the 82 parliamentary questions I have asked over the past 20 months to try to see whether this new plan works any better than the last one?

Mr Hammond: I hope the hon. Gentleman is not suggesting that he has 82 unanswered parliamentary questions; if so, I would be extremely interested to hear about it. The closure of Craigiehall results in a reduction of 27 military personnel on the site but, as he rightly says, there will also be some civilians there. As of today, we will engage with the trade unions in the usual way to talk about how we manage the impact of these closures on civilian staff, and we will of course do everything we can to minimise the effects.

John Glen (Salisbury) (Con): I warmly welcome the Secretary of State’s announcement of £800 million of investment in and around Salisbury plain, which will also be welcomed by my hon. Friend the Member for Devizes (Claire Perry). Will he set out the profile of the spending of that £800 million and assure my constituents and the people of south Wiltshire that there will be a significant dividend in extra civilian jobs over the coming years?

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Mr Hammond: The expansion of the military facilities on and around Salisbury plain, and the additional military numbers to be based there, certainly implies an increase in civilian employment as a consequence. I cannot give my hon. Friend an exact profile of the investment in Salisbury at the moment, but I can tell him that the move of 20 Armoured Brigade will take place towards the back end of the programme. That reflects the fact that there is a very big investment programme to be completed. Partly for technical and planning reasons and partly for financing reasons, it will be somewhat slower to get under way than some of the smaller investments we are making elsewhere. It will therefore be towards the second half of the programme that he sees that investment going into the area.

Mr Crispin Blunt (Reigate) (Con): My right hon. Friend will understand that if, like me, one was born in a British military hospital in Germany, lived there as a child, and then served there as an adult in the British Army of the Rhine, the importance of this statement, certainly in personal terms, can hardly be overestimated. Charting as it does the plan for ending the contribution of the British Army of the Rhine, it is a very profound thing that he has brought to the House today.

May I ask the Secretary of State two things? First, will he ensure that the arrangements made with the German towns that have played host to the British Army for so long are kept under close ministerial oversight and that proper compliments are paid to them? Secondly, and substantively, will he and my right hon. Friend the Minister for the Armed Forces make sure that the plans for the necessary, very substantial investment around the Salisbury area are executed to a scale and a standard that we will be able to look back on with pride in decades to come, rather than future Administrations having to put right a failure of investment over the next few years?

Mr Hammond: Let me deal with the last point first. I am clear that the accommodation we build and the technical facilities we construct must be of a high quality and fit for purpose. I do not, however, intend this £1.8 billion to form a cornucopia for architects.

On the question of Germany, my hon. Friend is absolutely right. We need to plan carefully how we end the relationship with the many German towns that have hosted the British Army. The Army in Germany is very much on the front foot on this. We are aware of the significant impact, particularly in the Bergen-Hohne area, which, by German standards, is relatively less well off. We are looking, where appropriate, at what can be left behind as a physical memorial to the British Army presence in Germany. A series of events will be organised with local communities, and Ministers and senior military personnel will expect to attend them and provide a fitting tribute to the support the German people have given us.

James Morris (Halesowen and Rowley Regis) (Con): I welcome the Secretary of State’s statement. Will he say a little more about the training implications for British forces coming from Germany, with particular regard to his reference to potentially retaining training facilities in Germany? What sort of time scale does he have in mind for the establishment of training facilities?

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Mr Hammond: It is not a question of us retaining training facilities. We definitely will not retain British-run training facilities. However, the Bundeswehr operates NATO training facilities in Germany and we have been offered the use of them. One of the challenges the Army high command faces as part of this process, with the end of our combat operations in Afghanistan, is how to provide a suitably stimulating environment for young recruits coming into the Army. It is clear to us that an element of overseas training has to be part of that equation. We have overseas training facilities in Kenya, Cyprus and Canada and, as I discovered last week, superb Arctic training facilities in Norway, but over the coming months we will consider whether to take up the offer to use the NATO facilities in Germany.

Guy Opperman (Hexham) (Con): People in Northumberland will be delighted that our long campaign to retain Albemarle barracks has been successful, for which I thank the Secretary of State. We will welcome the 3rd Regiment Royal Horse Artillery as much as we have supported the 39th Regiment Royal Artillery. I visited Albemarle again only three weeks ago. Will the Secretary of State meet me again to ensure that the present troops have the broadband, local transport and mobile facilities they need and that future, post-2015 troops will have the facilities they should enjoy as well?

Mr Hammond: I am sure that my right hon. Friend the Minister for the Armed Forces, who has responsibility for such matters, will be very happy to meet my hon. Friend to talk about those issues.

Mr John Baron (Basildon and Billericay) (Con): Having served in Germany twice, I know that this is an important announcement. In welcoming the basing plan, I suggest to the Secretary of State that its success will be contingent in part on the ability of 30,000 royal reservists to plug the gap left by the loss of 20,000 regular troops. Given that some of us have concerns about the cost and recruitment assumptions underlying the reservist plan, is it the Secretary of State’s intention to publish or keep the House regularly updated on the costs of implementing it?

Mr Hammond: That is slightly off the beam of the regular Army basing announcement. It is certainly my intention, once the recruiting campaign for reserves gets under way this year, to publish routinely—I think quarterly would be most appropriate—the recruiting data for the reserves. My hon. Friend is right that success in delivering our reserves programme is a crucial part of the Army 2020 plan. I will reflect on his suggestion that the cost of the reserve programme should be published, although I am not so sure it will be that easy to identify and isolate it.

George Freeman (Mid Norfolk) (Con): I warmly welcome the announcement and congratulate the Secretary of State on the quiet competence he and his team have shown in putting it together, which is in stark contrast to the disgraceful financial planning we inherited from the Labour party. I particularly welcome the announcement that Swanton Morley in my constituency will be the home of the Queen’s Dragoon Guards, whom we will welcome as we did the Light Dragoons, and one of the seven consolidated centres. For some strange reason,

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that did not appear in the written statement, so will the Secretary of State confirm that I have understood him correctly?

Mr Hammond: I can indeed confirm that the 1st Battalion the Queen’s Dragoon Guards will be going to Swanton Morley and that Swanton Morley, together with Colchester, will form one of the seven hubs.

Alun Cairns (Vale of Glamorgan) (Con): I thank the Secretary of State for the certainty and security he has given to the St Athan site. Bringing the Royal Signals to St Athan is welcome news, because the community has been on something of a rollercoaster ride in recent years. I also pay tribute to the Armed Forces Minister for the interest he showed when he met community leaders last year and said he would do everything possible. How many armed forces personnel will bringing the Royal Signals to St Athan attract to the site, and how much capital investment is needed?

Mr Hammond: The investment at St Athan will be in excess of £50 million. I cannot give my hon. Friend a more precise figure because of commercial issues relating to negotiations and contracts. The moves I have announced today will bring some 560 additional personnel to the site, taking the total liability on it to about 1,250. I say to my hon. Friend, who has been an ardent campaigner on this issue, that the consolidation of 14 Signal Regiment on the St Athan site represents a very important step in resolving the site’s future. The work we have done with the Welsh Assembly Government sets out a very good route to securing the site in the future, both for military use and for civilian development

Jeremy Lefroy (Stafford) (Con): I thank my right hon. Friend for his statement. The people of Stafford will warmly welcome the two additional Signals Regiments to be based at MOD Stafford from 2015. Will he assure me that the construction of housing and creation of school places can now go ahead without delay?

Mr Hammond: Yes, I can assure my hon. Friend that the necessary accommodation will be constructed in time for the planned redeployment to Stafford.

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Jason McCartney (Colne Valley) (Con): Having been brought up on RAF bases at home and abroad, including RAF Wildenrath and RAF Rheindahlen, I welcome the certainty that today’s statement brings for forces families. The 1st Battalion of my locally recruited regiment, the Yorkshire Regiment, will remain in Warminster, while the 2nd Battalion will relocate from Münster to Cyprus. Will my right hon. Friend confirm that there will be investment in married quarter and single living accommodation overseas in Cyprus as well as at home?

