Session 2010-11
Publications on the internet
|
EXPLANATORY MEMORANDUM Main Estimate20 1 0 - 20 1 1 Table of Contents
I NTRODUCTION 1. The purpose of this memorandum is to provide the Select Committee with an explanation of how the resource and cash requirements sought in the Main Estimate will be applied, how this compares with previous years and plans, and how the expenditure planned will relate to Departmental O bjectives . 2. Departments are expected to clear "For Press" versions of Main Estimates and Supplementary Budgetary Information b y 16 June . The se documents set out the planned expenditure by the Department for Communities and Local Government in 20 1 0 - 1 1 . 3. The Comprehensive Spending Review 2007 (CSR07) set out the Government’s spending plans for the three years 2008-09 to 2010-11 . Other spending announcements were made in autumn 2008 , April 2009 and following the 2010 General Election ; details of how this year ’ s Main Estimate relates to those announcements can be found at Section D . Further details of how spending plans relate to objectives are given in section s A and C below. A) SUMMARY OF THE ESTIMATE 4. The Main Estimate cover s two Request s for Resources (RfRs) : . · RfR1 (Improving the quality of life by creating thriving, inclusive and sustainable communities in all regions) covers the Department ’ s m ain programme expenditure ; and · RfR2 (Providing for effective devolved decision making within a national framework) covers l ocal g overnment e xpenditure. 5. RfR1 is structured so that it broadly reflect s the Objectives of the Department over the Spending Review period . The objectives are : · T o free-up and devolve power to local government , communities and individuals ; · T o meet people's housing aspirations ; · T o create economically strong communities which enhance national prosperity and provide opportunities for everyone ; · T o create and maintain united, attractive, economically thriving communities and neighbourhoods ; · T o provide a planning system which gives local people far more ability to determine the shape of places in which they live ; and · T o work with local fire and rescue authorities and in partnership with the Fire and Rescue Service and other agencies to deal with major emergencies . 6. Note: these objectives have been abbreviated for the purposes of the Main Estimate for reasons of space . The full objectives can be found at http://www.communities.gov.uk/newsroom/whatwedo/ 7. The Department for Communities and Local Government's Main Estimate for 20 1 0 - 1 1 requests :
8. Most of the expenditure within the Net Resource Requirement or Voted capital also falls within budgetary Departmental Expenditure Limits (DEL) . But the totals (total DEL compared to total Voted R f R plus capital) are not the same because: · S ome expenditure within DEL is N on-Voted, while some Voted expenditure is outside DEL . T he Departmental Expenditure Limits consolidate expenditure of the Department with that of the Non-Departmental Public Bodies (NDPBs) which the Department sponsors. Voted expenditure in the Estimate , however, records expenditure by the Department and its executive agencies only, which includes grant in aid to NDPBs, but not NDPB expenditure itself ; · Some voted expenditure is within Annually Managed Expenditure (AME) rather than DEL ; and · Supported borrowing falls within the DELs, but is not voted. Departmental Unallocated Provision - a small reserve - is also not voted. 9. Further details of the Departmental Expenditure Limits are given in Section D .
