Schools dubbed ‘exam factories’

18 November 2012 Last updated at 19:05 ET

By Angela Harrison Education correspondent, BBC News

Business leaders say some UK schools have become “exam factories” and are calling for children to be given a broader education.

The CBI is calling for radical changes to schools.

It says there is too much focus on exams at 16 and that should be switched to 18, with more emphasis on skills people need for life and work.

It calls for schools inspectors and league tables to look beyond exam results.

But it says improved attainment would boost the UK’s economic growth.

The CBI, the employers’ organisation, made the recommendations in a report released at the start of its annual conference.

Its director general John Cridland said: “In some cases secondary schools have become an exam factory.

“Qualifications are important, but we also need people who have self-discipline and serve customers well. As well as academic rigour, we need schools to produce rounded and grounded young people who have the skills and behaviours that businesses want.”

The business leaders say their report is for the UK as a whole, but power over education is devolved from Westminster and policies and exams taken differ.

Some of their recommendations relate most closely to schools in England, where Education Secretary Michael Gove is overhauling the school system, including exams.

‘Cult of the average’

Mr Cridland told journalists the CBI was not criticising government policies – or teachers.

“Government reforms are heading in the right direction, but are not sufficient on their own and must go further and faster,” he said.

The report backs England’s academy programme – where schools are encouraged to take on more independence – but is also critical.

It attacks what it calls the “cult of the average”, saying 40% of young people are underachieving while the top 10% are not being stretched enough.

The report says UK schools have had 35 years of “piecemeal reforms” and the result has been a “gentle upswing in performance”, judged by international benchmarks, but also a “long tail of low achievement”.

In England, from 2015, young people will be expected to stay in education or training until they are 18 and the CBI says the focus should be switching more towards exams at 18, with improved vocational A-levels. All children should study English and maths until that age, it recommends, which is in line with Labour proposals.

A spokesman for the Department for Education said: “The CBI rightly recognises the importance of English and maths, calls for greater rigour in the curriculum and in exams, welcomes the academy programme, wants a new accountability system and backs greater freedom for teachers.

“These are all part of the government’s radical package of reforms that will give England’s education system the thorough overhaul it needs.”

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Israel, Gaza fighting rages on as Egypt seeks truce

GAZA/JERUSALEM (Reuters) – Israel bombed Palestinian militant targets in the Gaza Strip from air and sea for a fifth straight day on Sunday, preparing for a possible ground invasion though Egypt saw “some indications” of a truce ahead.

Militant rocket fire into Israel subsided during the night but resumed in the morning with three rockets fired at the nearby coastal city of Ashkelon, the Israeli army said.

“As of now we have struck more than 1,000 targets, so Hamas should do the math over whether it is or isn’t worth it to cease fire,” Israeli Vice Prime Minister Moshe Yaalon, over Twitter.

“If there is quiet in the South and no rockets and missiles are fired at Israel’s citizens nor terrorist attacks engineered from the Gaza Strip, we will not attack.”

Forty-eight Palestinians, about half of them civilians, including 13 children, have been killed in Israel’s raids, Palestinian officials said. More than 500 rockets fired from Gaza have hit Israel, killing three people and injuring dozens.

Israel unleashed intensive air strikes on Wednesday, killing the commander of the Hamas Islamist group that governs Gaza and spurns peace with the Jewish state. Israel’s declared goal is to deplete Gaza arsenals and press Hamas into stopping cross-border rocket fire that has plagued Israeli border towns for years.

Air raids continued past midnight into Sunday, with warships shelling from the sea. A Gaza City media building was hit, witnesses said, wounding 6 journalists and damaging facilities belonging to Hamas’s Al-Aqsa TV as well as Britain’s Sky News.

An Israeli military spokeswoman said the strike had targeted a rooftop “transmission antenna used by Hamas to carry out terror activity”.

Two other predawn attacks on houses in the Jabalya refugee camp killed two children and wounded 13 other people, medical officials said.

These attacks followed a defiant statement by Hamas military spokesman Abu Ubaida, who told a news conference: “This round of confrontation will not be the last against the Zionist enemy and it is only the beginning.”

