Occupational Pension Schemes (Funding and Investment Strategy and Amendment) Regulations 2024

Lord Palmer of Childs Hill Excerpts

Tuesday 26th March 2024 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, these regulations were relaid before the House on 26 February. They bring in new measures that will support trustees and sponsoring employers of defined benefit occupational pension schemes to plan and manage their scheme’s funding over the longer term. The aim of the regulations is to achieve a fair and long-lasting balance between providing security for members of defined benefit schemes and affordability for the sponsoring employer.

I start by giving a bit of background. The UK has the third-largest pension system in the world, with assets of around £2 trillion held in both defined contribution and defined benefit schemes. The pensions sector is an integral part of the UK economy. I will focus on defined benefit pensions and these regulations. Over the last decade, across the Organization for Economic Cooperation and Development, the UK has seen the greatest improvement in defined benefit funding.

There are around 5,000 defined benefit schemes in the UK, and around 9 million people who depend on these pensions when they retire. Defined benefit pension schemes, often referred to as DB schemes, are a promise that scheme members will receive a guaranteed income in retirement, usually paid monthly, for the rest of the member’s life. Between them, UK DB schemes have around £1.4 trillion of assets under management.

Most DB schemes are closed either to new members or to new accruals. This means that they have an increasing number of members who are retired or close to retirement, and either a decreasing number of members or no members at all who will make contributions to the scheme. This is referred to as “maturing” and will change the funding requirements of the scheme. It is therefore extremely important that employers and trustees work together to manage maturing schemes to ensure they can continue to pay members’ pensions.

DB funding levels have improved in recent years through a combination of employers supporting schemes and, more recently, changes to interest rates. The Work and Pensions Committee report on its DB schemes inquiry, published today, recognises the new opportunities and challenges this brings. But financial markets and economic conditions are changeable and funding positions can quickly deteriorate. The Government will respond to the Work and Pensions Committee report in due course, but I reassure noble Lords that these regulations are designed to provide a solid foundation across current and future economic and market environments. This is good news for schemes, members and sponsoring employers, and for the UK economy.

The majority of DB schemes are well managed and supported by their sponsoring employers, but some schemes are not as well run, or are taking an inappropriate level of risk in their approach to investment and funding. This can lead to funding problems developing. Over a quarter of all DB schemes are in deficit on a technical provisions basis. This means that they have a deficit which will need to be repaired to ensure that members get their promised pensions when they are due to be paid—hence the regulations we are debating today.

The regulations build on the current funding regime for DB schemes, embed good practice and provide clearer funding standards. This will help ensure that all DB members have the best possible prospect of getting the benefits they have worked so hard to build paid in full when they fall due.

The consultation attached to these regulations built on extensive discussion, engagement and consultation with the pensions industry going back as far as 2017. This joined-up working is ongoing, with the development of the Pensions Regulator’s draft code of practice through to its most recent consultation on the statement of strategy. We had good engagement with the consultation: 92 responses from a wide variety of organisations across the pensions industry. The industry broadly welcomed the draft regulations but expressed some concerns that they were too prescriptive and could be improved for schemes open to new accrual. We listened, and the regulations before us today take account of that.

A key aspect of this work was the importance of balancing, on the one hand, clear standards for both open and maturing schemes that reflect the best practices that most schemes already follow and, on the other, ensuring that individual schemes have the flexibility to make funding decisions that best suit their own unique circumstances. Also, schemes must continue to be affordable for their sponsoring employers and to pay out all pensions as they fall due. Importantly, we aim to promote better collaboration between sponsors and trustees in the formulation of an overall journey plan. This includes an investment approach that reflects the scheme’s circumstances.

The Pension Schemes Act 2021 introduced new scheme funding requirements for DB schemes and requires DB scheme trustees to prepare a statement setting out the scheme’s funding and investment strategy, which must be submitted to the Pensions Regulator. These regulations are principle-based and set out detailed requirements for the funding and investment strategy. Better information and clearer funding standards will help address the problems the Pensions Regulator has faced in the past and will enable it to be more effective, efficient and proactive in carrying out its statutory functions.

As part of this strategy, all DB schemes will be required to set out their plans for how pension benefits will be paid over the long term. For example, this could be through buyout with an insurer, by entering a superfund or by running on with continued employer support. The strength of this employer support is fundamental. For the first time, these regulations introduce key principles for assessing the strength of the employer covenant. This is an assessment of the financial ability of the employer in relation to its legal requirements to support the scheme.

Schemes are required to have a clear plan along their glide path to maturity and low dependency, so as not to need further employer support by the time they are significantly mature. Schemes are required to reach low employer dependency in reasonably foreseeable circumstances. This embeds existing good practice that funding risks taken by a scheme before they reach maturity must be supportable by the employer, while providing explicitly for open schemes to support more risk, because there is more time for them to address any funding shortfalls.

The best possible protection for a DB member is to be supported by a strong and profitable employer. That is why we have made it clear that recovery plans are to be put in place as soon as the employer can reasonably afford, but this does not mean that the employer must put every free penny into the scheme to the detriment of its growth and other commitments. We believe that this sets an appropriate and sustainable balance while ensuring that schemes get a fair share of available resources.

The funding and investment strategy must be reviewed and, if necessary, revised, alongside each scheme valuation, which is usually every three years. When submitted to the Pensions Regulator, these valuations will be accompanied by a statement of strategy. This will articulate the trustees’ approach to long-term planning and management, as well as their assessment of the implementation of the funding strategy, key risks and mitigations and any lessons learned. Depending on circumstances, the Pensions Regulator now has the flexibility to ask for less detailed information from the schemes to improve long-term planning and avoid unnecessary burdens.

These regulations help drive the Government’s vision to encourage schemes to invest in ways that are productive for the UK economy. They make it clear that schemes have significant flexibility to choose investments while meeting the low-dependency principle. This will help support trustees in reacting to changing circumstances while investing in the best interests of their members.

The pensions industry has welcomed these revised regulations, which are explicitly more accommodating of risk taking, where supported by the employer covenant. They increase the scope for scheme-specific flexibility, including allowing open schemes to take account of new entrants and future accrual when determining when the scheme will reach significant maturity. The Pensions and Lifetime Savings Association recently commented that this is

“a significant set of ‘win’”

for its members.