RfR1 - Improving the quality of life by creating thriving, inclusive and sustainable communities in all regions 10. The individual budgets included within each of the Sections of the Estimate are as follows (all figures in £ million s ) : Table 2
11. Overall budgetary p rovision sought for RFR1 is 26 % below th e final, S pring Supplementary E stimate, budget for 200 9 - 1 0 . The Main E stimate 20 1 0 reflects spending cuts implemented after the General Election as well as the changes made for FY 2009-10 in which the September 2008 Housing P ackage, Pre Budget Report 2008 and B udget Report 2009 brought forward funding from FY 2010-11 to support the housing sector in response to the economic downturn . The se were the main contributor s for this de crease in budget ( See section D for further information) . 12. Explanations of the large variations ( those £ 10 m or more , unless lower than 10 % ) from 200 9 - 1 0 budgets which T able 2 highlights are as follows: · Section A: Meeting people's housing aspirations : £9 million (9%) increase. This section change is narrowly de minimis for the "large" variation criteria stated above, but is included because it contains a £13m increase in Support for Voluntary and Community Sector Sustainability. This is a planned increase to expand policy into areas such as community participation and social finance. The increase in budget for the Support for Voluntary and Community Sector is to support the sector through the newly established Community Builders Fund (to support cross-cutting community organisations) and other initiatives to take forward the community empowerment agenda. Also in section A the funding allocation for Zero Carbon Buildings is due to increase by £5m as a response to the Climate Change impact of domestic buildings. During the year, as decisions are made on the allocation of funding, the balance of funding between different delivery vehicles may alter, and we would expect to reflect such changes at Supplementary Estimates. · Section B: Creating economically strong communities which enhance national prosperity and provide opportunities for everyone : £ 863 million ( 39 %) decrease . This is mainly in capital brought forward from 2010-11 to 2009-10, as part of Pre Budget Report 2008, in Regional Development Agencies (£ 690m ) for projects to provide a fiscal stimulus to regional and national economic development ; in Olympics capital contributions (£ 139m ) to the Department for Culture, Olympics, Media and Sport (DC O MS) – in line with the original CSR plan and ring-fenced ; and in Decent Mixed Communities (£30m) which has ended. · Section E: Working with local fire and rescue authorities and in partnership with the Fire and Rescue Service and other agencies to deal with major emergencies : £ 19m ( 20 %) decrease. This is mainly in Firelink (£25m) in line with expectations as the programme progresses . · Section J: European Structural Funds - Communities and Local Government : £ 26m ( 37 %) increase. This is due to the need for ongoing cover for potential closure adjustments in European Regional Development Funding (ERDF) 2000-2006 programmes. · Section K: Ordnance Survey: £16m (310%) increase. This is for the cost of OpenData – providing data free of charge. · Section M: Meeting people's housing aspirations : £1,754m (75%) decrease . This is mainly in Supporting People programmes (£1,666m) that are now being paid in Area Based Grant; and in Regional Housing Pot Grant (£124m) reduced as part of the contribution to Housing Pledge. · Section N: Creating economically strong communities which