Memoranda submitted by the Scotland Office
SCOTLAND OFFICE MAIN ESTIMATE 2007-08
This memorandum provides information in relation
to the Main Estimate for the Scotland Office. The provision for
the Scotland Office (including the Grant to the Scottish Executive)
is carried as a separate Request for Resources on the Main Estimate
for the Department for Constitutional Affairs.
EXPENDITURE
DETAILS
The 2007-08 baseline provision for the Scotland Departmental
Expenditure Limit (DEL) agreed at the 2004 Spending Review has
increased from £25,877,034,000 (SE £25,870,350,000 and
SO £6,684,000) to £26,634,731,000 (SE £26,627,863,000
and SO £6,868,000). The changes include:
SCOTLAND OFFICE
DEL
The only change to the Scotland Office DEL is
as a result of the reclassification of the reporting of Accruing
Superannuation Liability Charges (ASLC), which increased the SO
DEL by £184,000 from £6,684,000 to £6,868,000.
SCOTTISH EXECUTIVE
DEL
2004-05 Winter Supplementary
1. Pre Budget Report (PBR) 2004 consequentials
of £1,938,000.
2. Budgeting changes transferring £365,000,000
from AME to DEL in respect of Supporting People.
3. A number of changes in the DEL arise
from transfers to and from other departments. Details are:
— surrender of £88,649,000 in
respect of Housing Benefit/Council Tax Benefit Administration
funding;
— a transfer of £649,000 in respect
of non cash capital charges for National Parks; and
— a transfer of £1,112,000 to
the Ministry of Defence in respect of severe weather systems (NMS
& NSWW).
2004-05 Spring Supplementary
1. PBR 2004 consequentials of £29,633,000.
2. A change in the DEL arises from a transfer
of £405,000 from the Home Office in respect of funding for
Immigration Advisory Service.
2005-06 Main Estimate
Budget 2005 consequentials of £90,803,000.
2005-06 Winter Supplementary
The change in the DEL arises from a transfer
of £47,000 to the Department of Health in respect of Infectious
Diseases.
2006-07 Main Estimate
1. PBR 2005 consequentials of £22,356,000.
2. Budget 2006 consequentials of £47,598,000.
3. Budgeting Changes resulting in a decrease
of £151,935,000 in the DEL in respect of the net effect of
the transfer of AME EC expenditure and Non Budget EC receipts.
4. A number of changes in the DEL arise
from transfers from other departments. Details are:
— a transfer of £338,000,000 from
Department for Transport in respect of Rail Services in Scotland—Network
Grant;
— a transfer of £17,000 from Department
for Transport in respect of Integrated Transport Fund;
— a transfer of £7,500,000 from
Department for Transport in respect of Transport Agency Administration
Costs; and
— a transfer of £74,000 from Department
of Trade and Industry in respect of Civil Contingencies for Oil
Emergency Training.
2007-08 Main Estimate
1. PBR 2006 consequentials of £15,998,000.
2. Budget 2007 consequentials of £893,000.
3. Baseline funding in respect of Police
Safety Cameras for 2007-08 of £8,549,000.
4. Budgeting changes, transferring £44,580,000
from AME to DEL in respect of Education Maintenance Allowances.
5. Two changes in the DEL arise from transfers
to and from other departments. Details are:
— a transfer of £9,540,000 from
Department for Transport in respect of Rail Services in Scotland;
and
— a transfer of £1,260,000 to
Department for Environment, Food and Rural Affairs in respect
of staff transfer costs to the State Veterinary Service.
The reconciliation from the SE DEL figure of
£26,627,863,000 to the grant payable to the Scottish Consolidated
Fund of £24,613,393,000, can be found on page 34 of the Scotland
Office and Office of the Advocate General Annual Report 2007.
A Grant reconciliation table is attached at
Annex A.
