House of Commons - Communities and Local Government Committee

Communities and Local Government's Departmental Annual Report 2009, and the performance of the Department in 2008-09 - Communities and Local Government Committee Contents

Explanatory memorandum from the Department for Communities and Local Government (WSUP (09-10) 01)

WINTER SUPPLEMENTARY ESTIMATE 2009-10

INTRODUCTION

1. The changes to Departmental Expenditure Limits (DELs) which are referred to below were announced by the Secretary of State on 24 November 2009. Changes to DELs, of which the department has two (Main Programmes and Local Government), are not always identical to those to the Estimate described below. This is because:

End Year Flexibility

2. The End Year Flexibility (EYF) entitlements were included in the Public Expenditure 2008-09 Provisional Outturn White Paper (Cm 7606) which was presented to Parliament by the Chief Secretary to the Treasury in July 2009.

SECTION A: SUMMARY OF CHANGES SOUGHT IN ESTIMATE

3. The Department for Communities and Local Government Winter Supplementary Estimate requests additional net resource provision, above Main Estimate totals, of:— RFR1 £658.446 million

— RFR2 £59.967 million

And decrease in provision for

— Voted Capital £7.480 million

4. The Department also seeks an increase of £782.330 million to the Net Cash Requirement, resulting from these changes to the RFRs.

5. The main policy reasons for taking a Winter Supplementary Estimate are to:

— reallocate resources within the DEL limits, including:

(a)allocation of existing budget to our Arms length Bodies (ALBs) to support their agreed programmes; and

(b)to reflect technical accounting changes as a consequence of implementing International Financial Reporting Standards (IFRS);

— draw down end year flexibility for Local Government programmes for the Local Government Public Service Agreement Performance Fund;

— adjust non-budget provision for grant in aid for the Homes and Communities Agency in respect of the Pledge announced by the Government on 29 June as part of the Building Britain's Future and for the Thames Gateway Urban Development Corporations in support of their agreed budgets;

— effect small transfers to and from other Government departments;

— effect small transfers between the RfRs;

— adjust levels of appropriations in aid and related expenditure;

— make a number of transfers between sections within the RfRs.

6. A summary of the DEL impacts of the changes is set out in section B below.

7. The increases in the Net Resource Requirement sought in this Supplementary Estimate relate to:

— Increases outside public expenditure (£776.213 million).

— Draw down of End Year Flexibility (£59.000 million).

— Take up of Departmental Unallocated Provision (£0.309 million).

— A switch of £4.220 million within the Estimate from Capital to Resource (capital grants).

— Switches within the RFR, across RFRs, within the DEL or across Government as a whole (£1.943 million to the Estimate, but neutral in public expenditure terms);

offset against

— A movement of £122.644 million from voted to non voted programmes (but neutral in overall public expenditure terms); and

— A reduction of £0.619 million to reflect technical accounting changes as a consequence of implementing International Financial Reporting Standards (IFRS).

8. The decrease in voted capital sought relates to:

— A transfer of £3.260 million from non voted to voted programmes (but neutral in overall public expenditure terms); and

— A switch of £4.220 million within the Estimate to Resource (capital grants) from Capital.

9. These changes can be divided into those which increase public expenditure overall, and those which reallocate within the existing public expenditure totals or are outside public expenditure totals altogether. It is the increases that are outside public expenditure which make the biggest contribution to the changes in this Supplementary Estimate.

Changes sought which increase public expenditure

10. These are as follows:

(a)To provide £59.000 million for Local Government Public Service Agreements to cover planned spending over the amount provided in the Comprehensive Spending Review 2007;

offset by

(b)A reduction of £0.619 million to reflect technical accounting changes as a consequence of implementing International Financial reporting Standards (IFRS).

Changes sought which do not increase public expenditure, taken across government

11. These are as follows:

— An increase in grant in aid (£694.504 million) to the Homes and Communities Agency, mainly to reflect the announcement that the Government made on 29 June on the Pledge as apart of Building Britain's Future (see Annex A).

— An increase in grant in aid to the Thames Gateway Urban Development Corporations (£82.500 million) to support their agreed programmes.

— Adjustments to grant in aid to the Tenant Services Authority (£0.367 million increase ) to reflect adjustment of spend between the HCA and TSA.

— Adjustments to grant in aid to the Community Development Foundation (CDF) (£1.706 million increase) to reflect adjustment of spend between the voted Community Empowerment programme and non voted CDF programme.

— An increase in grant in aid (£3.621 million) to the Infrastructure Planning Commission to cover set up costs.

— Adjustment to grant in aid to the West Northamptonshire Development Corporation (£0.300 million) in respect of unfunded legal challenges on planning.

— Reduction of £6.800 million for Loan Charges on Defective Housing Grant.

— Adjustment of £0.015 million for the Valuation Tribunal Service for depreciation.

(b) Decreases totalling £122.470 million resulting from net transfers of DEL from the RFRs to non voted budgets (table 1, item 8). The largest element is the transfer of £86.500 million to the Thames Gateway Urban Development Corporations to support their agreed programmes. Further large adjustments were as follows:

— £13.700 million to Government Offices to adjust budgets for utilisation of provisions in respect of early exit costs and provision release from Central Administration.

— £6.411 million from Implementing Planning Reforms comprising £2.750 million to the HCA and £3.661 million to fund the new Non Departmental Public Body for the IPC.

— £6.248 million from Efficient Geographic and Statistics for the Tenant Services Authority (£1.667 million) and to the Departmental Unallocated Provision (£4.581 million).

(c) Smaller transfers within DEL. Other changes which are relatively small in value and which lead to no change in total DEL are:

— Take up of non voted non-cash Departmental Unallocated Provision (£0.309 million) for the National Register of Social Housing Capital Plan (table 1, item 3).

— A net transfer of £4.220 million from voted capital to resource within the Estimate comprising (i) a switch of £4.720 million in voted capital from the Planning Inspectorate to resource (capital grants) in New Deal for Communities programme to meet demands of projects approved in 2009-10 and (ii) a switch of £0.500 million in resource (capital grants) from Support for Voluntary and Community Sector to voted capital in INTERREG for the continued development of Management Control Information System (table 1, item 4).

— Net transfers of £1.943 million from other Government departments (table 1, item 5).

— Net transfers of £1.135 million from RfR1 to RfR2 (table 1, item 6).

— Changes that net out within the Estimate, involving either switches between sections or increases in Appropriations in Aid funding additional expenditure (table 1, items 7 and 10).

(d) A change to the net cash requirement of £63.908 million over and above the Net Resource Requirement. This mainly reflects adjustments made for the release/use of provisions.

12. These changes are summarised at tables 1 and 2 below:

Table 1

			£ million
Net Resource Requirement	RFR1	RFR2	Total
Changes which increase/decrease public expenditure
1) End Year Flexibility	0.0	59.000	59.000
2) Consequence of implementing International Financial Reporting Standards (IFRS)	—0.619	0.0	—0.619
Changes which do not increase public expenditure, taken across Government
3) Take up from Departmental Unallocated Provision	0.309	0.0	0.309
4) Net transfers to voted resource from voted capital	4.220	0.0	4.220
5) Transfers to/from other government departments	1.943	0.0	1,943
6) Transfers between the RFRs	—1.135	1.135	0.0
7) Transfers within the RfRs	0.0	0.0	0.0
8) Transfers to/from non-voted spending	—122.470	—0.174	—122.644
9) Changes in non-budget spending	776.198	0.015	776.213
10) Changes in A in A, offset by voted spending	0.0	0.0	0.0
	658.446	59.976	718.422

Table 2

			£ million
Voted Capital	RFR1	RFR2	Total
Changes which do not increase public expenditure, taken across Government
1) Net transfers from voted capital to voted resource	—4.220	0.0	—4.220
2) Transfers within the RFRs	0.0	0.0	0.0
3) Transfers to non-voted spending	—3.260	0.0	—3.260
4) Changes in A in A, offset by voted spending	0.0	0.0	0.0
	—7.480	0.0	—7.480

SECTION B: DETAILED EXPLANATION OF CHANGES (AMOUNTS ARE IN £S)

Changes to RFR1: Improving the quality of life by creating thriving, inclusive and sustainable communities in all regions

13. Changes in resources, and their implications for DEL and AME budgets, are as follows:(DEL budget changes are indicated by an asterisk in the right hand column)

(References in Section B to sections are to sections in the Estimates.)

