APPENDIX
Supplementary Memorandum from the Welsh
Office
[References to Qs are to the oral evidence; references
to As are to the answers to the written questions]
ADMINISTRATIVE COSTS
51. (See Qq 13-16) Please provide a breakdown
of the £86.4 million planned expenditure on Central Administration
in 1998-99 (Table 1.02).
(a) Does this include the £17.3 million
capital, as well as the £0.5 million current, expenditure
on devolution (Table 1.03)? How do these figures relate to the
£2.3 million mentioned in Q 13?
(b) What is the reason for the increase
in expenditure on Central Administration, over and above the provision
for devolution?
The £86.4 million is made up as follows:
Welsh Office Running Costs £68.6 million[3]
(includes £3.6 million capital)
Devolution costs—capital £17.3 million
Devolution costs—current £ 0.5 million
The £2.3 million is included in the £68.6
million Welsh Office running costs. It was approved by the Treasury
and for devolution related running costs and is in addition to
the £17.8 million. Devolution apart, central administration
expenditure has decreased and this is shown clearly in Table 1.03
of Departmental Report.
LOCAL GOVERNMENT
EXPENDITURE/SCHOOLS
52/53. (See Qq 29-32) Please explain why
it is not possible to provide in the Departmental Report details
of planned local authority expenditure for the current year. How
much was spent on schools, in total, in 1997-98, and how much
is planned to be spent in 1998-99? Why is this not shown in the
Departmental Report?
The bulk of resources for local authorities
is distributed by formula as a Standard Spending Assessment (SSA)
for each local authority. SSAs represent the Secretary of State's
judgement about the level of expenditure each authority needs
to incur to provide a standard level of service. It is the responsibility
of individual authorities to determine the actual level of overall
expenditure and to determine how resources are allocated. Because
of this the Departmental Report is not, at the time of publication,
able to include actual expenditure data as it is not available
to the Department at that time. However, the Departmental Report
does include the amount set for local authority revenue services
(total standard spending TSS) and for 1998-99 this is set at £3,090.5
million (Chapter 7, paragraph 7.06).
NHS RECONFIGURATION
54. (See Q 42) Please clarify when the full
savings from Trust reconfiguration are expected to be achieved,
and what will be the transitional costs in the meantime.
Initial estimates by each of the project teams
established to manage consultation and early transitional arrangements
are that the full annual savings of in excess of £7 million
will be achieved by year 3, i.e. 2001-2002. Similarly, they estimate
the transitional costs to be approximately £12 million, most
of which will be incurred in year 1, i.e. 1999-2000. Each project
team is producing detailed financial commentaries which will be
assessed by the Welsh Office and independent assessors. These
will be available before any final decisions are taken on reconfiguration
proposals.
TEC-FUNDED TRAINING
AND ENTERPRISE
PROGRAMMES
55. (Qq 45-47) Please provide a note (in
confidence if necessary) on planned expenditure on TEC-funded
programmes.
TEC FUNDED TRAINING
TRAINING FOR
YOUNG PEOPLE
Some £61.4 million—virtually half
of the all-Wales training and enterprise budget—will be
available to train young people. This will build on the success
of Modern Apprenticeships; help the introduction of the new National
Traineeships; and assist disadvantaged young people to enter,
or return to, work, training or education.
Provision has been made for a further 4,500
Modern Apprenticeships and for around 7,800 National Traineeships.
In total the number of young people expected to start on the programme
is around 22,700, compared with 21,700 in 1997-98.
New funding arrangements are being introduced
for Modern Apprenticeships and National Traineeships to replace
the previous system, which was based predominantly on the number
of weeks spent in training. Instead, TECs will be paid for starts,
progress, and achievement of qualifications-in essence, payment
by results. The technical adjustment to reflect this new method
of funding means that, for 1998-99 only, it will be possible to
maintain broadly the same volume of activity at lower cost—hence
the small reduction (3.2 per cent) in planned expenditure compared
with 1997-98. Costs in future years will be correspondingly greater.
WORK BASED
TRAINING FOR
ADULTS
The level of provision for adult training has
been reduced by £7.2 million (31.9 per cent) by comparison
with planned provision in 1997-98. However, it is important that
the level of spending for 1998-99 is set in context. Firstly,
there is the welcome fall in unemployment—down by over 16
per cent over the past year. Then, there is the range of measures
to help unemployed people under the New Deal—under which
the Government expects to spend around £25 to £30 million
in Wales in the current year, dependent on demand. The New Deal
for 18-24 year-olds guarantees opportunities for young people
who have been unemployed for 6 months or more, all of which will
involve training or education. The adult training programme has
therefore been refocused on the over-25 client group.
