§ Lord SAINSBURYasked Her Majesty's Government:
How much it is estimated that the accumulated deficit of the Refreshment Department will be at 31st March 1979; what proposals there are for improving the Department's financial position; and whether they will make a Statement.
§ Lord PEARTThe forecast accumulated deficit at 31st March 1979 is about £130,000. The Department's main difficulty is that it is unable to spread its overheads over a full year's trading. For about one-third of the year the House is in recess but the Department's basic wages bill has still to be met during these periods of low receipts. The income from special functions makes a useful contribution to the Department's finances but the profits generated are not sufficient to meet the rising losses in other areas of the Department's operations. The Government, in consultation with the House authorities, have given careful consideration to the Department's difficulties. They 127WA have concluded that it would be unrealistic to expect the Department to eliminate its deficit and break even on its future operations from internally generated resources. The kind of price increases required to achieve this would be so large as almost certainly to lead to a fall in turnover, thus exacerbating the position. The Government have, therefore, decided to make available from public funds in the current year a grant equivalent to the cost of salaries and wages during the periods of recess in 1978–79 (with the exception of any such costs which relate solely to special functions) and a further grant towards the accumulated deficit which will enable the Department to start off 1979–80 in financial balance. Provision for these grants will be made in a Supplementary Estimate. In future the Department will receive an annual grant equivalent to its recess salary and wages costs The Department's financial position 128WA will of course continue to be kept under close review and the arrangements will in any case be reconsidered in two years' time.