Further memorandum submitted by the Department
for Environment, Food and Rural Affairs
DEFRA'S
SPRING SUPPLEMENTARY
ESTIMATE
In your letter of 6 March you sought clarification
on specific changes made in our Spring Supplementary Estimate.
I am responding to the questions in the order they appear in your
letter.
You mentioned a number of shifts in resources.
The original Main Estimate for 2002-03 reflected an early assessment
of how resources contributed to objectives following the SR 2000
Settlement for MAFF, the Intervention Board (IB) plus DETR areas—agreed
with Treasury in July 2000. We subsequently carried out a detailed
review of how allocations to specific programmes and activities
contributed to objectives. This meant it was necessary to make
switches between various subsections on the Estimate to reflect
our current spending plans. The effect of the total changes made
is neutral, with individual shifts representing improved analysis
rather than specific major changes in the ways in which resource
is directed.
The £45 million for front line services
has been re-classified from administration resources to programme
resources, as agreed with the Treasury.
The re-classification arose from a Treasury
review of the existing Administration Cost regime, that made the
general proposal that departments should consider transferring
"front line" service activities into programme from
administration costs. Defra has identified and agreed with Treasury
the following areas:
— Rural Development Service (RDS)—£42.5
million.
— Drinking Water Inspectorate (DWI)—£2.1
million.
— Pet Travel Scheme Unit/ Quarantine
Unit—£0.4 Million.
We expect to make a similar reclassification
in 2003-04 for the British Cattle Movement Service (BCMS); we
have sought a transfer for the State Veterinary Service (SVS);
and we are actively considering a similar transfer for the Sea
Fisheries Inspectorate.
You asked about the transfer of English Nature
unfunded pensions to the Principal Civil Service Pension Scheme.
The Government Actuary estimated the transfer value taking into
account membership data at the transfer date. As usual with Treasury,
three separate components are required to show the resource budget
cover and the overall cash requirement. In particular:
— resource budget cover in the form
of Departmental Expenditure Limit (DEL) was needed for the recurring
excess of Accruing Superannuation Liabilty Charges over the existing
pensions-in-payment;
— resource budget cover in the form
of Annually Managed Expenditure (AME) was needed principally for
the one-off bulk transfer to Cabinet Office;
— grant-in-aid (ie cash) was needed
to fund the budget changes outlined above.
The actual transfer of the pension scheme took
place on 1 September 2002. Any delay relates to the updating of
our Estimate, which, as is often the case, takes place after the
implementation of changes to which it relates.
English Nature currently pays existing pensioners
through the English Nature in-house payroll. Following discussion
with Capita and Cabinet Office it has been agreed that responsibility
for paying pensioners will transfer to Capita from 1 July 2003.
English Nature's pay settlement, effective from 1 April 2002,
is currently being implemented. A 1 July 2003 transfer date will
allow revised awards to be calculated for leavers since 1 April
2002. This will mean that the data given to Capita will be wholly
up to date thus making the transition more straightforward.
It has been agreed with Cabinet Office that
the Principal Civil Service Pension Scheme will continue to fund
the cost of English Nature's existing pensioners during the period
1 April to 30 June 2003 and that these costs will be offset against
ASLC payments. No pensioner will be disadvantaged by these arrangements.
27 March 2003
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