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Government Response to the Communities and Local Government Committee's follow-up questions on the Winter Supplementary Estimate 2008-09
1. The Committee wrote to the Department on the 23 January setting out a number of questions relating to the Department's Winter Supplementary Estimate and accompanying explanatory memorandum. The Government's response to these questions is set out below.
£82m is added to the Estimate, drawing-down EYF funds, for the 'Local Government PSA Performance Fund' programme, "to cover planned spending over the amount provided in the CSR 2007" (Memorandum para 9). What does this extra expenditure cover, and why has the need for it now arisen?
2. When the CSR 2007 budgets for this programme were set, the availability of unused resources from the 2004 Spending Review period - which could be drawn down through End Year Flexibility (EYF) arrangements in CSR 2007 - was taken into account. The amount included in the supplementary estimate represents the amount of EYF estimated to be needed to meet Local Government PSA commitments in 2008-09.
The memorandum describes numerous adjustments needed to brigade funds for the new HCA. This appears to subsume a £10m allocation to cover part of the Housing Corporation's pension scheme deficit (Memorandum p9 last entry, p11 6th entry). Why is the Estimate only providing for this sum, rather than the full £75m deficit?
3. There remains uncertainty over the exact terms of the agreement to eliminate the pensions deficit. It is expected that the deficit will remain in the £50-75m range and that the final payment terms will be resolved before the end of this financial year. At present we anticipate repayment terms over a period of several years, hence the amount budgeted being less than the total deficit.
The Supplementary Estimate changes needed for setting up the HCA have involved no overall change to the Department's budget. Once the HCA has been operating for a time and a steady state has been reached, to what extent will the Department's budget be able to be reduced, or indeed increased, as a result of this change eg through efficiency savings?
4. The original business case for the HCA included an assumption that over time operational efficiencies would be achievable by brigading existing and potentially new Programmes together to achieve increased outputs through economies of scale and better targeting of resources. During the remainder of the current CSR period work will be done in this area in order to plan efficiencies during the next spending review.
The Estimate makes an extra £33m available for the 'Growth Areas' programme (Memorandum p9). Why is this extra provision being made, and what impact will there be on the Community Infrastructure Fund, whose funds are being reduced? 5. The changes to these budgets reflect timing differences. While the demand for Growth Areas resources was higher in 2008/09 than originally anticipated during CSR 2007, the CIF Programme was delayed. The extra £33m allocated will revert from Growth Areas to CIF during 2009/10 and 2010/11 with transfers of £23m/£10m. The net impact across these Programmes during the CSR period is therefore nil.
An extra £11m is provided to cover higher than expected bids for tackling rough sleeping (Memorandum p9). To what extent does the Department's Rough Sleeping Strategy, launched in November, require further changes in the funding likely to be needed to tackle rough sleeping?
6. At this stage it is not envisaged that extra resources will be required. This position will, however, be reviewed in due course.
What new funds are being made available for the Thames Gateway and New Growth Points programmes that do not form part of the more extensive reallocations needed for setting-up the HCA?
7. No new funds are being made available for the Thames Gateway and New Growth Points programmes. Some routine transfers have been made from the voted (Departmental) elements of those programmes to non-voted Non Departmental Public Bodies in line with approved business plans and project allocations.
Communities and Local Government February 2009 |