Wales Office Supplementary Estimates Memorandum

Transcription

1 Wales Office Supplementary Estimates Memorandum Introduction The Wales Office Supplementary Estimate for seeks the necessary resources and cash to support the functions of the Wales Office. 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 Welsh Affairs Committee with an overview of the Wales Office Supplementary Estimate, which is part of the supply procedure. It also gives information on the budgetary changes of the Welsh Government and changes to the cash grant payable to the Welsh Consolidated Fund by the Wales Office. The Supplementary Estimate seeks approval to a net resource requirement of 14,794,008,000 and a net cash requirement of 14,793,952,000 and for the Wales Office Departmental Expenditure (DEL) limit, net of depreciation and impairments, will increase from 4,450,000 to 4,970,000. The Memorandum is split into sections covering: (1) Summary of the Wales Office plans for ; (2) An overview of the Office s Administration Costs; (3) An overview of DEL and AME totals; (4) Details of the cash grant paid to the Welsh Consolidated Fund; (5) Details of Barnett consequentials for ; (6) Control Totals for the Welsh Government including breakdown by main programme of AME spending; (7) Reconciliation of the SR 2015 settlement for Welsh Government and Control Totals for ; and (8) Details of the Welsh Block to This memorandum has been agreed with HM Treasury.

2 Section 1: Summary of Wales Office Plans for Spending plans for were set in the 2015 Spending Review. From the baseline set in the 2015 Spending Review, the Wales Office agreed an overall real term increase of 2 per cent in its administration budget over the baseline. This is in line with the targets set for the other Territorial Offices. The Wales Office supports the Secretary of State for Wales in promoting the best interests of Wales within a strong United Kingdom. We are the face of the UK Government in Wales and the voice of Wales in Whitehall. Our primary and on-going goal is to support the Union of the United Kingdom. Linked to this key objective is a more immediate goal which is to ensure that the UK, including Wales, is in the strongest possible position on exiting the European Union. Our three key objectives to support these priorities are: I. A strong Welsh economy, with the Wales Office playing a key role in securing infrastructure investment and high levels of exports and foreign direct investment; II. Wales s interests fully reflected and represented in the ongoing work on exiting the European Union, and as the UK government develops its UK regional policy and industrial strategy in particular noting the importance of cross-border working; and III. A clearer, stronger and fairer devolution settlement that is coherent, stable and lasting, where powers are exercised at the most appropriate level of government across the United Kingdom. To help deliver these objectives and challenges the Office will manage work efficiently and effectively, in accordance with good governance principles and providing value for money to the taxpayer. The Department continues to look to share services and expertise with the other Territorial Offices and other Government Departments wherever possible to both drive down costs and improve resilience. To date a shared parliamentary unit has been established with the other Territorial Offices and a shared freedom of information requests (FOI) service with the Northern Ireland Office. The Office continues to use Ministry of Justice shared services in respect of accommodation, information technology, procurement, finance and Human Resources e.g. recruitment of staff. In respect of accommodation, the Department has tenants (the Greater London Lord Lieutenancy and Independent Commission for Aid Impact) in the London Office which generates rental income in of 63k for the Office and improves the utilisation of our accommodation. We have also held discussions with the Government Property Unit (GPU) over its Hubs programme and in particular the implications for Government buildings in South Wales. The Hubs Programme seeks to use rationalised estates and

3 land release to reduce overall running costs and wherever possible locate departments together in hubs around the country. The Wales Office is increasing its headcount in to reflect the nature of the work the Office is undertaking around EU Exit and Strengthening the Union. The Office will be responsible for providing guidance on the Welsh dimension of aspects of EU exit such as frameworks, market access, trade deals, funding, border controls, issues that arise during negotiations etc as well as leading on strengthening the Union in Wales through activity such as Ministerial visits/roundtables and enhanced stakeholder engagement.

4 Section 2: Overview of the Wales Office s Administration Costs The key purpose of the Wales Office remains to support the Secretary of State for Wales in promoting the best interests of Wales within the United Kingdom. This Estimate provides for the administration costs of the Wales Office, including the upkeep of a Grade II* listed building; the salaries of Wales Office Ministers and staff; and payments to the Welsh Consolidated Fund. The Wales Office also has AME for future dilapidation costs for exiting the lease for the Cardiff Office. The lease ends in 2022.