The masked gunman dressed in military fatigues insisted that despite Israel’s blows Hamas “is still strong enough to destroy the enemy”.

An Israeli attack on Saturday destroyed the house of a Hamas commander near the Egyptian border.

Casualties there were averted however, because Israel had fired non-exploding missiles at the building beforehand from a drone, which the militant’s family understood as a warning to flee, and thus their lives were spared, witnesses said.

Israeli aircraft also bombed Hamas government buildings in Gaza on Saturday, including the offices of Prime Minister Ismail Haniyeh and a police headquarters.

Among those killed in air strikes on Gaza on Saturday were at least four suspected militants riding motorcycles, and several civilians including a 30-year-old woman.

ISRAELI SCHOOLS SHUT

Israel said it would keep schools in its south shut on Sunday as a precaution to avoid casualties from rocket strikes reaching as far as Tel Aviv and Jerusalem in the past few days.

Israel’s “Iron Dome” missile interceptor system destroyed in mid-air a rocket fired by Gaza militants at Tel Aviv on Saturday, where volleyball games on the beach front came to an abrupt halt as air-raid sirens sounded.

Hamas claimed responsibility for the attack on Tel Aviv, the third against the city since Wednesday. It said it had fired an Iranian-designed Fajr-5 at the coastal metropolis, some 70 km (43 miles) north of Gaza.

In the Israeli Mediterranean port of Ashdod, a rocket ripped into several balconies. Police said five people were hurt.

Israel’s operation has drawn Western support for what U.S. and European leaders have called Israel’s right to self-defense, but there was also a growing number of calls from world leaders to seek an end to the violence.

British Prime Minister David Cameron “expressed concern over the risk of the conflict escalating further and the danger of further civilian casualties on both sides,” in a conversation with Israeli Prime Minister Benjamin Netanyahu, a spokesperson for Cameron said.

London was “putting pressure on both sides to de-escalate,” the spokesman said, adding that Cameron had urged Netanyahu “to do everything possible to bring the conflict to an end.”

Ben Rhodes, a deputy national security adviser to President Barack Obama, said the United States would like to see the conflict resolved through “de-escalation” and diplomacy, but also believes Israel has a right to self-defense.

Egyptian President Mohamed Mursi said in Cairo as his security deputies sought to broker a truce with Hamas leaders, that “there are some indications that there is a possibility of a ceasefire soon, but we do not yet have firm guarantees.”

Egypt has mediated previous ceasefire deals between Israel and Hamas, the latest of which unraveled with recent violence.

A Palestinian official told Reuters the truce discussions would continue in Cairo on Sunday, saying “there is hope,” but it was too early to say whether the efforts would succeed.

In Jerusalem, an Israeli official declined to comment on the negotiations. Military commanders said Israel was prepared to fight on to achieve a goal of halting rocket fire from Gaza, which has plagued Israeli towns since late 2000, when failed peace talks led to the outbreak of a Palestinian uprising.

Diplomats at the United Nations said Secretary-General Ban Ki-moon is expected to visit Israel and Egypt in the coming week to push for an end to the fighting.

POSSIBLE GROUND OFFENSIVE

Israel, with tanks and artillery positioned along the frontier, said it was still weighing a ground offensive.

Israeli cabinet ministers decided on Friday to more than double the current reserve troop quota set for the Gaza offensive to 75,000 and around 16,000 reservists have already been called up.

Asked by reporters whether a ground operation was possible, Major-General Tal Russo, commander of the Israeli forces on the Gaza frontier, said: “Definitely.”

“We have a plan. … It will take time. We need to have patience. It won’t be a day or two,” he added.

A possible move into the densely populated Gaza Strip and the risk of major casualties it brings would be a significant gamble for Netanyahu, favored to win a January election.

The last Gaza war, a three-week Israeli blitz and invasion over the New Year of 2008-09, killed 1,400 Palestinians, mostly civilians. Thirteen Israelis died in the conflict.

But the Gaza conflagration has stirred the pot of a Middle East already boiling from two years of Arab revolution and a civil war in Syria that threatens to spread beyond its borders.