I move on to the timing of these regulations. They will come into force on 6 April 2024 and a scheme must have a funding and investment strategy within 15 months of the effective date of the first actuarial valuation obtained on or after 22 September 2024. We intend that the Pensions Regulator’s funding code will be laid before Parliament this summer. The regulations, the code and guidance will work in partnership. These regulations will encourage the widespread adoption of existing good practice and help the regulator to intervene more effectively to protect members’ benefits.

I am confident that the Occupational Pension Schemes (Funding and Investment Strategy and Amendment) Regulations 2024 will support schemes and employers to make long-term plans and enable the Pensions Regulator to take effective action when needed. This will help ensure that scheme members get the retirement they have contributed towards and rightly expect. In my view, the provisions in these regulations are compatible with the European Convention on Human Rights. I commend the regulations to the Committee and beg to move.

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank the noble Viscount very much for his normal exposition. I am sure that we will hear a lot more detail from other participants. I will confine myself to some questions rather than go through this large document, which the noble Viscount did not go through in great detail.

First, is there a disproportionate governance burden for small firms? I was worried about how small firms will be able to cope with these new regulations. Secondly, the resolutions will add to the duties of defined benefit schemes. Can the noble Viscount elaborate on how these duties will be dealt with? Thirdly, will the regulations help set out long-term objectives? I was a bit worried about comments that these schemes are all coming to an end and that we are just relying on people sitting in place on the schemes and very few new people, if any, coming in.

Is there a conflict—I could not answer this myself—between the beneficiaries and the employers? The noble Viscount used the phrase “fair balance”. I am not sure that this conflict shows a fair balance. On the duty of trustees to protect the interests of the beneficiaries, can we rely on all these trustees to do so, especially when the schemes are, in effect, stationary and being wound up? Also, there is the impact of the fund being hived off to insurance companies. These funds are hived off so often; will the beneficiaries’ interests really be protected? I think that will be their worry.

Finally, the noble Viscount talked about actuarial valuations. So often they mean that funds keep moneys in reserve, probably more than a commercial firm would have to. Can he comment on that? It is very nice and careful that they do so, but sometimes that might have a negative impact on the beneficiaries. I hope he can give me some answers to those numerous questions.

Women’s State Pension Age

Lord Palmer of Childs Hill Excerpts

Tuesday 26th March 2024 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I am sure the House will join me in thanking the ombudsman and his staff for all their hard work on this report over a number of years. The product is a serious report that requires serious consideration. The ombudsman has rightly said that it is for the Government to respond but that Parliament should also consider its findings. As my honourable friend Liz Kendall said in the other place on this debate, we on these Benches will study the report and its findings carefully and will continue to take seriously the representations of those affected by these issues.

It was good that the Secretary of State made a Statement soon after the report was published, and it is good that the Minister is here today. The Government have said that they will provide a further update to Parliament on this matter. Can the Minister give the House some sense of the timescale? Should we expect that to happen soon after the House returns from the upcoming Easter Recess? After all, this matter has been under consideration for many years now.

The ombudsman began investigating how changes to the state pension age were communicated back in 2019. In the same year, the High Court ruled that the ombudsman could not recommend changes to the state pension age itself or the reimbursement of lost pensions, because that had been decided by Parliament. The ombudsman's final report, published last week, says that in 2004, internal research from DWP found that around 40% of the women affected knew about the changes to the state pension age. Does that remain the DWP assessment? What is the Government’s assessment of the total number of women who could receive compensation based on the ombudsman’s different options? How many of those are the poorest pensioners, in receipt of pension credit? How many of them have already retired or, sadly, died?

The Statement rightly says that issues around the changes to the state pension age have spanned multiple Parliaments, and it is important that lessons are learned from the events described in the report. The equalisation of the state pension age was legislated for in 1995, giving 15 years’ notice to those affected. In 2011, the then Chancellor, George Osborne, decided to accelerate the state pension age rises, giving much less than 10 years’ notice to many of those affected. His comment that this change

“probably saved more money than anything else we’ve done”

understandably angered many people and will not have made this debate any easier.

At that time, Labour tabled amendments that would have ensured that more notice was given so that women could plan for their retirement, which would have gone some way towards dealing with this problem. Given that the department already knew that there were problems with communicating changes to the state pension age, does the Minister think that it was wise for the Government to press ahead with the changes in the 2011 Act in the way that they did?

The Government have said that they are currently committed to providing 10 years’ notice of future changes to the state pension age. Labour’s 2005 Pensions Commission called for 15 years’ notice. Have the Government considered the merits of a longer timeframe and how they would improve future communications? Labour is fully committed to guaranteeing that information about any future changes to the state pension age will be provided in a timely and targeted way that is, wherever possible, tailored to individual needs. Will the Government make the same commitment?

Finally, the ombudsman took the rare decision to ask Parliament to intervene on this issue, clearly because he strongly doubted that the department would provide a remedy. In the light of these concerns, and to aid Parliament in its work, will the Minister now commit to laying all relevant information about this issue, including all impact assessments and relevant correspondence, in the Library, so that lessons can be learned and all Members from both Houses can do their jobs on this matter? Given the lack of confidence that the ombudsman has displayed in the likelihood of the DWP engaging to provide redress or a remedy, can the Minister say more about how his department will deal with future ombudsmen’s reports? I look forward to his reply.

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank the Minister for bringing the Oral Statement to the House. However, to paraphrase “Hamlet”, methinks the noble Viscount doth protest too much. It is all protest as to why he is not doing things.

From these Benches, we support the WASPI women in their campaigns, and we welcome that, after their years of work, the ombudsman has finally recommended compensation. They must be recognised as courageous women, and their persistence should be rewarded. Sadly, as the noble Baroness, Lady Sherlock, said, some have died along the way.

The noble Lord, Lord Hague, wrote a big op-ed in the Times today about why the WASPI women were not going to be paid. Basically, what he said can be summed up as “They should have known better”. At this late hour, I can think only to quote from The Hitchhiker’s Guide to the Galaxy:

“All the planning … and demolition orders have been on display at your local planning department in Alpha Centauri for 50 of your Earth years, so you’ve had plenty of time to lodge any formal complaint”.


I am afraid that what has happened is that so much time has elapsed that so many of the WASPI women have died or retired, and life has gone on.

