Memorandum 8
Supplementary submission from the Department
for Innovation, Universities and Skills
SPRING SUPPLEMENTARY
ESTIMATE 2007-08
DEPARTMENT FOR INNOVATION, UNIVERSITIES AND
SKILLS—ESTIMATE MEMORANDUM
SUMMARY OF
SUPPLEMENTARY ESTIMATE
The Department for Innovation, Universities
and Skills (DIUS) was created by the Prime Minister in June 2007
to drive forward delivery of the Government's long-term vision
to make Britain one of the best places in the world for science,
research and innovation, and to deliver the ambition of a world-class
skills base.
PSAS
DIUS have the following CSR 04 PSA targets which
have transferred from DTI and DFES.
DTI's PSA 2 "Improve the relative international
performance of the UK research base and increase the overall innovation
performance of the UK economy, making continued progress to 2008,
including through effective knowledge transfer amongst universities,
research institutions and business".
DFES's PSA 13 "Increase the number of adults
with skills required for employability and progression to higher
levels of training through:
— improving the basic skill levels
of 2.25 million adults between the launch of Skills for Life in
2001 and 2010, with a milestone of 1.5million in 2007; and
— reducing by at least 40% the number
of adults in the workforce who lack NVQ 2 or equivalent qualification
by 2010. Working towards this, one million adults in the workforce
to achieve level 2 between 2003 and 2006".
DFES's PSA 14 "By 2010, increase participation
in higher education towards 50% of those aged 18 to 30 and also
make significant progress year on year toward fair access, and
bear down on rates of non- completion".
The funds included in this Estimate are being
applied to meet these PSA targets. Changes outlined within the
Spring Supplementary do not impact the achievement of the departmental
PSA targets.
New PSA targets for the full CSR07 period have
been published on the Treasury website.
SUMMARY OF
CHANGES SOUGHT
IN THE
ESTIMATE
The Department's Spring Supplementary Estimate
resulted in:
1. A net decrease in Resource DEL of
£443,498,000, as a result of:
— A reclassification change from DEL
to AME of £515,000,000 in relation to student loans.
— Draw down of EYF of £63,869,000
non-cash EYF in relation to the student loan provision.
— Draw down of £4,090,000 administration
budgets.
— Net transfers between departments
of £2,874,000.
— Additional changes of £669,000.
2. A increase in Capital DEL of £95,157,000.
3. A net increase in Departmental Resource
AME of £561,315,000.
4. An increase in our net cash requirement
of £543,672,000.
DIUS was formed on 28 June 2007; as a result
no prior year estimate totals are available.
DETAIL OF
THE NEW
ESTIMATE SUPPLY
SOUGHT
The Spring Supplementary seeks an increase in
the resources available to those in the New Estimate published
on 15 November.
| Request for Resource (RfR)
| New Estimate | Spring Supplementary
|
| RfR 1—DIUS | £13,694,011
| £14,535,587 |
| RfR 2—Science | £3,367,253
| £3,413,066 |
| Total net resource requirement | £17,061,264
| £17,948,653 |
| Net cash requirement | £18,892,556
| £19,436,228 |
The elements of the Spring Supplementary are as set out below:
RfR1
— Take up of End Year Flexibility of £4,090,000
to cover pressure on departmental administration costs.
— Take up of End Year Flexibility £63,869,000
for Student Loan Provision Maintenance following review of the
provisions for Student Loans based on the output from the updated
student loan provisioning model.
— Transfer to the Ministry of Justice £1,872,000
for Offender education in Prisons.
— Reclassification from DEL to AME £515,000,000
for Student Loan Provision Maintenance. This reclassification
aligns the budgetary treatment of annual student loan provisions.
— Impairment costs £20,000,000 towards the
National Physical Laboratories. The National Physical Laboratories
is a specialist building, and as a result the valuation process
for the annual accounts production will result in a decrease in
the book value.
— Transfer £1,625,000 to the GO-Science Group
administration (RfR2). Contra transfer above.
— Transfer of £205,100,000 to non-voted expenditure
for the Technology Strategy Board.
— Increase in capital provision of £422,821,000
for Student Loan Principal Payments, in line with revised projections
for student loan payments.
— Increase in capital provision of £76,120,000
for Student Loan Principal receipts, in line with revised projections
for student loan payments.
