1 Letter from the Clerk of the Committee
to the Cabinet Office
The Committee has had a brief opportunity to
consider the Spring Supplementary Estimates, which were laid on
21 February and are to be considered in the House on 10 March.
They would like further information on the matters detailed below.
Two changes concern the PPP deal at CMPS; the
first transfers £680k capital expenditure from the Cabinet
Office to CMPS and the second transfers £2.15 million resource
expenditure from CMPS to the Cabinet Office. The explanation of
these changes states that these are required as a result of the
PPP deal (under which repayments are now treated as capital rather
than resource) and due to the revaluation of the related assets.
Can a note be provided setting out why a change in accounting
policy was made in respect of this PPP deal, the future implications
of this change on Cabinet Office and CMPS budgets, the impact
of the revaluation and whether any further revaluations are expected
over the lifetime of the deal?
The Spring Supplementary Estimate notes that
the Cabinet Office's Internal Audit Service transferred to ODPM
on 11 December 2004 and resource cover of £370k is moved
to ODPM for this. The Committee would be aided if the Cabinet
Office could provide assurances that under the new arrangements
Cabinet Office will receive the same level of internal audit cover
in terms of man-days. In addition, could the Cabinet Office confirm:
whether any other departments are involved in this pooling of
resources; what training plans are in place to ensure the new
joint teams understand the operations of all departments within
their remit; whether any redundancies will occur within the Cabinet
Office internal audit team; and, if so, what impact the loss of
departmental memory will have on the quality and time taken to
produce Internal Audit reports?
Whilst the Committee is content that the mandatory
sections within the Estimate Memorandum follow Treasury guidance,
the additional sections to be included where appropriate were
either omitted or too brief. Of particular note was the lack of
a section on End Year Flexibility (EYF). The Public Expenditure
Outturn 2003-04 Provisional Outturn (Cm 6293 2003-04) shows Cabinet
Office as having an opening stock of £1.25 million administrative
and £20 million capital EYF whereas the Estimate included
a drawing of £5 million administrative EYF to cover "anticipated
cost pressures". First, the Committee would be grateful for
a note giving a fuller explanation of the nature of the administrative
cost pressures anticipated to arise, the origin of the additional
administrative EYF stock that was drawn and an explanation of
how the Cabinet Office intends to use up its remaining EYF stock.
Secondly, the Committee requests that all future Estimate Memoranda
and Written Statement follow the format as set out in the enclosed
guidance.
Please could you let me have a reply by Friday
8 April. This may be drawn on by the Committee in future evidence
sessions and inquiries.
7 March 2005
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