Northern Ireland Office - Introduction

Transcription

1 9 FEBRUARY 2015 NI AFFAIRS COMMITTEE NORTHERN IRELAND OFFICE (NIO) MEMORANDUM ON THE SUPPLEMENTARY ESTIMATE (SE) This paper explains the background to and consequences of changes sought in the SE for Northern Ireland Office - Introduction The NIO Supplementary Estimate for seeks the necessary resources and cash to support the functions of the NIO. These are continuing functions and no new functions have been added since the Main Estimate. The main purpose of this Memorandum is to provide the NIAC with an overview of the NIO Supplementary Estimate, which is part of the supply procedure. It also gives information on the budgetary changes of the NIE and changes to the cash grant payable to the NICF by the NIO. The Supplementary Estimate seeks approval to a net resource requirement of 14,931,151,000 and a net cash requirement of 14,932,339,000 and for the NIO Departmental Expenditure (DEL) limit, net of depreciation and impairments, will increase from 21,583,000 to 27,551,000. The Memorandum is split into sections covering: (1) Summary of the NIO plans for ; (2) An overview of the Office s Administration Costs; (3) An overview of DEL and AME totals; (4) Details of the grant paid to the Northern Ireland Consolidated Fund; (5) Details of Barnett consequentials for ; (6) Control Totals for the NIE including breakdown by main programme of AME spending; (7) Reconciliation of the SR 2010 settlement for NIE and current Control Totals; and (8) Details of the NI Block to This memorandum has been agreed with HM Treasury.

2 Section 1: Summary of NIO Plans for is the fourth year of the 2010 Spending Review period. From the baseline set in the 2010 Spending Review, the NIO agreed an overall real terms reduction, over the four years, of 25 per cent (and a real terms reduction of 33 per cent in its administration budget). This is in line with the targets set for the other Territorial Offices (SO/WO). Following the collapse of the trial of John Downey in February 2014, the Prime Minister commissioned an inquiry into the on-the-runs (OTR) administrative scheme. On 12 March 2014 Lady Justice Hallett was appointed to conduct an independent review of the scheme. The Review s terms of reference as originally agreed were to produce a full public account of the operation and extent of the administrative scheme for OTRs; to determine whether any letters sent through the scheme contained errors; to make recommendations as necessary on this or related matters that are drawn to the attention of the inquiry. Lady Justice Hallett s report was received by the Government on 16 July 2014, and laid in Parliament the following day. In late September 2014, the Secretary of State for Northern Ireland announced that cross-party talks involving the five parties in the Northern Ireland Executive, the UK and Irish Governments, would commence on Thursday 16 October. The talks focussed on four key areas: finance and budgets (including welfare); the legacy issues of flags, parades and the past; institutional reform and the functioning of the Assembly and Executive; and outstanding commitments of the Agreements. The overarching objective was to ensure that the Executive can once again operate effectively; ensuring political and economic stability. The talks culminated in the Stormont House Agreement of 23 December Section 2: Overview of the Northern Ireland Office s Administration Costs The key purpose of the NIO remains to support the Secretary of State for Northern Ireland in promoting the best interests of Northern Ireland within the United Kingdom. This Estimate provides for the administration costs of the NIO, including the salaries of the Secretary of State and her Minister and payments to the Northern Ireland Consolidated Fund.

3 Section 3: Overview of NIO DEL and AME totals for Departmental Expenditure Limit (DEL) The following adjustments have been made to the Control Totals for NIO since the Main Estimate: Resource Reserve claim to support the outcome of legacy legal cases of 1,800K Reserve claim for capability support expenditure of 410K (admin budget) Reserve claim to support the funding of the Hallett Review of 510K Budget transfer from the NIE for Admin purposes of 46K (admin budget) Budget exchange carryforward of 187K from to in relation to required maintenance at Stormont House that wasn t carried out this financial year (admin budget) Budget exchange carryforward of 80K from in relation to publication costs that will be now be incurred in due to delays in publication Reserve claim for the funding of the 2014 European elections of 3,363K Budget transfer from the Cabinet Office for mailing costs relating to the 2014 European elections of 106K Capital Capital Reserve claim to support new arrangements at Hillsborough Castle of 1,250K The Departmental Expenditure Limit current control totals for the NIO are set out in the table below: 000 nominal Main Estimate Changes Supp Estimate Resource DEL (RDEL) o/w RDEL excluding depreciation o/w depreciation ring fence in RDEL Administration Budget* o/w non-ringfenced RDEL administration budget o/w depreciation ringfence administration budget Capital DEL * This is part of the RDEL control total and not an addition to it.

