Appendix 5
Memorandum submitted by the Northern Ireland Office
on 23 October 2007 in response to Questions from the Committee
in connection with the Spring Supplementary Estimates 2006/07
General points raised by the Committee:
The Committee has reviewed the Spring Supplementary
Estimate, which was laid on 20th February, along with the accompanying
Estimate Memorandum. The Memorandum provided much useful information
and explanation, meeting most of the presentational requirements
of the guidance produced by the Treasury and the House of Common's
Scrutiny Unit. I would, however, draw your attention again to
the Scrutiny Unit's guidance. For example, it could have included
tables showing past changes and outturns in Departmental Expenditure
Limit figures and the balance of different types of End-Year Flexibility
drawn on in the Estimate and carried forward to next year.
Departmental Response:
Thank you. These points have been noted and the
next Supplementary Estimate Memorandum will address the issues
raised.
SPECIFIC QUESTIONS:
NIO - Request for Resources (RfR) 1
1. The
'Central Administration' subhead is increased by £28m, mainly
to provide for potential over-spends throughout the NIO resource
during the financial year. The Committee would like further information
on whether the NIO envisages such potential overspends are likely
to be concentrated in particular sub-heads or programmes (and
if so which ones).
£28m was drawn down as a contingency fund to
cover potential over-spends. Various factors influenced the
draw down of this additional funding. Within Political Directorate
(Subhead C2) the post Cory inquiries have in recent years been
subject to cost fluctuation in their forecasts, it was considered
prudent to hold a reserve for such costs. Compensation Agency
claim levels (Subhead G3) and impairment costs for IT and buildings
(various subheads) have also been areas in which additional resource
can be required towards year end. Again, it was considered prudent
to hold a contingency for such additional costs. In all, this
additional £28m funding represents only 2.1% of the total
NIO budget.
2. There is a £9 million increase
in provision for the Compensation Agency mainly in relation to
Criminal Damage claims. The Committee would like further information
on the reasons for this increased liability.
Of the £8.7m increase, the largest pressure
(£6m) related to criminal damage (CD) claims. The Agency
received quite a number of claims as a result of incendiary attacks
on business premises in Newry, Shane Retail Park and Newtownabbey.
Also, the average value of Criminal Damage awards had increased
by 23%. The provision is calculated based on the number of claims
and average values.
There was also a pressure of £3.5m for criminal
injury claims under the 1988 legislation. The main cause of the
increase was as the result of a rise in the value of awards made
both by the agency in general settlements and at Court. There
was also one case cleared amounting to £1.5m, and another
case of similar value was expected to be paid out before the end
of the financial year. The pressure in provision was offset by
an unexpected easement of £0.8m in Tariff. Tariff has been
relatively stable over the past few years, and the number of likely
awards had fallen by approximately 8% from the beginning of the
year.
3. The Estimate increases provision
for the 'Police' subhead by £15m, primarily due to the NIO
opting to use an earlier provision for full time reserve severance
costs. With this additional expenditure, what progress is the
NIO making in meeting its FTR headcount reduction targets?
As at 31 March 2006, the FTR headcount stood at 1144
officers. By 31 March 2007, the headcount had been reduced by
393 officers to 751. This is 71 officers short of the 680 target.
4. The Committee would like further
information on the £3m increase in gross provision for Forensic
Science Northern Ireland, which the Memorandum does not discuss.
FSNI increased their gross provision and offsetting
receipts by £3m in the Spring Supplementary Estimate. This
meant that there was no increased resource requirement, and therefore
the memorandum did not highlight this change.
The main reason for the increase is that the original
budget for expenditure to be offset by receipts was set in SR2004
at the level of £5m. This has become out-dated due to the
growth in service provided by FSNI which at the Spring Supplementary
Estimate was reforecast to the level of £8m.
This has been addressed in the opening main estimate
for 2007/08 where FSNI have forecast gross expenditure which will
be offset by receipts at a total of £9m. This is much more
in line with expectations.
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