2017/18 Supplementary Estimates:

Transcription

1 2017/18 Estimates: Overview of in-year Budget Revisions: Guide to all Departments This document provides help for Members and staff to better understand: Changes in Departments overall budgets; Reallocations of funding within those budgets reflected in the 2017/18 Estimates. If you have any questions, comments, feedback on this document s usefulness or otherwise, and any suggestions for inclusion in a future year s edition, please contact Larry Honeysett in the Scrutiny Unit honeysettl@parliament.uk

2 Changes in various areas of spending What are the Estimates? The Estimates provide the last chance for government departments to alter in-year budgets in the light of latest forecasts. Changes to forecasts for spending areas that are difficult to predict (e.g., welfare) Claims on the Reserve: New money from Treasury for specific, unforeseen items. Main Reasons for Estimates Underspending: Departments may return money they know they will not spend. Offering it up now means they may be able to draw down the money again next year (known as Budget Exchange ). Machinery of Government changes: establishing new Departments and reallocating funding as responsibilities alter Moving money between Resource and Capital. Transfers of money between departments: e.g., joint projects

3 SPENDING REVIEW October 2015 Spending Review settlement sets DEPARTMENTAL SPENDING TOTALS (DELs) for to Decisions on changes to benefits designed to make FUTURE SAVINGS (AME). BARNETT CONSEQUENTIALS for next four years calculated for Scotland, Wales and Northern Ireland. How do departments get their funding? VOTE ON ACCOUNT March 2017 Parliament votes each Department an advance of funds for the first four months of the year based on last year s spending totals THE BUDGET November 2017 The Divvy Ups Further changes to future taxes and spending. The Finance Bill enacts tax changes; spending changes are enacted instead through ESTIMATES (see below). Departmental Ministers consider PRIORITIES, how to make EFFICIENCY SAVINGS and how to SHARE OUT each Department s budget MAIN ESTIMATES Detail of plans, by spending programme, are published in MAIN ESTIMATES This included any changes affecting spending announced in the March Budget. Block grant totals for Scotland, Wales and Northern Ireland set. Decisions on spending choices are for relevant Parliaments. Departments provide a memorandum explaining the content of the Main Estimate. An incoming government may choose to withdraw and replace individual Estimates before they are voted upon (i.e. present Revised Estimates ) Committees Scrutiny Unit briefed provides on content briefing of on Main Estimates Estimates for Members, by for Scrutiny information Unit (this (this is is what you are now reading) April 2017 In absence of committees, following General Election, there is little opportunity for scrutiny before Estimates are authorised No ESTIMATES DAY DEBATES because of General Election Main Estimates approved by the June 2017 House July 2017 SUPPLEMENTARY ESTIMATES February 2018 Later in the year Departments publish SUPPLEMENTARY ESTIMATES, showing proposed changes to in- year budgets. These will be voted upon in March 2018

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5 Departments (click on the link to view slides for each department): Business, Energy and Industrial Strategy Cabinet Office Digital, Culture, Media and Sport Education Environment, Food and Rural Affairs Exiting the EU Foreign and Commonwealth Office Health and Social Care Home Office Housing, Communities and Local Government International Development International Trade Ministry of Defence Ministry of Justice Transport Work and Pensions Treasury and HMRC Devolved Administrations: Scotland Wales Northern Ireland Sources

6 Business, Energy and Industrial Strategy

7 millions 2017/18 BEIS Day-to-day budget (Resource DEL) Day-to-day Spending: Resource DEL (Departmental Expenditure Limits) 3,000 2,500 2,000 1,500 Increase sought now 1% increase: 19m BEIS 1,000 Budget proposed in Previous years Planned future budget Main Estimate Increase sought (restated for previous and future years to take into account change of departmental functions) Changes in Day-to-day budget: 156m 28m 82m 25m 77m 196m 19m Energy Intensive Initiatives (compensation for increased costs as a result of Government energy policy) Brexit Write-downs in value (impairments) Net amount transferred from other Departments Transfer to Capital (Investment) Carried over to next year

8 millions 2017/18 BEIS Investment budget (Capital DEL) Investment Budget: Capital DEL (Departmental Expenditure Limits) 12,000 10,000 Reduction sought now 0.4% reduction in Investment budget 39m BEIS 8,000 6,000 4,000 Budget proposed in , Previous years Budget reduction sought Main Estimate Planned future budget Changes in Investment Budget: 64m 7m 77m 61m 17m 109m 39m Extra money for: British Business Bank Northern Powerhouse Midlands Engine Brexit Transfer from Resource (Day-to-day) Net amount transferred to other Departments Carried over to next year Surrendered to Treasury Reduction in Investment budget

9 Annually Managed Expenditure (AME): additional funds BEIS Extra 1.8bn For other provisions due to changes in Treasury discount rate Extra 68bn for Nuclear Decommissioning provision due to changes in Treasury discount rate Extra 8.9bn for Contracts For Difference (CFD) liabilities Extra 2.3bn Other movements in values of assets and liabilities Extra 3.1bn Additional estimated Nuclear decommissioning costs

10 Cabinet Office

11 millions Changes to 2017/18 Cabinet Office Day-to-day budget (Resource DEL) Day-to-day budget: Resource DEL (Departmental Expenditure Limits) Increase sought now 2010/ / / / / / / / / /20 Budget proposed in % increase: 319m Previous years Budget increase sought Planned future budget Changes in Day-to-day budget: 6.6m 134m 150m 55m 1m Extra funds to cover net cost of General Election 2017 General election To underwrite the Official receiver, appointed as liquidator of Carillion, in providing liquidity (i.e. cash) and support his role in seeking to maintain the continuity of public services. Extra funds for Exiting the EU Transfers in from other Departments, including 34m from SIA for cross government IT system and an Identity Assurance programme Transfer from DEXEU to establish Europe Unit in Cabinet Office 5m Extra funds for Independent Grenfell inquiry 33m Other changes 319m increase in Day-to-day budget

12 millions Changes to 2017/18 Cabinet Office Investment budget (Capital DEL) Investment budget: Capital DEL (Departmental Expenditure Limits) Increase sought now 2010/ / / / / / / / / /20 Budget proposed in % increase: 26m Previous years Budget increase sought Planned future budget Changes in Investment budget: 16m Transfer from Day-to-day (Resource DEL) to Investment (Capital DEL) budget 11m 3m Transfers from other departments, including 10.8m for fit out costs of 10 South Collonade office in Canary Wharf Reduction for Government Digital Service underspend carried forward to m increase in Investment budget

