The UK is making it harder for terrorists and criminals to move money through its banks and businesses by today (26 October 2017) publishing new information on the best way for organisations to protect themselves against illicit financing.

The second ‘National risk assessment’ into money laundering and terrorist financing builds on successful government action in this area over recent years. It uses the lessons learnt from these actions to create a comprehensive risk assessment, which can be used by government, law enforcement and the private sector, to bolster their protections.

Key findings identified by the report include:

• the criminal exploitation of banks, professional and financial services and cash remain the greatest areas of money laundering risk to the UK
• cash remains the favoured method for terrorists to move funds through and out of the country
• a wide-ranging set of reforms by government, like introducing the ability to investigate suspicious asset trails, to crack down on illicit finance over recent years are starting to take effect

By examining how criminals attempt to move illicit funds through the UK, this report underlines the risks and pinpoints areas where businesses may be currently vulnerable. It informs the government, businesses and law enforcement agencies on how best to plug these gaps.

It advises on which services or products criminal groups are currently exploiting, enabling organisations to strengthen their efforts to shut this activity down. It will also help law enforcement allocate resources to the most significant threats.

The vast majority of firms are already vigilant but this information will shape future risk assessments so they can continue to better protect themselves against threats.

The Economic Secretary to the Treasury, Stephen Barclay, said:

This country has done more to put a stop to money laundering and terrorist financing than any other in the world, but we are not complacent as there is always more we can do.

Our record is strong and we are already seeing threats foiled due to the action we’ve taken.

Today’s report makes it clear to criminal groups that the UK will never be an easy target and won’t tolerate this activity.

Security Minister, Ben Wallace MP said:

We will not stand by and allow criminals and the corrupt to use the UK to launder and hide their dirty money.

It is essential that we know what the risks to the UK are, which is why we are publishing the second national risk assessment of money laundering and terrorist financing which names a number of jurisdictions whose financial systems are linked to the UK and are at risk of abuse by criminals.

This assessment will help law enforcement agencies and industry take the necessary action against those threats.

Serious and organised crime costs Britain tens of billions of pounds every year and working with the private sector by sharing information and best practice remains vital to addressing this abuse, making it harder for criminals to operate in the UK.

Secretary of State for Wales Alun Cairns is to call on Welsh manufacturing businesses to maintain their competitive edge and keep firing on all cylinders, as Britain prepares to leave the European Union.

Mr Cairns will deliver a keynote speech to firms at this evening’s annual EEF dinner (26 October), where he is expected to outline plans to address Wales’ low productivity rate, through the UK-wide Industrial Strategy, which calls on Welsh firms to be at the forefront of innovation and export trade, so that prosperity is shared across the country.

Wales currently benefits from its economy’s manufacturing base, which employs around 150,000 people and is made up of over 5,000 companies, 97% of which are SMEs. But Wales is the least productive region in the UK, with productivity only 80.5% of the UK average.

The Secretary of State for Wales is expected to say:

If we want to stimulate every part of our economy, then we need to create the right conditions for generating ideas and innovation – we need to foster entrepreneurship.

Wales has the advantage of a strong innovation base – be that compound semi-conductors in Cardiff, agri-tech in Aberystwyth, or advanced manufacturing in Deeside.

The UK Government will invest an additional £4.7 billion by 2020-21 in research and development funding and create a new Industrial Strategy Challenge Fund to help the UK capitalise on its strengths in science and innovation in manufacturing.

Mr Cairns will also say:

We know Wales has huge potential when it comes to trade and investment, as there are currently more than 3,800 businesses in Wales that export.

I’d like to see businesses in Wales taking advantage of the world-class support on offer from the UK Government and Welsh Government so that Wales and the wider UK is the best place in the world to do business.

Additional information:

• The UK Government has announced an additional £4.7 billion by 2020-21 in research and development funding and created a new Industrial Strategy Challenge Fund to help the UK capitalise on its strengths in science and innovation in manufacturing.

• There are currently more than 3,800 businesses in Wales that export, with a combined value of £13billion in the first quarter of 2017. Wales is also an attractive place for inward investment, with latest figures showing that 85 foreign direct investment projects were secured in Wales, creating 2,581 new jobs and safeguarding almost 9,000 more.

