Cash Limits (Hansard, 4 November 1996)

§ Mr. Gummer

Subject to parliamentary approval of the necessary supplementary estimates, the cash limit for class VI, vote 1 (Housing and Construction, England), covering sections A, D to G and J to L of that vote, will be increased by £900,000 from £330,568,000 to £331,468,000. Increases in the cash limit of £2,200,000 are balanced by decreases of £1,300,000. The increases are a switch of £2,000,000 from non-cash-limited asylum seekers' housing grant to cash-limited Housing Corporation revenue grants; and £200,000 to meet increased administration costs the corporation is expected to incur preparing the loan portfolio for possible sale, funded from any receipt of the sale. The decreases are a transfer of £500,000 from gipsy site grant to class VI, vote 2, to fund projects on the Barkantine estate which was damaged in the docklands bombing of February 1996; and a switch of £800,000 from homelessness grants to Housing Corporation capital grant in aid, included in the DOE/HC (Housing Corporation) non-voted cash limit.

The DOE/HC (Housing Corporation) cash limit will be increased by £1,369,000 from £1,034,499,000 to £1,035,868,000 because of the take-up of £569,000 entitlement to end year flexibility as announced by the Chief Secretary to the Treasury on 12 July 1996, Official Report, columns 326–31, to fund capital projects; and the transfer of £800,000 from the cash limit for class VI, vote 1 in order to switch current to capital expenditure within the rough sleepers initiative.

The cash limit for class VI, vote 2 (Regeneration and Countryside and Wildlife) will be increased by £5,336,000 from £1,459,443,000 to £1,464,779,000. The increase is partly due to the net effect of the payment of £4,702,000 on capital projects which either slipped from previous years or to meet statutory compensation claims or the claim slipped into the following year. This extra provision will be met by the take-up of end year flexibility entitlement, as announced by the Chief Secretary to the Treasury on 12 July 1996, Official Report, columns 326–31, and will cover claims for the following: Teeside development corporation, Derby and Leicester city challenge and challenge fund within the single regeneration budget, estate action and Bristol development corporation. The balance will be made up of a transfer of £134,000 from the Departments for Education and Employment and of Trade and Industry as their contribution towards the Manchester bomb fund, and £500,000 transfer from vote 1 (Housing and Construction) to estate action to cover bomb damage in London.

There will be associated increases in external financing limits for urban development corporations by £767,000 from £207,050,000 to £207,817,000 and the housing action trusts by £250,000 from £878,960,000 to £879,210,000.

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The DOE/NT (New Towns) non-voted cash limit will be decreased by £8,000,000 from -£100,000,000 to -£108,000,000. This decrease is due to the Commission for the New Towns having accelerated disposals and generated additional receipts in 1996–97 of £15,000,000 in gross terms, of which the commission expects to use £7,000,000 to increase capital spending leaving a balance of £8,000,000. Of this public expenditure survey saving: £1,800,000 will be transferred to class VI, vote 3 to meet pneumoconiosis compensation payments; £434,000 will be transferred to class VI, vote 7 (Office of Water Services) to meet additional monitoring and accommodation costs, £230,000 will be used to offset the penalty imposed on the Office of Water Services for its breach of cash and running cost limits in 1995–96 and £3,394,000 will be transferred to class VI, vote 8 (Ordnance Survey) to meet additional accommodation, security and severance costs.

The cash limit for class VI, vote 3 (Environmental protection and water), covering sections A to H of that vote, will be increased by £4,301,000 from £347,309,000 to £351,610,000. This change reflects increases in provision of £1,850,000 for grant in aid to the British Waterways Board, £1,800,000 for pneumoconiosis compensation payments, £500,000 for water and sewerage grants, £244,000 for grant to Mersey Basin Business Foundation, £39,000 for grant in aid to the Environment Agency, and £10,000 for Going for Green, less a transfer of £142,000 to the Scottish Office for the air quality pilot project. The increase will be met by reductions in the DOE/new towns cash limit (£1,800,000), the cash limits for class VI, vote 5 (DOE administration) (£254,000), class XIII, vote 2 (Scottish Office) (£800,000), class IV, vote 1 (DTI) (£39,000) and the take-up of end year flexibility entitlement—£1,550,000—as announced by the Chief Secretary to the Treasury on 12 July 1996, Official Report, columns 326–31.

