Finance and Staff

77.  The Finance and Staff Sub-Committee approved proposals for additional staff in a number of areas, in response to increased levels of activity in the House and to meet the requirements of Members. These included:

• a post of Legal Adviser to the proposed Joint Committee on Human Rights, the cost of which will be shared between the two Houses.

• a new post in the Accountant's Office to assist in the introduction of resource accounting and budgeting.

• four legal assistant posts for the Law Lords, on short term appointments (see paragraph 47 above).

• in the Committee Office, following a review early in 1999, an increase in staff of eight posts at various grades to meet the demands of increased committee activity.

Eleven posts in the office of the Official Report were abolished following the introduction of new working methods (see Part II, page 33 below).

Resource Accounting

78.  The introduction of Resource Accounting and Budgeting--a new system for planning, controlling and reporting on public expenditure--has been described in previous Annual Reports[6]. Work continued in 1999-2000, in consultation with the Treasury, the National Audit Office and the House of Commons, towards the preparation of "dry run" resource accounts for 1998-99 and 1999-2000. A resource budget for the House will be compiled from 2001-02.

Future Expenditure and the Spending Review 2000

79.  Following inclusion of the House of Lords' expenditure plans for the years 1999-2000, 2000-01 and 2001-02 in the Government's Comprehensive Spending Review in 1998, the Finance and Staff Sub-Committee considered and approved further plans for the years 2001-02, 2002-03 and 2003-04. The figures, which included significant increases in expenditure to take account of high levels of attendance and activity in the House, will be incorporated into the Government's Spending Review 2000 and will form the Departmental Expenditure Limit for the House of Lords for the three year period.

House of Lords' Accounts: 1999-2000

80.  The five Accounts of the House for 1999-2000 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 pie charts below give a percentage breakdown of the main elements of expenditure.

Administration Vote

81.  Provision in the Peers' Expenses, Administration, etc. Vote (the "Administration Vote") for 1999-2000 was £30,369,000, which included £9,127,000 for Peers' Expenses. In December 1999, a supplementary estimate of £1,016,000 was approved by the Finance and Staff Sub-Committee, making total provision for the year of £31,385,000. The supplementary estimate was due to higher than forecast expenditure on Peers' Expenses, additional administration costs attributable to high levels of attendance by Lords and activity in the House, and increased expenditure in the Parliamentary Communications Directorate. The supplementary estimate did not constitute a claim on the Reserve because, with the agreement of the Treasury, it was offset against savings on the Works Services Vote (see paragraph 83 below). Final out-turn expenditure on the Administration Vote was £31,123,000, giving a small surplus of £262,000 (0.8%).

82.  The Estimate for 2000-01 was set by the Finance and Staff Sub-Committee at £31,391,000, in line with the Expenditure Limit mentioned in paragraph 79 above.

Peers' Expenses, Administration etc. Vote Expenditure 1999-2000

Works Services Vote

83.  Provision in the Works Services Vote was £15,483,000. Expenditure totalled £14,144,000, giving a substantial surplus of £1,339,000 (8.6%). This was due to lower than forecast expenditure on Millbank House, where the refurbishment costs will be included in the rent and will thus be spread over the period of lease, and on the refurbishment of Old Palace Yard, which was postponed from 1999 to 2000.

Works Services Vote Expenditure 1999-2000

Internal Audit

85.  A new Internal Auditor (an internal candidate) was appointed in April 1999. He conducted an assessment of the audit requirements of the House based on risk analysis and drew up a strategic audit plan which was subsequently agreed by the Clerk of the Parliaments. The latest developments in corporate governance (the system by which organisations are directed and controlled) in the public sector were also considered. An arrangement was made to purchase computer audit expertise from the Department for Education and Employment which replaced, by mutual consent, a similar arrangement with the House of Commons. The Internal Auditor also completed reviews of the system for the disposal of surplus computer equipment; the central payment function; office supplies and stationery; and Judicial Office income.

Refreshment Department

86.  The Refreshment Department provides catering services through eight trading outlets, a private function service and a gift shop. Turnover for the year was £2.81m representing a 9.3% increase over the 1998-99 results. This is the eighth consecutive year of sales growth. The departure of many hereditary peers in November 1999 led to a slight decrease in turnover in certain outlets, but the overall trading position remained largely unaffected. After transfers and appropriations, a surplus of £580,000 was returned to the Exchequer (£560,000 in 1998-99). All internal and external performance targets were met. The Accounts of the Department are set out at page 60.

Security Fund Account

87.  Under the Appellate Jurisdiction Act 1876, security must be provided for the cost of certain civil appeals. The Security Fund Account on page 77 records lodgements of security and repayments.

Works of Art Collection Fund

88.  The Accounts of the Works of Art Collection Fund (page 80) record purchases of works of art on behalf of the House of Lords. The major purchases in 1999-2000 were three watercolours by Sophie Knight and two oil paintings by Edmund Fairfax Lucy, all specially commissioned for the Barry Room; a painting by Andrew Benjamin Donaldson of the consecration of Westminster Abbey; and a portrait of Lord Melbourne by Sir William Ross RA.

89.  In addition, in 1999 the Finance and Staff Sub-Committee allocated £110,000 from the Works Services Vote, spread over the financial years 1999-2000 to 2002-03, for the purchase of works of art for the new offices in Millbank House and 7 Little College Street. This will be supplemented by £10,000 from the Works of Art Collection Fund. In 1999-2000 the Advisory Panel made the first purchases under this arrangement, which included original works by contemporary artists and limited edition prints.

Remuneration and Expenses of Members of the House

90.  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 House of Lords' 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 2000, are given in Appendix E. Total expenditure on Peers' expenses in 1999-2000 was £9.39mn (compared with £9.49mn in 1998-99 and £6.58mn in 1997-98).

91.  Financial assistance to the two main Opposition parties in carrying out their Parliamentary business in the House has been provided from the Administration Vote since 1996. The sums payable are uprated annually in line with the Retail Price Index. In July 1999 a Resolution of the House doubled the sums available with effect from the previous April: £216,842 became available to the official Opposition; £65,052 to the Liberal Democrat Opposition; and, for the first time, a sum of £20,000 per year was made available to the Convenor of the Cross Bench Peers to provide secretarial assistance, with effect from 1 October 1999. The sums paid are subject to independent audit.