enhance national prosperity and provide opportunities for everyone : £ 102m ( 46 %) decrease : This is mainly in New Deal for Communities (£ 101 m) ( where the programme is winding down ) . · Section O: Creating and maintaining united, attractive, economically thriving communities and neighbourhoods : £ 29m ( 70 %) decrease : This is mainly in Migration Impacts Fund (£ 17m ) where budget will increase back to baseline when contributions from Other Government Departments have been agreed. · Section P: Providing a planning system which gives local people far more ability to determine the shape of places in which they live: £137m (93%) decrease : This is mainly the reduction, announced after the 2010 General Election, in Housing and Planning Delivery Grant (£134m) , where activity will be funded through other mechanisms . · Section Q: Working with local fire and rescue authorities and in partnership with the Fire and Rescue Service and other agencies to deal with major emergencies: £ 17m ( 15 %) increase : This is mainly in Fire Regional Control Rooms (£17m) which is entering a key delivery phase . · Section R: Area Based Grant: £1, 487m ( 220 %) increase : This increase in Area Based Grant is mainly in the transfer of the Supporting People Programme into this grant (see section M above). · Section U : AME: Meeting people's housing aspirations : £228m (33%) decrease : This is in Housing Revenue Account Subsidy. Sums payable as Housing Revenue Account Subsidy vary between years, and during the year, for a number of reasons. For example the sums payable depend on the formula grant calculated relating to the size and condition of local authority council housing stock and therefore not controllable by the Department. This programme is included by Treasury in Annually Managed Expenditure due to the difficulties there would be in managing variations in expenditure within fixed Departmental Expenditure limits. · Section not lettered (below section Y on page 11) : AME: European Structural Funds - Communities and Local Government : £52m (100%) decrease from £52m: The £52m in 2009-10 was funding allocated at the last Supplementary Estimate in the year to cover the latest estimate of liability for European Regional Development Fund closing programmes (2000-2006) adjustments. During 2010-11 the liability will continue to be reviewed so an estimate of any 2010-11 funding requirement in this section will be possible by the time of the next Supplementary Estimate. · Section not lettered (below section Z on page 11) : AME: Meeting people's housing aspirations : £300m (100%) decrease from £300m: The £300m funding line in 2009-10, for the Overhanging Debt Repayment on disposal of local authority housing stock, was planned by Spending Review 2007 to be the final funding for this activity. · Section A A : Non-budget: Meeting people's housing aspirations : £2, 461m ( 44 %) decrease: This is in grant-in-aid to the Homes and Communities Agency (£2, 441m ) in line with reduced spending plans which were further lowered by the Housing Pledge and fiscal stimulus re-profiling in 2009 - 10; and Thames Gateway Development Corporations ( where the £ 18m reduction mainly relat es to transfer of £17m resource to the Olympics Public Realm (land regeneration around Olympics venues) – see section N ) . Again the decrease in 2010-11 is due to the Budget Report 2009 bringing forward funding to FY 2009-10 to support the housing sector in response to the economic downturn. The main direct impact is on the National Affordable Housing Programme (NAHP) element of the Homes and Communities Agency.