Mr Hammond: The single living and married quarter accommodation in Cyprus is of a very high quality. My hon. Friend may have been there and may know that substantial investment has been made recently in new single living accommodation blocks, so I am not sure that any further investment is planned to accommodate this rotational battalion at the Cyprus garrison.

Richard Drax (South Dorset) (Con): May I suggest that the pressure on realistic training facilities overseas will increase as the demand for training in a smaller area in the United Kingdom also increases? Will the Secretary of State reassure me and Her Majesty’s armed forces that there will be no cutbacks on training, particularly overseas, including multi-arms training and live-fire training, so that our armed forces can be given the most realistic training possible in a suitable environment?

Mr Hammond: When billions of pounds are spent annually on equipment and manpower, we are conscious of the importance of ensuring that we hone that equipment and manpower by exercising and training it. It was unfortunate that the previous Government had to cut in-year operational activity in order to balance the books. I hope the measures we have taken and those I have announced today mean that we will never get into that position.

New Member

The following Member took and subscribed the Oath required by law:

Mike Thornton, for Eastleigh.

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Mid Staffordshire NHS Foundation Trust

Application for emergency debate (Standing Order No. 24)

2.51 pm

Jeremy Lefroy (Stafford) (Con): I seek leave to call for a debate on a specific and important matter that I believe should have urgent consideration: the appointment by Monitor of a trust special administrator for the Mid Staffordshire NHS Foundation Trust and the proposed changes to hospital services in Stafford and Cannock. There are four reasons why such a debate is vital.

First, this is the first such appointment to a foundation trust under the Health and Social Care Act 2012. Given the seriousness of the decisions, I urge Monitor to ensure that there is the longest possible period of consultation and that the trust special administrator has the option to consider proposals other than those that have been set out, none of which are acceptable to me or my constituents. I welcome the reassurance that the administrator’s priority is to deliver high-quality services to patients.

Secondly, although some of the reasons for the administration are particular to Mid Staffordshire, the most important reasons are not. The pressure being placed on mid-sized and even large acute trusts by the squeezing of the emergency and acute tariffs since 2009 is huge. Mid Staffs, which had £21 million of extra funding injected into it last year, may be the first trust this has happened to, but if the squeeze continues, it may be the first of many. The House urgently needs the opportunity to debate NHS tariffs for emergency and acute care, the demand for which is rising annually.

Thirdly, the proposed changes to hospital services in the area served by Mid Staffordshire, including Cannock Chase, Stone and south Staffordshire, are not acceptable. They will increase health inequalities, contrary to section 4 of the Health and Social Care Act 2012, by reducing access, especially for those on low incomes and those without access to private transport. The changes will put tens of thousands of my constituents much further away from emergency, acute and maternity services.

Finally, the impact of some of the changes will be felt much further afield. The surrounding hospitals are already operating at or near capacity. The idea that they can take on large numbers of additional patients without it damaging the services for their local populations is highly questionable.

I have always accepted that there need to be changes and that the trust in its present form needs to alter. However, the current proposals, which differ from those made by several reports over the past three years by Professor Sir George Alberti and others, go much too far. The services provided by the trust have improved considerably in the past three years. I urge the people of Stafford, Cannock and the surrounding areas to make full use of them to show the administrator just how indispensable they are.

Mr Speaker: The hon. Gentleman asks leave to propose a debate on a specific and important matter that should have urgent consideration: namely, the proposed appointment of a special administrator for the Mid Staffordshire NHS Foundation Trust. I have listened carefully to his application and conclude that the matter does not, on this occasion, meet the criteria of Standing Order No. 24. I thank him for his contribution.

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Points of Order

2.54 pm

Angus Robertson (Moray) (SNP): On a point of order, Mr Speaker. Following a point of order yesterday about the basing review, you told me that ministerial statements of public policy should be made first in the House and asked that if I had compelling evidence of briefing, I should bring it forward. I forwarded to your office this morning four examples of newspapers that had been briefed. That was illustrated by the right hon. and learned Member for North East Fife (Sir Menzies Campbell) in the preceding statement. Given the blatant advanced briefing by the Ministry of Defence about the statement, what are you able to do?

Mr Speaker: I am grateful to the hon. Gentleman for his point of order. I have not yet had the opportunity to study the material in question, for reasons that will be apparent to all. I shall, of course, do so and will revert to him if it proves necessary.

Mr William Cash (Stone) (Con): On a point of order, Mr Speaker. Further to the rejection of the proposal put forward by my hon. Friend the Member for Stafford (Jeremy Lefroy), there is an important question relating to the Francis report that I have raised repeatedly with the Leader of the House. An urgent debate is needed. If a debate cannot be granted in respect of Mid Staffordshire and Monitor, one is certainly required in the context of the Francis report as a matter of urgency on the Floor of the House and in Government time. Would you agree?

Mr Speaker: I am grateful to the hon. Gentleman. We appreciate his display of a sense of humour in these circumstances. I will say two things to him. First, strictly speaking, points of order do not arise pursuant to refused Standing Order No. 24 applications. I was willing to hear him, as who could be denied that particular privilege? He made his point with his usual force and eloquence, and it will doubtless have been heard very clearly by those on the Treasury Bench. The hon. Gentleman will have been in the House for 29 years in June, so he knows that there are many opportunities to pursue matters; there is rarely just one opportunity. He is as persistent a woodpecker as the hon. Member for New Forest East (Dr Lewis), who also feels impelled to raise a point of order.

Dr Julian Lewis (New Forest East) (Con): On a point of order, Mr Speaker. On a different subject, I am sure that you will have noticed the unprecedented number of Liberal Democrat right hon. and hon. Members who suddenly appeared in the Chamber, as if by magic, just before the swearing in of the new Member, only to evaporate just as rapidly so that normal service could be resumed as soon as possible. Is there any way within the rules of order that I can place that remarkable phenomenon on the record for the benefit of history?

Mr Speaker: No, but the hon. Gentleman has already done so. If he is going to raise an obviously bogus point of order, he should at least make the effort to contrive an air of solemnity, rather than looking so ostentatiously cheeky.

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Property Blight Compensation

Motion for leave to bring in a Bill (Standing Order No. 23)

2.58 pm

Mrs Caroline Spelman (Meriden) (Con): I beg to move,

That leave be given to bring in a Bill to require the Secretary of State to amend legislation to allow for noise contours to be used as a measure of property blight caused by national infrastructure projects; and for connected purposes.

Having represented a constituency at the heart of the midlands motorway network for almost 16 years, I have seen the impact of successive efforts to improve the national transport infrastructure, often with harsh consequences for local residents. Early in my tenure, I visited a family whose home was just beyond the threshold for compensation on the hard shoulder of the M42, despite the fact that the motorway noise blighted their property as much as their next-door neighbours who got compensation. The M42 has vastly exceeded its intended capacity and the hard shoulder is now used for active traffic management, so the property would now be eligible on simple metreage.

A few years later, the White Paper on aviation proposed a second runway at Birmingham airport, which came as a bolt from the blue for local residents. Immediately, they had difficulty selling their homes, yet no statutory compensation was available.

The airport came up with a proposed voluntary compensation scheme based on noise contours rather than straight metreage from the runway, which gained broad public support. The airport maps the noise contour of every flight, so there is a strong scientific base for estimating noise nuisance and taking account of the prevailing winds. Most recently, the proposal of HS2 has brought a new blight to villages and a council estate in my constituency. Once again, statutory blight laws mean that compensation will not be paid until one year after HS2 opens in 2026, except on the grounds of hardship, which are, of course, discretionary. That adds yet more uncertainty. Although blight is often most severe when uncertainty is at its highest, and when HS2 is built the impact on properties will probably be much less than feared, the blight is now.

