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I am asking the RDAs to focus, working with and through others:

as an immediate priority, on providing assistance to business;for the medium-term, on stimulating the recovery and growth; and for the longer-term, on restructuring and developing each region’s strengths, supporting its growth and competitiveness in the future.

Through such investment, businesses will not only survive but thrive, with more jobs and employment created for the people in all parts of the country. This will be delivered more successfully by aligning RDAs’ business-focused capital expenditure with that of other bodies such as the Homes and Communities Agency, and sub-regional and local partners. Our ambition is to maximise economic benefits and through them the impact on people’s life chances, by targeting investment firmly on regenerating and strengthening each region’s economy.

The PwC report gives the RDAs, and government more widely, an opportunity to identify which types of investments and interventions have the greatest economic impact and in which circumstances. The evidence from the report will inform the conclusions of the Public Value Programme review of RDAs to be announced in the Budget. More immediately, I have agreed with the RDAs that they should:

reprioritise and focus sharply on measures to help their regions through the downturn and prepare for the upturn. They will look at the strategic mix of their interventions and use the evaluation work to arrive at a programme with maximum impact in the short and medium term to address the acute problems of the present and to lay strong foundations for recovery;ensure that robust mechanisms are in place uniformly across the network to embed learning from the evaluation into future investment planning and that experience is shared effectively across the RDA network. RDAs will also be working with BERR and others to produce new appraisal guidance which will set out a shared understanding of what, in the light of the evaluation, works well and what does not;draw extensively on the evaluation results and other evidence to refine their investment frameworks, to help them choose between competing investment projects to maximise the economic return to the region and the national economy. The result will provide an even more robust basis for ensuring the effective use of funds, particularly in ensuring that investment in physical regeneration complements business investment; andupdate me on the immediate priorities they have agreed with their regional Ministers and partners and stakeholders such as the Homes and Communities Agency and local authorities. These should be set out in corporate plan updates so that there is clear visibility of everything they will be doing for the region over the period. This will provide the basis for more open and firmer performance management.

RDAs have agreed to provide detailed responses by the end of May.



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School Teachers’ Review Body

Statement

The Parliamentary Under-Secretary of State, Department for Children, Schools and Families (Baroness Morgan of Drefelin): My right honourable friend the Secretary of State for Children, Schools and Families (Ed Balls) has made the following Written Ministerial Statement.

Part 1 of the 18threport of the School Teachers’ Review Body (STRB) is being published today, covering a range of matters referred to it in June 2008. I am grateful for the careful consideration which the STRB has given to these matters. Copies of the report and of my detailed response to it are available in the Vote Office, the Printed Paper Office, the Libraries of the House and at www.teachernet.gov.uk/pay.

The STRB has recommended that teachers’ pay be increased by 2.3 per cent from 1 September 2009 without prejudice to the outcome of the part 2 report in June on the appropriateness of the pay award for September 2009 and 2010. In addition a further adjustment to pay scales for teachers in Inner London is recommended for September 2009.

I am grateful to the STRB for these recommendations, which will allow teachers to receive an increase in September 2009, pending the STRB’s report in June, and I intend to accept these recommendations.

The STRB has recommended that new statements of responsibilities for all teachers are drawn up, separate from conditions of employment, taking account of draft statements that the STRB has produced, and that the current statements in the school teachers’ pay and conditions document (STPCD) be removed.

I am grateful to the STRB for its consideration of this issue and for the work it has done to prepare draft statements. I agree that account should be taken of the STRB’s draft statements for teachers as work develops in this area. I agree that existing statements within the STPCD should be replaced in due course. I also take the view that conditions of employment should be considered alongside revised statements of responsibilities.

The STRB has also made recommendations concerning the leadership group. In particular, it has recommended certain interim arrangements for pay and conditions for leaders in the STPCD be changed to enable leaders to be paid for existing models of leadership in a consistent and transparent manner. STRB has also recommended that there should be a fundamental review of the system of reward for the leadership group.

I note the STRB’s recommendation for changes to the pay and conditions for leaders and I agree that this work should be taken further by the STRB in the course of a future remit. I believe that this work should also link with work to develop a new set of professional responsibilities for all teachers.

The STRB has also made helpful recommendations concerning pay ranges for the Excellent Teachers Scheme, which I propose to accept, and concerning payments for teachers of pupils with special educational needs, including unattached teachers. My detailed response contains further information on all these issues.



