Winter Supplementary Estimate 2010-11 Department for Education and Teachers’ Pension Scheme

Winter Supplementary Estimate 2010-11 Department for Education and Teachers’ Pension Scheme

DEPARTMENT FOR EDUCATION - ESTIMATE MEMORANDUM

Summary of Winter Supplementary

1. The Winter Supplementary seeks an increase in the resources available of £617,839,000.

Summary of Winter Supplementary Estimate Supply sought compared to the Main Estimate 2010-11 cover.

2. The main areas of DEL change compared to the Main Estimate are as follows:

· A Machinery of Government transfer to the Ministry of Justice of £43,811,000 in respect of the Joint Youth Justice Unit. This was a joint project between the Department for Education and the Ministry of Justice. Responsibility for this has been moved entirely to the Ministry of Justice.

· A transfer to the Foreign and Commonwealth Office of £1,850,000 to cover the Departments’ contribution to the educational objective of the jointly funded Papal Visit.

· A transfer from the Department for Business, Innovation and Skills of £20,000,000 in respect of Higher Discretionary Support for 19-24 year olds. This funds learning support costs for all 19-24 yr old learners with a learning difficulty.

· A transfer from Qualifications and Curriculum Development Agency (QCDA) to the Department for Business, Innovation and Skills of £1,990,000 in respect of National Vocational Qualifications income received by QCDA that funds UK Commission for Employment and Skills expenditure.

· A transfer from the Department for Work and Pensions for £4,183,000 in respect of their agreed share of the costs associated with the Child Poverty Innovation fund. This transfer is to help fund co-ordinated support for separating parents.

· A transfer to the Department for Communities and Local Government of £1,980,000 for the joint underwriting of the Migration Impact Fund (MIF). The MIF is a national fund to manage the short term impacts of migration on local communities.

· A transfer to the Scottish Government of £213,000 for Child Trust Funds top ups. The Child Trust Fund top-up (CTF) is a UK wide policy for looked after children in Scotland, Northern Ireland and Wales as well as to England. Due to Scottish Government administration the funds are transferred through the Estimate process rather than through invoicing as is the process for Northern Ireland and Wales.

· A switch of £33,000,000 from Capital Grants to Resource spending for Schools and Teachers to re-profile budgets affected as part of the Department’s 2010 Emergency Budget savings of £670m.

· A movement of £4,500,000 from Non Voted spending to re-profile Provision usage no longer required and relieve pressures on the depreciation budgets caused by the recent Clear Line of Sight adjustments.

· Take up of Departmental End Year Flexibility of £606,000,000 to increase provision for Sixth Forms delivered through the Young People’s Learning Agency.

Detailed explanation of the changes to the Estimate

RFR1

Machinery of Government changes

Transfers to/from other Government Departments

Transfer of Capital spending to Resource spending

Other Changes

Summary of Estimate changes

Changes in Departmental Capital

3. There is no change to Departmental Capital from that reported in the Main Estimate 2010-11.

Administration cost limits

4. The Administration cost limit has increased from £180,503,000 in the Main Estimate 2010-11 to £182,003,000 in this Winter Supplementary.

5. The change in Administration cost budget is a reclassification of programme costs of £1,500,000, to relieve pressures on the depreciation budgets caused by the recent Clear Line of Sight adjustments.

The impact on the Administration cost budget is set out in the following table:

Departmental Expenditure Limits (DEL)

6. The Supplementary Estimate will increase the DfE resource DEL by £623,339,000 from £50,663,185,000 to £51,286,524,000; Capital DEL will be decreased by £43,000,000 from £6,655,572,000 to £6,612,572,000.

7. Within Non Voted DEL there is a switch of £10,000,000 from Capital DEL to Resource DEL to re-profile budgets affected as part of the Department’s 2010 Emergency Budget savings of £670m.

8. Within the DEL change, the impact on resources and capital are as set out in the following table:

*Depreciation, which forms part of resource DEL, is excluded from the total DEL, in the table above, since capital DEL includes capital spending and to include depreciation of those assets would lead to double counting.

**Capital DEL includes items treated as resource in Estimates and accounts but which are treated as Capital DEL in budgets.

End Year Flexibility (EYF)

9. Within DfE both programme and administrative budgets are delegated to Board members and the expectation is that they will normally manage within their allocations. Where this is not possible and subject to the approval of Ministers the use of EYF will be considered.

10. £606,000,000 Resource EYF has been drawn down in this Winter Supplementary.

11. EYF stands as follows:

Provisions and Liabilities

12. Fuller details on provisions and liabilities are given in the Department’s Resource Accounts 2009-10 issued as HC 256 on 14 July 2010. Note 20 to the accounts refers.

13. The Department has an early departure financial liability 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.

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14. The property provision covers:

o 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;

o the future cost of leases of buildings used by NDPBs that closed as a result of programme policy changes.

The TEC provision is expected to end in 2018, the NDPB provision in 2015.

15. 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.

ESTIMATE MEMORANDUM FOR THE TEACHERS’ PENSION SCHEME 2010-2011 WINTER SUPPLEMENTARY

Summary of main changes sought

1. Subject to Parliamentary approval of any necessary Supplementary Estimate, the Teachers’ Pension Scheme Annually Managed Expenditure (AME) will be increased by £68,790,000 from £13,213,288,000 to £13,282,078,000.

2. The increase in Estimate provision is required to cover the higher than anticipated AME forecast for provision unwinding and changes to forecast Contributions.

Detailed explanation of the changes

3. The net increase in resource of £68,790,000 is made up as follows:

· The gross resource in RFR1 has been increased by £57,954,000 to cover increases in liability for provisions of unwinding (£89,260,000), transfers (£7,460,000), other benefits payable (£342,000) and offset by decreases in current service costs (£35,378,000), enhancements (£3,528,000) and past service costs (£202,000).

· Appropriations in Aid have been decreased by £10,836,000 due to decreases in employer and employee contributions (£17,942,000) and in other income (£354,000) and offset by increases in transfer income (£7,460,000).