• The Secretary of State for Wales has recently written to over 26,000 Welsh businesses identified as potential exporters including a copy to the Wales Export Guide. The Wales specific guide sets out the full range of support available to Welsh businesses from the UK Government and contains inspiring stories of companies based in Wales that are successfully exporting. You can read the guide online here.

• Up to £15m funding over three years for New Model in Technology & Engineering (NMiTE)
• NMiTE will train up the next generation of engineers, providing the skills that employers need
• All courses co-created with employers, with 6-12 month integrated work placements

Universities Minister Jo Johnson today announced funding of up to £15 million to support the establishment of a new higher education provider specialising in high-quality engineering courses.

The New Model in Technology & Engineering (NMiTE) aims to become the first new ‘greenfield’ university in the UK for 30 years, addressing the growing need for engineering talent in sectors such as advanced manufacturing, artificial intelligence and cyber-security.

NMiTE is taking a radical approach to training the next generation of engineers, including having a 50:50 gender balance target, 6 – 12 month integrated work placements, and recruiting graduates from non-traditional backgrounds. It will also offer accelerated degrees, meaning students can complete their degrees in two years.

The funding, which relies on the project meeting a set of milestones and criteria, will be used to develop the faculty, campus and curriculum, creating a new institution to draw talent to Hereford from the UK and beyond. NMiTE will increase the number of engineering graduates and professionals, addressing a vital skills gap in the economy.

It will work closely with University of Warwick and employers including QinetiQ and Heineken on the design of the curriculum, producing graduates who are ready for the demands of the job market.

Universities Minister Jo Johnson said:

New innovative higher education providers such as NMiTE will play an important part in educating the next generation of much-needed engineers, providing the skills and talent that employers need.

Our reforms are about giving all young people access to university and an increasingly diverse market to choose from. This will ensure a steady stream of highly-skilled graduates into the workplace, meeting the needs of business and boosting the British economy.

Today’s announcement builds on plans set out in the government’s modern Industrial Strategy which aims to improve living standards and economic growth by increasing productivity and driving growth across the whole country.

Engineering graduate supply currently falls significantly short of demand. Engineering UK estimates a shortfall of at least 20,000 annually.

NMiTE will take its first cohort of students in September 2020, with development cohorts in 2018 and 2019. Some features include:

• Hands-on project based learning with no lectures – classes will be delivered by teaching professors and practitioners;
• Courses co-created with employers, with mandatory work placements of 6-12 months before graduation;
• Emphasis on enhancing pathways for women with a 50:50 gender balance target, boosting the number of female engineering graduates;
• An aim to support 25% of its student intake with bursaries and scholarships to support diversity and social mobility; and
• A commitment to recruiting from non-traditional backgrounds – e.g. higher level apprentices, armed service leavers.

This follows the introduction of the Higher Education and Research Act 2017, which aims to drive up quality and competition in higher education by making it easier for high-quality institutions to enter the market.

The government has also already set out a series of reforms to technical education, backed by an investment of more than £500 million, to ensure young people receive the training they need to take on the high-paid, high-skilled jobs of the future.

Jesse Norman, MP for Hereford and South Herefordshire, first called for a university there in 2009. He said:

This may well be the most significant development for Herefordshire since they built Hereford Cathedral. Economically, socially, demographically, I believe it will be transformative for the county. But in its vision, innovation and energy, it will also be transformative for tech and engineering education in the UK.

Founding President and Chief Executive Professor Janusz Kozinski said:

With this terrific investment from the Government we are now ready for lift-off. We will be totally reimagining and redesigning the higher education experience for the young people who will create Britain’s future.

If Britain is to lead the next industrial revolution, driven by artificial intelligence, driverless cars and 4D printing, we need to educate young people to be pioneers and creators. We need to give them the confidence to think beyond their textbooks, the freedom to be daring, and the tenacity to turn ideas into new products, new companies and even entirely new industries.

The future of higher education for engineers is arriving very soon, in Hereford.

Toby Kinnaird, MD of Barrs Court Engineering in Hereford, said:

The area is dominated by larger SMEs, many of which are key links in national and international supply chains. The university will be key to upskilling the local and regional workforce, boosting productivity and enabling many companies to innovate faster and compete globally.