13 Housing, Communities and Local Government

14 millions Changes to 2017/18 MHCLG (Communities and Housing) Day-to-day budget (RDEL) Day-to-day spending: Resource DEL (Departmental Expenditure Limits) 5,000 4,000 Reduction sought now 16% reduction in Day-to-day budget: 471m 3,000 2,000 1, / / / / / / / / / /20 Previous years Budget reduction sought Planned future budget Budget proposed in 2017 Unspent funds rolled over to future years ( Budget Exchange ): 71m 125m 43m 41.2m 31.5m 9.1m 28.3m Other reductions: 74.6m 26.5m 19.8m

15 millions Changes to 2017/18 DCLG (Communities and Housing) Investment budget (Capital DEL) Investment budget: Capital DEL (Departmental Expenditure Limits) 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Increase sought now 2010/ / / / / / / / / /20 Previous years Budget increase sought Planned future budget Changes in Investment budget: Budget proposed in % increase in Investment budget 484m 1,598m Extra funds for Help to Buy scheme 742m Money surrendered to the Treasury 50m Extra funds for Home Building Fund This includes: 329m from Starter Homes 166m from Accelerated construction 72m from Affordable Homes spending 65m from London Settlement 52m from Build to Rent 52m from Estate Regeneration 42m Funding for Disabled Facilities Grant 478m Unspent money carried over into the future years ( Budget Exchange ) from various housing programmes 14m Other budget switches and transfers 484m Increase in Investment budget

16 million Changes to 2017/18 DCLG (Communities) Investment budget (Capital DEL) contd Investment budget (CDEL) for Housing and Planning change between main and supplementary estimate 6,000 5,000 Changes at supplementary estimate resulted in 4,000 3,000 1,691 3, bn (95%) increase in Help to Buy investment 2,000 1, ,988 Other housing investment Help to Buy 1, Main estimate estimate 1.2bn (40%) decrease in other Housing Investment (e.g. starter homes, affordable housing) Changes to 2017/18 DCLG (Local Government) budget: Resource DEL (Local Government) reduced by 10.5 million (0.5%) due to a surrender to HM Treasury in exchange for an increase in AME cover to fund the City of London Offset. Resource AME increased by 778 million (+5%) Increase in Transitional Relief payments of 619m - to help business ratepayers who face large increases in business rates bills at revaluation by phasing in bill increases. Plus other transfers of 159 million.

17 Digital, Culture, Media and Sport

18 millions DCMS Changes to 2017/18 DCMS Day-to-day budget (Resource DEL) Day-to-day budget: Resource DEL (Departmental Expenditure Limits) 20% increase: 4,000 3,000 2,000 Increase sought now 319m 1, / / / / / / / / / /20 Budget proposed in 2017 Previous years Budget increase sought Planned future budget Changes in Day-to-day budget: 276m New money from the Treasury, including 213m for potential fee repayment liabilities (after a court ruling that increases of the annual licence fee Ofcom charges to mobile networks should be reversed) 30m Net transfers from other Departments, including: 16m from DIT for the GREAT campaign 15m from CO for Cyber Security Transfers from Investment (Capital) to Day-to-day (Resource) are NOT NORMALLY ALLOWED. Possible concerns that investment budgets are being raided to fund running costs. 7m 7m Transfer from LIBOR funding Investment to for Office for Day-to-day Civil Society and budget, largely technology for 5G and Fibre projects 9m Extra funds for Exiting the EU 1m Funds carried forward into future years ( Budget Exchange ) from Discover England 1m Returned to Treasury for unused Tampon Tax funding 319m increase in Dayto-day budget

19 millions DCMS Changes to 2017/18 DCMS Investment budget (Capital DEL) Investment budget:capital DEL (Departmental Expenditure Limits) 1,400 1,200 1, Reduction sought now 2010/ / / / / / / / / /20 Previous years Budget reduction sought Planned future budget Budget proposed in % reduction: 64m Changes in Investment budget: 40m 34m 3.6m New funds from the Treasury, including: 24m to allow Museums to access their reserves; 11m to buy the shareholding for the Royal Armouries Museum Funds carried forward into future years ( Budget Exchange ) for Blythe House 57m Re-profiling of Broadband Delivery UK (efficiency savings that will be reallocated for additional superfast broadband coverage in future) Surrendered to the Treasury due to unspent Digital funding 7m Transfer from Investment to Day-to-day budget for 5G and Fibre 8m Transfers from BDUK to N. Ireland and Wales for Superfast Broadband 64m reduction in Investment budget

20 Changes to budgets within DCMS programmes: DCMS Most of the changes have focused on Broadcasting and Media; this group has the biggest increase in Day-to-day budget, and biggest decrease in Investment budget. Day-to-day budget ( millions) Olympics/ London 2012 Museums Galleries and Libraries Arts and Heritage Sports Broadcasting and Media Other Budget proposed in 2017 ME Proposed SE new budget Investment budget ( millions) Olympics/ London 2012 Museums Galleries and Libraries Arts and Heritage Sports Broadcasting and Media Other Budget proposed in 2017 ME SE Proposed new budget

21 Education

22 millions 2017/18 DFE Day-to-day budget (Resource DEL) Day-to-day Spending: Resource DEL (Departmental Expenditure Limits) 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10, / / / / / / / /20 Previous years Budget increase sought Planned future budget (restated for previous and future years to take into account change of departmental functions) Changes in Day-to-day budget: Increase sought now Budget proposed in % increase: 14,013m DFE 14,766m 390m 142m Additional student loan loss estimates arising from latest macroeconomic forecasts (funded by Treasury) Carried over to future years Surplus surrendered to the Treasury 220m 2m Transferred to academies to allow them to make use of their reserves Net amount transferred to other Departments 14,013m

23 What are the changes in DfE s Day-to-day budget? Reductions in spending on: Revised economic forecasts: DFE - 221m Across a range of standards and qualifications programmes - 132m From early years programmes 14,766m from the Treasury to cover revisions to the costs of student loans impairments (changes in the estimated value of the amount of student loans which are not expected to be repaid) - 47m From initial teacher training incentives - 48m - 91m From pupil premium - 70m From school improvement programmes From Teach First Expansion programme, Subject Knowledge enhancements, and Teaching Schools programme Without the increase in costs associated with student loans, DFE Day-to-day budget would have gone down Increases in the levels of estimated impairments are split between Resource DEL and Resource AME. Most impairments are charged to Resource DEL, but up to 1/30 of the changes due to previously inaccurate forecasts can be charged initially to Resource AME. This helps avoid DFE being hit by large unforeseen costs to its Resource DEL within a single year which it is unable to manage. Many of these costs arise from factors outside DFE's control (eg revised inflation and economic forecasts). Budgets for student loan impairments are ring fenced. The so-called RAB charge is the total estimated costs of these impairments, adjusted to present day values.

