Supplementary Estimates memorandum ( ) for Department for International Development

Transcription

1 Supplementary Estimates memorandum ( ) for Department for International Development 1 Overview 1.1 Objectives The Department for International Development s (DFID) objectives, as set out in its published Single Departmental Plan 1, are as follows: 1. Strengthen global peace, security and governance 2. Strengthen resilience and response to crisis 3. Promote global prosperity 4. Tackle extreme poverty and help the world s most vulnerable 5. Deliver value for money and efficiency 1.2 Spending controls DFID s spending is broken down into a several different spending totals, for which Parliament s approval is sought. The spending totals which Parliament votes are: Resource Departmental Expenditure Limit ( Resource DEL )- money that is spent on resource and administration costs Capital Departmental Expenditure Limit ( Capital DEL ) - money that is spent on investments and assets to create growth in the future for either the UK or our partner governments. Resource Annually Managed Expenditure ( Resource AME )- annually managed expenditure, for spending that is considered difficult to control within fixed budgets due to its size or volatility Capital Annually Managed Expenditure ( Capital AME ): - annually managed capital expenditure. DFID are required to record capital injections in DFID s wholly owned self-financing public corporation, CDC Group plc (CDC) as prescribed by the Government budgeting rules. In addition, Parliament votes a net cash requirement, designed to cover the elements of the above budgets which require DFID to pay out cash in year

2 1.3 Main areas of spending The graphic below shows the main components of DFID s proposed budget for the current year, after taking account of the latest Supplementary Estimate, and the proportions of funds spent on its main activities. Resource DEL 2

3 Capital Budget 1.4 Comparison of spending totals sought The table and graphic below show how the totals sought for DFID compare with original budget set out in the Main Estimates: Supplementary Estimates( m) Main Estimates ( m) Change ( m) % Change Resource DEL 7,325 7,479 (-154.3) (-2.1%) Capital DEL 3,129 2, Capital AME Resource AME (-75) 0 (-75) (-100%) Total Managed Expenditure 11,115 10, % 3

4 1.5 Key drivers of spending changes since original budget The main causes of the changes are: Additional budget received from HMT and OGD s was received as Resource DEL budget. We have agreed with HMT to transfer Resource DEL to Capital DEL to better reflect DFID s 2018/19 spending plans to ensure the Department delivers against the UK Aid Strategy commitments whilst also achieving value for money. HMT allocated additional budget to DFID to deliver HMG s commitment to spend 0.7% of GNI on Official Development Assistance (ODA). Budget cover received from other government departments to ensure delivery of 0.7% commitment. Detail of transfers in/out can be found in Annex A 1.6 New policies and programmes; ambit changes The Government Equalities Office and its Arm s Length Body (ALB) Equalities and Human Right commission moved to DFID under a Machinery of Government change announced 28 April Spending trends The charts below show overall spending trends for the last five years and plans presented in Estimates for

5 Resource DEL has remained broadly stable in the past 5 years with increases in as additional budget received at supplementary estimates was utilised on Programme RDEL. Capital DEL budget has increased year on year as DFID s financial transactions ring-fenced budget has increased over the period. Resource AME is used primarily for accounting adjustments to provisions and financial instruments such as loans and shares. In line with ODA rules DFID has decreased the number of loans being issued resulting in a reduction Resource AME in 2018/19. Capital AME budget is used to make investments in DFID s wholly owned self-financing public corporation, CDC Group plc (CDC). Capital injections into CDC contributes towards DFID s financial transactions target. 1.8 Administration costs and efficiency plans DFID is on track to make almost 500 million in efficiency savings by 2019/20, higher than the 400m target set in the 2015 Spending Review. The department s overall administration spend has decreased as a percentage of Total DEL from 1.58% ( 123 million) in to 0.97% ( 100 million) in This represents a reduction of 17%. 5