One major change has been the election of an Islamist government in Cairo that is allied with Hamas, potentially narrowing Israel’s maneuvering room in confronting the Palestinian group. Israel and Egypt made peace in 1979.

(Writing by Allyn Fisher-Ilan; Editing by Douglas Hamilton)

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14 Black Friday Tech Deals Start Early at Walmart

1. Apple iPad 2 — 16GB

$ 399

Click here to view this gallery.

[More from Mashable: Top 10 Twitter Pics of the Week]

This year Walmart is starting Black Friday on Thursday, so you can get an early start on your holiday tech savings. You’ll need to gobble up your Thanksgiving dinner early and get over to Walmart; the company is kicking off in-store deals at 8 p.m. local time on Thanksgiving, when you can snag a Nintendo Wii Console for $ 89.

The big electronics event begins at 10 p.m. with deals on a Samsung 43-inch plasma TV and a NOOK Color. Don’t worry that they’ll run out of those door-buster deals either. Walmart is offering a one-hour guarantee on select consumer electronics during Thursday’s 10 p.m. event.

[More from Mashable: Stylish HiRise Stand Elevates Laptops to the Ideal Height]

Walmart says customers inside the store and in line between 10 p.m. and 11 p.m. local time can purchase an Apple iPad 2 16GB with Wi-Fi for $ 399 and score a $ 75 Walmart gift card, an Emerson 32-inch 720p LCD TV for $ 148 and an LG Blu-ray Player for $ 38. If the store runs out of stock, you’ll receive a Guarantee Card for the item, which you must purchase by midnight and register online.

If shopping online from the comfort of your home is more appealing than elbowing your way through a jam-packed store, Black Friday specials will be posted on Walmart’s website early on Thanksgiving Day. Head to Walmart’s Facebook page or use its mobile app to check out all the deals.

Scroll through the gallery above to see the top 14 tech deals we spotted, and let us know if you’ll be out shopping the specials this Black Friday.

Thumbnail image courtesy of Flickr, el neato

This story originally published on Mashable here.

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Dark Horse graphic novel adaptation “The Strange Case of Hyde” gets new writer

LOS ANGELES (TheWrap.com) – Screenwriter Albert Torres has come on board to re-write the script for feature film adaptation of the Dark Horse graphic novel, “The Strange Case of Hyde,” one of his representatives has told TheWrap.

The film is based on the graphic novel of the same name, which was written by Cole Haddon and published in 2011.

“The Strange Case of Hyde” follow Dr. Jekyll, after he is allegedly rehabilitated, and released from prison to help hunt a new monster who appears to be using an improved version of the infamous Hyde serum.

The film is being produced by Dark Horse Entertainment, Skydance Productions and Mark Gordon Productions.

The now classic characters Dr. Jekyll and Mr. Hyde first appeared in a novella by Robert Louis Stevenson in 1886.

Torres credits include “Henry Poole Is Here,” which starred Luke Wilson. He was also hired earlier this year to write a big-screen version of the Cartoon Network series “Ben 10″ for Silver Pictures.” He also came on board recently to re-write the script for “Akira” for Appian Way. Torres is represented by 3 Arts Entertainment and CAA.

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Golf-Obsession drove Aussie Batibasaga to mental institution

MELBOURNE, Nov 18 (Reuters) – The desire to improve can drive professional athletes to distraction, but for Australian golfer Rika Batibasaga it became a dangerous obsession that saw him handcuffed and thrown into a Florida mental institution.

In 2008, Batibasaga, whose father played international rugby for Fiji, was a 21-year-old living in Florida and grafting on the Nationwide Tour when his world spectacularly imploded.

“I was living away from home for the first time and it all got too much for me,” Batibasaga told Reuters at the Australian Masters in Melbourne on Sunday.

“I had a psychotic episode – it’s called psychosis. I lost the plot because of a lack of sleep – just due to stress.

“And I couldn’t control it and basically just flipped it out.”

Like hundreds of other young talents drawn to the United States to chase their dreams, Batibasaga felt hard work would prove the difference after he carried countryman and former house-mate Jason Day’s bag at a local tournament.