Large infrastructure schemes can take a huge amount of time to progress from the initial announcement to completion of the scheme. During that process, the scheme will often change as more information becomes available, although home owners or landowners do not know that at the time. As the Country Land and Business Association points out, farmers and landowners are prevented from making important business decisions, sometimes for a whole generation. That impacts not only on those individuals, but on their suppliers and markets.

Statutory blight and compulsory purchase provisions do not encourage an acquiring authority to conclude compensation negotiations quickly. Although provisions for paying interest on outstanding claims are available, the statutory rate is 0% and the landowner foots the loss at a cost of 5% per annum. Some claims will remain outstanding for 10 years. For example, some landowners have still not been compensated for the building of the M6 toll road.

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The Land Compensation Act 1973 makes provision for compensation for the depreciation of property values caused by physical effects such as noise, but such compensation is available only a year after the infrastructure is built. The blight is now, and current metreage-based compensation does not help those who may feel the same physical effects of the scheme as their neighbour, but are a few extra metres away.

I believe compensation should be paid in advance of the railway opening, in anticipation of the nuisance it will cause as modelled by noise contours. If accurate scientific information about the physical effects of the line on properties was made available, it would ensure that residents receive proper compensation, reduce the level of uncertainty about the effect of the line, and therefore reduce blight. We must be clearer about noise data sooner and clear up the fear that causes generalised blight.

The HS2 voluntary compensation scheme is an example of how the rigidity of the metreage approach does not address blight. Homes within 60 metres of the track are safeguarded by compulsory purchase provisions, and those within 120 metres can be purchased on a voluntary basis. However, the eligibility criteria ignore the prevailing wind direction or contours in the land that shield or aggravate noise. My Bill is designed to make the eligibility for compensation fairer and more scientifically based, and create parity between roads, rail and airports. Such a proposal does not detract from the property bond proposed by other pressure groups seeking better terms of compensation for those affected. I am aware of the broad base of support for the property bond compensation scheme that would tackle the root cause of property—the loss in property market confidence.

To give one example from many, my constituents, Mr and Mrs Hickin of Berkswell, live about 500 metres north of the HS2 line past their village. Their interest-only mortgage must be repaid in 2015 and they had planned to downsize to a smaller property and pay off the debt. Despite being on the market for nearly three years and reducing the price of their home by £90,000, they have received no offers and live with the worry that they will not be able to meet their financial obligations. Other constituents whose properties have been on the market for several years have not received any offers, even when dramatically reducing the price. That is not unusual among affected constituencies such as those of my neighbour, my hon. Friend the Member for Kenilworth and Southam (Jeremy Wright) and my right hon. Friend the Member for Chesham and Amersham (Mrs Gillan). On average, properties have lost 20% of their value. The exceptional hardship scheme suffers from a lack of credibility. The Government will be consulting on phase 2 of that, so why not bring it forward and consult on amendments to phase 1?

When Birmingham airport proposed its voluntary compensation scheme, it was designed to support the sale of property within a defined boundary of the noise contour with a bond. The level of noise recognised by the aviation industry to trigger voluntary compensation is 66 dB. The boundary of eligibility was drawn with sensitivity around semi-detached properties where one property might be eligible but the other not, so as to avoid the kind of rigidity I experienced with motorway compensation. The bond was based on an independent valuation of the difference between the base price before

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the announcement and the reduced price thereafter. An independent commissioner was appointed to review any complaints that compensation had been incorrectly calculated and applied.

I believe that model offers a more scientific basis for eligibility for property bonds and would allow many people now experiencing blight from major national infrastructure projects to receive fair recognition and move on with their lives. Essentially, it would bring forward part 1 payments under the Land Compensation Act.

In conclusion, blight laws must be reviewed and changed to help those who, through no fault of their own, are blighted by decisions made in Westminster. In the long term, HS2 is vital for this country’s economic progression and for the west midlands economy in particular, but we should not balance the books on the backs of home owners and landowners whose property may reduce in value. Adding flexibility to the way blight is measured, removing the strict metreage classification in the current compensation scheme, and recognising the loss in value through a property bond would be a welcome reform for many.

Question put and agreed to.


That Mrs Caroline Spelman, Mr Graham Brady, Andrea Leadsom, Mrs Cheryl Gillan, Dan Byles and Mrs Anne Main present the Bill.

Mrs Caroline Spelman accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 26 April, and to be printed (Bill 144)

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Estimates Day

[2nd allotted day]

supplementary estimates 2012-13

Ministry of justice

Budget and Structure of the Ministry of Justice

[Relevant Documents: The Second Report from the Justice Committee on the budget and structure of the Ministry of Justice, HC 97, and the Government response, Cm 8433.]

Motion made and Question proposed,

That, for the year ending with 31 March 2013, for expenditure by the Ministry of Justice—

(1) further resources, not exceeding £1,157,003,000, be authorised for use for current purposes as set out in HC 894,

(2) the resources authorised for use for capital purposes be reduced by £19,950,000 as so set out, and

(3) a further sum, not exceeding £385,095,000, be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament.—(Greg Hands.)

3.7 pm

Sir Alan Beith (Berwick-upon-Tweed) (LD): Today is an estimates day and the presence of pound signs and a lot of noughts on the Order Paper tends to frighten Members away, when really it ought to draw them in to see what on earth the Government are doing with very large amounts of taxpayers’ money. Repeated attempts by zealous reformers to make Parliament pay more attention to expenditure have still not, I think, achieved the degree of success that many of us would like. I am pleased to have the opportunity to open this debate on the Ministry of Justice’s supplementary estimate for 2012-13, with particular reference to the report published by the Justice Committee on the budget and structure of the Ministry of Justice.

This is the first debate on the Ministry’s estimates since it was established in 2007, and I gather that the Minister who will respond is one of two in the Department who were formerly members of the Justice Committee—well, three if we count the Minister for Policing and Criminal Justice, the right hon. Member for Ashford (Damian Green). We are infiltrating our Committee members into relevant positions, which I hope will lead to almost all our recommendations being carried out.

The Ministry’s resource departmental expenditure limit for this financial year amounted to £8.2 billion. The supplementary estimate that provides the occasion for this debate adds a net £379 million in programme expenditure to that total, but MOJ spending, if not huge, relates to crucial areas of great public concern and interest: prisons, probation and legal aid. Most of the expenditure that the Ministry is responsible for is incurred in programmes administered by agencies and non-departmental public bodies. The broad figures of the budget show that the National Offender Management Service—prisons and probation—receives £3.4 billion, that the Legal Services Commission, which deals with legal aid, receives just under £2 billion, that the Courts

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Service receives £1.3 billion, that the Youth Justice Board receives £300 million and that the Criminal Injuries Compensation Authority receives £282 million. Between them, they account for the lion’s share of the Ministry’s budget.

I said that the supplementary estimate added a net £379 million to the main estimate resource expenditure limit. I will write on behalf of the Justice Committee to seek some further information on the components of the increase, as well as on increases in resource annually managed expenditure; but, in the meantime, it would be helpful if the Minister responded with some of the reasons for the £159 million increase for NOMS in the resource departmental expenditure limit, which is mysteriously described in the Ministry’s memorandum as due to “emergency cost pressures”. Last year, £51 million was included in the supplementary estimate under exactly the same heading. What are those pressures? Is that money part of the £1.2 billion funding agreed in 2007 for prison capacity, following the Carter review, and, if so, when was it carried over into the current comprehensive spending review period and what will the money be spent on?

The supplementary estimate includes provision for a net extra £750 million in round terms in resource annually managed expenditure, the largest elements of which are impairments on the court estate, £326 million, and impairments on the prison estate, £252 million. I hope that the Minister can explain why those elements are there.

