UK Trade & Investment (UKTI) 2012-13 Supplementary Estimate Written Statement The statement below follows the format guidance as set out in Supply Estimates: a guidance manual, available on the HMT website. Subject to parliamentary approval of any necessary Supplementary Estimate, UKTI s total DEL (Resource and Capital) will increased by 11,000,000 from 89,098,000 to 100,098,000. This reflects an increase through budget cover transfer from the Department for Business, Innovation and Skills (BIS) to UKTI of 13,000,000; against a reduction of 2,000,000 in forecasted underspend in Voted Resource DEL. Within the total DEL change, the impact on resources and capital is set out in the following table: Change 000 New Total 000 Voted Non-Voted Voted Non-Voted Resource DEL 11,000-97,500 - Depreciation - - 1,600 - Capital DEL - - 2,598 - Total DEL 11,000-100,098 - UKTI s Vote does not include Administration provision, which is included in the Estimates of our parent departments, BIS and FCO. The changes in the Resource element of Departmental Expenditure Limit (DEL) sought in this Supplementary Estimate relate to: 13,000k increase due to a budget cover transfer from BIS Resource DEL to UKTI Resource DEL: to support the coalitions drive to increase export activity, especially by small to medium-sized enterprises and areas of high-value opportunity; and to attract quality foreign direct investment; 2,000k reduction due to forecasted underspends, transferred from UKTI RDEL to DCMS RDEL to fund pressures relating to supporting exporters; 510k movement of non-ringfenced RDEL to ringfenced RDEL to cover the increase in depreciation on departmental fixed assets. UK Trade & Investment February 2013
Annex A UK Trade & Investment (UKTI) Supplementary Estimate 2012-13 Select Committee Memorandum Introduction The purpose of this memorandum is to provide the Select Committee with an explanation of how the resources and cash sought in the Supplementary Estimate will be applied to achieve departmental objectives. This includes information on comparisons with the resources provided in earlier years in Estimates and departmental budgets, and may also refer to future financial plans. The change in the resource element of Departmental Expenditure Limit (DEL) sought in this Supplementary Estimate relate primarily to: Description Resource Capital Increase of Resource DEL expenditure through Budget Cover Transfer Increase through Budget Cover Transfer of 13.0m from BIS Resource DEL to UKTI Resource DEL to support the coalitions drive to increase export m 13.0 m activity, especially by small to medium-sized enterprises and areas of high-value opportunity; and to attract quality foreign direct investment. Reduction in Resource DEL expenditure through Budget Cover Transfer Reduction due to forecasted underspends -2.0 transferred from UKTI RDEL to DCMS RDEL to fund pressures related to supporting exporters. Movement of non-ringfenced Resource DEL expenditure to ringfenced Resource DEL Movement of 510k from non-ringfenced to - ringfenced RDEL to cover the additional costs of depreciation on departmental fixed assets. This causes a net nil impact on resource. Change in Capital DEL expenditure N/A - Total Resource DEL Change 11.0 Total Capital DEL change - TOTAL DEL CHANGE 11.0 UKTI s Supplementary Estimate for 2012-13 seeks the necessary resources and cash for its programme and capital Vote. UKTI s administration costs are met from within the resources of the Department for Business, Innovation & Skills (BIS) and the Foreign & Commonwealth Office (FCO) and consequently any changes related to Administration costs are shown in the BIS and FCO Supplementary Estimates. An explanation of key terms used in the memorandum is provided in the glossary of key terms located at the end of this memorandum.
Summary of the main spending control figures contained in the Estimate Voted provision Voted Provision The Supplementary Estimate provides for a 12.7% increase in net Voted resource: Resource and Capital DEL Change Voted Change Non-Voted Total increase m Resource DEL 11.0-11.0 Total Resource DEL 11.0-11.0 Capital DEL - - - Total Capital DEL - - - TOTAL DEL 11.0-11.0 The Net Cash Requirement The Net Cash Requirement (NCR) has increased by 10,490k from 88,508,000 to 98,998,000. As the table below shows, this is due to the budget cover transfer received from BIS. Net Cash Requirement Resource DEL: Budget Cover Transfer increase from BIS Budget Cover Transfer reduction through underspends, transferred to DCMS Cash impact for movement of 510k from nonringfenced to ringfenced RDEL Increase/ Decrease m 13.00-2.00-0.51 Capital DEL: N/A - TOTAL NET CASH REQUIREMENT INCREASE 10.49 Budgetary data The effect of the above Vote changes on UKTI resource is as follows: Total Departmental Expenditure Limit (TDEL) increased by 10.49m Resource DEL - due to increase of 10.49m Of which, Budget cover transfer changes of 11.0m; Reduction due to RDEL movement of 0.51m Capital DEL remains unchanged.
