Select Committee on Treasury Minutes of Evidence


APPENDIX I

ILLUSTRATIVE RESOURCE ACCOUNT

Schedule 1: Summary of Resource Outturn 1998-99


1998-99
1997-98

Estimate Gross expenditure

A in A*
Net total
Outturn Gross expenditure

A in A*
Net total
Net total outturn compared to estimate: saving or (excess)
Prior year outturn
£000
1
£000
2
£000
3
£000
4
£000
5
£000
6
£000
7
£000
8

Request for
Resources 1
3,358,021
823,924
2,534,097
3,164,947
1,014,053
2,150,894
383,203
4,029,796
Request for
Resources 2
52,320
0
52,320
50,364
0
50,364
1,956
0
Request for
Resources 3
40,855,900
837,690
40,018,210
36,653,417
238,265
36,415,152
3,603,058
35,742,489
Request for
Resources 4
8,976,557
733
8,975,824
8,604,729
2,016
8,602,713
373,111
7,772,669
Total Resource
53,242,798
1,662,347
51,580,451
48,473,457
1,254,334
47,219,123
4,361,328
47,544,954
Non-Operating Cost A in A
252,461
2,268
(250,193)
662
Net Cash
Requirement
50,551,223
48,675,048
1,876,175
48,612,772


RECONCILATION OF RESOURCES TO CASH REQUIREMENT


Note
£000
£000
£000
£000

Net Total Resources
51,580,451
47,219,123
4,361,328
47,544,954
Capital:

  Purchase of fixed assets
46,153
33,323
12,830
24,606
  New loans
0
0
0
0
Non-operating cost A in A
-252,461
-2,268
-250,193
-682
Accruals adjustments:

  Non-cash items
3
-212,699
-138,170
-74,529
-64,374
  Changes in working capital other
  than cash
12
-535,070
1,499,535
-2,034,605
1,154,595
  Transfer (to)/from provision
17
-75,151
63,505
-138,656
-46,327
Excess cash to be CFERd
0
0
0
0
Adjustment to reflect departmental
underspending on cash
0
0
0
0
Net Cash Requirement (schedule 4)
50,551,223
48,675,048
1,876,175
48,612,772


Explanation of the Variation between Estimate and Outturn

  (i)  RfR1 variance is mainly due to treatment of transfer of properties to the private sector being treated as non-operating AinA income in the Estimate but as AinA income in the accounts. In addition, the department's IT agency is treated on a net subhead basis for the purposes of the Estimate but was subject to consolidation in the accounts.

  (ii)  RfR3 reduction in the number of claims for Disability Benefits and Income Support led to expenditure being significantly lower than anticipated when the Estimates were made prior to the financial year. During the year the Department identified this variation from expenditure monitoring but, by then, it was not possible to seek a reduction in the Parliamentary grant.

  (iii)  RfR4 variation was due to caseload levels being lower than anticipated.

Explanation of the Variation between Estimate Net Cash Requirement and Outturn Net Cash Requirement:

  (iv)  The variation in cash requirement is related to reasons identified at (i) and (ii) above.

Analysis of Income Payable to the Consolidated Fund:

  In addition to appropriations-in-aid the following income relates to the department and is payable to the Consolidated Fund:

(cash receipts are shown in italics)


1998-99 Forecast Income
£000Receipts
£000
1998-99 Outturn Income
£000Receipts
£000

Income for fees not classified as A-in-A
10,510
10,510
10,478
10,478
Income from the sale of assets not classified as A-in-A

Total
10,510
10,510
10,478
10,478


  *In the years prior to the introduction of Resource Estimates the references to "AinA" and "CFER" in Schedule 1 and relevant notes to the Accounts do not apply for purposes of Parliamentary control. The figures represent what will be classified as "AinA" and "CFER" following the introduction of Resource Estimates.

Schedule 2: Consolidated Operating Cost Statement for the year ended 31 March 1999


£000
1998-99
£000
1997-98
£000

Administration Costs
Request for Resources 1
  Staff costs
1,469,216
1,586,849
  Other administration costs
1,515,428
1,463,257
2,984,644
3,050,106
Request for Resources 2
  Other administration costs
14,655
0
Gross Administration Costs
2,999,299
3,050,106
  Operating income
-321,348
-68,992
Net Administration Costs
2,677,951
2,981,114
Programme Costs
Request for Resources 1
  Expenditure
180,303
1,758,886
  Income
-204
-199
180,099
1,758,687
Request for Resources 2
  Expenditure
35,709
0
Request for Resources 3
  Expenditure
36,653,417
35,994,953
  Income
-236,265
-252,104
36,415,152
35,742,849
Request for Resources 4
  Expenditure
8,604,729
7,774,466
  Income
-2,016
-1,797
8,602,713
7,772,669
National Insurance Benefits and Non-Voted Expenditure
  Expenditure
43,931,836
43,075,511
Net Programme Costs
89,165,509
88,349,716
Net Operating Cost
91,843,460
91,330,830
Net Resource Outturn
47,219,123
47,544,954
Resource Budget Outturn
91,793,494
90,621,787
The net cost of operations arises wholly from continuing
operations