13. Section D : DEL Support for Local Authorities: Revenue Support Grants : £ 1,292 m ( 24 %) decrease: There is a decrease of £1.3 80 billion for Revenue Support Grant s in consequence to the increase in national non-domestic rates (NNDR) (please see below at Section E). This decrease, t ogether with NNDR payments , make s up formula grant determined in the annual Local Government Finance Settlement. With the amount of NNDR payments set to increase, the amount of RSG reduces. Also within Section D the f unding for PFI Special Grant for 2010-11 was increased at CSR07 reflect ing the then expected level of PFI schemes for 2010-11. 14. Section E : DEL Support for Local Authorities: Non Domestic Rates : £2, 000 m ( 10 %) in crease: This funding line is the amount of NNDR available to be redistributed to authorities as part of the annual Local Government Finance Settlement. The amount of non-domestic rates is dependent on a) the amount of non-domestic rates expected to be collected in the year for both local & central list properties less any reliefs and repayments in respect of previous years, b) the balance brought forward in respect of the Distributable Amount (DA) calculations for previous years, and c) an amount to allow for fluctuations in collection – normally attributable to downward revaluations of properties within the year. It is worth noting that the DA is the amount of money that will be redistributed to local authorities and it is not the amount of money we expect to collect from them.
15. The Estimate structure reflect s Departmental Objectives at the end of the CSR07 period. 16. Service a greements w ere revised for the whole of Government for the CSR07 period. Most agreement s are cross-cutting and reflect shared objectives across a number of Departments. CLG has lead responsibility for two agreement s relating to: : · f acilitat ing housing growth and improv ing affordable housing ; and · decentralis ing power to people and communities to build a stronger society. 17. CLG also contribute s to a wide variety of other agreements . For some our direct contributions will be limited , whereas for others we will support delivery more directly - for example, our work on planning will impact on Transport and Climate Change. 18. In many cases it is not practical to attempt to directly relate spending in a particular area to a specific outcome . However, we have highlighted below where the department makes a substantial and clearly quantifiable financial contribution: · much of the expenditure shown against meeting people's housing aspirations and providing a planning system which gives local people far more ability to determine the shape of places in which they live (Sections A, D, M, P, U, Y and AA of RFR1) will contribute towards facilitating housing growth and improv ing affordable housing . This includes expenditure on the Thames Gateway, growth areas/points and eco towns; on improving the planning system and delivery; and on grant- in-aid to the Homes and Communities Agency; · much of the expenditure shown against creating and maintaining united, attractive, economically thriving communities and neighbourhoods (Sections C and O of RFR1) will contribute towards decentralising power to people and communities to build a stronger society . This includes expenditure on cohesion and race equality programmes; and community empowerment; 19. The Department’s investment also indirectly supports the delivery of a number of agreement s . It is not meaningful to attribute expenditure or relate particular programmes to these . 20. Agreements d o not cover the full range of activities undertaken by the Department. These are, however, covered by Departmental Objectives. 21. It should also be noted that where the Department makes payments to local authorities, it is the Department's policy, wherever possible, to make these through non-ringfenced general grants, either Revenue Support Grant or Area Based Grant, which authorities are free to use in support of local, regional and national priorities as they see fit. 22. There are a number of funding streams contributing to the Area Based Grant programme for 20 1 0 -1 1 . In total Communities and Local Government are contributing over £ 2, 1 6 2 million to Area Based Grant (Section R ) from te n individual funding streams which for clarity are set out below. Table 3
23. The programme DELs covering RfR 1 and RfR2 at the start of 20 1 0 - 1 1 are set out in the following tables: Main programme budgetary DEL (where voted, within RFR1 )Table 4
24. The following Table shows how the DEL was arrived at taking the Comprehensive S pending R eview 200 7 ( C SR0 7 ) s ettlement for 200 9 - 10 as the baseline: Table 5
N otes 1. D EL surrenders include £ 89m for Council rents, £ 6m for the Energy Performance Certificate , £4 .6 m for H ousing R evenue A ccount S ubsidy (HRAS) AME (see section 28 ) and £0.7m for Infrastructure UK . 2. These are f inancial adjustments, approved by HM Treasury, for the Department’s DEL over the CSR period to take account of the transition to the Homes and Communities Agency. 3. See Section 2 7 . 4. The April 2009 Budget changes included further funding for the housing programmes (see section 2 7 ) as well as a re-profile of £200m from the f iscal s timulus from 2009-10 to 2010-11 and £50m brought forward from 2010-11 to 2009 -10 for Area Based Grant. 5. £791m budget cuts to support delivery of the £6 billion 2010-11 spending cuts as announced by the Government on 24 May for spending control. 6. £170m of capital funding for 2010-11 to safeguard delivery of around 4,000, otherwise unfunded, social rented homes to start on site this year as part of the Housing Pledge. This is in respect to the £500m (of the £6bn of savings) announced by the Government on 24 May that would be used to invest in improving Britain ’s growth potential and building a fairer society 25. Depreciation, which forms part of the Resource DEL, is excluded from total DEL since capital DEL includes capital spending and to include depreciation of those assets would lead to double counting .26. The non-cash element in DEL resource has been removed by the Clear Line of Sight (Alignment) Project. Non-cash has been either reclassified to AME (e.g. creation and release of balance sheet provisions), reclassified within DEL (e.g. depreciation, which is ring-fenced in 2010-11), or removed entirely (the charge for cost of capital).Relationships to announcements made since September 2008 27. The funding sought in the Main Estimates derives from decisions announced in the CSR07 settlement , the September 2008 Housing Package, the Pre B udget R eport 2008 , the Budget Report 2009 , the Housing Pledge , and following the 2010 General Election . 1 Transfers into Annually Managed Expenditure 28. Where Departmental policy decisions impact upon Annually Managed Expenditure forecasts, Departments are required to make switches from Departmental Expenditure Limits into Annually Managed Expenditure . Reductions to DEL of £4.6 million have been made, reflecting the increase in forecast for AME for the Housing Revenue Account Subsidy (see table 5 above) .
29.
