Supplementary Estimate 2017-18 Select Committee Memorandum January 2018 1
Contents Introduction... 3 Format of the Supplementary Estimate... 3 Structural Changes to the Estimate... 3 Summary of Changes... 3 Departmental Expenditure Limit... 4 Key Activities... 4 Spending Review 2015... 5 Ringfenced Funding... 5 Annually Managed Expenditure (AME)... 8 AME Changes... 8 Net Cash Requirement... 12 Provisions... 12 Contingent Liabilities... 12 Departmental Accounting Officer... 13 Annex A: Changes in Estimate Summary Control Totals... 14 Annex B: Summary Analysis by Estimate Section Heading Resource... 15 Annex C: Transfers with Other Government Departments... 17 Annex D: Outline of Changes in Annually Managed Expenditure (AME) Resource... 18 Annex E: Departmental Expenditure Limit 5 Year Outturn Comparison... 19 Annex F: Changes to Departmental Expenditure Limit funding for 2017-18 following the Spending Review (SR) 2015... 20 Annex G: Key Terms... 21 Distribution list... 22 2
Introduction 1. This memorandum gives the Select Committee more information about the Department for Work and Pensions (DWP) Supplementary Estimate for 2017-18. It describes the changes we will make in the Estimate and how those changes relate to our Departmental budgets and control totals and movements since the Spending Review settlement for SR15. 2. The Supplementary Estimate is our final opportunity to align our DEL 2017-18 funding provision with latest spending plans. It is also our final opportunity to amend the Annually Managed Expenditure (AME) provision. Format of the Supplementary Estimate 3. Each Supplementary Estimate is produced in a standard format and consists of an introduction, Part I, Part II and Part III. 4. Part I of each Supplementary Estimate states, as necessary, the changes sought to Resource DEL, Capital DEL, Resource AME, Capital AME, Non Budget Expenditure and the net cash requirement for the financial year. It also reproduces the ambit of the vote, which is the formal description of all the expenditure and income to be financed from the estimate. 5. Part II contains 3 tables. The first table identifies the sections within budgetary limit where changes to resource and capital are being proposed and also shows movements in cash. The second table which follows is a reproduction of the Main Estimate showing the revised subhead details, including additional provision sought under each subhead and any subheads unchanged as a result of the Supplementary Estimate. The third table provides reconciliation between the net resource total and the net cash requirement. 6. Part III contains a number of notes which are self-explanatory. Structural Changes to the Estimate 7. Since the Main Estimate, there have been no changes to the structure of the Estimate. Summary of Changes 8. The Supplementary Estimate provision is summarised in Table 1 below. 3
Table 1 Supplementary Estimate Changes to Departmental Budgets Supplementary Description Main Estimate Estimate Movement % Change m m m DEL (including Capital) Of which DEL Admin AME (including Capital) Voted Non Budget Net cash Requirement 6,788 6,739 (49) (0.7) 901 899 (2) (0.2) 176,901 180,235 3,334 1.9 2,230 2,550 320 14.3 83,697 85,333 1,636 2.0 Totals may not sum due to rounding. 9. Annex A provides an overview of all the proposed changes at control total level. Annex B shows an analysis of the movements by Estimate Section Heading. More detailed explanations for the changes are included in the following paragraphs. Departmental Expenditure Limit Key Activities 10. The Department for Work and Pensions is the UK s biggest public service Department. We develop policy and deliver essential services on work, welfare, pensions and child maintenance. We are creating a welfare system that supports those who are unable to work but which expects those who can work to do so. We will achieve this through 5 strategic objectives: Running an effective welfare system that enables people to achieve financial independence by providing assistance and guidance into employment; Increasing saving for, and security in, later life; Creating a fair and affordable welfare system which improves the life chances of children and adults; Delivering outstanding services to our customers and claimants; Transforming the way we deliver our services to reduce costs and increase efficiency. 11. We have set out in our Single Departmental Plan, updated in April 2017, how we will achieve our objectives and how we will measure how well we are doing. Our Annual Report and Accounts published in July 2017 sets out the progress we 4