5 Section 3: Overview of Wales Office DEL [and AME] totals for Departmental Expenditure Limit (DEL) The following adjustments have been made to the Control Totals for Wales Office since the Main Estimate.: 444,000 Reserve claim in relation to higher than expected legal costs for work undertaken on the Wales Bill; 106,000 Reserve claim in relation to EU Exit work; -30,000 Budget switch from Administration to Programme to reflect increase in ringfenced depreciation to reflect an increase in our asset base offset by a reduction in cash; 90,000 - Reserve claim on Capital in relation to IT and capital works expenditure. The Departmental Expenditure Limit current control totals for the Wales Office are set out in the table below: 000 nominal Main Changes Supp Estimate 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 Capital DEL * This is part of the RDEL control total and not an addition to it. Annually Managed Expenditure (AME) In addition, the Estimate (Section II) contains a change of 6,000 for AME. This change relates to an increase in provision to cover an increase in future dilapidation costs from the lease for the Cardiff Office.

6 Section 4 Details of the Cash grant payable to the Welsh Consolidated Fund The Estimate also allows for the payment of a cash grant to the Welsh Consolidated Fund. All expenditure by the Welsh Government is charged to the Welsh Consolidated Fund. This expenditure is shown in Section II of the Wales Office Estimate. Since the Main Estimate, provision has increased/decreased by 470,943,000. The table below reconciles the spending aggregates of the Welsh Government with the cash grant payable to the Welsh Consolidated Fund. RECONCILIATION OF GRANT PAYABLE TO WELSH CONSOLIDATED FUND Supplementary Main Estimate Changes Estimate '000 '000 '000 Expenditure Classified as DEL 15,605, ,149 16,380,582 Expenditure Classified as AME 754,198 33, ,749 Expenditure Financed by Capital Borrowing 20,000-20,000 0 Non Domestic Rates AME 1,059, ,059,000 Total Managed Expenditure 17,438, ,700 18,227,331 Less: Non Voted expenditure: LA Credit Approvals 88, ,800 Other Non-Voted 6, ,078 Wales Act 2014 Transactions: Capital Borrowing 20,000-20,000 0 Non-Cash: Resource Ringfenced Non Cash 636, , ,538 AME Non-cash 204,937 21, ,810 TOTAL NON VOTED TME 956, , TOTAL VOTED TME 16,482, ,553 16,956,105 Voted receipts Contributions from the National Insurance Fund 1,163,325 45,540 1,208,865 NDR Receipts 1,001,278 17,070 1,018,348 Timing Adjustments Increase / Decrease in Debtors & Creditors 0 60,000 60,000 Use of Provisions TOTAL GRANT TO WELSH CONSOLIDATED FUND 14,317, ,943 14,788,892

7 The following significant adjustments have been made to the cash grant to the Welsh Consolidated Fund since the Main Estimate: - 462,000,000 Increase in DEL (RDEL excluding depreciation + Capital DEL + Financial Transactions); 11,000,000 increase in cash spending in AME; 60,000,000 Movement in Creditors/Debtors; - 63,000,000 Increase in income.

8 Section 5 Details of Barnett Consequentials for 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 Budget. In December 2017, the Treasury published a breakdown of changes in the devolved administrations block grant funding from the 2015 Spending Review until Autumn Budget 2017 for all years covered by the SR. This includes details of included all Barnett Consequentials allocated to the devolved administrations since the conclusion of the 2015 SR. The table below details the Barnett consequentials for the financial year received by the Welsh Government since the announcement of the 2015 Spending Review in Autumn Additional Barnett consequentials for announced since the publication of the Main Estimate are shown at the foot of the table. This information is provided to assist the Committee to understand the composition of the block budgets of the Welsh Government.

