Memorandum from the Ministry of Defence
WINTER SUPPLEMENTARY ESTIMATES 2009-10
1. INTRODUCTION
1.1 This Memorandum covers the Winter Supplementary
Estimate for the Ministry of Defence (MoD) and should be read
in conjunction with the Department's Winter Supplementary Estimate
(2009-10). The Introduction to the Estimate lists the changes
being made since the 2009-10 Main Estimate. This is shown by Request
for Resources (RfR), and the section number shown in brackets
after the detail for each change is a reference to the line(s)
that are affected by the change in Part II of the Estimate.
1.2 There is a separate Estimates Memorandum
for the Armed Forces Retired Pay and Pensions Vote.
2. SUMMARY OF
RESOURCES SOUGHT
IN THE
ESTIMATE
2.1 The Introduction to the Estimate shows a
net increase in Voted DEL (Resource and Capital) of £143.792
million from £39,237.543 million at Main Estimates to £39,381.335
million for Winter Supplementary Estimates. The main elements
to this are:
(a) The Treasury fiscal CDEL fine abatement of
£17 million; and the Fiscal CDEL relief for lower Northern
Ireland receipts of £15 million.
(b) An additional £20 million Resource DEL
(funded from our 2008-09 End Year Flexibility stock) to reflect
the Government decision to negate the impact of the planned MoD
training costs 2009-10 budget reduction for the Territorial Army
(RfR1).
(c) To reflect the estimated net resource (near
cash and indirect cost) impact of the third trigger point of the
International Financial Reporting Standards (IFRS) for leases
(IAS 17) relating to Annington Homes of £222 million; for
provisions (IAS 37) of £5 million; for employee benefits
(IAS19) of £35 million; and for the estimated net capital
resource impact (near cash) for leases relating to Annington Homes
(IAS 17) being a reduction of £3 million.
(d) To reflect the latest additional estimated
Annually Managed Expenditure forecast of the impact of FRS26 (Financial
Instruments) on the forward Purchase Contract for foreign exchange
Derivative impairments of £650 million.
(e) To transfer £100 million Capital Resource
to Direct Resource within RfR1 relating to Single Use Military
Equipment (SUME) flexibility with no overall impact on DEL;
2.2 The Voted Resource and Capital changes are
summarised in the following tables:
Table 1
CHANGES IN NET RESOURCE AND CAPITAL EXPENDITURE
| Resource Expenditure
| £ millions |
| Provision of Defence Capability (RfR1)
| 1,025.500 |
| Operations and Peace Keeping (RfR2) | 000.001
|
| Total Net Request for Resources |
1,025.501 |
| Capital Expenditure | £ millions
|
| Net Provision of Defence Capability (RfR1)
| -71.000 |
| Operations and Peace Keeping (RfR2) | 000.000
|
| Total Net Request for Capital | -71.000
|
| Total Change in Capital and Resource
| 954.501 |
2.3 The total change in the Estimate is £954.501 million,
which generates an additional net cash requirement of £38.501
million. The cash requirement is analysed in the following table,
and the reconciliation between the changes in the Estimate and
the net cash requirement is shown in Part II of the Estimate,
Resource to Cash Reconciliation.
Table 2
CHANGE IN VOTED CASH REQUIREMENT
| £ millions |
| Near Cash (Voted) in Resource DEL |
41.521 |
| Near Cash (Voted) AME | 35.000
|
| Near Cash Non Budget | 32.980
|
| Near Cash in Capital DEL | -71.000
|
| Net Cash Requirement | 38.501
|
2.4 In addition to the changes outlined in paragraphs 2.1
above, the changes to the Winter Supplementary Estimate comprise:
(a) Net PES transfers out to other Government Departments
of £13.229 million, including transfers out to the Foreign
and Commonwealth Office (FCO) of £6.500 million under RfR1
and £6.729 million to the Department for International Development
(DfID) under RfR2. Further details are provided at paragraphs
4 and 5.
(b) To increase Non Budget Grants in Aid (Non Voted) for the
Council of Reserve Forces and Cadets Association of £31.7
million; £0.180 million for the National Army Museum; and
£1.1 million for the Royal Hospital, Chelsea; by reducing
Resource DEL current costs and increasing Non Budget Grants in
Aid with no overall impact on resource.
