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Ministers were in full retreat last night over plans to give more public bodies powers to snoop on private communications, including e-mails and mobile telphone calls, according to The Daily Telegraph (pp1-2).

Home secretary David Blunkett pulled the plug on a debate after being warned that his proposals faced defeat in the lords and a rebellion by Labour MPs who fear the new legislation poses a threat to civil liberties.

A draft order extending the reach of the Regulation of Investigatory Powers Act (RIPA) to include local authorities and government-appointed quangos was withdrawn at the last minute and will be considered on the floor of the commons next Monday (see LGCnetfor more). It was due to be debated for just 90 minutes by the specialist committee of MPs that scrutinises secondary legislation, before being put to the commons for approval - without debate.

Last night the home office announced that Mr Blunkett would publish new safeguards today to ensure that the powers were not abused, but did not provide details of how they would work. It is understood the home secretary will risk angering campaigners by refusing to compromise on the principles of the legislation or the list of organisations allowed access to private communications information. However, he is expected to offer to limit the circumstances under which they can apply for details of e-mails, phone calls and internet surfing.

When RIPA was introduced it gave the security services, customs and excise and the inland revenue powers to ask for the communications record of individuals. But the RIPA, which was fiercely opposed by opposition parties and civil liberty groups, also extended to other bodies such as the Food Standards Agency and the Royal Pharmaceutical Society the right to use surveillance. The latest orders extend the list of bodies still further and have prompted questions about the need for such intrusive powers.


Taxpayers face the prospect of rising council tax or cuts in services to cover billions of pounds lost by local authorities on the stock markets after 11 September, reported The Times (p4).

The value of council investments in the markets, normally limited to pension funds, is estimated to have dropped by more than£5bn last week as the market closed at its lowest level for 10 months. The slump took estimated council losses to more than£15bn since 1999.

Most local authorities have watched pension fund values plummet in recent years, leaving funding deficits across the UK. West Sussex CC treasurer Helen Kirkpatrick said the average loss for local authorities on pension funds over the past two years was 6.8%. She said that could affect the public in the long term if authorities had to raise their contribution rates to pension schemes, leaving less money for services.

According to recentfigures from Pensions Week magazine, some councils already face funding shortfalls of several hundred million pounds, two years before they next review contributions to pension schemes in March 2004. Brent LBC is estimated to have a deficit of£65m on its£346m pension fund, while Surrey CC's£1bn fund has calculated that the scheme is only 75% covered. leaving a potential£250m black hole.

Vernon Soare, policy and technical director of the Chartered Institute of Public Finance and Accounting said the government would be consulted before any dramatic tax rise was introduced. 'Local authorities should be in touch with their actuaries and fund managers and taking advice on what they should be doing', he said.

Glyn Jenkins, national pensions officer for Unison, said that as well as increasing employer contributions, local authorities tended to consider pension fund losses as part of their overheads and pass on the cost to the taxpayer.


One of Britain's richest councils has been forced to cut£15m from its annual budget after losing 'tens of millions' on the stock markets since 11 September, reported The Times (p4).

Shetland Isles Council, which is debt-free because of oil industry spin-offs, has asked all its 2,100 staff to consider voluntary redundancy or early retirement as part of a cost-cutting exercise. About 500 jobs are expected to go. In addition, plans to build a new secondary school and a bridge across to Bressay, as well as updating island ferry terminals, have been put on hold.

Shetland Council has led a charmed existence, cushioned from the budget constraints faced by local authorities thanks to huge reserves accumulated from oil industry revenues and rents from Sullom Voe, Europe's biggest oil terminal. It means that over the past 15 years it has come to rely on income from stock market returns to fund its capital and revenue programmes and maintain its status as the only debt-free council in Scotland.

It had been hoped that the stock market decline would bottom out, but the situation appears to have worsened. In the past fortnight the council has lost up to£15 million in returns on its£600m reserves, which are invested in a broad international portfolio by various fund managers. Council chief executive Morgan Goodlad said 'tens of millions' had been lost since 11 September but it was not a 'meltdown scenario'.


Schools are finding it increasingly difficult to recruit and retain good teachers, Ofsted said yesterday, reported The Times (p4). It said that two thirds of local education authorities had problems finding enough experienced staff.

As a result, schools were forced to rely on temporary teachers and those who are not specialists in the subjects they are teaching, with potentially disruptive effects on children's education. Efforts to find better staff were being hampered by the lack of consistent financial help from Whitehall, which made it 'exceedingly difficult' to make adequate provision for the future.


The number of homeless families living in bread and breakfast accomodation has reached record levels, ministers admitted yesterday, according to The Times (p12).

Despite repeated promises to end the problem, 81,260 families are living in temporary accomodation, which includes bed and breakfast hotels and hostels, a rise of 9% on last year. More than 11,000 children are being brought up in bed and breakfast hotels and two thirds of the families affected are stuck in temporary accomodation for more than six weeks.

The number of families without a home has risen to 118,360, an increase of 3.5% on last year. The office of the deputy prime minister, publishing the figures, announced that an extra£25m would be made available to the 44 local authorities with the biggest homelessness problem.


The main education standards authority needs to 'raise its game' if it is to strengthen confidence in the examination system and make vocational qualifications more relevant to business, education secretary Estelle Morris said yesterday, reported the Financial Times (p3).

Speaking at the publication of an independent report into the Qualifications and Curriculum Authority for England and Wales she said she was giving David Miliband, the new school standards minister, responsibility for overseeing changes. Aides said her patience was 'running thin'.

'My view of the whole vocational qualification framework is that we have never ever got it right', Ms Morris said. The report was right to criticise the QCA for being too rigid and slow to respond to employers' needs, and she backed calls for a cut in the number of institutions issuing vocational qualifications. There are 98 institutions authorised to award vocational qualifications in the UK, and another 48 awaiting authorisation, compared with just three authorised to award academic qualifications.

Ms Morris said the QCA should listen and communicate better, be more flexible, focus on strategic supervision of the awarding bodies, and be prepared to use new powers to intervene decisively to prevent a recurrence of last year's examination fiasco. She stressed that the public would not tolerate even occasional errors.


Recruitment by the public sector has dramatically outstripped private sector efforts, in a reflection of the government's determination to eliminate severe labour shortages in key services, reported the Financial Times (p6).

The number of public sector jobs grew by 91,000, or 1.8%, in the year to mid-2001 - more than three times faster than private sector growth. The figures, boosted by strong increases within education and health, suggest that the government's ambitious recruitment drive was bearing fruit last year. If anything, the drive has intensified in the subsequent year.

There was a sharp increase in jobs within education - regarded as key to government plans to reduce crime and social exclusion and accelerate the transformation into a knowledge-based economy. The number of jobs in public sector education rose by 48,000 to 1,349,000 - cited by the DfES as proof the strategy to recruit and retain teachers was working. However, jpb numbers in state education were still lower than during the 1980s and early 1990s.

The total number of public sector jobs, at 5.2 million, was still considerably lower than the 7.2 million level reached two decades, and lower even than in 1961.

Earnings growth has remained muted.

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