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Transport

Departmental Expenditure Limit 2006-07

The Secretary of State for Transport (Mr. Douglas Alexander): Subject to parliamentary approval of any necessary supplementary estimate, the Department for Transport departmental expenditure limit (DEL) for 2006-07 will be increased by £459,653,000 from £13,046,822,000 to £13,506,475,000 and the administration budget will be decreased by £1,800,000 from £264,970,000 to £263,170,000.

Within the DEL change, the impact on resources and capital are as set out in the following table:

£’000
Changes in DELNew DEL
VotedNon-votedVotedNon-votedTotal

Resource

626,242

283,746

7,244,850

541,942

7,786,792

Of which: Administration

-1,800

-

256,392

6,778

263,170

Near cash in RDEL

453,962

454,809

5,761,557

789,316

6,550,873

Capital

-65,503

-639,057

4,645,852

2,038,312

6,684,164

Depreciation(*)

281,832

-27,607

-943,665

-20,816

-964,481

Total

842,571

-382,918

10,947,037

2,559,438

13,506,475

(*)Depreciation, which forms part of resource DEL, is excluded from the total DEL since capital DEL includes capital spending and to include depreciation of those assets would lead to double counting.

This written statement starts from the position in the Transport departmental expenditure limit 2006-07 written statement, 21 November 2006, Official Report columns 61-62 WS which accounts for the small differences to the equivalent table in the Department’s 2006-07 spring supplementary estimate. This latter table starts from the position in the 2006-07 main estimate (HC 1035 2 May 2006, p 123).

Resource Change: Administration (total decrease of £1,800,000)

Voted: total decrease of £1,800,000.

RfRl

(i) a transfer of £1,800,000 to the Department for Communities and Local Government to cover Government Offices’ Voluntary Early Retirement schemes.

Resource Change: Programme (total increase of £911,788,000)

Voted: total increase of £628,042,000

RfRl

(i) £300,000,000 reserve claim to reflect the reclassification of part of the Greater London Authority/ Transport for London grant from capital to resource;

(ii) take up of £263,570,000 end year flexibility, comprising:

(a) £112,000,000 to allow for increased grant payments to Cross London Rail Link;

(b) £59,505,000 non-cash provision for London Underground pensions;

(c) £45,000,000 for Rail in respect of franchise payments;

(d) £23,000,000 to reflect the reclassification of grant payments to Transport for London from capital to resource;

(e) £10,281,000 for Transport Direct including £8,706,000 non-cash costs for depreciation and cost of capital charges;

(f) £7,800,000 to fund a shortfall in the Driver and Vehicle Licensing Agency's Vehicle Excise Duty enforcement receipts;

(g) £2,582,000 non-cash to fund the National Air Traffic Services cost of capital charges;

(h) £2,203,000 to the Driving Standards Agency to cover costs of migrating to shared services (£1,819,000) and non-cash costs (£384,000) for cost of capital;

(i) £749,000 non-cash for the Vehicle and Operator Services Agency cost of capital;

(j) £375,000 for additional Shared Services Project costs; and

(k) £75,000 for Mobility and Inclusion Unit for Building Capacity in the Voluntary Sector;

(iii) a net transfer of £44,022,000 from non-voted resource provision comprising:

(a) £10,900,000 to the Driver and Vehicle Licensing Agency to cover shortfall in Vehicle Excise Duty enforcement receipts;

(b) £5,000,000 non-cash for provisions for Voluntary Early Retirement;


21 Feb 2007 : Column 55WS

(c) £22,281,000 for Railways in respect of rail franchise payments (£54,664,000) partially offset by a transfer to non-cash departmental unallocated provision to reflect change in budgeting treatment of guarantees to certain rail industry pension schemes (£26,487,000) and a non-cash transfer to British Transport Police (£5,896,000);

(d) £2,995,000 non-cash for London Underground pensions provision;

(e) £400,000 to the Vehicle and Operator Services Agency trading fund to cover Shared Services costs; and

(f) £3,390,000 to cover the costs of emerging pressures on Driver, Vehicle and Operator Group Enforcement work; partially offset by

(g) transfers to non-voted departmental unallocated provision from the Driving Standards Agency (£501,000), the Vehicle and Operator Services Agency (£127,000),and a non-cash transfer for aviation costs (£316,000).