(c) Re-alignment of Resource and Capital Sub Head provisions
to reflect changes in budgetary responsibility, with no overall
impact on DEL.
3. DETAILED EXPLANATION
OF CHANGES
3.1 Part I of the Estimate summarises the changes described
above and provides detail about the costs included in each RfR.
3.2 Part II of the Estimate shows the changes proposed in
the Estimate, by Top Level Budget Holder (TLB). This shows the
present net position (the position at Main Estimates), the changes
in the position, and the new net provision (Winter Supplementary
Estimates). Again this is set out by Request for Resources. The
transfers and other changes outlined in the Introduction to the
Estimate are analysed in this section of the Memorandum.
3.3 The table overleaf shows how the Winter Supplementary
Estimate is compiled, identifying changes since the 2009-10 Main
Estimates.
Table 3
SHOWING CHANGES TO VOTED RESOURCES AND CAPITAL AT 2009-10
WINTER SUPPLEMENTARY ESTIMATES
|
Direct
RDEL
|
Indirect
RDEL |
Total
RDEL
|
Resource
AME | Non
Budget
near cash
|
Total Net
Resources | Net
Capital
DEL
|
Capital
AME | Capital
Non
Budget
| Total
Net
Capital |
| £m (rounded) | 1
| 2 | 3 | 4
| 5 | 6 | 7
| 8 | 9 | 10
|
| RfR1 Provision at Main Estimates |
23,887.1 | 11,632.5 | 35,519.6
| 173.3 | 139.9 | 35,832.9
| 7,555.1 | 56.8 | 2.1
| 7,614.0 |
| Switch from CDEL to RDEL | 100.0
| 0 | 100.0 | 0
| 0 | 100.0 | -100.0
| 0 | 0 | -100.0
|
| Additional CDEL provision for Northern Ireland loss of receipts
| 0 | 0 | 0 |
0 | 0 | 0 | 15.0
| 0 | 0 | 15.0 |
| EYF drawdown for TA budget relief | 20.0
| 0 | 20.0 | 0 |
0 | 20.0 | |
| | |
| CDEL Fine Abatement | 0 | 0
| 0 | 0 | 0 |
0 | 17.0 | 0 | 0
| 17.0 |
| IFRS accounting changes | -39.0
| 261.0 | 222.0 | 690.0
| 0 | 912.0 | -3.0
| 0 | 0 | -3.0 |
| Transfers In | 0.5 | 0
| 0.5 | 0 | 0 |
0.5 | 0 | 0 | 0
| 0 |
| Transfers Out | -7.0 | 0
| -7.0 | 0 | 0 |
-7.0 | 0 | 0 | 0
| 0 |
| Reallocation of NDPBs | -23.2
| 0 | -23.2 | 0
| 23.2 | 0 | 0 |
0 | 0 | 0 |
| Additional Grants to NDPBs | -9.8
| 0 | -9.8 | 0 |
9.8 | 0 | 0 | 0
| 0 | 0 |
| RfR1 at Winter Supplementary Estimates
| 23,928.6 | 11,893.5
| 35,822.1 | 863.3
| 172.9 | 36,858.4
| 14 | 0 | 0
| 14.0 |
| RfR2 Provision at Main Estimates | 2,449.3
| 422.7 | 2,872.0 | 1726.6
| 345.8 | 2,872.0 | 1,564.6
| 0 | 0 | 1,564.6
|
| Transfers Out | -6.7 | 0
| -6.7 | 0 | 0 |
-6.7 | 0 | 0 | 0
| 0 |
| Adjustment to ensure RfR is not reduced |
6.7 | 0 | 6.7 |
0 | 0 | 6.7 | 0
| 0 | 0 | 0 |
| RfR2 at Winter Supplementary Estimates
| 2,449.3 | 422.7
| 2,872.0 | 1,726.6
| 345.8 | 2,872.0
| 1,564.6 | 0 |
0 | 1,564.6 |
| RfR3 Provision at Main Estimates | 0
| 0 | 0 | 1,023.7
| 0 | 1,023.7 |
| | | |
| RfR3 at Winter Supplementary Estimates
| 0 | 0 | 0
| 1,023.7 | 0 |
1,023.7 | |
| | |
| Winter Supplementary Estimates Total*
| 26,377.9 | 12,316.2
| 38,694.1 | 1,887.0
| 172.9 | 40,754.1
| 9,048.7 | 56.8
| 2.1 | 9,107.6 |
4. RFR1 PROVISION
OF DEFENCE
CAPABILITY—EXPLANATION
OF CHANGES
Transfers In/Out:
4.1 The Estimate includes one transfer in from Other
Government Departments and three transfers out, which are detailed
in Table 4.
