Budget Statements are increasingly used to bring together policy announcements that involve public or stakeholder consultation.

To assist Institute members ensure that they are aware of consultations that may affect them, this Resource Pack highlights references from the Budget Statement, released on March 16th.

Explanatory Note

This Reference Pack is provided essentially as a safety-net for Member organisations and others who may need to be aware of Government Consultations.

The Pack publishes selected extracts from the 2005 Budget Statement and highlights references to forthcoming, current and recent consultations.

It is in five sections:-

Section 1 –  New Consultations Announced

Section 2 –  References to Current Consultations

Section 3 –  References to Consultation Output

Section 4 –  Announcements of Consultation Outcomes

Section 5 –  Other Items of Possible Interest

Martin Woodrow Knowledge Management Officer The Consultation Institute

Section 1 NEW CONSULTATIONS ANNOUNCED

1. Inland Revenue and HM Customs and Excise have today (16/3/05) published Working towards a new relationship: a consultation on priorities for reducing the administrative burden of the tax system on small business. This sets out how, consistent with the recommendations of the Hampton Review, the Government will realise the benefits to small business of the integration of the Inland Revenue and HM Customs and Excise. The paper also seeks views from smaller businesses and their advisers on what the priorities for the new department should be in order to improve their relationship. See http://www.hmcgov.uk/channelsPortalWebApp/downloadFile?contentID=HM CE_PROD1_023946

2. Formal consultation on draft legislation to consider tax relief issues across the entire film sector.

3. Consultation document on the Local Enterprise Growth Initiative to remove barriers to enterprise in the most deprived areas of England. The details of the LEGI are being consulted on from now until summer 2005, with key questions outlined in Enterprise and economic opportunity in deprived areas: A consultation on proposals for a Local Enterprise Growth Initiative, published alongside the Budget.

4. Consultation on Research & Development tax credits. The Government will consult with business on this issue and will publish a discussion paper in summer 2005

5. The Government is working to ensure that national funding streams for science and innovation better reflect regional prioritie It is currently developing an allocations procedure for the third round of the Higher Education Innovation Fund, supporting universities’ collaboration with business, and will consult with stakeholders on how funding for knowledge transfer can best be aligned with regional priorities.

6. Consultation in the summer on some aspects of the Barker Review package, including introducing a long term national goal for affordability in the housing market and on increasing the planning system’s responsiveness to housing market signals by reforming Planning Policy Guidance on Housing (PPG3)

7. The Government is now inviting views on what further payments (following payment at age 7) should be made into Child Trust Fund accounts at secondary school age. Details of the consultation can be found on the HM Treasury website (www.hm-treasury.gov.uk).

8. Details of changes to the taxation of authorised investment funds (AIFs) and further consultation on potential changes are announced alongside the Budge (Reform of taxation of Collective Investment Schemes. Inland Revenue March 2005)

9. ‘Third sector’ lenders, such as credit unions and community development finance institutions (CDFIs), have a key role to play in providing affordable credit to those on low income The Government is publishing a consultation document on the costs and benefits of raising the cap on interest that credit unions can charge on loans to members, to establish what impact, if any, this would have on the ability of credit unions to offer loans to low-income consumers. The credit union interest rate cap: a consultation document, HM Treasury. (http://www.hm- treasury.gov.uk/media/A61/E2/budd05_credit_union.pdf)

10. The Government will shortly begin consulting on the powers that will be available to the new tax department and the appeal rights and other safeguards for taxpayer This will be a key element in creating a modern organisation with modern tools. The aim will be to provide a framework of law and practices that supports the Government’s objectives of a tax system that is fair and better adapted to the needs of customers. The consultation will consider the scope for aligning and rationalising the different powers that currently apply to different taxes to make it easier for taxpayers to comply; and how best to obtain the information needed for better risk assessment and better targeted compliance activities. A key aspect of this process will be a consultative committee to ensure its outcomes fully reflect the priorities of a wide range of stakeholders.

11. The Government is continuing to review the residence and domicile rules as they affect the taxation of individuals and will proceed on the basis of evidence and in keeping with its principle It would welcome further contributions to the debate, which will then be taken forward by the publication of a consultation paper setting out possible approaches to reform.