Transfers to other government Departments o £5 million under arrangements for the Pan-Government A greement for mapping services that are now being made more consistent and transparent. Previously some Departments had transferred DEL baseline to CLG, whereas other Departments retained their DEL to make payments to CLG. Departments that had previously transferred DEL to CLG, are now transferring it back so that all can make payments to CLG for services provided. o £1 million, as part of Machinery of Government changes, to the Department for Business, Innovation and Skills for the Northern Way programme. o £1 million to the Office for National Statistics for a 4th page of the 2011 Census. o A total of £0.5 million for small transfers e.g. £0.2 million to the Department for Environment Food and Rural Affairs for the Min ing Waste Directive. o £25 million (capital) transfer to the Department for Transport in respect of two road improvement projects. The first is the A19 funding at a total of £3.975m that is included in the Highways Agency business plan and the second is for Postwick Hub, Norwich Scheme at a cost of £21m announced in December 2009. Transfers from other government d epartments o £ 8 million, for the Migration Impact s Fund, from the Department for Business, Innovation and Skills. o £ 7.5 million for the Ordnance Survey OpenData scheme; being £2.5 million each from the Home Office, the Department for Business, Innovation and Skills, and the Department for Environment, Food and Rural Affairs . o £2 .4 million, as part of Machinery of Government changes, from the Department for Work and Pensions for the functional responsibilities of the Rent Office Services. RfR1/Main Programmes DEL expenditure over last three years 30. E xpenditure against budget for RfR1/Main Programmes DEL for the financial years since 2007-08 is set out in the table below : Table 6
* F orecast outturn as at March 2010 (excluding c hange for Alignment/Clear Line Of Sight )
Table 7
The following Table shows how the DEL was arrived at taking the C SR0 7 Settlement for 2010-11 as the baseline: Table 8
31. Changes since the last spending review settlement comprise: Transfers in: · £8.1 million resource and £1.6 million capital grant from the Department for Culture, Media and Sport to GLA General Grant for Museum of London funding. · £0.2 million from Communities and Local Government (Main DEL) to GLA General Grant in support of the Mayor’s planning powers · £2.5 million resource from the Department of Health for the IDEA (Improvement and Development Agency) Healthy Communities programme into Revenue Support Grant. · £3.7 million resource from the Home Office for "Stray Dogs" into Revenue Support Grant · £1.2 million resource from the Food Standards Agency for "Food Hygiene on Farms" into Revenue Support Grant · £0.6 million resource from the Department for Environment, Food and Rural Affairs for "Contaminated Land" into Revenue Support Grant · £0.084 million resource from the Department for Business, Enterprise and Regulatory Reform for "Services Directive" into Revenue Support Grant · £0.1 million resource from Communities and Local Government (Main DEL) for "Community Empowerment" into Revenue Support Grant · £0.150 million resource from Communities and Local Government (Main DEL) for the "Electronic Service Delivery" (ESD) Toolkit" into Revenue Support Grant · £2.1 million resource from the Department of Health to the Commission for Local Administration in England for health related complaints · £0.7 million resource from Communities and Local Government (Main DEL) for Community Empowerment to the Commission for Local Administration in England · £9 million resource from Communities and Local Government (Main DEL) for Regional Improvement Partnerships to the Improvement, Transformation and Efficiency programme
Transfers out: · £27.9 million resource from Revenue Support Grant to the Department for Children, Schools and Families for "Student Finance" · £0.3m resource from Tribunal Services to the Ministry of Justice for Valuation Tribunal appointments; · £1 million capital from Local e-Gov (Local Electronic Government) to the Department for Work and Pensions for Government Connect; · £0.3m resource from the Standards Board to the Ministry of Justice for Adjudication Panel for England costs. · £45 million resource baseline reduction for LAA Reward Grant as part of budget 2009 savings · £50 million resource baseline reduction for Local Area Business Growth Incentive as part of budget 2009 savings · £5 million resource baseline reduction for Valuation Office Agency as part of budget 2009 savings · £0.5 million for research projects in Communities and Local Government (Main DEL · £405m contribution to the £6bn savings in 2010
32. The DEL expenditure for RfR2/Local Government DEL for the financial years since 2007-08 is set out in the table below: Table 9
* F orecast outturn as at March 2010 (excluding change for Alignment/Clear Line Of Sight) .