4 Annually Managed Expenditure (AME) In addition, the Estimate contains a reduction in AME (non-cash) funding for the NIO of 1,800,000. The Main Estimate has been changed as a result of; Utilisation of existing provision for legal cases

5 Section 4: Cash grant payable to the NICF The Estimate also allows for the payment of a cash grant to the Northern Ireland Consolidated Fund. All expenditure by the NIE is charged to the NICF. This expenditure is shown in the NIO Estimate. Since the Main Estimate, provision has increased by 285,500,000. The table below reconciles the spending aggregates of the NIE with the cash grant payable to the NIE. RECONCILIATION OF GRANT PAYABLE TO NORTHERN IRELAND CONSOLIDATED FUND million Main Estimate Changes in Supplementary Current position Departmental Expenditure Limit 11, ,364.3 Annually Managed Expenditure (inc Other AME & Reg Rates) 9, ,738.0 RRI Borrowing Total Managed Expenditure (DEL, AME & Other AME) 21, ,367.2 Less Non Cash charges -3, ,401.5 Less Non Voted (DEL, AME & Other AME) -10, ,733.5 Voted Other Expenditure outside DEL 7, ,191.0 Utilisation of Provisions 1, ,107.4 Movement in debtors/creditors Supply Expenditure 15, ,832.9 Interest Payable District Council Rates Other Services Total Expenditure 16, ,459.1 Income Add in RRI District and Regional Rates 1, ,201.5 Interest Receivable Miscellaneous receipts of which: NICF Balance Continental Shelf Misc - NIHE, Land Annuities etc Excess Accruing Resources CFERS EU CFERS Total Income 1, ,554.0 Cash grant payable to the NI Consolidated Fund 14, ,905.2

6 Section 5: Barnett Consequentials From time to time, the Treasury will adjust the budgets of UK departments with the devolved administrations receiving Barnett consequentials of these adjustments. The majority of these budgetary adjustments take place at major fiscal events such as the Autumn Statement and Spring Budget. The table below details the Barnett consequentials for the financial year received by the NIE since the announcement of the 2010 spending review in October Barnett consequentials for announced since the publication of the Main Estimate are shown at the foot of the table. Barnett Consequentials for since 2010 Spending Review Fiscal Event UK Government Measure Resource/Capital Barnet Consequential ( m) Budget 2011 Apprenticeships Resource Business Rates - Enterprise Zones Resource Sub total Notes Autumn Statement 2011 Highway Agency - additional motorway schemes (M6 J10A-13, M3 J2-3, road pinch point fund) Capital Additional LA major transport projects Capital Highway Agency reserve schemes (A45 tollbar & A453 widening) Capital M1/M6 J19 junction improvement Capital A14 J7-9 Kettering Bypass Widening Capital Accelerate M25 J13-27 Capital Accelerate M1 J39-42 Capital New link road to Manchester airport Capital East-West rail project. New rail line from Oxford to Milton Keynes/Bedford. Capital Rail winter resilience Capital 0.028

7 Tackle local problems on the rail network more quickly Capital Electrification of trans-pennine Capital Station accessibility improvements Capital Regional Growth Fund Capital free schools Capital Basic need capital Capital Housing: Get Britain Building (loan & equity) Capital Housing: Get Britain Building (expected income) Capital Housing: Empty Homes Capital Work Programme Resource JCP Offer Resource Get Britain Working Resource Skills Resource DWP DEL savings Resource Early Years Childcare Resource Rail fares increase by RPI+1% instead of RPI+3 from 2012 for 1 year only (2012) Resource Business Rates deferral Resource Pay restraint Resource Sub total Budget 2012 Get Britain Building Capital Support for free advice services Resource DWP Fraud and error initiatives Resource Sub total Financial Transactions Autumn Statement 2012 Empty Homes Capital Affordable housing Capital Private Rented pump priming (financial transactions) Capital Public land (NHS Trust Acquisitions) Capital 0.335