J R Wildgoose
Accounting Officer
Scotland Office
July 2007
Annex A
| Changes to 2007-08 SE DEL from SR2004
| £m |
| SR2004 Baseline | 25,870.350
|
2004-05 Winter Supplementary
| |
| PBR 2004 Consequentials | 1.938
|
| Surrender for Housing Benefit/Council Tax Benefit Administration Funding
| -88.649 |
| Non cash costs for National Parks | 0.649
|
| Transfer to MoD/Met Office iro Severe Weather Systems (NMS and NSWW)
| -1.112 |
| Budgeting Changes—AME to DEL transfer iro Supporting People
| 365.000 |
| Sub Total | 277.826
|
| |
| 2004-05 Spring Supplementary |
|
| PBR 2004 Consequentials | 29.633
|
| Inter Departmental Transfers: |
|
| Transfer from Home Office iro funding for Immigration Advisory Service
| 0.405 |
| Sub Total | 30.038
|
| |
| 2005-06 Main Estimate |
|
| Budget 2005 Consequentials | 90.803
|
| Sub Total | 90.803
|
| |
| 2005-06 Winter Supplementary |
|
| Inter Departmental Transfers: |
|
| Transfer to Department of Health iro Infectious Diseases
| -0.047 |
| Sub Total | -0.047
|
| |
| 2006-07 Main Estimate |
|
| Inter Departmental Transfers: |
|
| Transfer from Department for Transport iro Rail Services in Scotland
| 338.000 |
| Transfer from Department for Transport iro Integrated Transport Fund
| 17.000 |
| Transfer from Department for Transport iro Transport Agency Admin Costs
| 7.500 |
| Transfer from DTI iro Civil Contingencies for Oil Emergency Training
| 0.074 |
| PBR 2005 Consequentials | 22.356
|
| Budgeting Changes—AME/Non Budget EU Funding into DEL
| -151.935 |
| Budget 2006 Consequentials | 47.598
|
| Sub Total | 280.593
|
| |
| 2007-08 Main Estimate |
|
| Inter Departmental Transfers: |
|
| Transfer from Department for Transport iro Rail Services in Scotland
| 9.540 |
| Transfer to DEFRA iro SVS Staff transfer costs
| -1.260 |
| Police Safety Cameras Baseline for 2007-08 |
8.549 |
| Budgeting Changes—AME to DEL transfer of Education Maintenance Allowances
| 44.580 |
| PBR 2006 Consequentials | 15.998
|
| Budget 2007 Consequentials | 0.893
|
| Sub Total | 78.300
|
| |
| SE DEL Position at publication of 2007-08 Main Estimate
| 26,627.863 |
ANSWERS TO
THE COMMITTEE'S
WRITTEN QUESTIONS,
11 JULY 2007
The Committee Clerk wrote to the Scotland Office on 11 July
2007 conveying a set of questions to which replies were requested
in advance of the evidence session with the Secretary of State
and the Minister of State on 17 July. The replies to the questions
are set out in the following paragraphs.
1. The Explanatory Memorandum by the Scotland Office on
the Spring Supplementary Estimate mentions "a transfer of
£16,000,000 to the Scotland Office for the funding of the
2007 Scottish Parliament Election". Why was this expenditure
not identified at the time of the Main Estimate?
The likely costs of the Scottish Parliament Election in May
2007 had not been fully assessed at time of submitting the 2006-07
Main Estimate in early 2006. Only as the year progressed were
officials able accurately to assess probable costs in consultation
with Returning Officers and in the light of developments.
2. What is the Scotland Office record on efficiency?
(a) What did you contribute to the Department for
Constitutional Affairs' £244 million of efficiency improvements
as at December 2006?
(b) What efficiency targets will the Scotland Office
have to help the Ministry of Justice live within its Comprehensive
Spending Review settlement? Why isn't there a formal efficiency
target in the Annual Report?
(c) Your staffing profile at Annex 9 portrays an essentially
flat complement over the next couple of years. Have you reached
a steady state in terms of your staffing needs? Will changes in
the administration of the Scottish Executive, with the possibility
of more Joint Ministerial Committees, require an increase in staff,
or will you be able to accommodate changes with existing resources?
The Scotland Office is a small organisation of about 50 staff
and expenditure of about £6.5 million. The costs of the Office
are top-sliced from the Scottish Block which is a ring-fenced
element of the MoJ Estimate. The Scotland Office is having to
operate efficiently to live within the 2004 spending review settlement.
