HMRC WINTER SUPPLEMENTARY ESTIMATE 2007-08

  The Committee has now had an opportunity to consider the HM Revenue & Customs' Winter Supplementary Estimate 2007-08 and supporting Memorandum.

  The Committee has noted the movements of £44.5 million for staff exit costs and £30 million for expansion of the call centres, in the Supplementary Estimate. It is expected that these changes and the related programmes within the Department will be pursued at the Sub-Committee's hearing at the Departmental Annual Report session on 5 December 2007.

  However, the Committee has noted that the £30 million DEL Reserve claim is also included within the End Year Flexibility (EYF) figures in the Memorandum. If the amount is to be drawn down from EYF, then there would be no need for a Reserve claim, and vice versa. Hence, the Committee requests an explanation of why the £30 million figure is included as both a Reserve claim and within the EYF calculations.

  On the take up of Departmental Unallocated Provision (DUP) of £15 million intended for direct tax compliance activity, the Memorandum states that the funding was part of the original spending plans, which was ring-fenced whilst a business case was developed. The Committee requests information on the following matters:

—  The Memorandum states that the £15 million DUP is intended for direct tax compliance activity, but there is no further explanation as to what specific programmes or activities it will be used for. The Committee requests further information on the use of this £15 million, particularly in view of the fact that there was a specific need for a "robust business case" to justify the expenditure.

—  The Memorandum states that the funding was part of the original spending plans. However, DUP—as per Treasury guidance contained in the glossary to the Memorandum—is for "unforeseen pressures", rather than for expected spending. The Committee requests clarification as to whether this was part of the original spending plans and if so, why this method was utilised because it appears to contradict the Treasury guidance.

  Finally, the figures in the EYF table, under the Admin Resource and Other Resource headings do not appear to be correctly calculated: Admin Resource appears to be overstated by £3.9 million, and Other Resource appears to be understated by the same amount. Therefore, the Committee requests that the calculations on this table are either revised, or explained.

  The Committee would be grateful for a response to the questions raised above by 30 November 2007.

22 November 2007