UK i shares bond duration

[Observer]

I am setting up a UK based permanent portfolio, where under the long term bonds 25% allocation, i have the choice of the i shares IGLT ETF

http://uk.ishares.com/en/rc/products/IGLT

in Craigs book, he mentions that since the average duration of this fund is only 13 years, that i can increase my weighting in this fund , and reduce the weighting in the cash portfolio ( page 222 in his book) . How much of an increase in weighting would be appropriate, and why? also, what would the rebalancing strategy need to look like? there are no initial charges to enter the IGLT ETF or the cash fund, and the annual charges are low. I am weighing this up against acquiring directly from the UK Government - the charges are about 1% to buy and 1% to sell

another thing that i dont quite understand is securities lending - under IGLT, the lending of gilts seemed to have generated an annual return of 0.02% which hardly seems worth the risks? it seems that the fund is lending gilts in exchange for corporate grade debt? the following is their lending profile which they can change at any time - does anyone have concerns about this?

12 Month Lending Summary as at ~
31/12/13
Securities Lending Return* 0.02%
Average on-loan (% of AUM) 14.61%
Maximum on-loan (% of AUM) † 50.00%
Collateralisation (% of Loan) 111.24%