33. The Department uses its EYF to fund ongoing programmes where slippage has occurred and for the management of unbudgeted pressures which arise. The EYF available to the department for 2010-11 will not be finally known until the Public Expenditure Provisional Outturn White Paper is published, usually in July. The forecast EYF available for 2010-11 is made up of the sum of underspends accumulated in years to 2009-10, less EYF drawn down, plus the current forecast underspend for 2009-10, and is set out in the following tables: Main DEL Table 10
34. From 2010-11, the ring-fenced programmes include the Olympics, tackling violent extremism and the Regional and London Development Agencies. LG DEL Table 11
F) ADMINISTRATION BUDGET 35. The Administration DEL Budget for 20 1 0- 1 1 is £ 261 .7 m illion . 36. The following Table shows how the Administration Budget was arrived at taking the CSR07 Settlement for 20 1 0 -1 1 as the baseline: Table 1 2
The apparent difference in the total is due to roundings in component numbers. 37. The administration budget covers the costs of staff and related overheads in the core department and Government Offices . 38. The main changes were: · the transfer of £0.4million of resources to cover the accommodation costs of the newly created Government Equalities Office; · the £0.4 million reclassification of the Crown Premises Inspection Group from administration to programme as agreed with Treasury; · adjustments to baselines as part of the Alignment/Clear Line Of Sight Project comprising a net £0.1million transfer to AME and a forecasting adjustment for removal of £4.5 millions cost of capital ; and · £9 millions reduction s to the baseline for the contribution to the new Government’s £6bn savings announcement.
Provisions 39. 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. The following table sets out the provisions made by the Department and the Government Offices for the start of 2010-11 : Table 13
Early Departure Costs 40. 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, by paying the required amounts annually to the PCSPS over the period between early departure and normal retirement date. The department and its agencies provide for this in full when the early retirement programme becomes binding by establishing a provision for the estimated payments discounted by the Treasury discount rate of 2.2% in real terms. Other Costs European Regional Development Fund Correction 41. This relates to the closure of the 2000-06 programme on 31st March 2010 and estimates the cost of a number of issues expected to be resolved in the 2010 - 11 financial year, including European Commission Hearings on specific audits, collection of disallowed claims from grant recipients, and some points of principle on the calculation of financial corrections . Dilapidations 42. The provision relates to complying with lease clauses for buildings occupied by the Government Offices.
43. These relate to claims made by staff and third parties against the department. The majority represent claims by ex Property Services Agency employees who have contracted lung disease following exposure to asbestos in the workplace. It is expected that nearly half of these cases may be settled in 2010-11 with the remainder settled in the following 2 years. Rent Assessment Panels’ Presidents’ Pensions 44. The Rent Assessment Panels’ Presidents’ Pension Scheme is a small scheme that has similar conditions to the Principal Civil Service Pension Scheme in respect of 33 serving and retired presidents, vice-presidents and their widows. Firefighters’ Pensions 45. The Firefighters’ Pension Scheme is a small scheme that has similar conditions to the Principal Civil Service Pension Scheme and which was inherited from the Home Office in respect originally of 18 (now 1 4 ) ex-firefighters and their widows. Contingent Liabilities 46. Contingent liabilities are those liabilities where the likelihood and amount of payment are uncertain so they are not provided for in operating costs , being only disclosed in a note. The department ’ s estimated contingent liabilities for 20 1 0- 1 1 are: Table 1 4
H) PROCESS FOR PREPARATION & APPROVAL OF MEMORANDUM 47. This Memorandum has been prepared in accordance with guidance in the Estimates Manual provided by HM T reasury and that found on the H ouse of C ommons website. This has been approved by the Department’s Principal Accounting Officer, Irene Lucas .
