The UK Health and Social Care Secretary has invited the devolved administration for talks to discuss lessons learnt and tackle waiting lists across the UK
The UK Government Health and Social Care Secretary Steve Barclay has written to the devolved administrations inviting them for talks about how all parts of the UK can work together to tackle long-term waiting lists in all parts of the UK.
NHS services across the UK are a devolved matter, but Prime Minister Rishi Sunak has made cutting waiting lists a priority across the UK. Although approaches taken across England, Scotland, Wales and Northern Ireland share many common features, significant variations in outcomes exist.
In Wales, more than 73,000 people are waiting over 77 weeks for treatment, and at least 21,600 people are waiting over 78 weeks for an outpatient, day case or inpatient appointment in Scotland. In England, waiting times for patients over 78 weeks have been virtually eliminated.
The Secretary of State is inviting health ministers from the devolved administrations to discuss what lessons can be learnt from the different approaches taken.
In England for example, NHS patients are offered a choice of provider at GP referral – NHS or independent sector – provided that it meets NHS costs and standards. And from October we will proactively notify patients waiting over 40 weeks for treatment of their right to choose to be treated elsewhere.
In his letter, the Secretary of State writes that he would be open to requests from the devolved administrations to allow patients in Wales and Scotland who are waiting for lengthy periods to choose to be treated at providers in England, NHS or independent sector – building on the current arrangements for cross-border healthcare.
The Secretary of State has also asked UK health ministers to discuss how health data can be made more comparable across the UK. Northern Ireland official counterparts have also been invited to the ministerial meeting.
Health and Social Care Secretary Steve Barclay said: “I hugely value being able to share knowledge and experiences on the joint challenges facing our healthcare systems. I want to support collaboration between our nations to share best practices, improve transparency and provide better accountability for patients.
“This will help to ensure we are joined up when it comes to cutting waiting lists – one of the government’s top five priorities – and will allow us to better work together to improve performance and get patients seen more quickly.”
The letter reads:
Dear Michael and Eluned,
Thank you for a constructive meeting last month.
As you know, the NHS is at the forefront of people’s minds, and the Prime Minister has made cutting waiting lists a priority to ensure people across the UK get the care they need more quickly. We must continue to take steps to support the NHS and reduce waiting times to ensure no part of the UK is left behind. I am therefore concerned by the variation in performance across NHS services.
As we look to address this issue, it is important that the UK Government and Devolved Administrations work together to ensure that no matter where you are in the country, citizens can access vital services quickly.
In England, we are delivering on the actions set out in the NHS’s Elective Recovery Implementation Plan published last February. Our target to virtually eliminate waits of longer than two years by July 2022 was achieved on time and waits for treatment of more than 78 weeks have been virtually eliminated. Although data is not collected on the same basis across the UK, recent figures show more than 73,000 people are waiting over 77 weeks for treatment in Wales, and at least 21,600 people are waiting over 78 weeks for an outpatient, daycase or inpatient appointment in Scotland.
Whilst there are common features across the approaches of England, Wales and Scotland, one area of difference relates to patient choice. In England, patients have the legal right to choose the provider for their first outpatient appointment (at the point of GP referral) for many healthcare services. Patients may choose to be treated free of charge at any provider – NHS or independent sector – provided they meet NHS standards and costs and hold a contract for the provision of services to the NHS. A Patients Association study has found that this can reduce a patient’s waiting time by up to 3 months.
From October, we will proactively notify patients in England who have been waiting over 40 weeks of their right to request to be treated at a different provider if clinically appropriate, again in the NHS or in the independent sector, provided they meet NHS standards and costs, and they hold a contract for the provision of services to the NHS.
The Secretaries of State for Scotland and Wales share my desire to see patients across the UK have the same rights when it comes to accessing treatment. I would therefore be happy to facilitate a Ministerial working group session (with NI official counterparts) to share how we are implementing this choice approach in England, and to share lessons on work across the UK to tackle the elective waiting list. I would also be open to considering any request from you for patients waiting for lengthy periods for treatment in Scotland and Wales to be able to choose from alternate providers in England – NHS or independent sector – in line with the approach we are taking here, and building on the existing arrangements for cross-border healthcare.
I also believe we need to work together to ensure that health data is more comparable across the UK. It is important that all our citizens can understand the performance of the health services they are receiving and that we can learn from what has been tried and tested in one part of the UK to improve services across the country. I welcome the work our respective teams have been doing to improve data comparability, for example through the Office for National Statistics’ work to improve key UK-wide health performance metrics.
I am very keen to see this work progress and ask for your continued support in prioritising this moving forward.
In the absence of Ministers in Northern Ireland, I am copying this letter to the Department of Health in Northern Ireland and the Secretary of State for Northern Ireland.
Partnership with social media companies to clamp down on people smugglers’ operations online
Illegal crossings remain down on last year and returns are at their highest level since 2019
Extra funding and resources for law enforcement to tackle harmful content
A voluntary partnership between social media companies and government will accelerate action to tackle people smuggling content online, such as criminals sharing information about illegal Channel crossings, Prime Minister Rishi Sunak has announced today [Sunday 6th August].
It comes as new figures show the government continues to make progress on the Prime Minister’s plan to stop the boats: crossings remain down on last year, the legacy asylum backlog has been reduced by a third since December 2022, and enforced returns of people with no right to be in the UK are at their highest level since 2019.
While figures from the NCA show that over 90% of online content linked to people smuggling is taken down when social media companies are notified, the partnership between tech firms and government will drive forward efforts to clamp down on the tactics being used by criminal gangs who use the internet to lure people into paying for crossings.
This content can include discount offers for groups of people, free spaces for children, offers of false documents and false claims of safe passage – targeting vulnerable people for profit and putting people’s lives at risk through dangerous and illegal journeys.
Prime Minister Rishi Sunak said: “To stop the boats, we have to tackle the business model of vile people smugglers at source.
“That means clamping down on their attempts to lure people into making these illegal crossings and profit from putting lives at risk.
“This new commitment from tech firms will see us redouble our efforts to fight back against these criminals, working together to shut down their vile trade.”
Home Secretary Suella Braverman said: “Heartless people smugglers are using social media to promote their despicable services and charge people thousands of pounds to make the illegal journey into the UK in unsafe boats.
“They must not succeed.
“This strengthened collaboration between the National Crime Agency, government and social media companies will ensure content promoting dangerous and illegal Channel crossings doesn’t see the light of day.”