The DWP has said, so I have read, that it will comply with the ombudsman’s decision. I would like the Minister to say how many WASPI women have died—a simple calculation, rather than the additional details that the noble Baroness, Lady Sherlock, asked for. Please will he come back to the House and say that the DWP has agreed, after consideration, that it will comply with that ruling, as the ombudsman suggested?

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

I thank the noble Baroness, Lady Sherlock, and the noble Lord, Lord Palmer, for their comments. Some of what I will say chimes with the comments made by the noble Baroness. The Government are fully committed to supporting pensioners in a sustainable way that gives them a dignified retirement, while also being fair to them and taxpayers. We will carefully study the ombudsman’s recommendations in that respect.

I too am grateful to the ombudsman for conducting the investigation. The Government will provide an update to the House once we have considered the report’s findings; I will say a little more about the timings in a moment. Following the ombudsman’s five-year investigation —we should note that it has been five years—and his subsequent substantial report, it is right that we carefully consider his findings in full. That is work that this Government and the department are steadfastly committed to. I also make the point that the department has assisted the ombudsman throughout his investigation—which he recognises—by providing thousands of pages of evidence and detailed comments on his provisional views. As I said previously, the ombudsman’s chief executive herself has recognised that.

Something else that chimes with some of the remarks from the noble Baroness is that I well understand the strong feelings across the Chamber on these matters and the desire for urgency in addressing them. To echo points that have been made in the other place: these are complex matters, and they require careful consideration. It is therefore right that we take time to consider the ombudsman’s full findings.

There are many issues to consider, including that the courts concluded that the DWP gave adequate and reasonable notification of the state pension age changes. The ombudsman has noted in his report the challenges and complexity in laying the report before Parliament, through which he has brought matters to the attention of this House. We will provide a further update to the House, as I said earlier; but I also echo points made in the other place that it will be done with “no undue delay”.

The ombudsman is not saying that WASPI women suffered a direct financial loss, nor that all women in born in the 1950s will have been adversely affected. That adds to the complexity of the situation, which, again, is why the report requires proper and due consideration.

I turn to the points that were made. The noble Baroness, Lady Sherlock, asked about remitting to Parliament. In saying that we continue to take the work of the ombudsman very seriously, it is only right that we consider the findings of what is a substantial document. In laying the report before Parliament, the ombudsman has brought matters to the attention of the House, so it is important that it is considered very carefully.

The noble Baroness, Lady Sherlock, raised some points about the 2011 Act. The Pensions Act 2011 accelerated the equalisation of women’s state pension age by 18 months and brought forward the increase in men’s and women’s state pension age to 66 by five and a half years relative to previous timetables. The changes in the 2011 Act occurred following a public call for evidence and extensive debates in Parliament. During the passage of the Act, Parliament legislated for a concession worth £1.1 billion, which reduced the proposed increase in state pension age for over 450,000 men and women. That means that no woman will see her pension age change by more than 18 months relative to the timetable set by the 1995 Act. These reforms have focused on maintaining the right balance between the affordability and sustainability of the state pension and fairness between generations.

On the figures that were raised, I think, by the noble Lord, Lord Palmer, I will cite a few statistics that may be helpful to the House. Around 3.5 million women born in the 1950s are impacted by the state pension age, and around 2.2 million men born between 6 December 1953 and April 1960 inclusive are also impacted. At the start of 2024, there will be around 790,000 women born in the 1950s who are still to reach their state pension age of 66. On the number of women who have died, which was also mentioned, the department offers its very sincere condolences to the families of the 1950s-born women who have died before reaching state pension age.

A question was raised about the referral to Parliament and not to the DWP, as well as the question of trust. In reply, I quote what the ombudsman’s chief executive herself said on Sky News last Thursday, the day the report was published:

“The Government, the DWP, completely co-operated with our report, with our investigation, and over the period of time we have been working they have provided us with the evidence that we asked for”.


I respect the independence of the ombudsman’s office and note that he has referred this matter to Parliament. His report notes the complexity and challenges involved. In laying the report before Parliament, the ombudsman has brought matters to the attention of this House. As I have said before, we will provide a further update to the House.

The noble Baroness, Lady Sherlock, asked about considering giving 15 years’ notice. She is right that it is important to give people enough notice about state pension age changes. In the last review of state pension age, the Government committed to provide 10 years. That is intended to provide sufficient time to allow people to plan.

I will finish by stating that this Government have a very strong record in supporting all pensioners; for example, in 2023-24 we will spend £151 billion on support for pensioners, which represents 5.5% of GDP. That includes around £124 billion for the state pension. We are committed to ensuring that the state pension remains the foundation of income in retirement—now and for future generations. Just to make the point, we are honouring the triple lock, which was mentioned on Sunday by the Chancellor, and is being put into the Conservative Party manifesto. Also, we are increasing the basic and new state pensions by 8.5% from next month. I mentioned earlier in the Chamber that we now have 200,000 fewer pensioners in absolute poverty after housing costs than in 2010. I thank both Peers for their comments.

Household Support Fund: Children’s Bed Poverty

Lord Palmer of Childs Hill Excerpts

Thursday 21st March 2024 Lords Chamber

[Viscount Younger of Leckie (Con)]

I am well aware of the sensitivities if decisions are made for that particular time. We will have to wait and see. But as inflation falls, as in the good news yesterday with the fall to 3.4%, and with evidence of some price falls and, as the Prime Minister said yesterday, some evidence of some green shoots, notably with energy prices coming down as well, the Government will want to take careful stock over the next few months. Of course, any decision on the future of the household support fund after 30 September will be a matter for the Chancellor when he deems the timing to be right.

[Lord Palmer of Childs Hill (LD)]

My Lords, it is vital that the household support fund continues, but the sad reality of children’s bed poverty is that it stems from systemic problems with our benefit system, which keeps people in deep poverty. Does the Minister agree that the most efficient and effective means of reducing child poverty is to lift the two-child limit? It is not just the right thing to do to end hardship now but the best route in which to end the cycle of poverty for future generations.

[Viscount Younger of Leckie (Con)]

We are very alert to the issue of child poverty. Tackling child poverty is incredibly important, and we have set out a clear and sustainable approach based on evidence of the important role that parental employment plays in reducing the risk of child poverty. But it is more than that. The Question focuses on bed poverty, and it is good to mention that the household support fund can be used to ameliorate bed poverty. There are some examples that the noble Lord may know of, particularly in Bolton and Oldham.