have made so far. We are currently refreshing our Single Departmental Plan for publication in April 2018. Spending Review 2015 12. The estimate for DEL is based on the Department s Spending Review 2015 settlement. Subsequent transactions impacting DEL are covered in the sections below. Overall movements at each estimate are shown in Annex E. Ringfenced Funding 13. The majority of funding provided at SR15 is without ringfences; however, a small number remain and these are detailed below. Depreciation 14. Depreciation continues to be ringfenced, as a non-cash expense. The total amount of depreciation funded for 2017-18 is 179m, of which 101m is within Administration. Official Development Assistance 15. Within the Department s settlement there is 4m per year relating to Official Development Assistance (ODA) for the International Labour Organisation. This is ringfenced within the RDEL budget and any underspends will be formally returned at the Supplementary Estimate each year for redistribution across government. The funding has been fully utilised in 2017-18. Financial Transactions 16. Funding for Financial Transactions within DEL Capital has been ringfenced for the SR15 period. This totals 165m in 2017-18, and relates to National Employment Savings Trust loans and Social Fund Funeral Expenses. Work and Health Programme 17. At Summer Budget 2015 the Department was provided additional funding for Work and Health Programme. This started in 2017-18 and has been ringfenced for the remainder of the SR15 period. The total amount of funding for the current financial year is 61.9m. The Work and Health Programme replaced the Work Programme and Work Choice. It provides specialist support for the long-term unemployed and claimants with health conditions and disabilities and is run by service providers awarded contracts by the Government. This provision is devolved to Scotland, Greater Manchester and London. Support for Self Employed 18. Ringfenced funding of 5m has been provided for Support for Self Employed. The New Enterprise Allowance (NEA) supports unemployed people starting and developing their own businesses. To help them through the difficult early stages of business development, DWP provides funding for mentoring services and financial allowances once they begin trading. 5
19. A summary of the Supplementary Estimate changes to Departmental DEL budgets for 2017-18 are shown in Table 2 below: Table 2 Changes to Departmental DEL Increase/Decrease in DEL Provision Resource Capital Total m m m Paragraph Reference Main Estimate 2017-18 Closing Position 6,410.1 377.7 6,787.8 23-26 Budget Exchange (44.9) 0.0 (44.9) 27 Virements (123.0) 123.0 0.0 28 Cash Rebate 1.6 0.0 1.6 29 Transfers to Other Government Departments Supplementary Estimate 2017-18 Closing Position (5.9) 0.0 (5.9) 6,237.9 500.7 6,738.6 Movement (172.1) 123.0 (49.1) Totals may not sum due to rounding. 20. Annex E summarises movements in DEL budget limits and outturn spend since 2012-13. 21. Annex F shows how the 2017-18 funding has changed at each Estimate from the SR15 position. Budget Exchange 22. Under budget exchange the Department can surrender a forecast DEL underspend at the 2017-18 Supplementary Estimate in return for a corresponding DEL increase in the next financial year. An underspend is forecast for 2017-18, with a potential parallel financial pressure in 2018-19. The Department will therefore carry out budget exchange, reducing Resource DEL funding by 44.9m. 23. The Department is undertaking a People and Locations Programme, a key element of which is reducing the cost of the estates expenditure through a process of rationalisation of demand, shared usage with other departments and commercial negotiation with landlords. This is almost certainly the largest estate renegotiation in the UK and is hugely complex, ultimately involving around 15% of DWP s 75,000 employees changing their office location in the months ahead. 24. Crucially, the Programme involves significant interaction with suppliers to complete works on a large number of sites across the DWP Estate. The latest view of our Programme Board is that works on around 50 sites which had been timetabled to be completed in 2017-18 will now move to the first quarter of 2018-6