The partnership will build on the close working already in place between government and social media companies, and includes a range of commitments to explore increased collaboration.
Under this initiative, social media companies will look to increase cooperation with the National Crime Agency to find and remove criminal content and step up the sharing of best practice both across the industry and with law enforcement.
The voluntary partnership also includes a commitment to explore ways to step up efforts to redirect people away from this content when they come across it online. This approach is already widely being used successfully by platforms, for example around harmful content promoting extremism or eating disorders, where people are presented with alternative messages to displace, rebut or undermine the damaging content they searched for – diverting them away from harmful messaging and misinformation.
Alongside the partnership, the government will also set up a new centre led by the National Crime Agency and Home Office to increase the capacity and capability of law enforcement to identify this content on social media platforms.
Known as the ‘Online Capability Centre’, backed by £11m funding, its work will focus on undermining and disrupting the business model of organised crime groups responsible for illegal crossings and using the internet to facilitate these journeys by intensifying efforts to combat their online activity.
The centre will be staffed by highly trained technical specialists alongside law enforcement officers and will work by building a clearer picture of the scale of illegal immigration material online.
They will work with internet companies to identify more of this material, notifying platforms so they can take the appropriate action. The centre will also focus on developing and building a bank of intelligence around the criminal networks who are promoting people smuggling services online, which will help improve law enforcement’s ability to identify content and in turn help drive investigations.
To harness the potential of new technology such as AI to clamp down on criminals’ content, government will also hold a ‘hackathon’ event with industry experts in order to develop innovative new tools which will better detect people smugglers’ publicly available content online, to help social media companies take it down more quickly.
Government will also intensify the existing work taking place with social media companies ahead of the Online Safety Bill coming into effect.
Once in force, under the Bill social media companies will be required to make sure their systems and processes are designed to prevent people coming into contact with illegal content created by people smugglers, minimise how long this content is available online and remove it as soon as possible once they become aware of it.
Alongside this, the Bill also requires major platforms to publish annual transparency reports setting out what they’re doing to tackle online harms. This could include information around how content around illegal migration is spread across platforms, how frequently it is uploaded, and what systems and processes companies have in place to deal with this kind of content.
The partnership confirmed today also builds on the work of the “Social Media Action Plan”, a voluntary agreement between the Home Office, National Crime Agency and five major social media platforms in 2021 to increase understanding of how organised criminals used their platforms to promote illegal services.
To date, this cooperation has seen more than 4,700 posts, pages or accounts have been removed or suspended as a result, increasing disruption of organised crime groups’ activity, and today’s partnership will drive further progress.
Stopping the boats is one of the Prime Minister’s top five priorities and the government is fully focused on delivering his whole system plan to tackling illegal migration. This includes:
stepping up law enforcement activity, with 50% more illegal working visits carried out in the first half of this year compared to the first half of last year
tackling the legacy asylum backlog, which has reduced by nearly a third since the end of December
passing the Illegal Migration Act which will ensure that people who come to the UK illegally will be detained and swiftly removed.
Working with international partners to tackle this global challenge is another key strand of efforts to stop the boats, and since taking office the PM has secured new agreements with allies, including strengthened partnerships with France and Albania which will see 40% more patrols on French beaches, and have resulted in a 90% drop in Albanian small boat arrivals in the first quarter of 2023 compared to the same period last year.
The oil price cap is significantly impacting Russia’s ability to use oil to finance its illegal war.
45% plunge in Russian Finance Ministry energy revenues.
UK continues to monitor effectiveness of the cap alongside its Coalition partners amid expected market price fluctuations.
UK-backed price cap on Russian oil and oil products is successfully undermining Putin’s ability to fund his illegal war in Ukraine, according to official data collated six months on from implementation.
Russian government income declined by over 20% between January and March 2023 compared to a year ago. The Russian Ministry of Finance posted a 45% plunge in government energy revenues in the same period.
According to the International Energy Agency’s Oil Market Report for July 2023, Russian oil export revenues were down by $1.5 billion month-on-month in June to $11.8 billion (down $9.9 billion year-on-year).
Independent research by the Centre for Research on Energy and Clean Air has estimated that the price cap on crude oil is costing Russia around €160 million per day.
Treasury Lords Minister Baroness Penn said: “The oil price cap is succeeding in its dual objectives – bearing down on Putin’s most lucrative source of revenues that could otherwise be used to fund his illegal war, while ensuring that vulnerable countries can continue to secure affordable oil.
“The oil price cap forms a critical part of the largest and most severe package of sanctions ever imposed on a major economy. We will continue to keep the pressure on Russia alongside our international partners.”
The G7 and Australia (G7+), who collectively constitute the Price Cap Coalition, agreed to cap the price of Russian seaborne oil and refined oil products in September 2022 as a way to undermine Putin’s ability to fund his illegal war in Ukraine through inflated global oil prices, while ensuring that third countries can continue to secure affordable oil. T
he crude oil price cap and high- and low-value refined oil price caps (collectively referred to as the G7+ oil price cap) were introduced on 5th December 2022 and 5th February 2023 respectively.
UK guidance has been periodically updated to assist market participants with implementation of, and compliance with, the cap, and OFSI will continue to engage collaboratively with industry partners to ensure as much clarity is provided as possible.
Recent routine fluctuations in oil prices have seen the average price of Urals rise above the G7+ cap level. For any above-cap trades, Russia will face significant headwinds in securing alternative service providers, with data from market intelligence provider Argus indicating that the cost to Russia of moving its product is considerable. This added burden on Russia will continue to contribute to depressed revenues.
The Price Cap Coalition continues to monitor the effectiveness of the price cap and is prepared to review and adjust the measure as appropriate to ensure that it continues to meet its twin goals.
The bell that floated up as water filled the historic gasholder in Granton Waterfront has been taken apart to make way for work to begin to restore the original 76 x 46 metre frame to look like new.
The City of Edinburgh Council plan to open up the area to create a new and exciting multifunctional public space as part of their wider £1.3bn regeneration project to create a new sustainable coastal town at Granton Waterfront.
McLaughlin & Harvey began work on the site in January of this year on behalf of the Council using £16.4m from the UK Government’s Levelling Up Fund. The Scottish Government has also provided an additional £1.2m to provide a high quality public park within the gasholder frame.
