Departmental Expenditure Limits (Hansard, 5 November 1999)

§ Mr. Byers

Subject to Parliamentary approval of the necessary Supplementary Estate, the voted element of the Departmental Expenditure Limit for the Department of Trade and Industry will be increased by £53,901,000 from £3,127,781,000 to £3,181,682,000. This increase, which will be made to the net provision of Class IX Vote 1, results from

(i) the take up of End Year Flexibility entitlements of £42,192,000, comprising £2,966,000 for capital, £9,226,000 for running costs and £30,000,000 for current expenditure, as announced by my right hon. Friend the Chief Secretary to the Treasury on 27 July 1999, Official Report, column 393;
(ii) the take up of the Department Unallocated Provision of £5,000,000;
(iii) the provision of £8,000,000 from the Reserve for a payment to the Post Office for Horizon re-negotiation costs;
(iv) the transfer of £250,000 in programme costs and £205,000 in running costs from the Home Office (Class IV Vote 1) as part of the Crime Reduction Programme; offset by:
(v) the transfer of £1,096,000 to the Department of the Environment, Transport and the Regions (Class III Vote 1) to cover the administrative costs of the Regional Development Agencies;
(vi) the transfer of £500,000 to Northern Ireland in respect of the SMART scheme;
(vii) the transfer of £150,000 to the Ministry of Agriculture, Fisheries and Food (Class X Vote 2) for the enforcement of the National Minimum Wage in the agricultural sector.

Within this total the gross running costs limit will be increased by £14,994,000 from £373,606,000 to £388,600,000, which will include £5,563,000 transferred from the capital computer budget in respect of the Elgar Private Finance Initiative project.

The take up of the End Year Flexibility entitlements of £42,192,000 and the £8,000,000 for the payment to the Post Office will be charged to the Reserve and will not therefore add to the planned total of public expenditure.

Also, subject to Parliamentary approval of the necessary Supplementary Estimate, the Department Expenditure Limit of Class IX Vote 8—the Office of Telecommunications—will be increased by £2,140,000 from £1,000 to £2,141,000 and the gross running costs limit will be increased by £635,000 from £11,661,000 to £12,296,000. These increases result from the take up of End Year Flexibility entitlements of £1,426,000, comprising £791,000 for capital, £635,000 for running costs, as announced by my right hon. Friend the Chief Secretary to the Treasury on 27 July 1999, Official Report, column 393, and a reduction of £714,000 in appropriations in aid as a result of the adoption of the Telecommunications Licensing Directive, under which certain statutory responsibilities can no longer be met from licence fees. The increase in net provision will be charged to the Reserve and will not therefore add to the planned total of public expenditure.

Additionally, subject to Parliamentary approval of the necessary Supplementary Estimate, the Departmental Expenditure Limit for Class IX Vote—the Office of Gas Supply—will be increased by £1,000 from £1,000 to £2,000 and the gross running costs limit will be increased by £1,830,000 from £12,000,000 to £13,830,000. An increase in running costs provision of £2,370,000 is necessary to cover the Office of Gas Supply's administrative costs preparatory to the merger with the Office of Electricity Regulation. An increase in VAT refunds arising from the increase in the gross expenditure provision reduces the increase in the gross running costs limit to £1,830,000, of which £30,000 represents the take up of End Year Flexibility. The total increase in expenditure of £3,300,000 is offset by additional receipts of £3,299,000, of which £1,200,000 represents VAT refunds and a £1,800,000 payment from DTI. The increase in net provision will be charged to the Reserve and will not therefore add to the planned total of public expenditure.

In addition, subject to Parliamentary approval of the necessary Supplementary Estimate, the Departmental Expenditure Limit for Class IX Vote—the Office of 338W Electricity Regulation—will be increased by £86,000 from £1,000 to £87,000 and the gross running costs limit will be increased by £1,800,000 from £28,200,000 to £30,000,000. An increase in running costs provision of £3,375,000 and in capital expenditure provision of £886,000 is necessary to cover the Office of Electricity Regulation's administrative costs preparatory to the merger with the Office of Gas Supply. An increase in VAT refunds arising from the increase in the gross expenditure provision reduces the increase in the gross running costs limit to £1,800,000 and the Office of Electricity Regulation will also take up End Year Flexibility entitlements of £86,000. Additional receipts of £4,175,000, of which £1,400,000 will come from VAT refunds and the balance from electricity licence fees, will not fully meet the increase in gross provision. The shortfall is due to the requirement to reduce electricity licence fees in 1999–2000 by the amount overrecovered in 1998–99 and the take up of End Year Flexibility. The increase in net provision will be charged to the Reserve and will not therefore add to the planned total of public expenditure.