Examination of Witnesses (Question Numbers
MP, MR DAVE
16 DECEMBER 2009
Q300 Mr Fallon: You have estimates
but you are not prepared to publish them?
Mr Darling: The reason we do not
is because up until now we have only published those estimates
as part of our estimate of departmental spending and our AME spending
over a three year period. We have not published them beyond that
Q301 Mr Fallon: `You have estimates
but you are not prepared to share them with Parliament. Let us
come to the spending. The note you have supplied to the Committee
shows total managed expenditure for three years after next so
you must have projections of the two constituent totals, Annually
Managed Expenditure and the departmental spending total not the
individual departments but the total. You must have current projections
of those totals.
Mr Darling: Inside the Treasury
we have many, many projections. I was just going to come on to
the next point, Mr Fallon, because I think it is an important
one. What we have published in the PBR in terms of content and
in terms of the range of figures has been the same as it was for
the last ten or so years. I recognise that within this Committee,
and therefore the House, and outside the House too, there is increasing
interest in various forecast assumptions that we make. I want
to strike a balance between ensuring that what we publish are
figures that people can say, "Yes, that is what the Government
is going to spend", whether it is on social security, whether
it is on the expenditure of individual departments, and also giving
people a fair idea of some of the uncertainty, some of the other
figures that might be around. I have been reflecting on this for
some time. I think there are areas probably where we need to go
further, because it will probably inform the debate, and I am
reflecting on how we can do that and I hope we can come to a conclusion
on that fairly shortly. I know full well that you have asked foryou
collectivelymore information, you did so at yesterday's
hearing, you have done so on previous occasions, and I am reflecting
how best we can do that. What I think we need to do is to make
sure that when we do publish figures people can see what exactly
are those things that are fixed and decided upon and those things
that are simply estimates of what we are doing.
Q302 Mr Fallon: Chancellor, I did
not ask you for decisions, I asked you for your projections because
Table 12 of the Budget document of 21 April, the leaked document,
showed the figures quite clearly, showed cuts in departmental
totals of 4%, 1.8% and 3%. The real reason you are not sharing
these figures with us is that they show you are going to cut public
spending. You are not being frank with us, are you?
Mr Darling: As I said to you,
the Treasury does have forecasts and estimates for thousands of
different bits of information and they are necessary to put together
our overall forecasts. What we publish are the Departmental Expenditure
Limits when they are fixed, we publish the AME forecastssocial
security, debt interest and so onwhen they are fixed, what
we do not do though is publish every assumption, every estimate
because that is not an indication of what the Government's policy
is. You take that document you referred to, which you say therefore
implies percentage cuts in each department, it does not because
the Government has not yet decided on what expenditure will be
in any department. We have not done the Spending Review or reached
a Budget settlement for any department.
Q303 Mr Fallon: Chancellor, we understand
the difference between a projection and decision.
Mr Darling: Good. I am glad about
Q304 Mr Fallon: The Institute for
Fiscal Studies have been able to calculate that in effect you
are cutting public spending by an average of 3.2 per cent a year
over those three years. Now they have been able to calculate that,
why will you not admit it?
Mr Darling: The IFS, and indeed
anybody else, can make stylised assumptions because it depends
on what they assume the Government actually does in relation to
spending and can come up with a conclusion. My point to you is
we have not yet decided on the individual Departmental Expenditure
Limits, a point which you accept. In relation to spending as a
whole, as I said the other day, we assume that spending overall
is broadly flat. Within that I have said I want to protect some
of the frontline services, which you know about, but in relation
to what happens to other departments, we have set ourselves ambitious
targets in terms of getting savings but I have said, and I said
it in the Pre-Budget Report, that some programmes will have to
be cut, some programmes will have to be delayed, some things will
have to be reprioritised because we are going into an era where
public spending will be much, much tighter than it has been over
the last period. I have made no bones about that, I do not flinch
from that but when people say, "Okay, so what does it mean
in Department X or Y", no we have not done the Spending Review
Q305 Mr Fallon: I understand that,
but you are trifling with the Committee when you are telling us
that because you have the total managed expenditure total it is
not possible to even provide your current projection for the two
big totals, annually managed expenditure and the departmental
total. You have admitted today you have those projections but
you are not prepared to share them with Parliament. You are not
being open about this.
Mr Darling: I am being very open
about it and about the fact that I come to a different conclusion
from the one that you come to. What I am saying is that we cannot
publish, because we have not done a Spending Review yet, our decisions
in relation to those things. What we have done in Spending Reviews
is to publish our decisions and people can judge us for good or
ill as a result of that. I have always been clear. There is nothing
new about this. Since the Treasury first set up shop it would
have had the estimates and forecasts, but those do not necessarily
translate themselves into being actual decisions.
