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The Report by the Committee of Public Accounts on Excess Votes is part of the framework of Parliamentary control over government spending. Once the audited accounts of each department have been laid before Parliament, the Committee considers the reports by the Comptroller and Auditor General on the accounts of those departments that have exceeded the limits of expenditure authorised by Parliament. The Committee's Report recommends whether Parliament should approve further grant to the departments concerned, thereby regularising the excess expenditure. Where the excesses are the results of failures in control within departments, the Committee may make recommendations for improvements.
Resource-based Supply, introduced in 2001-02, requires departments to estimate and manage the resources they will consume in delivering services on an accruals basis, as well as their cash spending. Parliament authorises both cash spending and the use of resources.
In 2005-06, three bodies (the NHS Pensions Scheme; the Assets Recovery Agency; and the House of Commons Members Account) incurred Excess Votes, with an excess in the use of resources totalling £795.9 million and a single cash excess of £5.1 million. In 2004-05, one Department incurred a resource excess of £188.2 million and there were no cash excesses. The total value of excesses in 2005-06 is far greater than in 2004-05, mainly as a result of a significant excess in the NHS Pensions Scheme Accounts.
In 2005-06 the Excess Votes arose predominantly from the bodies underestimating their resource requirements, rather than overspending cash.
i. The excess on the NHS Pensions Scheme of £788.2 million was because Scheme Managers did not accurately budget for their appropriations in aid and also incurred significantly higher costs than expected on a range of non-cash items of expenditure.
ii. The Assets Recovery Agency incurred a resource excess of £6.8 million and a cash excess of £5.1 million, because the Agency did not appreciate fully the impact of changes in its operating legislation and the method by which it received funding for its activities which led to the need to seek a Supplementary Estimate to cover these changes.
iii. The House of Commons Members Account incurred a resource excess of £0.9 million, because the Department of Finance and Administration at the House of Commons did not allow sufficient Estimate cover for increases in the costs related to the Parliamentary Contributory Pension Fund or the level of Members' expenses.
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