DEPARTMENT FOR CHILDREN, SCHOOLS AND FAMILIES - ESTIMATE MEMORANDUM

Summary of Main Estimate

On 12/05/2010 it was announced that the Department for Children, Schools and Families would change its name to the Department for Education. It is not possible to reflect this in the Main Estimate and a Supplementary Estimate, reflecting the new name, will be presented to Parliament later in the year.Summary of Main Estimate Supply sought compared to Final 2009-10 Estimate cover.

2. The main areas of change to the 2010-11 Estimate are as follows: o Increase in total net resource requirement of £1,228.2 million from £56,131.1 million to £57,359.3 million. o Decrease in the total appropriations in aid of £131.6 million from £134.2 million to £2.6 million. o Increase in the net cash requirement of £1,205.7 million from £56,199.5 to £57,405.2 million. o Decrease in the administration cost limit of £12.4 million from £192.9 million to £180.5 million.

The Alignment Project

3. The 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; · depreciation, impairments and notional audit fees have remained in Resource DEL. 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.

Detailed explanation of the changes to the Provision

4. The increase in the total net resource requirement of £1,228.2 million results mainly from: o A £2,243.5 million increase in RfR 1 for the Dedicated Schools Grant. o An increase of £552.2 million in RfR 1 programmes to support children and families. o An increase of £562.1 million in RfR 1 programmes to support young people. o A decrease of £1,615.6 million in RfR 1 programmes for schools. o A decrease of £389.6 million in RfR 1 Area Based Grants. o A decrease of £64.2 million in RfR 1 from areas that support all functions of the Department. o A decrease of £59.4 million in RfR2 programmes for sure start, early years and childcare.

Appropriations in Aid:

5. The appropriations in aid of £2.6 million is made up of administration receipts of £1.6 million and programme receipts of £1 million.

Administration cost limits

6. The reduction of £12.4 million is the result of ongoing reductions due to Departmental efficiency savings and changes that fall under the Clear Line of Sight Alignment project.

Departmental Expenditure Limits (DEL)

7. The Main Estimate will increase the resource DEL by £1,125.5 million to £50,663.2 million and the capital DEL by £918.3 million to £6,655.6 million.8. The tables below provide details of DEL resource and capital totals (excluding OFSTED) for the previous and current financial years. DEL totals set out in the tables below are drawn from the relevant Spring Supplementary. The outturn figures for 2009-10 are taken from the Departments’ latest forecast of outturn.

11. The provisions for liabilities and charges at 1 April 1010 are expected to be as follows:

o The Department has a financial liability for early departure costs which meets the additional costs of benefits beyond normal Principal Civil Service Pension Scheme (PCSPS) benefits in respect of employees who retire early, and compensation payments payable to employees who take early severance.

o The property provision relates to the future lease costs of certain properties which were re-assigned to the Secretary of State when the Training and Enterprise Councils (TEC’s) closed. The TEC provision is expected to end in 2018.

o Partnership for Schools (PfS) is an NDPB which operates under a joint venture agreement between the Department and Partnerships UK to deliver the Building Schools for the Future programme. The related provision covers amounts payable to Partnerships UK on achieving agreed targets. The arrangement was terminated effective 31 March 2009 and the liability was settled in 2009-10.

June 2010