Select Committee on Procedure Sixth Report



14. The constitutional conventions governing the role of the Crown and the Commons in public expenditure lie at the heart of the Supply procedure. It is for the Crown to propose expenditure; it is for the Commons to grant the money needed. This principle is underpinned by more detailed controls, which were set out by the Treasury in its Memorandum on the Legislative Proposals for Resource Accounting and Budgeting:

    "a.  No expenditure without legislation (whether a specific statute or the Appropriation Act).

    b.  No undue reliance on the sole authority of the Appropriation Act.

    c.  An absolute limit to spending.

    d.  Annual Appropriation Acts.

    e.  No release of funds without legislative authority and the prior approval of the C&AG.

    f.  Supplementary Estimates.

    g.  Excess Votes.

    h.  The current arrangements for obtaining Parliament's subsequent authorisation of urgent spending funded from the Contingencies Fund".[11]

The principle of Commons control is reflected in a system in which the controls on Government expenditure operate on many levels, centred on the Estimates presented to the House each year. Although expenditure must rest on statute, money must be released afresh every year by the House of Commons in voting the Estimates.[12] Nor is the Government given licence to spend the money granted as it wishes; the Estimates are divided into "Votes" (one or two for each department), each governed by an "ambit" setting out the uses which may be made of the money granted;[13] money must be spent for the purpose for which it is sought, and may not be transferred from one Vote to another without the House of Commons' consent.[14]

Standing Order Provisions

15. Procedure on the Estimates is currently governed by two Standing Orders: Standing Order No. 54 (Consideration of estimates) and Standing Order No. 55 (Questions on voting of estimates, &c). Standing Order No. 54 is concerned with debate on Estimates; Standing Order No. 55 deals with the approval of Estimates which are not selected for debate; these may be voted quite separately.

16. Standing Order No. 54 provides that three days each session, other than Fridays, before 5 August, shall be allowed for consideration of Estimates chosen by the Liaison Committee ("Estimates Days"). One of these days may be taken as two half days. (The two full days are often divided, so that two separate debates may take place.) At the conclusion of the days appointed, the Estimates chosen for debate are voted. All such votes take place at ten o'clock, even when a half day debate has ended at seven, and has been followed by other business, or when one Estimate has been the subject of debate until seven and been followed by debate on another; the Votes are simply (and uniquely) held over.

17. Standing Order No. 55 sets out the various time limits by which various Estimates must be voted. The standing order prevents the House from delaying consideration of such Estimates and so ensures that the Government can obtain the money it needs at the time it is needed.[15] It also provides for the votes on such Estimates to take place at ten o'clock. Provided that Estimates conform to the standing order (ie they have been laid at the appropriate time; the Committee of Public Accounts has approved any excess Vote) the questions can be put forthwith. It is frequent for Standing Order No. 55 to be applied on the same day allocated for consideration of the Estimates under Standing Order No.54, and there may be a series of votes at ten o'clock, some after debate under Standing Order No. 54, and others under Standing Order No. 55.

18. The introduction of Estimates Days was done at the instigation of the Select Committee on Procedure (Supply) in 1981; its intention was, in part, to ensure the House considered the Estimates properly. To this end, it recommended the replacement of "Supply Days", which were nominally for debate on the Estimates but had been largely used as opposition days, by a variety of days explicitly earmarked for certain business, including set piece debates and opposition motions. The Committee proposed that, in addition to such debates, eight days a Session should be devoted to debates which really were based on particular Estimates; the Estimates concerned would be chosen by an Estimates Business Committee.[16] Thus the original proponents of Estimates Days did not see them as select committee days, but as days on which the Estimates themselves should be discussed; the Committee also intended that the House should devote considerably more time to such business than it does at present. Instead, the current system, in which the Estimates Days are allotted to debate on particular reports from the departmental select committees, was introduced. The Select Committee recommended that "the relevant Estimates be formally submitted to each departmentally-related select committee";[17] and departments send any Supplementary Estimates to the appropriate committee. However, the House has no part in this process, and there is no obligation on committees to take any action on the Estimates submitted to them.

Forms of Motion

19. The rules of the House dictate the form of the motion to be used when particular Estimates are debated under Standing Order No. 54. For example, in the following example taken from the Home Office, the motion, which must be moved by a Minister, takes the following form:

It will be seen that the ambit of the Vote is set out in full, but that ambit covers a wide variety of programmes. The form of the motion is invariable; it is not possible to select part of an ambit, or part of a Vote for approval, even though to do so might more clearly indicate the subject of debate.

20. The principle of the financial initiative of the Crown has led to amendments to increase the amount of money voted in total, or to vire (switch money) between different lines being ruled out of order. Argumentative motions are not in order.[19] It is, however, possible to move a "motion to reduce" which proposes a reduction of a certain sum, without, in itself, setting out the reasons for such a reduction. The Votes are broken down into lines showing expenditure on various items which fall within the ambit concerned. The motion to reduce can be directed at the entire Vote, or at an individual line within it.

21. A select committee which secures an Estimates Day debate thus has to choose between a debate on a motion to approve, in which it has itself put nothing before the House, or a debate on a motion to reduce, which is confrontational, in that it exposes the government to acute financial embarrassment, at best, and may even lead to its fall. Given the nature of the public expenditure rounds, both motions must be directed at budgets which have already been fixed.[20] We cannot think of a better means to ensure a Government resists select committee proposals, however well founded, while also ensuring that committees, which, after all, contain a majority of Members from the governing party, refrain from pressing their case to a vote in the House. Moreover, although the motion to reduce has always been a blunt instrument, since 1996-97 the Estimates have been simplified, and much of the detail they formerly contained has been transferred to the departmental annual reports.[21] This has made it more difficult for a committee to put down a motion to reduce a particular line which will clearly identify the expenditure to which it objects.

11  Evidence, p 91. Back

12  There are exceptions to this; for example, judges' salaries are charged directly to the Consolidated Fund, to avoid any appearance of political influence. Back

13  Once the Estimates are voted, a Consolidated Fund Bill is brought in to give statutory authority to the issue of money from the Consolidated Fund; proceedings on Consolidated Fund Bills are now formal. The final Consolidated Fund Bill of each Session is the Consolidated Fund (Appropriation) Bill. Like the previous Consolidated Fund Bills it authorises the issue of money. In addition, it "appropriates" money issued by it and preceding Consolidated Fund Bills, that is it gives statutory authority to the division of money between departments indicated in the Estimates. Back

14  Departments are subject to a variety of controls on transfers from one budget heading to another; some transfers require the authority of the Treasury, others require the authority of the House of Commons in addition. Back

15  The time limits are as follows:

16  HC(1980-81)114-I, paragraphs 52-66. Back

17  HC(1980-81)114-I, paragraph 50. Back

18  Votes and Proceedings 10 December 1998. Back

19  See Erskine May, Parliamentary Practice 22nd Ed 1997, p 756. Back

20  For this reason, it is frequently a token reduction that is offered. Back

21  See Evidence, pp 50, 54. Back

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Prepared 26 July 1999