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The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord McIntosh of Haringey): My right honourable friend the Paymaster General (Dawn Primarolo) has made the following Written Ministerial Statement.
Subject to parliamentary approval of any necessary Supplementary Estimate, the Inland Revenue departmental expenditure limit will be increased by £133,643,000 from £3,358,210,000 to £3,491,853,000 and the administration costs limit will be increased by £94,530,000 from £3,075,757,000 to £3,170,287,000. Within the DEL change, the impact on resources and capital are as set out in the following table:
The change in the resource element of the DEL arises from increases in gross administration costs, mainly, £61,544,000 met from the central reserve to enable the GOGGS East building to be brought on to the department's balance sheet. A further increase of £29,000,000 and £3,400,000, which is also being met from
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the central reserve for continued work on Child Trust Fund and for Team Bonus payments, respectively. HM Treasury is to transfer £99,000, for the cost of capital in respect of the GOGGS East building. Cabinet Office will be transferring £1,790,000, due to the change in funding arrangements for the Parliamentary Counsel Office; and, Department for Work and Pensions is transferring £1,661,000, for child benefit work on the Payment Modernisation Programme and the Child Benefit Cheque Payment Service. These transfers are partially offset by a transfer of £2,964,000 to HM Treasury to meet the costs of the transfer of tax policy work for the first half of the financial year.
The change in the capital element of the DEL arises from an increase of £97,477,000 from the central reserve to enable the GOGGS East building to be brought onto the department's balance sheet. This increase is partially offset by an accounting adjustment of £58,364,000, in relation to the assets transferred to CapGemini, the department's new IT service provider.
Subject to parliamentary approval of any necessary Supplementary Estimate, the Government Actuary's departmental expenditure limit will be increased by £130,000 from £1,309,000 to £1,439,000. Within the DEL change, the impact on resources and capital are as set out in the following table:
The change in the capital element of the DEL arises from the partial draw down of capital end-year flexibility (EYF) of £130,000. This is required to meet the costs arising from the replacement of pension's valuation software and the implementation of a document management system.
Subject to parliamentary approval of any necessary Supplementary Estimate, HM Treasury DEL will be increased by £6,383,000 from £251,764,000 to
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£258,147,000 and the administration costs limits will be increased by £7,883,000 from £152,509,000 to £160,392,000. Within the DEL change, the impact on resources and capital are as set out in the following table:
The Treasury's offices at 1 Horse Guards Road being held at a valuation based on commercial property market rents. There are indications of a fall in market rents in the Victoria/Whitehall area during 200405, which would give rise to an accounting charge. To cover the estimated charge, £9,000,000 will be drawn from a fund of end-year flexibility (EYF) ring-fenced for the purpose;
The Treasury's Spending Review 2002 settlement set in-year administration funding at a level lower than forecast spending, anticipating that the shortfall would be met from a draw down of EYF. The projected shortfall in 200405 is up to £3,000,000, which will be drawn from EYF accordingly;
The funding consequences of the transfer of tax policy functions from the Inland Revenue and HM Customs and Excise to the Treasury. These were partly dealt with in the winter Supplementary Estimate, but a further £4,235,000 of funding in relation to the first part of 200405 remains to be transferred to the Treasury in order properly to account for the transfer, in accordance with the Resource Accounting Manual;
The completion of the refurbishment of 1 Parliament Street (the east end of the building formerly known as Government Offices Great George Street), required the Treasury to transfer assets relating to 1 Parliament Street from its books to the books of the Inland Revenue and HM Customs and Excise. There is an accounting profit of £8,168,000 to the Treasury on the disposal;
An increase in the Office of Government Commerce (OGC) appropriations in aid (A in A) of £725,000 and a matching £725,000 increase in expenditure for the engagement of consultants on behalf of other bodies;
|Administration costs changes indetail:||£|
|Accounting profit on disposal of 1 Parliament Street assets||-8,168,000|
|Funding for cost of capital charges on 1 Parliament Street assets||-184,000|
|Funding for costs of tax policy functions in the first part of 200405||4,235,000|
|Estimated accounting charges on revaluation of 1 Horse Guards Road||9,000,000|
|Funding for other Treasury administration costs||3,000,000|
|OGC engagement of consultants||0|
|Net total effect on admin DEL||7,883,000|
A partial draw-down of capital EYF of £22,433,000 and the subsequent transfer of that funding to Inland Revenue and HM Customs and Excise for the transfer of the 1 Parliament Street assets referred to above. These changes net to zero; a partial draw down of EYF of £1,500,000 by HM Treasury for the purchase of information systems software and hardware;
1 The Whitehall systems are backup heating and electricity power systems, previously operated and accounted for by OGC. Responsibility for them is being transferred to OGCbuying.solutions. OGC is surrendering its funding for cost of capital charges. OGCbuying.solutions is paying £11.55 million for the assets, £3 million in cash and £8.55 million via a loan from OGC.
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