12. A consultation paper will shortly be published with a view to establishing a single justice and community safety inspectorate from 2007, bringing together Her Majesty’s Inspectorate of Constabulary, Her Majesty’s Crown Prosecution Services Inspectorate, Her Majesty’s Inspectorate of Court Administration, Her Majesty’s Inspectorate of Prisons and Her Majesty’s Inspectorate of Probation.

13. The Government will consult with employers on the future of the Adult Learning Inspectorate, with the expectation that by 2008 it will also be part of this single inspectorate for education, children’s services, and skill

14. The Deputy Prime Minister will shortly publish a further discussion document on the performance framework for local government as part of the development of his local:vision strategy. It will include plans to establish a single inspectorate of local services, merging the Audit Commission’s and the Benefit Fraud Inspectorate’s inspection functions in relation to English local authorities. It will consider the issues involved in implementing the new inspectorate, including how it will ensure a co-ordinated approach to inspection is taken across local government services.

15. In January 2005, the Deputy Prime Minister set out five-year plans for delivering sustainable communities and meeting housing needs, including proposals for extending low cost homeownership opportunities for 80,000 household The Deputy Prime Minister will be publishing a consultation paper with further details on all of the Government’s low cost home-ownership options later this month.

16. The Government’s and the Devolved Administrations’ policies on improving air quality are set out in the Air Quality Strategy for England, Scotland, Wales and Northern Ireland and its first addendum. To tackle the pollution hotspots and achieve further public health benefits and air quality improvements, the Government is assessing the need for additional cost-effective measures in the current review of the Air Quality Strategy. Public consultation will take place during the summer and the Review will be published towards the end of 2005.

17. The Government recently commenced a Review of the Renewables Obligation to ensure that the Obligation continues to stimulate the use of renewable electricity, while maximising value for money for consumer The Department of Trade and Industry (DTI) will publish a preliminary consultation on the Review in March 2005.

18. In relation to modernising the business tax system: the Government is establishing a new integrated tax department, and taking immediate steps to deliver benefits for busine Further proposals for the reform of corporation tax have been published for consultation.

SECTION 2 – REFERENCES TO CURRENT CONSULTATIONS

1. In order to support child development and parents’ choices during the crucial first year of a child’s life, the ten year strategy sets out the aim for a year of paid maternity leave by 2010. Further details on work-life balance proposals announced in the ten year childcare strategy were published in Work and Families: Choice and Flexibility in February 2005. These measures include: the extension of maternity pay to 39 weeks; the introduction of a new right for a mother to transfer a proportion of her pay and leave to the father; the extension of flexible working to carers of sick and disabled relatives and parents of older children; and the case for transferring responsibility for the administration of Statutory Maternity Pay, Statutory Paternity Pay, Maternity Allowance and Statutory Adoption Pay to the Inland Revenue. The consultation period ends on 25 May 2005.

2. To improve accessibility to the financial support system for vulnerable young people who are unable to live in the family home, the Government has been consulting with the voluntary sector on ways of simplifying and improving the processing of benefits claims for 16-17 year olds under the estrangement criteria. This consultation will feed into revised guidance and training for Jobcentre Plus advisers to be rolled out nationally in April 2006.

3. The Review of the CCP, launched in September 2004, is evaluating and consulting on the efficacy and cost-effectiveness of existing policy measures, and appraising options for future action, to ensure the UK continues to make progress in reducing carbon dioxide emissions. The Government’s aim is to introduce a revised CCP in the first half of 2005.

4. Government is undertaking a feasibility study and consultative process on a possible Renewable Transport Fuels Obligation (RTFO). A cross- Government group has been set up and is currently holding a series of stakeholder workshops to discuss specific aspects of how an RTFO could work in practice.

5. The Government has consulted stakeholders on the potential for a new enhanced capital allowance for waste and associated resource efficiency technologies. It is clear that there is support for a scheme and the Government will therefore continue to consult, focusing on supporting the introduction of new technologies, such as mechanical and biological treatment, and report on its findings at the 2005 Pre-Budget Report.

6. As announced in the 2004 Pre-Budget Report, the Government is consulting on a universal payment at age seven of £250, with children from low-income families receiving ᪯500 more. This will link in with financial education in primary schools, by providing a relevant and practical example of saving.