Feeling his game was not far off the professionals in that tournament, Batibasaga threw himself into a punishing training regime of 10-hour days hitting hundreds of balls, followed by running and gym sessions.

“It was stupid. It became an obsession. I felt I needed to push it a lot harder because I was almost there,” he recalled.

“But my brain just wouldn’t turn off and I would just get so frustrated and angry.

“When I went two or three days without sleep, I panicked and that it made it even worse. It just sort of snowballed.”

Into his sixth consecutive day without sleep, Batibasaga snapped.

Wearing just a pair of underwear, he jumped into a car belonging to the owner of the Orlando house he was living in and crashed it in the garage.

He jumped into another car, this one his house mate’s, and was arrested by police in front of Universal Studios.

“They both had their guns out. I guess it’s just America and they love pulling a gun on someone,” Batibasaga, an affable 25-year-old with a wispy beard, laughed.

“I was just driving around, I had no idea where I was going. I was in no state to drive.

“They put me in an ambulance, they obviously thought I was on drugs. They knocked me out at the hospital and I woke up feeling fine.”

With no phone or identification cards, Batibasaga was taken to a mental hospital where he spent “probably the scariest two days” of his life before being checked out.

The same problems came back to haunt him later, though, and he returned home for further treatment and a course of prescription drugs at a Brisbane hospital where he was diagnosed with bipolar disorder.

Batibasaga, who made the cut in his debut Australian Masters, has not suffered any further mental illness, and has learnt to take a more measured approach to success and failure.

He continues to grind on the minor tours but has shown signs of his promise, winning A$ 18,459 ($ 19,000) at the European Tour co-sanctioned Perth International last month for finishing joint 25th.

Batibasaga still has the green uniform from the Lakeside mental institution in Florida as a souvenir and wore it out to a New Year’s Eve party.

He says dozens of young golfers struggling to make the step up to the A-grade suffer from anxiety and depression that borders and often crosses over into mental illness.

“It’s rife. Because you’re always by yourself and if you’re not playing well, you go back to your hotel alone,” he said.

“When things aren’t going well, that’s when it’s tough.” ($ 1 = 0.9702 Australian dollars) (Editing by Nick Mulvenney)

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Europe’s Economy: Look Out Below, Again

It’s official: Europe has double-dipped. The 17-country euro zone has fallen into its second recession since 2008, as figures released on Nov. 15 showed gross domestic product declining 0.1 percent during the third quarter. That followed a 0.2 percent contraction during the previous three months, according to the European Union’s statistics office.

There were some unexpected bright spots. Germany and France posted 0.2 percent quarter-on-quarter growth, ahead of expectations. Even some of the region’s most troubled economies suffered relatively modest contractions, including 0.3 percent in Spain and 0.2 percent in Italy.

Overall, though, “Europe’s economic downturn has not only deepened; it’s broadened with a vengeance,” says Nicholas Spiro, managing director of Spiro Sovereign Strategy in London. Usually solid economies in such countries as Austria and the Netherlands were among those posting quarterly declines.

In some countries, even worse times could lie ahead. “Whereas austerity is starting to ease in Italy, Spain is heading for the point of maximum pain,” economist Holger Schmieding of Berenberg Bank in London wrote in a research note. Recent austerity measures in Spain “will likely lead to a more pronounced recession” during the current quarter and in early 2013, Schmieding says.

France’s 0.2 percent expansion, which followed three quarters of flat growth, “is probably the result of a temporary rebound at the European level,” says Michel Martinez, an economist at Société Générale in Paris. France “is heading to a moderate recession or at best remaining flat.”

The picture isn’t likely to improve soon, Spiro says. “We’re looking at a period of extreme weakness. This is all because of the repeated failures on the part of politicians to shore up confidence in the single currency area.”

Businessweek.com — Top News

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Jamaica to abolish slavery-era flogging law

KINGSTON, Jamaica (AP) — Jamaica is preparing to abolish a slavery-era law allowing flogging and whipping as means of punishing prisoners, the Caribbean country’s justice ministry said Thursday.