Detailed explanation of changes in provision sought in the Supplementary Estimate, and implications for budgets Description Movements in provision related to Resource DEL An increase through Budget Cover Transfer from BIS RDEL of 13.0m to UKTI RDEL in 2012-13 to be utilised in 2012-13: to support the coalitions drive to increase export activity, especially by small to medium-sized enterprises and in areas of high-value opportunities; and to attract quality foreign direct investment. Reduction due to forecasted underspends transferred from UKTI RDEL to DCMS RDEL to fund pressures related to supporting exporters. Amount m 13.0-2.0 Movement between non-ringfenced to ringfenced RDEL to cover - depreciation costs of departmental fixed assets, which have been higher than first estimated as part of the 2010 spending review. However, the overall impact on Resource DEL is nil. Movements in provision related to Capital DEL N/A - TOTAL DEL CHANGE 11.0 Departmental Expenditure Limit This Supplementary Estimate will result in an overall increase in Resource DEL of 11.0m and no change in Capital. Details of DEL in Estimates are: Resource DEL Voted Non-Voted Total m Main Estimate 86.5-86.5 Spring Supplementary Estimate 97.5-97.5 Capital DEL Main Estimate 2.6-2.6 Spring Supplementary Estimate 2.6-2.6 REVISED TOTAL DEL 100.1-100.1 Financial Performance The table below compares final outturn from 2009-10 onwards with planned DEL for the previous and current years, and plans for future years covering the 2010 Spending Review and the 2011 and 2012 Autumn Statements. These figures are available from the relevant UKTI Accounts: Year m m m m % Resource Voted Non-Voted Total Outturn Variance 2009-10 96.4-96.4 94.4-2.1% 2010-11 92.9-92.9 85.7-7.7% 2011-12 83.9-83.9 81.7-2.6% 2012-13¹ 97.5-97.5 94.5-3.1% 2013-14² 151.1-151.1 - - 2014-15² 146.8-146.8 - -
Year m m m m % Capital Voted Non-Voted Total Outturn Variance 2009-10 4.0-4.0 3.9-1.8% 2010-11 2.1-2.1 1.1-49.2% 2011-12 3.2-3.2 2.6-16.3% 2012-13¹ 2.6-2.6 1.7-35.1% 2013-14² 3.0-3.0 - - 2014-15² 1.2-1.2 - - ¹ Provisional Outturn at time of printing ² Plans covering the 2010 Spending review period, 2011 and 2012 Autumn Statements The Resource DEL outturn for 2011-12 of 81,743,000 was an underspend of 2,139,000 compared to the final provision of 83,882,000 (equivalent to 2.6 per cent of Resource DEL). The Resource DEL underspends were largely due to efficiencies delivered in response to the emergency budget and introduction of the Cabinet Office marketing restrictions. The Capital DEL Outturn for 2011-12 of 2,649,000 was an underspend of 517,000 compared against a final provision of 3,166,000 (equivalent to 31.8 per cent of Capital DEL). The Capital DEL underspends were largely due to the re-phrasing of delivery milestones in respect of a single IT infrastructure project. Administration Budget UKTI s Vote up to the end of 2012-13 does not include Administration provision. Administration costs for UKTI are included in the Estimates for our parent departments, BIS and FCO. As of 2013-14, UKTI will have a small Admin RDEL of 2.0m to cover the costs of the proposed ministerial visits coordination unit and any administration costs connected with the proposed unit to encourage exceptional talent to the UK or accrediting overseas chambers. Provisions UKTI does not have any provisions. Contingent Liabilities UKTI does not have any contingent liabilities. Approval of Memorandum This memorandum has been prepared with reference to guidance in the Supply Estimates: a guidance manual provided by HM Treasury. The information in this memorandum has been approved by Nick Baird, the departmental Accounting Officer.
