Select Committee on Public Accounts Minutes of Evidence


Supplementary note from HM Treasury

Question 43 (Mr Trickett): Does the Treasury publish accounts and make assumptions about the amount of surplus which will be used to `help' with the National Debt? Are there assumptions made? I can easily check in future years.

  At the hearing on 12 January, you asked several questions about how the undistributed balances of the National Lottery Distribution Fund (NLDF) are forecast and accounted for. I am writing to complete the explanation I offered at the hearing.

  I understand that my colleagues who deal with the forecast consult DCMS when assessing flows of lottery income and disbursements from the NLDF. In turn DCMS' advice draws on information from the lottery operator and the various lottery distributors. The objective is to make the most realistic forecast that can be drawn up.

  Projections of lottery income score as revenue and disbursements from the funds score as public expenditure since lottery income is public money. Total payments by the distributors form part of annually managed expenditure (AME). Of this, capital grants (typically more than half of the total disbursements) are classified as public sector net investment. The most recent figures were set out in tables B16 and B20 of the Pre-Budget Report of December 2004, copies of which are enclosed.

  As you observed from the NAO report, the Commissioners for the Reduction of the National Debt hold the undistributed balances. The Debt Management Office manages these funds and the amounts involved appear in their Resource Accounts. I attach a copy of the most recent Report and Accounts of the Debt Management Account (for 2003-04), which sets out the details of stock and flows relating to the NLDF.

Paula Diggle

Second Treasury Officer of Accounts

25 January 2005


 
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