24 millions DFE 2017/18 DFE Investment budget (Capital DEL) Investment Budget: Capital DEL (Departmental Expenditure Limits) 7,000 6,000 Reduction sought now 4.7% reduction in Investment budget 244m 5,000 4,000 3,000 2,000 Budget proposed in , / / / / / / / /20 Previous years Budget reduction sought Planned future budget (restated for previous and future years to take into account change of departmental functions) Changes in Investment Budget: 6m 195m 55m 244m Net amount transferred from other Departments Carried over to next year Transferred to academies to allow them to make use of their reserves Reduction in Investment budget

25 DFE Reasons for changes in DfE Day-to-day and Investment budgets: Reductions in funding were caused by Delays because of the General election: Planned engagement with the sector not taking place Policy decision and procurement delays Teaching schemes- fewer applicants/participants than expected Lower than anticipated costs of some activities Census data or declining eligibility the refurbishment of old Admiralty building cost less than expected Some, but not all, of this money is being carried forward to next year 2017 General election Increased funding for: Fast tracking newly designated teaching schools National leaders of governance advocates Revised accountability arrangements for post 16 high needs and Physical education and sports grants Additional Investment (Capital) costs payable under the Condition Improvement Fund 14m additional costs for sanctuary buildings (DFE s headquarters) Accommodating additional costs under the Condition Improvement fund

26 DfE: Annually Managed Expenditure: Resource AME (Annually Managed Expenditure) + 1,985m DfE budget ,861m Extra Funds ,985m This covers: Interest payments received from (mainly HE) students (a benefit, not a cost) Student loans impairments - those in excess of a target set by Treasury New DFE Resource AME: - 876m These AME changes result from latest estimates of changing interest rates on student loans, and amounts to be borrowed and repaid by students AME covers demand-led spending outside the spending limits, which is reforecast each year by the OBR. AME also covers provisions for large liabilities in reality payable over many years. A provision scores against AME once it is payable and unavoidable, even if the cost is not payable for some time (sometimes years) Capital AME (Annually Managed Expenditure) DfE budget ,678m Extra Funds ,716m This covers: Student loans made Less repayments made in year New DFE Capital AME: 18,394m DFE

27 Average spending per head in 2014/15, 2015/16 and 2017/18: 5-16 funding 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, Early years budget 5-16 year olds Pupil premium Free School Meal Primary Average 5-16 spending went down in cash terms (Annex E of Estimates Memorandum) Pupil premium Free School Meal Secondary Pupil premium service children Pupil premium local authority care/post-lac children year olds DfE has not given data for y.o. for 2017/18 There is a wide variation between actual spending per head in different areas of England. DFE is to introduce a new national funding formula soon but disparities will remain

28 Environment, Food and Rural Affairs

29 millions 2017/18 DEFRA Day-to-day budget (Resource DEL) Day-to-day Spending: Resource DEL (Departmental Expenditure Limits) 2,500 2,000 1,500 Increase sought now 5% increase: 102m DEFRA 1,000 Budget proposed in / / / / / / / / / /20 Previous years Budget increase sought Planned future budget Changes in Day-to-day budget: This has been fairly common practice within the Department as identifying the resource /capital split of projects is difficult at the beginning of the year 24m 58m 30m 10m 102m Extra funds including: 12m for Environment Agency for recovery and resilience against flooding 7m for improving air quality Extra funds for Exiting the EU Net transfers from other Departments, including: 28m from DFID for the International Climate Fund 1m from DIT for the Food is Great campaign Transfer from Day-today (Resource) to Investment (Capital) budget (largely within the Environment Agency) Increase in Day-to-day spending

30 millions DEFRA 2017/18 DEFRA Investment budget (Capital DEL) Investment Budget: Capital DEL (Departmental Expenditure Limits) Reduction sought now 2010/ / / / / / / / / /20 Budget proposed in % reduction in Investment budget 41m Previous years Budget reduction sought Planned future budget Changes in Investment Budget: 6m 9m 10m 30m 36m 41m Extra funds, including 5m for Environment Agency funding for flood resilience Extra funds for Exiting the EU Transfer from Resource budget (Day-to-day) largely within Environment Agency Re-profiling the Flood and Coastal Risks Management (FCRM) budget from to Net amount transferred to other Departments, including 27m to DFID for the International Climate Fund Reduction in Investment budget

31 DEFRA Changes in Resource Annually Managed Expenditure (AME): AME is spent on unpredictable or difficult to control items, and is usually demand-led (welfare, tax credits etc) Provisions (money set aside for an event that may occur in future) are initially recognised in AME 154% increase ( 162m): DEFRA budget m Provision for Metal Mines and Foot and Mouth Disease m (this is due to a change in the discount rate, which has been lowered in the latest guidance from the Treasury) Potential flood defence impairments m Flood Re s budget m (forecasts for spending for first year of operation were conducted on a conservative basis, so spending is likely to be lower) New DEFRA Resource AME: 267m

32 Exiting the EU

33 2017/18 DExEU budget Day-to-day spending: Resource DEL (Departmental Expenditure Limits) 24.6m reduction (24%) DExEU Investment budgets : Capital DEL (Departmental Expenditure Limits) Capital m Proposed budget Planned future budget 24.6m 0.36m Increase in estimate for depreciation (non-cash) 20m Returned to Treasury 0.965m Transfer of Europe Adviser to the PM and Secretariat function from DExEU to the Cabinet Office m Transfer to the National Archives to prepare to publish new UK legislation that incorporates laws previously covered by EU legislation. 0.38m Transfer to the FCO for a number of UK Representative to Brussels (UKREP) roles that will help support the Brexit negotiations 0.7m Transfer to capital budget for IT 2.5m Transfer to Annually Managed Expenditure Budget (provision for litigation)