The space within the restored gasholder is to have multi-sensory play zones, a dedicated space for permanent and temporary public art, a relaxation area, outdoor trails and tracks for exercise as well as a large outdoor space for sports, markets, seasonal events, community use, festivals, performance arts, exhibitions and play.
Work will also be carried out to plant trees, shrubs and wildflowers improving biodiversity and local habitat in the area.
Council Leader Cammy Day said: “It was really dramatic to see the bell being ripped apart by the machinery. It marked a historic moment as this iconic structure will be transformed now to move on with the times to serve a completely different purpose for the local community to enjoy arts, sports and culture for future generations to come.
“Now the bell has gone the contractor can get on with the exciting work to transform the frame back to its original glory which will be seen for miles around.
“The scale and ambition of the gasholder nicely mirrors that of this £1.3bn regeneration project where we are using brownfield land to build a new sustainable 20-minute neighbourhood which is well linked to surrounding communities and is somewhere residents will be proud to live.
“We’ve already started building some of the thousands of environmentally friendly affordable homes planned and active travel routes, along with recently completing the restoration of the former Granton Station building to become a modern workplace and cultural hub, with public square.”
UK Government Minister for Levelling Up, Dehenna Davison, said: “The Granton gasholder has been part of Edinburgh’s skyline for over 120 years, and will soon be brought back to life as a real community asset.
“The bell’s removal will ensure the structure can be restored to its former glory, whilst the space will be brought into the 21st Century by becoming a destination for families, residents, and future generations to enjoy.
“We’re delighted to have supported this project through £16.4 million from the UK Government’s Levelling Up Fund which will ensure this iconic structure will serve as a beacon to people in the area for many years to come.”
Seamus Devlin, McLaughlin & Harvey Civil Engineering Director, said: “McLaughlin & Harvey is delighted to be main contractor for the restoration works at Granton gasholder.
“We bring with us a wealth of experience in the civil engineering sector, and look forward to completing the deconstruction of the bell this week and the removal of the walls in the upcoming weeks.”
Fascinating gasholder facts
Over 100K rivets holding the structure together
Total cost of original construction £18,968.
Was opened in 1901, making it 122 years old.
It’s since been painted 72 times.
26 columns in total with a height of 42m. each column is 9.3m apart.
Granton was one of 12 gas storage tanks for the greater Edinburgh area. These 12 tanks had a combined capacity of 175,000 cubic meters of storage. At the time they were in operation the demand was around 28,000 cubic meters an hour (at its peak).
The lowest tier was erected with the use of a steam locomotive crane.
The Granton Gas Holder is unique as the umbrella which supports the tank roof when the system is not pressurised, was made from timber as opposed to cast iron. These timbers were in remarkably great condition when demolition began.
Thirteen new community diagnostic centres are opening across England to deliver more than 742,000 additional scans, tests and checks a year
The Elective Recovery Taskforce – formed last year to identify ways to cut waiting times – publishes plan to maximise independent sector capacity to treat NHS patients more quickly
Measures include better use of data to help the NHS identify potential opportunities for the independent sector to support patient care, and expanding training opportunities for staff
Thirteen new community diagnostic centres (CDCs) – including eight independently run CDCs – are being launched across England as part of UK government plans to use the independent sector to cut NHS waiting lists, Health and Social Care Secretary Steve Barclay will announce today.
Five of these independent sector-led CDCs will operate in the South West of England, with permanent sites fully opening in 2024 in Redruth, Bristol, Torbay, Yeovil and Weston Super Mare. Additional diagnostic testing capacity is already being rolled out in the region via the use of mobile diagnostic facilities, to provide additional diagnostic services while these sites are constructed.
Three others will open in Southend, Northampton and South Birmingham – with the former commencing activity from November and the latter two from December. These independently run CDCs will help to make it easier for patients to receive checks closer to home and will remain free at the point of use for patients. This adds to the four CDCs run by the independent sector that are already operational in Brighton, North Solihull, Oxford, and Salford.
Five more NHS-run centres will also open across the country, delivering on our ambition to open up to 160 across the country by 2025, backed by £2.3 billion. These will be in Hornchurch, Skegness, Lincoln, Nottingham and Stoke-on-Trent.
Health and Social Care Secretary, Steve Barclay, said: “We must use every available resource to deliver life-saving checks to ease pressure on the NHS.
“By making use of the available capacity in the independent sector, and enabling patients to access this diagnostic capacity free at the point of need, we can offer patients a wider choice of venues to receive treatment and in doing so diagnose major illnesses quicker and start treatments sooner.
“The Elective Recovery Taskforce has identified additional diagnostic capacity that is available in the independent sector which we will now use more widely to enable patients to access the care they need quicker.”
As well as being more convenient for patients, CDCs drive efficiency across the NHS by shielding elective diagnostic services from wider hospital pressures.
The government has also set out a range of new measures to unlock spare capacity within the independent healthcare sector. This comes following actions from the Elective Recovery Taskforce which was established last December.
Chaired by Health Minister Will Quince and made up of academics and experts from the NHS and independent sector, the taskforce looked for ways to go further to bust the Covid backlogs and reduce waiting times for patients.
The measures include a commitment to using data on independent sector providers to identify where they have capacity to take on more NHS patients to help clear the backlog and increasing the use of the independent sector in training junior NHS staff.
These thirteen new CDCs will provide capacity for more than 742,000 extra tests a year once all are fully operational, bolstering access to care.
Independent sector led centres will function like NHS-run CDCs, but staff will be employed by the independent sector, which also owns the buildings. The South West network will be run by InHealth, a specialist provider of diagnostic tests which has worked with hospitals and commissioners across the health service for more than 30 years. By utilising independent sector staff, the NHS will be able to keep pace with rising demand in the region and deliver a high number of tests for patients.
There are currently 114 CDCs open across the country, which have delivered an additional 4.6 million tests, checks and scans since July 2021. Alongside this, significant progress has already been made to cut waiting lists, with 18-month and two-year waits virtually eliminated.
Health Minister and Elective Recovery Taskforce Chair, Will Quince, said: “We have already made significant progress in bringing down waiting lists, with 18 month waits virtually eliminated.
“I chaired the Elective Recovery Taskforce to turbocharge these efforts and help patients get the treatment they need.
“These actions will bolster capacity across the country and give patients more choice over where and when they are treated.”