I shall turn to the main conclusions of my Committee’s wide-ranging report. We took evidence in the first half of last year and reported in August 2012, and the Government responded in October. We visited the Department during our inquiry, and we did so in an innovative way that I commend to other Committees. We simply said, “We don’t want a formalised tour. We wish to enter every part of the Department and, on a second day, NOMS, and all we want is someone who has got the keys to every door in the building.” That is what we did, and we just wandered about every part of the Department, talked to staff and got a clear picture from them—interestingly, it was to the Department’s credit—of their commitment to the transforming justice programme. We just landed on anyone and asked, “What are you doing? What is your role in all this?” That gave us a much better feel than formal presentations sometimes do for how the Department was functioning, and it was to the Department’s benefit.

We have regularly taken evidence and reported on the annual reports produced by the Ministry. On the broader relationship between expenditure and policy, our predecessor Committee in early 2010 produced a seminal report on the case for justice reinvestment—a strategy for the transfer of resources away from custody to the prevention of crime and the reduction of reoffending. It remains my firm belief that the blueprint set out in that report is the only sensible way forward for a long-term criminal justice policy. Some elements of that philosophy are present in Government policy today, but quite a lot more could be included.

Our report focused on managerial and operational matters, but it also covered some important questions of policy, particularly on the commissioning of prison and probation services and payment by results. Our inquiry was the first major examination of the activities

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of the Ministry and its associated public bodies. We looked at the background to the setting up of the Ministry, its internal governance, budgetary provision, financial management, commissioning and procurement, the relationship with other public bodies, Departments and the judiciary and the prospects for achieving the Ministry’s radical long-term policies of transforming justice at a time of severe public expenditure retrenchment.

Some of the subjects that we covered, such as the Ministry’s financial management and procurement capacity, may seem technical, but when things go wrong with those functions, as happened recently in the shambolic outsourcing of court interpreting services, excoriated by the Public Accounts Committee and by us, the political fallout and the effect on public confidence in the judicial system can be deeply harmful.

We concluded in our report that the Ministry’s structure and performance had improved since its creation and that progress had been made in integrating the Department, but many of the improvements had been from a low starting point and there had been criticisms and failures. The culture in which the focus was on policy creation previously had changed to an increasing recognition of the importance of programme management. The Department had developed a greater understanding of its cost drivers, although it still did not have sufficient management control of its finances.

We noted that the Ministry had sought to bring its sponsored bodies under closer central control and make them more accountable to Ministers and had streamlined senior management structures and reduced the duplication of functions. We called for further structural change to create an integrated system of offender management, involving the commissioning of both prison and probation services in defined geographical areas. In fact, we look like ending up with roughly the opposite: national commissioning of prisons, which is what we already have, and now of probation, as part of the Government’s probation proposals. The Lord Chancellor defended that on the grounds that, at this stage at any rate, the limited available experience needs to be concentrated to carry out that commissioning function, but that seems to us to be entirely the wrong strategy. The commissioning of ways to deal with offenders really needs to be associated with all the other agencies that are situated in an area. The prisons, police and crime commissioners, local authority social services departments and housing authorities need to work together, as they have done in youth offender teams, for example, to achieve the best results locally.

We expressed doubt about whether the Ministry had sufficient skills capacity to implement the radical change of approach, with the greater outsourcing of the delivery of services, and we pointed to a danger that the way payment by results would be commissioned might undermine the work of voluntary sector organisations, which play, and need to play, a vital role in the justice sector. I think that Ministers have got that message. I am less sure whether they can implement it properly. There is certainly considerable anxiety across the voluntary sector, where so much of the skill and commitment that is required to change offenders’ lives is available. We drew attention to the wide range of public, private and voluntary organisations that need to work together if the wider justice system is to operate more effectively and efficiently when resources are so constrained.

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It is difficult to think of any part of the Department’s activities that are not affected by the process of transformation, which has been under way and has gathered pace. In particular, the proposals in transforming rehabilitation document will entirely re-fashion the terrain of probation services. There are welcome plans to extend rehabilitation to prisoners serving sentences of under 12 months who currently receive no such provision. We pitch them back into society with no realistic expectation that they will turn away from a life of crime merely because they have spent a limited time in prison.

More controversially, the plans include contracting out to the private and voluntary sectors of the majority of work with offenders in the community currently overseen by probation trusts. This rehabilitation revolution agenda is in addition to a huge amount of change occurring across other parts of the Ministry’s core business: changes in legal aid entitlement and in the status of the Legal Services Commission, which has moved physically into the headquarters building in Petty France and is becoming an executive agency under closer central control. The Ministry is closing a number of magistrates courts. It has announced plans to transform youth custody by introducing secure colleges. In family justice, Children and Family Court Advisory and Support Service will transfer back to MOJ control effectively from the Department for Education.

On prisons and probation policy, I think we all share the same goal of reducing offending and reoffending, which in turn will free resources currently spent on keeping people in prison, to maintain progress and to have a virtuous circle, rather than the vicious cycle that the system now has. But we remain to be persuaded that the Ministry has at its centre the right people to steer through this monumental transformation process. Most importantly, does it have people with the commercial, technical and legal skills necessary to embark upon a huge range of highly complex and sometimes novel commercial projects?

The transformation agenda coincides with a period when the Ministry, like most Departments, is being tasked with making very large savings. By the end of the spending review period—by the end of the 2014-15 financial year—it needs to make annual real-terms savings of more than £2 billion against its spending review baseline. According to the National Audit Office’s departmental overview, the Ministry still has some way to go to meet its cost reduction target. It aims to make front-line savings of around 10% over the spending review period—it has already saved £244 million—and to reduce back-office costs by around a third, which will contribute about £1 billion towards its target.

The Ministry has projected legal aid savings of about £320 million annually by 2014-15 and sentencing savings of £51 million by the same year, from the changes introduced under the Legal Aid, Sentencing and Punishment of Offenders Act 2012. A further statement from the Minister today gives an accelerated timetable for proposals yet to be spelled out in relation to criminal legal add. Obviously, we will be closely interested in what comes out. We have some indications that things such as cost recovery from offenders will form part of that. Of course, there has been more coverage today in reference to the President of the Supreme Court and

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anxieties in the judiciary—of course, such anxieties are widespread among lawyers and voluntary organisations—about the effect of the legal changes.

I will make a personal comment, which I think is broadly shared by the Committee. It is widely recognised that we cannot go one having the most expensive legal aid system in the common law world with no real prospect of restraining its potential increase. The Government had to do something, and any Government would have had to do something.

Secondly, and this is a view that the Committee expressed strongly in a previous report, the welfare and tribunal systems are part of the problem. The extent of legal advice necessary in much of the tribunal system indicates a weakness in the way services are delivered in the first place, and in the tribunal system. We ought to have a system under which people receive the right benefit to start with, and, if they do not, the tribunal system should obtain directly the information required to judge the matter correctly. Where Departments in particular fail to achieve that objective and generate a lot of failed appeals—failed on the Department’s side—they should contribute to the cost. It should not be the MOJ budget that bears the cost, but the Department that is not doing its job properly. Change is required in this area.

Savings of approximately £50 million per year are expected from changes to criminal injuries compensation criteria, and there will be other, lesser savings from the closure of courts and prisons, and from rationalising the administration of the Ministry itself and its sponsored bodies. Restructuring the NOMS headquarters is expected to save £91 million. At the same time, there are cost implications to changes that the Ministry is making. Is there any costing for the plan to extend rehabilitation to short-sentenced prisoners? That is welcome, but we have not seen any plans for how it will be paid for. How feasible will it be to fund it by introducing competition into probation?

The Ministry has little control of many things that determine its cost, such as the demand for prison places. One has to ask: how would its transformation and cost-cutting agendas be affected by an unforeseen event. Into that category fell the national riots—they are described as national riots, but it may be fairer to describe them as riots in a number of cities—that occurred in 2011 and generated significant expenditure in the court service and in the prison system.

The Ministry is moving forward with its radical plans for transforming rehabilitation. Payment by results, for example, has not yet been tested in the field of criminal justice. There are a number of pilots up and running, but we do not know what their outcome will be. The Secretary of State clearly feels that to wait, probably for many years, for the outcome of the pilots is to wait too long—he is impatient to get on with developing payment by results. One has to ask, however, how can the Ministry know that it is rolling out programmes that will work and not waste money? How can it learn from the programmes that are up and running, even though we are not at the stage to receive final conclusions?