Table 4
SHOWING TRANSFERS BETWEEN MoD AND OTHER GOVERNMENT DEPARTMENTS
| Transfers Out | RfR
| £m | Purpose
|
| Department for International Development
| 1 | (0.500) | Contribution to the Stabilisation Unit.
|
| Foreign and Commonwealth Office | 1
| (6.500) | Afghanistan Delivery Group.
|
| Department for International Development |
2 | (6.729) | Contribution to the Conflict Pool.
|
| Transfers In | |
| |
| Department for Transport | 1
| 0.500 | Contribution to the Royal Flight funding arrangements.
|
| Total Net Transfers Out |
| (13.229) | |
End Year Flexibility (EYF):
4.2 With Treasury approval the Department has been able
to draw down £20 million of its near cash Resource EYF at
WSE. This EYF access was allowed so that the MoD could reverse
its planned reduction for the Reserve Force training budget in
the current financial year. The Department's current EYF position
is set out in the table below.
Table 5
END YEAR FLEXIBILITY STOCK
End Year Flexibility |
Direct Resource
DEL £m | Indirect Resource
DEL £m
| Capital
DEL £m |
| EYF Stock B/Forward from 2008-09 | 60
| 0 | 0 |
| EYF Stock Drawn Down at 2009-10 WSE | (20)
| 0 | 0 |
| Balance | 40 |
0 | 0 |
Fiscal CDEL 2009-10 Fine abatement:
4.2 £17 million of fiscal CDEL has been reinstated to
the MoD 2009-10 capital budget because the final 2008-09 audited
outturn overspend was lower than the original forecasted over
spend, on which the fine of £81 million imposed at Main Estimates
was based.
Fiscal CDEL Relief: Northern Ireland Receipts
4.3 The Winter Supplementary Estimate also includes Fiscal
CDEL relief to compensate for a lower forecast of Northern Ireland
capital receipts than originally planned, of £15 million.
OTHER CHANGES
Financial Instruments (FRS 26)
4.5 The first stage of the IFRS implementation related to
discounting of long-term debtors/liabilities and the movement
on financial derivatives on forward purchase contracts under FRS
26 was implemented in our Estimates last year. The latest forecast
indicates a non cash impairment impact of £650 million, which
we have requested in our Winter Supplementary bid. Most of this
relates to the change in the value of the pound sterling against
the US dollar. The volatility of exchange rates may further impact
on our 2009-10 final outturn.
Implementation of Stage 3 of the International Financial Reporting
Standards
4.6 The Department has implemented the third trigger point
of the IFRS requirements at Winter Supplementary Estimates. These
are technical accounting changes relating to the disclosure of
finance leases and balance sheet liabilities. The impact on resource
is set out in table 6 below.
Table 6
SUMMARY OF IFRS CHANGES AT 2009-10 WSE
| Budgetary Area | Net Resource
Impact £m
| Financial
Instrument | Explanation
|
| Resource DEL | 222 |
IAS 17 | Annington Homes to be recognised as a finance lease.
|
| AME | 5 | IAS 37
| Depreciation and cost of capital charges for capitalised nuclear decommissioning costs provisions of MoD assets.
|
| AME | 35 | IAS 19
| Employee benefits resulting from the movement on the liability in respect of untaken leave, earned bonuses, and unpaid overtime.
|
| CDEL | (3) | IAS 17
| Deferred income on the forecasted disposal of surplus Annington Homes.
|
| Total | 259 |
| |
Neutral Sub Head Budget Transfers:
4.7 The changes under these sub-headings reflect alterations
to TLB allocations of Resource and Capital funding to bring the
allocations into line with responsibility transfers between TLBs,
and other funding adjustments to align TLB provision with current
forecasts. The capital transfers between sub heads are principally
for further transfers of budgetary provision from "customer"
budgets to Defence Estates, which is responsible for most estate
expenditure. There are related IRDEL cost re-allocations associated
with the Capital budget re-allocations.