Some of this client group (those unemployed
for 2 years or more) will also be able to access opportunities
for subsidised employment and full time education or training
under the New Deal for the over-25s. Around 6,000 people are expected
to start on the programme, compared to the 8,400 planned for 1997-98.
Funding for the New Deal, including follow-through
training for those who need further help to secure employment
following completion of their options, will be provided by the
Employment Service (ES), separately and in addition to provision
made available by the Welsh Office for youth and adult training.
ES are confident that they will be able to secure high quality
training provision in Wales, drawing on the existing training
infrastructure. They are in fact well advanced in agreeing contracts.
Most of the TECs in Wales will be playing a key role in facilitating
the delivery of training under the New Deal in Wales.
EDUCATION BUSINESS
LINKS
Although there has been a small reduction in
the budget it is expected that the full range of objectives will
be met as a result of efficiency savings. Table 4.08 of the Departmental
Report shows the planned objectives for 1998-99 compared with
those for 1997-98 and 1996-97.
BUSINESS AND
ENTERPRISE SUPPORT
AND LOCAL
INITIATIVE FUND
The provision available for Business Enterprise
Support and Local Initiatives is £25.2 million. Of this £3.4
million is for Business Connect, the Manufacturing Action Plan
and other non-TEC programmes, and £8.6 million was for TEC
Business and Enterprise Support (including £1.1 million to
help businesses to prepare for the problems anticipated with the
Millennium Bug). £13.1 million is for the TEC Local Initiative
Fund. £6 million of this is the estimated commitment to LG,
and the remainder is for other inward investments, outcomes from
Adult Technician Training and TECs' discretionary local initiative
projects.
The £8.6 million for Business Enterprise
Support compares with provision of £10.4 million last year.
Decisions on budgets for 1998-99 reflected the general fall in
unemployment and the significant additional resources coming available
under the New Deal.
Table 4.07 of the Departmental Report shows
the planned volumes for 1998-99 compared with 1997-98 and 1996-97.
LG
56. (Qq 47-4) Please provide a note on the
public sector costs of the LG project, with an explanation of
where these costs appear in the expenditure tables.
The LG project has two elements: LG Electronics
and LG Semicon. The Electronics project is to develop an integrated
monitor plant, and is expected to cost £521 million and create
4,400 jobs in two phases. The Semicon project is to develop a
wafer fabrication facility, with associated production facilities,
and is expected to cost £1,142 million and create 1,700 jobs.
Public sector support for the LG project consists
of a number of separate elements.
Regional Selective Assistance—LG
were offered a Regional Selective Assistance grant, by the Welsh
Office, of £69.5 million. The grant will be released over
the life of the project, dependent on progress on capital expenditure
and job creation. RSA grants form part of the industry programme
and are shown in Table 4.01 of the Departmental Report.
Infrastructure Costs—the Welsh
Development Agency has funded, and is funding, general infrastructure
works both on and off site. These works include the diversion
of overhead power lines and a trunk sewer; the upgrading/provision
of electricity, gas and water; and highway improvements. The LG
companies will benefit from this general infrastructure work and
the value of this benefit is estimated at £10 million.
Property Costs—property grants
from the WDA to fund the shortfall between the cost of developing
the site and the end value of the site once it has been completed.
The property grants element of the assistance totals £118.9
million and site development support amounts to £17 million.
Land Costs—the value of the site
acquired jointly by the WDA and Newport County Borough Council.
The LG companies will benefit from land to the value of £14.2
million. The WDA has spent £12 million on land acquisition.
Land, property and infrastructure costs all
form part of the Property and Construction figures shown in Table
3.06 of the Departmental Report (Welsh Development Agency's Expenditure
and Financing).
Training Costs—support for training
amounts to £17.6 million—paid by Gwent TEC to LG. This
expenditure appears within the provision for Business Growth and
Start-up and Local Initiatives in Table 4.01. Additionally, there
are currently 32 Modern Apprentices in training linked to LG companies,
supported by funding of £50,000 in 1997-98 and £125,000
in 1998-99 (also shown in Table 4.01).
Additionally, through a joint venture with the
TEC, the Agency has made available a (longstanding) vacant property
in Cwmbran for the electronics training centre for LG(E). As part
of that arrangement, the Agency has agreed to forgo the rent for
a period of up to 3 years; the market rent of these premises is
estimated to be £206,000 pa.
The WDA has also provided a building at Imperial
Park to serve as the Wales Semi-conductor Training Centre, available
to any company in the industry. LG(S) has free access to the Centre
for 3 years. The financial benefit of this access will depend
on usage, but is not considered to be significant.