The external financing limit for the British Waterways Board will be increased by £2,800,000 from £47,000,000 to £49,800,000. This change will enable the board to undertake essential works to the Caledonian canal and will be funded by take-up of end year flexibility of £1,050,000, as announced by the Chief Secretary to the Treasury on 12 July 1996 Official Report, columns 327–28, a transfer of £800,000 from class XIII, vote 2 (Scottish Office) and virements within vote 3.

The cash limit for class VI, vote 4, (Local government and planning, England), covering sections A to F of that vote, will be reduced by £30,000 from £31,128,087,000 to £31,128,057,000. This reduction is the net result of reductions in the payments made to the Valuation Office agency in section A (Valuation services) and an increase to allow payments to the Local Government residuary body in section B (Reorganisation of local government). The savings in section A will be used within vote 4, to cover residual payments of community charge grant in section H (Other grants), which is outside the cash limit on the vote.

The DOE/LGR (Local government reorganisation) non-voted cash limit will be reduced by £205,000 from £108,050,000 to £107,845,000 to offset the increase on section B of vote 4.

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The cash limit for class VI, vote 5 (Administration) covering sections A to G and I of that vote, will be increased by £11,032,000 from £452,776,000 to £463,808,000. This change reflects increases due to the drawdown of £11,744,000 of running costs end year flexibility entitlement and £2,000,000 of capital end year flexibility entitlement, as announced by the Chief Secretary to the Treasury on 12 July 1996, Official Report, columns 326–31, together with a £20,000 transfer from the Security Facilities Executive agency (class XVII, vote 1) and £587,000 to pay for the Department's costs in respect of the sale of the Housing Corporation loans portfolio with the extra provision being funded from the expected proceeds of the sale. The increases will be offset by transfers of; £1,522,000 to the Foreign and Commonwealth Office (class II, vote 1) and of £43,000 to the Office of Public Service (class XVII, vote 1) in respect of Lancaster house; £1,500,000 to the Department of National Heritage (class X, vote 1) for preparatory works to Somerset house to house the Gilbert collection; and £244,000 to provide for grant to the Mersey Basin Business Foundation and £10,000 in respect of Going for Green, both to class VI, vote 3. Also as a consequence, the DOE gross running cost limit has increased by £10,985,000 from £218,078,000 to £229,063,000.

The cash limit for class VI, vote 7 (Office of Water Services) will be increased by £434,000 from £9,201,000 to £9,635,000 and the running costs limit will be increased by £434,000 from £8,901,000 to £9,335,000. This increase is required to cover the costs of active annual monitoring of the performance of the water and sewerage undertakings, development of information systems to allow the analysis of performance against comparative benchmarks and to meet additional administrative and accommodations costs. This change takes into account the penalties imposed following Ofwat's breach of its cash and running cost limits in 1995–96. The increases will be offset by savings on the DOE/NT (New Towns) non-voted cash limit and will not therefore add to the planned total of public expenditure.

The cash limit for class VI, vote 8 (Ordnance Survey) will be increased by £5,305,000 from £9,110,000 to £14,415,000. The increase is required to cover additional expenditure on building refurbishment, enhancement of building security, higher than anticipated contributions in lieu of rates and early retirement costs. The increase will be met by a transfer of £3,394,000 from the DOE/NT (New Towns) non-voted cash limit and by a transfer of £5,000 from the Security Facilities Executive agency (class XVII, vote 1) with the balance of £1,906,000 being charged to the reserve.

All the increases will be offset by either savings or transfers from other Government Departments or else represent take-up of end year flexibility entitled or will be otherwise charged to the reserve and will not therefore add to the planned total of public expenditure.