The taskforce aims to form strong local relationships between NHS organisations and the independent sector. This will help to support improved training opportunities for junior doctors through first-hand experience of procedures. This follows the NHS Long-Term Workforce Plan which will deliver the biggest training expansion in NHS history and recruit and retain hundreds of thousands more staff over the next 15 years.
The department has also published its response to a consultation on a new procurement system known as the Provider Selection Regime, which will give commissioners of healthcare services more flexibility when selecting NHS and independent sector healthcare providers. This is intended to remove unnecessary levels of competitive tendering and barriers to integrating care, which will help to promote collaboration across the NHS and wider healthcare system.
NHS England will evaluate the independent sector’s impact on healthcare capacity and has already begun publishing regular monthly data on independent sector use, showing its contribution to tackling the backlog.
NHS England National Clinical Director for Elective Care, Stella Vig, said: “Hardworking staff across the NHS have made significant progress towards recovering elective care, and it is testament to their efforts that widespread innovative measures are already being rolled out to transform our services and bring down the longest waits for patients.
“Alongside this, we have increased our use of the independent sector by more than a third since April 2021 – carrying out 90,000 appointments and procedures every week, including more than 10,000 diagnostic tests – and independent providers will continue to play a key role as we work towards the next milestone in our recovery plan, as well as the additional one stop shops announced today as part of NHS England’s rollout of community diagnostic centres.
“As this report details, we have already made significant progress in this area, including operating mutual aid systems across both the NHS and independent sector, and by expanding My Planned Care to make it easier for patients to choose where they receive care.”
David Hare, Chief Executive of IHPN, who sat on the Taskforce, said: “The publication of this report is good news for patients. This is a real, significant step forward to unlocking more of the capital, capacity and capability of the independent sector.
“Today’s report builds on the Prime Minister’s recent welcome announcements about how the government is committed to providing patients with better choice over who provides their NHS care, as well as positive changes in how services are procured, which can help add overall capacity and speed up waiting times for NHS patients.
“The report’s commitment to open further independent sector-led Community Diagnostic Centres is also good news for patients, deploying some of the private capital that is available to build new facilities and to help ensure that more NHS patients can get the tests and scans that they need.”
Rachel Power, Chief Executive of the Patients Association, said: “We are advocates of patients having choice and welcome today’s announcement. In particular, the news that GPs will tell patients, at the point of referral, of options for treatment other than the local hospital or clinic.
“Patients in England already have a right to choose where they are treated but not all patients are aware of this right or exercise it. Our expectation is that once GPs offer patients a choice of where to receive treatment, more and more patients will choose to travel further to receive treatment if that means shorter waits.”
Justin Ash, CEO of Spire Healthcare, said: “The best way to cut waiting times for patients is for the independent sector to be fully integrated as part of the solution, and to offer patient choice.
“We welcome the Elective Recovery Taskforce’s recognition of this and are pleased that it has recommended some bold and far-reaching steps to encourage collaboration, promote patient choice and engage the independent sector to help deliver the NHS Long Term Workforce Plan.
“The Taskforce’s work will genuinely benefit patients, who’ll be able to choose where they can receive treatment most quickly, regardless of whether that’s at an NHS or an independent sector hospital.”
This builds on previous work to give patients greater choice. At the point of referral (for example, at a GP appointment), patients will be actively offered a list of providers which are clinically appropriate for their condition.
This will be a minimum of five providers where possible. And by October 2023, all patients waiting over 40 weeks who have not had a first outpatient appointment booked or where a decision to treat has been made but the patient does not have a date for their treatment will be able to initiate a request to transfer to another provider and receive treatment more quickly.
Last month, the Health and Social Care Secretary also convened ministers, clinical leaders and health experts for the NHS Recovery Summit to collaborate and drive forward ideas to help cut waiting lists and improve care for patients.
UK Government will continue to top-up the Scottish Government’s tax revenues, worth £1.4 billion last year, as a benefit of strength and scale of the UK.
Boost to borrowing powers and backing of Barnett formula will build a better future for Scotland and help to grow the economy.
Chief Secretary to the Treasury John Glen hails a fair and responsible deal in line with the Prime Minister’s economic priorities.
The UK and Scottish Governments have today reached an agreement on an updated Fiscal Framework.
Holyrood’s capital borrowing powers will rise in line with inflation, enabling the Scottish Government to invest further in schools, hospitals, roads and other key infrastructure that will help to create better paid jobs and opportunity in Scotland.
The new deal maintains the Barnett formula, through which the Scottish Government receives over £8 billion more funding each year than if it received the levels of UK Government spending per person elsewhere in the UK. It also updates funding arrangements in relation to court revenues and the Crown Estate.
Chief Secretary to the Treasury, John Glen, said:“This is a fair and responsible deal that has been arrived at following a serious and proactive offer from the UK Government.
“We have kept what works and listened to the Scottish Government’s calls for greater certainty and flexibility to deliver for Scotland.
“The Scottish Government can now use this for greater investment in public services to help the people of Scotland prosper. These are the clear benefits of a United Kingdom that is stronger as a union.”
The funding arrangements for tax will be continued, with the Scottish Government continuing to keep every penny of devolved Scottish taxes while also receiving an additional contribution from the rest of the UK.
Under the previous Fiscal Framework, the Scottish Government could borrow £450 million per year within a £3 billion cap, as well as receiving a Barnett-based share of UK Government borrowing. Going forward these amounts will instead rise in line with inflation, which supports additional investment across Scotland and lays the foundations for economic growth.
The UK Government has listened to calls from the Scottish Government for greater certainty and flexibility to help them manage their Budget and agreed a permanent doubling of the resource borrowing annual limit from £300 million to £600 million.
Limits on how much can be withdrawn from the Scotland Reserve to spend in future years will also be removed. This will boost spending through borrowing by £90 million in 2024/25. All future limits will increase in line with inflation.
Scottish Secretary Alister Jack said:“The renewed Fiscal Framework shows what can be achieved when there is a collaborative focus on delivering economic opportunity and why we are stronger and more prosperous as one United Kingdom.
“The deal – worth billions of pounds to Scotland over the coming years – builds upon work to support economic growth and provide more high skill jobs, investment and future opportunities for local people, such as the establishment of Investment Zones and Freeports in Scotland.
“The UK Government knows that high prices are still a huge worry for families. That’s why we’re sticking to our plan to halve inflation, reduce debt and grow the economy. As well as providing targeted cost of living support, we are directly investing more than £2.4 billion in hundreds of projects across Scotland as we help level up the country.”