Changes which decrease public spending

—£619,000 Decrease in the Government Offices spending (section H) to reflect technical accounting changes as a consequence of implementing International Financial reporting Standards (IFRS) *

—£619,000 Total change to Main Resource DEL

—£619,000 Total change to Main DEL

—£619,000 Total change to Estimate

Take up of Departmental Unallocated Provision

£309,000 Transfer to National Register of Social Housing (section K) for capital plan update *

ZERO Total change to Main Resource DEL

ZERO Total change to Main DEL

£309,000 Total change to Estimate

Transfers between Resource Spending (Capital Grants) and Capital Spending

—£4,720,000 Transfer from capital expenditure in the Planning Inspectorate (section E) to resource (capital grants) in New Deal for Communities (section N) to meet demands of projects approved in 2009-10. *

£500,000 Transfer from resource (capital grants) in Support for Voluntary & Community Sector Sustainability (Section B) to capital expenditure for INTERREG (Section J) for the continued development of Management Control Information System which will satisfy the contractual commitments made with Real Time (the new developers). *

ZERO Total change to Main Capital DEL

ZERO Total change to Main DEL

ZERO
(+£4,220,000 resource)
(—£4,220,000 capital) Total change to Estimate

Transfers of budgetary cover to/from other Government Departments

£1,396,000 Transfer from Home Office in respect of the Migration Impacts Fund programme (section O) *

£440,000 Transfer from Department of Work and Pensions to Government Offices (section H) for work on Older Persons agenda *

£340,000 Transfer from Cabinet Office to the Government Offices (section H) for work on Community Cohesion. *

—£233,000 Transfer to DEFRA from Implementing Planning Reforms (section P) for the Environment Agency Implementation of the Mine Waste Directive. *

£1,943,000 Total change to Main Resource DEL

£1,943,000 Total change to Main DEL

£1,943,000 Total change to Estimate

Resource transfers to/from another Request for Resources

—£1,432,000 Transfer to Best Value Inspection (RfR2, section B) from Fire Improvement Programme (RfR1, Section F) to pay the Audit Commission's bill in respect of work on "Fire". *

—£200,000 Transfer to Greater London Authority General Grant (RfR2, section F) from Implementing Planning Reforms (RfR1, section E) to fund the Mayor's new planning powers in the GLA Act 2007. *

—£76,000 Transfer to Audit Commission (RfR2, Section B) from Efficient Geographic and Statistics (RfR1, section K) for secondment costs relating to the Data Inter Change Hub. *

£500,000 Transfer from Local Government Research (RfR2, section C) to Cohesion and Race Equality (RfR1, section D) to provide a more streamlined and effective research team. *

£73,000 Transfer from Audit Commission Best Value Inspection (RfR2, Section B) to Research (RfR1, Section C) for New Strategic Research. *

—£1,135,000 Total change to Main Resource DEL

—£1,135,000 Total change to Main DEL

ZERO
(—£1,135,000 RFR1
+£1,135,000 RFR2) Total change to Estimate

Resource transfers within the Request for Resources

£13,436,000 Transfer for housing strategy for older people (in improving the supply and quality of housing) from voted central funding (section B) to voted local authorities funding for (section M) to pay grant to third sector to deliver a national telephone and website service. *

£1,464,000 Transfer, within voted central funding, from supporting local government (section A) to improving the supply and quality of housing (section B) to correct an previous publication error. *

£385,000 Transfer for homelessness and housing reform (in improving the supply and quality of housing) from voted central funding (section B) to voted local authorities funding for (section M) to pay grant to third sector to part fund a pilot project to assist workless adult non-dependant household members. *

£1,200,000 Transfer for housing mobility services from voted central funding (in ensuring safer communities by providing the framework to prevent and respond to emergencies in section F) to voted local authorities funding for (section M) to properly reflect where expenditure is taking place and enhance CLG's existing monitoring and responsibility arrangement. *

£61,000 Transfer within voted central funding from ensuring safer communities by providing the framework to prevent and respond to emergencies (section F) to building prosperous communities, promoting regeneration and tackling deprivation (section C) to set up a new strategic research service. *

£113,000 Transfer within voted central funding from cohesion and race equality (in section D) to building prosperous communities, promoting regeneration and tackling deprivation (section C) to set up a new strategic research service. *

£65,000 Transfers within voted central funding for building prosperous communities, promoting regeneration and tackling deprivation (section C) from new horizons and regeneration, monitoring and digital inclusion to set up a new strategic research service. *

£209,000 Transfer within voted central funding from improving the supply and quality of housing (in section B) to building prosperous communities, promoting regeneration and tackling deprivation (section C) to set up a new strategic research service. *

£370,000 Transfer within voted central funding from cohesion and race equality (in section D) to voted central funding for improving the supply and quality of housing (in section B) to tackle unlawful sub-letting in social housing identified by the Audit Commission. *

£475,000 Transfer within voted central funding from cohesion and race equality (in section D) to voted central funding for improving the supply and quality of housing (in section B) to properly reflect where expenditure is taking place and enhance CLG's existing monitoring and responsibility arrangements. *

£230,000 Transfer from voted central funding for building prosperous communities, promoting regeneration and tackling deprivation (section C), to Regeneration Monitoring & Digital Inclusion in voted local authorities funding for building prosperous communities, promoting regeneration and tackling deprivation (section N). *

£5,159,000 Transfer from voted central funding for building prosperous communities, promoting regeneration and tackling deprivation (section C), to Regeneration Strategy in voted local authorities funding for building prosperous communities, promoting regeneration and tackling deprivation (section N) for the `Inspiring Communities' programme which is intended to address aspirational barriers to educational outcomes. This takes forward the recommendations from the Houghton Review. *

£100,000 Transfer from voted central funding for building prosperous communities, promoting regeneration and tackling deprivation (section C), to Sub National Economic Development in voted local authorities funding for building prosperous communities, promoting regeneration and tackling deprivation (section N) for work with the Language Partnership to further fund the Cornish Language Grant and Coastal Handbook Grants. *

£4,232,000 Transfer from voted central funding for building prosperous communities, promoting regeneration and tackling deprivation (section C), to Renewing Neighbourhoods in voted local authorities funding for building prosperous communities, promoting regeneration and tackling deprivation (section N). *

£100,000 Transfer within voted central funding from the Valuation Office Agency in section B to building prosperous communities, promoting regeneration and tackling deprivation (section C) in respect of research on household projections. *

£100,000 Transfer within voted central funding for the Valuation Office Agency in section B to provide for statutory increases in pension liability. *

£500,000 Transfer from New Deal for Communities in voted local authorities funding for building prosperous communities, promoting regeneration and tackling deprivation (section N) to voted central funding in Planning Inspectorate for a shortfall in Development Plan Documents (DPD) income (section E). *

£138,000 Transfer within voted central funding from SCDU Communications in building prosperous communities, promoting regeneration and tackling deprivation (section C) to the Homeowner Mortgage Support Scheme in improving the supply and quality of housing (section B). *

£2,862,000 Transfer from New Deal for Communities in voted local authorities funding for building prosperous communities, promoting regeneration and tackling deprivation (section N) to the Homeowner Mortgage Support Scheme in voted central funding for improving the supply and quality of housing (section B). *

£500,000 Transfer from New Deal for Communities in voted local authorities funding for building prosperous communities, promoting regeneration and tackling deprivation (section N) to voted central funding for developing communities that are cohesive, active and resilient to extremism (section D) for Adults Facing Chronic Exclusion (ACE), a joint project with Other Government Departments. *

£750,000 Transfer from New Deal for Communities in voted local authorities funding for building prosperous communities, promoting regeneration and tackling deprivation (section N) to voted central funding for improving the supply and quality of housing (section B) to fund the Carbon Hub. *

£2,719,000 Transfer from New Deal for Communities in voted local authorities funding for building prosperous communities, promoting regeneration and tackling deprivation (section N) to Private Housing Renewal in voted local authorities funding for improving the supply and quality of housing (section M) for Invest to Save housing initiatives at LB Newham. *

£1,750,000 Transfer from New Deal for Communities in voted local authorities funding for building prosperous communities, promoting regeneration and tackling deprivation (section N) to Homelessness and Housing Reform in voted local authorities funding for improving the supply and quality of housing (section M) for extra debt advice work arising as a result of increasing numbers of Mortgage defaulters. *

£750,000 Transfer within voted central funding from improving the supply and quality of housing (section B) to INTERREG in European Structural Funds in (section J) for the development of a Management Control Information System. *

£5,410,000 Transfer from voted central funding for community empowerment in section D to Support for Voluntary & Community Sector Sustainability in voted central funding for improving the supply and quality of housing (section B) to properly reflect where expenditure is taking place and enable more specific targeting to key areas. *