The visit took place during Black History Month, a nationwide celebration of black history, arts and culture held every October.

Sir Michael Fallon met the unit’s engagement team, who have been specifically set up to build links with minority communities across London, and congratulated the Royal Navy’s longest serving female reservist Chief Petty Officer Evadne Gordon who joined 40 years ago and whose family moved from Jamaica to the UK in the 1950s.

The visit included a meeting with Commander Richmal Hardinge, HMS President’s second ever female Commanding Officer, and a chance to speak to a group of Sea Cadets, following this month’s approval of 31 new cadet units in state schools, five of which are in London and the South East.

The Defence Secretary Sir Michael Fallon, said:

We are working hard to ensure the Armed Forces, like our cadets, better represent the society they serve but there is still much more to do. We want more sailors, soldiers and airmen to come from minority and ethnic communities. More diverse armed forces are a stronger armed forces; that has to start amongst the junior ranks and work all the way up to chief of the defence staff.

Sir Michael Fallon congratulated Chief Petty Officer Evadne Gordon for becoming the longest serving female member of the Royal Naval Reserves.

The Armed Forces have committed to ensuring that at least 10 per cent of all new recruits come from minority and ethnic communities by 2020, with intake levels currently at 7.2 per cent.

To achieve this a set of networks have been established within the Armed Forces, which is part of the diversity and inclusion strategy.

The Defence Secretary spoke to members of the Sea Cadets at HMS President

In June the Defence Secretary attended the unveiling of the first ever memorial to African and Caribbean servicemen and women during the First and Second World Wars.

15,000 soldiers from the West Indies Regiment saw action in France, Palestine, Egypt and Italy during the First World War – 2,500 of them were killed or wounded. These brave men from the West Indies won 81 medals for bravery, whilst 49 were mentioned in despatches.

55,000 men from Africa fought for the British during the First World War and hundreds of thousands of others carried out vital roles. They came from Nigeria, the Gambia, Zimbabwe, South Africa, Sierra Leone, Uganda, Malawi, Kenya and Ghana. It is estimated that 10,000 Africans were killed. African troops were awarded 166 decorations for bravery.

When I arrived in the Chief Secretary’s office in June, I was expecting to find a note telling me how much cash there was.

Instead all I got was a few pieces of cricket memorabilia and a rather sweet cat.

But what I did inherit were public finances in much better shape than in 2010. The deficit is down and the economy has enjoyed years of sustained growth.

On every street corner, I can see untapped potential. I see the ambition to succeed from the founders of firms to the leaders of social enterprises. In every business, school and hospital, we have huge talent.

I know that the best days of Britain are ahead of us.

In order to turbocharge our success, we need to unleash this potential within our economy.

And for that we must look to public services.

Why?

Because around a fifth of the economy is in the public domain.

And because:

Education

Infrastructure

Health care

Planning

Regulation

…are all under the control of the government.

Unlocking our potential is not about increasing the size of the state.

It’s not about what you spend – it’s about how you spend it.

We’ve made good progress over the last seven years, reducing the deficit while improving front-line services. Some say we can’t go any further, but I don’t accept that defeatism.

I know we can: it’s about unleashing a new era in technology, creativity and ideas.

In Britain we have some of the best public servants in the world.

But we need to give our public sector leaders new freedom…

Robustly measure our output…and make sure we spend every penny well.

Achievements to date

We’ve made huge progress since 2010:

• 4 years of uninterrupted economic growth

• a record number of start-ups created: we rank 3rd, with over 650,000 founded in 2016 alone

• we now have 22 billion-dollar tech companies based in the UK, from St Ives to Inverness

• the unemployment rate at its lowest since 1975

• millions more children in good or outstanding schools, and more student choosing to pursue maths at A-level

• historically high cancer survival rates

We didn’t achieve all this by losing control of the public finances.

We did it by harnessing the creative, innovative spirit that has driven Britain’s success for centuries…

By shifting money to the front line in health, policing and education…And by giving those on the front line the power to transform what they do.

Moving from inputs to outputs

So why is so much of the public spending debate just about how much money there is?

