New build nuclear: Big returns for French and Chinese governments at Brits’ expense

8 May 2014

The private financing behind the Hinkley Point C nuclear power station will cost British consumers £12.4 billion more over 35 years than government backed procurement, a new report from CentreForum suggests.

The think tank says the absence of government investment will result in an additional bill of at least £15 a year per UK household for a generation while the taxpayer underwrites double digit returns to French and Chinese nationalised industry.

Need for new build nuclear

82% of Britain’s existing nuclear generation capacity is due to be decommissioned by 2023 – more than half of the UK’s low carbon energy supply.

To meet the UK’s climate change targets and provide security of supply, new build nuclear is considered essential to the UK energy mix. CentreForum believes that state subsidy is appropriate given the risks associated with new build nuclear.

However, its report maintains that both the financing model and the selection criteria for the Hinkley Point C project are flawed. It says that there should have been a public auction to secure the minimum subsidy level with a viable public sector comparator.

The company created out of the comparator could have looked like Network Rail, operating at arm’s length from government – but unlike Network Rail, would be able to pay back its debts, CentreForum says. 

Achieving cost effectiveness

The report suggests that the assessment criteria for new build nuclear in future should include the differential costs of grid connections and realising the value of government owned nuclear sites.

It says that there are savings to be made from burning the UK’s 140 tonne plutonium stockpile rather than continuing to store it.

Further savings could be achieved by “transmuting” existing nuclear waste to make it easier to store, the report adds.

Toby Fenwick, CentreForum research associate and report author, said:

“New nuclear is essential for low carbon energy. The question is how to provide it in the most cost effective way. Decisions taken under the last government will result in expensive electricity that will cost British consumers more than £12 billion more than is necessary over the next 35 years. UK consumers deserve better value.”

“Operating as a Network Rail style arms length organisation, a public operator is best placed to provide the competition required to get the best price for the low carbon nuclear power we need.”

“Getting rid of the 140 tonne plutonium stockpile will save us £40m a year in storage costs and £500m to build a new storage facility. It is important to build the most efficient plutonium burning option into the selection process for future nuclear power plants.”

NOTES TO EDITORS

The CentreForum report ‘UK new build nuclear power: delivering best value’ by Toby Fenwick can be viewed here.

Britain’s universities falling short on social mobility, new research indicates

1 May 2014

A new study by respected academic Professor Michael Brown suggests that the delivery model for higher education in Britain is not fully “fit for purpose” in assisting social mobility.

Writing for the think tank CentreForum, the former vice-chancellor of Liverpool John Moores University observes that current policy focuses wholly on “input” measures of social mobility – the type of students being admitted to university – rather than “outputs” – what happens to students once they leave. 

Special interest is taken in the recruitment of disadvantaged students by research intensive universities. But Professor Brown’s study says that progress made against even this limited measure of social mobility has been slow.

When output measures are employed, it finds that research intensive universities are being outplayed by many other institutions in boosting the employment prospects of disadvantaged students.*

Social Mobility Graduate Index

Professor Brown unveils a prototype Social Mobility Graduate Index (SMGI) as a tool for comparing institutions’ success in getting disadvantaged students into graduate level employment. Using data from the Higher Education Statistics Agency, the SMGI considers the destinations of university leavers six months after they graduate. 

The index is weighted to recognise the additional support that disadvantaged students need to secure professional employment. This means institutions will score highly if their graduates from disadvantaged backgrounds get a graduate level job. It thus becomes a “value-added” measure and could be further refined to take university subject mix into account, the study says.

The SMGI appears to indicate that the current higher education practices are not delivering good outcomes when it comes to social mobility. The results for research intensive universities are particularly underwhelming, especially for the relatively few disadvantaged students that they have admitted.

Traditional practices no longer fully fit for purpose

The report concludes that the traditional undergraduate course is no longer fully fit for purpose and that in addition to subject mastery, universities must provide systematic graduate and high level skills development to facilitate the transition from higher education to professional employment. 

It also calls on government to make the SMGI a key social mobility indicator and so strengthen universities’ incentive to treat disadvantaged students as valuable assets.

Professor Michael Brown said:

“As students and their families make larger and larger investments in higher education their expectations for satisfactory outcomes become greater. The most sought outcome is that of achieving satisfying professional employment.” 

“However students need to understand the importance of graduate and high level skills in achieving success in future life, and universities need to take responsibility to develop these skills in addition to subject knowledge and mastery.”

“This is especially important for disadvantaged students who do not have readily available role models, relevant experience or family networks.”

“Encouraging students to go to university but then not ensuring that those students are fully developed to facilitate them achieving professional outcomes seems perverse. It is time for universities to raise their game.”