9 Barnett Consequentials from Fiscal Events for since 2015 Spending Review Fiscal Event UK Government Measure Resource/Capital Barnet Consequential ( m) Budget 2016 Business Rates - Permanently double SBRR from Resource Business Rates - Increasing the Small Business Rate ReResource Business Rate - Increasing the standard multiplier threshresource Making all schools academies by 2022 Resource National Funding Formula Resource Northern Powerhouse Resource Mentoring for 25,000 disadvantaged students Resource Longer school day Resource Expanding breakfast clubs Resource Doubling the primary school sports premium Resource Flood package: maintenace funding Resource Partnership Support Fund Capital Six year programme top-up Capital Royal College of Arts Capital Drapers Hall - Coventry Capital Hall for Cornwall Capital S1 Artspace Capital Shakespeare North Capital Cathedrals Resource Hull City of Culture Resource Devolution Deals - resource Resource Sub-Total Budget Autumn Statement 2016 Business Rates - Rural Rate Relief Resource Business Rates - Fibre relief Resource Northern Power House: Investment Fund Capital - Financial Transactions Midlands Engine: Investment Fund Capital - Financial Transactions Mayfield Review of Management Resource Wentworth Woodhouse Resource Creative Media Centre Plymouth Capital Studio 144 Southampton Capital Royal Socierty of Arts School Pilots Resource Rugby League World Cup 2021 Capital Rugby League World Cup 2021 Resource World Road Cycling Capital World Road Cycling Resource Right to Buy - extended pilot Resource Midlands Rail Hub Resource Invest in University Tech Transfers Capital Grammar Schools Capital Strategic roads pinchpoints Capital Local roads and local transport Capital Smart ticketing Capital Development funding for Oxford-Cambridge + M25 Capital Accelerated build-out (Conference) Capital Affordable housing grants Capital Help-to-Build, including Roads for Homes Capital QR funding Capital Sub-Total Autumn Statement Spring Budget 2017 Business Rates - Mitigating Impact of SBRR Resource Business Rates - Discretionary Relief Fund Resource Business Rates - Pubs Resource LAs delivering Business Rates Reforms Resource Free Schools Resource Social Care Resource Health Capital A & E Capital Social Transformation Programme Funding Capital Work Coaches Resource Midlands Skills Challenge (English Language Training) Resource Returnships Resource Suffragette Centenary Resource Sub-Total Spring Budget Autumn Budget 2017 Air Quality - Compliance Funding Resource Air Quality - Compliance Funding Capital Local Roads Capital Midlands Connect: Motorway Hub Resource Health - Resource Resource Health Capital Capital Help to Buy Equity Loan Capital - Financial Transactions Office for Data Analytics Resource Disabled Facilities Grant Capital Efficiency Review Savings Resource Sub total Autumn Budget Totals Resource DEL Resource Capital DEL Capital Capital - Financial Transactions Capital - Financial Transactions All DEL Note Totals may not sum due to roundings

10 Section 6: Control Totals for the Welsh Government including breakdown by main programme of AME spending Resource and capital DEL for Welsh Government The following adjustments have been made to the Control Totals for the Welsh Government since the Main Estimate: DEL Changes million RDEL excluding depreciation Barnett Consequentials - EU exit Funding Barnett Consequentials - Autumn Budget Barnett Consequentials Abortion Services for women from Northern Ireland Reserve claim Barnett Consequentials Department for Transport reserve claim to cover loss of rail fares income Budget Exchange Budget Transfer from Cabinet Office: Cyber Security Budget Transfer from DH: HIV infected blood Budget Transfer from HO: Immigration Health Surcharge Budget Transfer from MoJ: Offender Learning Cash Management Charge/Rebate Coastal Communities Fund EU Structural Funds LIBOR: Wales Air Ambulance Personal Injury Discount Rate Reprofile Efficiency Review savings into Reserve Claim - Apprenticeship Levy Reserve Claim: Tampon Tax Resource to Capital Switch: R&D Depreciation ring fence in RDEL Budget Exchange (RDEL Depreciation) Switch within non-cash ring-fence (RDEL Depreciation) Student loans ring fence in RDEL Reserve Claim: Student Loan Impairment Switch within non-cash ring-fence (Student Loans) General Capital DEL Barnett Consequentials - EU exit Funding Barnett Consequentials - Autumn Budget Barnett Consequentials - Floods Reserve Claim Budget Exchange Budget Transfer from BEIS: Energy Efficiency Budget Transfer from BEIS: R & D funding Budget Transfer from DCMS: Superfast Broadband 2.073