7. In December 2004, Defra announced the allocation of 45 million to local authorities in 2005-06 from the reform of the Waste Minimisation and Challenge Fund. To help ensure the planning system assists delivery of the required disposal facilities, Defra and the Office of the Deputy Prime Minister issued a joint consultation on revised policy guidance in December 2004 to facilitate strategic and spatial planning for waste management.

8. The Government is developing, in consultation with the building industry, a voluntary Code for Sustainable Buildings, which will set new standards for resource efficiency in the built environment, focusing initially on new housing. Demonstrations of the Code will be in place by the end of 2005, followed by national rollout in 2006.

9. The Government is developing measures to promote catchment-sensitive farming (Defra-HMT consultation), June 2004.

Section 3 – REFERENCES TO CONSULTATION OUTPUT

1. The responses to a consultation on removing the tax uncertainty surrounding the formation of spin-off companies from universities and public sector research establishments (PSREs), were published.

2. In the 2004 Pre-Budget Report, the Government announced that it would consider options for modernising the capital allowance rules for business cars, including those that would fit with its wider environmental objectives, by potentially basing car allowances on carbon dioxide emission The Government will now assess the responses to that consultation before deciding on the next stage of the process.

3. At the Pre-Budget Report 2004, the Government instructed the DMO formally to consult the market about possible issuance of ultra-long (circa 50-year maturity) conventional and index-linked gilts, perhaps in the alternative format of fixed-term annuitie A full summary of the responses to the consultation is available on the DMO’s website at http://www.dmo.gov.uk/

Section 4 – ANNOUNCEMENTS OF CONSULTATION OUTCOMES

1. As a result of impact assessment consultations with business steps have been taken to reduce the regulatory burden of EU legislation in relation to:
   the registration, evaluation, and authorization of chemicals (REACH) directive

1. the standard for digital interactive television services

2. In the light of consultation with representatives of employers and other interested parties, the Government will phase out the payment of Working Tax Credit via employer (PVE) between November 2005 and April 2006. 1.2 million small businesses stand to benefit from this reform and the new tax department and employers will be issuing targeted publicity to make employees aware of the changes that will result from the phasing out.

3. As a result of consultation launched in the 2004 Pre-Budget Report, the Government will legislate in the Finance Bill for the introduction of the business premises renovation allowance.

4. As a result of consultation on the funding of fixed-rate mortgages the Government has considered whether the funding limit for building societies should be changed. In light of the greater flexibility provided by the legislation, and following consultation, no further action will be taken at this time, but the position will be kept under review.

5. Following a consultation to consider the introduction of Real Estate Investment Trusts (REITs) the Government is today publishing UK Real Estate Investment Trusts: a discussion paper, along with a summary of responses to the Budget 2004 consultation.

6. As a result of consultation in relation to legislation that outlaws age discrimination in employment and vocational training, the Government has concluded that the legislation should provide for a national default retirement age of 65.

7. The National Employment Panel, working with the Ethnic Minority Business Forum, has been examining how to increase the employment, self- employment and business growth of ethnic minorities and faith groups in the UK. The Panel has consulted with a wide range of stakeholders – employers, community and faith groups, and academics – to identify reasons for continued disadvantage and to explore ways of building on current service

8. The ten-year childcare strategy invited responses from parents and other stakeholder Over 75 written responses have been received, with contributions from a range of groups including parents, local authorities, representative bodies and businesses. A summary of responses has been published. (see www.hm-treasury.gov.uk/childcare)

9. Supporting young people to achieve, published alongside Budget 2004, launched a consultation on the Government’s long-term vision of a single, coherent system of financial support, focused on encouraging and supporting all young people to participate in education or training. The consultation clearly demonstrated that there is a strong consensus in favour of the Government’s proposal The Government published a full response to the consultation alongside the Budget. The Government’s response to the Supporting young people to achieve consultation is available at www.hm- treasury.gov.uk/financialsupport

10. In response to the consultation announced in the 2004 Pre-Budget Report, the Government will extend further the existing higher ISA limits, not only to 2009 but now to April 2010. Responses to the consultation on ISA limits, and a wider debate among industry bodies, providers and consumer groups contain interesting ideas on how to continue and build on the success of ISAs.

