CLASS XV, VOTE 2 ESTIMATE, 2000-01
Memorandum submitted by the Northern Ireland
Office
This paper provides guidance on the role of
the Northern Ireland Office (NIO) with regard to Class XV Vote
2. Transfers to the Northern Ireland Consolidated Fund—2000-01.
SUMMARY
1. It is a responsibility of the Secretary
of State for Northern Ireland to secure Northern Ireland's share
of public expenditure. There are separate financial allocations
for NIO and for the devolved institutions. Class XV Vote 2 covers
the transfer of funds from the United Kingdom Consolidated Fund
to the Northern Ireland Consolidated Fund in support of expenditure
by the Northern Ireland departments and certain transfers from
European funds to Northern Ireland departments. The United Kingdom
Parliament votes the necessary provision to the Secretary of State
for Northern Ireland who makes a grant in aid to the Northern
Ireland devolved administration. The Permanent Under Secretary
in the NIO is Accounting Officer for the Vote.
FUNDING THE
NORTHERN IRELAND
ADMINISTRATION
2. The Northern Ireland Administration is
not funded solely by the grant in aid made by the Secretary of
State for Northern Ireland but also by funding from locally financed
expenditure, the European Commission and through borrowing. The
arrangements for funding the Northern Ireland Assembly are those
set down generally for the funding of devolved administrations
in the Treasury document: "HM Treasury—Funding the
Scottish Parliament, National Assembly for Wales and Northern
Ireland Assembly—A Statement of Funding Policy" (31
March 1999).
CHANGES IN
FUNDING ARRANGEMENTS
3. Prior to the commencement of devolved
government in Northern Ireland, the provision in Class XV Vote
2 covered the subvention to the Northern Ireland Consolidated
Fund in respect of the difference between spending by the NI departments
and Northern Ireland's income from rate and other receipts and
from its attributed share of United Kingdom taxes. At that time,
separate payments were made from the United Kingdom Consolidated
Fund to the Northern Ireland Consolidated Fund in accordance with
section 15(5) of the Northern Ireland Constitution Act 1973 on
account of the sum payable to the Northern Ireland Consolidated
Fund under section 15(1) of that Act, being the Northern Ireland
estimated share of United Kingdom taxes.
4. Under the new constitutional arrangements
implemented under the Northern Ireland Act 1998, Class XV Vote
2 provides for all transfers from the United Kingdom Consolidated
Fund to the Northern Ireland Consolidated Fund. Consequently,
the provision in Class XV Vote 2 has increased substantially with
the change in arrangements.
MECHANICS OF
TRANSFERS
Grant in Aid
5. Requests for funds are made by the Northern
Ireland Department of Finance and Personnel (DFP) to the NIO on
an average of two or three times per week. Usually the increment
of grant in aid transferred on each occasion lies between £50
and £60 million. On the basis of these requests, NIO, having
provided notice of the demand to HM Treasury, authorises the transfer
from the United Kingdom Consolidated Fund (Paymaster General Account)
to the Northern Ireland Consolidated Fund (Northern Bank). In
these transfers, no funds are received into or withdrawn from
the Northern Ireland Office's bank accounts.
European Funds
6. European funds due to Northern Ireland
departments are received into the UK Paymaster General Account.
The NIO, having established with HM Treasury the receipt of the
funds and their purpose, authorises the transfer of the funds
to the Northern Ireland Paymaster Account (Northern Bank)—and
occasionally for certain funds to the Northern Ireland Department
of Agriculture and Rural Development (First Trust Bank)—on
a date agreed with DFP and the Northern Ireland department to
which the funds are due, having provided notice of transfers over
£10 million to HM Treasury. In these transfers, no funds
are received into or withdrawn from the NIO's bank accounts.
ESTIMATE
7. Changes to the budget for the Northern
Ireland administration are largely determined on an automatic
basis by application of the "Barnett" formula. The determination
of the Estimate for Class XV Vote 2 for 2000-01, and the detail
of what the provision is intended to cover, was a matter of direct
negotiations between HM Treasury and DFP. Although the Estimate
was presented on behalf of the Secretary of State for Northern
Ireland, the NIO did so on the basis of the analysed information
on proposed expenditure supplied by DFP but played no part in
the negotiations leading to the determination of the Estimate.
Accordingly the NIO is unable to provide details of what the provision
in the Estimate for Class XV Vote 2 is intended to cover above
those in the published Estimate.
SUPPLEMENTARY ESTIMATES
8. The NIO is not expected to play any part
in the detailed determination of Supplementary Estimates for Class
XV Vote 2 in 2000-01 and cannot comment on the criteria that may
be used for Supplementary Estimates should they arise.
SPEND DURING
2000-01
9. Of the total provision for 2000-01 of
£7,171 million in Class XV Vote 2, £1,360 million had
been transferred from the United Kingdom Consolidated Fund to
the Northern Ireland Consolidated Fund at 22 June 2000. To the
same date £107.4 million had been transferred during 2000-01
to the Northern Ireland Paymaster Account from European Funds.
NIO has received no advance profile for 2000-01 of when the transfers
of funds are likely to be required.
10. NIO receives no information on how the
grant in aid made to the Northern Ireland Consolidated Fund is
utilised within the Northern Ireland devolved administration.
Accordingly, NIO is unable to supply any information on spend
by the Northern Ireland departments.
NORTHERN IRELAND
DEPARTMENTS
11. The responsibilities of the Northern
Ireland departments and the principal areas of expenditure with
which each is concerned were described in Annex A to the Memorandum
submitted by NIO to the Committee in January 2000, summarising
the powers and responsibilities of the Secretary of State for
Northern Ireland.
THE SECRETARY
OF STATE
12. The Secretary of State will represent
Northern Ireland's interests in any Cabinet discussion of Northern
Ireland financial matters and will provide information on the
wider political context of any bid for additional resources made
by the devolved administration.
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