Cash Limits (Hansard, 23 February 1998)

§ Dr. Reid

The Government have decided that, subject to Parliamentary approval of the necessary Supplementary Estimate, an addition should be made to the Defence budget to cover the additional costs of operations by UK forces in Bosnia in the current financial year. These costs are estimated to be £189 million. Some £11 million will be met from technical adjustments leaving £178 million which will be met from the Reserve.

A Spring Supplementary Estimate is, therefore, to be presented to the House to take on to Vote the additional provision of £178 million. The Supplementary Estimate will also make adjustments between the Defence operating costs programme (mostly Votes 1 and 2) and the Defence equipment programme (Vote 3) to reflect the expected pattern of expenditure on the Defence programme generally.

Because of the adjustment between operating costs and the equipment programme, the additional funding will be drawn on to Class 1, Vote 3 and token increases of £1k will be taken on Votes 1 and 2. The cash limits on Votes 1 and 2 will, however, be reduced and that on Vote 3 increased by more than the amount of the additional funding to reflect the realignment. The cash limit changes will be as follows:

£000
Class 1 Vote	Current cash limit	Change	Revised cash limit
1	10,096,130	-3,786	10,092,344
2	4,754,337	-59,263	4,695,074
3	6,112,530	241,068	6,353,598
Total	20,962,997	178,019	21,141,016

37W

The impact of these changes on the Ministry of Defence Operating Cost limit is as follows:

£000
Class 1 Vote	Current cash limit	Change	Revised cash limit
1	10,090,598	-3,786	10,086,812
2	4,754,337	-59,263	4,695,074
3	735,976	-1,720	734,256
Total	15,580,911	-64,769	15,516,142

Because the increase on the Defence budget cash limit will be met from the Reserve, which is part of the Government Control total, it will not add to the planned total of public expenditure.