11. Following the Sandler Review of the retail savings industry, the Government will introduce a new ‘Stakeholder’ suite of simple, low cost, risk-controlled savings and investment products in April 2005. Following consultation, the launch of the Stakeholder Suite will be supported by a £4 million programme to inform consumer

12. Many low-income households rely on the ‘alternative credit market’, where typical products have Annual Percentage Rates of over 100 per cent. Through the Consumer Credit Bill, the Government aims to increase transparency and fairness in the market and improve consumers’ access to redress mechanisms. To reduce the costs and risks of lending to vulnerable groups, and following consultation, the Government will work towards a scheme where, under certain circumstances, lenders could apply for repayment through deduction from benefits, where normal repayment arrangements have broken down.

13. In the 2004 Pre-Budget Report, the Government announced changes to the special exemption in relation to Gift Aid and admission charge Charities have been consulted on how the broader scope of the exemption will be applied and on draft legislation, which reflects their comments. Legislation will be introduced in the next Finance Bill and changes will take effect from April 2006.

14. The Russell Commission, led by Ian Russell, Chief Executive of Scottish Power, was established by the Chancellor and the Home Secretary in May 2004. The report of the Russell Commission sets out recommendations for a national framework to deliver a step change in the diversity, quality and quantity of young people’s volunteering. The Commission calls for a shared purpose in making the framework happen – the voluntary and community sector, business, government and young people themselves all have an essential part to play. Almost 6,000 responses were received to the Commission’s consultation and key results were announced as part of the Chancellor and the Home Secretary’s Volunteering Conference in January 2005. The full report is available at: www.russellcommission.org.

15. The Government has consulted widely on the modernisation proposals in Modernising the tax system for trusts and continues to work with the industry to secure consensus on the best way to simplify trusts taxation further to help people manage their affairs, whilst ensuring that trusts are not used to achieve an unfair tax advantage.

16. The Government is committed to achieving stability and sustainability in the funding of local authorities, so that they can play a full part in delivering high quality public service The Government is committed to introducing three-year settlements from 2006-07, following the recent consultation.

17. In the 2004 Pre-Budget Report, the Government launched a consultation on proposals to establish regional funding allocations for regional transport, housing and economic development. The Government has held consultation events with stakeholders across the English regions, received 107 written responses by the consultation deadline of 10 March, and iscurrently considering this feedback. The Government will set out how it intends to proceed in due course.

18. Following consultation, Budget 2004 announced new eligibility criteria to widen the entitlement to relief, to be introduced once EU state aid approval is obtained. In the meantime, negotiations are continuing with several sectors of business that have applied for agreements under the new arrangement

Section 5 – OTHER ITEMS OF POSSIBLE INTEREST

1. There was a statement relating to Corporation Tax system operation that the Government is grateful for businesses’ contributions to this debate and for written comments received, which will help ensure that the Government can take forward reform with a clearer understanding of businesses’ prioritie

2. Following recent consultation, the Government is considering how best to merge Regional Housing Boards (RHBs) and Regional Planning Bodies (RPBs) to create integrated bodies responsible for managing regional housing markets.

3. The Government has been considering the outcome of a consultation by the Office of the Deputy Prime Minister (ODPM) on legislative remedies for the prevalence in commercial property leases of upward-only rent review clauses in the light of the voluntary Code of Practice and remains willing to pursue legislation if further movements towards greater market flexibility are not forthcoming.

4. There was a general commitment to consulting frontline professionals – Engaging the knowledge and experience of public service professionals in the design of public services has the potential to make services more efficient and tailored to users’ need In developing future public service reforms, the Government will examine the way in which employees’ and professionals’ input is used in the design of policy and the provision of services, ensuring a constant flow of information and ideas between policy-makers and the front line.

5. The Government continues to examine options to extend the contaminated land tax credit (CLTC) to long-term derelict land in an efficient way. Research into the effectiveness of the CLTC is under way and, depending on the outcome of that research, the Government will consult later this year on extension.

This is the 5^th Briefing Paper; a full list of subjects covered is available for Institute members and is a valuable resource covering so many aspects of consultation and engagement