8 Large scale development Capital Large scale development (financial transactions) Capital Public Land (Investment fund ) Capital Accelerate delivery of 4 road schemes Capital Roads pinch point fund Capital HA and LA road maintenance and renewal Capital Development funding for Highways Agency Pipeline Capital Cycling investment Capital A1 enhancements (Leeming to Barton) Capital A1 enhancements (Lobley Hill) Capital New A5-M1 link road Capital Dualling A30 Temple to Carblake Capital Basic need: c.100 new free schools, academies and 18,000 school places by expanding good schools in areas experiencing the greatest demographic Capital pressures Schools Maintenance Capital Regional Growth Fund 4 Capital Flood defences: fund full pipeline, inc. making land available for development in Leeds, Sheffield, Exeter, Derby, Ipswich Capital Enterprize Zones infrastructure funding Capital FE new building and maintenance Capital Start up loans - funding for 2 more years Capital AMSCII Capital Council Tax Freeze Resource Empty property business rate relief Resource LEP Capital Pots Resource Start up loans - funding for 2 more years Resource Skills in Digital Industries Resource LHA hardship fund Resource UC - cut all disregards by 400 from Resource

9 RDEL Reduction Resource Sub total Budget 2013 Affordable Housing Capital Start up Loans (Reserve funded) Capital First Buy Capital Build to Rent Capital Start up Loans (Reserve funded) Resource Growth vouchers Resource Sickness Absence Review Resource RDEL Reduction Resource Sub total Financial Transactions Financial Transactions Autumn Statement 2013 Free School Meals Resource Free School Meals Capital Small Business Rates Relief one year extension to April 2015 Resource Business Rates 1000 discount for 2 years (Retail properties up to 50K incl. food properties) Resource Business Rates cap at 2% for 1 year Resource Business Rates: Reoccupation Relief (50% for retail) Resource Relax single property criteria for SBRR Resource Increasing HE student numbers by 30k in 14/15 Resource FE apprenticeships Resource New Enterprise Allowance Resource Help to Work Resource Rail fares RPI + 0 Resource Warm Homes Discount Resource SALIX: energy efficiency loans Capital 0.839

10 Rebates for Energy Efficiency Capital Rebates for Energy Efficiency Resource Energy Efficiency for Landlords Capital Affordable Rent to Buy Capital Builders Finance Fund Capital Housing: Infrastructure to unlock housing on large sites Capital RDEL Top slice Resource Supporting Work Interventions Resource Sub total Budget 2014 Apprenticeship Grants for Employers Resource Postgrad Apprenticeships Resource Magna Carta 800th Anniversary Resource Flooding - Extra maintenance funding Resource Flooding - Extra capital funding for maintenance Capital Road repair challenge fund (potholes) Capital Development Benefits Resource DWP DEL Funding Resource Cathedral Repairs Capital Landfill tax: uprate lower rate by inflation and reducing landfill communities fund Resource Custom Build Capital Sub total Financial Transactions Financial Transactions Financial Transactions Financial Transactions Autumn Statement 2014 Rail fares Resource Household energy efficiency measures Capital Kew Gardens Resource Sub total 1.616

11 Total Barnett Consequentials of which: Resource Capital

12 Section 6: Control Totals for the NIE including breakdown by main programme of AME spending Resource and capital DEL for NIE The following adjustments have been made to the Control Totals for NIE since the Main Estimate: DEL changes million 100m support from Reserve Resource DEL Barnett Consequentials - Autumn Statement 2014 Resource DEL Barnett Consequentials - Autumn Statement 2014 Capital DEL Barnett Consequentials - Council Tax Freeze Resource DEL Block Grant Adjustment for Air Passenger Duty Resource DEL Budget Exchange Resource DEL Budget Exchange Capital DEL Budget transfer to NIO: Stormont Rent Resource DEL Cash Management Charge Resource DEL DEL reduction: Delay in implementation of Welfare Reform Resource DEL DOJ carryforward of underspends Resource DEL Reserve Claim: Blue lights charities Resource DEL Reserve Claim: Coastal Communities Fund Resource DEL Reserve Claim: PSNI Security Funding Resource DEL Reserve Claim: PSNI Security Funding Capital DEL Reserve Claim: Student Loans Student Loans Total The current control totals for the NIE are set out in the table below: Main Estimate Changes Supplementary Estimate m nominal Resource DEL (RDEL) 10, ,281 of which: RDEL excluding depreciation 9, ,748 depreciation ring fence in RDEL student loans ring fence in RDEL Capital DEL 1, ,084