£7,335,000 Transfer, within voted local authorities funding, from providing a more efficient, effective and transparent planning system (section P) to Area Based Grant (section R) for costs estimated in an Impact Assessment associated with local planning authorities implementing new national planning policy on climate change. *

£1,500,000 Transfer from voted central funding for improving the supply and quality of housing (section B) to voted local authorities funding Area Based Grant (section R) to help local authorities tackle extremism inspired by Al Qaeda. *

£1,900,000 Transfer from voted central funding for emergency resettlement (in ensuring safer communities by providing the framework to prevent and respond to emergencies in section F) to housing management in voted local authorities funding (for improving the supply and quality of housing in section M) to tackle unlawful sub-letting in social housing (Local Authorities). *

£935,000 Transfer from voted central funding for supporting people administration (in improving the supply and quality of housing in section B) to housing management in voted local authorities funding (for improving the supply and quality of housing in section M) to tackle unlawful sub-letting in social housing (Local Authorities). *

£330,000 Transfer from voted central funding for tenant empowerment (in developing communities that are cohesive, active and resilient to extremism in section D) to housing management in voted local authorities funding (for improving the supply and quality of housing in section M) to tackle unlawful sub-letting in social housing (Local Authorities). *

£100,000 Transfer from voted central funding for improving the supply and quality of housing (section B) to Housing Mobility Services in voted local authorities funding for improving the supply and quality of housing (section M) to tackle Zimbabwe resettlement Programme for accommodation & housing support. *

£50,000,000 Transfer, within voted local authorities funding, from Area Based Grant (section R) to the Safer & Stronger Communities & New Ventures Fund, in building prosperous communities, promoting regeneration and tackling deprivation (section N), pending final allocations. *

£750,000 Transfer, within voted central funding, from providing a more efficient, effective and transparent planning system (section E), to Support for Voluntary & Community Sector Sustainability in improving the supply and quality of housing (section B) to enable funding on the Empowerment Fund to be better targeted as part of the overall Voluntary Community Sector Programme. *

£750,000 Transfer, for providing a more efficient, effective and transparent planning system, from Local Planning Authorities (LPA) performance on community empowerment, in voted central funding (section E), to Housing & Planning Delivery Grant, in voted local authorities funding (section P). *

£7,000,000 Transfer within voted Central Administration (section G) for the cost of staff early retirements. *

£175,000 Transfer from voted Central Administration (section G) to voted Government Office Administration (section H) to provide funding for the cost of staff, goods and services in the English Regions. *

£688,000 Transfer in voted Administration budgets from Government Office Administration (section H) to Central Administration (section G) for legal and audit costs arising from management of European Regional Development Funding.

-£114,541,000 Reductions in budgets to meet increases, as detailed above. *

ZERO Total change to Main Resource DEL

ZERO Total change to Main Capital DEL

ZERO Total change to Main DEL

ZERO Total change to Estimate

Transfers to/from non-voted spending

References to sections are to sections in the Estimates

—£86,500,000 Transfer from Thames Gateway direct funding (section B) to Thames Gateway UDC to support their agreed programmes *

—£15,711,000 Transfer from various programmes uncommitted and available resources to the Departmental Unallocated provision (DUP) comprising Supporting People Administration (£3,280,000)(section B); Regeneration Strategy (£600,000) (section N); Local Enterprise Growth Initiative(£2,359,000) (section N); National Register of Social Housing (£419,000) (section B); Regeneration Monitoring and Digital Inclusion (£2,000,000) (section C); Efficient Geographic and Statistical Data (£4,581,000) (section K) and Planning Inspectorate (£2,472,000) (section E)

—£13,700,000 Transfer from Central Administration (section G) to no voted Government Offices comprising £12,300,000 (near cash) to adjust budgets for utilisation of provisions in respect of early exit costs and £1,400,000 (non cash) to correct baseline provision of both pay and provision release. *

—£3,661,000 Transfer from the Infrastructure Planning Commission (section E) to fund the newly formed IPC. *

—£3,050,000 Transfer from the Infrastructure Planning Commission to the Homes and Communities Agency comprising from section E for Rural master-planning (joint with the Department for Environment, Food and Rural Affairs (£250,000) and for the Advisory Team on Large ApplicationS (ATLAS) (£2,500,000) and from section P for Planning Performance Agreements for Renewal and Low Carbon Energy Planning Applications (£300,000). *

Transfer from Planning Inspectorate (section E) to the Homes and Communities Agency to cover additional accommodation/IT costs incurred as a result of its set-up

—£1,706,000 Transfer from Community Empowerment (section D) to Community Development Foundation. This is a budget transfer to reflect annual funding, and not a re-allocation or re-prioritisation of resources. *

—£1,667,000 Transfer from Efficient Geographic and Statistics (section K) to support the maintenance and running of the National Register of Social Housing (NROSH) database which is to be transferred to the Tenant Services Authority (TSA). *

—£606,000 Transfer to Other Growth Areas—West Northamptonshire Development Corporation from Valuation Office Agency Right to Buy charges (£100,000) (section E) and New Deal for Communities (£300,000) (section N) to cover Legal costs in respect of unfunded legal challenges on planning and from Planning Inspectorate (£206,000) (section E) to cover non cash charges. *

—£292,000 Transfer from Planning Inspectorate to to fund the newly formed IPC *

—£140,000 Transfer voted (section B) to non-voted Homes and Communities Agency for commitment in the "lifetime Homes, Lifetime Neighbourhoods; a National Strategy for housing in an Ageing Society *

£3,163,000 Transfer from Local Authority Supported Capital Expenditure to Regional Housing Pot (section M) to assist with delivery of programme for East Midlands and South East region. *

£1,400,000 Transfer near cash from non voted to voted Government Offices to correct the baseline provision of both pay and provision release; *

ZERO Total change to Main Resource DEL

ZERO Total change to Main Capital DEL

ZERO Total change to Main DEL

—£122,470,000 Total change to Estimate

Changes in non budget spending

£694,504,000 Increase in grant in aid for the Homes and Communities Agency (section W) to reflect £555,000,000 for the Pledge as announced on 29 June and £139,504,000 to reflect their latest spending forecast.

£82,500,000 Increase in grant in aid for Thames Gateway UDC (section W) to supported non-voted budget allocation to this body under the Thames Gateway programme

£3,621,000 Increase in grant in aid for the newly set up—Infrastructure Planning Commission (IPC) (section AA). This is to support the non voted budget allocation to this body under the IPC programme.

£1,706,000 To provide grant in aid cover for Community Development Foundation (section X). This reflects their annual grant-in-aid funding. The amount of grant-in-aid for 2008-2011 was agreed during the CSR07.

£367,000 Increase in grant in aid for the Tenant Services Authority (section W) to support the non voted budget allocation to this body.

£300,000 Increase in grant in aid for Other Growth Areas—West Northamptonshire Development Corporation (section W) for the legal costs in respect of unfunded legal challenges on planning.

—£6,800,000 reduction of non budget provision for Loan Charges on Defective Housing Grant because a few authorities were a year late in changing the way they reclaimed monies on repairing or repurchasing defective properties.

ZERO Total change to Main DEL

£776,198,000 Total change to Estimate

Changes in Operating Appropriations in Aid fully offset by changes in voted spending

Spend: £23,080,000

Receipts: —£23,080,000

(net change
zero) Government Offices (Section H) Increase in provision fully offset by increase in A-in-A for communications support for Regional Ministers from Cabinet Office (£350,000); work on Crime Reduction, Regional Drugs Team, Drugs Intervention programme and Core work from the Home Office (£12,730,000); work on briefing, Sure Start and core agenda for DCSF ((£3,440,000); work on additional core agenda for DEFRA (£2,814,000); additional UKTI funding from BIS (£94,000); funding for DWP staff taking early retirement (£1,600,000); funding from DfT for statutory advertising and additional income from renting out office space (£1,126,000), and £926,000 from the Department of Health. *

Spend: £7,954,000

Receipts: —£7,954,000

(net change
zero) Internal changes within the Planning Inspectorate budget to reflect projected spend (Section E). *

Spend: £1,800,000

Receipts: —£1,800,000

(net change
zero) Central Administration (Section G) Increase in budget fully offset by increase in A-in-A for outward secondees. *

Spend: £672,000

Receipts: —£672,000

(net change
zero) Government Offices (Section H) to reflect the technical accounting changes as a consequence of implementing International Financial reporting Standards (IFRS) *