As both governments continue to work together to tackle challenges like the cost of living, an updated Fiscal Framework equips the Scottish Government with the instruments for growth while protecting the wider public finances.
Scotland’s Deputy First Minister Shona Robison said: “This is a finely balanced agreement that gives us some extra flexibility to deal with unexpected shocks, against a background of continuing widespread concern about the sustainability of UK public finances and while it is a narrower review than we would have liked, I am grateful to the Chief Secretary to the Treasury for reaching this deal.
“As I set out in the Medium-Term Financial Strategy, we are committed to tackling poverty, building a fair, green and growing economy, and improving our public services to make them fit for the needs of future generations.
“We still face a profoundly challenging situation and will need to make tough choices in the context of a poorly performing UK economy and the constraints of devolution, to ensure finances remain sustainable.”
This morning the UK and Scottish governments have published the long-awaited update to the Fiscal Framework, following the review that has been going on for the last couple of years (writes MAIRI SPOWAGE of the Fraser of Allander Institute).
Since this was due to happen in 2021, we have been waiting for the outcome of this review. For more background, see our blog from late 2021.
For those new to it, the Fiscal Framework sets out the rules for how devolution of tax and social security powers following the Scotland Act 2016 is supposed to work in terms of finances. It sets out the mechanisms by which the Scottish block grant is adjusted to reflect the fact that large amounts of tax and social security powers are now the responsibility of the Scottish Parliament.
It also sets out fiscal flexibilities that the Scottish Government can choose to use in managing these new powers, as new tax and social security powers also come with risks that require to be managed.
In this blog, we set out the main headlines and our initial reaction to the updates.
The mechanism for adjusting the Block Grant will remain permanently as the Index Per Capita (IPC) method.
This is one of the most complex areas of the fiscal framework but definitely one of the most significant.
For tax, it sets out the mechanism for working out how much the UK Government has “given up” by devolving a tax to Scotland, given that it is a significant loss in revenue. As, following devolution, there are different policies pursued in rest of UK and Scotland, this is not straightforward. Essentially though, the mechanism agreed in 2016 was to grow the tax at the point of devolution at the rate, per person, that it grows in the rest of the UK. This is known as the Index Per Capita (IPC) method.
So, the idea is that if taxes per head grow quicker in Scotland, the Scottish Budget will be better off – conversely, if taxes per head grow more slowly, the Scottish Budget will be worse off.
In 2016, when the fiscal framework was first agreed, the IPC method was the SG’s preference, whereas the UKG preferred the “Comparable Method” (which would generally be worse than the IPC method for the Scottish Budget). SO they agreed to use IPC for the first 5 years and review it in this review published today.
They have now agreed that the IPC method will remain on a permanent basis.
Interestingly, this means that on a permanent basis, the mechanisms for adjusting the block grants for Wales and Scotland will be different, given Wales’s Fiscal Framework uses the Comparable Method, albeit with additional provisions to keep a funding floor in place.
Borrowing Powers for managing forecast error have been increased significantly
Resource borrowing powers to manage forecast error associated with tax and social security powers have been increased from £300m to £600m. This is required because when budgets are set, the tax, social security and block grant adjustment estimates are set on the basis of forecasts from both the Scottish Fiscal Commission and the Office for Budget Responsibility. When the outturn data is available, if there is a discrepancy (which is very likely) then the Scottish Budget has to reconcile these differences.
This will be good news for the Deputy First Minister looking ahead to delivering her first budget in December, given that it was confirmed recently that there will be a large negative reconciliation to reflect income tax receipts in 2021-22 of £390m. As these changes are coming into effect for the 2024-25 budget year, this means she will have more flexibility to borrow to cover this.
All limits, such as resource and capital borrowing powers, will be uprated in line with inflation
When the Fiscal Framework was first agreed, the limits on borrowing for both resource and capital, and the limits for what could be put into the Scotland reserve, were set in cash terms and have been fixed ever since.
This agreement today sets out that the ones that remain will be uprated by inflation (although the exact inflation measure and timing is still to be confirmed), and that the limits on the additions and drawdowns on the Scotland Reserve will also be abolished.
The VAT Assignment can gets kicked down the road again
One thing that is a little disappointing is that there was no final decision on VAT Assignment. See our blog from 2019 to get the background in this.
VAT Assignment was included as part of the Smith Commission powers. The idea was that half of VAT raised in Scotland would be assigned to the Scottish Budget, which would mean, if the Scottish Economy was performing better than the UK as a whole, the budget would be better off, and conversely, if VAT was growing less quickly in Scotland, the budget would be worse off.
However, after almost 10 years, it has become clear that there is no way to estimate VAT in Scotland that is precise enough for this to have budgetary implications. It is a large amount of money (more than £5 billion) so even small fluctuations in how it is estimated can mean changes of hundreds of millions of pounds.
Today, the Governments have agreed to just keep discussing it. We think it is time that everyone admitted it is just not a sensible idea.
We’ll keep digging through the detail of everything published today and will provide more commentary through our weekly update on Friday.
Tax paid on pints and other drinks on tap in over 38,000 UK pubs is now up to 11p cheaper than their supermarket equivalents
The new Brexit Pubs Guarantee will keep it this way for good
Alcohol duty now simplified so drinks are taxed by strength, lowering duty on supermarket shelves for many UK favourites including bottles of pale ale, pre-mixed gin and tonic, and prosecco
Over 38,000 UK pubs and bars have seen a tax cut on the pints they pull from today as the government’s alcohol duty changes take effect.
The duty paid on drinks on tap in pubs will be up to 11p lower than at the supermarket. The changes are designed to help pubs compete on a level playing field with supermarkets, so they can continue to thrive at the heart of communities across the UK. The Brexit Pubs Guarantee announced in the Chancellor’s Spring Budget secures the pledge that pubs will always pay less alcohol duty than supermarkets going forwards.
It comes as other landmark changes to the alcohol duty system also come into effect today, which see drinks taxed by strength for the first time and a new relief – named Small Producer Relief – to help small businesses and start-ups create new drinks, innovate and grow.
Today’s changes have automatically lowered the duty in shops and supermarkets on many of the UK’s favourites including certain bottles of pale ale, pre-mixed gin and tonic, hard seltzer, Irish cream, coffee liquor and English sparkling wine, amongst others.