19, with associated DEL costs of 20.4m. A budget exchange mitigates this potential risk. 25. In addition, the Department has reached a commercial settlement with one of its suppliers in respect of the cost of works which will be required to ensure that the Department s estate meets the condition prescribed under the expiry requirements as per the process set out in the PRIME contract. Part of this settlement has resulted in a cash receipt in the current year related to expenditure which will be required in 2018-19. This has led to additional requirement for budget exchange of 24.5m, 2.4m of which is DEL Admin. Virement 26. In this estimate 123m of funding will be moved from Resource DEL to Capital DEL. This amount reflects the latest assumptions around expenditure plans and the accounting and budgeting treatments within our Change Programmes and Digital Refresh activity. Making this virement demonstrates the Department s desire to invest for the future to modernise and improve digital infrastructure and its physical estate to reduce cost and improve service to customers. Cash Rebate 27. To encourage good cash management in departments, HMT operates a system of penalties and rebates in respect of departmental performance. DWP has been awarded a rebate of 1.6m for good cash management relating to the year 2016-17. The Department has a very strong record in this area and has received this rebate annually since SR10. Transfers with Other Government Departments 28. A full breakdown of transfers is given in Annex C. The net impact of these transfers between DWP and other government departments is a reduction in the Department s overall funds of 5.9m. 7
Annually Managed Expenditure (AME) 29. The provision of AME included in the Supplementary Estimate reflects latest outturn data and forecasting assumptions. It also includes cover against fluctuations to year-end, as AME is demand-led and therefore cannot be controlled with complete certainty. This is the dominant factor in movements in provision on benefit expenditure and does not represent expected increases in actual spending. The calculation of margin is based on an assumption of risk associated with each benefit. The headline Supplementary Estimate changes to departmental AME budgets for 2017-18 are shown in table 3 below which summarises the overall position. Table 3 Changes in AME Provision Increase in AME Provision Resource Capital Total m m m Main Estimate 2017-18 Closing Position 176,901 0 176,901 Supplementary Estimate 2017-18 Closing Position 180,099 136 180,235 Movement 3,198 136 3,334 Of which: Forecast Movement between Main Estimate and Autumn Budget -297 0.0-297 Forecast Movement post Autumn Budget 318 136 454 Total Forecast Movement 21 136 157 Movement in Provisions 1,816 0 1,816 Margin 1,362 0 1,362 30. Annex D shows a breakdown of changes to AME resource provision included within the Supplementary Estimate. Notable variations are explained in the paragraphs below. AME Changes Summary 31. Resource Annually Managed Expenditure (RAME) budget will increase by 3.2bn (1.8%) from 176,901m to 180,099m. Capital AME (CAME) will increase by 136m, from 0m to 136m. Resource Annually Managed Expenditure 32. The methodology for preparation of the Supplementary Estimate is aligned to that adopted in previous years, using the expenditure forecasts agreed by Office for 8
Budget Responsibility (OBR) at the Autumn Budget, as updated for latest assumptions, onto which small margins are applied to cover potential uncertainty in the remainder of the year. In establishing a suitable margin, an assessment of risk has been undertaken. This has been set according to historic judgements of benefit volatility and perceived challenges for the rest of the year. The increase in RAME therefore consists of a number of elements, as shown in Table 3 above: The underlying published expenditure forecasts for benefit expenditure are materially unchanged from those published in the Main Estimate, having increased by only 21m. This takes account of latest actual expenditure, revised unemployment figures and other economic assumptions provided to the Department by the OBR. There is also 1.4bn of margin which has been added to protect against fluctuation to final outturn. The margin applied is in line with prior years treatment and as margins are not applied at the Main Estimate, it is normal to see an increase of this nature at the Supplementary Estimate. The remaining 1.8bn relates to provisions which are non-cash items. This is made up of 899m for potential legal cases for PIP and ESA, and a further 917m for Financial Assistance Scheme due to a change in the long term discount rates supplied by HMT. Universal Credit 33. Universal Credit (UC) is currently being rolled out nationally. Latest forecasts show UC Spending is 522m lower than the Main Estimate (split by 313m inside the Welfare Cap and 209m outside), as the rate of claimants becoming eligible for UC has been slower than previously anticipated. 