UNICEF: Child Poverty Rankings

Lord Palmer of Childs Hill Excerpts

Wednesday 28th February 2024 Lords Chamber

[Viscount Younger of Leckie (Con)]

The noble Baroness will have heard me say this before, but we believe that the best route out of poverty is through work. We are committed to a sustainable long-term approach to tackling child poverty in particular—the subject of this Question—and supporting people on lower incomes to progress in work. She will know that in April 2023, we uprated benefit rates by 10.1%, and working-age benefits will rise by 6.7% from April 2024, in line with inflation. But we are very aware of the pressures that quite a few households are experiencing.

[Lord Palmer of Childs Hill (LD)]

My Lords, the figures are truly devastating and very worrying. Can the Minister tell the House whether the Government have related those child poverty figures to the mental health of young people, as referred to in a report that came out a few days ago? Is there a relationship—and what are the Government doing about it?

[Viscount Younger of Leckie (Con)]

I have given the Government’s view on this scorecard—and, by the way, it is a scorecard, not a report, we should be careful to say. But the noble Lord makes a good point. What I can say is that we are looking at a new type of measure: the Department for Work and Pensions is developing the below average resources statistics to provide a new additional measure of poverty, based on the approach proposed by the Social Metrics Commission, led by my noble friend Lady Stroud.

The noble Lord makes a very good point about children. It is very important to get the statistics accurate. The importance of children remains very much live in our minds.

Occupational Pension Schemes (Collective Money Purchase Schemes) (Amendment) Regulations 2023

Lord Palmer of Childs Hill Excerpts

Tuesday 13th February 2024 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, I am pleased to introduce this instrument. Subject to your Lordships’ approval, these regulations will make two small technical amendments to the landmark Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022 to ensure that they operate in accordance with our published policy. The instrument clarifies requirements on trustees of authorised collective money purchase schemes, more commonly known as collective defined contribution, or CDC, schemes.

I will first set out the context. The Pension Schemes Act 2021 provided the statutory framework for CDC schemes in the UK. The guiding principle of our approach has been to ensure that it protects the interests of members. The Government believe that CDC schemes have an integral role in the future of pensions in this country. CDC schemes offer members a seamless transition from saving to receiving a regular retirement income.

We know that many people do not want, or feel ill equipped, to make complex financial decisions at retirement. The Government want to ensure that as many savers as possible can take advantage of the numerous benefits of CDC. By pooling longevity and investment risk across the membership, CDC schemes can shield savers from much of the uncertainty faced by members of DC schemes. This also allows the scheme actively to target higher investment returns for their members than a DC scheme through increased investment in growth-seeking assets. This in turn can lead directly to greater investment in vital UK infrastructure and the technologies of the future, such as transport and renewable energy. That is why the Government have provided the legislative framework for single or connected employer CDC schemes to be set up in the UK. The CDC regulations came into force on 1 August 2022.

Throughout the development of our policy, the Government have been engaging with stakeholders on how best to deliver CDC schemes in the UK and inviting challenge and scrutiny. In that vein, we have been helpfully advised that two areas of the current framework do not meet our published policy intent. CDC schemes can succeed only if there is confidence in this new type of provision. That is why it is important that we provide immediate clarity. This instrument ensures that, from the start, prospective schemes are set up to work as we intend.

I will now take noble Lords into the detail of this instrument. With regards to the first amendment, the existing regulations make provision in relation to the annual actuarial valuation and benefit adjustment process for CDC schemes. This means that each year benefits are reviewed and adjusted where required so that the value of assets held is in balance with the projected costs of benefits. This protects members from the need to fund a surplus and means that reductions to benefits are not deferred and stored up. Doing so would have a detrimental impact on future years and younger members, which would be unfair. It is important that CDC schemes follow strict rules around benefit adjustment to ensure that all members, without bias or favour, are subject to the same adjustments.

It is important that a balance is maintained between the value of the available assets of the scheme and the amount needed to provide the target benefits to members on an ongoing basis. If, for example, the value of the assets is lower than the amount needed to pay the benefits, the scheme may be required to make a cut to benefits to regain that balance. Conversely, if the value of the assets is more than the amount needed to pay the benefits, the trustees will be required to pay an increase to the members.

The policy intention is to provide that, where a cut to benefits must be made, the trustees of the CDC scheme can smooth the impact of the cut on members over three years. This is called a multiannual reduction. Regulation 17 currently provides that, if a subsequent annual valuation that occurs during a multiannual reduction shows that an increase in benefits is required, the trustees, having taken advice from the scheme actuary, will be required to apply that increase in addition to the planned reduction for that year under the multiannual reduction that is in effect.

I appreciate that this is quite complex, so let me provide an example of how it is intended to work in practice. In a period of extreme economic downturn where equities fall significantly in value, it is possible that a CDC scheme would have to make a cut to members’ benefits. Regulation 17 enables the trustees of the scheme to mitigate the impact of this market volatility on member benefits by spreading the overall cut over three years. To use an easy example, if the overall cut necessary were 6%—my maths is not too good, but here we go—the members’ benefits could be cut by 2% a year over the three-year period.

This mechanism helps to reduce volatility and ensures that current and future benefits remain relatively stable. It contrasts with individual DC schemes, where there is no pension-smoothing mechanism. Members of these schemes would have experienced a significant reduction in the value of their retirement savings immediately, which for savers closer to retirement may be unrecoverable. The intention of Regulation 17 was that, where a market recovered during the period of such a reduction, increases in benefits resulting from subsequent annual valuation would offset, in whole or in part, planned cuts under a multiyear adjustment before being applied as an increase to future benefits in the normal way. This would have the benefit that any bounce-back immediately after a period of very poor performance could help to smooth outcomes and avoid cuts, which would then be unnecessary, while maintaining the principle that the costs of current and future benefits remain in balance with the value of scheme assets.

If we did not do this, the benefit of the recovery would instead be likely to go to future pensioners. This would run against our principle that, as far as possible, all members—current pensioners, those who are currently accruing benefits and those who are not contributing but have rights to a future pension from the scheme—should all share in upsides and downsides at the same time.

