Annual Report and Accounts 1998-99

Annual Report 1998-99

Part I - Review of the Year


Resource Accounting

56.  The introduction of Resource Accounting and Budgeting-a new system for planning, controlling and reporting on public expenditure-and the benefits which it should bring were described in last year's Annual Report. Work continued throughout 1998-99 to meet the requirement for a first audited resource account for the House of Lords in 1999- 2000. Valuations have been obtained for most Parliamentary assets and a ``dry run'' resource account for 1998-99 is being prepared. So far as future budgeting is concerned, the Public Expenditure Review will be conducted on a resource basis from 2000, although it will continue to include a forecast cash requirement.

Future Expenditure and the Comprehensive Spending Review

57.  The House of Lords was not required to participate in the Government's Comprehensive Spending Review (CSR) which was conducted throughout the public service in 1997-98. However, the Finance and Staff Sub-Committee considered and approved expenditure plans for the years 1999-2000, 2000-01 and 2001-02 and the figures proposed were included in the CSR and now form the Departmental Expenditure Limit for the House of Lords for the three year period.

House of Lords' Accounts: 1998-99

58.  The five Accounts of the House for 1998-99 are published at the end of this volume. The Appropriation Accounts will be published by the Government in the autumn; meanwhile this Report records the financial statement of results. The two charts below give a percentage breakdown of the main elements of expenditure.

Administration Vote

59.  Provision in the Peers' Expenses, Administration, etc. Vote (the ``Administration Vote'') for 1998-99 was £28,286,000, which included provision of £7,568,000 for Peers' Expenses. In the course of the year, due to the number of sittings of the House and higher than expected attendances by Lords, additional expenditure on Peers' Expenses of £2,359,000 was forecast, partly offset by an anticipated underspend of £800,000 on other subheads of the Vote, in particular printing and publishing. A supplementary estimate of £1,559,000 was accordingly approved by the Finance and Staff Sub-Committee in November 1998, making total provision for the year of £29,845,000.

60.  Out-turn expenditure on the Administration Vote was £29,680,000, giving a small surplus of £165,000 (0.6 per cent).

61.  The Estimate for 1999-2000 was set by the Finance and Staff Sub-Committee at £30,369,000, in line with the Expenditure Limit for the year mentioned in paragraph 57 above.

Works Services Vote

62.  Provision in the Works Services Vote was £13,803,000. Expenditure totalled £13,560,000, giving a small surplus for the year of £243,000 (1.8 per cent). Overspends on some major and minor new works were funded from savings on the other subheads of the Vote.

63.  The Estimate for 1999-2000 was set by the Finance and Staff Sub-Committee at £15,483,000. This was some £1.5m less than the Expenditure Limit mentioned in paragraph 57 above. The reduction was due to the preferred option, agreed with the Treasury, for the funding of Millbank House, whereby the costs of preparing the accommodation will be included in the rent over the period of the lease. By special agreement with the House of Commons, it was also agreed that, in 1999-2000, the House should fund 100 per cent of the costs of two shared projects (stone restoration in Royal Court and the installation of air- conditioning in the Victoria Tower) on the understanding that, over the remaining years of the projects, the Commons would contribute such shares as are necessary to bring the funding for these projects into line with the normal 40:60 share between the two Houses.

History of Parliament Trust

64.  The Finance and Staff Sub-Committee agreed that the House of Lords should make a financial contribution of £200,000 towards the costs of the History of Parliament Trust, whose principal activity is to research and publish a history of the House of Commons from its origins. Following a decision by the Trust to extend its work to include the House of Lords, the first Lords' contribution will be made in the year 1999-2000 and will reflect the level of academic resources devoted to work on the House of Lords, which will, in future, represent approximately one-fifth of the work of the Trust.

Internal Audit

65.  An internal audit review of car parking revealed some under-usage of rented parking spaces. As a result, 49 spaces have been given up at a saving to the House of £190,000 a year. Other work by the internal auditor included reviews of systems for paying Peers' expenses; the payment of staff travel and subsistence expenses; and reviews of the agreement with TSO for printing and publishing; staff recruitment procedures; and telecommunications charges. In all cases, recommendations have been aimed at tightening control procedures and achieving economies.

Refreshment Department

66.  The Refreshment Department provides catering services through eight trading outlets, a private function service and a gift shop. Turnover for the year was £2.57m representing a 21 per cent increase over the 1997-98 figure. This is the seventh consecutive year of sales growth, during which period turnover has increased by 148 per cent, while service quality and gross profit, as measured under an agreement with the Treasury, have both improved. After transfers and appropriations, a surplus of £560,000 was surrendered to the Exchequer (£500,000 in 1997-98). All internal and external performance targets were met. The Accounts of the Department are set out at page 53.

Security Fund Account

67.  Under the Appellate Jurisdiction Act 1876, security must be provided for the cost of certain civil appeals. The Security Fund Account on page 69 records lodgements of security and repayments.

Works of Art Collection Fund

68.  The Accounts of the Works of Art Collection Fund (page 72) record purchases of works of art on behalf of the House of Lords. The major item in 1998-99 was the commissioning of five pictures to be hung in the Barry Room. Sophie Knight has been commissioned to produce three watercolours and Edmund Fairfax Lucy to produce two oil paintings, all of river scenes. A sum of £10,575 has been committed for this project, which will be completed in the summer of 1999. Another notable purchase was a book of sketches for the Royal Gallery fresco of Waterloo by Daniel Maclise.

Remuneration and Expenses of Members of the House

69.  Remuneration for Members of the House is restricted to Ministers, to the Leader and Chief Whip of the main opposition party, to the Chairman and Principal Deputy Chairman of Committees and to Lords of Appeal in Ordinary; of these, only the Chairman and Principal Deputy Chairman of Committees' salaries and that part of the Lord Chancellor's salary attributable to his duties as Speaker of the House are paid from the Administration Vote. For other Members of the House, expenses may be reimbursed in accordance with the Peers' Reimbursement Allowance Scheme. The limits within which they may be reimbursed, applicable at 31 March 1999, are given in Appendix D. Total expenditure on Peers' expenses in 1998-99 was £9.49m (compared with £6.58m in 1997-98 and £7.02m in 1996-97).

Annual Report 1998-99

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