Prime Minister Rishi Sunak said: “I want to support the drinks and hospitality industries that are helping to grow the economy, and the consumers who enjoy the end result.
“Not only will today’s changes mean that that the price of your pint in the pub is protected, but it will also benefit thousands of businesses across the country.
“We have taken advantage of Brexit to simplify the duty system, to reduce the price of a pint, and to back British pubs.”
Jeremy Hunt, Chancellor of the Exchequer, said: “British pubs are the beating heart of our communities and as they face rising costs, we’re doing all we can to help them out. Through our Brexit Pubs Guarantee, we’re protecting the price of a pint.
“The changes we’re making to the way we tax alcohol catapults us into the 21st century, reflecting the popularity of low alcohol drinks and boosting growth in the sector by supporting small producers financially.”
The three alcohol duty changes that have taken effect today are only possible thanks to the UK’s departure from the EU and the guarantees set out in the Windsor Framework.
The previous duty system was complex and unfair but now that the UK is free to set excise policy to suit its needs, the government has brought about common-sense reforms in order to support wider UK tax and public health objectives.
Brexit Pubs Guarantee
Over 38,000 UK pubs will benefit from lower alcohol tax on the drinks they pour from tap from today. This is because the government has expanded Draught Relief, which effectively freezes or cuts the alcohol duty on the vast majority of these drinks. This is to protect pubs, who are often undercut by supermarket competitors.
It means that the duty they pay on each drink poured from draught, such as pints of beer and cider, will be up to 11p cheaper than in supermarkets. The government has pledged that the duty pubs and bars pay on these drinks will always be less than retailers, known as the Brexit Pubs Guarantee.
This tax reduction is part of a wider shake up of the alcohol duty system which also comes into effect from today – the biggest in 140 years.
A simpler, more modern alcohol duty system
The alcohol duty reforms were announced at the Autumn Budget in 2021. The reforms pledged to modernise and simplify a duty system that had not been changed in 140 years, only possible as the UK has left the EU.
The key changes are:
All products taxed in line with alcohol by volume (ABV) strength, rather than different duty structures for different drinks
Fewer main duty rates, from 15 to 6, to make it easier for businesses to grow and operate
There will be lower taxes on lower alcohol products – those below 3.5% alcohol by volume (ABV) in strength – a huge growth area in the drinks industry
All drinks above 8.5% ABV will pay the same rate regardless of product type This will mean that many UK favourites will see duty reductions. Irish cream will drop by 3p, cans of 5% ABV ready-to-drink spirit mixers by 6p, Prosecco by 61p and 500ml 3.4% pale ale by 20p a bottle.
New tax relief to encourage small producers to make new drinks
The UK alcoholic drinks market reached just under £50 billion in 2022, up 6% year on year and is expected to continue to grow – sales are forecast to reach £60.9 billion in 2026. The UK government is laser-focused on continuing this burgeoning success.
The government is introducing Small Producer Relief effective from today, which replaces and extends the previous Small Brewers Relief scheme.
This allows small businesses who produce alcoholic products with an ABV of less than 8.5% to be eligible for reduced rates of alcohol duty on qualifying products.
The new tax relief scheme promotes innovation in the drinks sector, giving small producers the financial freedom to experiment with new types of drink and grow their business. It also supports the modern drinking trend of lower alcohol beverages.
Hundreds of new oil and gas licenses will be granted in the UK, PM confirms
Prime Minister commits to future oil and gas licensing rounds, as new analysis shows domestic gas production has around one-quarter the carbon footprint of imported liquified natural gas
North East Scotland and the Humber chosen as locations for two new carbon capture usage and storage clusters – building a thriving clean industry in the North Sea which could support up to 50,000 jobs
Investment in the North Sea will continue to unlock new projects, protect jobs, reduce emissions and boost UK energy independence
Hundreds of new oil and gas licences will be granted in the UK, the Prime Minister has confirmed today (Monday 31 July), as the UK Government continues to back the North Sea oil and gas industry as part of drive to make Britain more energy independent.
The Government and the North Sea Transition Authority (NSTA) are today announcing a joint commitment to undertake future licensing rounds, which will continue to be subject to a climate compatibility test.
By adopting a more flexible application process, licences could also be offered near to currently licensed areas – unlocking vital reserves which can be brought online faster due to existing infrastructure and previous relevant assessments.
With the independent Climate Change Committee predicting around a quarter of the UK’s energy demand will still be met by oil and gas when the UK reaches net zero in 2050, the Government is taking steps to slow the rapid decline in domestic production of oil and gas, which will secure our domestic energy supply and reduce reliance on hostile states.
This will increase the UK’s energy security and reduce dependence on higher-emission imports, whilst protecting more than 200,000 jobs in a vital industry as we grow the UK economy.
As part of a visit to a critical energy infrastructure site in Aberdeenshire today, the Prime Minister will highlight the central role the region will play in strengthening the UK’s energy independence and meet the next generation of skilled apprentices key to driving this work forward.
The NSTA – responsible for regulating the oil, gas and carbon storage industries – is currently running the 33rd offshore oil and gas licensing round. They expect the first of the new licences to be awarded in the autumn, with the round expected to award over 100 licences in total.
Future licences will be critical to providing energy security options, unlocking carbon capture usage and storage and hydrogen opportunities – building truly integrated offshore energy hubs that make the best use of the established infrastructure.
This comes as new analysis released by the NSTA today shows that the carbon footprint of domestic gas production is around one-quarter of the carbon footprint of imported liquified natural gas.
As the UK is a rapidly declining producer of oil and gas, new oil and gas licences reduce the fall in UK supply in order to ensure vital energy security, rather than increase it above current levels – so that the UK remains on track to meet net zero by 2050.
UK Prime Minister Rishi Sunak said: “We have all witnessed how Putin has manipulated and weaponised energy – disrupting supply and stalling growth in countries around the world.
“Now more than ever, it’s vital that we bolster our energy security and capitalise on that independence to deliver more affordable, clean energy to British homes and businesses.
“Even when we’ve reached net zero in 2050, a quarter of our energy needs will come from oil and gas. But there are those who would rather that it come from hostile states than from the supplies we have here at home.
“We’re choosing to power up Britain from Britain and invest in crucial industries such as carbon capture and storage, rather than depend on more carbon intensive gas imports from overseas – which will support thousands of skilled jobs, unlock further opportunities for green technologies and grow the economy.”