The instrument also makes a consequential change to Regulation 19. Any variation to a multiannual reduction as a result of offsetting an increase against must be reported to the Pensions Regulator, ensuring proper oversight.

I turn to the second of these amendments, which addresses an issue that may arise where a scheme winds up and the value of members’ accrued rights are transferred to suitable pension schemes or alternative payment arrangements. A key element of the wind-up process is calculating the share of the fund for each person who is a beneficiary at that time. The scheme rules may provide that the person may be a member or a successor of that member. Potential successors will be determined by the scheme rules, but could include a spouse, a child, a cohabitant or a person financially dependent on the deceased beneficiary. That share of the fund is applied to the scheme’s assets at the end of the winding-up to produce the beneficiary’s pot, which is then used to discharge the scheme’s obligations to the member by transfer to another scheme offering flexi-access income drawdown.

I ask noble Lords to imagine a scheme that has provided for these categories of people to be a beneficiary under its rules. If a member of that scheme dies during the winding-up process, their benefits are reallocated to the deceased’s stipulated beneficiary. They are not reallocated among the collective. The policy intention has always been that, if the beneficiary dies during the winding-up period, the pot allocated to them would not be extinguished but would instead be reallocated among their successors, where a scheme’s rules provide for that. This instrument therefore amends Schedule 6 to the regulations to ensure that the deceased member’s accrued rights in wind-up may be discharged in this way.

In conclusion, CDC schemes are an important addition to the UK pensions landscape and, when well designed and run, have the potential to provide a good retirement outcome for members. The effect of this instrument will be to provide clarity for schemes moving forward by more accurately reflecting the intent of the regulations that it is amending. I commend it to the Committee and beg to move.

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank the noble Viscount for his clarification of the papers, which is very welcome—as usual. This is a statutory instrument with a more than usually snappy title, which will probably be more noted than some of the things in the instrument.

This statutory instrument is good news. It helps pave the way, as I understand it, for the introduction of the UK’s first collective defined contribution pension scheme, which I believe is by the Royal Mail. Collective defined contribution schemes in various forms are common in Scandinavia, the Netherlands and Canada. Work on these risk-pooling arrangements started during the coalition years when we, the Liberal Democrats, worked collaboratively with the Labour Front Bench and the Communication Workers Union to get the Royal Mail to implement the first scheme of this sort. I believe that it has not yet gone live, although perhaps the noble Viscount can tell me more about that.

The next developments of CDC, in my view, are, first, the extension of multi-employer or industry-wide CDC—when does the Minister expect to publish the next consultation on this?—and, secondly, the development of retirement-only or decumulation-only CDC schemes, so that a person could take his or her own pot and pool it with other people’s. Any comments on that would be gratefully received.

These regulations tidy up some issues that are causing practical problems. The main part is to do with what happens each year, as the noble Viscount said, when a scheme reviews whether it has enough money to meet its target pension payouts. As things stand, if the scheme is short, it can reduce planned pensions. But what happens if, a year later, it thinks that things are better? What these regulations appear to make clear is that the first thing you do is reduce or eliminate the planned pensions cuts. I think this was covered by the Minister’s comment about “a smoothing mechanism”.

One thing that comes out of this SI is that, as so often, there seems to be a lot more valuation work for actuaries. I am sure they will be very grateful. I am very grateful for the guidance in the papers and the elucidation from the Minister. I think the principles are right and we on these Benches agree with the instrument.

[Baroness Drake (Lab)]

I thank the Minister for setting out the intent of these regulations so clearly and for arranging a briefing session with DWP officials engaged with CDC, who also provided a very helpful briefing document. It probably has reduced the number of questions that my noble friend and I have—although I suspect the Minister will take very little comfort from that observation.

The regulations amend the Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022, in two key ways. In the first instance, they amend how reductions to members’ benefits in a CDC scheme can be smoothed following a fall in the value of assets held. Given the Government’s opposition to any buffer fund in a collective DC scheme to manage volatility and assets, intergenerational fairness or cuts in benefits, clarity on how the legally permitted smoothing mechanisms operate is indeed important.

Household Support Fund

Lord Palmer of Childs Hill Excerpts

Tuesday 30th January 2024 Lords Chamber

[Viscount Younger of Leckie (Con)]

I can reassure the House that allocations are targeted fairly and proportionally on the basis of population, weighted by the index of multiple deprivation. The distribution of funding is targeted at the areas of the country with the most vulnerable households. This ensures that funding proportionally reaches those areas in England with the most need. It is for each local council to decide, as my noble friend may know, where and when they distribute their funding, within the parameters of the fund’s terms and conditions.

[Lord Palmer of Childs Hill (LD)]

My Lords, the term “impact assessment” has been used by other speakers. I am sure that the Government have carried out impact assessments of what will happen if this fund is removed or reduced. Can the Minister tell the House how much funding will remain available to local authorities for discretionary local welfare assistance should the household support fund be reduced or discontinued? The idea is that it will come out in the wash, more or less, as the Minister says, but we want to know in advance what the situation will be. For instance, is there an estimate in the Minister’s file of the number of children in England who will no longer be eligible for free school meals during the school holidays once the household support fund is ended or reduced?

[Viscount Younger of Leckie (Con)]

To date, over £2 billion-worth of support has been allocated to local authorities in England via the household support fund to support those most in need. As I said, it is up to local councils to decide how it is disbursed. Local authorities in England are funded through the finance settlement to deliver local welfare provision.

Engineered Stone and Silicosis

Lord Palmer of Childs Hill Excerpts

Monday 15th January 2024 Lords Chamber

[Viscount Younger of Leckie (Con)]

The noble Lord makes some very helpful comments. He is right that individuals are most at risk when dry cutting and polishing are being performed. In Great Britain, as I think he alluded to, engineered stone is mostly imported. He makes an interesting point about the amount of silica content found in engineered stone: yes, it is high, but sandstone also contains 70% to 90% and granite 25% to 60%. The Health and Safety Executive and COSHH have taken good measures on that over many years.

[Lord Palmer of Childs Hill (LD)]

My Lords, I am not very reassured by the Minister’s comments on British health and safety precautions and enforcement. Can he explain in greater detail what we are doing, rather than just hoping that this will go away? Are cases increasing, and are there numbers for illness in the UK, not Australia, from these causes?