— Increase in capital provision of £206,000,000
for Interest Added to Student Loans, in line with revised projects
of student loan interest.
— Increases to grant-in-aid provision of £599,004,000.
At the beginning of the financial year an element of the programme
funding is place in departmental budgets pending the final decision
on how the activity will best be delivered. These plans have been
finalised and as a result the funding is being transferred to
NDPB partners where they are best placed to deliver.
— Higher Education Funding Council for England £37,419,000;
— Student Loan Company £12,318,000;
— Investors in People £600,000;
— Learning and Skills Council £320,237,000;
— Sector Skills Development Agency £17,647,000;
— Quality Improvement Agency £5,683,000;
— Technology Strategy Board £205,100,000.
— Transfer of £205,100,000 to non-voted expenditure
for the Technology Strategy Board. This is a new body and the
treatment within previous estimates did not reflect its status
as an NDPB.
— Decrease to grant-in-aid provision of £50,000
for the Office for Fair Access.
— Transfer of £32,476,000 to non-voted for
Further Education. See point above on allocation of funding from
central to NDPB budgets.
— Increase in non-budget £384,499,000 support
for student loan provisions, following review of the provisions
for Student Loans based on the output from the updated student
loan provisioning model. This relates to the prior year element
of the £63,869,000 in year EYF draw down recorded above.
— Increase in appropriations-in-aid of £3,690,000
following revised projects for income.
— Higher Education £2,936,000;
— International programmes £754,000.
— Decrease in appropriations-in-aid of £14,927,000,
following revised projects for income.
— Further education £14,746,000.
RfR2
— Take up of capital End Year Flexibility £5,489,000
for Scientific Research, form expenditure on the Science Research
Infrastructure Fund (SRIF) to develop university research facilities.
— Increase in provision of £200,000 for the
Swindon research Council Pension.
— Increase in provision of £27,000 for fees
payable under the animal (Scientific Procedures) Act.
— Transfer of £1,625,000 from RfR1 for GO-Science
Group administration. Contra transfer above.
— Take up of unallocated provision of £5,046,000
for GO Science programme spend, previous included within central
science budget. Not net impact of DEL.
— Transfer of £10,163,000 from non-voted capital
grants for Scientific Research. Reclassification of expenditure
as a result of the review of budget classification following the
creation of the new department.
— Transfer of £6,097,000 to non-voted for Knowledge
Transfer. Primarily relating to the reclassification of expenditure
to HEFCE, which has now come into the departmental DEL boundary.
— Increase in grant-in-aid of £29,360,000.
See point above on allocation of funding from central to NDPB
budgets.
— Biotechnology and Biological Science Research
Council £9,861,000;
— Engineering and Physical Sciences Research Council
£19,499,000.
APPROPRIATIONS IN
AID
Appropriations in Aid total £7.9 billion of which 91%
(£7.2 billion) is funding by the Department of Children,
Families and Schools (DCSF) for the 14-19 work carried out by
the Learning and Skills Council (LSC). The majority of the remainder
is £721 million representing the repayment of interest on
student loans.
ADMINISTRATION COST
LIMITS
The administrative costs limit is has increased from £71,840,000
to £75,930,000 in this supplementary.
The change in the administration cost budget is made up of
£4,090,000 taken up from end year flexibility. This primarily
relates to costs incurred on IT projects, on the set up of facilities
within Kingsgate House, where the classification between resource
and capital has yet to be finalised.
DEPARTMENTAL EXPENDITURE
LIMITS (DEL)
The supplementary estimate exceptionally seeks a reduction
in the resource DEL available by £443,768,000 from £16,117,217,000
to £15,673,719,000. The capital DEL will be increased by
£95,157,000 from £1,970,732 to £2,065,889.
The DEL requirements of the Spring Supplementary are set
out below. The negative voted DEL is the result of the £7.165
billion receipts from DCSF to support the 14-19 programmes controlled
by the Learning and Skills Council exceeding DIUS voted Resource
DEL expenditure.