6 2. Spending detail 2.1 Explanations of changes in spending Resource DEL The table below shows how DFID s spending plans for Resource DEL compare with earlier this year. Resource DEL budget has decreased by 154.3m. Subheads Description Resource DEL million Supp Main change in year Estimate Estimate % see note number A CSC (ALB) (net) scholarship relating to developing countries % B Total Operating Costs % C Independent Commission for Aid Impact (ALB) (net) % D Conflict, Stability and Security Fund % 1 E Regional Programmes 3, , % F Other Central Programmes % 2 G Policy Priorities, International Organisations and Humanitaria 2, , % H Prosperity Fund % 3 I Equality and Human Rights Comission (ALB) (Net) % 4 J Government Equalities Office % 4 Non-Voted Expenditure : K European Union Attributed Aid % 5 total voted and non voted 7, , % spending in Annually Managed Expenditure (AME) Voted expenditure : L Other Central Programmes % 6 M Policy Priorities, International Organisations and Humanitarian Total Spending in AME % Total for Estimate 7, , % Differences of more than 10% which are more than 10 million are explained below. Numbers relate to the relevant row in the table above. Further detail of spending within these totals is given in the Table at Annex A. 1. Conflict Stability and Security Fund Increased requirement for conflict funding in DFID regional programmes including Iraq, Pakistan and Jordan. 2. Other Central Programmes - Central Programmes holds the 200m redeployable crisis reserve budget. The budget is allocated to Regional 6

7 Programmes as and when crisis occur. Budget allocated so far this year for crises in Democratic Republic of Congo, Yemen, Afghanistan and Sudan. 3. Prosperity Fund - Prosperity Fund budget was transferred to Capital DEL to reflect the nature of the planned expenditure. 4. Government Equalities Office and Equalities and Human Rights Commission - A Machinery of Government Change announced on 30 April 2018 that the functions of the Government Equalities Office and its Arm s Length Body Equality and Human Rights Commission were to transfer to DFID for the financial year European Union Attributed Aid - A transfer of 49m from voted to non-voted RDEL (EU Attribution) budgets to reflect the latest forecasts. Forecasts for all DFID expenditure are reviewed regularly and subsequently adjusted through the estimates process. The change in the EU Attributed Aid budget is a result of changes in EU disbursements and currency fluctuations. Resource AME 6. Other Central Programmes - Resource AME requirement has reduced by 74m. This is because the department has a more accurate assessment of the impact of adopting new accounting standards. Capital DEL The table below shows how spending plans for Capital DEL compare with the Main Estimate. Capital DEL budget has increased by 476.6m 7

8 Capital DEL Subheads Description million Supp Estimate Main estimate change in year see note % number A CSC (ALB) (net) scholarship relating to developing countries B Total Operating Costs C Independent Commission for Aid Impact (ALB) (net) D Conflict, Stability and Security Fund % E Regional Programmes % 7 F Other Central Programmes % 8 G Policy Priorities, International Organisations and Humanitari 2, , % 9 H Prosperity Fund % I Equality and Human Rights Comission (ALB) (Net) % J Government Equalities Office Non-Voted Expenditure : K European Union Attributed Aid % total voted and non voted 3, , % spending in Annually Managed Expenditure (AME) Voted expenditure : L Other Central Programmes % m Policy Priorities, International Organisations and Humanitari % 10 Total Spending in AME % Total for Estimate 3, , % Differences of more than 10% which are more than 10 million are explained below. 7. Regional Programmes - Capital DEL spending plans set out at Main estimate reduced during the year and allocated to Policy Priorities. 8. Other Central Programmes - Budget transferred from Resource DEL to be allocated to Policy Priorities during Quarter 4 to deliver spending plans. 9. Policy Priorities, International Organisations and Humanitarian - Additional budget from HMT and ODA underspends from other government departments were received as Resource DEL. However, DFID s remaining spending plans are in Capital DEL, primarily through a multi-lateral payment to the International Development Association (IDA). Capital AME 10. Policy Priorities, International Organisations and Humanitarian Increase of 53m from main estimates represents an increase in budget to DFID s wholly owned self-financing public corporation, CDC Group plc (CDC) 8