Spend: £600,000

Receipts: —£600,000

(net change
zero) Changes in budgets reflecting contributions from Department for Work and Pensions to Regeneration Strategy for the Houghton Review on Tackling Worklessness (section C) *

Spend: £250,000

Receipts: —£250,000

(net change
zero) Change in budget to enable CLG to invoice the Fire Service College to recover subscription expenditure. This is in respect of selection test booklets. *

Spend: £100,000

Receipts: —£100,000

(net change
zero) To increase resource for Residential Property Tribunal Service (RPTS) for tribunal hearing applications(section B). *

Spend: £100,000

Receipts: —£100,000

(net change
zero) To increase resource for Supporting People for supporting PSA 16 Challenge Fund (section B) *

ZERO Total change to Main DEL

ZERO Total change to Estimate

14. Changes in voted capital, and their implications for DEL and AME budgets, are as follows:

Transfers to/from non-voted spending

—£2,810,000 Transfer from Planning Inspectorate (section E) to the Homes and Communities Agency (£1,800,000) to cover additional accommodation/IT costs incurred as a result of the set-up and to the newly formed IPC ( £1,010,000) *

—£450,000 Transfer from E- Planning (section E) to the newly formed IPC *

ZERO Total change to Main Capital DEL

ZERO Total change to Main DEL

—£3,260,000 Total change to Estimate

Transfers between Capital spending and resource (capital grants)

£4,720,000 Transfer to resource (capital grants) in New Deal for Communities (section N) from capital expenditure in the Planning Inspectorate (section E) to meet demands of projects approved in 2009-10. *

£500,000 Transfer to capital expenditure for INTERREG (Section J) from resource (capital grants) in Support for Voluntary & Community Sector (Section B) for the continued development of Management Control Information System which will satisfy the contractual commitments made with Real Time (the new developers). *

ZERO Total change to Main Capital DEL

ZERO Total change to Main DEL

ZERO

—£4,220,000 capital

+£4,220,000 resource Total change to Estimate

Capital transfers within the Request for Resources

—4,720,000 Transfer from Planning Inspectorate (section E) to New Deal for Communities (section N) to cover capital requirements for the NDC.

£4,720,000 Transfer to New Deal for Communities (section N) from the Planning Inspectorate (section E) to cover capital requirements for the NDC.

ZERO Total change to Main Capital DEL

ZERO Total change to Main DEL

ZERO Total change to Estimate

Changes in Non Operating Appropriations in Aid fully offset by changes in voted spending

Spend:

£450,000

Receipts: —£450,000

(net change

zero) Changes in FRS Improvement budget to take account of the short term working Capital Loan to the Fire Service College *

ZERO

Total change to Main DEL

ZERO Total change to Estimate

Changes to RFR2: Providing for effective devolved decision making within a national framework

15. The changes to RfR2, and their implications for DEL and AME budgets, are as follows:

Take up of End year Flexibility

£59,000,000 Draw down of EYF for the Local Government Public Service Agreement performance fund (Section G) to meet commitments. *

£59,000,000 Total change to Local Government Resource DEL

£59,000,000 Total change to Local Government DEL

£59,000,000 Total change to Estimate

Resource transfers to/from another Request for Resources

£1,432,000 Transfer from Fire Improvement Programme (RfR1, Section F) to Best Value Inspection (RfR2, section B) to pay the Audit Commission's bill in respect of work on `Fire'. *

£200,000 Transfer from Implementing Planning Reforms (RfR1, section E) to Greater London Authority General Grant (RfR2, section F) to fund the Mayor's new planning powers in the GLA Act 2007.

£76,000 Transfer from Efficient Geographic and Statistics (RfR1, section K) to Audit Commission (RfR2, Section B) for secondment costs relating to the Data Inter Change Hub. *

—£500,000 Transfer to Cohesion and Race Equality (RfR1, section D) from Local Government Research (RfR2, section C) to provide a more streamlined and effective research team

—£73,000 Transfer to Research(RfR1, Section C) from Audit Commission Best Value Inspection (RfR2, Section B) for New Strategic Research

£1,135,000 Total Change to Local Government Resource DEL

£1,135,000 Total change to Local Government DEL

£1,135,000 Total change to Estimate

Resource transfers within the Request for Resources

£140,000 Transfer from Valuation services (section A) to Improvement, Transformation and Efficiency (section G) towards the costs of National Graduate Development Programme. *

£5,800,000 Transfer from Valuation services (section A) to Cost of Collection Grant (section G) to fund Local Authorities additional costs of implementing the business rates deferral scheme. *

£3,885,000 Transfer from Improvement, Transformation and Efficiency (section G) to Emergency Financial assistance to Local Authorities (Section G) to provide cover for possible Bellwin schemes later in the year. *

—£9,825,000 Reductions in budgets to meet increases, as detailed above.

ZERO Total change to Local Government DEL

ZERO Total change to Estimate

Transfers to/from non-voted spending

—£174,000 Transfer from Valuation services (section A) to Commission for Local Administration (Non Voted) to provide funding for existing Cost of Capital and Depreciation charges.

*

ZERO Total change to Local Government Resource DEL

ZERO Total change to Local Government DEL

—£174,000 Total change to Estimate

Changes in non budget spending

£15,000 Increase in grant in aid for Valuation Tribunal Services (Section I) to reflect an adjustment for depreciation charges

ZERO Total change to Local Government DEL

£15,000 Total change to Estimate

Changes in Operating Appropriations in Aid fully offset by changes in voted spending

Spend: £13,600,000

Receipts: —£13,600,000

(net change
zero) Changes in budgets for Local Government Public Service Agreement performance fund (Section G) from repayment of Capital grants from Local Authorities. *

ZERO Total change to Main DEL

ZERO Total change to Estimate

SECTION C: IMPACT ON THE DEPARTMENT'S STRATEGIC OBJECTIVES

16. DEL expenditure against the Department's Strategic Objectives will change as set out in the following table:

Table 3

  £ million

Departmental Strategic Objective DEL at Main Estimate EYF/Brought forward funds Transfers to/from DUP Transfers to/from OGDs Transfers between DSOs New DEL at Winter Supps Estimates

1.  Supporting local government 25,703.5 59.0 0.0 0.0 —0.33 25,762.17

2.  Improving the supply and quality of housing 8,964.8 135.0 —3.70 420.0 18.49 9,534.59

3.  Building prosperous communities, promoting regeneration and tackling deprivation 2,466.9 0.0 —4.96 0.0 50.76 2,512.70

4.  Developing communities that are cohesive, active and resilient to extremism 98.4 0.0 0.0 1.396 —5.70 94.10

5.  Providing a more efficient and transparent planning system 273.0 0.0 —2.47 —0.23 —17.74 252.56

6.  Ensuring safer communities by providing the framework to prevent and respond to emergencies 313.5 0.0 0.0 0.0 —4.60 308.90

Not assigned to a DSO (see note iii below), including administration and other costs 1,049.60 0.0 11.13 0.16 —40.88 1,020.01

Total Main and Local Government DEL change (before depreciation) 38,869.70 194.00 0.00 421.33 0.0 39,485.03

Less administration costs (before depreciation) 272.9 0.0 0.0 0.16 0.0 273.06

Total change (excluding administration costs) 38,596.80 194.00 0.00 421.17 0.0 39,211.97

Notes:

(i)  Amounts may not sum exactly due to rounding.

(ii)  The Local Government DEL contributes entirely to DSO 1 (Supporting local government).

(iii)  The "not assigned" section of the table comprises Area Based Grant, European Regional Development Fund, departmental unallocated provision, central administration costs, Government Offices administration costs and CLG re-structuring, payments for Ordnance Survey mapping data and services and the Queen Elizabeth II Conference Centre.

17. The main budget changes which lead to increases in 2009-10 DEL expenditure against DSOs are:

— draw down of end year flexibility for DSO1 to increase provision for the Local Government PSA performance fund (£59,000,000).

— increase in budget of £555,000,000 for the Homes and Communities Agency (DSO 2) for the Pledge as announced by the Government on 29 June as part of Building Britain's Future. This comprises a transfer of £420,000,000 from Other Government Departments and £135,000,000 of CLG's funds brought forward from 2010-11 (see section B, paragraph 23 (Table 4) and Annex A).

18. These additional resources have been provided either by bringing forward planned expenditure from 2010-11 or by using EYF. Neither increases the planned spend to deliver targets above what was expected over the Comprehensive Spending Review years.