£000 | Voted
| Non-Voted | Total
|
| Resource DEL | -4,415,296 |
20,089,015 | 15,673,719 |
| Of which: | |
| |
| Administration Budget | 75,930
| 0 | 75,930 |
| Near Cash in RDEL | -5,396,338
| 19,950,469 | 14,554,131 |
| Capital DEL | -79,756 | 2,145,645
| 2,065,889 |
| Less depreciation | -4,567 |
-119,465 | -124,032 |
| Total DEL | -4,499,619
| 22,115,195 | 17,615,576
|
The DEL baseline for the CSR period is set out below:
£m Baseline | 2008-09
| 2009-10 | 2010-/11
|
| Resource DEL | 16,888 | 17,649
| 18,693 |
| Of which: | |
| |
| Administration Budget | 70 |
68 | 67 |
| Capital DEL | 1,990 | 2,205
| 2,260 |
| Less Depreciation | 145 |
162 | 175 |
| Total | 18,733
| 19,692 | 20,778
|
END YEAR
FLEXIBILITY (EYF)
Within DIUS both programme and administrative budgets are
delegated to Board members and the expectation is that they will
normally manage within their allocations. Where this is not possible
and subject to the approval of Ministers the use of EYF will be
considered.
End year flexibility take up since the new estimate is detailed
below:
£'000 nominal | 2007-08 EYF Stocks
|
| Near Cash | Non Cash
| Capital |
| Opening Stock | |
| |
| | |
|
| RfR1—Admin | 4,090 |
0 | 0 |
| RfR1—Education Programme | 478,673
| 484,722 | 180,000 |
| RfR2—Science Programme | 187,769
| 16,303 | 102,746 |
| | |
|
| Winter Supplementary Take up |
| | |
| | |
|
| RfR1—Admin | 0 | 0
| 0 |
| RfR1—Education Programme | 0
| 0 | 0 |
| RfR2—Science Programme | 0
| 10,946 | 11,969 |
| | |
|
| Spring Supplementary Take up |
| | |
| | |
|
| RfR1—Admin | 4,090 |
0 | 0 |
| RfR1—Education Programme | 0
| 447,758 | 89,668 |
| RfR2—Science Programme | 0
| 399 | 5,489 |
| | |
|
| EYF Carry Forward |
| | |
| | |
|
| RfR1—Admin | 0
| 0 | 0 |
| RfR1—Education Programme | 478,673
| 36,964 | 90,332
|
| RfR2—Sciecne Programme | 187,769
| 4,958 | 85.288
|
The EYF stocks were inherited from Dfes and DTI on the creation
of DIUS.
The draw down of the £4,090k Admin has been made to
cover pressures on departmental administration costs. The use
of the £447,758k EYF primarily relates to the in year and
prior year non-cash adjustment to the Student Loan Provision,
following review of the provisions for Student Loans based on
the output from the updated student loan provisioning model.
The £95,157 draw down of Capital EYF has been to fund
capital investment projects within the FE, HE and Science sectors.
The remaining EYF stock will be drawn down in accordance
with the drawndown limits outlined in the CSR settlement.
PROVISIONS AND
LIABILITIES
The Department has inherited three major provisions from
the DCSF all relating to Student Loans. At 1 April 2007 the balance
of the three provisions was £3.482 billion.
The student loan provisions relate to:
— the possible write-off of loans issued which in
the event will be unrecoverable for various reasons;
— the interest subsidy as the student is only charged
interest at the rate of inflation; and
— the debt sale subsidy which covers the contractually
due subsidies to the purchaser of the debt.
Fuller details of these subsidies are given in the Department
for Education and Skills Resource Accounts 2006-07 issued as HC
772 on 16 July 2007. Note 20 to the accounts refers.
The Department has inherited 3 quantifiable contingent liabilities
from DCSF. They all relate to the Secretary of State acting as
guarantor to take over the responsibility for the leases of properties
used by local Learning and Skills Councils offices because at
the time of establishment the LSC was an unknown body to the landlord.
Outstanding liabilities at 1 April 2007 were:
| Croydon LLSC | £4,037,000
|
| Brighton, Manchester and Coventry LLSCs |
£30,688,000 |
| Kempston LLSC | £386,000
|
In addition the Department has inherited three unquantifiable
contingent liabilities from DBERR:
(i) Liabilities relating to the issue of licences to operators
of satellites and other space objects;
(ii) European Patent Office: the UK as one of the contracting
states has a potential liability under Article 40 of the European
Patent Convention of 1973; and
(iii) World Intellectual Property Organisation: the UK, as
a contracting state to the Patent Co-operation Treaty of 1970,
has a potential liability under Article 57 of the Treaty.
March 2008
|