34 DExEU supports the Prime Minister to deliver the Government s objective of exiting the EU, including: the negotiation of the UK s future relationship with the EU Working very closely with the UK s devolved administrations, Parliament, and a wide range of other interested parties on what the approach to those negotiations should be Key Responsibilities Leading and co-ordinating cross-government work to seize the opportunities and ensure a smooth process of exit on the best possible terms Main Priorities of DExEU: Ensuring the government is able to take initial decisions on UK s withdrawal on the basis of the best possible advice Strengthening capability across government in preparation for the work ahead Reaching out to stakeholders in order to understand and capture their views Establishing the department and setting it up to succeed DExEU The policy work to support the UK s negotiations to leave the EU and to establish the future relationship between the EU and the UK Conducting the negotiations in support of the Prime Minister including supporting bilateral discussions on EU exit with other European countries

35 Foreign and Commonwealth Office

36 millions Changes to 2017/18 FCO Day-to-day budget (Resource DEL) Day-to-day Spending: Resource DEL (Departmental Expenditure Limits) 2,500 2,000 Increase sought now 4% increase in Resource DEL: 79.5m FCO 1,500 1,000 Budget proposed in Expenditure Proposed budget Planned future budget Note: planned future budget excludes peacekeeping and CSSF Changes in Resource DEL (see next slide for details): 96.7m 4.6m 12.7m 79.5m increase in Resource DEL Net additional funds from the Treasury Net transfers to other Departments These are mostly routine transfers to DFID and other departments related to CSSF [Conflict, Stabilisation and Security Fund]and the Prosperity Fund. Transfer from Resource to Capital

37 What is FCO requesting new money for? What are major transfers between Departments? 143.9m of new money from the Treasury for following activities: FCO (Main movements identified only) 49.4m Consular premiums collected in the UK by the Home Office (routine transfer) Hurricane recovery costs 1.2m 38.3m International Subscriptions (routine transfer) 3.9m Support for EU exit costs 0.2 m Funds for Sousse Memorial 27.5m Depreciation of overseas estate (non-cash) increased due to fall in the value of Sterling 14.4m 9m Excess cost of overseas inflation Non- ODA for BBC World Service work local initiatives, countering disinformation and civil society engagement 47.2m returned to Treasury: 36m from the CSSF to cover the cost of the EU s Common Foreign and Security Policy (CFSP) which is paid centrally rather than by the FCO 11m from the FCO s Foreign Currency Mechanism, because, over the year as a whole, sterling was stronger than in the FCO baseline year of As a result of the fall in sterling during the year, the amount returned is smaller than in previous years

38 millions Changes to 2017/18 FCO Investment budget (Capital DEL) FCO Investment spending: Capital DEL (Departmental Expenditure Limits) Increase sought now Budget proposed in % increase in Capital DEL: 3.2m Expenditure Proposed budget Planned future budget Changes in Capital DEL: 12.7m 6.6m 16m 3.2m increase in Capital DEL Transfer from Resource to Capital Transfer from other Departments (Main one: 5.1m from DfID for Kathmandu) Proceeds from disposal of Bankgok residence banked at the Treasury. This can be used in future years by the FCO for asset purchases. (FCO uses income from asset disposals to fund its asset acquisitions)

39 Health and Social Care

40 millions Changes to 2017/18 DHSC Day-to-day budget (Resource DEL) Day-to-day spending: Resource DEL (Departmental Expenditure Limits) 140, , ,000 Increase sought now 1.8% increase in Day-to-day budget: 2,098m 80,000 60,000 Budget proposed in ,000 20, / / / / / / / / / /20 This is the fourth year that some of the NHS investment has been diverted to running costs (see next slide). Previous years Budget increase sought Planned future budget Changes in Day-to-day budget: 1,000m Transfer from Investment to Day-to-day Budget 337m 267m 394m 100m 2,098m Extra funds announced in Autumn Budget 2017 Extra funds for reciprocal healthcare arrangements with the EEA Extra funds to cover the change in the Personal Injury Discount Rate the lower discount rate increases the value of claims Transfers from investment (capital) to day-to-day (resource) are NOT NORMALLY ALLOWED. Risk that cutting back on investment could result in increased future maintenance costs. Other transfers Increase in Day-to-day spending

41 millions millions Changes to 2017/18 DHSC Investment budget (Capital DEL) Investment budget: Capital DEL (Departmental Expenditure Limits) 8,000 7,000 6,000 5,000 Reduction sought now 8% reduction in Investment budget: 486m 4,000 3,000 Budget proposed in ,000 1, / / / / / / / / / /20 Previous years Budget reduction sought Planned future budget Transfers from Investment to Day-to-day budgets over the last 4 years: 7,000 6,000 5,000 4,000 3,000 2,000 1, ,200 1, Transfer to Day-to-day Budget Remaining Investment Budget 506m Extra funds announced in the Autumn Budget m Other transfers 1,000m Transfer from Investment to Day-to-day budget 486m Reduction in Investment budget

42 Home Office

43 millions HO 2017/18 HO Day-to-day budget (Resource DEL) Day-to-day Spending: Resource DEL (Departmental Expenditure Limits) 14,000 12,000 Increase sought now 0.3% increase: 29m 10,000 8,000 6,000 4,000 Budget proposed in , / / / / / / / / /20 Previous years Budget increase sought Planned future budget Changes in Day-to-day budget: 162m 75m 58m 29m Claims on the Treasury Reserve These include: 80m for Asylum Support 42m for EU Exit costs 24m for Counter Terrorism relating specifically to the London and Manchester attacks 15m for the HO contribution to the FCO overseas platform costs Neutral transfers switches between programme budgets, including: 110m reduction in crime policing and fire 42m increase for HO central functions Net transfers from other Departments, including 79m to DH and Devolved Administrations for Immigration Health Surcharge Increase in Day-to-day budget Immigration Health Surcharge is an additional fee that is applied to visa charges in order to help fund the NHS ; this income is collected by HO and then transferred to the NHS and devolved administrations.

