Letter from the Secretary of State to
the Chair of the Committee dated 29 October 2010
STRUCTURE OF
THE 2011-12 DEPARTMENT
FOR TRANSPORT
MAIN ESTIMATE
Thank you for your letter of 14 September in which
you responded to the proposed restructuring of the Department
for Transport's Main Estimate and commented on the Department's
Estimate and supporting memorandum for 2010-11.
I welcome your positive response to our proposals
and have set out below answers to the queries you raised.
The proposed "Smarter Travel" estimate
line has been redefined and renamed "Sustainable Travel"
following the outcome of the spending review and would cover those
departmental programmes which are aimed at supporting alternative
modes of transport which would reduce carbon emissions. It will
also include a few miscellaneous programmes:
- Local Sustainable Transport Fund;
- cycling;
- powershift and cleaner vehicles;
- freight grant;
- support for bus operators and passenger (previously
Line G);
- Smart Ticketing; and
- Trams and Metro systems.
My officials have discussed the possible inclusion
of a footnote in the Main Estimate to make clearer the meaning
of "Sustainable Travel" in this context. HM Treasury
has advised that the memorandum would be the best place for any
explanation of expenditure: we will ensure that the Memorandum
provides that explanation.
The Department's expenditure on bus services, including
Bus Service Operator Grants, would fall within the Sustainable
Travel priority area.
I note your concern regarding the need to compare
spending proposals between 2010-11 and 2011-12. The 2011-12 Estimates
memorandum will include a detailed comparison of spending proposals
for 2011-12 and final provision for 2010-11. Unfortunately, we
will not be able to provide a comparison against final outturn
in that memorandum as the Main Estimate is published before that
information is available.
I can confirm that it is our intention to use the
revised structure on a consistent basis throughout the Spending
Review period to ensure that budgeting and spending patterns can
be monitored and compared from year to year.
One of our key objectives throughout this exercise
has been to ensure a more obvious read across between expenditure
reported in the Annual Report and the budget headings used in
the Estimate. I can assure the Select Committee that the basis
of the expenditure reported will be the same as the Estimate budget
headings.
There may be further changes to the structure arising
from the detailed completion of the Spending Review - my Department
will continue to consult and liaise with HM Treasury, the Committee
Clerk and the House of Commons Scrutiny Unit throughout this process.
I will inform the Select Committee of any significant changes
which may arise.
You asked why the resource provision for Annually
Managed Expenditure by the Highways Agency for 2010-11 is £500
million more than the outturn for 2009-10. The original provision
for 2010-11 was £50 million higher than that for 2009-10
and reflected the investment programme that was envisaged in the
2007 Spending Review. Subsequently, the Agency's provision for
2009-10 was reduced by £433 million to reflect lower levels
of asset write downs and provisions following a decision to focus
its investment programme on managed motorways. The provision for
2009-10 also included a PFI charge (£44 million)—this
is now classified and reflected in the Agency's resource provision
within the Departmental Expenditure Limit. The Highways Agency
is also anticipating a reduction in the 2010-11 AME provision
when the impact of changes to the current year investment programme
becomes clearer. Any changes will be reflected in a Supplementary
Estimate.
I hope you and the Committee find this response helpful.
My aim is to ensure that these changes will deliver improvements
in accountability and transparency. If you have any further questions
or concerns I would be happy to look into these.
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