Q306 Mr Fallon: It sounds as if you
were prepared to publish more information this time but, in fact,
you were overruled by Number 10, is that right?
Mr Darling: No, that is not right.
Q307 Mr Fallon: Let us turn now to
this issue of protection. You are protecting what you call frontline
Mr Darling: No, frontline services.
Q308 Mr Fallon: It says here "frontline
schools". Paragraph 6.28 of your own document: "to ensure
cash funding for frontline schools rises in real terms".
What is the definition of "frontline"?
Mr Darling: What is being protected
is the schools budget which is set out there. I appreciate what
you say in a document, a school is a school is a school.
Q309 Mr Fallon: No, I want to know
what is frontline. Is it the delegated schools budget? Is it the
total budget given to the local authority?
Mr Darling: I see what you mean
now. I was just making the point there is no such thing as a backline
school or anything like that. A school is a school. Can I ask
Andrew because Andrew has got the figures in front of him which
will explain exactly what we are doing in the schools budget.
Q310 Mr Fallon: Could you explain
what is in the frontline?
Mr Hudson: The judgment that is
made for schools is that the resources will ensure near cash funding,
to use the technical term, for the frontline rising by 0.7%. The
sorts of things that will protect is it will enable every school
to guarantee individually tailored education, including catch-up
support for 7-11s who are falling behind, free childcare for 3-4
year olds and more for disadvantaged 2 year olds and, as the Chancellor
stressed earlier on in the discussion, the September guarantee.
We made an assessment of the sorts of objectives that we wanted
to achieve and the funding necessary to deliver that is the 0.7%
Q311 Mr Fallon: What is at risk then?
Are they central Government grants like, for example, the £83
million you are spending on the Schools Music Service, the £168
million on the Sports Strategy for Young People? These are the
things that are now at risk.
Mr Darling: No decisions have
been made on those.
Q312 Mr Fallon: But are they frontline
Mr Darling: Andrew has explained
what is being protected.
Q313 Mr Fallon: Is the Schools Music
Service frontline? Let us have some answers.
Mr Darling: I am just answering
it. What Andrew Hudson was explaining is what is covered in the
protection that is being offered either in terms of a real term
increase or simply at inflation. As far as the rest of the Department
for Education is concerned or, indeed, other departments we have
not yet reached a decision because we have not settled the budgets
of any departments.
Q314 Mr Fallon: So what is at risk
are, in fact, things like the Schools Music Service, the Sports
Strategy, 28 million being spent on teenage pregnancy, the Children's
Fund on Social Exclusion, the Children in Care Grant of 43 million.
All of these programmes are actually not protected, they are at
Mr Darling: We have not fixed
the budgets for any of these and we will decide upon that in due
Q315 Ms Keeble: This was just a point
about the options. You have said that you have not got the decisions
but what we would like to see is the options.
Mr Darling: How do you mean "the
Q316 Ms Keeble: If you have a number
of projections as possibilities, if people can see what the options
and the consequences are. You previously said you would not consider
tackling old-age pensions but there must have been a decision
about the pensioners' income.
Mr Darling: Because we increased
Q317 Ms Keeble: Exactly. It is about
what the options are, what the costs are. These are unprecedented
times for people and they rely on the services and it is about
knowing what can happen, what it costs and what the options are.
He calls them "forecasts", I call them "options".
Mr Darling: It is up to whatever
individual, whatever government, to decide what it thinks is a
priority and what is a lesser priority and what it is not going
to do any more of. There is no list of things that you consider
and list of things you do not consider. Inevitably, every budget
holder whether it is the total budget in my case or an individual
department, ministers, have to make their minds up as to what
is important. The same with tax, you have to decide what is the
thing that is most important to you.
Q318 John Thurso: Can I very quickly
clear up one technical point. I had a very interesting exchange
with Mr Richardson yesterday regarding the fact that accounts
are in IFRS but that the Budget is done under Eurostat, which
has the effect that PFI is accounted for differently in each.
It was a very good technical explanation and I do not want to
go into the technicalities. What I suggested, which is obviously
a ministerial decision rather than anything else, is that it would
be extremely helpful in future documents if there was a clear
reconciliation between the two so we do not all have to scurry
around doing the work. Would you be prepared to do that in the
interests of transparency?
Mr Darling: I will certainly consider
John Thurso: Thank you.
Mr Tyrie: How very generous!
Q319 John Thurso: Half a step better
than I expected.
Mr Darling: It is all very uncertain.