19. Further detail of changes by DSO is set out below. Changes relate to DEL and may not therefore match the totals shown in Estimates—some funding will relate to non voted expenditure. Full details of changes to voted budgets are given in Section B above.

DSO1—SUPPORTING LOCAL GOVERNMENT

Drawdown of End Year Flexibility

— £59,000,000 (capital DEL) for the Local Government PSA performance fund to meet commitments.

Transfers between DSOs

There is a net decrease of £329,000 comprising a decrease of:

— £1,464,000 due to Capacity Building and Efficiency Improvement in Housing programme being moved to DSO 2;

— £73,000 from Local Government Research (RFR 2) to Research (DSO 3—RFR1) for new strategic research budget; and

— £500,000 from Local Government Research (RFR 2) to Cohesion Race and Equality (DSO 4—RFR1) to provide a more streamlined and effective research team.

offset against increases of:

— £200,000 from Implementing Planning Reforms (DSO 5—RFR1) to London Governance (RFR2) to fund the mayor's new planning powers in the Greater London Authority Act 2007;

— £1,432,000 from Fire and Rescue Services Improvement programme (DSO 6—RFR1 ) to Best Value inspection (RFR 2) to pay the Audit Commission's bill in respect of work on "Fire"; and

— £ 76,000 from Efficient Geographic and Statistics (not assigned to a DSO—RFR1) to Best Value Inspection (RFR2) for secondment costs relating to the Data Inter Change Hub.

DSO 2—IMPROVING THE SUPPLY AND QUALITY OF HOUSING

Brought Forward Funds

— £135,000,000 has been brought forward from Financial Year 2010-11 for the Homes and Communities Agency in respect of the Pledge announced on 29 June by the Government as part of Building Britain's Future.

Transfers from Other Government Departments

— There is a transfer of £420,000,000 from other government departments to the Homes and Communities Agency towards the Housing Pledge as announced on 29 June. This comprises £350,000,000 from the Department for Transport; £25,000,000 from the Department for Business, Innovation and Skills and £45,000,000 from the Home Office.

Transfers to/from Departmental Unallocated provision

There is a net decrease of £3,669,000 comprising £3,280,000 from Supporting People and £419,000 from National Register of Social Housing to DUP (not assigned to a DSO).

Transfers between DSOs.

There is a net increase of £18,492,000 comprising a decrease of:

— £5,000,000 from Growth Areas & ECO towns to New Deal for Communities (DSO3) to cover capital requirements of the New Deal for Communities;

— £1,500,000 from Support for Voluntary & Community Sector to Area Based Grants (Not assigned to a DSO) to boost funding to help local authorities tackle extremism inspired by Al Qaeda;

— £1,250,000 from Support for Voluntary & Community Sector to INTERREG (Not assigned to a DSO) comprising £750,000 to provide cover for unexpected residual Meta-skills contract costs which were exacerbated by under accruals in 2008-09 and £500,000 to ensure there is budget cover for the continued development of Management Control Information System which will satisfy the contractual commitments made with the Real Time (the new developers);

— £209,000 from Sustainable Buildings to Research (DSO3) for the New Strategic Research budget; and

— £200,000 from Valuation Office Agency to Research (DSO3) and Other Growth Areas (DSO5) for research on Household Projections and legal costs in respect of unfunded legal challenges on planning.

offset against increases of:

— £5,410,000 to Support for Voluntary and Community sector from DSO 4 to disaggregate part of the Community Empowerment budget to the Voluntary Community Sector budget, which will allow greater transparency on how funding is being spent;

— £3,050,000 from Implementing planning reform (DSO5) to the Homes and Communities Agency for ATLAS (£2,500,000), Rural master-planning (£250,000), and renewable and low-carbon energy planning applications (£300,000);

— £3,000,000 from New Deal for Communities (£2,862,000) and HPG Communications (£138,000) (DSO3) to Homeowners Mortgage Support to fund Homeowner Mortgage Support Scheme;

— £2,719,000 from New Deal for Communities (DSO3) to Private Housing Renewal to fund Invest to Save housing initiatives at LB Newham;

— £2,230,000 comprising £1,900,000 from Tenant Empowerment (DS04) and £330,000 from Emergency resettlement (DSO6) to Housing Management to fund a new initiative to tackle unlawful sub-letting in social housing;

— £1,800,000 from Planning Inspectorate (DSO5) to HCA to fund additional resource requirements for HCA arising from the Housing Pledge;

— £1,750,000 from New Deal for Communities (DSO3) to Homelessness and Housing Reform to fund extra debt advice work arising as a result of increasing numbers of Mortgage defaulters;

— £1,667,000 from Efficient Geographic and Statistics (Not assigned to a DSO) to Tenant Services Authority to support the maintenance and running of the National Register of Social Housing (NROSH) database which is to be transferred to the Tenant Services Authority;

— £1,200,000 from Emergency resettlement costs (DSO6) to Housing Mobility Service to transfer responsibility for the administration of finance for the Zimbabwe Programme from European Policy & Programme Directorate to Housing Management & Support Directorate;

— £750,000 from Implementing planning reforms (DSO5) to Support for Community and Voluntary Sector for community involvement;

— £475,000 from Cohesion and Race Equality (DSO4) to Gypsy Site Grant to enable the budget to properly reflect where expenditure is taking place;

— £180,000 from Planning Inspectorate (DSO5) to Supporting People for Planning Performance agreements;

— £750,000 from New Deal for Communities (DSO3) to Zero Carbon Buildings to fund the Carbon Hub;

— £206,000 from Planning Inspectorate to Other Growth Areas (West Northamptonshire Development Corporation) for non-cash cover; and

— £1,464,000 from DSO1 in respect to Capacity Building and Efficiency Improvement in Housing programme which has been moved to DSO2.

DSO 3—BUILDING PROSPEROUS COMMUNITIES, PROMOTING REGENERATION AND TACKLING DEPRIVATION

Transfers to/from Departmental Unallocated Provision

A decrease of £4,959,000 comprising:

— £2,359,000 from Local Enterprise Growth Initiative to DUP (Not assigned to a DSO);

— £2,000,000 from Regeneration Monitoring and Digital Inclusion; and

— £600,000 from Regeneration Strategy.

Transfers between DSOs

There is a net increase of £50,757,000 comprising decreases of:

— £3,000,000 to Homeowners Mortgage Support (DSO2) from New Deal for Communities (£2,862,000) and the Housing and Planning budget (£138,000) to fund Homeowner Mortgage Support Scheme;

— £2,719,000 from New Deal for Communities to Private Housing Renewal (DSO2) to fund Invest to Save housing initiatives at LB Newham;

— £1,750,000 from New Deal for Communities to Homelessness and Housing Reform (DSO2) to fund extra debt advice work arising as a result of increasing numbers of Mortgage defaulters;

— £750,000 from New Deal for Communities to Zero Carbon Buildings (DSO2) to fund the Carbon Hub;

— £500,000 from New Deal for Communities to Planning Inspectorate (DSO5) to cover a shortfall in Development Plan Documents (DPD) income;

— £500,000 from New Deal for Communities to Adults Facing Chronic Inclusion (DSO4), to enable funding to be targeted at key areas in a more transparent way; and

— £300,000 from New Deal for Communities to Other Growth Areas (DSO5) to fund legal costs in respect incurred by the West Northamptonshire Development Corporation relating to legal challenges on planning.

offset against increases of:

— £50,000,000 from Area Based Grants (Not assigned to a DSO) to Working Neighbourhood Fund to correct an administrative error;

— £9,720,000 from Planning Inspectorate (DSO5) and Growth Areas & Eco Towns (DSO2) to cover capital requirements of the New Deal for Communities;

— £209,000 from Sustainable Buildings (DSO2) to Research for New Strategic Research Budget;

— £100,000 from Valuation Office Agency (DSO2) to Research for research on housing projections;

— £113,000 from Cohesion and Race Equality (DSO4) to Research for New Strategic Research Budget;

— £73,000 from Local Government Research (DSO1; RfR2) to Research for New Strategic Research Budget; and

— £61,000 from Fire Services (DSO6) to Research for the New Strategic Research Budget.

DSO 4—DEVELOPING COMMUNITIES THAT ARE COHESIVE, ACTIVE AND RESILIENT TO EXTREMISM

Transfers from Other Government Departments

— A transfer of £1,396,000 from the Home Office in respect of their contribution to the Migration Impact Fund.

