Main Estimate Memorandum 2009-10 submitted
by the Government Actuary's Department
INTRODUCTION
The Government Actuary's Department Main Estimate
for 2009-10 seeks the necessary resources and funding to
support the continuing function of the Department which, is to
provide an actuarial consultancy service to Government and other
clients principally in the public sector.
The purpose of this memorandum is to provide
the select committee with an explanation of how the resources
provided in the Main Estimate will be applied to achieve the department's
objectives.
An explanation of key terms used in the Memorandum
is provided at Annex A.
SUMMARY OF
RESOURCES SOUGHT
IN THE
MAIN ESTIMATE
The Main Estimate provides for a:
Net Resource Requirement (NRR) of £ 588,000 and;
a Net Cash Requirement (NCR) of £ 272,000.
RfRI 588,000
Budgetary data The key budgetary figures are:
|
| Resource Departmental Expenditure Limit (DEL)
| £542,000 |
Of which:
near cash is
| £55,000 |
| Administration budget is
| £542,000 |
| DEL Capital Budget is | £217,000
|
| Annually Managed Expenditure (AME)
| £46,000 |
|
CHANGES IN
PROVISION COMPARED
WITH THE
PREVIOUS YEAR
|
| Net resource requirement: | 2009-10
| £588,000 |
| 2008-09
| £603,000 |
|
Provision is currently 2.5% lower than last year
|
| Net cash requirement: | 2009-10
| £272,000 |
| 2008-09
| £272,000 |
|
The lower cash requirement reflects the lower resource requirement
|
| Resource DEL: | 2009-10
| £542,000 |
| 2008-09
| £557,000 |
| Capital DEL: | 2009-10
| £217,000 |
| 2008-09
| £222,000 |
| Annually Managed | 2009-10
| £46,000 |
| 2008-09
| £46,000 |
|
IMPACT ON
DEPARTMENT'S
PERFORMANCE MANAGEMENT
FRAMEWORK (PMF)
GAD does not have a PSA but it has Performance Management
targets which were set as part of the CSR07 settlement. The
resources being provided as part of this Main Estimate impact
on the following objectives:
Objective 1. Provide actuarial advice to Ministers, Government
Departments and other GAD clients in respect of employer- sponsored
pension arrangements and other employee benefits; and to provide
actuarial advice necessary to underpin Ministerial decision-making
on general pensions policy.
Objective 2. Provide the actuarial advice necessary for the
regulation and supervision of financial institutions overseas.
General Objective. To provide mainly public sector clients
with independent, professional, actuarial advice of the highest
quality.
DEPARTMENTAL EXPENDITURE
LIMIT (DEL)
The table below compares outturn from the last few years
with planned DELs for the immediate future.
|
| | |
| | | £'000s
|
| OUTTURN
| PLANS |
| 2005-06
| 2006-07 | 2007-08
| 2008-09 | 2009-10
| 2010-11 |
|
| Resource DEL | (553)
| 263 | 655
| 557 | 542
| 528 |
| Of which Near cash | (967)
| (194) | 231
| 57 | 55
| 54 |
| Of which Non-cash | 414
| 457 | 424
| 500 | 487
| 474 |
| Capital DEL | 381
| 178 | 63
| 222 | 217
| 212 |
| Less Depreciation | (265)
| (320) | (291)
| (366) | (356)
| (346) |
| TOTAL DEL | (437)
| 121 | 427
| 413 | 403
| 394 |
|
| *Depreciation, which forms part of RDEL, is excluded from total DEL since CDEL includes capital spending and to include depreciation of those assets would lead to double counting.
|
The RDEL Plan for 2009-10 is £542,000 and
compares against a final provision in 2008-09 of £557,000.
This means a decrease of £15,000 equivalent to 2.69 per
cent of the RDEL. This decrease was due to an increase in planned
fee income relative to expenditure.
