HC Deb 23 February 1998 vol 307 cc122-4W
Ms Drown

To ask the Secretary of State for Social Security if she will make a statement on changes in the(a) cash limits and (b) running costs limit of her Department for 1997–98. [30382]

Mr. Field

Subject to the Parliamentary approval of the necessary Supplementary Estimate the cash limit for Class XII, Vote 2 will be decreased by £6,313,300 from £462,105,000 to £455,791,700. The cash limit of Class XII, Vote 3 will be increased by £314,536,000 from £2,035,828,000 to £2,350,364,000.

The main reason for the revision to Vote 2 is to provide for payments totalling £190 million to be made from the Social Fund in respect of the Winter Fuel Bonus announced by the Chancellor in his Pre-Budget statement of 25 November 1997, Official Report, columns 779–80.

Smaller increases are also sought: £77,066,000 for payments into the National Insurance Fund due to an increase in the Government Actuary's assessment of expenditure on Statutory Sick Pay and Statutory Maternity Pay and amount owed in respect of the National Insurance Surcharge Account; £32,000,000 for Rent Rebate Subsidies due to higher costs than previously estimated on this one element of benefit expenditure; £270,000 for the grant in aid to Motability towards additional equipment fund costs; £1,700 for the grant in aid to the British Limbless Ex-Servicemen's Association (BLESMA).

The Estimate also takes account of the improved performance of the economy which has resulted in falling unemployment, and which in turn has reduced the take up of benefits compared with what was expected at the time the Main Estimate provision was approved. The specific decreases are: £104,170,000 on sums payable to the National Insurance Fund due to a decrease in the Government Actuary's assessment of the expenditure on the National Insurance Contribution Holiday Scheme and Treasury Grant; £90,000,000 for Rent Allowance and £90,000,000 for Council Tax Benefit subsidies due to lower final claims and benefit costs than previously estimated; £8,000,000 for Rent Rebates subsidies payable to New Towns due to lower benefit costs than previously estimated; £3,000,000 on Social fund expenditure due to improved Social Fund loan recoveries which allows the planned level of gross funding to be delivered with a reduced net budget; £2,000,000 due to a reduction in Housing Benefit and Council Tax Benefit administration costs and £1,000,000 for discretionary Rent Allowance to reflect the policy decision not to extend the Single Room Rent to those aged 25 to 59 and £585,000 being transferred to the Department of Social Security administration Vote, Class XII Vote 3.

Vote 3 revisions take account of increased requirements of (£13,264,000 running costs) under the Welfare to Work programme, an increase of £47,999,000 (running costs) towards early retirement costs, comprising £29,500,000 additional funding and £18,499,000 under the end year flexibility scheme as announced by the Chief Secretary to the Treasury on 17 July 1997, Official Report, columns 245–50), an increase of £3,774,000 (capital) under the capital end year flexibility scheme and an increase of £20,600,000 (running costs) for the administration costs associated with the Winter Fuel Bonus.

Other changes result from a reduction of £4,498,000 (running costs) arising from the recalculation of JSA implementation costs, offset by a corresponding increase on Class IX Vote 3 (Education and Employment), an increase of £514,000 (running costs), offset by a corresponding reduction on Class IX, Vote 1 (Education and Employment), a reduction of £1,017,000 (running costs) for legal aid assessment work, offset by a corresponding increase on Class VIII, Vote 1 (Lord Chancellors' and Law Officers' Departments), a reduction of £300,000 (running costs) for expenses associated with the employment of agency solicitors, offset by a corresponding increase on Class XI, Vote 2 (Department of Health), a reduction of £170,000 (running costs), which represents an aggregate of a number of small transfers, offset by a corresponding increase on Class IX, Vote 3 (Education and Employment), an increase of £70,000 (running costs), offset by a corresponding reduction on Class XI, Vote 1, Class XIII, Vote 4 and Class XIV, Vote 4 and an increase of £585,000 (running costs) offset by a corresponding reduction on Class XII, Vote 2 (Department of Social Security). Further transfers arise from an increase of running cost cover of £160,000 for services provided to Department of Health and Social Services (Northern Ireland) and a net reduction of £7,808,000 in running cost provision arising from a higher recovery of deductible VAT on contracted out services.

Cash limit changes arise from a net reduction in capital provision of £1,952,000 and a reduction in Appropriations in Aid of £243,315,000. This arises mainly as a result of an anticipated receipt from the sale of assets now being due in 1998–99.

As a result of these changes the running cost limit of the Department of Social Security (within the control total) will be increased by £56,135,000 from £3,218,908,000 to £3,275,043,000 and the new running cost limit for the Welfare to Work programme (outside the control total) is £13,264,000.

Increases will be offset by transfers or charged to the Reserve and will not therefore add to the planned total of Public Expenditure.