TRAINING TAKE-UP
57. (q 52) A note on take-up of training
places for each of the training schemes identified in Table 4.01,
with a year-on-year comparison, would be helpful.
Tables 4.09 and 4.10 of the Departmental Report
provide volume figures for Training for Young People and Work
Based Training for Adults planned for 1998-99 compared to those
for 1997-98 and 1996-97. In addition, the table below shows the
numbers planned to start on the two programmes in 1998-99, compared
with those for the previous two years.
| 1995-96
outturn |
1996-97
outturn | 1997-98
provisional
outturn
| 1998-99
plans |
| Training for young people1 | 20,014
| 24,219 | 21,700 | 22,706
|
| Training for work | 12,051 |
12,641 | 8,994 | 6,000
|
1 Includes Modern Apprenticeships.
NDPBS
58. (See Qq 65-67, A4) Is it the Department's intention
that all NDPBs will have targets and expenditure plans for 1999-2000
ready for inclusion in the Departmental Report 1999?
The Department does not foresee any difficulty which would
preclude any of its NDPBs from being able to include targets and
expenditure plans for 1999-2000 in the 1999 Departmental Report.
RESOURCE ACCOUNTING
AND BUDGETING
59. (See A5) Is it the intention to publish the "practice"
resource accounts for 1997-98? If not, it would be helpful to
the Committee to see these, in some summarised and comparative
form.
The Department does not intend to publish the "practice"
resource accounts for 1997-98 but will provide the Committee with
a summarised set of the practice accounts.
60. Will details of the pilot study on Resource Budgeting
be made available to those outside the Department, and if so,
when?
The Department did not take part in the pilot study which
included 12 departments. The results of that study are to be included
in HM Treasury's summer Memorandum to Parliament. HM Treasury
will be conducting a further pilot study on Resource Budgeting
next year in which the department will be involved.
ESTIMATES
61. (A6) It would be helpful to have details of the proposed
form of the Estimates in due course.
For 1999-2000 the form of the Estimates will be slightly
different to following years because the Assembly will not be
in place for the full financial year. When details of the Estimates
are available a copy will be forwarded to the Committee for information.
CHEPSTOW COMMUNITY
HOSPITAL
62a. (See A 9a) Please explain exactly what `non-clinical
services' comprise.
The non-clinical services provided by this contract are:
catering; cleaning; grounds and garden maintenance; portering;
building maintenance; provision of energy and utilities; mechanical
and engineering services; reception and telephonist services.
62b. (See A 9c) Please explain how the Public Comparator
figure was derived, why it is £4 million less than the capital
value of the hospital as built by the private sector, and the
basis on which it was decided to opt for PFI in this case.
The Glan Hafren Trust developed a conventional public sector
capital scheme to replace facilities at St Lawrence Hospital.
The proposal included both refurbishment of existing buildings
and the construction of new facilities at a total cost of £5.8million.
The PFI requires the Trust to test for interest by the private
sector. The proposals received indicated that the best way of
meeting the requirements of a Neighbourhood Health Unit was through
the construction of a new hospital under the PFI. This would provide
a complete range of primary, continuing care, mental health, diagnostic
and acute services and entailed building a new hospital at a cost
of £10m. The private proposal offered better value for money
over the length of the contract than the original capital scheme,
despite the higher capital cost involved.
MILLENNIUM BUG
63. (A 14) Under the terms of the PFI contract for OSIRIS,
is the Department or the contractor liable for the costs of Millennium
testing and remedial work? (If the Department, why?)
The contractor (Siemens Business Services ) is responsible
for ensuring the Millennium compliance of the OSIRIS system and
for meeting any costs arising from this.
CONSULTANCY
64. (A 15) Is it correct to assume that the Department's
expenditure on consultancy of "less than 1 per cent relates
to the £7 billion total budget (ie it approaches £70
million)? Does this exclude NDPB consultancy expenditure?
No. My Department's expenditure on consultants in 1997-98
(excluding NDPBs) amounted to £0.7 million.
65. It is clear that some NDPBs spend more than others
on consultancy (eg CBDC spend around 10 per cent (Table 3.14)).
It would be helpful to have an indication of how much each NDPB
spends on consultancy.
