Capital Assets (Hansard, 8 January 2002)

§ Matthew Taylor
To ask the Chancellor of the Exchequer, pursuant to his answer of 11 December 2001,Official Report, column 765W, on capital assets, which definition of investment he used in answering on (a) on the level of investment provided through PFI and (b) the level of total investment; and if he will make a statement. [24127]

§ Mr. Andrew Smith
Capital spending provided through PFI can be classified in national accounts as either investment by the public sector or by the private sector. The term private sector investment through PFI refers to PH capital spending that is classified to the private sector.
Total investment in public services includes all capital expenditure financed through PFI, regardless of how that spending is classified in national accounts. It is measured gross of asset sales and before deducting depreciation.

§ Matthew Taylor
To ask the Chancellor of the Exchequer, pursuant to his answer of 12 December 2001,Official Report, column 889W, on capital assets, if he will place in the Library information on the accounting treatment of the public private partnership projects relating to (a) office automation in Customs and Excise, (b) NIRS2, (c) Manchester Inland Revenue offices, (d) Stockport Inland Revenue, (e) Bootle St. John's House, (f) Newcastle Estate Development Scheme, (g) CCTA MTS Telecoms Service and (h) Treasury GOGGS Building; and if he will make a statement. [24256]

§ Ruth Kelly
The information is as follows:
809W

Project Accounting treatment

Stockport Inland Revenue Inland Revenue follows Treasury guidance and adopts the processes therein. The accounting treatment for the Inland Revenue projects mentioned is reported in note 22 of the Department's 2000–01 resource accounts. The projects are operating leases and consequently are not included in the Department's balance sheet as fixed assets.

Bootle St. Johns House Inland Revenue follows Treasury guidance and adopts the processes therein. The accounting treatment for the Inland Revenue projects mentioned is reported in note 22 of the Department's 2000–01 resource accounts. The projects are operating leases and consequently are not included in the Department's balance sheet as fixed assets.

Newcastle Estate Development Scheme Inland Revenue follows Treasury guidance and adopts the processes therein. The accounting treatment for the Inland Revenue projects mentioned is reported in note 22 of the Department's 2000–01 resource accounts. The projects are operating leases and consequently are not included in the Department's balance sheet as fixed assets.

MTS Telecomms Service OGCbuying.solutions, CCTA's successor body managing the telecoms contract service on behalf of Departments, follows Treasury guidance and adopts the processes therein. The outcomes of applying the guidance are as follows:

On 1 January 1997, some telecommunications assets were transferred to Racal Telecom as part of an agreement under which Racal undertook to provide telecommunication services under agreed terms for a period of 10 years.

Racal Telecomm (now Global Crossing) agreed as payment for those assets to abate the agreed level of payments for services under the contract, by an amount of £400,000 per annum for 10 years. The value of the payments over the 10 year period were sufficient to cover the book value of the assets at the time of transfer plus interest for the deferred payment schedule.

The original £4 million was treated as a deferred debtor in the accounts of CCTA, following advice from NAO. The abatements (£400k per annum) reduce the deferred debtor on an on-going basis. This treatment has carried forward from April 2001 to OGCbuying.solutions accounts.

HM Treasury GOGGS Building The Treasury's PH agreement for refurbishment of its new building will take effect during 2002–03. The accounting treatment has yet to be decided. The agreement will be recorded in the Treasury's 2000–01 accounts as a post-balance sheet event.

Project	Accounting treatment
Stockport Inland Revenue	Inland Revenue follows Treasury guidance and adopts the processes therein. The accounting treatment for the Inland Revenue projects mentioned is reported in note 22 of the Department's 2000–01 resource accounts. The projects are operating leases and consequently are not included in the Department's balance sheet as fixed assets.
Bootle St. Johns House	Inland Revenue follows Treasury guidance and adopts the processes therein. The accounting treatment for the Inland Revenue projects mentioned is reported in note 22 of the Department's 2000–01 resource accounts. The projects are operating leases and consequently are not included in the Department's balance sheet as fixed assets.
Newcastle Estate Development Scheme	Inland Revenue follows Treasury guidance and adopts the processes therein. The accounting treatment for the Inland Revenue projects mentioned is reported in note 22 of the Department's 2000–01 resource accounts. The projects are operating leases and consequently are not included in the Department's balance sheet as fixed assets.
MTS Telecomms Service	OGCbuying.solutions, CCTA's successor body managing the telecoms contract service on behalf of Departments, follows Treasury guidance and adopts the processes therein. The outcomes of applying the guidance are as follows:
	On 1 January 1997, some telecommunications assets were transferred to Racal Telecom as part of an agreement under which Racal undertook to provide telecommunication services under agreed terms for a period of 10 years.
	Racal Telecomm (now Global Crossing) agreed as payment for those assets to abate the agreed level of payments for services under the contract, by an amount of £400,000 per annum for 10 years. The value of the payments over the 10 year period were sufficient to cover the book value of the assets at the time of transfer plus interest for the deferred payment schedule.
	The original £4 million was treated as a deferred debtor in the accounts of CCTA, following advice from NAO. The abatements (£400k per annum) reduce the deferred debtor on an on-going basis. This treatment has carried forward from April 2001 to OGCbuying.solutions accounts.
HM Treasury GOGGS Building	The Treasury's PH agreement for refurbishment of its new building will take effect during 2002–03. The accounting treatment has yet to be decided. The agreement will be recorded in the Treasury's 2000–01 accounts as a post-balance sheet event.