The ministry said the punishment hasn’t been ordered by a court since 2004 but the statutes remain in the island’s penal code. It was administered with strokes from a tamarind-tree switch or a cat o’nine tails, a whip made of nine, knotted cords.

Justice Minister Mark Golding says the “degrading” punishment is an anachronism which violates Jamaica’s international obligations and is preventing Prime Minister Portia Simpson Miller‘s government from ratifying the U.N. convention against torture.

“The time has come to regularize this situation by getting these colonial-era laws off our books once and for all,” Golding said in a Thursday statement.

The Cabinet has already approved repealing the flogging law and amendments to other laws in the former British colony, where plantation slavery was particularly brutal.

The announcement was welcomed by human rights activists who view the flogging law as a barbaric throwback in a nation populated mostly by the descendants of slaves.

“We don’t really see that (the flogging law) has any part in the approach of dealing with crime in a modern democracy,” said group spokeswoman Susan Goffe.

But there are no shortage of crime-weary Jamaicans who feel that authorities should not drop the old statutes but instead enforce them, arguing that thieves who steal livestock or violent criminals who harm innocent people should receive a whipping to teach them a lesson.

“The worst criminals need strong punishing or else they’ll do crimes over and over,” said Chris Drummond, a Kingston man with three school-age children. “Getting locked up is not always enough.”

The last to suffer the punishment in Jamaica was Errol Pryce, who was sentenced to four years in prison and six lashes in 1994 for stabbing his mother-in-law.

Pryce was flogged the day before being released from prison in 1997 and later complained to the U.N. Human Rights Committee, which ruled in 2004 that the form of corporal punishment was cruel, inhuman and degrading and violated his rights. Jamaican courts then stopped ordering whipping or flogging.

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Why David Geffen is getting the “American Masters” treatment

LOS ANGELES (TheWrap.com) – David Geffen is not a singer. Nor is he a movie star. Nor is he a writer.

Thus he would seem an odd subject for “American Masters,” a series devoted to artists ranging from Willa Cather to Woody Allen.

Yet series creator Susan Lacy claims that the mogul has had a profound impact on American popular culture that equals any of those figures. She pleads her case in “Inventing David Geffen,” which will be broadcast November 20 on PBS. The documentary had its premiere in Los Angeles on Tuesday night.

“He seems like a bit of an odd choice,” Lacy admitted to TheWrap. “But I have a degree in American Studies and I learned that the people with the most influence are often the ones behind the scenes.”

In Geffen, Lacy saw a figure like Alfred Stieglitz, a photographer whose lasting legacy was a series of modernist shows he held at his New York galleries that influenced visual arts in this country and brought cubism to the masses.

Some arm twisting must have been required to get the press-averse Geffen to emerge from semi-retirement to reflect on his career in movies, music and Broadway. Lacy said that part of the reason she was able to convince him to participate is that he was a fan of the series and had participated in her documentaries on figures such as Joni Mitchell.

“It wasn’t hard,” she said. “I knew from other people that he thinks my Leonard Bernstein documentary is one of the best documentaries anyone ever made. Mike Nichols told me that he makes everybody who stays with him watch it.”

In addition to Geffen, the documentary features interviews with his friends and colleagues — an A-list rolodex that includes Tom Hanks, Steven Spielberg, Elton John, Neil Young, Clive Davis, Barry Diller, and Irving Azoff. His sphere was huge, Lacy claims because his influence was tectonic.

By championing musicians such as Jackson Browne and Laura Nyro, Geffen put his own imprint on the emerging singer-songwriter movement in the 1970s. Later, Geffen managed to adapt to shifting tastes, by aligning himself with groups like Aerosmith and Guns ‘N Roses and helping to usher in the heavy metal craze. For more than 30 years, his labels – Asylum Records, Geffen Records, and DGC Records – represented the high-water mark for musicians, who clamored to get in the door.

“He had an incredible eye for talent,” Lacy said. “These people would have eventually found their way. But he helped them get there. He fixed their teeth and allowed them to write music that’s history.”

Though he made his name in music, Geffen also became a force in the theater and film businesses.