My Committee took evidence from the Secretary of State last week on the transforming rehabilitation proposals, and put some of those questions to him, including the concern that he makes full use of the voluntary sector that has so much to contribute. Since then, there have

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been some reports in the press of doubts in the Treasury on whether the payments by results programme can achieve its predicted financial outcomes. I think that those reports came out accidentally in a conference or a seminar on related issues, but they indicate that not everybody is confident that the Ministry can achieve that kind of saving from the programme.

Much depends on getting the basics of financial management right, and our report devoted considerable attention to the effectiveness of financial management in the Ministry and its sponsored bodies. The Ministry did not produce its resource accounts for 2009-10 and 2010-11 before the summer recess, and blamed the accounting arrangements of probation trusts. Last year the Department’s accounts were submitted before the recess, but still after the deadline set by the Treasury. The Committee considered that to be unacceptable.

The Committee was also critical of the regular qualification of the Legal Services Commission’s accounts because of error rates in overpayments—£35.7 million in 2011-12—and called for it to establish a clear plan to reduce those rates significantly.

Our final main concern related to the accounts contained in the Her Majesty’s Courts Service trust’s statement. The Comptroller and Auditor General issued a disclaimer of opinion on those accounts, meaning that he could not say whether they gave a true and fair view. Its chief executive explained that the Courts Service’s accounting system was not able to handle the requirement placed on it by the Treasury to produce an auditable report. The Secretary of State said that the £3 million it would cost to put that right would not represent good value for money.

The Committee was highly critical of the lack of financial management competence in the Ministry and its sponsored bodies. We said that there was “unacceptable complacency” and a “defeatist mindset”. That is strong language, but the Committee think it is justified. The Committee thinks that the Ministry is now taking financial management more seriously, including centralisation and standardisation of processes and standardised forms. The LSC is implementing a new IT system. Frankly, we were horrified when the LSC told us that it could not possibly ask all solicitors to submit claims online, in a world where you and I, Mr Deputy Speaker, and most other people have to use online procedures. This is having to change, thank goodness. The Ministry, however, still faces an uphill struggle with IT legacy systems and its estates. In particular, in the courts many IT systems are old and require a great deal of effort and input to work at all. There is a question regarding whether any useful analysis has taken place to determine whether investing in capital projects now would save money in the longer term.

On European-related issues, the Committee said that the maintenance of separate teams in the MOJ and the Home Office to deal with European, international justice and home affairs issues was a duplication of effort, and that they should be merged. The Ministry has not accepted this recommendation, which seems so obvious to us.

The Government, with some fanfare, announced that they would exercise their right, under protocol 36 of the Lisbon treaty, to opt-out en bloc from justice and home affairs measures, and would consult parliamentary Committees, my Committee included, on their proposals

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regarding which ones they would opt back into. Up until now, negligible information has been forthcoming from the Government on their plans. The Committee, and other Committees, have had nothing on which to carry out any work. I emphasise strongly that my Committee expects to be provided with the time it requires to scrutinise the Government’s opt-out proposals. The same applies to the other affected Committees too, and we have written jointly on that.

The Ministry of Justice has not yet shown itself able to achieve the full savings to which it has committed, despite some tough decisions and some welcome improvements. The Department is trying to achieve major change, a process that always involves front-end costs with the hope of later savings. We should not be wasting taxpayers’ money on ineffective use of the prison system, where half of those released from prison reoffend within a year—for those on short sentences the figure is 60%. We should not lose sight of the long-term objective, which is to cut crime and reduce reoffending to such an extent that much less money has to be spent on the consequences of crime, whether in the criminal justice system or beyond. For that to happen, we need to spend money to ensure that people are not drawn into crime in the first place. The troubled families programme and early-years education are examples of what the Government are doing and need to build on if we are to cut not only the costs of crime, but the misery it brings to those of our constituents who are victims of crime. We are spending their taxes on trying to keep them safe from crime. That money needs to be spent wisely and that is why it is important that we debate it today.

3.28 pm

Gareth Johnson (Dartford) (Con): It is a pleasure to follow the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith). This might not be the most eagerly awaited debate the Chamber has ever seen, but the funding of the Ministry of Justice is an extremely important issue, and although I am a new member of the Justice Committee, in my short time I have seen how daunting is the MOJ’s task of balancing the books.

The MOJ aims at having less reoffending, more rehabilitation and a better court, prisons and probation service, and all with less money. I do not envy the Secretary of State’s position, but I know that in endeavouring to meet the task he will consider all areas for savings. One area being considered is funding work opportunities for inmates in custody. It is right that we provide employment opportunities in prisons. Taking part in work programmes helps offenders to retain or—where it is lacking—adopt a work ethic, increases work-based skills, makes inmates more employable on release and reduces reoffending rates. We must ensure that it does not undercut companies not working with offenders or take jobs away from the law-abiding, but giving prisoners work opportunities in custody could help not just inmates, but victims of crime. If the money earned by prisoners can be shared between rehabilitation and payments to victims, there is a dual gain to be made.

It is not only prison work schemes, however, that provide these opportunities. The National Offender Management Service has been identified as a department that could undergo further restructuring. Managing the

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rehabilitation of offenders is one of the most crucial aspects of the Ministry’s work, and the MOJ is right that someone is not best placed to help prevent reoffending just because they are employed by it. Very often, private companies or charities can assist with the rehabilitation of offenders, so it is worth considering—and, in suitable cases, adopting—the tendering of work currently carried out by the probation service. If payment by results actually gets results, it is worth pursuing, and giving a financial incentive to those who carry out rehabilitative work can only help to reduce reoffending rates. For the first time, we can say that if offending rates are not reduced, taxpayers’ money will not be spent. That seems right to me.

Jenny Chapman (Darlington) (Lab): I am sorry, but the hon. Gentleman seems to be suggesting that companies with PBR contracts will not be paid if they do not achieve results. I am sure the Minister will correct me if I am wrong, but that is not going to be the case.

Gareth Johnson: As I understand the system, there will be payment by results. If the results are not achieved, there will be a financial consequence for that company. We will be able to say, “If there are no results, the taxpayer will not have to shoulder the full burden.” To draw an analogy, we would not expect the Ministry of Defence to pay for guns that do not fire, so why should we expect the MOJ to pay when anti-reoffending programmes do not work? We should pay for what works, not for what does not work.

Rehman Chishti (Gillingham and Rainham) (Con): Does my hon. Friend agree with the MOJ that we should consider other means of resolving disputes, such as mediation, rather than going down the avenue of tribunals and courts, which cost a lot of money?

Gareth Johnson: My hon. Friend makes an important point. There is more scope, particularly in family courts, for the increased use of mediation and perhaps non-judicial disposals. We want to see court processes in appropriate cases, but nevertheless we could consider ways of avoiding them, if it is correct to do so.

I was reassured by the Secretary of State’s comments to the Justice Committee last week, when he confirmed that the probation service could also tender for contracts to work with offenders. That is right. The public want less crime; what is less important to them is who achieves it. Whether it is the probation service, a charity or private company matters little; what is vital is that whoever helps offenders to stay on the straight and narrow is successful in that important quest. Payment by results is potentially groundbreaking for the MOJ, but I concede that the devil will be in the detail. We need to ensure that cherry-picking cannot prevail, for example, and that the system recognises tangible improvements in a repeat offender’s behaviour, rather than progress towards good behaviour.

Successive Governments have tried to tackle the so-called revolving door of reoffending—the tendency to come back into the system time and time again, particularly following short-term custodial sentences. There are two approaches to the problem. We can either curtail short prison terms, letting people off without custodial sentences and not having any short-term prisoners, or we can

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work with such offenders, both in custody and on release. I support the latter approach. It has not been done in the past, but the commitment now to ensure the supervision of such offenders on release is the right approach and very much to be welcomed. The involvement of charitable and private sector organisations in such work has made it affordable. I believe it will be more successful for their presence.

