Examination of Witnesses (Questions 180
- 199)
WEDNESDAY 7 DECEMBER 2005
MR JON
CUNLIFFE, MR
DAVE RAMSDEN,
MR TONY
ORHNIAL, MR
JOHN KINGMAN
AND MS
MRIDUL BRIVATI
Q180 Mr Mudie: Has that just been
left out of the box?
Ms Brivati: It is not in the box.
It is elsewhere. It is chapter 3.
Q181 Mr Mudie: I know. I raised it
this morning. I think it is in the wrong chapter.
Mr Cunliffe: I will make one point
as a follow-up from a fiscal expenditure framework point of view
rather than on the detail which is we set the plans for public
expenditure in the spending reviews. At the PBR budget there may
be particular things done for need, all the initiatives around
heating have been pushed by higher fuel prices. If you look at
chart 6.1 on the following page, that shows the allocation of
resources to 2007-08 for the priorities of health, education and
transport. It is quite a marked direction of resources there.
I would get worried from the macro position if we started to have
large shifts of expenditure at PBR or even at Budget within those
public spending review periods.
Q182 Mr Mudie: Is £580 million
not a big shift?
Mr Cunliffe: For the special reserve?
Q183 Mr Mudie: Yes. We could do it
for Iraq.
Mr Cunliffe: It is a relatively
large amount. There are some situations which you cannot envisage
or you have to make special provision for. I think the amount
for winter fuel is also a large amount.
Q184 Mr Mudie: Jon, as this is the
only time we financial watchdogs get to ask you questions, let
us take the additional £580 million for the special reserve
for military operations in Iraq. It says "an additional £580
million", how much have we got and where is it? I could not
find it in the book.
Ms Brivati: Total spending on
Iraq at the end of 2004-05 was about £3 billion.
Q185 Mr Mudie: £3 billion.
Ms Brivati: These figures are
not in the PBR report but they can be derived from outturn data
from the Ministry of Defence.
Q186 Mr Mudie: Can you say that last
bit again?
Ms Brivati: Yes. You can get the
figure of £3 billion by looking at spending outturn data
from the Ministry of Defence.
Q187 Mr Mudie: It is hidden in there.
There is no other sum because the Ministry of Defence will have
some in. This is labelled "special reserve", so there
is not a Ministry of Defence sum and the reserve and the special
reserve. What is the total amount of expenditure for Iraq? That
is what I am trying to find out as a financial watchdog.
Ms Brivati: The total amount of
expenditure on Iraq at the end of 2004-05 was £3 billion.
Q188 Mr Mudie: £3 billion. What
was it estimated for 2005-06, the present year? Something has
happened because you have an additional £580 million to put
in for this year. How much was in? You have obviously spent up,
have you, with all these aircraft which are flying over.
Ms Brivati: We have allocated
the additional sum to represent our current view of what will
be required in Iraq.
Q189 Mr Mudie: What is that?
Ms Brivati: It would not be correct
to say that we have a forecast for the total requirement over
2005-06 because it does not quite work in that way. We have made
our allocation for the moment.
Q190 Mr Mudie: What is that allocation
then?
Ms Brivati: The allocation is
£580 to the special reserve.
Q191 Mr Mudie: Are you saying to
me, which would be good news, that we have gone down from £3
billion in 2004-05 to £580 million in this year because that
does not make sense, you are speaking about an additional £580
million?
Ms Brivati: No.
Q192 Mr Mudie: That is what I mean.
Ms Brivati: The figure of £3
billion is the total amount that has been spent on Iraq up until
that point.
Q193 Mr Mudie: It was allocated in
2004-05 but you are running it forward?
Ms Brivati: No, the allocations
would have taken place at a number of points over the preceding
Budgets and PBR.
Q194 Mr Mudie: How much money since
2003, say, have we spent in Iraq?
Ms Brivati: I do not have that
figure to hand.
Q195 Mr Mudie: Will it be more than
the £3 billion?
Ms Brivati: No, it will be less
because the figure of £3 billion includes expenditure in
2001-02 and 2002-03.
Mr Mudie: The £3 billion that you
referred to and you relate it to 2004-05.
Mr Love: Up to 2004-05.
Q196 Mr Mudie: Up to 2004-05, has
it been spent?
Ms Brivati: Yes.
Q197 Mr Mudie: At the end of 2005?
Ms Brivati: Yes.
Q198 Mr Mudie: You are putting an
additional £580 million in. Is that all then? You have no
more financial approvals? We have spent up to the end of 2005
£3 billion and we are putting another £580 million in.
That seems a small amount for Iraq this financial year.
Ms Brivati: There are two answers
to that. One is that allocations to the special reserve represent
our view of what will be required in Iraq but that does not preclude
funding coming from other sources because we manage the reserves
together. There is still the general reserve as well as the special
reserve.
Q199 Mr Mudie: To save the Committee's
time, can you give the Committee a full breakdown of all the expenditure
in the financial years from whichever vote?
Ms Brivati: Yes.[3]
3 See supplementary memorandum dated 12 January
2006. Back
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