11 Resource to Capital Switch: R&D Financial Transactions Barnett Consequentials - Autumn Budget Budget Exchange Total The current control totals for the Welsh Government are set out in the table below: Changes m nominal Main Estimate Supp Estimate Resource DEL 14, ,415 of which: RDEL excluding depreciation 13, ,465 depreciation ring fence in RDEL student loans ring fence in RDEL Capital DEL 1, ,966 of which: General Capital DEL 1, ,597 Financial Transactions

12 Annually Managed Expenditure (AME) The following changes have been agreed since the publication of the Main Estimates: - Programme Main Changes Supp Estimate Estimate Non- Domestic Rates 1, ,059 Student Loans Public Sector Pensions Depreciation & Impairments NHS Impairments & Provisions TOTAL 1, ,846 Note Totals may not sum due to rounding s

13 Section 7: Reconciliation of the SR 2015 settlement for Welsh Government and Control Totals for In December 2017, the Treasury published a breakdown of changes in the devolved administrations block grant funding from the 2015 Spending Review until Autumn Budget 2017 for all years covered by the SR. This includes details of included to the budgets of the devolved administrations since the conclusion of the 2015 SR. The table below details the changes to the Welsh Government budget for the financial year received by the Welsh Government since the announcement of the 2015 Spending Review in Autumn We have provided this information to assist the Committee in their understanding of the composition of the block budgets of the Welsh Government for the financial year which form part of the Wales Office Supplementary Estimate. Changes to Welsh Government Control Totals for since 2015 Spending Review Ring-fenced Ring-fenced General Capital Finacial Transactions RDEL depreciation student loans DEL Capital m m m m m 2015 Spending Review settlement 13, , Barnett Consequentials: Budget Barnett Consequentials: Autumn Statement Barnett Consequentials: Spring Budget Barnett Consequentials - EU exit Funding Barnett Consequentials - Autumn Budget Barnett Consequentials - Floods Reserve Claim Barnett Consequentials - Free terminations for NI Women Reserve claim Barnett Consequentials - Rail fares Reserve Claim Budget 2016: Cardiff City Deal Budget Exchange Budget Transfer from BEIS: Energy Efficiency Budget Transfer from BEIS: R & D funding Budget Transfer from Cabinet Office : Cyber Security Budget Transfer from DCMS: Lloyd George Museum Budget Transfer from DCMS: Superfast Broadband Budget Transfer from DH: HIV infected blood Budget Transfer from HO: Health migrant levy Budget Transfer from HO: Immigration Health Surcharge Budget Transfer from HO: Police funding Budget Transfer from MoJ: Offender Learning Cash Management Charge/Rebate Coastal Communities Fund EU Structural Funds LIBOR: Wales Air Ambulance Personal Injury Discount Rate Reprofile Efficiency Review savings into Reserve Claim - Apprenticeship Levy Reserve Claim: Student Loan Impairment Reserve Claim: Tampon Tax Resource to Capital Switch: R&D Switch within non-cash ring-fence Current Control Totals (Supplementary Estimate ) 13, ,

14 Section 8 Details of The Welsh Block to outturn plans plans plans '000 '000 '000 '000 Wales Office Resource (3) Wales Office Administration Costs 4,350 4,910 4,480 4,570 Wales Office - other (3) Wales Office Resource (3) 4,513 5,110 4,650 4,740 Wales Office Capital Wales Office Wales Office Resource + Capital DEL (3) 4,513 5,230 4,680 4,770 less depreciation & impairments Wales Office DEL (4) 4,404 5,090 4,570 4,660 Welsh Government Welsh Government Resource 13,324,553 14,414,970 14,188,181 14,270,032 Welsh Government Capital 1,448,699 1,965,612 1,897,847 2,110,584 Welsh Government DEL (3) 14,773,252 16,380,582 16,086,028 16,380,616 less depreciation & impairments -253, , , ,981 Welsh Government DEL (4) 14,519,933 15,431,044 15,421,749 15,690,635

15 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.