NOTES

* Students least likely to participate in higher education according to POLAR3 classification.

 

Urgent need to tackle loneliness among the over 85s

29 April 2014

- Time to “break the taboo” around loneliness says CentreForum in a report supported by Age UK and endorsed by care and support minister Norman Lamb

More must be done to combat loneliness and isolation among Britain’s oldest residents, a new report from CentreForum argues.

The think tank warns that more than half of over 85s, the country’s fastest growing age group, feel lonely some or all of the time.

It says this is not just a personal tragedy for the individuals affected but places pressure on the NHS through related health problems and on the care services sector. Socially isolated and lonely adults are more likely to be admitted to residential and nursery care early, it points out. 

The report ’Ageing alone’ contains case studies that show how loneliness among older people is being tackled across the UK.

But it says that access to services is patchy and there is a need for relevant organisations to work together to reach isolated over 85s. Loneliness in general is under regarded as a health priority, it adds.

The report finds among other things that only around half of local Health and Wellbeing Boards which have published a Joint Health and Wellbeing Strategy acknowledge loneliness and isolation in their plans.

In response, it says that more research needs to be undertaken by government on the financial costs of loneliness as the number of people aged 85 and over increases.

Other recommendations include a requirement on all Health and Wellbeing Boards to address loneliness within their Joint Strategic Needs Assessments (JSNAs), and call for more structured opportunities for volunteers to build relationships with older people.

The report is being launched at a stakeholder event with Age UK and minister Norman Lamb MP on 29 April.

Norman Lamb MP, Minister of State for Care and Support, said:

"Loneliness needs to be tackled by a change in society’s attitude. Every one of us can help to combat loneliness and we all need to be more creative about how we help elderly people and the chronically lonely to feel more a part of their society.”

“We are working with partners like the Campaign to End Loneliness to reduce levels of loneliness and help people to understand the link between people's relationships and their mental and physical health and wellbeing. I am pleased to see CentreForum focusing on this important area."

James Kempton, Associate Director, Education and Social Policy at CentreForum and co-author of the report, said:

“Growing older does not have to mean growing lonelier.  There are fantastic projects out there showing how you can make a huge difference. But too many of the oldest old are missing out and that will only get worse as life expectancy increases.”

“Loneliness is a personal tragedy and as a society we should be aiming to do more. A key first step is for government and the new health and wellbeing boards to the recognise loneliness as an important public health priority.”

Caroline Abrahams, Charity Director at Age UK, said:

“We are delighted to support this CentreForum project because the evidence increasingly shows that loneliness not only makes life miserable for far too many older people, it also represents a real threat to their health.

“At the moment we aren't doing enough in this country to help older people avoid and overcome loneliness, and many of the local services that we know older people value, like lunch clubs, are struggling to survive because of council funding cuts.

“We hope this report will inspire local and national policymakers to want to do more, and give them the tools to know how to do so effectively."

Budget 2014: Give self-employed Brits a tax break, think tank urges

14 March 2014 

The government should help Britain's growing legion of self-employed workers in next week's Budget statement, according to CentreForum.

In its formal submission to the Budget, the think tank urges the Chancellor George Osborne to scrap Class 2 National Insurance – a "poll tax" on self-employed people – to ease living cost pressures for the one in seven UK workers currently running their own business.

It is estimated that half of these workers have annual earnings of £12,000 or less. Scrapping Class 2 National Insurance would deliver them with a £143 tax cut and cost the Treasury next to nothing, the analysis finds.*

The Class 2 proposal is part of a package of recommendations for making National Insurance simpler and fairer. CentreForum argues that self-employed workers could be helped further by a rise in the other self-employment National Insurance threshold – Class 4 – so that it matches the personal allowance for income tax.

Additionally, the think tank calls for the removal of the requirement on local authorities to hold a referendum on any council tax rise above 2%. It accuses the government of weakening the link between local finance and local democracy.

Other measures in CentreForum's Budget submission seek to address 'unfair' tax breaks. This includes the subsidy on red diesel which costs the Treasury up to £2.4 billion each year in lost revenue.

The submission also reaffirms CentreForum's longstanding proposal to hand shares in RBS to the British public.

Adam Corlett, Economics Researcher at CentreForum, said:

"George Osborne should make National Insurance simpler and fairer. A good start would be scrapping the antiquated self-employment poll tax which hits the poorest and small businesses the hardest."

NOTES TO EDITOR

* HM Revenue and Customs recently consulted on bringing Class 2 National Insurance within the self-assessment process to cut red tape. CentreForum was the first to argue it should instead be scrapped entirely.

'CentreForum proposals for Budget 2014' by Adam Corlett, Toby Fenwick and Tom Papworth can be accessed here.