The CDEL Plan for 2009-10 is £217,000 and
compares against a final provision in 2007-08 of £222,000 indicating
a decrease of £5,000 equivalent to 2.7% of the CDEL.
The 2009-10 DEL plans are consistent with Comprehensive
Spending Review settlement after taking account of subsequent
reclassifications of £46,000 DEL spending into AME.
END YEAR
FLEXIBILITY (EYF)
The 2007-08 EYF stock for GAD was reported in the Public
Expenditure Outtum White Paper 2007-08 (PEOWP) (Cm 7419).
The changes since then can be seen as follows:
|
| | |
| | | £'000
|
| Admin
| Other
resource
| TOTAL
Resource
| Of which:
near cash
| Non-cash | Capital
|
|
| GAD EYF balance from PEOWP, July 2008 | 139
| - | 139
| 139 | -
| 300 |
| Winter supp | -
| - | -
| - | -
| - |
| Spring supp | -
| - | -
| - | -
| - |
| Balance of EYF March 2009 | |
| | |
| |
|
The table above presents the position of the EYF stocks following
the adjustments and drawdown since the publication of PEOWP 2007-08.
The department currently estimates an underspend of £183,000
for the financial year just completed. The underspend was due
to client demand throughout the last financial year being higher
than planned relative to expenditure. Subject to Treasury approval
the resource is now expected to be used in a future year if client
demand is lower than planned leaving GAD unable to cover its expenditure
through client fee income. Capital has been deferred in order
to finance new pensions valuation software which is critical to
the business of the department. A tender exercise is currently
underway to select the software.
ADMINISTRATION BUDGET
A comparison with earlier years (outturn) and plans is set
out below.
|
| | |
| | | £'000s
|
| OUTTURN
| PLANS |
| 2005-06
| 2006-07 | 2007-08
| 2008-09 | 2009-10
| 2010-11 |
|
| Administration budget | -553
| 263 | 655
| 557 | 542
| 528 |
|
The administration budget decreases by £ 15,000 compared
with last year due to an
increase in planned fee income relative to expenditure.
MACHINERY OF
GOVERNMENT CHANGES
There are no Machinery of Government (MoG) changes impacting
on the Estimates.
PROVISIONS
There have been no major changes in provisions since the
last Estimate was presented.
CONTINGENT LIABILITIES
GAD has no contingent liabilities.
APPROVAL OF
MEMORANDUM
This Memorandum has been prepared by reference to guidance
in the Estimates Manual provided by HM Treasury and that found
on the House of Commons, Scrutiny Unit website.
GLOSSARY OF
KEY TERMS
DEPARTMENTAL EXPENDITURE
LIMIT (DEL)
This is spending within the Department's direct control and
which can therefore be planned over an extended period, such as
the costs of its own administration, payments to third parties,
etc.
ANNUALLY MANAGED
EXPENDITURE (AME)
AME spending is generally less predictable and controllable
than expenditure in DEL.
REQUEST FOR
RESOURCES (RIR)
A Request for Resource is a function based description of
the organisational level of the department. These can vary between
one or more RfR and should be objective based, referring to the
purpose for which the functions being carried out by the department
are intended to meet.
SUBHEADS AND
SECTIONS
Subheads and sections are lines within RfRs that detail the
functions that the department is carrying out in pursuit of its
objective. For example, subhead Al is frequently' Administration'
in many departmental Estimates.
DEPARTMENTAL UNALLOCATED
PROVISION (DUP)
A contingency reserve, which the department accesses, where
necessary, by means of a Supplementary Estimate.
END OF
YEAR FLEXIBILITY
(EYF)
A mechanism that enables the Department to plan the use of
resources over Spending Review years and therefore carry forward
unspent provision in the Departmental Expenditure Limit (DEL)
in one year to subsequent years.
VOTED AND
NON-VOTED
Voted expenditure is that which has gone through the Supply
Estimates process. Non-voted, as its description suggests, has
not been through this process. It usually refers to expenditure
that comes from another source eg consolidated fund standing services.
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