First supplementary memorandum by the
DTI)
At yesterday's committee, I promised you a note
addressing questions and providing further clarification on the
tables in the Annex to the 2006 Departmental Report.
I set out below the answers and further clarification:
Why, in Annex A1, has DTI's planned 2005-06 Total
Public Spending increased from £6,323 million in the 2005
Report to £7,526 million in the 2006 Report?
The 2005 Report shows total planned spending
of £6,323 million for 2005-06. This represents the Department's
planned spend, as set out in the Main Estimate in May 2005 and
were a "taut and realistic estimate" of the funds required
for the year, at that time. As time moves on, we adjust our Estimate
via the Supplementary Estimates process. The 2006 Report shows
the 2005-06 Estimated Outturn as £7,526 million.
The attached Annex to this letter details the
movements that have occurred. All of the movements between the
two estimates, amounting to £1.2 billion, are detailed in
the Winter and Spring Supplementary Estimates. The main changes,
are as a result of transfers of funding from other government
departments (£167 million from MoD for the NDA), use of our
end-of-year flexibility, which arises from prior period underspends
(Science £192 million; RDAs £51 million; British Shipbuilder
provision £87 million), changes in our coal, health and nuclear
related provisions (£240 million) and changes in the amounts
available for drawdown as part of the Post Office's revolving
loan facility (£430 million).
We have previously notified the Committee of
these changes, in our letters dated 11 November 2005 and 10 February
2006.
For clarity, the explanation provided in Committee
yesterday for the increase in the Department's spending related
to the movements between the years, 2004-05 (£4,757 million)
and 2005-06 (£7,526 million) as set out in the 2006 Report.
The main movements resulted from increased allocations as part
of the Spending Review 2004 (RDAs £343 million; Science £400
million); establishing the NDA (£1,027 million); and as noted
above, movement in provisions (£327 million), the Post Office
loan facility (£430 million) and transfers in from other
government departments (£207 million).
What does "Increasing UK Competitiveness"
relate to?
The Department requests resources from Parliament
under three broad headings, one for the non-Science related expenditure;
one for Science and one for UKAEA Pensions schemes. The "Increasing
UK Competitiveness" spending relates to all of our non-Science
and non-UKAEA pension scheme expenditure, and is analysed in detail
in Annexes A2, A3 and B1 of the 2006 Report.
An explanation of non-cash
For government budgeting purposes our resource
expenditure is classified as either near-cash or non-cash. Non-cash
represents all of the transactions that are included to reflect
the full economic cost of activities and the use of assets. As
mentioned at the Committee, it includes depreciation, cost of
capital charges, profit or loss on disposal of assets and new,
or changes in, provisions.
Alistair Darling
25 October 2006
Annex
TOTAL PUBLIC SPENDING—ANALYSIS OF MOVEMENTS
BETWEEN 2006 DEPARTMENTAL REPORT (DR) AND 2005 DEPARTMENTAL REPORT
| Other Govt Departments
| £'000 | £'000
|
| Transfers in | |
|
| From DFES for National Council of Graduate Entrepreneurship
| 350 | |
| From Cabinet Office for ShEX | 1,250
| |
| From HMT for ShEX | 1,350 |
|
| From ODPM for RDAs | 21,020
| |
| From DFES for OME, schools teachers review body
| 101 | |
| From ODPM for the Government Offices | 1,125
| |
| From MOD for NDA | 167,000 |
|
| From Cabinet Office for Parliamentary Council
| 1,587 | |
| From DWP for CEHR | 229 |
|
| From DCA for CEHR | 126 |
|
| From HMT for MG Rover | 13,000
| |
| From DCA for CEHR | 38 |
|
| | |
| | 207,176
|
| Transfers out | |
|
| To DCA, ETS machinery of government transfer
| (78,149) | |
| To ODPM for Government Offices | (731)
| |
| To DFT for low carbon vehicle partnership |
(250) | |
| To DCMS for transfer of Women's Minister |
(100) | |
| To ODPM for the Government offices, from UKTI
| (210) | |
| To Cabinet Office for equalities review, CEHR
| (224) | |
| To Cabinet Office for equalities review, CEHR
| (165) | |
| | (79,829)
|
| Use of EYF, using unspent balances brought forward from prior years
| | |
| OST draw down to fund Research Councils |
191,658 | |
| RDA drawdown | 50,507 |
|
| Funding "2 roof" department relocation
| 10,600 | |
| Former Soviet Union cost | 6,500
| |
| Post Office Urban reinvention | 31,400
| |
| Efficiency Challenge Fund (for early staff exits)
| 3,095 | |
| Competition Commission cost of capital charges
| 3,000 | |
| Concessionary Fuel | 10,000
| |
| British Shipbuilders provisions | 87,000
| |
| Performance Innovation Fund (renewable energy)
| 2,000 | |
| SBS Enterprise Capital Fund | 6,000
| |
| Launch Investment—to meet shortfall in receipts
| 23,900 | |
| For the OFCOM loan | 6,190 |
|
| To fund the Enemy Property scheme | 2,055
| |
| | |
| | 433,905
|
| Accounting/Adjustments |
| |
| Post Office loan facility (AME) | 430,000
| |
| Coal and nuclear provisions, cost of capital (AME)
| 240,005 | |
| LDA corporation tax (AME) | 370
| |
| OST adjustment for depreciation | (9,400)
| |
| BE related adjustment (cost capital credits etc)
| (29,179) | |
| | |
| | 631,796
|
| UKAEA pensions (AME) | 10,000
| |
| | 10,000
|
| | |
| | 1,203,048
|
| Budget Estimate—Departmental Report (DR) 2005 Annex A1
| 6,323,000 | |
| Estimated Outturn—Departmental Report (DR) 2006 Annex A1
| 7,526,000 | |
| |
| Movement—DR 2006 vs DR 2005 |
1,203,000 | |
Addendum
GLOSSARY OF
TERMS
DfES—Department for Education and Skills
ShEX—Shareholders' Executive
HMT—HM Treasury
ODPM—Office of the Deputy Prime Minister (now Department
of Communities and Local Government)
RDA—Regional Development Agency
NDA—Nuclear Decommissioning Authority
CEHR—Commission for Equality and Human Rights
DFT—Department for Transport
UKTI—UK Trade and Investment
DCA—Department for Constitutional Affairs
EYF—End Year Flexibility
OST—Office of Science and Technology (now Office of
Science and Innovation)
SBS—Small Business Service
OFCOM—Office of Communications
AME—Annual Managed Expenditure
BE—British Energy
LDA—London Development Agency
UKAEA—United Kingdom Atomic Energy Authority
OME—Office of Manpower and Economics
MOD—Ministry of Defence
DWP—Department for Work and Pensions
ETS—Employment Tribunal Service
DCMS—Department for Culture, Media and Sport
|
