Select Committee on Environment, Transport and Regional Affairs Minutes of Evidence


  Schedule 5 of the resource accounts aggregates total resource costs against each of DETR's 10 main objectives. The total in Schedule 5 should equal the net operating cost in schedule 2 (Operating Cost Statement) and cover 100 per cent of the activity of DETR.


  Development of Schedule 5 within DETR has taken account of two factors:

    (b)  That within DETR there is a high degree of devolution of financial responsibility, supported both by Centres of Financial Expertise in the line and by Finance Directorate centrally.

  Procedures to produce Schedule 5 have involved:

    (a)  Developing mechanisms for attributing support service costs (e.g., Finance, Legal, Personnel) and overheads (e.g., accommodation, utilities);

    (b)  Identifying the main objective or objectives which policy colleagues support; and

    (c)  Assessing the extent to which the DETR accounting system (ASP) can aggregate the financial data to produce Schedule 5.

  Support service and overhead costs are collated against each policy objective, so that managers can see the total costs of delivering their objectives. Each policy objective underpins one of DETR's main objectives, so summing these gives the total cost of delivering DETR's main objectives.

Cost Attribution

  Following merger, DETR had two different systems of attributing costs which have now been replaced with a single system. It is proposed that this will be used for calculating costs of support services and overheads for any internal charging process; for costing services provided by DETR which are used by Agencies and for any Fees and Charges purposes, although detailed discussions are continuing. Various mechanisms for charging are being considered according to the service provided. Direct charged services (e.g., Internal Consultancy Unit) will probably be on the basis of the time expended; accommodation on the basis of the cost/m2 and indirect services costed on a per capita or other appropriate unit cost basis. The service costs will take account of inter-service costs (e.g., Personnel support for Finance).


  Programme costs will be attributed directly to the policy objective they support and, hence, the appropriate DETR main objective. This enables cross cutting costs (e.g., Transport policy development aimed at curbing CO2 emissions) to be attributed to the appropriate DETR main objective.

  In developing these mechanisms the intention has been to provide managers with useful information over which they have some control without placing disproportional burdens on them to provide, maintain and interpret the information.


  Development of the cost attribution system for support services is due to be completed in July and a detailed proposal for producing Schedule 5, by September. Implementation, including any modification of DETR's accounting system (ASP), is planned from January 1999.

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