44 millions HO 2017/18 HO Investment budget (Capital DEL) Investment Budget: Capital DEL (Departmental Expenditure Limits) Increase sought now Budget proposed in / / / / / / / / / /20 19% increase in Investment budget 97m Previous years Budget increase sought Planned future budget Changes in Investment Budget: 79m 18m Net amount transferred from other Departments: 75m switch from Resource to Capital from HMT (unclear if this is new funding, or is a re-profiling of planned future spending) 5m from the National Crime Agency Extra funds for EU Exit 97m Increase in Investment budget

45 Changes in spending on various programmes: Day-to-day Spending: HO Crime, Policing and Fire - 77m Office for Security and Counter Terrorism +67m Central Department and Corporate Enablers +47m Enablers is the central Home Office and administration function Investment Spending: Crime, Policing and Fire + 77m Border Force - 6m Office for Security and Counter Terrorism - 19m Central Department and Corporate Enablers +48m UKVI - 6m

46 International Development

47 'millions Changes to 2017/18 DfID Day-to-day budget (Resource DEL) Day-to-day spending: Resource DEL (Departmental Expenditure Limits) 9,000 8,000 7,000 Increase sought now Less than 1% increase in Resource DEL: 52m DFID 6,000 5,000 4,000 3,000 Budget proposed in ,000 1, Acutal outturn Budget increase sought Changes in Resource DEL: Transfers from capital to resource are NOT NORMALLY ALLOWED. Possible concerns that investment budgets are being raided to fund DfID running costs. 137m Transfer from Capital to Resource 75m 10m 52m Net transfers to/from other Departments (largest 70m transfer to FCO for the Prosperity Fund) Reduction in the Resource budget

48 'millions Changes to 2017/18 DfID Investment budget (Capital DEL) Investment Budget: Capital DEL (Departmental Expenditure Limits) 3,500 Reduction sought now 5% reduction in Capital DEL: 141m DFID 3,000 2,500 2,000 1,500 1,000 Budget proposed in Actual outturn Budget reduction sought Changes in Capital DEL: 124m 137m 128m 141m reduction in Investment budget Transfers from other departments, the main one being 91m from Treasury for funding of Asian Infrastructure Investment Bank Transfer from Capital to Resource Transfer to Annually Managed Expenditure for capital injection into Commonwealth Development Corporation (CDC)

49 International Trade

50 millions 2017/18 DIT Day-to-day budget (Resource DEL) Day-to-day Spending: Resource DEL (Departmental Expenditure Limits) Increase sought now 7.5% increase: 27.3m Budget proposed in Previous years Increase sought Planned future budget Changes in Day-to-day budget: 22.9m 27.3m 20.3m 2.6m 27.3m Extra funds to prepare for EU Exit Reserve funding for DIT oversight of the GREAT campaign Net amount transferred to other Departments for their spending on GREAT campaign Other transfers Increase in Day-to-day budget

51 millions 2017/18 DIT Investment budget (Capital DEL) Investment Budget: Capital DEL (Departmental Expenditure Limits) Increase sought now 186% increase in Investment budget 12.4m Budget proposed in Previous years Increase sought Planned future budget Changes in Investment Budget: 6.9m 4.0m 1.5m 12.4m Extra funds to prepare for EU Exit Transfer from BEIS for Cirrus IT programme Switch from RDEL to CDEL Increase in Investment budget

52 Defence

53 millions 2017/18 MOD Day-to-day budget (Resource DEL) Day-to-day Spending: Resource DEL (Departmental Expenditure Limits) 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Increase sought now 2010/ / / / / / / / / /20 Budget proposed in % increase: 184m MOD Previous years Budget increase sought Planned future budget Changes in Day-to-day budget: 1,102m Extra funds from the Treasury (see next slide for detail) 900m Transfer from Resource (Day-to-day) to Investment (Capital) for SUME (Single Use Military Equipment) 9.5m Carried over to future years ( Budget Exchange ) 5m Net amount transferred to other Departments 2.5m Fine by HMT for MoD performance in cash forecasting This includes: - 26m to SIA for Operations and Peacekeeping + 34m from the CO for the CSSF + 29m from FCO for the CSSF 184m Increase in Day-to-day budget

54 Extra funds from the Treasury (Reserve Claims) in Day-to-day budget: MOD 530m for the Raw Materials and Consumables (RMC) Amnesty MOD has been asked to absorb the impact of changes in accounting treatment for RMC in an exceptional, one-off removal of obsolete items from the MoD balance sheet. (included in the ring-fenced budget for depreciation and impairments). 122m for the Armed Forces community Funded by fines paid by the financial sector for manipulation of LIBOR 386m for Operations and Peacekeeping 64m for Operations and Peacekeeping depreciation (included in the ring-fenced budget for depreciation)

55 millions 2017/18 MOD Investment budget (Capital DEL) Investment Budget: Capital DEL (Departmental Expenditure Limits) 12,000 10,000 Increase sought now 15% increase: 1,264m MOD 8,000 6,000 4,000 Budget proposed in , / / / / / / / / / /20 Previous years Budget increase sought Planned future budget Changes in Investment Budget: 200m 900m 159m 1,264m Budget adjustment (no detail is given for this extra expenditure) Transfer from Resource Budget (Common to transfer day-to-day spending to budget for SUME) New funds from the Treasury: 154m for Operations and Peacekeeping 5m for Loans to Museums Increase in Investment budget

56 Major changes within the budget (excluding Operations): MOD Changes in different areas of spending ( millions and % change) Service Personnel Costs -3% These reductions may represent difficulties in recruitment Civilian Personnel Costs -9% Infrastructure Costs -2% Inventory Consumption Equipment Support Costs -19% 3% Not clear whether this increase represents pressures from the Equipment Plan (highlighted by the NAO) Research and Development Costs 190% Other Costs and Services 25% Fiscal Capital SUME Capital Research & Development -32% Income and receipts have fallen by 653m (25%). 17% 29% Total Spending on R&D in RDEL and CDEL has decreased by 485m. Therefore, spending on equipment and R&D combined has decreased by 307m. There is a NATO target that equipment spending (including R&D) represents 20% of total defence spending. In 2017 NATO analysis showed the UK was spending 22%.

