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Viscount Falkland: My Lords, we on these Benches also thank the Minister for explaining in such detail the specific initiatives contained in the order. We have nothing particular add to the points raised by the noble Baroness. Indeed, we support her in her remarks about the need for further clarification on the additionality aspect of this funding.
As regards the initiative to offer funding that will enable children to be taught at home, will that include the increasing number of disruptive children who are being excluded from school, no doubt for perfectly good reasons? That appears to be a matter well outside normal funding arrangements in education and I hope that that will be reflected in this new initiative.
As I have said, the matter of additionality needs to be explained a little further. A number of initiatives are not defined clearly as falling outside the accepted scope of funding, but they are subject to certain budgetary constraints which may well be got round by putting them into a list such as that contained in the order.
Having said that, the success of the New Opportunities Fund depends on the continuing success of the lottery--and a grand success it has been. I am sure that the Minister recognises that more than most, in particular in the area of the arts. Let us hope that that will continue.
Lord McIntosh of Haringey: My Lords, I am grateful to both noble Lords who have contributed to the debate. Of course the important point, as the noble Baroness, Lady Anelay, recognised--she has been consistent in making the point, but I do not complain about that in any way--is the issue of additionality. The best way to make clear how we are preserving additionality is to say that additionality does not mean that we shall spend money only on matters on which central government could not spend money, but also on matters on which central government would not spend money. The Government and the taxpayer can pay for anything they like. In that sense, any expenditure of lottery money involves issues of additionality.
But the example of childcare given by the noble Baroness illustrates my point most effectively. We introduced the National Childcare Strategy in May 1998. It aims to ensure the provision of good quality, affordable childcare for children aged from 0 to 15, and up to the age of 16 for children with special needs. The Government have already made provision from central funds--from the taxpayer--of £300 million towards the strategy for 1998-2003. What we are doing with the money targeted for funding childcare here is adding to public expenditure, particularly in deprived areas as well as for capital projects which it would not otherwise be possible to realise from the money which has been allocated by the taxpayer. That illustrates the difference between the two sources of funding and why these proposals do not breach additionality.
The noble Baroness asked me about the relationship with Sport England and the sport lottery distributors. The policy directions which were made available to the House state that NOF projects should be complementary to, and not in competition with, planned provision from other lottery distributors. That means that NOF will work with the sport lottery distributors to ensure that the money goes where it is most needed. In England, the school sports allowance
will be very important in the implementation of this initiative. So they are genuinely complementary rather than competitive.So far as concerns school sports co-ordinators, there are 145 in place now; there will be approximately 200 in September; and we aim to have 1,000 by the end of 2004. However, in practice, with any luck, it could be earlier than that. So we have kept the matter deliberately vague in that sense.
The noble Baroness, Lady Anelay, asked me how expenditure on heat and power generation was appropriate. The answer is that these are part of community initiatives. It is when communities wish to save themselves money by setting up installations for a wide variety of renewable energy that NOF money would become available for that purpose. It is rather different from commercial energy policy.
As to the question raised by the noble Viscount, Lord Falkland, in regard to home teaching, yes, of course, the teaching of disruptive children is included. However, as the money is not to pay the basic costs of home teaching but to provide ICT training for home teachers and teachers in hospitals, it is not quite as fundamental as it might appear. In any case, there is only £1 million available for that purpose.
On Question, Motion agreed to.
Limited Liability Partnerships (Fees) (No. 2) Regulations 2001
12.12 p.m.
Lord McIntosh of Haringey rose to move, That the regulations laid before the House on 14th March be approved [11th Report from the Joint Committee].
The noble Lord said: My Lords, as I explained when we debated the limited liability partnerships regulations on 16th March, due to an administrative error an earlier set of fees regulations had to be withdrawn and a new set laid. I should like to assure the House that the regulations before us today contain the correct incorporation fee for limited liability partnerships, which is £95. We have also taken the opportunity to propose a minor change to fee No. 4, which has been reduced from £20 to £10.
In setting the level of fees for limited liability partnerships, we have made every effort to ensure that it is as near as possible to the level of fees for companies. Following the revocation of the earlier fees regulations, we looked again at the fees applied to LLPs and concluded that fee No. 4 could be reduced to bring it in line with companies. However, because of the need to set up a separate registration system for LLPs, it has not been possible to do this in all cases, although six of the nine fees applied to LLPs are in line with companies.
Companies House is responsible for the incorporation and dissolution of companies and the publication of financial and other information
supplied in compliance with the provisions of the Companies Act. The Limited Liability Partnerships Act 2000 gives it similar responsibilities for LLPs.Clearly, one of the fees that is higher for LLPs than for companies is the registration fee. I should like to explain why. The demand for LLP incorporation is unlikely to be on anything like the scale of company registrations. Market research carried out for Companies House suggests initial volumes of some 8,000 LLPs over the first three years, although, of course, there is considerable uncertainty about any estimate of that kind.
The administration of the LLP regime requires the creation of a dedicated team within Companies House. The fees charged for LLPs need to recover these costs, the cost of developing the necessary computer systems and the costs of provision of information to the public. As a result, the projected unit costs for the registration of an LLP gives a fee of £95. By contrast, there are 1.4 million active companies and some 200,000 new company registrations per year. This brings substantial economies of scale and accounts for the much lower registration fee of £20.
It is not permissible for Companies House to cross-subsidise LLPs from the moneys received from the registration of companies. Companies House has been an executive agency since October 1988 and has operated as a trading fund since October 1991. As a trading fund, Companies House must recover the costs of providing its services from fees. It must also aim to achieve a net return of 6 per cent on its assets, on average, taking one year with another. Within this framework, Companies House must also avoid, as far as possible, cross-subsidy between its various activities. So each major product and service category has to be broadly self-financing.
Companies House also has to finance development programmes from fees and charges. This includes the costs of continuing to invest in new IT systems. These costs must be charged to and spread across the relevant components of Companies House products and services.
As part of the modernising and e-commerce agenda, Companies House is putting a great deal of effort into systems which will widen the scope of electronic filing, permit electronic incorporation and make company information available over the Internet--a great relief to those of us who had to use the old microfiche system. At the same time, it is putting the final touches to a project to make all information held available electronically. Information up to five years old is already available electronically.
The users of information on limited liability partnerships will benefit from these changes immediately. Later on, there will be benefits for LLPs in terms of registering information electronically.
Companies House, as a DTI agency and a trading fund, is set strict public targets. Among those targets is a requirement to recover its operating costs from the fees it charges. In this way, it is self-financing and makes no demands on the public purse. It has made efforts, year by year, to reduce the unit cost of
processing information by almost 20 per cent in real terms over the past four years. The result is that the fees for the incorporation of companies and registration of returns are quite exceptionally modest. The proposed fees for LLPs are inevitably higher for the reasons that I have given.In the longer term I expect that the systems for capturing, holding and disseminating information on both companies and LLPs will come together. We can then look again at the relative level of fees, but I hope that I have explained why the fees for LLPs in these regulations are both reasonable and reflect the expected cost of Companies House administration. I commend the regulations to the House. I beg to move.
Moved, That the regulations laid before the House on 14th March be approved [11th Report from the Joint Committee].--(Lord McIntosh of Haringey.)
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