Statement of Recognised Gains and Losses for the year ended 31 March 1999


1998-99
£000
1997-98
£000

Unrealised movement on the revaluation of tangible fixed assets
-311
-2,647


Schedule 3: Consolidated Balance Sheet as at 31 March 1999


31 March 1999
31 March 1998
£'000
£'000
£'000

Fixed Assets
  Tangible assets
75,581
137,282
Current Assets
Debtors
  Amounts due after more than one year
1,337,843
39,844
  Amounts due within one year
379,145
2,674,619
Cash with paying agents
1,041,249
797,688
Cash at bank and in hand
563,898
146,647
3,322,135
3,658,798
Creditors—amounts falling due within one year
-2,377,030
-4,301,790
Net Current Assets/(Liabilities)
945,105
-942,992
Total Assets less Current Liabilities
1,020,686
-505,710
Creditors—amounts falling due after one year
-217
0
1,020,469
-505,710
Provisions for Liabilities and Charges
-25,475
-88,980
Net Assets/(Liabilities)
994,994
-594,690
Taxpayers' Equity
  General Fund
992,970
-609,237
  Revaluation reserve
2,024
14,547
994,994
-594,690


Schedule 4: Consolidated Cash Flow Statement for the year ended 31 March 1998


1998-99
£000
1997-98
£000

Net cash outflow from operating activities
-92,939,424
(91,056,488)
Capital expenditure and financial investment
-31,055
-23,924
Financing from the Consolidated Fund
49,092,299
48,195,512
Financing from the National Insurance Fund
44,295,431
42,467,640
Increase/(Decrease) in cash in the period
417,251
-417,260


Reconciliation of net operating cost to net cash outflow from operating activities


1998-99
£000
1997-98
£000

Net cost of operations
91,843,460
91,330,830
  Adjust for non-cash items
-138,170
(64,374)
  Adjust for movements in working capital other than cash
1,170,629
(163,641)
  Adjust for transfers to/from provisions
63,505
(46,327)
Net cash outflow from operating activities
92,939,424
91,056,488
Analysis of capital expenditure and financial investment
  Purchase of fixed assets
33,323
24,606
  Proceeds from disposal of fixed assets
-2,268
-682
Net cash outflow from investing activities
31,055
23,924
Analysis of financing
  From Consolidated Fund
49,092,299
48,195,512
  Increase/Decrease in cash
-417,251
417,260
  CFERs received but not paid over
0
0
Net cash requirement (Schedule 1)
48,675,048
48,612,772
  From National Insurance Fund
44,295,431
42,467,640
Total cash requirement for department
92,970,479
91,080,412


Schedule 5: Resources by Departmental Aims and Objectives for the year ended 31 March 1999

Aim:As part of the Government's determination to reform the welfare state, to modernise the social security system, to encourage work for those who can and provide security for those who cannot, the modern social security system will provide clear enforceable gateways to enable people to meet their responsibilities and to take opportunities available to them. The system will be reformed to ensure that benefits go to those for whom they were intended by:

reducing error and preventing fraud;
providing a system that is efficient and effective and easy for people to use; and
making the best use of resources available.

Gross
£000
Income
£000
Net
£000

Objective 1:To reduce the cost of economic failure by actively helping people without a job into work, and providing them with financial support while they are unable to support themselves through work, ensuring that rights are matched with responsibilities.
16,537,947
203,064
16,334,883
Objective 2:To support families with the costs of raising children whilst recognising the primary responsibility rests with parents.
7,566,486
-28,921
7,537,565
Objective 3:To provide disabled people with the support and financial security they need to lead a fulfilling life with dignity.
24,664,664
-268,290
24,396,374
Objective 4:To promote financial security in retirement, encourage provision of funded pensions and own savings, establish clearly the responsibilities of individuals, employees and the state, strike a fair and clear balance between generations, secure a more efficient and equitable distribution of public support for pension provision, and take into account the manifesto aims that pensioners should have an adequate income in retirement, that they should share fairly in the increasing prosperity of the nation, and that public finances should be both sustainable and affordable.
43,636,248
-61,610
43,574,638
Net Operating Cost
92,405,345
-561,885
91,843,460


STATEMENT OF ACCOUNTING OFFICER RESPONSIBILITIES

  1.  Under section 5 of the Exchequer and Audit Act 1921 [in the future under the Government Resources and Accounts Act 2000] the Department of Social Security is required to prepare resource accounts for each financial year, in conformity with a Treasury direction, detailing the resources acquired, held, or disposed of during the year and the use of resources by the the department during the year.

  2.  The resource accounts are prepared on an accruals basis and must give a true and fair view of the state of affairs of the Department, the net resource outturn, resources applied to objectives, recognised gains and losses and cash flows for the financial year.

  3.  The Treasury has appointed the Permanent Head of the Department of Social Security as Accounting Officer of the Department with responsibility for preparing the Department's accounts and for transmitting them to the Comptroller and Auditor General.

  4.  In preparing the accounts, the Accounting Officer is required to comply with the Resource Accounting Manual prepared by the Treasury, and in particular to:

    —  observe the relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis;

    —  make judgements and estimates on a reasonable basis;

    —  state whether applicable accounting standards, as set out in the Resource Accounting Manual, have been followed, and disclose and explain any material departures in the accounts;

    —  prepare the accounts on a going concern basis.

  5.  The responsibilities of the Accounting Officer, including responsibility for the propriety and regularity of the public finances for which the Accounting Officer is answerable, for keeping proper records and for safeguarding the Department's assets, are set out in the Accounting Officers' Memorandum, issued by the Treasury and published in Government Accounting.


 
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