APPENDIX
Letter dated 23 February 2000 from the
Secretary of State for Social Security to the Chairman of the
Committee
USE OF THE POWER GRANTED TO THE SECRETARY
OF STATE BY SECTION 82 OF THE WELFARE REFORM AND PENSIONS ACT
1999
Since our exchange of correspondence in December
on this issue, the Social Security Committee has taken evidence
from officials, on 12 January, and published its report into the
issue of the first use of the power granted to me by section 82
of the Welfare Reform and Pensions Act 1999.
I am grateful for the urgency with which the Committee
conducted the hearing into the draft Report and for the speed
with which this Report was completed.
You made a series of recommendations in your Report.
I enclose a final draft of the Report[7]
that I intend to lay before Parliament as soon as possible. Given
the need for consultation with Treasury colleagues and the printing
timetable, I aim to lay the Report in the week beginning 13 March.
I agree with the substance of your recommendations,
and have therefore included a great deal of additional material.
The areas of the text that represent a change or addition are
sidelined for your convenience.
There are a few areas where the revision does not
wholly accord with your recommendations. You have asked that the
total liabilities accrued by signing a contract with Affinity
should be on the face of the Report. The requirements of section
82 require that an estimate of the financial liabilities under
the contract for the period covered by the Report be included.
This has been done for the relevant period, but I cannot provide,
at this juncture, further information on the total liabilities
that might be incurred under the contract. This is mainly because
we have not yet signed a contract with Affinity and, until full
agreement is reached, it would not be right to reveal this information—for
obvious reasons. The Report refers to these matters at paragraphs
13 to 18.
You proposed, at paragraph 12 of your Report, that
we could avoid accrual of financial liabilities with Affinity
by adjusting the timetable to ensure that work specifically related
to the Child Support, Pensions and Social Security Bill did not
begin until after the Bill had achieved Royal Assent. The plan
is that the legislation-dependent work will not begin until September
this year. (This is spelled out on the face of the report at paragraph
15.) If we achieve Royal Assent by the summer recess, then no
liability in respect of legislation-dependent work will have been
accrued. While I clearly hope that the Bill will achieve Royal
Assent by the summer recess, there is of course a risk that it
may not. In these circumstances I would be concerned about the
effect of any consequent delay in the creation of the new IT system.
At paragraph 11 of your Report, you recommended that
we make clear how we could minimise the risk to the taxpayer from
signing a contract in advance of Royal Assent. This is done in
paragraph 20. You go on to ask that the House be told of the scale
of the unavoidable expenditure in the event of the Bill not being
enacted or being substantially amended. As far as a failure to
enact the Child Support, Pensions and Social Security Bill is
concerned, essentially all of the spending authorised by the passing
of this Report would be unavoidable expenditure. That is the purpose
of this Report—to allow necessary spending in advance of
Royal Assent to a Bill. If the Bill falls, then what was believed
to be necessary is no longer so, and becomes the scale of nugatory
expenditure. The effect of a substantial amendment is difficult
to accurately determine—it would depend on what the amendment
was.
I am sending a copy of this letter, along with a
copy of the revised section 82 report, to David Davis at the PAC,
and further copies to the Clerk of the Social Security Committee
and that of the Public Accounts Committee.
7 Not printed herewith. Back
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