He enriched himself by producing hit musicals like “Cats” and “Dreamgirls,” and branched out into movies with memorable pictures like “Risky Business.” In 1994, he co-founded DreamWorks SKG, the studio behind Oscar-winners like “American Beauty” and “Saving Private Ryan.”

“In each decade, he has done something that has affected the culture,” Lacy said. “If I had to boil it down to one thing it would be his genius at business.”

It’s a mastery of deal-making and talent-scouting that has made him a very wealthy man, worth an estimated $ 5.5 billion. It is also a trajectory that Lacy maintains cannot be replicated in a more fractured media landscape, where mega-corporations wield disproportionate influence and are more interested in quarterly earnings than fostering rising stars.

“Even he would say that nobody could do what he did today,” Lacy said. “The times have changed so much. I asked him if he could raise $ 2 billion to start a new studio, and he said ‘absolutely not.’ And record companies, well, we know what happened to them. Behind all the conglomerates and corporations, to find someone with a genuine sensibility like David Geffen‘s would be impossible. He was unique.”

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New Global Fund head targets killer diseases with cash

WASHINGTON, Nov 15 (TrustLaw) – The Global Fund‘s new executive director, Mark Dybul, said he will move quickly to raise fresh money and release funding to combat the killer diseases AIDS, malaria and tuberculosis.

New scientific research shows that these diseases can be contained and his mission will be to achieve that in partnership with hard-hit countries, Dybul said in an interview on Thursday shortly after his appointment to head the epidemic-fighting agency based in Geneva.

“We are going to move aggressively to get money out of the door,” said Dybul, a former U.S. global AIDS coordinator. “We will be working to increase the resources of the Fund and its contributions. We will be very aggressive.”

“We have the scientific knowledge to completely control these diseases, and we want to have the resources,” Dybul added, although he did not set time frames nor financial goals.

Since its founding in 2002, the Global Fund to Fight AIDS, Tuberculosis and Malaria has approved $ 22.9 billion in funding for more than 1,000 programs in 151 countries. Its programs have helped treat 3.6 million people with AIDS, 9.3 million with anti-TB treatments and delivered 270 million insecticide-treated mosquito nets to prevent malaria, it said.

Dybul joins the Global Fund after a turbulent year for the public-private organization.

Set up a decade ago to combat the three epidemics, it was forced to halt new program funding in face of a revenue shortfall after the start of the global financial crisis. The Global Fund also faced criticism over misuse of funds, prompting its head, Michel Kazatchkine of France, to step down in January.

Its chief auditor, John Parson, was fired on Thursday after the board deemed his performance “unsatisfactory.”

Dybul, an AIDS clinician with a specialty in immunology who held leading posts under former U.S. President George W. Bush at the President’s Emergency Program for AIDS Relief and as an ambassador for AIDS, brushed aside any concern about the recent upheavals at the Fund.

“It is on a very strong forward trajectory,” he said. “It is in a very strong position and has a very strong emphasis on value for money and focus on the three killer diseases.”

He said the recent challenges demonstrate that the Fund is a “learning institution that reflects, reviews and reacts.”

The Fund’s board also on Thursday approved a new funding model, starting in 2013, that is designed to be simpler, more flexible and have greater impact in conquering the diseases.

The new system relies upon closer discussions with the recipient countries, along with other donor groups and experts, over the design of their disease-fighting programs, it said.

Funding also will focus on addressing the needs of the poorest countries with the highest number of infections, it said. Additionally, grant cycles will be flexible instead of falling in set time periods, so that they can be coordinated better with a country’s budgetary cycle, it said.

Medecins Sans Frontieres said in a news release that the first priority for the new executive director “should be making sure funding for new proposals gets out the door to accelerate much-needed treatment of HIV and drug-resistant tuberculosis, and raising the necessary funds to do so.”

Dybul said he will seek to build strong partnerships with countries in the design of comprehensive programs to control the epidemics, and work with other organizations in obtaining financing.

