Memorandum from the Department for Innovation,
Universities and Skills
FURTHER IUSS SELECT
COMMITTEE QUESTIONS
ARISING FROM
THEIR FIRST
REPORT OF
SESSION 2007-08: UK CENTRE
FOR MEDICAL
RESEARCH AND
INNOVATION
1. Why was the treatment of income to the
MRC Commercial Fund not previously consistent with government
expenditure rules?
The Department has always made regular financial
returns to the Treasury that provide analysis of the use of voted
provision from the Consolidated Fund. But the income and expenditure
of the MRC Commercial Fund was not being reported to the Treasury
before 2007-08. This was due to a misunderstanding about the correct
treatment of the MRC Commercial Fund, which was seen as third
party funds which fell outside the reporting regime.
From 2007-08 all of the MRC Commercial Fund
income and expenditure has been brought within the budgetary regime.
2. Why the MRC was able to keep the £106.9
million of the surplus but not the £92 million?
The Department was able to demonstrate that
it had received in the past specific Treasury approval to retain
up to £106.9 million in the MRC Commercial Fund.
There were two elements to this:
— a £14 million general near cash
resource limit; and
— £92.9 million related to a capital
receipt.
On regularising the MRC Commercial Fund, DTI
and Treasury agreed: (1) the previously authorised amounts should
be added to the stock of EYF and (2) the accumulated funds beyond
these authorised limits should be returned to the Exchequer.
3. Was there something different about the
income relating to the £92 million which prevented it being
retained by the MRC?
There was no Treasury authority to retain the
amounts in the MRC Commercial Fund beyond the £106.9 million
described above. Accordingly there was no authority to spend the
£92 million and it was returned to the Exchequer.
May 2008
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