57 Operations and Peacekeeping: MoD pays for ongoing military operations through claims on the Treasury Reserve in the Estimate MOD In total an additional 640m is required for operations, including: 386m Day-to-day (Resource DEL); 64m ring-fenced Resource DEL depreciation; 34m from CO for CSSF; 29m from FCO for CSSF; 154m Investment; Less - 26m in transfers to SIA. Most of Operations and Peacekeeping Spending has been for operations against Daesh; this accounts for virtually all Investment spending Operations and Peacekeeping (total budget), millions Counter Daesh CSSF Afghanistan Wider Gulf NATO enhanced Forward Presence (Estonia/Poland) Other (inc DMAP) Main Budget Estimate proposed in 2017 (Main Estimate) Estimate Extra funds from the Reserve Treasury Claim (reserve claim at Estimate)

58 Justice

59 millions 2017/18 MOJ Day-to-day budget (Resource DEL) Day-to-day Spending: Resource DEL (Departmental Expenditure Limits) 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1, / / / / / / / / / /20 Previous years Budget increase sought Planned future budget Changes in Day-to-day budget: Increase sought now Budget proposed in % increase: 579m MOJ 348m 235m 4m New funds from the Treasury, including: 250m for a shortfall in probate income, as planned increases in fees could not be implemented before the general election 77m for the Court Reform programme (preagreed in the Autumn Statement m for emerging risks within the department. Transfer from Investment to Day-to-day budget Net amount transferred to other Departments Transfers from Investment (Capital) to Day-to-day (Resource) are NOT NORMALLY ALLOWED. Possible concerns that investment budgets are being raided to fund running costs. 579m Increase in Day-to-day budget

60 millions 2017/18 MOJ Investment budget (Capital DEL) MOJ Investment Budget: Capital DEL (Departmental Expenditure Limits) Reduction sought now 2010/ / / / / / / / / /20 Budget proposed in % reduction: 317m Previous years Budget reduction sought Planned future budget Changes in Investment Budget: 10m 235m 103m Extra money for emerging risks within the department Transfer from Investment to Day-to-day budget Carried over to future years- Budget Exchange (likely from the prison reform programme) 11m Transfer from MHCLG to provide social housing 317m Reduction in Investment budget

61 MOJ Significant Changes: Day-to-day (Resource DEL) spending on Policy, administration and corporate services has increased significantly, for a mix of reasons, including the capital to resource switch and HMT funding for probate fees (see previous slides) being held centrally, and a number of back-office functions transferring to MoJ HQ from HMPPS, LAA and OPG. HMPPS Day-to-day spending is decreasing by around 3%, despite pressures in prisons does this suggest funding for new officers is not being spent? 60m additional funding is transferred to Legal Aid Agency to alleviate increased demand. Judicial Appointments Commission has been given a 10% increase in funding for a recruitment drive for new judges. Investment spending on Policy, administration and corporate services has decreased by 50%, due to the capital to resource switch. HMPPS spending has decreased by nearly 70%, as capital is no longer required in-year it appears this is under Budget exchange and a significant proportion will still be available next year. It is not clear how this relates to the progress of the Prisons Reform plan. Investment budget ( millions) Policy, administration and corporate services Prison and Probation Courts and Tribunals Legal Aid and Services Youth Justice Board Other Budget proposed in 2017 ME Proposed SE new budget

62 MOJ Judicial Pension Scheme MoJ is also responsible for the Judicial Pension Scheme. This is funded through Annually Managed Expenditure (as it is harder to forecast, and significant changes to the required provision can occur through changes to the discount rate, for example). The Resource Annually Managed Expenditure provision has increased by 139m. 150m of this relates to the finding in favour of the claimants in the McCloud case, whereby the transitional protection offered to some judges in transferring between the 1993 and 2015 judicial pension schemes was found to be discriminatory. There are then several small offsetting decreases in spending.

63 Transport

64 millions 2017/18 DfT Day-to-day budget (Resource DEL) Day-to-day Spending: Resource DEL (Departmental Expenditure Limits) 7,000 6,000 Increase sought now 8.6% increase in Day-to-day budget: 308m 5,000 4,000 3,000 2,000 1,000 0 Budget proposed in / / / / / / / / / /20 Previous years Budget increase sought Planned future budget Changes in Day-to-day budget: 60m 100m 75m 68m 5m 308m Extra funds from the Treasury to partially cover the reduction in Passenger Rail income Increased depreciation of roads. This is a non-cash cost HS2 property stock revalued downwards. This is a non-cash cost Costs of repatriating and reimbursing passengers following Monarch airlines collapse. Net effect of Other transfers Increase in Day-to-day spending

65 millions 2017/18 DfT Investment budget (Capital DEL) Investment Budget: Capital DEL (Departmental Expenditure Limits) 12,000 10,000 Increase sought now 0.3% increase in Investment budget 22.3m 8,000 6,000 4,000 2, / / / / / / / / / /20 Budget proposed in 2017 Previous years Budget increase sought Planned future budget Changes in Investment Budget: 211m 167.4m 111.8m 90.5m 22.3m Extra money to cover the risk that HS2 Ltd will have to pay back recovered VAT Transfer of budgets to Network Rail (into Capital AME) Unspent funds to be used in future years ( Budget Exchange ) Other transfers Increase in Investment budget

66 Key changes in Network Rail investment (Capital AME):

67 Work and Pensions

68 millions Changes to 2017/18 DWP Resource AME budget are very small: DWP Resource AME budget is used for paying pensions, benefits, etc. Resource AME (Annually Managed Expenditure) 200, , , , , ,000 80,000 60,000 40,000 20,000 0 Increase sought now 1.8% increase in Resource AME: 3,198m Budget proposed in / / / / / / / / / /20 Extra funds: 1,400m: Addition of routine safety margin (e.g. for cold weather payment) 899m: For PIP and ESA legal case liabilities 917m: For Financial assistance scheme (discount rate change) Previous years Budget increase sought Planned future budget

69 millions Changes to 2017/18 DWP Day-to-day budget (Resource DEL) DWP Resource DEL budget is used for admin, running costs, staff costs, etc. Day-to-day spending: Resource DEL (Departmental Expenditure Limits) 2.7% reduction in Day-to-day spending: 172m 10,000 8,000 Reduction sought now 6,000 4,000 2, / / / / / / / / / /20 Budget proposed in 2017 Previous years Budget reduction sought Planned future budget Changes in Day-to-day spending: 2m 45m Extra funds from Treasury (cash rebate) Carried forward into next year 6m 123m Net transfers to other Departments Transfer to Investment (Capital DEL) for DWP Change programmes (This increases Investment budget by 33%). 172m reduction in Day-to-day budget

70 Treasury and HMRC

71 millions millions Major changes in budget of HM Treasury in 2017/18 Estimates: Departmental Expenditure Limits Budgets: Day-to-day (Resource): July 2017 planned budget Investment (Capital): 187 July 2017 planned budget 40% increase 91% reduction February 2018 proposed budget 17.5 February 2018 proposed budget Day-to-day spending (Resource DEL) changes include: Oil and gas decommissioning m Exiting the EU m Legal costs for case against Bank Mellat, an Iranian bank m Other changes...+ 2m Total changes: + 68m Investment spending (Capital DEL) changes include: Infrastructure UK investment in PF2 schools projects m Loan repayment to Infrastructure Finance Unit Ltd m Transfer to DFID for Asian Infrastructure Bank m Other changes m Total changes: m Resource: 24.8bn increase Capital: Annually Managed Expenditure: Changes in AME are largely due to changes in the value of assets held by HMT and an asset sale which concluded more quickly than expected 10.2bn increase The largest changes are due to: Forecast reduction in the fair value of the Bank of England Asset Purchase facility fund (i.e. Quantitative Easing assets) which increase Resource AME by 25.05bn. Sale of Bradford and Bingley loan assets which had been expected to take place in but took place in had the effect of increasing Capital AME by 11.3bn this year.

