Supplementary explanatory memorandum from
the Department for Communities and Local Government (SSUP (2008-09)
02)
CLG SPRING SUPPLEMENTARY
ESTIMATE 2008-09
Thank you for your letter of 2 April about the
Communities and Local Government (CLG) Spring Supplementary Estimate
2008-09 requesting under five headings, further information and
explanations. The requested information and explanations are laid
out below, prefaced by each request for ease of reference, in
the order of your letter:
Q The explanatory memorandum identifies £36
million extra grants to the Housing Corporation and £138
million less to English Partnerships (EP), "to reflect outturn
to the end of November 2008". There is also a £315.4
million increase in grant to the Homes and Communities Agency
(HCA) for December to March which appears to relate solely to
timing differences between grants and budget expenditure. Do any
of these adjustments represent any substantive change in the Housing
Corporation, English Partnerships, HCA or CLG budgets, or simply
timing differences between grant payments and budget expenditure?
A These adjustments to grants fall under three
headings: (1) to follow budget changes arising from decisions
taken on PBR and the Housing Package; (2) for non-material virements
between programmes; and (3) to meet the requirements of merger
accounting by identifying opening and closing balances for all
Programmes and treating cash disbursed by CLG prior to December
vesting as deemed Grant in Aid. This work was completed in January
2009.
Q It appears that £10.3 million is being
cut from the gross expenditure budgets of the New Deal for Communities
(NDC), and £105.1 million from Thames Gateway (TG) and HCA
Affordable Housing programme gross budgets, because of lower than
expected capital housing receipts. What practical impact has there
been on the programmes of those bodies?
A In 2008-09 we needed to accommodate a fall
in CLG's share of right to buy receipts of around £110m,
EP land and building receipts of £67 million and temporary
provision of £35 million for Fire Control leases (which will
be returned in 2009-10). This was largely covered from £50
million from the TG budget and £157 million from the HCA
Affordable Housing budget. In relation to TG, we do not expect
the £50 million reduction to result in cancellation of any
existing schemes but to be managed through slippage over the lifetime
of this £9 billion programme. The reduction in HCA Affordable
Housing Budget is more than offset by the £200 million brought
forward in the September Housing Package. The impact on NDC is
only in timing. The £10.3 million of Programme expenditure
will take place in 2009-10 instead of 2008-09.
Q The memorandum notes additional European Regional
Development Fund (ERDF) provisions, and utilisation of previous
ERDF provision, but Section G of the memorandum also tells us
that there is no change to the £73 million ERDF provision
made in CLG's 2007-08's accounts. The position might also be somewhat
complicated by the error in ERDF provisions made in the Winter
Supplementary Estimate. It would be helpful to have a table for
2008-09, subsuming Winter and Spring Supplementaries taken together,
showing new ERDF provisions, provision utilisation and bad debt
write-offs now anticipated.
A The table below shows ERDF provision and bad
debt changes in 2008-09:
2008-09 Budgets for ERDF Provision and Bad Debts/ Write Offs
| | | |
| | | |
| Notes | £m
| Start of Year | Supplementaries
| End of Year |
| | Near Cash
| Non Cash | Near Cash
| Non Cash | Near Cash
| Non Cash |
| | £m
| £m | £m
| £m | £m
| £m |
1 | Bad debts/Write offs
| 8.0 | | (8.0)
| 8.0 | | 8.0 |
| 2 | Corrections/Penalties |
| | - |
| | |
| 3 | 2008-09 Provision Release/Utilisation
| | | 55.0 |
(55.0) | 55.0 | (55.0)
|
| 4 | 2008-09 New Provision |
| | | 50.2
| | 50.2 |
1 | The £8 million original budget for bad debts and write offs was originally in near-cash. In 2008-09 a panel was set up to scrutinise possible write offs—generally the cases where grants have been made through the Government Offices to third sector bodies which have not then been properly administered.
| | | |
| | |
| 2 | A £22.3 million Winter Supplementaries change was cancelled in the Spring Supplementaries.
| | | |
| | |
| 3 | £55 million near-cash and —£55 million non-cash were estimated in Spring Supplementaries for provision utilisation (payments) expected in the last quarter of the year.
| | | |
| | |
| 4 | £50.2 million new provision relates to the 2000-06 programmes.
| | | |
| | |
| | |
| | | |
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Q Your memorandum notes that £43 million of the fiscal
stimulus package for 2009-10 involves Gap Funding connected with
Decent Homes voluntary transfers (page 19). How does that £43
million of gap funding generate additional capital expenditure
(such as to be considered "fiscal stimulus" investment)?
Are there conditions attached to the provision of gap funding
about how that funding may be spent?
A Gap funding grant arrangements support Decent Homes investment
programmes undertaken by Registered Social Landlords (RSLs) following
Large Scale Voluntary Stock transfers that would not have been
able to proceed without additional funding support. The £43
million fiscal stimulus package is additional to the £80
million baseline funding allocated in the Spending Review Settlement
and will be spent in 2009-10 by RSLs to improve the standard of
the stock they have taken over in the transfer programme. The
funding directly supports transfer RSLs' Decent Homes capital
investment programmes promised to tenants during the transfer
consultation and ballot process.
Q Page 10 of the explanatory memorandum records a transfer
from "Cohesion and race equality" (section D of Request
for Resources 1) to "Gypsy site grant" (section C),
"to focus an element of expenditure formerly within the cohesion
and faiths programme upon community empowerment". The Committee
requests further details of the purpose of this transfer.
A The transfer aims to improve the delivery of expenditure
programmes for elements of gypsy and traveller issues, and race
equalities, which were formerly within the cohesion and faiths
programme, by more closely aligning these programmes with other
community-focused programmes. The aim is to exploit synergies
within the delivery chains and thereby strengthen community aspects
within these programmes.
May 2009
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