Letter to the Clerk of the Committee from
UK Trade & Investment
ESTIMATES MEMORANDUM
HM Treasury guidance in Supply Estimates:
a guidance manual specifies that departments are required
to provide an "Estimates Memorandum" to their Select
Committee explaining the allocations sought in the Main Estimates
and how they link to the department's published targets.
I enclose UK Trade & Investment's Estimate Memorandum
for the forthcoming Main Supply Estimate. This allows the draw
down of £96.4 million resource and £97 million net cash
in line with the Comprehensive Spending Review Settlement. This
includes the Machinery of Government transfer of trade promotion
for defence exports from the Ministry of Defence and the additional
£5 million announced in the Budget on 22nd April 2009. Should
the Committee require any additional information, I would be happy
to expand the Memorandum appropriately.
Main Estimates are presented and published approximately
five weeks after the Budget and it is likely that presentation
to the House of Commons will be on Tuesday 2 June 2009.
I am also sending a copy of this letter and
enclosure to the Clerk of the Business & Enterprise Committee.
Curtis Juman
Director of Finance
8 May 2009
UK TRADE & INVESTMENT MAIN ESTIMATE 2009-10
INTRODUCTION
1. The purpose of this memorandum is to
provide the Select Committee with an explanation of how the resources
and cash sought in UK Trade & Investment's (UKTI) Main Estimate
will be applied to achieve departmental objectives. This includes
information on comparisons with the resources provided in earlier
years in Estimates and departmental budgets, and also refers to
future financial plans. Details of changes in resources relative
to original plans set out in the last Comprehensive Spending Review
are provided.
MAIN ESTIMATE
2. The UKTI's Main Estimate for 2009-10
seeks the necessary resources and cash for its programme and capital
Vote.
3. UKTI's administration costs are met from within
the resources of Business, Enterprise & Regulatory Reform
(BERR) and Foreign & Commonwealth Office (FCO). Consequently
any changes related to the administration costs fall within the
BERR and FCO Estimates.
SUMMARY OF
THE MAIN
SPENDING CONTROL
FIGURES CONTAINED
IN THE
ESTIMATE
Total Departmental
Expenditure Limit
| Outturn | |
| | Plans
|
| 2006-07 | 2007-08
| 2008-09 | 2009-10
| 2010-11 |
| £m | £m
| £m* | £m
| £m |
| Total Net Resource Requirement (NRR) | 98.005
| 89.113 | 91.527 | 96.383
| 96.256 |
| Annually Managed Expenditure (AME) | 0.014
| -0.034 | 0.021 | 0.021
| 0.021 |
| Net Resource DEL | 97.991 |
89.147 | 91.506 | 96.362
| 96.235 |
| Of which: | |
| | | |
| Near cash | 97.887 | 89.180
| 91.419 | 96.275 | 96.148
|
| Non-cash | 0.104 | -0.033
| 0.087 | 0.087 | 0.087
|
| Capital DEL | 0.176 | 0.057
| 0.048 | 0.248 | 0.248
|
| Less Depreciation** | 0.161 |
0.147 | 0.166 | 0.166
| 0.166 |
TOTAL DEL | 98.006 |
89.057 | 91.388 | 96.444
| 96.317 |
* Provisional figures |
| | | |
|
| ** Depreciation, which forms part of Net Resource DEL, is excluded from total DEL as it is also included in Capital DEL. To include it again would lead to double-counting.
| | | |
| |
| | |
| | |
5. Annually Managed Expenditure: There is no change
in the provision provided.
6. Net Resource DEL: The increase in Resource DEL
compared with the previous year largely reflects £10 million
additional resource over the next two financial years announced
in the 2009 Budget to help UK businesses better showcase their
strengths to overseas customers and markets. This is offset by
reduced resource requirement for UKTI mainly from increased efficiency.
Resource DEL excludes Annually Managed Expenditure (AME) but includes
delivery of agreed efficiencies.
7. Near-cash figures in Resource DEL: The increase
in near-cash DEL compared with the previous year is due to the
additional resource offset by reduced resource requirement for
UKTI as detailed above.
8. Capital DEL: The reduction in capital of £0.2
million in 2008-09 reflects the transfer of provision to BERR
for capital works to provide secure Information Technology (IT)
rooms.