(iv) a reclassification of £20,450,000 for the Driver and Vehicle Licensing Agency to reflect the ending of the netting off agreement in respect of Continuous Registration;

Non-Voted: total increase of £283,746,000.

RfRl

(i) £261,000,000 reserve claim for London and Continental Railways in respect of the change in classification partially offset by a surrender to the reserve of £89,000,000 non-cash;

(ii) take up of £155,768,000 end year flexibility, comprising:

(a) £75,000,000 for London and Continental Railways in respect of the change in classification;

(b) £15,731,000 non-cash to cover the gap between the Spending Review 2004 settlement provision and current year budgetary needs;

(c) £22,506,000 to the Driver and Vehicle Licensing Agency to cover costs relating to the Shared Services Centre (£19,051,000) and additional non-cash to cover the gap between the Spending Review 2004 settlement provision and current year budgetary requirements (£3,455,000);

(d) £34,031,000 for the Highways Agency utilisation of provisions;

(e) £8,500,000 for the utilisation of Voluntary Early Retirement provision;

(iii) a net transfer of £44,022,000 to voted provision;

(iv) £895,000 adjustment to reflect treatment of provisions offset by non-cash decrease.

Capital Change (total decrease of £704,560,000)

Voted: total decrease of £65,503,000

RfRl

(i) transfer of £300,000,000 to the DEL Reserve in respect of Greater London Authority resource transport grant to reflect the reclassification of grant payments to the Transport for London from capital to resource

(ii) take up of £62,173,000 end year flexibility to increase provisions for network grant (£60,673,000) and for the Air Accident Investigation Branch (£1,500,000);

(iii) a transfer of £45,000 to the Department for Communities and Local Government in respect of IT services Outsourcing projects;


21 Feb 2007 : Column 56WS

(iv) a net transfer of £172,057,000 from non-voted capital provision comprising:

(a) other transport grants (£126,133,000) reflecting a switch from Supported Capital Grants to Transport Grants payments;

(b) rail (£86,168,000) reflecting £333,590,000 increase for network grant to meet funding assumptions made in 2004 spending review partially offset by £242,822,000 reduction in respect of London and Continental Railways capital expenditure which now scores within the non-voted element of the Departmental Expenditure Limit following its reclassification as a public corporation and £4,600,000 additional capital funding for British Transport Police; partially offset by

(c) a transfer (£25,629,000) to the departmental unallocated provision from Greater London Authority capital grants of £23,000,000 and savings of £2,629,000 from Transport Direct;

(d) net transfer in respect of detrunking (£4,266,000); and

(e) to Driver and Vehicle Licensing Agency for shared services centre (£10,349,000);

(vi) To increase capital provision for the Highways Agency to cover loss on sales of land (£312,000).

Non-Voted total decrease of £639,057,000

RfRl

(i) £489,000,000 transfer to the DEL Reserve following the reclassification of London and Continental Railways as a public corporation;

(ii) take up of £22,000,000 end year flexibility, comprising

(a) £17,600,000 to the Driver and Vehicle Licensing Agency to cover the Shared Services Centre costs;

(b) £4,400,000 to cover budget shortfalls arising from the reclassification of British Rail Residual Board as a public corporation;

(iii) a net transfer of £172,057,000 to the voted capital provision of the DEL.

Advance from the Contingencies Fund

The Department for Transport did not present a winter supplementary estimate in 2006-07. Consequently, its potential drawdown of cash is limited to the net cash requirement presented to Parliament in the main estimate (£11,199,801,000). On latest forecasts, it is expected to reach that limit before the end of February 2007. As the Consolidated Fund Bill, enacting the spring supplementary estimate, is not due to be passed until mid-March, the Department needs access to the Contingencies Fund to maintain spending on transport programmes. The amount it is seeking is not the full difference between the Main Estimate Net Cash Requirement and the Spring Supplementary Estimate Net Cash Requirement, and it will be repaid in full once the Consolidated Fund Bill receives royal assent.

The Department is obtaining the appropriate estimate cover to repay the advance during the spring supplementary estimates. Parliamentary approval for additional resources of £533,764,000 will be sought in the spring supplementary estimate for the Department for Transport. Pending that approval, urgent expenditure estimated at £300,000,000 will be met by repayable cash advances from the Contingencies Fund.


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