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Senior Salaries Review Body

Statement

The Lord President of the Council (Baroness Royall of Blaisdon): My right honourable friend the Prime Minister (Gordon Brown) has made the following Written Ministerial Statement in the House of Commons today.

The 31st report of the Review Body on Senior Salaries is being published today. In addition the Government intend to reform Civil Service severance and early retirement terms.

The Government are determined to reduce the costs of the Civil Service. Having achieved 86,700 workforce reductions and £26.5 billion of efficiency savings as part of the Gershon efficiency programme, the Government are going further to ensure that resources are focused on improving key front-line public services. As well as delivering £35 billion of value for money gains by 2010-11, the Government will bear down on the cost of running government, with -5 per cent reductions in real terms in the cost of running government in each of the next three years. Over the next few years the Government will continue to ensure that value for money is driven throughout all aspects of the public sector to support our drive to continue to improve key public services.

The Government therefore intend fundamentally to reform the severance and early retirement terms for all civil servants in order to control costs. The current arrangements have been in place since 1987 and are inflexible and expensive. The new terms require departments to reduce costs and will improve accountability and value for money for the taxpayer, saving up to £500 million over the next three years.

The report of the Senior Salaries Review Body makes recommendations about the pay of the senior Civil Service (SCS), senior military personnel, the judiciary and very senior NHS managers. Copies have been laid in the Vote Office and the Library of the House. I am grateful to the chairman and members of the review body for their work.

The Government have decided to accept some but not all of its recommendations. It is important in the present economic climate that senior staff in the public sector show leadership in the exercise of pay restraint.

Senior Civil Service

For 2009-10, the review body recommended a 2.1 per cent increase in base pay and no increase to the size of the non-consolidated performance-related pay pot.

The review body has recommended that the maxima and minima for each pay band should be increased by approximately 2.1 per cent.

The Government have decided that base pay and the minima and maxima of each pay band will increase by 1.5 per cent. They have accepted the recommendation of no increase to the size of the non-consolidated performance-related pay pot. Permanent secretaries have already announced that they will forgo such payments in 2009.

Senior Military Personnel

On senior military pay the review body has recommended that base pay for all senior military officers should increase by 2.8 per cent from 1 April 2009.



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The review body has recommended that the X-factor (a supplement to base pay in recognition of the differences between military and civilian life) should be paid at a rate of 25 per cent of the full cash value to 2- and 3-star officers and that an appropriate differential should be re-established between 1- and 2-star medical and dental officers.

The Government have decided to accept the review body’s recommendations on senior military pay.

Judiciary

The review body’s main recommendation for the judiciary is an increase of approximately 2.6 per cent for almost all judicial salaries.

The Government have decided that judicial salaries will increase by 1.5 per cent.

Very Senior NHS Managers

The review body has recommended an increase in base pay of 2.4 per cent and no increase to the size of the non-consolidated pay pot.

The Government have decided that base pay will increase by 1.5 per cent and have accepted the recommendation of no increase to the size of the non- consolidated pay pot.

Ministers

The changes to senior Civil Service pay mean that ministerial pay, which is linked by legislation to the average increase in the midpoint of senior Civil Service pay ranges, will increase by 1.5 per cent. However, given the importance of public sector pay restraint at a time of economic uncertainty, salaried Ministers will not be accepting any pay rise in 2009-10, either in their ministerial pay or in their parliamentary pay.

Skills Funding Agency

Statement

The Parliamentary Under-Secretary of State, Department for Innovation, Universities and Skills (Lord Young of Norwood Green): My honourable friend the Parliamentary Under-Secretary of State for Further Education (Siôn Simon) has made the following Written Ministerial Statement.

The Apprenticeships, Skills, Children and Learners (ASCL) Bill will legislate for the creation of a new post of chief executive of Skills Funding, to take over most of the post-19 education and training functions of the Learning and Skills Council (LSC), which will be dissolved. The chief executive will lead a new Skills Funding Agency, and will be responsible for some £5 billion a year of public funding. This change will take effect from April 2010, subject to the successful passage of the Bill.

The move to the new arrangements will be complex, and it is essential to minimise the potential for any risk to public funds or disruption in education and training delivery. Early recruitment of a chief executive will reduce the set-up cost for the Skills Funding Agency. It will also facilitate a successful move to the new arrangements. It is for these reasons that the Department for Innovation, Universities and Skills is seeking a contingency fund advance of £77,000 to begin the

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chief executive recruitment process so the successful candidate can take up their position as early in the transition year (2009-10) as possible.