The UK’s oil and gas industry are also vital to driving forward and investing in clean technologies that we need to realise our net zero target, like carbon capture usage and storage, by drawing from the sector’s existing supply chains, expertise and key skills whilst protecting jobs.
Today, the Government has confirmed that projects Acorn in North East Scotland and Viking in the Humber have been chosen as the third and fourth carbon capture usage and storage clusters in the UK.
The Government has already committed to deploy CCUS in two industrial clusters by the mid-2020s – the HyNet cluster in North West England and North Wales, and the East Coast Cluster in the Teesside and Humber – and another further two clusters by 2030 – now confirmed as Acorn and Viking.
Together, these four clusters will build a new thriving carbon capture usage and storage industry, which could support up to 50,000 jobs in the UK by 2030.
The UK has one of the largest potential carbon dioxide storage capacities in Europe, making the North Sea one of the most attractive business environments for CCUS technology. The Government has committed to provide up to £20 billion in funding for early deployment of CCUS, unlocking private investment and job creation.
Energy Security Secretary Grant Shapps said: “In the wake of Putin’s barbaric invasion of Ukraine, our energy security is more important than ever. The North Sea is at the heart of our plan to power up Britain from Britain so that tyrants like Putin can never again use energy as a weapon to blackmail us.
“Today’s commitment to power ahead with new oil and gas licences will drive forward our energy independence and our economy for generations. Protecting critical jobs in every region of the UK, safeguarding energy bills for British families and providing a homegrown fuel for our economy that, for domestic gas production, has around one-quarter the carbon footprint of imported liquified natural gas.
“Our next steps to develop carbon capture and storage, in Scotland and the Humber, will also help to build a thriving new industry for our North Sea that could support as many as 50,000 jobs, as we deliver on our priority of growing the economy.”
The Prime Minister has also tasked the relevant Government departments and regulators to work collaboratively and report back by the end of the year on how we can make the best use of our offshore resources in a truly integrated way as we unlock CCUS and hydrogen opportunities in the North Sea.
A call for evidence has also been launched by Government today, seeking views on the evolving context for taxes for the oil and gas sector to design a long-term fiscal regime which delivers predictability and certainty, supports investment, protects jobs and the country’s energy security.
CAMPAIGNERS FURY OVER NEW LICENSES
‘Rishi Sunak is gleefully encouraging the arsonists to go and put more fuel on the fire‘
Climate campaigners are furious that the Prime Minister is ‘doing the bidding’ of the oil industry after he re-affirmed that the UK Government will issue over 100 new licences for oil and gas exploration this Autumn.
Rishi Sunak also said that the Acorn project was chosen as the third of four carbon capture and storage clusters in the UK. Climate campaigners regard carbon capture and storage (CCS) as an attempt to ‘greenwash’ the oil industry and pointed to the long history of failure of the technology.
Campaigners say that instead of giving more public money to oil firms it should be invested in climate solution that work today and can improve people’s lives such as public transport and home insulation.
Friends of the Earth Scotland head of campaign Mary Church said: “Burning oil and gas is driving extreme weather and killing people on every continent yet Rishi Sunak is gleefully encouraging the arsonists to go and put more fuel on the fire.”
“By ignoring the huge harm caused by fossil fuel company greed and doing bidding of the industry, the UK Government is blatantly in denial about climate breakdown.”
“By committing to future licensing rounds on the same day, it’s clear to see that carbon capture is little more than a greenwashing tactic by big oil to try and keep their climate-wrecking industry in business.”
“CCS has a long history of over-promising and under-delivering yet both the Scottish and UK Governments have fallen for the snake oil salesmen rather than face reality that the only solution to the climate crisis is a fast and fair phase out of oil and gas.
“Funding for the Acorn project is yet another massive public subsidy to oil companies like Shell who have been making billions in profits, while ordinary people are struggling to pay the bills.
“Instead of handing more money to polluters, it is time to redirect that investment to climate solutions that we know can deliver emissions cuts and improve peoples’ lives today – such as improving public transport and insulating people’s homes to help with energy bills.”
Commenting on the UK Government’s citation of analysis showing domestic gas production has a lower carbon footprint than imported gas, Ms Church continued: “It’s pure spin to try to sell more climate wrecking extraction as lower carbon when every nation needs to phase fossil fuels out with rich nations like the UK going first and fastest.
“What’s more, the Prime Minister is comparing apples and pears as most of what’s left in the North Sea is heavy oil, that we don’t even use domestically, not gas, so it has to be exported anyway.”
Unsurprisingly, ‘stakeholder’ comments have been overwhelmingly positive:
David Whitehouse, CEO Offshore Energies UK said: “Domestic production is the best pathway to net zero and the UK Government’s commitment to licences is a welcome boost for energy security and jobs.
“Oil and gas fields decline naturally over time. The UK needs the churn of new licences to manage production decline inline with the maturing basin. There are currently 283 active oil and gas fields in the North Sea, by 2030 around 180 of those will have ceased production due to natural decline. If we do not replace maturing oil and gas fields with new ones, the rate of production will decline much faster than we can replace them with low carbon alternatives.
“Developing our new carbon capture industry and its high-value jobs needs significant investment from our energy producing companies. This means that the bedrock to success and delivering growth in the economy can only be collaboration between private and public capital.
“The UK’s skilled offshore workforce, its engineering expertise and its geology have given our nation a unique opportunity to lead the way in building a net zero world.”
Tom Glover, RWE UK, Country Chair said: “RWE is delighted that Viking CCS has been awarded Track 2 status for the Government’s Cluster Sequencing Process.
“RWE is a long-term cluster partner of Viking CCS and is developing two projects that could use this facility, providing firm, secure and flexible low carbon power generation to support our transition to a net zero economy.”
Will Gardiner, Drax Group CEO, said: “We welcome the Government’s decision to designate Viking as a Track 2 carbon capture utilisation and storage cluster (CCUS). Progressing a CO2 transport and storage network in the Humber represents a significant step toward helping the region meet its Net Zero ambitions and ensuring that it remains a source of high-skilled jobs and energy security for decades to come.
“The announcement shows the importance of CCUS to the Humber and, along with the East Coast Cluster, creates an additional pathway to support our plans for bioenergy with carbon capture and storage (BECCS) at Drax Power Station.
“We are currently engaged in formal discussions with the UK Government on this project and hope to invest billions in its development and deploy this critical, carbon removals technology by 2030.”