72 Major changes in budget of HMRC in 2017/18 Estimates: Departmental Expenditure Limits Budgets: Day-to-day (Resource DEL) changes: Main estimate RDEL total... 3,947m 2017 Autumn Budget m EU exit preparatory work m Transfer from Resource to Capital DEL m Other transfers m Total increase: 34.3m (0.9%) Resource annually Managed Expenditure: Key changes include: Total RAME reduction: - 343m (-0.8%) from 42,388m to 42,045m Tax-free Childcare: - 346m (-90%) decrease from 383m to 37m due to low take up Estimate RDEL total... 3,981m Other tax reliefs: + 303m (+9%) increase from 3,524m to 3,827m for higher than expected use of tax reliefs (including R&D, TV, Video Games) Investment (Capital DEL) changes due to: Main estimate CDEL total m EU exit preparatory work m Transfer from Resource to Capital DEL m Transfers to other departments m Estimate CDEL total m Total increase: 35.5m (14.4%) Personal tax credit: - 491m (-1.8%) decrease from 26,721m to 26,230m Child benefit: 175m (1.5%) increase from 11,579m to 11,754m due to accounting adjustment

73 Scotland

74 millions Changes to 2017/18 Scotland Office s budget: Day-to-Day Spending: Resource DEL (Departmental Expenditure Limits) SCOTLAND This includes 13.8m extra funds to cover the cost of the 2017 UK General Election in Scotland 2017 General election Administration Costs Other Other changes: 0.5m: reserve claim for VAT liabilities (routine) 0.14m: reserve claim for EU exit preparations staff costs 0.05m: transfer to Capital Investment Spending (Capital DEL) has doubled from 0.05m to 0.1m (due to transfer of 0.05m from Resource to Capital)

75 millions Changes to 2017/18 Scotland s Day-to-Day budget (Resource DEL) Day-to-day Spending: Resource DEL (Departmental Expenditure Limits) 30,000 25,000 20,000 Increase sought now 0.1% increase in Day-to-day budget: 20.2m SCOTLAND 15,000 10,000 5, / / / / / / / / / /20 Budget proposed in 2017 Block Grant Budget increase sought Planned future budget Changes in Day-to-day Spending: 37.5m Barnett Consequentials 78m Personal injury discount rate 12.1m Net transfer from other Departments 23.7m Apprenticeship levy 5.2m EU exit funding 88.5m Revisions to block grant adjustments 150m Reduced non-cash requirement 100m Fiscal framework implementation costs 2.1m Other adjustments 20.2m Increase in Day-to-day budget

76 millions SCOTLAND Changes to 2017/18 Scotland s Investment budget (Capital DEL) Investment Spending: Capital DEL (Departmental Expenditure Limits) 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, Increase sought now Budget proposed in / / / / / / / / /20 7.2% increase in Investment budget: 245m Capital DEL Budget increase sought Planned future budget Changes in Investment Budget: 222.5m Barnett Consequential (2017 Autumn Budget) 6.1m 15m Budget Glasgow Transfer city deal 1.4m EU Exit funding 245m Increase in Investment budget

77 What shows up in the Estimate: SCOTLAND The Scotland Office Estimate routinely includes: Funding for the Scotland Office; Cash grant to Scotland Government - this is derived from Scotland Government's budget [Resource DEL + Capital DEL +Annually Managed Expenditure] with adjustments mainly taking out non-cash items such as depreciation Estimate has increased cash grant by 71.8m (0.4%) to 16,816m Pay-over of income tax this is income tax that HMRC collects on behalf of the Scottish Government and is then pays over to the Scottish Government. Estimate increased this by 29m (0.2%) to 11,858m

78 SCOTLAND The Barnett Formula Change (rise or fall) in Resource DEL budget determined by UK government Share of change related to functions RESERVED TO UK GOVERNMENT (e.g., defence) Share of change related to DEVOLVED FUNCTIONS (e.g., health) Population share (compared to England or England and Wales) Scotland s population compared to England s: 2010 Spending Review: 10.03% 2015 Spending Review: 9.85% This reduction in population share will mean slightly smaller increases and decreases in funding for Scotland from the Barnett Formula than would have resulted if the share had remained as before. Extra funding available to the governments of Scotland, Wales and Northern Ireland (may also be a spending cut) These funds can be spent on ANY DEVOLVED FUNCTION NO CHANGE TO THE BLOCK GRANT provided to Scotland, Wales and Northern Ireland Example: Increase of 100m in UK Departments Resource DEL budget. 75% relates to functions which are 9.85% (Scotland s population compared to England) Extra 7.388m to Scottish government devolved; 25% are UK reserved functions. Block grant adjustments: in addition block grant adjustments can be made: reductions where taxes are devolved or additions where welfare is devolved.

79 Wales

80 'milions WALES Changes to 2017/18 Wales Govt Day-to-day budget (Resource DEL) Day-to-day budget: Resource DEL (Departmental Expenditure Limits) Increase sought now Budget proposed in Actual out-turn Budget Budget Budget 2.9% increase: 413.3m Changes in Day-to-day budget: 8.3m 92.5m 5.5m 365m 43m 14.9m 413.3m Barnett Consequential (Mostly 2017 Autumn Statement) Funds carried forward from previous years ( 79m cash and 13m non cash) ( Budget Exchange ) Net transfer from other Departments, including: 3.8m from HO for Immigration Health surcharge Transfer from Dayto-day (Resource New money from the Treasury for various projects, including: DEL) to Investment 300m for Student Loans (non-cash) (Capital DEL) budget 39m for Personal Injury Claims 3m for preparations for Exiting the EU Efficiency savings Increase in Day-to-day budget