[Viscount Younger of Leckie (Con)]

In contradiction to what the noble Baroness, Lady Bennett, said, our information is that nobody has suffered any long-term exposure to silicosis. There are instances of non-compliance, which have reduced from 19% to 11%, but the HSE has been tackling exposure to RCS for many years through a mature regulatory model that combines targeted inspection activity on high-risk activity, communications activity and working with stakeholders.

Child Support (Management of Payments and Arrears and Fees) (Amendment) Regulations 2023

Lord Palmer of Childs Hill Excerpts

Monday 18th December 2023 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, I am pleased to introduce this statutory instrument, which, subject to approval, will help more families to access the vital support that is available through the Child Maintenance Service. It will also ensure that efforts and resources can be focused on taking action to collect unpaid arrears in those cases that will make the biggest difference to children. These changes build on a number of improvements that we have already made and are among the first in a further wave of legislative measures that we plan to bring forward to ensure that the service is more accessible, simpler and speedier and ultimately gets more money to more children more quickly.

Families are the cornerstone of our communities. Each family is unique, but the importance of the bonds that bind them together is universal. When these bonds fray or falter, the impact on children can be significant, including where parents separate. It is therefore right that we continue to take action to promote family cohesion and reduce conflict, so that children grow up with the love and support that they need.

It was an honour to respond to the recent debate on the Love Matters report, commissioned by the most reverend Primates the Archbishop of Canterbury and the Archbishop of York. The report delivered a powerful reminder of why love and support matter and the importance of strengthening and supporting family life, including ensuring that children get the best start in life.

The Child Maintenance Service plays a key part in that endeavour. It is part of a wide-ranging set of programmes and initiatives that my department is leading on. For example, through the reducing parental conflict programme, we are supporting parents to reduce the impact of frequent conflict. Delivered through local authority family services and with local community and faith partners, we are on track to have directly supported 40,000 parents in the last two years. Since we introduced it in 2014, the family test has been guiding policymakers in looking at the potential impact of policies on the family. It is something that I have actively supported in my role and I am committed to promoting it across government. Our new childcare offer has removed one of the biggest barriers to parents working and providing for their family, with a nearly 50% increase in the amount of childcare costs that parents on universal credit can claim back.

I will just highlight a number of other linked programmes happening across government. In addition to the childcare change for parents on universal credit, the Government are also substantially increasing the amount of free childcare that working parents in England can access, with 30 hours of free childcare a week all the way through from nine months up to their child starting school. Our £2.4 billion Supporting Families programme is showing how intervening early can improve outcomes for families in the long run. The Start for Life and family hubs programmes have created a network of centres and extra support for families with children.

I return to the Child Maintenance Service, which I oversee. Alongside the range of help that I have just outlined, it plays a crucial role in securing financial support for children where parents have separated, mandating, and where necessary, enforcing arrangements so that money flows from paying parents to receiving parents. This can benefit children and help to prevent them from falling into poverty. The Child Maintenance Service is currently supporting nearly a million children through maintenance arrangements. Between 2020 and 2022—the latest figures available—160,000 children were kept out of poverty each year because of parents coming to private arrangements and with our interventions through the Child Maintenance Service.

Furthermore, the Government supported two child maintenance Private Members’ Bills, which gained Royal Assent earlier this year. This included the Child Support (Enforcement) Act 2023, which we consulted on in November to seek views on how we accelerate enforcement by replacing the slow and outdated court-based process to obtain a liability order. Once implemented, this will reduce the process from 22 weeks to as low as six weeks, making it quicker to see money flow through for children.

These regulations are intended to further improve access to the Child Maintenance Service for all families and to ensure that it runs effectively to focus on getting more money to children. First, to improve access, the regulations remove the £20 application fee that currently needs to be paid to access the Child Maintenance Service. By way of background, the original rationale for introducing the fee in 2014 was to help parents to think twice before going down the statutory route by default and encourage them to come to their own arrangements. However, as part of an evaluation of the fee and its impact, we found that it has not quite worked as intended.

Research published by my department found that the fee is not a major factor for parents when making decisions about whether to apply to the Child Maintenance Service. Indeed, the evaluation found that families on lower incomes, who we know disproportionately experience conflict and are therefore often in need of support, can find the application fee a financial barrier to accessing the service. It is important to highlight that around 54% of all applicants already pay no fee because of existing waivers, such as victims of domestic abuse and those aged under 19. Therefore, we think it sensible to remove the application fee completely for all, ensuring that those most in need can get support more easily.

Secondly, the regulations will ensure that the service can more efficiently focus resources on getting larger, more-recoverable unpaid payments flowing to children. We continue to engage with parents who refuse to pay child maintenance and fail to take responsibility for their children, through a range of enforcement powers to collect unpaid amounts. However, in these regulations, we are taking a pragmatic approach to bring forward powers to write off very minimal amounts of £7 or less, in a small number of inactive cases that would otherwise have been closed were it not for this outstanding balance.

We are doing this for two pragmatic reasons. First, the reality is that keeping these cases open requires considerable resource and taking action to recover such small amounts often costs more than the actual value of the debt. Left open, the cost of maintaining them could increase for decades with no greater chance of money being paid to receiving parents. We need to ensure that taxpayers’ money, as well as the time and effort of caseworkers, is being directed effectively, such as by focusing action against parents who owe significantly larger sums and where the impact on children missing out on that money is greater.

Secondly, given that we will close only the cases in which we have stopped calculating child maintenance payments, it is likely that they are longer needed. This could be because the child has become an adult, the parents have reconciled or the absent parent has unfortunately died. It therefore makes sense to close these cases, not least for the certainty and clarity that it would provide for families. As I said, we expect only a small number of cases to qualify and the vast majority are likely to have outstanding arrears of less than £1. The full details of the criteria permitting write-off of a debt are set out in the regulations. As I said, they include cases where maintenance calculations have ceased and no payments have been made in the previous three months. In addition, the Child Support Act 1991 provides that, in order for write-off powers to be exercised, we need to be satisfied that it would be unfair or otherwise inappropriate to enforce liability in respect of the debt.

I believe both these measures to be proportionate common-sense changes that will further improve the Child Maintenance Service. The changes are good for parents, good for the taxpayer and, more important still, good for children. I hope that colleagues will join me in supporting these draft regulations and I commend them to the Committee. I beg to move.

