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The Report by the Committee of Public Accounts on Excess Votes is part of the framework of Parliamentary control over government spending. The Committee scrutinises the reasons behind individual departments exceeding their allocated resources, or 'Supply', and makes a recommendation to Parliament on whether to authorise the appropriate funding to make good the excesses. The authorisation of additional grant by Parliament regularises the excesses incurred by departments. The Committee may make recommendations to departments concerning the causes.
Resource-based Supply requires departments to estimate the resources they will need during a financial year on an accruals basis and for commitments to provide services and the cash they will need as commitments mature. Parliament authorises both cash spending and the use of resources.
In 2008-09, three departments incurred excesses in the use of resources totalling £23.9 billion.
The specific cases were:
- HM Treasury incurred net resource expenditure of £23,815,859,000 in excess of the amount authorised as a result of its obligations under the Government's Asset Protection Scheme, introduced as part of a range of measure to reinforce financial stability and increase market confidence. The excess arose because of the need to account for a provision of £25 billion to cover the then expected future losses, but this could not be estimated until confirmation in March 2009 of which banks would be covered by the Scheme. This occurred too late in the financial year to allow HM Treasury to secure advance funding through the Parliamentary Supply process;
- The Home Office incurred a resource excess of £79,094,000 as a result of providing for an additional £130m in back payments owed to police pensioners as a result of a judicial review that concluded in March 2009 that new lump sum commutation factors should be backdated to December 2006. Again, this was too late in the financial year for the Home Office to seek additional funding through the Parliamentary Supply process, and
- The United Kingdom Atomic Energy Authority Pension Schemes incurred a resource excess of £6,406,000 due to a failure to seek sufficient Parliamentary Supply for the transfer of some staff to the Nuclear Decommissioning Authority Pension Scheme. The transfer occurred later than originally envisaged, but an additional grant was not sought through a Supplementary Estimate.
On the basis of our examination of the reasons why these three bodies exceeded their voted provision, we recommend that Parliament provide the necessary amounts by means of an Excess Vote.
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