Supplementary Memorandum submitted by
the Northern Ireland Office
At the oral session on 28 June, I undertook
to respond in writing to the Committee on a number of items. These
are as follows:
Q38: "If as is widely rumoured the UK
Government announces substantial additional funding for the railways
will this automatically lead to an increase in the corresponding
financial provision available to the Assembly of Northern Ireland?"
Part of any changes announced for the railways
in England and Wales can read across to Northern Ireland under
the population-based Barnett formula. Increases in DETR's transport
budget determined in the 2000 Spending Review lead to consequential
increases for Northern Ireland through the normal workings of
Barnett. The detailed arrangements are set out in the updated
Statement of Funding Policy published on 18 July 2000.
There are three factors used to determine changes
in each devolved administration's spending allocation in a spending
review:
— The quantity of the change in planned
spending in departments of the UK Government.
— The extent to which the relevant
UK departmental programme is comparable with the services carried
out by each devolved administration.
— Each country's population as a proportion
of England, England and Wales or GB as appropriate.
ANNUALLY MANAGED
EXPENDITURE/DEPARTMENTAL
EXPENDITURE LIMIT
Q9: "What classes of expenditure are
included within departmental expenditure limits and in annually
managed expenditure respectively? What criteria are employed to
decide what falls into each category?"
The Treasury sets firm three-year spending plans
which can be controlled by departments. The annual total for each
year constitutes the departmental expenditure limit—DEL.
The Treasury reviews on an annual basis those spending items which
are not subject to the same degree of control by departments (annually
managed expenditure—AME). In essence therefore a DEL contains
all the expenditure which a department can directly control even
through some of it may be demand-led. It excludes large volatile
elements which could not sensibly be planned for over a three-year
period. AME will therefore consist of all other spending which
cannot reasonably be subject to firm three-year limits.
The Northern Ireland Office has only two items
apart from resource budgeting consequentials which fall within
AME—Police Pensions and European Peace and Reconciliation
Receipts.
Ministers have agreed that in the context of
the 2000 Spending Review resource budgeting consequentials ie
the big non-cash elements of resource budgets—depreciation,
cost of capital charges, etc will be put into AME rather than
DEL. This will allow departments to acquire some experience in
forecasting such volatile items so that by the time the 2002 Spending
Review they will be sufficiently experienced to allow these items
to be transferred into DEL for future funding purposes.
19 July 2000
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