No company would measure its performance by its cost base.

You don’t see Sainsbury’s saying we’re doing better this year because we’re spending more money on products we’re buying to sell to our customers. Deliveroo didn’t come up with their new operating model by deciding what the budget was first and then buying up bikes.

The reason we’ve got such a high number of start-ups and our businesses are so successful is because they are constantly finding new and better ways to deliver their services.

Why do we only ask:

How big is her Budget?

How much are we spending?

Is it more this year or last year?

Is it more in Manchester or Bristol?

What number is attached to that announcement? And to be clear, there aren’t any spending announcement here today.

Of course, public services do require money. So let me set out the facts:

• public spending is currently 38.9% of GDP

• this year, it will hit £800 billion for the first time – that’s around £29,000 per household, and in line with what other major economies are spending

• on education, we spend more as a percentage of GDP than countries like Germany or Japan, and our health spending is 9.7% of our GDP, more than the EU average

• our public services are important. We value them highly. And that is exactly why they have been, and will continue to be, well invested in

How do we make public services better?

Hard working taxpayers want to know that every penny that they pay is going to good use.

Lower productivity means less value achieved for every pound spent: fewer operations conducted, fewer children educated well, fewer bins collected.

And the result? A substantial budget deficit on the eve of the UK’s biggest financial crisis in 80 years.

Let me be clear – there are some things only government can do.

But allowing the state to grow squeezes out the freedom and enterprise of the private sector.

It raises the tax burden on both individuals and businesses, slowing and stifling the innovation which drives our economy and our success.

If we want to make sure our public services continue to lead the world, we shouldn’t be losing control of the public finances or wrecking the economy.

We need a balanced approach – investing while driving productivity and value for money.

Productivity doesn’t mean we’re expecting people to work harder – people already work hard.

It’s about giving people the means and the freedom to maximise the impact of what they do. And making sure public services are having the greatest impact on people’s lives.

We have commissioned Sir Michael Barber to look at how we do exactly this.

For me there are three key areas:

Firstly, we need to continue to move towards a system that rewards the impact money has, rather than the amount of money spent.

Secondly, we must cultivate leadership in public services. We know what we want to see, but we should give those on the front line freedom to deliver.

And, finally, we must open up more of our public services to new ideas and disruptive innovation. We need to think big.

1. Impact

Firstly: we must rigorously measure the impact each pound spent has. If we can’t measure results, people will talk about what they always talk about: money.

We’re now much better at investing in economic infrastructure. With more sophisticated analysis we’re making better decisions than ever about where we invest taxpayers’ money. This means families and businesses see maximum gain when we spend money on roads or railways.

For example, in 2015, we were able to prioritise the dualling of the A11 to Norfolk, because it had a very high cost-benefit ratio compared to other projects.

Now we need to go beyond concrete and steel and use this approach to look at how government spending affects people.

We’re already doing this in higher education. We’ve recently published data measuring the impact of a university course on students’ prospects. It’s a new tool for comparing the return on investment at different institutions and courses.

It shows, for example, that students taking engineering at the OU can earn well over £50,000 five years after graduating.

And our Teaching Excellence Framework is incorporating earnings data, and providing a measure of the overall value-add that universities and courses provide.

However, effective measurement is not just about holding ourselves to our own standards, it is also about benchmarking our performance against other countries – noting where we are better and when we are not, so we can improve. We know how to benchmark. We simply need to do it more.

Prioritisation

This measurement can help us prioritise.

We are already doing this by rebalancing public spending. For example, by helping people into work, we’ve reduced the Jobseekers Allowance bill by £2.1 billion since 2010. And we are increasing public investment to around £1 in every £8, as opposed to £1 in every £14 in recent decades. And we are reprioritising within out Budgets.

On Education, our prioritisation of funding to the front line has meant that we’ve been able to put £1.3 billion extra into core schools funding. The evidence shows that high quality teaching that is the key factor of educational performance.

But we need to go further.

We need to back brave leaders, like Simon Bailey of Norfolk Constabulary, who is reshaping his force to deal with the changing nature of crime: making difficult decisions so he can invest in the IT required to deal with increasingly complex crimes such as adult and child abuse, sexual offences and cyber-crime.