Grants in Aid
4.8 There are three Grants in Aid increases recognised in
the Winter Supplementary Estimates. The Grant in Aid of £1.100
million to the Royal Hospital Chelsea (to cover higher Utilities,
superannuation costs and maintenance of the infirmary and care
of the pensioners in the Margaret Thatcher infirmary); £31.700
million for the Council of Reserve Forces and Cadet Association
(a transfer of £23.222 million from Defence Estates to pay
for grants which was too late to be made in Main Estimates, £4.815
million for increased works programme costs, and £3.034 million
increase to cover staff costs, utilities, IT and other costs;
and £0.629 million for vehicles) ; and £0.180 million
for the National Army Museum (£0.095 million for replacement
boilers, £0.030 million for removal of asbestos, and £0.055
million for staff costs). The Grants in Aid have been allocated
within the existing provision of the TLBs' current DEL.
5. REQUEST FOR
RESOURCES 2: OPERATIONS
AND PEACE
KEEPING
5.1 The latest forecast for operations in Iraq and Afghanistan
is summarised in Table 7 below, with a more detailed analysis
shown in Table 8. Although we are not requesting any additional
funds at WSE the overall forecast of costs in Iraq and Afghanistan
has changed. These are set out in table 8.
5.1.1 The transfer to DfID and the re-allocation of the Stabilisation
Aid Fund require Parliament to make a token vote of £1,000
in resource.
Table 7
SUMMARY COST OF OPERATIONS AND PEACE KEEPING FORECAST
AT 2009-10 WSE
Operation | Direct
Resource
DEL £m
| Indirect
Resource
DEL £m
|
Capital
DEL £m | Total WSE
forecast
2009-10 £m
| Total ME
request
2009-10 |
| Iraq | 256 | 76
| 56 | 388 | 877
|
| Afghanistan | 1,914 | 295
| 1,545 | 3,754 | 3,495
|
| Total | 2,170 | 371
| 1,601 | 4,142 | 4,372
|
5.2 Afghanistan (Operation Herrick)
5.2.1 When the Main Estimate was drawn up in January of this
year, the forecast was based on the best information available
at the time. Forecasts supported a force level across the entire
2009-10 financial year of 8,300. In the light of announcements
by the Prime Minister in April that force levels would increase
to 9,000 to support national elections, and enable the deployment
of the counter improvised explosive device task force, there have
been increases in elements of personnel costs, additional sustainment
costs, the corresponding additional equipment, essential Urgent
Operational Requirements and associated costs of providing counter
improvised explosive device capability and expertise.
5.2.2 The costs of Operations are driven significantly by
the tempo of operations, which particularly affect equipment support
costs, attrition, fuel and ammunition consumption. Exchange rates,
fuel prices and costs incurred with contractors can all also vary
during the financial year. We have, however, involved HM Treasury
in formulating the estimates to reassure them of the rigour applied,
and to inform forecasts of wider government spending. We do expect
some corresponding cost changes throughout the year, as burden
sharing and partnering requirements are clarified. Therefore,
we may have to increase our request for resources at Spring Supplementary
Estimates. We will inform the Committee of any significant changes.
5.2.3 As announced by the Prime Minister on 14 October 2009,
an additional 500 troops will be made available to support the
Operation in Afghanistan—but they will only be deployed
when certain conditions are met. The figure detailed above does
not include the forecast expenditure to meet this requirement—we
will supply further details to the Committee as appropriate.