Transfers between DSOs

There is a net decrease of £5,698,000 comprising a decrease of:

— £5,410,000 from Community empowerment to Support for Voluntary and Community Sector (DSO 2) to disaggregate part of the Community Empowerment budget to the Voluntary Community Sector budget, which will allow greater transparency on how funding is being spent;

— £700,000 from Tenant Empowerment to Housing Management (DSO2) to fund new initiative/pressure for social housing fraud;

— £475,000 from Cohesion and Race Equality to Gypsy Site Grant (DSO2) to enable the budget to properly reflect where expenditure is taking place, enhancing CLG's existing monitoring and responsibility arrangements; and

— £113,000 from Cohesion and Race Equality to Research (DSO3) for New Strategic Research Budget.

offset against increases of:

— £500,000 from New Deal for Communities (DSO3) to Adults Facing Chronic Inclusion, to enable funding to be targeted at key areas in a more transparent way; and

— £500,000 from Local Government Research (DSO1; RfR2) to Cohesion and Race Equality to provide a more streamlined and effective research team within Communities.

DSO 5—PROVIDING A MORE EFFICIENT AND TRANSPARENT PLANNING SYSTEM

Transfer to/from the Departmental Unallocated provision

— £2,472,000 to DUP (not assigned to DSO) from Planning Inspectorate.

Transfer to/from Other Government Departments

— A transfer of £233,000 from Implementing Planning Reforms to the Department for Environment, Food and Rural Affairs for new burdens for the Environment Agency implementing of the Mine waste Directive.

Transfers between DSOs

There is a net decrease of £17,741,000 comprising decreases of:

— £7,335,000 from Implementing planning reforms to Area Based Grant (Not assigned to DSO) for costs estimated in an Impact Assessment associated with local planning authorities implementing new national planning policy on climate change;

— £4,720,000 from Planning Inspectorate to New Deal for Communities (DSO3) to meet demands of projects approved in 2009-10;

— £3,050,000 to the Homes and Communities Agency (DSO2) from Implementing planning reform for ATLAS (£2,500,000), Rural master-planning (£250,000), and renewable and low-carbon energy planning applications (£300,000);

— £1,800,000 from Planning Inspectorate to HCA (DSO2) to fund additional resource requirements for HCA arising from the Housing Pledge;

— £750,000 from Implementing planning reforms to Community Empowerment (DSO 2) for community involvement;

— £206,000 from Planning Inspectorate to Other Growth Areas (DSO2) to cover capital budgets held by the West Northamptonshire Development Corporation;

— £180,000 from Planning Inspectorate to Supporting People (DSO2) for Planning Performance agreements;

— £200,000 from Implementing planning reforms to GLA General Grant (RfR2, DSO1) for New burdens funding for the Mayor's new planning powers in the GLA Act 2007;

offset against an increase of:

— £500,000 from New Deal for Communities (DSO3) to Planning Inspectorate for a shortfall in Development Plan Documents income.

DSO 6—ENSURING SAFER COMMUNITIES BY PROVIDING THE FRAMEWORK TO PREVENT AND RESPOND TO EMERGENCIES

Transfers between DSOs

There is a net decrease of £4,593,000 comprising decreases of:

— £1,900,000 to Housing Management (DSO2) from emergency resettlement costs to fund new initiative/pressure for social housing fraud;

— £1,432,000 to Audit Commission Best Value Inspection (DSO1; RfR2) from Fire Improvement Programme to pay the Audit Commission's invoices in respect of work on `Fire';

— £1,200,000 to Housing Mobility Service (DSO2) from Emergency resettlement costs to transfer responsibility for the administration of finance for the Zimbabwe Programme from European Policy & Programme Directorate to Housing Management & Support Directorate; and

— £61,000 to Research (DSO3) from Fire Services for the New Strategic Research Budget.

Not Assigned to a DSO

Transfers to Departmental Unallocated Provision

There was a net transfer of £ 11,130,000 to DUP comprising:

— £3,280,000 from Supporting People (DSO2;

— £2,472,000 from Planning Inspectorate (DSO5);

— £2,000,000 from Regeneration Monitoring and Digital Inclusion (DSO3);

— £419,000 from National Register of Housing Statistics (DSO 2);

— £2,359,000 from Local Enterprise Growth Initiative (DSO 3); and

— £600,000 from Regeneration Strategy (DSO3).

Transfers to/from Other Government Departments

There is a net increase of £161,000 from Other Government Departments comprising increases of:

— £340,000 from Cabinet Office to Government Offices for work on Community Cohesion; and

— £440,000 from the Department for work and Pensions to Government Offices for work on Older Persons agenda;

offset by decreases of:

— £619,000 for Government Offices to reflect technical accounting changes as a consequence of implementing International Financial Reporting Standards.

Transfers between DSOs

There is a net decrease of £41,658,000 comprising decreases of:

— £50,000,000 from Area Based Grants to Safer and Stronger Communities Fund (DSO3) to correct an administrative error;

— £1,667,000 from Efficient Geographic and Statistics to Tenant Services Authority (DSO2) to support the maintenance and running of the National Register of Social Housing (NROSH) database which is to be transferred to the Tenant Services Authority; and

— £76,000 from Efficient Geographic to Audit Commission Best Value Inspections (DSO1; RfR2) for the cost of a secondee;

offset against an increase of:

— £7,335,000 from Implementing planning reforms (DSO5) to Area Based Grant for costs estimated in an Impact Assessment associated with local planning authorities implementing new national planning policy on climate change;

— £500,000 from Support for Voluntary & Community Sector Sustainability (DSO2) to Interreg to ensure there is budget cover for the continued development of MCIS which will satisfy the contractual commitments made with the Real Time (the new developers);

— £1,500,000 from Support for Voluntary & Community Sector Sustainability (DSO2) to Area Based Grants to boost funding to help focus local authorities to tackle extremism inspired by Al Qaeda; and

— £750,000 from Support for Voluntary & Community Sector Sustainability (DSO2) to INTERREG to provide cover for unexpected residual Meta-skills contract costs.

SECTION D: DEPARTMENTAL EXPENDITURE LIMITS (DEL) AND ANNUALLY MANAGED EXPENDITURE (AME)

20. Departmental Expenditure Limits—which are set in Spending Reviews—represent a share of total public expenditure which Departments are expected to manage. They cover a wider boundary than the RFRs, as they include NDPB expenditure and supported capital expenditure of local authorities. Increases can only be sought in RFRs if extra DEL is available—transferred from elsewhere (non-voted or another Department) or drawn down as EYF—or if a particular budget is outside the DEL.

21. Annually Managed Expenditure covers a few specific programme areas where spend is more difficult to control and forecast. For AME programmes, increases may be made in year and between Spending Reviews, with Treasury agreement. AME is within overall public expenditure.

22. The following is a summary of DEL and AME changes consistent with the RFR changes sought. The Department has two DELs—Main and Local Government—which broadly mirror the programme areas of RFR1 and RFR2 respectively.

MAIN DEL

23. The changes to the key budgetary figures for Main DEL are:

Table 4

£ million

Main Departmental Expenditure Limit

Resource DEL increases by 0.189

Of which

Near cash t0.189

Administration Near Cash 0.161

The net increase in Resource DEL is the effect of:

— Voted increase of £0.189m for near cash comprise a transfer of £1.943m from Other Government Departments offset against

— Voted decreases of £1.135m from Main DEL to Local Government DEL and a reduction of £0.619m in Government Offices to reflect the accounting changes for implementing the International Financial reporting Standards

Capital DEL increases by 555.000

The increase is a result of a transfer of £420.0m from Other Government Departments and £135.0m of funds brought forward from 2010-11 in respect of the Housing Pledge.

Table 5

£ million

Changes to the Departmental Expenditure Limit in 2009-10 Voted Non voted Total DEL

Resource

1 April 3,946 598 4,545

Change announced with winter supplementary estimate —55 55 0

Total resource Departmental Expenditure Limit 3,891 654 4,545

Capital

1 April 2,213 6,409 8,623

Change announced with winter supplementary estimate —70 625 555

Total capital Departmental Expenditure Limit 2,143 7,034 9,178

Less depreciation at the start of the year —36 —13 —49

Less change in depreciation at winter supplementary estimate 0 —1 —1

Total depreciation —36 —14 —50

Total Departmental Expenditure Limit 5,999 7,675 13,673

A reconciliation from CSR07 to the 1 April DEL position is set out in table 5 of the Explanatory Memorandum to the Main Estimate 2009-10.

Amounts may not sum exactly due to rounding.