Glossary of Key Terms Accounting Officer - A person appointed by the Treasury or designated by a department to be accountable for the operations of an organisation and the preparation of its accounts. The appointee is, by convention, usually the head of a department or other organisation, or the Chief Executive of a nondepartmental public body (NDPB). Administration Budget - A Treasury control on resources consumed directly by departments and agencies/ndpbs that forms part of the Departmental Expenditure Limit (DEL). Includes things such as staff costs, accommodation, etc, where they are not directly associated with frontline service delivery. Ambit - The ambits are set out in Part I of the departmental Estimate. Separate ambits are required for both expenditure and income in each budgetary category included in the Estimate (DEL, AME and non-budget). The ambit describes the activities for which provision sought in the Estimate will be used. Annually Managed Expenditure (AME) - AME is spending included in Total Managed Expenditure (TME), which does not fall within Departmental Expenditure Limits (DELs). Expenditure in AME is generally less predictable and controllable than expenditure in DEL. Budget Exchange - a mechanism whereby departments are allowed to transfer a proportion of identified unspent Departmental Expenditure Limit (DEL) provision into the following year. Capital grant - (See Grant below). In account, a capital grant scores as resource spending but in budgetary terms it scores as capital because an asset is created within the economy. Capital income or expenditure - Related to the purchase or sale of assets. The value must usually be above a certain capitalisation threshold and the asset must be expected to be used for a period of at least one year. It includes the purchase of buildings, equipment and land. The threshold is set by each body: items valued below it are not counted as capital assets, even if they do have a productive life of more than one year. Comptroller and Auditor General (C&AG) - The head of the National Audit Office, appointed by the Crown, and an Officer of the House of Commons. As Comptroller, the C&AG s duties are to authorise the issue by the Treasury of public funds from the Consolidated Fund and National Loans Fund to government departments and others; as Auditor General, the C&AG certifies the accounts of all government departments and some other public bodies, and carries out value-for-money examinations. Consolidated Fund - The Government s current account, operated by the Treasury, through which pass most government payments and receipts. Consolidated Fund Extra Receipt (CFER) - Income, or related cash, that passes through a department s accounts but may not be retained by the department and is surrendered to the Consolidated Fund.
Contingent Liability - Potential liability that is uncertain but recognises that future expenditure may arise if certain conditions are met or certain events happen. Departmental Expenditure Limit (DEL) - A Treasury budgetary control. DEL spending forms part of Total Managed Expenditure (TME) and includes that expenditure which is generally within the departments control and can be managed with fixed multi-year limits. Some elements may be largely demand led. There is a small DEL Reserve from which the Treasury may support unavoidable costs that cannot be absorbed within the existing limit. Departmental Unallocated Provision (DUP) - An element of a department s total DEL that is not allocated to particular spending, but held back by the department to meet any future unforeseen pressures. Depreciation - A measure of the wearing out, consumption or other reduction in the useful life of a fixed asset whether arising from use, passage of time or obsolescence through technological or market changes. Estimate - A statement of how much money the government needs in the coming financial year, and for what purpose(s), by which parliamentary authority is sought for the planned level of expenditure by a government department. Estimates Memorandum - An explanation of how provision sought in the Estimate is intended to be used and the relationship with other spending controls. Primarily provided for the departmental select committee but made freely available online Excess Vote - The means by which excess expenditure, or otherwise unauthorised expenditure, of cash, capital or resources, is regularised through an additional vote by Parliament. Grant - Payment made by a department, or other public body, to outside bodies to reimburse expenditure on agreed items or functions, and often paid only on statutory conditions being met. May be made for resource or for capital purposes. Grant in Aid - Financing payment made by a department to an NDPB or other arms length body. International Financial Reporting Standards (IFRS) - International accounting standards, adopted by government and reflected in UK GAAP. Main Estimate - The means through which departments seek parliamentary approval for their spending plans for the year ahead. Presented to Parliament within five weeks of the Budget Statement. Near-Cash - Expenditure that has a directly related cash implication, even though the timing of the cash payment may be slightly different. For example, expenditure on gas or electricity supply is incurred as the fuel is used, though the cash payment might be made in arrears on a quarterly basis.