5.3 Iraq (Operation Telic)
5.3.1 Operational costs in Iraq reflect the planned withdrawal
of UK forces over the first few months of this financial year,
including drawdown costs. As advised in the Government response
to the HCDC report on 2009-10 Main Estimates, forecasts of expenditure
are lower than envisaged when the Main Estimates were published,
due to the accelerated drawdown process. Since then, we have now
completed the orderly withdrawal of UK troops from the Contingency
Operating Base (COB), Basra in line with the UK security agreement
deadline of 31 July 2009. We have successfully extracted and re-mediated
all personnel and equipment; and all UK occupied or managed facilities
have been passed over to US forces, or handed back to Iraqi or
Kuwaiti authorities.
5.3.2 In line with the recent ratification by the Presidential
Council, we expect a continued presence of UK forces and assets
to be stationed in the region, primarily providing naval and air
support—for which, at the moment, we forecast there to be
continuing costs. We will supply further details to the Committee
if this estimate changes significantly prior to the Spring Supplementary
Estimates.
5.4 The current detailed cost estimate for operations in
Iraq and Afghanistan for the 2009-10 Winter Supplementary Estimates
is shown in Table 8.
Table 8
THE ESTIMATED COST OF OPERATIONS IN AFGHANISTAN AND IRAQ
AT WSE 2009-10
Cost Type | Iraq ME £m
| Iraq WSE
Forecast £m |
Afghanistan ME
£m | Afghanistan WSE Forecast £m
|
| Direct Resource DEL |
| | | |
| Civilian Personnel | 9 |
6 | 16 | 24 |
| Military Personnel | 37 |
39 | 148 | 171 |
| Stock/Other Consumption | 189
| 28 | 480 | 492
|
| Infrastructure Costs | 69 |
68 | 216 | 276 |
| Equipment Support Costs | 231
| 89 | 485 | 535
|
| Other Costs and Services | 93
| 52 | 423 | 445
|
| Income Foregone/Generated (-) | 1
| -26 | -12 | -29
|
| Total Direct Resource DEL | 629
| 256 | 1,756 |
1,914 |
| Indirect Resource DEL | 165
| 76 | 258 | 295
|
| Total Resource DEL | 794
| 332 | 2,014 |
2,209 |
| Capital DEL | |
| | |
| Capital Additions | 83 |
56 | 1,481 | 1,545
|
| Total Capital DEL | 83
| 56 | 1,481 |
1,545 |
| Total Estimated Costs | 877
| 388 | 3,495 |
3,754 |
5.5 Balkans (Operation Oculus)
Earlier this year, the Supreme Allied Commander Europe decided
that the specific capability provided by the UK to NATO force
in Kosovo, was no longer required. The UK force, has therefore
drawdown to a small number of remaining personnel. As such, costs
associated with the drawdown, and all MoD-led discretionary tasks
in the Balkans, have now been subsumed into, and will be charged
against the Wider Europe Programme of the Conflict Pool. As a
result, the ability of Operation Oculus to draw on the Reserve
ceases.
5.6 Conflict Pool
At the time the Main Estimates were prepared, overall responsibility
for administration of the Stabilisation Aid Fund (SAF) was being
re-negotiated between Government Departments. The final agreement,
as outlined by the Foreign Secretary in a Written Ministerial
Statement[1] on 25 March
2009, is that the new combined Conflict Pool subsumes all activity
under the Conflict Prevention Pool and Stabilisation Aid Fund.
Since then, it has been confirmed that the overall responsibility
for the Conflict Pool rests with DFID and as such, the funding
rests on that baseline. The transfer from MoD to DFID at WSE reflects
this change.
6. RFR3 WAR
PENSION BENEFIT
(WPB)
6.1 There are no changes to the RfR3 War Pension Benefit
at Winter Supplementary Estimates.
7. THE DEPARTMENTAL
EXPENDITURE LIMIT
(DEL)
7.1 Table 9 shows the DEL from 2006-07 to 2009-10 for
all RfRs. The Total DEL is calculated by adding Resource DEL,
Capital DEL and deducting depreciation, which forms part of Resource
DEL. Depreciation is excluded from Total DEL; including this as
well as Capital DEL would be double counting. The figures are
for Voted and Non-voted DEL; the Non voted DEL figure for WSE
2009-10 is £214.776 million net of depreciation, and this
is shown in more detail in the Notes to the Winter Supplementary
Estimate.