9 2.2 Ring fenced budgets Within the totals, the following elements are ring fenced i.e. savings in these budgets may not be used to fund pressures on other budgets Ring Fenced Budgets Supplementary Estimates( m) Main Estimates ( m) Change ( m) % Change Financial Transactions % International Climate Fund % The Financial Transaction budget has remained the same, however, budget has been transferred from Capital DEL to Capital AME for DFID s capital injection into CDC. DFID remains on track to deliver its International Climate Fund ringfence. 2.3 Changes to contingent liabilities As a result of the Machinery of Government change, a Contingent Liability in relation to Equality and Human Rights Commission has transferred from the Home Office to DFID. A contingent liability exists regarding pension provision for a Chair and Deputy Chairs of a legacy commission. The Commission does not hold sufficient information to estimate a value. The likelihood of occurrence is deemed possible. 3. Accounting Officer Approval This memorandum has been prepared according to the requirements and guidance set out by the House of Commons Scrutiny Unit, available on the Scrutiny Unit website. The information in this Estimates Memorandum has been approved by the Departmental Accounting Officer. Matthew Rycroft CBE Accounting Officer Permanent Secretary Department for International Development 1 February

10 Annex A Transfers to/from Other Government Departments From To Name of Programme Value of Transfer Admin Programme OGD Budget Transfers: RDEL m RDEL m CDEL m HMT DFID Q ODA increase various DFID ODA underspends from OGDs reallocated HO DFID Government Equalities Office HO DFID EHRC FCO DFID CSSF 20.4 FCO DFID Prosperity Fund 5.7 FCO DFID Hurricane IRMA return of funds 4.4 HMT DFID Rebate through Cashflow Management Schem 0.0 DFID FCO One HMG Project Hotspur - office in Nepal ( 8.2) DFID FCO One HMG overseas platform works ( 2.0) ( 3.9) DFID FCO Africa Strategy ( 3.3) DFID MOD Ex-gratia redundancy scheme Afghanistan ( 1.5) DFID FCO PSVI ToE Deployments ( 0.2) DFID FCO UK support to Madagascar's elections ( 0.1) DFID FCO CW Joint Unit ( 0.0) Net budget transfers in/ (out) between DFID and OGDs ( 1.1) Net transfer in to DFID DFID plans v outturn 2015/16 to 2018/19 m plans outturn variance plans outturn variance plans outturn variance plans Admin % % % RDEL 113 Programme 7,137 7,036 1% 7,411 7,310 1% 7,542 7,457 1% RDEL 7,212 Total RDEL 7,243 7,138 1% 7,524 7,407 2% 7,656 7,557 1% 7,325 voted non voted 6,667 6,644 0% 6,973 6,909 1% 7,155 7,018 2% % % % Total CDEL 2,173 2,125 2% 2,607 2,591 1% 2,747 2,714 1% 3,129 voted non voted 2,173 2,125 2% 2,607 2,591 1% 2,747 2,714 1% Total AME % % % 662 voted non voted % % % , ,129 10

11 Overseas Superannuation Account Memorandum MEMORANDUM ON DEPARTMENT FOR INTERNATIONAL DEVELOPMENT: OVERSEAS SUPERANNUATION SUPPLEMENTARY ESTIMATE Introduction The Estimate covers the payments of pensions and grants under various superannuation schemes relating to service overseas by former colonial public servants. The resource provision within the Estimate is required to fund the interest cost arising during the year. The interest rate is charged on opening discounted provision for future pension payments adjusted for pension payments made in year. All schemes are closed and have no active members. Therefore, there is no resource provision for current service costs. The cash requirement within the Estimate is for the payment of each member s annual pension entitlement and reflects the reduction in pension liabilities. Summary of changes in Departmental spending plans No change from main estimate 11