Net Cash Requirement (NCR) - The limit voted by Parliament reflecting the maximum amount of cash that can be released from the Consolidated Fund to a department in support of expenditure in its Estimate. In the case of a negative net cash requirement, the department must generate a surplus of at least that amount. Non-Cash - Expenditure where there is no directly related cash transaction but which reflects resources used. Examples include depreciation and provisions. Public Accounts Committee (PAC) - A committee of the House of Commons, which examines the accounting for, and the regularity and propriety of, government expenditure. It also examines the economy, efficiency and effectiveness of expenditure. Also commonly known as the Committee of Public Accounts. Section - An Estimate line within the Part II: Subhead detail table in an Estimate. Select Committee - Both Houses of Parliament have select committees that scrutinise the work and expenditure of government. Responsibilities include oversight of particular government departments. Spending Review - A cross-government review of departmental aims and objectives and analysis of spending programmes. Results in the allocation of multi-year budgetary limits. Subhead - A single cell within a section (or Estimate line) within the Part II: Subhead detail table in an Estimate. Supplementary Estimate - The means by which departments seek to amend parliamentary authority provided through Main Estimates by altering the limits on resources, capital and/or cash or varying the way in which provision is allocated. Normally presented in January each year. Supply - The process whereby Parliament gives statutory authority for both the consumption of resources (for resource and capital purposes) and for cash to be drawn from the Consolidated Fund. Supply and Appropriation Acts - Acts of Parliament which give formal approval to departmental Supply Estimates. There are usually two such Acts each year: the Supply and Appropriation (Main Estimates) Act is presented in July and authorises the Main Estimates, and the Supply and Appropriation (Anticipation & Adjustments) Act is presented in February/March and authorises Supplementary Estimates, Vote on Account for the forthcoming year and any Statement of Excesses relating to the prior year. Token Estimate (or section) - Where a department s expenditure within the Estimate (or the section) is wholly offset by income, so that a token amount of 1,000 is voted. Since Estimates may include negative limits (where income is greater than expenditure), a token 1,000 would only be required where income and expenditure completely offset.
Virement - The use of savings on one or more sections (Estimate lines) or subheads to meet excesses on another section or subhead within the same voted limit in an Estimate. Vote - The process by which Parliament approves funds in response to Supply Estimates. Voted provision - That which has been authorised by Parliament in response to Supply Estimates. Vote on Account - Presented to Parliament by the Treasury in January to provide necessary provision for voted resources, capital and cash for each departmental Estimate in the early months of the following financial year. For each department it generally seeks up to 45 per cent of the amounts voted in the current year s Main Estimate.
UK Trade & Investment Introduction This Supplementary Estimate is required for the following purposes: Changes in budgets, non-budget voted provision and cash Increases Reductions Total (Section A) - Increase due to a contribution from BIS to fund UKTI services supporting Small to Medium-sized Enterprises and High-Value Opportunities. 13,000,000 (Section A) - Reduction due to forecasted underspends transferred from UKTI RDEL to DCMS RDEL to fund pressures related to supporting exporters. -2,000,000 (Section A) - Increase in Ringfenced RDEL to cover depreciation costs of departmental fixed assets, offset by a corresponding reduction in Non-Ringfenced RDEL. 510,000-510,000 Total change in Resource DEL (Voted) 13,510,000-2,510,000 11,000,000 The increase to the Net Cash Requirement is as a result of the above changes, as follows: Resource DEL changes affecting cash. 13,000,000-2,510,000 Total change in Net Cash Requirement 13,000,000-2,510,000 10,490,000
Supplementary Estimates 2012-13 Part I Voted Non-Voted Total Departmental Expenditure Limit Resource 11,000,000-11,000,000 Capital - - - Annually Managed Expenditure Resource - - - Capital - - - Total Net Budget Resource 11,000,000-11,000,000 Capital - - - Non-Budget Expenditure - Net cash requirement 10,490,000 Supplementary amounts required in the year ending 31 March 2013 for expenditure by UK Trade & Investment on: Departmental Expenditure Limit: Expenditure arising from: Trade development and promotion and inward investment, including grants, associated capital and other related expenditure and non-cash items. Income arising from: The sale of goods and services relating to trade development and promotion and inward investment; asset sales; insurance claims; recovery of costs incurred on behalf of others; recovery of overpayments. Annually Managed Expenditure: Expenditure arising from: Depreciation, amortisation, revaluation and other non-cash items. UK Trade & Investment will account for this Estimate.