Table 9
CHANGES TO MOD DEPARTMENTAL EXPENDITURE LIMITS (VOTED
AND NON VOTED)
| 2006-07
SSE £m
| 2007-08
SSE £m | 2008-09
SSE £m
| 2009-10
ME £m | 2009-10
WSE £m
|
| Resource DEL | 34,104
| 36,940 | 38,071 | 38,582
| 38,911 |
| Capital DEL | 7,448 | 8,120
| 8,313 | 9,121 | 9,050
|
| Depreciation | -7,401 | -8,218
| -8,247 | -8,284 | -8,365
|
| Total DEL | 34,151
| 36,842 | 38,137
| 39,419 | 39,596
|
8. ADMINISTRATION COSTS
LIMIT
8.1 There are no changes to the Administration Costs Limit.
9. PROVISIONS AND
CONTINGENT LIABILITIES
9.1 No changes have been made at WSE.
10. MACHINERY OF
GOVERNMENT CHANGES
10.1 There are no Machinery of Government Changes.
11. THE DEPARTMENT'S
PUBLIC SERVICE
AGREEMENTS AND
STRATEGIC OBJECTIVES
11.1 As set out in the 2007 Pre-Budget Report and Comprehensive
Spending Review (Cm 7227), the Ministry of Defence will contribute
over the CSR 07 period to the delivery of the cross-Governmental
Public Service Agreements to reduce the impact of global and regional
conflict and to reduce the risk to the UK and its interests overseas
from international terrorism. These are underpinned by the three
Departmental Strategic Objectives (DSO) to achieve success in
the military tasks we undertake at home and abroad; be ready to
respond to the tasks that might arise; and build for the future.
The Department formally reports performance against its targets
to Parliament in the Autumn and in its Annual Report.
12. NET ADDITIONAL
CASH REQUIREMENT
12.1 The Net Cash impact for the Winter Supplementary
Estimate is an increased net cash requirement of £38.501
million. This is broken down in Table 2.
13. VOTES A
13.1 The Ministry of Defence Votes A Winter Supplementary
Estimate 2009-10 will be laid before the House on 24 November
2009 as HC7. We will be seeking an increase in the number of Royal
Marines Men and Women, Royal Fleet Reserve Naval officers, and
ratings and Royal Fleet Reserve officers and marines.
13.2 The current maximum number of officers, men and women
to be maintained for Naval Service category was established at
42,100 and within this total the Royal Marines were 8,450 for
Financial Year 2009-10. The Reserve Naval and Marine Forces total
was 15,092 for Financial Year 2009-10. The ceiling was calculated
from historical trend data and best estimates for future plans.
However, since the start of the year, the numbers in this category
have steadily increased due to higher than expected untrained
personnel increases, and subsequent increases in trained strength
following completion of training.
13.3 We have therefore requested an increase of 400 for Royal
Marine Men and Women bringing the total for Royal Marines to 8,850
and the overall total for the Naval Service to 42,500. This represents
an increase of 0.19% compared to the established Regular Tri-Service
Votes A maxima of 212,030.
13.4 For 2009-10 the maximum in this category was established
at 15,092 for the Reserve Naval and Marines Forces. This was calculated
from historical trend data and best estimates. As part of the
review of the quality of the data held in JPA it has been determined
that some of the records were incorrect. This exercise has lead
to an increase in Marine Officers and Marines, and naval men and
women; and a reduction in the number of naval officers. However,
based on calculations of strength increases, a prudent maximum
would be 17,652 (for all categories), an increase of 2,560 (3,775
-1,215) based on the Votes A 2009-10 estimate.
13.5 The changes for the Reserve Naval and Marine Forces
are set out in the table below.
Category | Main
Estimate
Officers
| Winter
Supplementary
Estimate Officers
|
Difference |
Main Estimate
Men and Women
| Winter
Supplementary
Estimate Men and Women
|
Difference |
Royal Fleet Reserve
(naval officers and ratings)
| 5,225 | 4,000 | -1,225
| 3,990 | 7,000 | 3,010
|
Royal Fleet Reserve
(marine officers and marines)
| 390 | 400 | 10
| 1,235 | 2,000 | 765
|
| Total | 5,615 |
4,400 | -1,215 |
5,225 | 9,000 | 3,775
|
26 November 2009
Annex 1
A. DEFINITION OF
TERMS
1. Direct Resource Departmental Expenditure Limits (RDEL)
This is a control aggregate within the resource budget. It
excludes the non-cash items such as depreciation, cost of capital
and movement in provisions. Direct Resource DEL is also known
as "near cash in the resource budget".