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank the Minister for his overview of the whole system. He eventually got to the regulations in front of us, but he gave us a good idea of the various things that the Government are attempting to do; I thank him for that.

I come to the regulations themselves. The Minister will, I am sure, be pleased to know that I and my party agree with the removal of the £20 application fee; it has been my party’s policy in the past couple of manifestos. We would, however, make an additional change: in addition to removing the £20 charge, it is Liberal Democrat party policy to remove the 4% charge for receiving parents using the collect and pay service. I would appreciate his view on the possibility of this.

The Minister pointed out that the Government are trying to be pragmatic in dealing with the rest of the instrument. I welcome the suggestion that up to £7 of arrears could be written off but I hope that the Minister can clarify whether that would be a one-off £7 at the end—with which we would have no problem—or could apply to more than one item of £7. Is this meant to be a generous action or is it to save administration costs, or a bit of both? He did say that it was pragmatic. Who gains and loses on this £7? I read the provision through and was not quite sure—perhaps it is just me—whether the receiving parents loses £7 or that the Child Maintenance Service in some way writes it off internally. I am not calling for it to be increased but does the Minister have any information as to whether an increase in the write-off—let us say it was £10; I am just dealing with the theory of it—would have any administrative effect? Would we save money? If it is meant to save on administration, is £7 an appropriate cut-off? I think that it is, but it is worth asking.

I will move on in dealing with this £7 write-off. My reading of the statutory instrument is that time arrears will be written off in only these limited circumstances: maintenance arrangements have come to an end because the payee parent has requested it; the paying parent has died; the child has died; the child is no longer a child; the parents have been cohabiting for more than six months; a new arrangement has been put in place; or the parent has failed to pay anything for the final three months. Presumably, there would be only one £7 sum of arrears rather than a series of £7 sums that could be written off unless a new arrangement were later put in place—for instance, if the couple got back together, then broke up or the payee parent requested that a new arrangement be put in place—but subsequently ended again. However, that would be some months or years down the track and would not happen too often, I hope. It may seem fairly obvious to the Minister but I have read the SI and it really is not that specific. The ambiguity is such that I would appreciate, for the purposes of Hansard, it being set out.

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for introducing these regulations. I also thank the noble Lord, Lord Palmer of Childs Hill, for his careful questioning on the £7 matter; I shall leave that entirely to him and commend him on getting into the weeds in which I normally pride myself on lurking with these sorts of regulations. I very much welcome him to this space.

I was surprised and delighted to find a Keeling schedule in the Explanatory Memorandum. Can the Minister convey my appreciation of that to those responsible? It is often quite hard to track back the way in which regulations apply, so I am grateful for that.

As we have heard, these regulations do two things: they remove the £20 upfront fee payable to all those who are not exempt; and they waive arrears below £7 in certain circumstances, as described by the noble Lord, Lord Palmer. The Government introduced both this upfront fee and the ongoing fees after they reformed the child support system in 2012. The ongoing fees are to be retained, but these regulations remove the upfront fee at a cost of roughly between £1 million and £2 million a year. I should say at the outset that we also support these changes. However, I want to ask some questions, particularly about the charging point.

--- Later in debate ---

[Viscount Younger of Leckie (Con)]

My Lords, I thank the noble Lord, Lord Palmer of Childs Hill, and the noble Baroness, Lady Sherlock, for their general support for these regulations. Certainly, the noble Lord, Lord Palmer, was fully in agreement with what we are doing with the £20 application fee. I appreciate the noble Baroness’s very complimentary remarks about the regulations. We work hard to get them right and I will certainly pass her remarks on. I thank both Members for their valuable contributions during this short debate.

Providing for our children is a fundamental responsibility. Most people can independently reach agreement about arrangements under the Child Maintenance Service, but there will always be circumstances where this does not happen or is not possible, as I said. Sometimes relationships are complicated and conflicted and, of course, there are reasons due to domestic abuse. That is why the work of the Child Maintenance Service is so vital. To add to what I said in opening, it provides that safe service for parents who specifically face safety concerns, and it ensures that both parents actively play their part to support their children, whether they live with them or not.

I will answer the questions of the noble Lord, Lord Palmer, about writing off £7 arrears. This legislation will permit the Child Maintenance Service to write off small volumes of very low-value debt in cases that meet certain criteria and that would otherwise have closed if it were not for that outstanding balance. Writing off low-level debt will be permitted only in cases where it would be unfair or otherwise inappropriate to enforce liability in respect of the arrears. I will explain more in a moment but, broadly speaking, it applies where a maintenance calculation has ceased, under specific provisions of the Child Support Act 1991 and where no payments have been made towards the arrears in the last three months.

We believe that setting the threshold higher, which I think was the gist of the noble Lord’s question, would give the wrong message to paying parents about their obligations. As the flat rate for child maintenance—the minimum amount a parent is expected to pay to meet their statutory duty to maintain their children—is £7 per week, we consider setting the threshold just below that amount the best way to strike that difficult balance. I hope that helps to explain our rationale behind the policy.

The noble Lord, Lord Palmer, asked why we are removing the application fee, why it was not removed sooner and whether we are doing this for the benefit of the customers. As I set out, the application fee was introduced partly to provide an incentive for separated parents to make collaborative family-based arrangements to facilitate better outcomes for children. In removing the fee, we first needed to allow enough time to properly evaluate the impact of this measure. As part of this evaluation, evidence published by my department has shown that the fee is not a significant factor when making decisions, as mentioned earlier. Most importantly, evidence has also found that families on lower incomes disproportionately experience conflict and are less able to make a family-based arrangement. Therefore, the fee could act as a financial barrier to those families accessing the service. The removal of the fee is expected to lead to a relatively modest loss of income of around £1 million to £2 million per annum. Looking at this, we think that, on balance, this is the right thing to do.

The noble Lord, Lord Palmer, asked about collection charges. They are applied to all Child Maintenance Service collect and pay cases. Our research suggests that this encourages some parents to use direct pay. The charges are 20%, as he knows, on top of the liability for the paying parent, and—the gist of his question—4% of the maintenance received by the receiving parent. Charges such as the application fee were originally introduced to provide both parents with an incentive to collaborate. Running the collect and pay service incurs costs for the taxpayer, especially where collection and enforcement action is required to secure payments. Therefore, it is reasonable for most parents to contribute towards running such a service. In a survey conducted between 2017 and 2019, 44% of receiving parents said that collect and pay charges influenced their decision to use direct pay. To answer the question directly, the Government continue to keep the other Child Maintenance Service measures, including the 4%, under review. No decision is being made, but we are keeping it under review.

