Letter from the Chief Secretary to the
Treasury to the Chairman of the Committee
The specific point on which you had asked for
evidence is on how the Treasury would determine whether any future
powers, similar to section 82 of the Welfare Reform and Pensions
Act, should be laid before Parliament. I think, given that this
is a straightforward factual and technical question, the best
way of answering it is to answer it here in writing.
The general principleset out in section
2.3 of Government Accountingis that expenditure
should not normally be incurred on preparing for a new service
before Royal Assent of a relevant Bill. There are exceptionsin
cases of particular urgency a department may apply to the Treasury
for a Contingencies Fund advance after the Bill has been given
a Second Reading in the House of Commons. Within the terms of
Government Accounting it is possible for a department to seek
powers that, while consistent with these new service rules, allow
them to undertake preliminary work on a new function in advance
of the specific legislation being approved. Departments must present
compelling justification for these and agree to the necessary
checks and balances in order to secure sufficient and proper Parliamentary
scrutinysuch as those in section 82(2) and (3) of the Welfare
Reform and Pensions Act.
As the DSS memorandum explains, other departments
have not sought similar powers. The argument put forward by DSS
was very strongthe new services rules caused serious problems
for DSS because of the extent and complexity of its IT systems,
in particular, the interdependence of those systems. DSS has one
of the largest IT systems in Europe and argued that it ran a significant
risk of being unable to implement welfare reforms in good time
without the powers in section 82, despite Parliament's clear intention
that such reforms should happen in good time.
If other departments were to seek similar powers,
having explored all available alternative options, the Treasury
would have to satisfy itself that without those powers implementation
would be seriously delayed, at greater risk than without such
powers and would incur greater expense than would otherwise be
the caseand so the power would secure improved value for
money. Such problems would also need to be of a continuing nature,
since a one-off problem could of course be solved by the department
bringing forward a paving Bill for that project. And the Treasury
would want to ensure that any such proposals included similar
safeguards to those in paragraphs 2 and 3 of section 82 of the
Welfare Reform and Pensions Act.
Of course, if such proposals were to be brought
forward for other departments the House of Commons would have
the opportunity to debate those, both in principle and in detail,
in the course of the relevant legislation.
Rt Hon Andrew Smith MP
5 October 2000
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