EXPLANATION OF KEY TERMS AND GLOSSARY 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, which covers main programme spending and Local Government . RfR - Request for Resources These are the resource element s 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. Capital grants are included within the Requests for Resources. 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 ringfenced programmes. The remainder is used as a central resource to meet pressures arising in year. Take-up of EYF in a specific financial year is subject to Treasury consent and P arliamentary approval. 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. Voted expenditure includes the Requests for Resources and voted capital. Examples of non-voted expenditure are the resource and capital expenditure by NDPBs. The grant-in-aid which the department pays NDPB s is voted. Voted capital The capital element of the Estimate, which covers the direct capital expenditure of the Department and the Government Offices , effectively leads to the creation of an asset on the Department’s balance sheet . Note that capital grants by the Department do not impact on this total, but score as resource within the Request for Resources. Comprehensive Spending Review (CSR) A fundamental look at resources by the Treasury which (usually) takes place every two years and, usually, covers a three year period. The budgets for 20 10-11 cover the last year of CSR07 that also included 200 8 - 09 and 20 09-10 . Other Abbreviations B IS - Department for Business, Innovation and Skills (formerly the Department for Business, Enterprise and Regulatory Reform ) DCOMS – Department for Culture, Olympics, Media and Sport DCSF - Department for Children, Schools and Families DWP - Department for Work and Pensions ERDF - European Regional Development Fund HCA – Homes and Communities Agency HRAS – Housing Revenue Account Subsidy INTERREG - Inter regional assistance- an ERDF programme MOG - Machinery of Government i.e. changes to the structure of government NDPB - Non Departmental Public Body NNDR - National Non-Domestic Rates OGA - Other Growth Areas OGD - Other Government Department PFI - Private Finance Initiative RDA – Regional Development Agency RSG - Revenue Support Grant TSA – Tenant Services Authority
The Alignment ("Clear Line Of Sight") ProjectThe Alignment (or ‘Clear Line of Sight’) Project seeks to simplify government’s financial reporting to Parliament by better aligning the recording of government spending in departmental budgets, Estimates and resource accounts. Full details of the alignment reforms were set out in Cm 7567 published in March 2009. Changes to the budgetary framework resulting from the Alignment Project have been implemented in 2010-11. The main change is that the separate near-cash and non-cash controls within resource budgets have been removed. Of those transactions previously recorded in non-cash budgets: · cost of capital charge has been removed from budgets, Supply Estimates and Resource Accounts; · provisions, revaluations, write-off of bad debt and exchange rate gains/losses have been moved from DEL budgets into AME; and · depreciation, impairments and notional audit fees have remained in Resource DEL. All figures were re-forecast before the classification changes were made. These classification changes, which are reflected in all departmental Estimates, have the effect of reducing DEL budgets across departments in all years. However, the adjustments have no impact on the purchasing power of departments or the planned level of expenditure. A NNEX C A note on the European Regional Development Fund The European Regional Development Fund (ERDF) is a structural fund of the European Union. In normal circumstances, income from the EU covers expenditure on grant payments to recipients, leading to no overall cost to the Request for Resources or Departmental Expenditure Limit. Losses (including foreign exchange losses) , write offs or fines by the EU are, however, costs to the DEL and RFR. ERDF operates in programmes ; each programme covering a range of years: · The 2000-2006 programme was administered by Government Offices , which form part of the Department. Expenditure and income under this programme is recorded as follows: o RFR1, Section H: net expenditure and income relating to old programmes o RFR1, Section J : losses, write offs and other payments or income shortfalls not funded by the EU ; and o RFR1, Section S: net expenditure and income relating to London programmes All of these lines fall within the Departmental Expenditure Limit (DEL) · The 2007-2013 programme ("New programmes") is being administered by the Regional Development Agencies , which are Non-Departmental Public Bodies, apart from the London Development Agency (LDA) , which is a local authority body. The Department continues to make claims to the EU, but passes on that funding to the RDAs in order to cover the grant payment costs incurred by the RDAs. Expenditure and income under this programme is recorded as follows: i. RFR1, Section I : income from the EU (within DEL ) ; ii. RFR1, Section T : payments by the LDA (within DEL ) ; iii. RFR1, Section AC : payments to RDAs (not LDA) (outside DEL ) ; iv. Non voted : expenditure by RDAs (not LDA) on grant payments (within DEL ) This recording is necessary to comply with Treasury and Estimate rules that require payments to an NDPB to be scored within the RFR but outside DEL ; while the expenditure funded by those payments must be recorded in DEL but is non - voted. Norm ally both amounts (i.e. items i ii ) and i v) above) would be the same, although timing differences may occur. [1] Details of the CSR07 settlement were reported in the Explanatory Memorandum of the Main Estimates 2008-09. Details of the September 2008 Housing Package, the Pre Budget Report 2008 and the Budget Report 2009 were reported in the Explanatory Memorandum of the Main Estimates 2009-10. [1] |
|
|
|
| ©Parliamentary copyright | Prepared 21st July 2010 |