[Lord Palmer of Childs Hill (LD)]

Can that be changed without it coming back? It cannot, can it? The Government are missing an opportunity. The Minister said £7 per week. Is that what he meant?

[Viscount Younger of Leckie (Con)]

No, I did not mean £7 per week. I should have said £7 arrears. On the £4, I understand that we have to use legislation to take that forward, should we wish. However, it is not on the agenda and we are keeping that under review.

The noble Baroness, Lady Sherlock, raised a number of questions. I shall first address the points made about the NAO. The Government also thank the NAO for conducting such a thorough report on the value for money audit of the CMS. The Government’s response partially and fully accepted a number of the NAO’s recommendations, as the noble Baroness probably knows, including investigating why fewer people are taking up the CMS than expected, tackling any inappropriate barriers that prevent families using its services and improving the effectiveness of direct pay and collect and pay arrangements.

Another question the noble Baroness asked was about what evidence the department has relating to the drivers of the fall in usage of the statutory system. Having a maintenance arrangement is not right for all parents. We know that many who do not have one want one. The department is investigating existing research and data to understand why some parents chose not to have a child maintenance arrangement and to improve its knowledge of customers who use its service. This is work in progress and the noble Baroness raised an important question. It is also important to note that, since the conclusion of the value for money audit, we have already seen greater take-up from parents wanting to use the service, so that perhaps helps to answer the question.

The noble Baroness also asked whether there is any more information that we can share with her about what we are doing to improve the effectiveness of the arrangements. Over the past few years, the Child Maintenance Service has developed and delivered significant improvements to its online services. These services make it easier and quicker for parents to engage with the service and the majority of applications are now made online. We are also continuing to work towards implementing the recommendations on improving the effectiveness of direct pay and collect and pay arrangements. Customers on direct pay can now report missed payments via their online account. In addition, the CMS developed an email campaign in 2022 to prompt direct pay customers to get in contact if their direct pay case was not working for them. This capability will be considered for future campaigns to communicate better with parents. For collect and pay cases, the department has set out its fast enforcement plan, which includes specific test and learn campaigns and greater use of risk and intelligence to drive compliance. As part of this regulations package, we will be extending our write-off powers for arrears of less than £7 when, as I said, certain circumstances are met. This aligns with the NAO’s recommendation to review the approach to managing arrears. The Committee will also be aware of our plans to improve and accelerate our enforcement of CMS, as outlined earlier, and our plans to consult more broadly on the service types.

The noble Baroness, Lady Sherlock, was also concerned about take-up more broadly. I am sure she will appreciate that these regulations will make it easier for people to access the CMS.

There is a lot more that we could be doing. There is a major programme in my department on using AI and making it effective for not just this service but others within the department. I think the noble Baroness is aware of that from the Question I answered not so long ago. I make the point that human contact is incredibly important. In the various products that we have, we are all the time dealing with some of the most vulnerable customers in the country, as she will be aware.

Universal Credit

Lord Palmer of Childs Hill Excerpts

Thursday 7th December 2023 Lords Chamber

[Viscount Younger of Leckie (Con)]

The right reverend Prelate is absolutely right. Across government, we are putting a lot of work into tackling mental health, particularly post pandemic. We have a sustainable long-term approach to tackling poverty and, as I said earlier, supporting people on lower incomes. Perhaps I can say to the right reverend Prelate that, in 2021-22, there were 1.7 million fewer people in absolute poverty after housing costs than in 2009-10, including 400,000 fewer children.

[Lord Palmer of Childs Hill (LD)]

My Lords, one group ignored by the Government in the Autumn Statement is unpaid carers. The Chancellor’s speech in the other place failed to mention the estimated 10.6 million people providing care, while the statement document itself mentions them only in relation to technical changes. In recent research by Carers UK, 60% of all carers said that they were worried about the impact of caring on their finances, while over a third of carers receiving carer’s allowance say they are struggling to afford the cost of food. Will the Minister look at reforming the rate of carer’s allowance and taking further steps to prevent eligibility restrictions acting as a barrier to employment?

[Viscount Younger of Leckie (Con)]

Indeed, the noble Lord raised an important point about carers, who play a vital role in our country. We are very alert to this; I will certainly take the point he raised back to the Treasury, but I am unable to comment on whether we can or cannot do it. In terms of carers, we have strong evidence that some carers would also like to take on some work if it is appropriate, so there is much work going on with job coaches, to encourage them to speak to carers to see whether it is possible for them to combine work as well as their caring responsibilities, if it is appropriate.

Department for Work and Pensions: AI

Lord Palmer of Childs Hill Excerpts

Tuesday 5th December 2023 Lords Chamber

[Viscount Younger of Leckie (Con)]

I can reassure my noble friend that it will. I shall give a bit of granular detail: a 2021 DSIT report highlighted the potential impact of AI on the UK labour market, and this of course includes DWP. Automation is forecast to increase, rising from an estimated 7% to 30%, but I can reassure my noble friend that, with the changes, there will be a net gain. We have an average of about 900,000 employees per quarter moving from one job to another, so I can reassure my noble friend that my department’s employees will reduce, but there will be opportunities for those in AI.

[Lord Palmer of Childs Hill (LD)]

My Lords, as the Minister said, the Government are rolling out massively complex new systems, with significant risk to claimants because they have not got their original systems in order. We hear constant reports of backlogs at the Future Pension Centre, payments for national insurance credits being lost within the system and more and more historic pension errors coming to light when it comes to things such as home responsibilities protection. Can the Minister update the House on the steps to get those existing systems in order and on what learning exercises will be carried out to ensure that no such errors will be carried forward on the new and potentially more powerful systems that he has outlined?

[Viscount Younger of Leckie (Con)]

We are certainly working very hard to look at and mitigate delays, and AI will over time be a game-changer for that. To manage and mitigate risk, we have produced a risk framework, in line with the Department for Science, Innovation and Technology. We are setting out AI governance and an approach to AI enablement which will be transformational.