Dr Nick Cooper, CEO of Acorn lead developer Storegga, said: “We are thrilled that the Acorn Project has advanced directly into Track-2. Acorn has been progressed by the development partners as the Track-1 reserve since late 2021 and is ready to move promptly to support the decarbonisation of Scotland and the wider UK.
“Today’s news is a defining milestone for us, and the Scottish Cluster. Acorn will be a major contributor towards meeting the UK and Scotland’s carbon reduction targets, able to serve emitters connected by pipeline and ship.
“As Lead Developer, Storegga thanks Acorn partners and Scottish Cluster participants for their support and we look forward to working with Government to deliver the multiple benefits of creating and future-proofing jobs, bringing inward economic investment, developing green-tech industries and, crucially helping decarbonise Scotland and the UK.”
Harbour Energy’s Executive Vice President of Net Zero and CCS Steve Cox said: The successful award of Track 2 status to Harbour’s Viking CCS project in the Humber as well as Acorn in northeast Scotland is another demonstration of how we are well positioned to use our existing skills and infrastructure to help develop the burgeoning CCS industry in the UK.
“More widely, the announcement today shows the key role the North Sea oil and gas sector will play in helping to deliver the UK’s carbon capture goals.”
Ruth Herbert, Chief Executive at the CCSA, said: “We are pleased to see the UK Government pushing ahead with its CCUS deployment programme and selecting the next two CCUS clusters, as time is running out to meet 2030 targets.
“This CO2 infrastructure is critical to safeguarding the UK’s supply chain security, enabling local industries to continue to thrive whilst reducing their emissions as we transition to a net zero economy.
“It is therefore vital that the Government urgently sets out clarity on the process and timeline for selecting carbon capture sites within these ‘Track-2’ clusters and within the previously announced Track-1 cluster expansion.
Billions of pounds of investment is waiting to be deployed to decarbonise these industrial regions, but firm plans are required to secure it.
“There are a number of other clusters under development across the country, which is why last year we asked government for visibility of the longer-term CCUS deployment plan.
“Collectively, CCUS clusters could protect 77,000 current jobs and create a further 70,000 jobs across the UK. Government’s forthcoming vision for the UK CCUS sector needs to be published as soon as possible, to avoid investment flight in those regions that have not been selected today.”
Simon Roddy, Senior Vice President of Shell UK‘s Upstream business, said: “This is an important step forward for one of the UK’s leading CCS clusters. The Acorn Project is a central part of plans to decarbonise North Sea operations, and to store emissions from other parts of Scottish industry.
“As Technical Developer, we bring Shell’s global experience of CCS and the delivery of major projects. T
“o stimulate investment in this and other CCS clusters, continued co-operation with governments will be key to finding the most innovative approaches and business models to allow CCS to reach the scale needed to help the UK achieve net zero.”
Alistair Phillips-Davies, Chief Executive of SSE, said: “Carbon capture will play a critical role not only in decarbonising the UK’s power system but also in unlocking economic growth and boosting our energy security, and today’s announcement marks a major step forward in its deployment.
“We know how important it is that the north-east of Scotland and Humber are decarbonised and the decision to support the Scottish Cluster and Viking Cluster shows that there is commitment to doing so.
“Time remains of the essence. Now, we must move quickly to deploy the transport and storage infrastructure which will underpin the rollout of CCS across the chosen clusters. Doing so will allow crucial low-carbon projects – such as our carbon capture project at Peterhead – to be brought forward, supporting the energy transition while providing good, green jobs and enhancing regional economies.
“The UK has a real opportunity to lead the world on carbon capture if we can accelerate progress and today’s announcement provides welcome impetus.”
Prime Minister visits North East Scotland, highlighting the central role it will play in defending the UK against disrupted global energy supplies.
There he will also meet with key figures in the energy sector and will visit critical infrastructure projects which will help grow the economy, reach Net Zero, and deliver the next generation of highly skilled jobs for young people in the region.
The Prime Minister will today confirm that Scotland will continue to be at the forefront of UK Government plans to strengthen the UK’s long-term energy security.
During a visit to the North East of Scotland, the Prime Minister will highlight the crucial role that the region will play in enhancing and delivering on the UK Government’s commitment to reaching Net Zero in 2050 and enhancing long term energy security for generations to come.
The UK is leading international efforts by setting ambitious net zero commitments, ramping up the transition to clean energy, reducing total greenhouse gas emissions by 32% since 2010, whilst bringing down energy bills and supporting households.
It is expected that the UK Government and energy authorities will go further than before in announcing continued decisive action to:
Boost the capability of the North Sea industry to transition towards Net Zero;
Strengthen the foundations of the UK’s future energy mix;
And create the next generation of highly skilled green jobs.
The Prime Minister will also meet with key energy industry figures and companies at the forefront of delivering the UK’s energy needs, as well as the next generation of highly skilled people who are working on the projects of tomorrow.
The UK Government says the package ‘will also underpin that Scotland remains a cornerstone of government plans for an energy-independent UK, as well demonstrating what can be achieved due to the strength and scale of UK collective action, in defending the public against global energy supplies which have been disrupted and weaponised by Putin’.
Environmental campaigners have condemned the plans, however. Friends of the Earth Scotland regards carbon capture and storage (CCS) as an attempt to ‘greenwash’ the oil industry and pointed to the long history of failure of the technology.
They say that instead of giving more public money to oil firms it should be invested in climate solutions that work today and can improve people’s lives such as public transport and home insulation.
Shell is a key partner in the Acorn project. Last week the fossil fuel giant announced profits of £3.9billion for just the last 3 months, on top of the £32.2 billion profit in 2022. Despite this vast wealth, the Acorn project appears to be totally reliant on further public subsidy to progress.
Friends of the Earth Scotland head of campaign Mary Church said: “Carbon capture is a greenwashing tactic by profit obsessed fossil fuel companies to try and keep their climate-wrecking industry in business.
“CCS has a long history of over-promising and under-delivering yet politicians have fallen for the spin rather than face reality that the only solution to the climate crisis is a fast and fair phase out of oil and gas.
“Funding for the Acorn project would be yet another massive public subsidy to oil companies who have been making billions in profits, while ordinary people are struggling to pay the bills.
“Instead of handing more money to polluters, it is time to redirect that investment to climate solutions that we know can deliver emissions cuts and improve peoples’ lives today – such as improving public transport and insulating people’s homes to help with energy bills.”