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MPs raise doubts over bank sales

16 November 2012 Last updated at 02:14 ET

A parliamentary committee has said the Treasury’s sale of Northern Rock in 2011 was “fortunate”, and Lloyds and RBS may not be sold “for many years”.

A Public Accounts Committee report noted that while the Rock’s sale was “well-handled”, taxpayers were still set to lose £2bn on the bank’s rescue.

MPs were not convinced that a profit would be made on the £66bn rescue of the two bigger banks any time soon.

A Treasury aide said it aims “to get the best possible value for taxpayers”.

“This government is putting right the catastrophic regulatory failings of the last decade that led to the biggest bank bailout in the world,” the Treasury aide added.

The government currently owns 40% of Lloyds, and 82% of RBS.

Lucky timing

Northern Rock was rescued in February 2008 by the previous government.

The sale of Northern Rock to Virgin Money in 2011 was carried out by the current government under time pressure, as EU state aid rules required the Treasury to dispose of its holding by 2013.

The committee said that UK Financial Investments (UKFI) – the state-owned body that manages the Treasury’s investments in the banks it rescued during the financial crisis – was lucky that Virgin was so keen to buy, given that there were only ever two bidders for the bank.

“The Treasury was fortunate that one of them had a strategic interest in purchasing a small retail bank at the end of 2011,” the committee’s report said, noting that current market conditions are less favourable than they had been at the time of the sale.

“The low level of competition does not give us confidence that the taxpayer will make a profit on the sale of RBS or Lloyds,” it added.

Continue reading the main story

September 2007 The run on Northern Rock

February 2008 Northern Rock nationalised

September 2008 Lloyds announces takeover of Halifax Bank of Scotland

October 2008 Government part-nationalises RBS and Lloyds-HBOS

January 2010 Northern Rock split into good and bad banks

December 2010 FSA clears RBS management of wrongdoing

November 2011 RBS agrees branch sale to Santander

November 2011 Northern Rock sold to Virgin Money

December 2011 Northern Rock sale to be investigated by NAO; FSA releases RBS report

September 2012 NAO releases Northern Rock report

October 2012 RBS branch sale to Santander collapses; RBS taken off Asset Protection Scheme

While the Treasury invested £1.4bn in Northern Rock shares, this was small in comparison to the £66bn invested in RBS and Lloyds.

“It seems inevitable that their ‘temporary public ownership’ will last for some time, if getting value for our investment remains the most important objective for government.”

The £2bn price tag for bailing out Northern Rock is not definite, and was drawn by the committee from a report provided to the committee by the National Audit Office (NAO) earlier this year.

The actual losses will depend on whether and how much profit UKFI is able to make from the Northern Rock assets that it did not sell to Virgin, and continues to own.

‘Lessons learnt’

Like the NAO, the committee was critical of the Treasury and UKFI – which took over ownership from the Treasury in 2010 – for being too slow to override the Rock’s management following the bank’s 2008 rescue.

“Northern Rock PLC still lost money in 2011, and its strategy should have been challenged sooner,” the report claimed.

The bank also failed to hit a £15bn government lending target during its time in public ownership, achieving only £9.1bn.

The report said that the government should have been more critical of the “optimistic” plan put forward by management for how to split the Rock up into a “good bank” that was sold to Virgin, and a “bad bank” with billions of pounds of problem mortgages that was retained in state ownership.

“The Treasury should ensure that lessons it learns from the sale are captured and can be applied to future disposals, including any sale of RBS or Lloyds.”

Margaret Hodge MP, chairman of the PAC, said the rescue of Northern Rock was made more complicated because the Treasury was unable to respond promptly to the banking crisis as “it lacked the right skills and understanding. It was slow to nationalise the bank and that made a loss difficult to avoid.

“The Treasury had spent five months trying to find a private sector buyer before giving up. After nationalisation, it then failed to effectively challenge the optimistic business plan put forward by the bank’s management to split the bank.”

She predicted that this would not be the last banking crisis, so the “Treasury must ensure it retains the right staff with the right skills to understand the risks and respond effectively.

“It needs to learn the lessons from the creation and sale of Northern Rock and make sure that these are applied in future, including to any sale of RBS and Lloyds.”

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