EXPLANATION OF
SIGNIFICANT CHANGES
IN PROVISION
COMPARED WITH:
Spending Review Allocations
| Resource DEL Requirement | 2008-09
£m*
| 2009-10
£m | 2010-11
£m
|
| CSR Settlement | 89.329
| 89.328 | 89.328 |
| Net Defence export Resource DEL | 2.198
| 2.055 | 1.928 |
| 2009-10 Budget announcement |
| 5.000 | 5.000 |
| Total Net Resource DEL Requirement | 91.527
| 96.383 | 96.256 |
| Capital DEL | 0.048 | 0.248
| 0.248 |
| * Provisional figures |
| | |
| |
| |
9. At the start of 2008-09 UKTI's allocation reflected
a net flat-cash budget settlement in the Comprehensive Spending
Review (CSR) 2007 of £89 million for each of the three years.
10. This funding is for the delivery of UKTI's agreed targets;
its marketing commitments related to the Olympics over the CSR
period; and a contribution to the Regional Development Agencies
(RDA) single pot of £17/16/16 million in relation to inward
investment activities.
11. In 2008-09 the responsibility for defence exports
promotion moved from the Ministry of Defence to UKTI to provide
greater integration with the Government's general support activities.
The related net budget decreases over the CSR period, reflecting
agreed efficiencies.
12. The provision increases from 2008-09 as a result
of additional resource (£5 million 2009-10, £5 million
2010-11) provided in the 2009 Budget to help UK businesses better
showcase their strengths to overseas customers and markets which
leads to an increase in UKTI's overall net resource requirement
as detailed above.
Previous Year Comparison (with 2008-09)
13. As set out above, the provision increases from 2008-09
due to the announced additional resource less agreed efficiencies.
Net Cash Requirement
| Net Cash Requirement | 2008-09
£m*
| 2009-10
£m |
| Net Resource Requirement | 91.527
| 96.383 |
| Total Net Voted Capital | 0.048
| 0.248 |
| Accruals to cash adjustment |
| |
| Cost of Capital charges | 0.079
| 0.079 |
| Depreciation | -0.187 | -0.187
|
| Increase (-)/Decrease (+) in creditors |
2.000 | 0.480 |
| Total accruals to cash adjustments | 1.892
| 0.372 |
| Excess cash to be CFER'd | —
| — |
| Net Cash Requirement | 93.467
| 97.003 |
| * Provisional figures |
| |
| |
|
14. The main change in the net cash requirement relates to
the draw down of cash reflecting the additional £5 million
resource provided in the 2009 Budget announcement.
Departmental Strategic Objectives
15. UKTI is a joint department of the Foreign & Commonwealth
Office (FCO) and the Department for Business, Enterprise &
Regulatory Reform (BERR). Consequently UKTI's funding and human
resources reflect this framework. It shares its Departmental Strategic
Objective (DSO) targets with its parent departments, delivering
through staff employed by either the FCO or BERR.
16. These shared objectives for FCO and BERR respectively
are to Support the British Economy and promote the creation and
growth of business and a strong enterprise economy across all
regions. They are underpinned by UKTI's Strategic Objective, and
related targets:
By 2011, deliver measurable improvement in the business performance
of UK Trade & Investment's international trade customers,
with an emphasis on innovative and R&D active firms; increase
the contribution of foreign direct investment to knowledge intensive
economic activity in the UK, including R&D; and deliver a
measurable improvement in the reputation of the UK in leading
overseas markets as the international business partner of choice.
Departmental Expenditure Limit
17. There has been an upward movement in the DEL budget
from 2007-08 due to the transfer of defence export promotion activity
to UKTI from the MOD. The summary table in para 4 above compares
outturn from 2006-07 onwards with the provisional outturn for
2008-09 and planned DEL for the CSR period which includes the
additional £10m over two years announced in the 2009 Budget.
DEL End-Year Flexibility
18. At the start of 2009-10 UKTI will have an accumulated
End Year Flexibility (EYF) entitlement of £11.158 million
resource and £1.647 million capital, subject to any further
adjustments that emerge during the finalisation of the 2008-09
Resource Accounts.
| DEL End-Year Flexibility | Resource
£m
| Capital
£m |
| EYF at start of year | 11.158
| 1.647 |
| EYF draw down in Winter Supplementary | 0
| 0 |
| EYF draw down in Spring Supplementary | 0
| 0 |
| Current EYF balance | 11.158
| 1.647 |
| |
|
19. The stock of EYF arose as a result of planned reductions
in resource over a number of years. There are no plans to draw
down any EYF during the financial year.
Provisions
20. UKTI does not have any provisions.
CONTINGENT LIABILITIES
21. UKTI does not have any contingent liabilities.
Approval of Memorandum
22. This memorandum has been prepared with reference to guidance
in the Supply Estimates: a guidance manual provided by HM Treasury.
The information in this memorandum has been approved by Sir Andrew
Cahn, KCMG, the Accounting Officer for UKTI.
| 