However, it is not just the work of prisons that we need to review; it is also the courts. I worked in the Court Service and saw a very changing environment. In fact, three of the five courthouses I worked in are no longer courthouses, but restaurants, accommodation and so on—I think one is a Zizzi. They have changed beyond all recognition. Although it is sad to see that happening to old courthouses, it is right for the Department continuously to assess the value for money it provides for the taxpayer. It has a difficult balancing act to perform, between the value for money it provides on one side and the interests of justice on the other. Witnesses cannot be expected to travel long distances to vast super-courts. Justice delivered locally is still an important doctrine.

The virtual courts system has been highlighted as a good way for the Department to save money. However, I would urge caution on this approach. Virtual courts can actually cost more. We therefore need an intelligent and targeted use of the system, rather than a blanket approach. I am probably the only Member of Parliament who has used the virtual courts system—I guess I should declare an interest—and I have seen not only its strengths and weaknesses, but its expense to the Department. I am pleased that the Department is also looking at different ways in which magistrates courts can operate. It makes sense to allow them to keep more cases for themselves. That will enable savings to be made without compromising justice. In limited circumstances, magistrates can already sentence adult offenders to 12 months. If we trust them to give such sentences for some cases, why not for all cases? In some courts, the same magistrates who can sentence a 14-year-old to up to two years cannot give an adult more than six months. That needs to change.

The challenges for the Department are substantial. In playing its part in tackling the country’s debt, it needs to find savings, yet they have to be made without compromising justice or the safety of the public. The first job of every Government is to protect the public. I pay tribute to the Department for the enormous strides it has made of late in doing just that, while at the same time finding significant savings in its budget.

3.38 pm

Jenny Chapman (Darlington) (Lab): It is a pleasure to take part in what has become a rather select gathering, considering the report from the Select Committee on Justice and the estimates for the Ministry of Justice.

It is a pleasure to follow the hon. Member for Dartford (Gareth Johnson). I agreed with a large amount of what he said, although I encourage him to look carefully at PBR. He will find that the reward element, which is the bit companies get should they achieve their targets—we are still not clear what the targets might look like—could be as little as 5% of the value of the contracts. He might find that quite poor or average performance could get 95% of the payment anyway, which is not quite what we are leading people to believe.

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It is also a great pleasure to follow the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith), who presented his report clearly and fairly, and very politely, given some of the criticisms that he made of the Department. I congratulate him and his Committee on their report on the budget and structure of the Ministry of Justice. I found it an interesting read, but I imagine that it was at times an uncomfortable read for Ministers.

I want to touch on several important subjects: a dysfunctional financial Department, inadequate leadership, evidence-free policy, no progress on improvements for women offenders or for victims of crime, and an overall lack of impact on outcomes in the past three years. In the first paragraph of the report, Members observe that

“this period has been marked by criticism of and, in cases such as the performance of the Legal Services Commission (LSC), failure by, the Department.”

Looking at finance in particular, the Department’s finance team has been performing particularly badly—not that anyone would know it from the Department’s own assessment of its performance, which states that it has

“put a renewed focus on improving financial management across the entire Department.”

The Department has, however, missed the Government’s deadline for submitting accounts for the third year running. If the Ministry were a charity, the Charity Commission would be considering removing its charitable status.

The Government have been reduced to ill-thought-through attempts at random savings through redundancies, and it is striking that the Department’s future budget targets depend on making significant numbers of staff redundant even though the Department does not yet have the necessary resources to fund the redundancy payments. That is chaotic, and one reason for the chaos is the £140 million hole in the Ministry of Justice budget following Ministers’ climb downs on plans to change sentences. I am reminded in particular of the proposed sentence discount for guilty pleas in rape cases, which was abandoned.

The Ministry has to make a massive budget saving, yet it is flailing around attempting to find people to sack. Unfortunately, it risks undermining its ability to do its job. The Chair of the Public Accounts Committee, my right hon. Friend the Member for Barking (Margaret Hodge), said this morning:

“"We are concerned about safety and decency in some prisons…Assaults on staff, self-harm and escapes from contractor escorts have all increased.”

She went on to say:

“We were not reassured that the Agency has done enough to address the risks to safety, decency and standards in prisons and in community services arising from staffing cuts implemented to meet financial targets.”

On offender management in the community, probation trusts, the Probation Association, the National Association of Probation Officers and, significantly, all but a couple of the police and crime commissioners are opposed to the Government’s attempts to squeeze savings out of the Department through the sell-off of probation services by contracting out the supervision of medium and low-risk offenders in the community. I believe that the Ministry of Justice’s proposals in that area are as yet uncosted.

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Ministers also have no idea of the extra cost of their plans to supervise offenders serving sentences of less than a year, or whether they will make any difference at all to outcomes. We know from experience that commissioning is not one of the Ministry of Justice’s strengths. The commissioning car crash involving the court interpreters Applied Language Solutions and Capita is something that I am sure officials and Ministers would rather forget, but it illustrates the point that commissioning is not one of the Department’s strengths.

The voluntary sector is likely to get frozen out of rehabilitation services. The Secretary of State has repeatedly said that he wants smaller, voluntary sector and other providers to take on more work relating to the rehabilitation of offenders. There is no argument there, except that the National Audit Office has observed in its response to the Government’s consultation that this desired level playing field is unlikely to materialise. It states:

“Large contracts within the criminal justice system are already held by a few large firms, who could exploit this synergy, compared to smaller or newer players. The Ministry needs to consider whether the size of the contract areas will create barriers to entry for some smaller providers, given the need for greater investment and exposure to risk that these will entail.”

Exactly what is the rationale behind the Government’s proposed 16 areas for probation services, because nobody I speak to seems to know?

The Department has to admit that it has a tendency to favour policy announcements at the expense of delivery. We have had announcements on prisoner working, improved services for victims, revolutionising rehabilitation, mentoring and drug-free prisons. These are all great announcements, and the Government have had no argument from any of us about them, but we are left feeling a little disappointed that the Minister’s hyperbole about a rehabilitation revolution is just that. So far, it is all rhetoric and, I am afraid, no reality. Prisoners are not working more; they are spending longer than ever locked in their cells; and the chief inspector of prisons says he can find no evidence of the rehabilitation revolution—[Interruption.] The Minister says that it is not true, but I have the figures in front of me. If he wants to contradict me in his remarks, I may well wish to intervene on him later.

The justice mandarins are simply not running things properly. The Select Committee says that Ministers need to alter the balance from policy creation to programme implementation, and it is right. Will Ministers tell us how many serving senior officials in the Department meet this criteria and how many of them have experience of managing these projects successfully at a sufficiently senior level? The Department says it wants cultural change through transforming justice, but it is not clear from its own report how many senior managers really have these skills. It believes it will save money by closing older prisons. The Secretary of State says he wants to build a new “supermax” prison, but does he have a budget for it, what is his timetable and where is it going to be?

Perhaps the most important unanswered question is this: at the end of the reforms, what will be happening on the ground that is so different from what happens now? What is the big idea? Where is the evidence to back any of this up? Among all the announcements and statements about restructuring, outsourcing, commissioning, paying by results and reforming, where is the real change that is going to make a difference?

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Chris Heaton-Harris (Daventry) (Con): There is recognition on both sides of the House for the work that National Grid has done on reoffending. It has taken more than 2,000 offenders, given them work, mentored them and found bank accounts for them—the right hon. Member for East Ham (Stephen Timms) is a great proponent of that. That proves that someone does not have to be a senior official in the Ministry of Justice to be able to bring forward a good idea that massively reduces reoffending.