The table below outlines NDPB consultancy spend in 1997-98,
in relation to their overall gross expenditure.
| NDPB | Gross
expenditure
1997-98
£
| Expenditure on
Private Sector
consultancy fees
1997-98
£
|
| Welsh Development Agency | 164,620,000
| 2,580,000 |
| Development Board for Rural Wales | 17,126,000
| 1,637,000 |
| Wales Tourist Board | 13,594,237
| 109,488 |
| Cardiff Bay Development Corporation | 59,575,000
| 5,322,000 |
| Land Authority for Wales | 15,274,000
| 621,000 |
| Countryside Council for Wales | 23,200,000
| 135,000 |
| National Museums and Galleries of Wales |
11,200,000 | 90,000 |
| National Library of Wales | 6,701,334
| 36,143 |
| Sports Council for Wales | 8,812,005
| 134,570 |
| Welsh Language Board | 6,000,000
| 19,000 |
| Arts Council of Wales | 114,812,030
| 2109,262 |
| Tai Cymru | 82,294,086 |
31,500 |
| Qualification Curriculum and Assessment Authority for Wales
| 8,524,000 | 116,561 |
| Welsh National Board for Nursing, Midwifery and Health Visiting
| 1,029,000 | 5,300 |
| Royal Commission on Ancient and Historical Monuments in Wales
| 1,400,000 | 6,500 |
| Higher Education Funding Council for Wales |
236,787,000 | 26,000 |
| Further Education Funding Council for Wales
| 182,938,000 | 68,000 |
| The Residuary Body for Wales | 519,000
| 44,100 |
| | |
| Total | 854,405,692 | 11,091,424
|
| | |
1 Excludes £19,275,000 incurred in respect of lottery activities.
2 Excludes £205,765 incurred in respect of lottery activities.
WELSH DEVELOPMENT
AGENCY
66. (A 25) How soon will the £3 million expected
annual saving from the merger of WDA, DBRW and LAW be realised,
and what are the estimated transitional costs?
We do not expect to see actual savings from the merger of
WDA, DBRW and LAW until the 1999-2000 financial year. Expect any
savings achieved in this financial year to be offset by the implementation
of a redundancy scheme and other short term and one-off costs.
The precise detail of the transitional costs is not yet available.
FURTHER EDUCATION
67. Why have staff-student ratios been unavailable for
Further Education in Wales since 1995-96? (Table 5.08)?
Data for the academic year ended 31 July 1997 was not available
in time for the Departmental Report. The information for the academic
year 1996-97 is being compiled at the moment and is expected to
be available by August.
68. (A 33) What is the purpose and effect of continuing
to divide the FEFCW's grant in aid into current and capital, if
the FEFCW no long distinguishes between the two in its funding
allocations?
With effect from 1 April 1998, the FEFCW's grant in aid is
given as a single sum.
CRICKHOWELL HOUSE
69. (Q17, A40) What will be the estimated saving to the
NHS of the transfer of Crickhowell House to the National Assembly?
Savings which will accrue to the NHS as a result of the Assembly
taking over the building cannot be estimated until the future
accommodation arrangements for the various elements of WHCSA and
the Assembly have been determined.
SOCIAL SERVICES
70. Does the Department anticipate increased provision
for Social Services as a result of the report of the North Wales
Child Abuse Inquiry? (If so, how much?)
We do not know yet what the North Wales Child Abuse Tribunal
will recommend: the Chairman, Sir Ronald Waterhouse, is currently
drafting his report, which we expect to be completed early in
the autumn. At this stage, therefore, it is premature to consider
what calls there might be for further expenditure on residential
services for children in Wales. However, the expenditure needs
of social services departments must be assessed within the broad
framework of the annual Revenue Support Grant settlement. Nevertheless,
the Welsh Office has made available £0.8 million in 1998-99,
in addition to £0.5 million in 1997-98, to assist local authorities
across Wales in implementing the recommendations of the 1996 North
Wales Child Care Examination Team (the Adrienne Jones Report),
which dealt broadly with this aspect of children's social services
provision.
OHMCI
71. (A 29) How are the expenditure plans for OHMCI affected
by the extension of its functions to cover vocational training
and the careers service?
OHMCI will receive additional resources to undertake these
new functions. An appropriate initial sum for preparatory work
will be transferred from the Welsh Office to OHMCI at the next
Winter Supplementary Estimate.
EQUAL OPPORTUNITIES
72. How does the staff profile of the Welsh Office (in
terms of gender, ethnic minorities and disability) compare with
that of other Departments?
Comparative data on an inter-departmental basis is not available.
However, the Cabinet Office publishes information for the Civil
Service as a whole (Equal Opportunities in the Civil Service Data
Summary 1997) and therefore comparisons between the Welsh Office
and the Civil Service follow.
| Percentage
of staff with
disability
| Percentage
of staff with
ethnic minority
| Gender of non-industrial staff
(percentage)
|
| | |
Male | Female |
Civil Service | 3.8
| 5.7 | 49 | 51
|
| Welsh Office | 5 | 1
| 48 | 52 |
30 June 1998
3
This is net of Appropriations-in-Aid receipts totalling £0.9
million and other miscellaneous expenditure and receipts totalling
£1 million. Back
| 