Supplementary Estimates, 2012-13 UK Trade & Investment Part II: Changes Proposed Net Resources Net Capital Present Changes Revised Present Changes Revised Admin Prog Admin Prog Admin Prog 1 2 3 4 5 6 7 8 9 '000 Spending in Departmental Expenditure Limits (DEL) Voted Expenditure - 86,500-11,000-97,500 A Trade development and promotion and inward investment - - 86,500-11,000-97,500 2,598-2,598 2,598-2,598 Total Spending in DEL - 86,500-11,000-97,500 2,598-2,598 Total for Estimate - 86,521-11,000-97,521 2,598-2,598 Voted Expenditure - 86,521-11,000-97,521 2,598-2,598 Non Voted Expenditure - - - - - - - - - '000 Present Changes Revised Plans Plans Net Cash Requirement 88,508 10,490 98,998
Supplementary Estimates, 2012-13 UK Trade & Investment Part II: Revised subhead detail including additional provision '000 Revised Plans Resources Capital Administration Programme Gross Income Net Gross Income Net Gross Income Net 1 2 3 4 5 6 7 8 9 Spending in Departmental Expenditure Limits (DEL) Voted expenditure - - - 116,541-19,041 97,500 2,598-2,598 A Trade development and promotion and inward investment - - - - 116,541-19,041 97,500 2,598-2,598 Total Spending in DEL - - - 116,541-19,041 97,500 2,598-2,598 Spending in Annually Managed Expenditure (AME) Voted expenditure - - - 21-21 - - - B Trade development and promotion and inward investment - - - - 21-21 - - - Total Spending in AME - - - 21-21 - - - Total for Estimate - - - 116,562-19,041 97,521 2,598-2,598 Voted Expenditure - - - 116,562-19,041 97,521 2,598-2,598 Non Voted Expenditure - - - - - - - - -
Supplementary Estimates, 2012-13 UK Trade & Investment Part II: Resource to cash reconciliation '000 Present Changes Revised Plans Plans Net Resource Requirement 86,521 11,000 97,521 Net Capital Requirement 2,598-2,598 Accruals to cash adjustments -611-510 -1,121 Adjustments to remove non-cash items: Depreciation -1,111-510 -1,621 New provisions and adjustments to previous provisions - - - Departmental Unallocated Provision - - - Supported capital expenditure (revenue) - - - Prior Period Adjustments - - - Other non-cash items - - - Adjustment for NDPBs: Remove voted resource and capital - - - Add cash grant-in-aid - - - Adjustments to reflect movements in working balances: Increase (+) / Decrease (-) in stock - - - Increase (+) / Decrease (-) in debtors - - - Increase (-) / Decrease (+) in creditors 500-500 Use of provisions - - - Removal of non-voted budget items - - - Consolidated Fund Standing Services - - - Other adjustments - - - Net Cash Requirement 88,508 10,490 98,998
Supplementary Estimates, 2012-13 UK Trade & Investment Part III: Note A - Statement of Comprehensive Net Expenditure & Reconciliation Table Revised Plans Gross Administration Costs - Less: Administration DEL Income - Net Administration Costs - Gross Programme Costs 116,562 Less: Programme DEL Income -19,041 Programme AME Income - Non-budget income - Net Programme Costs 97,521 Total Net Operating Costs 97,521 Resource DEL 97,500 Capital DEL - Resource AME 21 Capital AME - Non-budget - Adjustments to include: Departmental Unallocated Provision (resource) - Consolidated Fund Extra Receipts in the budget but not in the SoCNE - Adjustments to remove: Capital in the SoCNE - Non-Budget Consolidated Fund Extra Receipts in the SoCNE - Other adjustments - Total Resource Budget 97,521 Resource DEL 97,500 Resource AME 21 Adjustments to include: - Adjustments to include: - Prior period adjustments - Adjustments to remove: Consolidated Fund Extra Receipts in the resource budget - Other adjustments - Total Resource (Estimate) 97,521 '000
Supplementary Estimates, 2012-13 Part III: Note B - Analysis of Departmental Income UK Trade & Investment '000 Revised Plans Voted Resource DEL -19,041 Programme Sales of Goods and Services -19,041 A Trade development and promotion and inward investment -19,041 Total Programme -19,041 Total Voted Resource Income -19,041
Part III: Note C - Analysis of Consolidated Fund Extra Receipts No CFER income or receipts are expected in 2012-13.
Part III: Note D - Explanation of Accounting Officer responsibilities The Accounting Officer prepares resource accounts for each financial year. The following individuals are responsible for the expenditure within this Estimate: Accounting Officer: Nick Baird Nick Baird has personal responsibility for the proper presentation of the department's resource accounts and their transmission to the Comptroller & Auditor General, and is also responsible for the use of public money and stewardship of assets. In discharging these responsibilities, particular regard is given to: - - making judgements and estimates on a reasonable basis; - observing any accounting and disclosure requirements (including any Accounts Direction) and applying suitable accounting policies on a consistent basis; stating whether applicable accounting standards, as set out in the Financial Reporting Manual (FReM), or an organisation s version of it, have been followed, and explain any material departures in the accounts; and - preparing the accounts on a going concern basis. The responsibilities of an Accounting Officer, including responsibility for regularity and propriety of the public finances for which an Accounting Officer is answerable, for keeping proper records and safeguarding assets, are also set out in Chapter 3 of Managing Public Money.