Jenny Chapman: The hon. Gentleman makes a good point. We can all cite anecdotes and examples of very good practice, but anecdotes remain just that. There is no systemic sharing of good practice. These opportunities should be assessed, evaluated and made available for all the offenders who need them, but the truth is that they are not. According to the Public Accounts Committee, senior officials at the MOJ have a poor record of managing commissioning, so I am not sure about trying to transform the service through that method. At the moment, there is not enough evidence of a good track record to be able to put much confidence in their ability to do that. The problem with the reforms is that they are all of structure rather than of practice. The Government are rightly disappointed in reoffending rates of around 50%, but for nearly three years they have done nothing of any substance to improve the situation.

Let me deal now with payment by results. Instead of importing a failed policy from the Department for Work and Pensions to the MOJ, why not take a closer look at what works in preventing reoffending? For all the academic studies and Government data, the truth is that there is precious little understanding of what really makes a difference. Plenty of organisations are prepared to tell us that what they are doing works and are prepared to buy reports to prove it, but there is very little objective analysis of outcomes of programmes and interventions. As a result of scrapping probation service PBR pilots, the Government are failing to use evidence that they should have to help them to decide where to spend their money. When the Secretary of State cancelled the pilots, he said, “Sometimes you just have to go with your beliefs.” There we have it: Chris Grayling, Secretary of State for Justice, our very own mystic Meg.

This simply is not good enough. Interventions in health, for example, are assessed. They are monitored and evaluated before public money is used to provide them, and the same should apply to interventions in criminal justice. The rate of reoffending is stubbornly high, so why are the Government not doing what can be done in health? Why are they not asking for interventions to be evaluated and funded only if they prove to be effective, and then insisting that only what works should be delivered in our prisons and in community sentences? There is too much okay practice, and too little sharing of the very best ideas.

We need to know which are the best interventions, which are the best providers of services, and which are the best prisons. We need a value-added measure for criminal justice. The Government should be investing in ways of assessing the performance of establishments, based on the profile of inmates entering prisons and their future reoffending. Establishments should be accountable for their performance: the best should be given greater freedom to innovate, and the worst should

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be closed down. Farming out the supervision of medium-risk offenders to private sector providers with no idea whether that will work any better than the current arrangements is reckless, ideologically driven and dangerous, and the Government should think again. They are not showing any interest in practice on the ground, but are preoccupied with structures in the organisations without any evidence that they will make any difference.

The Government’s performance in the management of this Department has been woeful. The Department has failed to submit its accounts on time three years running, it has been subject to withering criticism from the National Audit Office over its ability to commission, it has scrapped PBR pilots—thus losing any evidence that payment by results works—and it has failed to show that its mandarins can manage projects and implement policy.

3.52 pm

The Parliamentary Under-Secretary of State for Justice (Jeremy Wright): Let me start by thanking my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith), the Chairman of the Select Committee, for introducing this short but very high-quality and wide-ranging debate. I am also grateful to him for the way in which his Committee drew up the report, and for the scrutiny that it provides of the Department more broadly.

As the House knows, parliamentary scrutiny of Government Departments is crucial to ensuring that they deliver Government policy properly and offer value for money. We have talked about both those things this afternoon. A large number of subjects have been covered, and I shall try to deal with as many as possible. I shall also say a little about the Department’s priorities, which have also been mentioned today.

Last year’s comprehensive report by the Justice Committee on the budget and structure of the Department focused on many of the changes that it has made to bring it closer to the goal of delivering a justice system that is more effective, less costly and more responsive to the public. At a time of continued financial pressure—to which my right hon. Friend rightly referred—finding ways of improving services while delivering even more value for money is, of course, of paramount importance.

There has been a renewed focus on improving financial management throughout the Department, which means that it is set to reduce spending by about £2.5 billion each year over the spending review period. It will achieve that by means of a range of measures to drive down the costs to the taxpayer. On the efficiency side, that has included rationalisation of the Ministry of Justice head office, streamlining our structures and processes, and rationalisation of the court estate. We have also delivered savings through policy reforms, including the reforms of legal aid funding—which have been mentioned—and the criminal injuries compensation scheme. As the Select Committee has acknowledged, the Department has protected front-line services by making the bulk of its savings—some 60%—through ways of working more efficiently. The Department also laid its 2011-12 accounts unqualified, before the summer recess and ahead of the timetable it had originally planned. That demonstrates a significant improvement on previous performance, but there is room for further improvement and the Department is looking to provide that this year.

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My right hon. Friend the Member for Berwick-upon-Tweed raised two specific points about the estimates, the first of which related to the explanation for the £159 million extra for the National Offender Management Service. As he will appreciate, a number of pressures that arise during the year were not part of the MOJ baseline used in the spending review negotiations. Such additional cost pressures will include not only inflationary impacts, but funding for voluntary staff exits—he will understand that there has been considerable change on that front in the past 12 months.

My right hon. Friend’s other point related to the impairments to the court and prison estate. As he knows, the Valuation Office Agency carries out regular reviews of that estate, and the recent downturns in the property market mean that that re-evaluation has obviously had an impact on the Department’s budget. The figure of £520 million or so is substantially explained by that change.

Let me talk a little about the justice system we are trying to design. Creating a transformed justice system requires the Department to go beyond improving its financial management. If we are to construct a justice system that punishes the guilty, protects liberties and rehabilitates offenders, the MOJ needs to continue to work at pace to drive an ambitious reform agenda. Despite the determination of those working within the justice system, there is too much litigation, too many people are reoffending and too much money is spent on systems. So by 2015 the Department will provide services in a completely different way. We are committed to transforming rehabilitation to reduce reoffending—I will discuss that in some detail later— to driving down costs across the prison estate to ensure that it delivers maximum value for taxpayers; making sure that the youth justice estate is appropriate and cost-effective; rationalising the court estate and identifying further efficiencies across the criminal justice system; and continuing to drive down the cost of legal aid and ensure it is focused on those cases that require it. That is what transforming justice looks like.

One of my top priorities within that is the transformation of rehabilitation. That has had a good deal of attention in this debate, so let me deal with the points that have been made. As the House knows, we have consulted on proposals that could open up approximately £1 billion of services to a diverse market; give greater scope for providers to innovate, with payment by results acting as an incentive to focus on rehabilitating offenders, as my hon. Friend the Member for Dartford (Gareth Johnson) was explaining; and change how the commissioning of services is managed.

Jenny Chapman: Will the Minister clarify a point for us, because hon. Members who are listening to this debate will not be clear about it? What percentage of the value of the contract will be paid upon the achievement of the targets?

Jeremy Wright: The hon. Lady knows that we are carefully considering the design of the system, so we will need to determine the appropriate percentage. She will also recognise that it is not going to be 100%, because anyone taking on this work will need to implement the orders of the court and to fulfil licence requirements. The fact that it will not be 100% may have some bearing on the discussion we have been having about the accessibility

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of this new landscape to smaller organisations, particularly those in the voluntary sector. We will settle on the precise figure having listened to those who may be involved in this landscape, and others, to make sure that we get it right.

Let me deal with some of the points made by the Chairman of the Select Committee. He raised the concern that he and his Committee have about having national as opposed to local commissioning, and I appreciate that that represents a change. It is explained simply by the need to ensure that the necessary expertise and abilities to commission on a payment-by-results basis are held by those doing the commissioning. We think it is difficult to see how that can be done on a local basis, but we think it is important, just as he does, that there are local elements in the commissioning process and that local intelligence is included in deciding what needs to be commissioned. We want to design a system—I hope he will see this coming through the process—that enables us to include that local understanding as well as greater expertise on payment by results. He is also right to say that we must design a system that allows voluntary sector organisations to participate actively.

Sir Alan Beith: I am grateful to the Minister for seeking to clarify this point. Let us analyse it a bit further. If the local partnerships that know the local situation best can design what the contract should be about, it is perfectly proper that they should turn to a national body that has expertise in how to include the measurements of results and so on. I would be worried, however, if the national commissioning body was also the body that said, “What you need in Blackburn is this.” That decision should be taken locally, even if the expertise must be drawn on from a central body.