Turning to staff, the staffing figures in Annex 9 reflect
steady state assumptions under the previous spending review. They
do not reflect possible changes arising under the 2007 Comprehensive
Spending Review, decisions on which have yet to be taken.
3. What sort of new Public Service Agreements or Departmental
Strategic Objectives are being considered for the Department's
activities under the Comprehensive Spending Review?
(a) Will these be subsumed within the Ministry of Justice's
new PSAs/DSOs, or will there be stand-alone objectives and targets
for the Scotland Office?
The Scotland Office is unlikely—given its size and
activities—to have a Public Service Agreement and will probably
have stand alone objectives, as in previous years. These will
be reviewed in the light of the Secretary of State's consideration
of the forward strategy of the Office.
4. The Pre-Budget Report told us that the then Chancellor
was planning for the Comprehensive Spending Review to cut Administration
Cost budgets cut by 5% a year in real-terms. Why are your Administration
costs growing by 12% this year?
(a) Last year you told us that you expected Administration
costs to be £6.5m in 2006-07. In the event the costs are
expected to be £5.8m. To what extent is this lower-than-expected
cost the result of continuing staff vacancies in the Scotland
Office?
The Committee is comparing the total provision in 2007-08
for both the Office of the Advocate General and the Scotland Office,
with the estimated outurn for both bodies in 2006-07. There were
several reasons for the underspend in 2006-07; the delay in the
expensive repairs to the roof at Dover House has had an impact
and may result in the Office spending up to provision in 2007-08;
also, there have been inevitable periods of unfilled posts which
have resulted in savings.
Underspends by the Scotland Office from 2006-07 and previous
years are being rolled forward as End Year Flexibility and, with
the agreement of the Treasury, will be available for draw down
in 2007-08 and subsequent years. The Comprehensive Spending Review
covers the years 2008-09 to 2010-11 and the Scotland Office have
yet to discuss likely outcomes with the Treasury.
5. Over the last few years the provision for the Scottish
Consolidated Fund grant has been consistently under-spent, including
by £1 billion last year. Is all of the under-spend available
for the Scottish Executive to draw-down in the following years?
(a) Government departments need to get the Treasury's
approval to draw down previous under-spent budgets, as part of
the End Year Flexibility arrangements. Does the Executive need
Treasury and/or Scotland Office approval to make similar draw
downs?
(b) Is the Executive able to hold Consolidated Fund
grant balances in interest-earning accounts? What happens to any
such interest, or any interest accrued on grant disbursements
to the Executive but not spent by Executive within the year?
The grant payable to the Scottish Consolidated Fund is calculated
on the basis of a full spend in each year. Many factors will contribute
to an underspend. The Scottish Executive can only draw down funds
from the Scotland Office on the basis of need, and this is still
subject to the overall provision approved by the Westminster Parliament.
Any portion of the Executive's grant that is not drawn down
from the Scotland Office is not held by the Executive but retained
by the Treasury. There is no question of the Executive accruing
interest on unspent draw down. As to interest accruing from monies
disbursed by the Executive to other bodies, this is a matter for
the Scottish Parliament and its auditors, not the Scotland Office.
However, should the Scottish Executive, or any of its bodies,
accrue interest on cash balances held, such interest would not
afford additional spending power but merely reduce cash requirement.
Scotland has benefited from the Treasury's macro-economic
management and sound public sector finances. Hence, like all other
Devolved Administrations and all Whitehall Departments, it must
play its part in minimising public borrowing where possible.
Underspends from the part of the Scottish Executive's budget
classified as Departmental Expenditure Limit may be rolled forward
under the Treasury's End Year Flexibility scheme. EYF is a prudent
and proper part of the Public Expenditure System that recognises
that real world expenditure may not neatly match the financial
year; it also rewards departments for careful management of budgets.
The Devolved Administrations are part of the UK public expenditure
framework and are subject to the same rules as Whitehall departments
for matters such as the calculation and drawing down of End Year
Flexibility stocks. Drawdown of EYF results in higher block grant
in Scotland Office Estimates which are subject to Treasury and
UK Parliament approval.
J R Wildgoose
Accounting Officer
Scotland Office
July 2007
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