24. The expenditure against Main DEL for this Department and its predecessors for the financial years since 2006-07 is set out in the table below:

Table 6

£ million

Previous years' expenditure against Departmental Expenditure Limits

Year Voted Non voted Total DEL Outturn Variance %

Resource

2006-07 3,545 121 3,666 3504 —162 —4.4

2007-08 4,118 218 4,336 4,198 —138 —3.2

2008-09 4,005 371 4,376 4,183 —193 —4.4

Capital

2006-07 2,208 3,588 5,796 5,635 —161 —2.8

2007-08 2,445 3,624 6,069 6,069 0 0.0

2008-09 2,103 5,225 7,328 7,091 —237 —3.2

Total

2006-07 5,753 3,709 9,462 9,139 —323 —3.4

2007-08 6,563 3,842 10,405 10,267 —138 —1.3

2008-09 6,108 5,596 11,704 11,274 —430 3.7

ANNUALLY MANAGED EXPENDITURE (MAIN DEL)

25. There are no changes to the AME forecast for Main DEL programmes

Local Government DEL

26. The changes to the key budgetary figures for Local Government DEL are:

Table 7

£ million

Local Government Departmental Expenditure Limit

Resource DEL increases by 1.135

Of which

Near cash 1.150

The increase in Resource DEL is funded by

— a net transfer of £1.135m from the Main DEL to Local Government DEL and

— a transfer of £15k non cash to near cash for Valuation Tribunal Service

Capital DEL increases by 59.000

The increase in Capital DEL is the draw down of £59.000m EYF for Local Government PSAs. Details are given in section B.

Table 8

£ million

Changes to the Departmental Expenditure Limit in 2009-10 Voted Non voted Total DEL

Resource

1 April 25,478 118 25,596

Change announced with winter supplementary estimate 1 0 1

Total resource Departmental Expenditure Limit 25,479 118 25,597

Capital

1 April 105 1 106

Change announced with winter supplementary estimate 59 0 59

Total capital Departmental Expenditure Limit 164 1 165

Less depreciation at the start of the year 0 1 0

Less change in depreciation at winter supplementary estimate 0 0 0

Total depreciation 0 1 0

Total Departmental Expenditure Limit 25,643 118 25,761

A reconciliation from CSR07 to the 1 April DEL position is set out in table 8 of the Explanatory Memorandum to the Main Estimate 2009-10.

Amounts may not sum exactly due to rounding.

27. The expenditure for the Local Government DEL for this Department and its predecessors for the financial years since 2006-07 is set out in the table below:

Table 9

£ million

Previous years' expenditure against Departmental Expenditure Limits

Year Voted Non-voted Total DEL Outturn Variance %

Resource

2006-07 22,460 106 22,566 22,551 —15 —0.1

2007-08 22,711 104 22,815 22,755 —60 —0.3

2008-09 24,615 103 24,718 24,651 —67 —0.3

Capital

2006-07 260 6 265 223 —42 —15.9

2007-08 126 4 130 34 —96 —74

2008-09 175 1 176 122 —54 —30.1

Total

2006-07 22,720 112 22,831 22,774 —58 —0.3

2007-08 22,838 107 22,945 22,789 156 0.7

2008-09 24,789 104 24,893 24,773 —121 —0.5

Note:

From 2006-07, there was a large change in funding mechanisms for education, reducing grant paid by this Department and increasing that paid by the Department for Children, Schools and Families.

Annually Managed Expenditure (Local Government Programmes)

28. There are no changes to the AME forecast for local government programmes.

SECTION E: END YEAR FLEXIBILITY (EYF)

Main DEL (RFR1 and non voted)

29. The Department's EYF has been accumulated by underspends in previous years. The department uses its EYF to fund ongoing programmes where slippage has occurred and for the management of unbudgeted pressures which arise.

Table 10

£ million

Resource Capital

Total

Administration Other Resource Total Resource of which:

Near cash Non cash

Entitlement set out in Public Expenditure: Provisional Outturn, July 2008 (table 6—Cm 7419) 69 115 184 144 40 397 581

Amount drawn down in 2008-09 —9 0 —9 —9 0 0 —9

Balance of accumulated EYF at 31 March 2009 60 115 175 135 40 397 572

EYF entitlement from unused resources in 2008-09 39 153 192 153 39 236 428

Adjustments to 2007-08 outturn 0 —22 —22 —6 —16 —2 —24

Entitlement set out in Public Expenditure: Provisional Outturn, July 2009 (table 6—Cm 7606) 99 246 345 282 63 631 976

EYF drawn down in winter supplementary estimates 0 0 0 0 0 0 0

Balance of accumulated end year flexibility 99 246 345 282 63 631 976

Table 11

£ million

Allocation of accumulated end year flexibility

Resource Capital Total

Central department (Programme & Administration) 345 631 976

of which Ring-fenced*

Regional Development Agencies 3 9 12

Olympics (Contingency) 0 214 214

Local Government DEL (RFR2 and non voted)

30. The Department's EYF has been accumulated by underspends. The Department uses its EYF to fund ongoing programmes where slippage has occurred and for the management of unbudgeted pressures which arise.

Table 12

£ million

Resource Capital

Total

Administration Other Resource Total Resource of which:

Near cash Non cash

Entitlement set out in Public Expenditure: Provisional Outturn, July 2008 (table 6—CM 7419) 0 107 107 107 0 418 525

EYF drawn down in winter supplementary estimates 0 0 0 0 0 —82 —82

EYF drawn down in Spring supplementary estimates (see section B) 0 —10 —10 —10 0 —10 —20

Balance of accumulated end year flexibility 0 97 97 97 0 326 423

EYF entitlement from unused resources in 2008-09 0 80 80 80 0 55 135

EYF entitlement set out in Public Expenditure: Provisional Outturn, July 2009 (CM 7606) 0 177 177 177 0 381 558

EYF drawn down in winter supplementary estimates 0 0 0 0 0 —59 59

Balance of accumulated end year flexibility 0 177 177 177 0 322 499

* EYF entitlement from unused resources in 2008-09 has been adjusted to account for changes to 2007-08 final outturn which was understated by £10m due to error in the published version of PEOWP.

Table 13

£ million

Allocation of accumulated end year flexibility

Resource Capital Total

RfR2 (Local Government Programmes) 177 322 499

of which Ring-fenced* 127 322 449

* The majority of this ring-fencing (£127m resource; £322m capital) is for PSA Reward Grant.

SECTION F: ADMINISTRATION BUDGET

Table 14

£ million

Changes to the Administration budget in 2009-10 Limit

1 April 272.9

Change announcement with winter supplementary estimate 0.2

Administration Budget 273.1

31. The changes to the overall Administration Budget in the Winter Supplementary Estimate are the result of a net transfer of £0.2m from other Government Departments which is explained in section B above.

32. The Administration Budget and outturn for the financial years since 2006-07 are set out in the table below:

Administration Budget (previous years)

Table 15

£ million

Year Budget Outturn Variance %

2006-07 324 298 —26 —8.1

2007-08 304 278 —26 —8.6

2008-09 291 252 —39 —13.4

SECTION G: PROVISIONS AND CONTINGENT LIABILITIES

Provisions

33. The Department provides for legal or constructive obligations, which are of uncertain timing, or amount, at the balance sheet date on the basis of the best estimate of the expenditure required in settling the obligation. Where the effect of the time value of money is significant, the estimated risk-adjusted cash flows are discounted using the real rate set by HM Treasury (currently 2.2% for general provisions and 2.5% for pension schemes). The following table sets out the provisions made at the start of 2009-10 and the use that has been made of them. Below the table is an explanation of the provisions which have been made.

Table 17

£ million

Position from 1 April 2009 Early Departure Other Total

Opening Balance at 1 April 2009 —31.601 —123.037 —154.638

Provided in year —0.710 —0.0 —0.710

Provisions not required written back 0.188 0.050 0.238

Provisions used in year 9.409 1.314 10.723

Unwinding of discount —0.162 0 —0.162

Closing Balance at 30 September 2009 —22.875 —121.673 —144.548

Early Departure Costs

The department meets the additional costs of benefits beyond the normal Principal Civil Service Pension Scheme (PCSPS) benefits in respect of employees who retire early. An amount is paid annually to the PCSPS for the period between early departure and the normal retirement date. The Department provides for this in full when the early retirement becomes a binding liability. Each liability is based on the estimated payments discounted at the Treasury discount rate for general provisions of 2.2% in real terms.