Jeremy Wright: Yes, I understand that entirely. I am saying that it will be important under the system that we are trying to design for local requirements to find their way through the system so that they can be clearly understood. We will try very hard to ensure that that can be done.

Let me return to the voluntary sector organisations, on which we have rightly spent a bit of time in the debate. There are probably two areas in which we need to be careful to ensure that the design of the system is right. The first is in the assessment of the bids that are made for the rehabilitative work that we are discussing. When we consider the bids, we will want to be satisfied not just about their quality and price but about the sustainability of the relationships brought forward as part of the bids. We anticipate that a large number of bids will include more than one organisation and will often include smaller voluntary and community sector organisations. We will want to be persuaded when assessing those bids that the smaller voluntary and community sector organisations will have a sustainable future in the course of the contract. We will want to ensure that the design is right and that we keep our eyes on what is happening in contract management. It is partly about assessing the bids when they come in and partly about assessing how they are implemented over the lifetime of the contract.

Jenny Chapman: I think the phrase the Minister is looking for is “bid candy”. I think he is trying to say that he would like there to be more involvement from

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not-for-profit, third sector and voluntary organisations, but is it not the truth that he has no idea at all of the number of organisations working with offenders in the criminal justice system? He does not know how many there are or what exactly they are doing, so how will he know whether there is more involvement after his reforms?

Jeremy Wright: The House will note the hon. Lady’s traditional fondness for central control, but we are not a fan of that. She is right that there is an issue about what is likely to be called “bid candy” in this context, but what she is missing is that that is precisely why it is important for us to consider not just the initial cost and attractiveness of the bid but the sustainability of what might be called the supply chain. We want to design that into the system for precisely the reasons she has given.

Let me move on to the issue raised by my right hon. Friend the Member for Berwick-upon-Tweed about prisoners who receive sentences of 12 months or less. There is broad agreement when the subject is raised that it is a good idea to bring within the ambit of rehabilitative services those offenders who receive such sentences, as at the moment very little provision is made for them. He is right to say that it will come at a cost, but it is difficult to be precise about the cost of that provision, which was another point raised by the hon. Member for Darlington (Jenny Chapman). Until we have finished designing a provision, we will not know precisely what it will cost.

Another aspect that needs to be clarified by the design process is the sanctions regime. Part of the cost will be incurred by deciding what to do if someone who is under such a sentence and who will be expected to participate in rehabilitation after that sentence does not comply. We must go through a number of processes in the design of the scheme before we can be more precise about the costs, but we confidently expect the cost of incorporating those 46,000 extra offenders will be covered by the savings we can make by competing rehabilitative services for medium and lower-risk offenders. That is one of the central advantages of taking that course.

My right hon. Friend also made the point that it is important to have in the management of the Department the right people with the rights skills to carry out the work we are asking them to. He is right, of course. He will almost certainly know from his review of the work of the Department that we have set up a capability steering group to consider those issues. One of the major issues for us to address is skills in programme and project management. We are very conscious of the need to make sure not just that we bring in new people with those skills where we need to do that, but that we give those skills to existing staff who will come into contact with programmes of various sizes and shapes.

Nick Smith (Blaenau Gwent) (Lab): From the Select Committee’s report I thought the emphasis on delivery and implementation was strong. However, I looked at the Government’s response to the Select Committee’s criticisms and, on the issue of project management, it felt very thin. How many of the Department’s senior managers have project management qualifications so that they can introduce this new culture of delivery?

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Jeremy Wright: As I said, we recognise the need to make sure not just that we bring in new people who have these skills, but that existing staff gain those skills, so taking a snapshot of how many have a particular qualification at this point may not be the most helpful way of looking at the issue. We are trying to make sure that civil servants who want and need these skills are given them, and that where there are gaps in the Department and particular skills are required, we plug those gaps.

Let me move on to talk about prison costs. We are keen to push down those costs. Across the custodial estate our strategy is to ensure that we have sufficient places to meet the demand of the courts, while securing best value for money for the taxpayer. We are committed to driving down the cost of imprisonment and to closing old and inefficient accommodation, which will contribute significantly to that. I am surprised that the hon. Lady expressed doubts that such an approach would save money. It seems clear that it would do so. The reason—

Jenny Chapman rose—

Jeremy Wright: If the hon. Lady will forgive me, I will explain and then I will give way.

It is a straightforward point that older accommodation is more expensive to run and to maintain. Newer accommodation is much cheaper in both respects. That is one reason why we want to transfer from an older estate to a newer estate. It is not the only reason, but if the hon. Lady wants to intervene, I will give way.

Jenny Chapman: My doubt was based on assertions from the Secretary of State that there is going to be some “supermax” prison, yet there is a lack of information about how much that would cost, when it would be built and where it would be. I would be interested to hear the Minister’s response to those questions. If they cannot be answered, I will keep my doubts.

Jeremy Wright: The hon. Lady is entitled to her doubts but she needs to be fair. We have said that we will look at the feasibility of providing just that sort of prison, although I would not use the language that she used. We are looking for a system of imprisoning offenders that is most efficient for the taxpayer, but not just in financial terms. Also—this is what I was going on to say—newer estate is much more susceptible to providing work in prisons, as my hon. Friend the Member for Dartford (Gareth Johnson) described, and the rehabilitative agenda that we all want to see outside as well as inside the prison gates. I can reassure the hon. Lady that once we have had the chance to have a look at the sites that we might want to pursue for a larger prison and at the economics of doing it, we will give her all the detail she could possibly want, but we are not going to rush into it because, perhaps unlike our predecessors, we do not believe in spending money hand over fist until we get it right. We will make sure that we have got it right first; then we will bring forward our proposals.

Let me move on briefly to youth justice, which was mentioned by the Chairman of the Select Committee. As he said, in February we published our plans for the future of youth custody. Young people who commit serious and persistent offences need to be properly punished and it is right that they are sentenced to custody, but custody is not delivering good enough results. The costs of youth custody are very high, yet

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73% of young people leaving custody go on to reoffend within a year. It is not acceptable to spend so much yet get such poor outcomes. That is why we launched our vision for secure colleges that refocus a young person’s time in custody so that it is education with detention, rather than detention with education as an afterthought.

My hon. Friend the Member for Dartford and the Chair of the Select Committee mentioned the court estate, reform of which is key to a transformed justice system. In identifying ways in which it could operate more efficiently, the Ministry has closed 132 courts—84 magistrates courts and 46 county courts. However, we recognise that there is a need to carry on looking at how our estate is most effectively utilised, and we will want to keep in mind the points that were raised on that. Spending money to keep underused and unsuitable courts and tribunals open is not a good use of taxpayers’ money, so we continue to keep the use of our estate under review to ensure that it meets operational requirements.

The Select Committee is also right to emphasise how important co-operation across the criminal justice is for improving outcomes. In July last year, we set out important reforms now under way across the criminal justice system in the “Swift and Sure Justice” White Paper. We are building on those reforms to ensure that victims have a louder voice and that the criminal justice system commands public confidence.

Jenny Chapman: I cannot let that point go without observing that the new victims commissioner will be working 10 hours a month. Is that sufficient to give victims the voice they need?

Jeremy Wright: I do not believe that it is the number of hours spent on the job that matters, but what one does in them. The effectiveness of this particular victims commissioner will become apparent. We think we have an excellent candidate for the job and that she will do a first-class job for victims. I am sure that the hon. Lady will support her in that work as she does it.

We want to make optimum use of the available resources so that the criminal justice system is quicker, less bureaucratic and more efficient. Therefore we are working closely with the Home Secretary and the Attorney-General to ensure that we all look at the whole system to tackle its weaknesses. My right hon. Friend the Member for Berwick-upon-Tweed was right to say that the Ministry of Justice cannot solve all these problems on its own. We are, as he knows, often described as a downstream Department, and we need to work with other Departments, not just those that I have mentioned, to ensure that we all do the right things to bring down offending and reoffending. He will know that we will shortly publish a criminal justice strategy and action plan to set out how we will deliver further change.