Conclusions and Recommendations
1. The
total of excesses in 2006-07 were £38.6 million (cash excess
£nil). This is a lot less than in 2005-06 when there was
a resource excess of £795.8 million and a cash excess of
£5.1 million. The causes for the excess in 2006-07 were:
i. The Teachers' Pension Scheme (England and
Wales), where the Scheme managers did not accurately forecast
the impact of scheme modernisation; and
ii. The Ministry of Defence, where they were
not able to forecast accurately the depreciation costs of assets
in operational use.
2. In
both cases the bodies made requests for additional resources in
the Spring Supplementary Estimates to reflect their revised forecasts
of outturn, but these proved to be insufficient to cover additional
costs. Each body has reviewed its operations to identify areas
of weakness and has taken steps to improve its resource budgeting.
3. It is unfortunate
that these excesses arose, through underestimation of resource
requirements, since they marred what was otherwise a satisfactory
outcome for the year. The result across all voted expenditure
was the best performance in the round since the introduction of
resource accounting and budgeting in 2001-02, with no cash excesses
and just the two resource excesses. It suggests that departments
and other bodies funded by Parliamentary vote are increasingly
able to manage the level of their expenditure in cash and resource
terms. It will be important for Accounting Officers to maintain
and build upon this progress.
4. We recommend that
Parliament provides the necessary amount by means of an Excess
Vote, as set out in Figure 1.
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