81 'milions WALES Changes to 2017/18 Wales Govt Investment budget (Capital DEL) Investment budget: Capital DEL (Departmental Expenditure Limits) 22.6% increase: Increase sought now 362.7m Budget proposed in Actual out-turn Budget Budget Budget Changes in Investment budget: 0.73m 126.6m 185.9m 43m 6.5m 362.7m New funds for leaving the EU Barnett Consequential ( 33m capital arising from Autumn Budget measures + 90m financial transactions arising from Help to Buy Scheme - Autumn Budget measure) Funds carried forward from previous years ( Budget Exchange ) Transfer from Resource to Capital DEL budget Transfer from other government departments Increase in Investment budget

82 What shows up in the Estimate: WALES The Wales Office Estimate routinely includes: Funding for the Wales Office Estimate has increased Day to day spending (Resource DEL) by 0.55m to 5.11m, Main changes are additional funds for: Higher than expected legal costs 0.444m; EU exit work m Investment spending (Capital DEL) by 0.09, to 0.12m due to additional funds for capital works. Cash grant to Wales Govt - this is derived from Wales Govt budget [Resource DEL + Capital DEL +Annually Managed Expenditure] with adjustments mainly taking out non-cash items such as depreciation Estimate has increased cash grant by 470.9m (3.3%) to 14,789m

83 The Barnett Formula Change (rise or fall) in Resource DEL budget determined by UK government WALES : a new needs-based factor will be included in the Barnett Formula to determine changes to Welsh Government block grant funding. A transitional factor of 105% will be set for the moment, increasing to 115% in the future. Share of change related to functions RESERVED TO UK GOVERNMENT (e.g., defence) Share of change related to DEVOLVED FUNCTIONS (e.g., health) Population share (compared to England) Wales compared to England: 2010 Spending Review: 5.79% 2015 Spending Review: 5.69% This reduction in population share will mean slightly smaller increases and decreases in funding for Wales from the Barnett Formula than would have resulted if the share had remained as before. Extra funding available to the governments of Scotland, Wales and Northern Ireland (may also be a spending cut) These funds can be spent on ANY DEVOLVED FUNCTION NO CHANGE TO THE BLOCK GRANT provided to Scotland, Wales and Northern Ireland Example: CHANGE EXAMPLE Increase of 100m in UK Departments Resource DEL budget. 75% relates to functions which are devolved; 25% are UK reserved functions. 5.69% (Wales s population compared to England) Extra 4.268m to Welsh government

84 Northern Ireland

85 millions NORTHERN IRELAND Changes to 2017/18 Northern Ireland Govt's Day-to-day budget (Resource DEL) Day-to-day spending: Resource DEL (Departmental Expenditure Limits) 12,000 10,000 8,000 6,000 4,000 2,000 0 Increase sought now Budget proposed in / / / /20 3% increase: 270m Previous years Budget increase sought Planned future budget Transfers from capital to resource are not normally allowed. Possible concerns that investment budgets are being raided to fund running costs. Changes in Day-to-day spending: 270m 39m Funding from Fresh Start 20m 20m 12m Confidence and Supply Agreement (this is the first instalment of the 1 billion funding agreed between Conservative and DUP parties) Return on Welfare reform Barnett Consequential 4m 34m Net transfers from other Transfer from Departments Investment (Capital) to Day-to-day (Resource DEL) 92m Student loan impairment 48m Funds carried forward from previous years ( Budget Exchange ) 1.85m 11m New money for Efficiency EU Exit savings 10m Other changes (mostly Apprenticeship levy) Increase in Day-to-day spending

86 millions NORTHERN IRELAND Changes to 2017/18 Northern Ireland Govt's Investment budget (Capital DEL) Investment budget: Capital DEL (Departmental Expenditure Limits) 1,600 1,400 1,200 1, Increase sought now Budget proposed in / / / /20 5% increase: 61m Previous years Budget increase sought Planned future budget Changes in Investment budget (Capital DEL): 75m 6m 7m Barnett Consequentials Funding from Fresh Start Funds carried forward from previous years ( Budget Exchange ) 6m Net transfers from other Departments 34m Transfer from Investment (Capital) to Day-to-day (Resource DEL) 0.5m New money for EU Exit 61m Increase in Investment budget

87 NORTHERN IRELAND What shows up in the Estimate: Northern Ireland Office Funding Estimate increases Resource DEL (Day to day spending) budget from 22.3m by 3.6m to 25.9m Main changes includes additional funding for: 0.32m for the Independent Reporting Commission 0.216m for EU exit preparations 4.581m for 2017 general election m budget carry forward to relation to publication costs Estimate increases Capital DEL (Investment spending) budget from 0.53m by 1.125m to 1.655m m: transfer of resource to capital (reflect the correct classification for improvements to Departmental IT systems and security arrangements) Cash grant to Northern Ireland Government Estimate reduces cash grant by 2.4% ( 0.378m) from 15.7m to 15.3m: It is notable that even though the Estimate shows increases to the resource and capital budgets of the block grant (Departmental Expenditure Limits), it seeks a reduction in the cash grant paid of million (-2.4%) from the Main Estimate. This is because various adjustments are made to resource and capital Departmental Expenditure Limits and Annually managed expenditure (which comprises mainly welfare payments, public sector pensions and student loans) to get down to the cash grant. These adjustments are mainly due to differences in timing between expenditure incurred in arms-length bodies of the Executive and cash paid out to them and also removal of non-cash expenditure items such as depreciation.

88 NORTHERN IRELAND The Barnett Formula Change (rise or fall) in Resource DEL budget determined by UK government Share of change related to functions RESERVED TO UK GOVERNMENT (e.g., defence) Share of change related to DEVOLVED FUNCTIONS (e.g., health) Population share (compared to England or England and Wales or Great Britain) Northern Ireland compared to England: 2010 Spending Review: 3.45% 2015 Spending Review: 3.39% This reduction in population share will mean slightly smaller increases and decreases in funding for Northern Ireland from the Barnett Formula than would have resulted if the share had remained as before. Extra funding available to the governments of Scotland, Wales and Northern Ireland (may also be a spending cut) These funds can be spent on ANY DEVOLVED FUNCTION NO CHANGE TO THE BLOCK GRANT provided to Scotland, Wales and Northern Ireland Example: Increase of 100m in UK Departments Resource DEL budget. 75% relates to functions which are devolved; 25% are UK reserved functions. 3.39% (Northern Ireland s population compared to England) Extra 2.543m to Northern Irish government