Parliamentary approval for additional resources of £175,000 for this new service will be sought in the main estimate for 2009-10 for the Department for Innovation, Universities and Skills. Pending that approval, urgent expenditure estimated at £77,000 will be met by repayable cash advances from the contingency fund.

Taxation and Business Rates

Statement

The Financial Services Secretary to the Treasury (Lord Myners): My right honourable friend the Financial Secretary to the Treasury (Stephen Timms) has made the following Written Ministerial Statement.

I can today announce the implementation of a measure consulted on during 2008 and a measure to protect revenues.

Simplification of standard method for calculating VAT

Effective from 1 April 2009, the Government announce changes to simplify the standard method for calculating VAT for partially exempt businesses.

The changes announced today follow consultation over the summer, and will benefit up to 120,000 businesses in the UK, by making it easier for them to operate the default standard method. I am today laying regulations to effect these changes.

Value Added Taxanti-forestalling legislation

On 25 November 2008 I announced the Government's intention to introduce legislation as part of Finance Bill 2009 to protect the public finances from artificial avoidance which sought to exploit the change in the VAT rate (forestalling). That Statement described the scope of the legislation, in particular the circumstances in which it was to apply, and set out that it would be effective from the date of the Statement.

The draft legislation is today published for comment by HMRC. It includes further necessary measures to protect revenues, effective from today.

Business rates

In addition, I can confirm that the Chancellor of the Exchequer has today announced that the Department for Communities and Local Government will bring forward legislation to enable businesses to spread payment of the increase in business rates bills for 2009-10 over the three years to 2011-12. Business ratepayers in England will be able to defer payment of around £600 million across 1.6 million properties, easing cash flow in the current year. Further details of the announcement can be found at www.communities.gov.uk.

Young People's Learning Agency

Statement

The Parliamentary Under-Secretary of State, Department for Children, Schools and Families (Baroness Morgan of Drefelin): My right honourable friend the Minister of State for Skills and Learners (Jim Knight) has made the following Written Ministerial Statement.



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The Apprenticeships, Skills, Children and Learners (ASCL) Bill will legislate for the creation of a new post—the chief executive of the Young People’s Learning Agency (YPLA)—and to take over some of the functions of the Learning and Skills Council (LSC), which will be dissolved. The Bill will also legislate to confer new responsibilities on local authorities for the commissioning of education and training for young people aged 16-19. Subject to the passage of the Bill, these changes will take effect from April 2010.

The scale of the change that the department is implementing is considerable. Some £7 billion per annum of public funding will be routed through the YPLA and local authorities for the provision of education and training to 16-19 year-olds. This new organisation will have a major role to play in ensuring the provision of education and training for young people, and that strategic skills needs are met across the country. For such a large and complex transition it is imperative that DCSF seeks to minimise the risks around transition. In particular, that we allow time for the detailed new delivery arrangements to be designed, tested and established before the transfer. This will minimise the potential for there to be any risk to public funds; avoid any disruption in delivery of education and training; and thus sustain delivery against PSA targets.

With this in mind, we want the YPLA to work in “shadow” arrangements with the LSC and local authorities before responsibility and staff are formally transferred in April 2010. The “shadow” period will begin at the start of the 2009-10 academic year and will end when, subject to the passage of legislation, responsibility is formally transferred to the YPLA in April 2010.

Recruiting a chief executive as early in the transition year (2009-10) as possible will be a crucial element of facilitating a successful move to the permanent new arrangements. If recruitment activity were not to begin until Royal Assent (which is due in autumn 2009) we would not be able to guarantee that a suitable candidate would be available to take up post by April 2010. Advertising early would enable the successful candidates to take up position early in the transition year as possible, which would enable us to involve them in the crucial work to:

provide Ministers with assurance that the new YPLA will have the capacity to deliver on Government’s ambition; effectively manage the significant amounts of resource that they will be delegated; and provide the leadership, strategy and operational plan so the YPLA is up and running from April 2010.

Parliamentary approval for additional resources of [£80,000] for this new service will be sought in the Main Estimate for 2009-10 for DCSF. Pending that approval, urgent expenditure estimated at £80,000 will be met by repayable advances from the contingencies fund.


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