2. Leadership freedom

As Charlie Mayfield identified in his report industry productivity, leadership is an area where the UK has much to learn.

To use his exact words: While we have world class, high performing businesses, in far too many UK firms of all sizes, management performance falls behind the best international standards.

Our public services are no different.

We need to move away from the idea that great leadership and management is something that you are born with. That someone is either Winston Churchill or David Brent.

Some of our most successful innovations like academies, foundation trusts and reform prisons have been about enabling and empowering leaders: giving them the freedom to lead and the accountability that comes with that.

Take the Michaela School, run by Katherine Birblesingh, that I visited in Wembley.

Katherine has reorganised the school day to eliminate the time normally lost moving from classroom to classroom.

Over time, it means hours – days – of time spent in the classroom instead of wasted in the corridor.

Taken together, seemingly insignificant changes can have a huge impact on children’s lives.

The Michaela School was recently rated ‘outstanding’ in every category by Ofsted.

Or take Worthing Hospital, where trust leader, Marianne Griffiths, has embraced the Japanese concept of Kaizen – continuous improvement.

This has been adopted by the brilliant team on Beckett Ward, led by deputy Sister Sue Grace.

Instead of lodging a complaint to senior management and waiting six weeks for a response, the team gather each day for an “improvement huddle”.

One such improvement was a nurse’s suggestion to move admin desks onto the patient bays. This would mean nurses could supervise patients while doing paperwork. Otherwise known as “BayWatch”.

Once put into practice, falls by frail patients dropped by 80%. We know our nurses are working their socks off.

The problem is, there are often too many barriers to making the small changes that have a big impact.

As a government, we must do more to empower our public servants, remove these barriers and provide them with the means and support to unlock their potential.

In the way we design frameworks and spending controls, the Treasury – whilst protecting public money – must make sure we are allowing leaders to lead and giving them freedom over how to achieve results.

3. Disruption is good

Finally, I want to take on this notion that the public sector should resist outside influence.

The public sector does not exist in a bubble and business should not be treated as the enemy.

Don’t critics realise that the cheap flights they take – the lattes they sip – and the smartphones they post their dubious comments from are all results of free enterprise.

Rather than ignoring or denying the virtues of enterprise we should be harnessing it for the public good.

Both of my parents worked in the public sector in Leeds, my dad as a university lecturer and my mum as a nurse and then teacher. In fact, my father is still working as a mathematics lecturer today.

The institutions that they worked in – Leeds University and the Infirmary – emerged in the city’s days as a wool town, and were paid for and heavily influenced by the industrialists of the day.

Fast forward to today, and we can easily see the huge contribution made by entrepreneurs and business people – like Lord Harris and Paul Marshall – to our public service. Both have brought their energy and drive to the academies and free schools movement, where performance is outstripping other schools in the state sector.

Public private partnerships, like the Docklands Light Railway, are some of the most effective and popular public services in the UK.

From Ask the Midwife, an app which is helping expectant mothers to access NHS services quicker and more effectively…

…to the brilliant IT company Reveal Media that supply bodyworn cameras to police, saving time and speeding up prosecutions

…to the transformative effect that digital flood information is having on coastal towns and villages vulnerable to flooding – technology only available because of the innovations of world leading software companies.

We must champion a rich, vibrant, creative, enterprising public sphere where all ideas are welcome.

Looking forward

We want to see new ideas challenging the status quo of our public services.

Government doesn’t always have the answers, but we can create structures to empower people – liberating our public servants and making the most of those opportunities.

This idea that some monolithic planned state will solve Britain’s problems in our rapidly changing and incredibly diverse world is ludicrous.

The best ideas often come from those on the front line. We need a public sector open enough to harness new ideas for the public good.

Conclusion

We’ve come a long way in understanding how to get the most from public services.

It’s not about spending money we don’t have.

It’s about championing the ambitious and the enterprising.

It’s about rigorous measurement of what we do and being willing to reprioritise.

It’s about opening up more of the public sector to new ideas and innovation, unleashing creativity in the way we approach our day to day delivery of public services.

In this way, we can harness the untapped potential of the public sector and its people to help drive our economy and put us in a strong position to thrive.