2. Indirect Resource DEL (IRDEL)
This covers items such as depreciation, cost of capital charges,
movement in provisions, and the notional auditors' fees for the
National Audit Office (NAO). This is also known as non-cash.
3. Total Resource DEL
This is the sum of Direct and Indirect Resource DEL.
4. Annually Managed Expenditure (AME)
Annually Managed Expenditure (AME) includes Programmes that
are demand-led, such as War Pensions (RfR3) and exceptionally
volatile items that cannot be controlled by the Department. AME
also includes Programmes that are so large that the Department
could not be expected to absorb the effects of volatility within
them, such as cash release of nuclear provisions, foreign exchange
fluctuations and certain asset value impairments.
5. Non-Budget:
Items of expenditure which are included in the Estimate,
but are outside of DEL and AME eg Grants in Aid, Royal Hospital
Chelsea. This is a Parliamentary control but not a Treasury control.
6. Total Net Resources
This is the net of items 1 to 5.
7. Capital Departmental Expenditure Limit (CDEL)
This is for new investment, including Capital additions,
disposals, and the capital repayment of loans.
8. Capital AME
Includes the capital element of the loan repayments for self-financing
public corporations, such as QinetiQ.
9. Total Net Capital
This is the sum of the above capital items.
10. Total Near Cash
This is the total accrued expenditure spend and is the sum
of Direct RDEL and Capital DEL.
11. Request for Resources 1
Provision of Defence Capability, provides for expenditure
primarily to meet the Ministry of Defence's operational support
and logistics services costs and the costs of providing the equipment
capability required by defence policy.
12. Request for Resources 2
Request for Resources 2 provides primarily for the additional
costs of peace keeping and operations. These are the net additional
costs incurred: the costs that the Department would have incurred
regardless of the operation taking place, such as wages and salaries
are recorded against RfR1.
13. Request for Resources 3
War Pensions and Allowances, etc. provides primarily for
the payments of pensions and allowances for disablement or death
arising out of war or service in the Armed Forces after 2 September
1939, and associated non-cash items.
B. LIST OF
ABBREVIATIONS USED
IN THE
ESTIMATE
| AME | Annually Managed Expenditure
|
| CSR | Comprehensive Spending Review
|
| DE and S | Defence Equipment and Support
|
| DSO | Departmental Strategic Objective
|
| EYF | End Year Flexibility |
| FCO | Foreign and Commonwealth Office
|
| GAR | General Accounting Rate
|
| HCDC | House of Commons Defence Committee
|
| MoD | Ministry of Defence |
| NAO | National Audit Office
|
| NDPB | Non Departmental Public Body
|
| PSA | Public Service Agreement
|
| RfR | Request for Resources
|
| SSE | Spring Supplementary Estimates
|
| SUME | Single Use Military Equipment
|
| UOR | Urgent Operational Requirement
|
| WSE | Winter Supplementary Estimates
|
Annex 2
ARMED FORCES RETIRED PAY, PENSIONS, ETC WINTER SUPPLEMENTARY
ESTIMATES 2009-10 ESTIMATES MEMORANDUM
REQUEST FOR
RESOURCES 1—ARMED
FORCES RETIRED
PAY, PENSIONS,
ETC
1. Summary of Changes sought in the Winter Supplementary
Estimate
The main reason for the Armed Forces Retired Pay and Pensions
Winter Supplementary Estimate is to increase the Appropriations-in-Aid
(A-in-A) estimate by £50 million, with a corresponding increase
in the current forecast of pension payments.
2. Detailed Explanation of the Change and Allocation
The increase of £50 million resource is to increase
the estimate in relation to the latest forecast of A-in-A.
3. Changes to Cash Requirement Allocation
There is an increase in the net cash requirement of £1,000
as a result of these changes.
1
Hansard 25 March 2009 Column 18WS. Back
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