USE OF THE POWER GRANTED TO THE SECRETARY OF STATE BY SECTION 82 OF THE WELFARE REFORM AND PENSIONS ACT 1999

In July, David Davis and yourself discussed with Stephen Timms the issue of the new power included in the then Welfare Reform and Pensions Bill, which is now section 82 of the Welfare Reform and Pensions Act.

This power allows me to place a Report before the House of Commons, seeking approval for expenditure on new services in advance of Royal Assent to the particular piece of legislation creating the service. The rationale for the measure, as explained to Parliament, was that use of the power enabled swifter implementation of changes than would otherwise be the case. My Department's dependence on large-scale information technology systems is well known. Changing those systems is a substantial task; use of the power to incur expenditure would allow earlier implementation of the changes than would otherwise be possible.

It was agreed that, in normal circumstances, whenever I was considering asking the House of Commons to approve a Report that allowed me to use the power, I would give both the SSSC and the PAC an opportunity to see the Report in draft.

I have concluded that making use of the power to incur expenditure is of great value in the implementation of child support reform. I have therefore asked my officials to draft the necessary Report. A copy of the draft is enclosed with this letter[11]. You will appreciate that, at the moment, my officials remain in complex and confidential discussions with our preferred supplier for IT projects, the Affinity consortium. The position over these contracts is such that, in my view, it would be prejudicial to them to make an early disclosure. I trust, therefore, that you will understand why the Report is drafted in the manner chosen.

I should also explain that the funds for the actual expenditure that will be incurred in 2000-01 on the items mentioned in the Report is "new" money, separately granted to my Department by HM Treasury to meet costs of welfare modernisation.

I understand that it was agreed in July that officials might be called before SSSC to give evidence on the use of the power. I am, of course, anxious to co-operate with the Committee in the swift transaction of this business, so my officials stand ready to answer questions you might wish to put to them. If there are any matters requiring clarification before any hearing, my officials will liaise with the Committee's Clerk to ensure that any such difficulties are resolved.

You will appreciate that there is a need for speedy resolution of the consultative process, in order that I can enter into a contract with our suppliers for the IT system. There is much public concern that we bring in the reformed system at the earliest date. I am sure you would agree that it will be important to get the new system under way as soon as possible.

I believe Second Reading of the Bill may still be possible before the Recess. It would therefore be very helpful to us if you could let me have your response on this before the House rises. I would then be in a position to lay the Report before the House soon after it resumes sitting in January.

If you have any questions, or wish to discuss the matter further, please let me know. A copy of this letter goes to the Clerk.

pp Alistair Darling

[Approved by the Secretary of State and signed in his absence]