OTHER COSTS

European Regional Development Fund (ERDF) Correction (£74.4m)

ERDF is a major grant programme with significant assets and liabilities on the balance sheet. The Department reviews outstanding issues monthly and, where it appears possible that grant related expenditure is likely to be disallowed and irrecoverable from grant recipients, accruals and provisions are raised as necessary. Following consideration of disallowed and irrecoverable expenditure the Department has raised provisions totalling £74.4m. None of this provision has been drawn down so far in 2009-10.

Firefighters' Pension Commutation (£35.0m)

The Firefighters' Pension Scheme 1992 includes payment of a lump sum based on factors to be assessed by the Government Actuary. Following advice from the Government Actuary's Department new factors have been assessed which are likely to be backdated to August 2006. The estimated cost of this backdating is £35m and the Department has provided for this in full. None of this provision has been drawn down so far in 2009-10.

Dilapidations (£6.4m)

The provision relates to complying with lease clauses for buildings which are occupied by the Government Offices. The Government Offices' dilapidations provisions are calculated based on the estimated cost of meeting future expenditure, in order to settle obligations in respect of lease clauses. The cost is apportioned over the term of the lease so as to give a constant periodic charge, and so reflect the best estimate of the obligation at the balance sheet date. None of this provision has been drawn down so far in 2009-10.

Compensation Payments (£3.9m)

These relate to claims made by staff and third parties against the Department. The provision is calculated based on general experience of what the maximum for each type of claim is worth. £1.2m of provision has been drawn down so far in 2009-10.

Firefighters' Pensions (£1.9m)

The Department has obligations under the Firefighters' Pension Scheme 1992 for 17 ex-firefighters or widows. The scheme was inherited from the Home Office and has similar conditions to the Principal Civil Service Pension Scheme. The liability is calculated by the Government Actuary's Department on an actuarial basis, ie based on life expectancy. The Treasury real rate for this pension scheme is 3.2% at 31 March 2009. £0.1m of this provision has been drawn down so far in 2009-10.

CONTINGENT LIABILITIES—SUPPLEMENTARY ESTIMATE

NOTE:

The Main Estimate contingent liabilities included a £656.255 millions item for Gap Funding. This contingent liability transferred during 2008-09 from the Department's Resource Accounts to the Homes and Communities Agency's Resource Accounts. However, the Main Estimate's inclusion of this material contingent liability, although consistent with preparations to consolidate Non Departmental Public Bodies' accounts into Department's resource accounts, was inconsistent with the approach taken in prior years. This supplementary estimate has therefore reverted, for consistency with prior years, to disclosure of the Department's Resource Accounts' contingent liabilities, pending full alignment of estimates and accounts in Treasury's Clear Line Of Sight Project.

£000's

STATUTORY

Liability to litigation by Fire Authorities results from delays in processing of appeals to the Secretary of State under legislation. 220

Statutory Contingent Liability in respect of Homeowners Support Scheme. 500,000

Payments to Local Authorities under the Housing Defects Scheme. 250-750

The Department has entered into the following quantifiable contingent liability by offering an indemnity. This is not a contingent liability within the meaning of IAS 13 since the likelihood of a transfer of economic benefit in settlement is too remote.

Indemnity given by DCLG for the Land Stabilisation Project to proceed in Northwich under Section 1 of the Derelict Land Act 1982. 150,000

NON STATUTORY

Ex-gratia payments which may possibly be made to appellants or other appeal parties who have incurred abortive appeal costs following an error made by the Planning Inspectorate. The timing and value of these payments are very difficult to predict. Unquantifiable

Litigation costs which may possibly be incurred following unsuccessful attempts to resist a High Court challenge into an Inspector's decision. The timing and value of such awards are extremely difficult to predict. 400

Possible administrative irregularities in respect of the 2000-06 European Regional Development Fund programme which are subject to audits by the European Court of Auditors or DG Regio. Where audits are incomplete at the balance sheet date potential liabilities have been addressed for each programme. Of a total potential exposure of £69.1m, £44.9m has been provided for and the remainder is disclosed as a contingent liability. 24,200

Possible financial corrections in relation to the INTERREG programme and for ERDF projects undertaken by Business Links and for those involving Venture Capital Loan Funds. The maximum liability is seen as about £91.1m and a provision of £27.2m has been made. The remainder is disclosed as a contingent liability. 63,900

Potential individual write off cases in relation to grant recoveries under the 2000-06 Programme where a decision may be taken that the total value of the recovery cannot be settled because of insolvency or other reason. 2,200

Possible financial corrections or other disallowances arising from Internal Audit closure reviews (Article 15) of ERDF grant expenditure administered by Government Offices. At present there is no expectation that financial corrections will be made, and so this remains a possibility to be recorded as a contingent liability. Total amount of the potential liability is £124.8m. 124,800

The Department has entered into the following unquantifiable contingent liabilities by offering indemnities. Neither of these are contingent liabilities within the meaning of IAS 13 since the likelihood of a transfer of economic benefit in settlement is too remote.

Indemnity given to the Nationwide Building Society as lender for claims relating to the treatment or removal of asbestos in connection with housing stock transfers. Unquantifiable

Indemnity given to the Fire and Rescue Services in respect of possible incidents as a result of mass decontamination. Unquantifiable

SECTION H: APPROVAL OF MEMORANDUM

33. This Memorandum has been prepared with reference to guidance in the Estimates Manual provided by the Treasury and that found on the House of Commons Scrutiny Unit website. The information in this Memorandum has been approved by the Departmental Accounting Officer.

Annex A

HOMES AND COMMUNITIES AGENCY

HOUSING PLEDGE

In Building Britain's Future (June 2009), the Government committed to invest a further £1.5 billion in building an extra 20,000 new affordable homes for rent and low cost sale over 2009-10 and 2010-11.

Changes to the Department's 2009-10 capital baseline in respect of the Housing Pledge are as follows:

1. Contributions from other Government Departments £420m

— Department for Transport: £350m

— Home Office: £45m

— Department for Business, Innovation and Skills: £25m

2. Funding brought forward from 2010-11 to 2009-10 £135m

In addition to this capital DEL increase of £555m, the Homes and Communities Agency has been tasked with reprioritising £108m in 2009-10 through efficient and flexible management of its housing and regeneration programmes.

The overall allocation for the Housing Pledge in 2009-10 is therefore £663m.

Annex B

EXPLANATION OF KEY TERMS AND GLOSSARY OF ABBREVIATIONS

DEL—DEPARTMENTAL EXPENDITURE LIMIT

This is spending within the department's direct control, which can be planned over a Spending Review period and includes programme and administration expenditure. The Department for Communities and Local Government has two DELs—Main DEL, which covers main programme spending, and Local Government DEL, which covers local government programmes.

RFR—REQUEST FOR RESOURCES

These are the resource element of the Departmental Estimates. The department has two RfRs:

RfR 1: Improving the quality of life by creating thriving, inclusive and sustainable communities in all regions.

RfR 2: Providing for effective devolved decision making within a national framework.

The RFR covers the central Department and the Government Offices, and unlike the DEL does not consolidate NDPB spend, showing instead payments of grant in aid to the NDPBs.

DUP—DEPARTMENTAL UNALLOCATED PROVISION

The department's (non voted) contingency reserve, which can be accessed to meet pressures or to deal with in year management of resources by means of Main and Supplementary Estimates

EYF—END YEAR FLEXIBILITY

This enables the department to plan the use of resources over a Spending Review period as it allows the carry forward of unspent DEL resources into future years. The department allows the carry forward of EYF for specific ring-fenced programmes. The remainder is used as a central resource to meet pressures arising in year.

VOTED AND NON-VOTED EXPENDITURE.

Voted expenditure is that expenditure which has been approved in Main or Supplementary Estimates. Non-voted expenditure has not been through this Parliamentary process. Examples of non-voted are the resource and capital expenditure by NDPBs. NDPBs' grant-in-aid is voted.

CSR07—COMPREHENSIVE SPENDING REVIEW 2007

A fundamental look at resources by the Treasury which (usually) takes place every two years and normally covers a three year period. The current budgets are a result of CSR07, which covered the years 2008-09, 2009-10 and 2010-11.

OTHER ABBREVIATIONS

A in A—Receipts Appropriated in Aid of Departmental expenditure

ACE—Adults facing Chronic Exclusion

AME—Annually Managed Expenditure (outside DEL)

ATLAS—Advisory Team on Large ApplicationS

BIS—Department for Business Innovation and Skills

CDF—Community Development Foundation

DCLG or CLG—Department for Communities and Local Government

DCSF—Department for Children, Schools and Families

DEFRA—Department for Environment, Food and Rural Affairs

DfT—Department for Transport

DG Regio—Directorate General for [European Union] Regional Policy