13 Annually Managed Expenditure (AME) The following changes have been agreed since the publication of the Main Estimates:- Programme Changes Supplementary Estimate m m m Expenditure funded by Regional Rates Borrowing under Reinvestment & Reform Initiative Depreciation & Impairments Provisions Social Security Benefits 5, ,686.3 Student Loans Public Sector Pensions 2, ,349.8 Capital - Public Corporations Other TOTAL 9, ,002.8

14 Section 7: Reconciliation of the SR 2010 settlement for NIE and Control Totals Changes to Northern Ireland Executive Control Totals for since 2010 Spending Review RDEL Ring-fenced depreciation Ringfenced student loans Capital DEL m m m m SR 2010 settlement 9, m support from Reserve Barnett Consequentials - Council Tax Freeze Barnett Consequentials: Budget Barnett Consequentials: Autumn Statement Barnett Consequentials: Budget Barnett Consequentials: Autumn Statement Barnett Consequentials: Budget Barnett Consequentials: Autumn Statement Barnett Consequentials: Budget Barnett Consequentials: Autumn Statement Block Grant Adjustment for Air Passenger Duty Budget Exchange Budget Regime Change: Housing Benefit Budget Regime Change: Housing Executive Budget Regime Change: NDPBs into DEL Budget Regime Change: Small benefits Budget Regime Change: Social Fund Budget Regime Change: Student Loans Budget Transfer from Cabinet Office: Law Commission Budget Transfer from NAO: Audit costs of Justice Budget Transfer from

15 NIO: Administration Budget Transfer to NIO: Stormont Rent Cash Management Charge DEL reduction: Delay in implementation of Welfare Reform DEL reduction: Delay in implementation of Welfare Reform DOJ carryforward of underspends Reserve Claim: Blue lights charities Reserve Claim: Coastal Communities Fund Reserve Claim: PSNI Security Funding Reserve Claim: Student Loan imparments Current Control Totals Supplementary Estimate ) 9, ,

16 The Northern Ireland Block to outturn outturn outturn outturn outturn plans plans '000 '000 '000 '000 '000 '000 '000 Northern Ireland Office Resource(3) Northern Ireland Office Administration Costs 15,112 15,530 14,641 13,351 12,876 15,496 15,430 Northern Ireland Office - other(3) 33,582 17,682 11,601 8,765 12,374 12,055 5,036 Northern Ireland Office Resource(3) 48,694 33,212 26,242 22,116 25,250 27,551 20,466 Northern Ireland Office Capital Northern Ireland Office 301 8, , , Northern Ireland Office Resource + Capital DEL(3) 48,995 41,492 26,404 23,400 25,557 29,042 20,846 less depreciation & impairments -2,836-2,196-1,858-1,764-1,533-1,773-2,100 Northern Ireland Office DEL (4) 46,159 39,296 24,546 21,636 24,024 27,269 18,746 Northern Ireland Executive Northern Ireland Executive Resource 9,632,807 9,963,784 9,856,210 10,040,967 10,174,627 10,280,665 10,308,485 Northern Ireland Executive Capital 1,277,142 1,192,128 1,000, , ,844 1,083,646 1,099,326 Northern Ireland Executive DEL(3) 10,909,949 11,155,912 10,856,593 11,009,865 11,105,471 11,364,311 11,407,811 less depreciation & impairments -342, , , , , , ,363 Northern Ireland Executive DEL(4) 10,567,687 10,785,959 10,436,133 10,432,927 10,654,609 10,831,255 10,857,448

17 Total Northern Ireland Block (4) (5) (6) 10,613,846 10,825,255 10,460,679 10,454,563 10,678,633 10,858,524 10,876,194 Notes (1) Totals may not sum due to roundings. (2) Includes Budgetary Changes as a result of Clear Line of Sight (3) Including depreciation & impairments (4) Resource + capital - depreciation & impairments (5) By convention Departmental Expenditure Limit budgets are expressed as resource and capital less depreciation & impairments. Therefore the resource and capital numbers in this table will not sum to the Departmental Expenditure Limit: the difference being depreciation & impairments. (6) Northern Ireland Office DEL + Northern Ireland Executive DEL less depreciation and impairments