Cash Limits (Hansard, 23 July 1987)

§ Mr. Younger

My right hon. Friend the Chief Secretary to the Treasury announced today an increase to the cash limit for class I, Vote 2 of £350,815,000 under the end-year flexibility scheme for central Government expenditure. I can now announce that the cash limit for that vote will be increased by a further £250,245,000, from £8,902,652,000 to £9,152,897,000. Of this new increase, £210,000,000 comes under the terms of the additional flexibility arrangements I announced to the House on 19 December 1986 at column 778, and which is a direct result of underspending last year arising from procurement decisions taken to improve contractors' performance and the value for money obtained from our defence procurement contracts during the 1986–87 financial year, including the Department's new and tauter approach to interim payments. The remaining amount, £40,245,000, represents the return to my Department's cash block of £40,000,000 which had been set aside for the external financing requirement of Royal Ordnance plc. (as described in the introduction to class I Supply Estimates 1986–87, HC284-I), but which was not in the event needed for this purpose; together with £245,000 in respect of the transfer of responsibility for the review board for Government contracts from Her Majesty's Treasury to the Ministry of Defence. These sums will be met from within the reserve and will therefore not add to the public expenditure planning total.