34. Margins of 2% for spending inside the Welfare Cap and 5% outside the Welfare Cap have been applied (totalling 109m), reflecting the potential variation in pace of new claimants coming on to UC and the greater uncertainty inherent in a new system, meaning the final movement in Universal Credit is a reduction of 413m. Disability Benefits (Attendance Allowance, Disability Living Allowance and Personal Independence Payment) 35. Latest forecasts compared to the Main Estimate show a total increase of 405m made up of 43m for Attendance Allowance (AA), 603m for Disability Living Allowance (DLA) and a reduction of 241m for Personal Independence Payment (PIP). These forecasts have been revised to reflect recent outturn data, including higher average awards and fewer people leaving at reassessment, but for PIP this is more than offset by fewer reassessments being conducted, resulting in the increase in spending occurring wholly in DLA. 36. The additional requirement for disability benefits in the Supplementary Estimate is 1,171m in total. This includes a 288m margin in total, set at 0.5% for AA, 2% for PIP and 1% for DLA, reflecting the fact that PIP is a relatively new benefit and therefore subject to greater uncertainty. In addition, an allowance of 479m has been included in respect of anticipated provision that will be included in the 9
Accounts for backdated payments that will be made in 2018-19 arising from recent or pending legal judgements. Employment and Support Allowance 37. Latest forecasts show 93m increase for non-contributory (voted) Employment and Support Allowance (ESA) and 1m increase for contributory (non-voted) Employment and Support Allowance (ESA). Forecasts have been adjusted to reflect a slower movement of claimants to UC. 38. The additional requirement for non-contributory ESA is 717m. This includes a 204m margin set at 2%. Contributory ESA has increased by 72m including a 1.5% margin of 71m. In addition, an allowance of 420m has been included in respect of anticipated provision that will be included in the Accounts for backdated payments for claimants reassessed from Incapacity Benefit who were also eligible for non-contributory ESA. Income Support 39. Latest forecasts show 150m increase, forecasts have been adjusted to reflect a slower movement of claimants to UC. The amount required for Income Support (IS) is 172m (including a 1% margin of 21m). Jobseekers Allowance 40. Latest forecasts show 110m reduction for income-based (voted) Jobseekers Allowance and 97m reduction of contributory (non-voted) Jobseekers Allowance. This reflects lower OBR unemployment forecasts, along with a slower movement of claimants to UC. 41. The Supplementary Estimate has been reduced by 93m for contributory (nonvoted) Jobseekers Allowance and by 88m for income-based (voted) Jobseekers Allowance, once a 1.5% margin is applied to both ( 4m and 22m respectively). Housing Benefit 42. Latest forecasts show that spending is 147m higher than the Main Estimate. Forecasts have been adjusted to reflect a slower movement of claimants to UC. 43. The amount required for Housing Benefit (HB) inside the Welfare Cap is 496m (including a margin of 203m, 1%), while for HB outside the Welfare Cap the Supplementary Estimate reduces provision by 117.4m once a margin of 2% is applied. State Pension 44. Latest forecasts show 230m reduction, reflecting lower outturn spending. The Supplementary Estimate reduces by 43m once a margin of 187m (0.2%) is applied. 10
Expenditure Incurred by the Social Fund 45. Cold Weather Payments (CWPs) are inherently difficult to predict. Past years outturn is not a guide to this year s expenditure nor is expenditure so far this winter. The Supplementary Estimate provides 500m, which allows cover above the current 137m assumption, itself based on an average of the last ten years payments, this is required to protect against uncertainty. The highest outturn figure for CWPs in the last ten years has been 435m in 2010-11. Statutory Maternity Pay (SMP) 46. As in past years, the Supplementary Estimate for SMP reflects the funding requirement stated by the Government Actuary s Department in its funding letter. This increases provision by 37m. Financial Assistance Scheme (FAS) 47. The FAS provision is an estimate of the current value of the liability to make payments to FAS pensioners over the coming decades. The basis for the provision calculation is the FAS long-term cash forecast model provided by the Pension Protection Fund, which administers FAS. The forecast movement in FAS provision has increased significantly, by 878m since the Main Estimate. In the main, this is due to a reduction in the long term discount rates increasing the provision by 977m in this year s accounts, partly being offset by a reduction of 99m which resulted from updated cash flows for the lifetime of the scheme, and reflects the estimated total number of FAS members, the required non-assetbacked assistance, and the average notional pension amounts for FAS2 members. These cash flows are then discounted to give their present value at the year-end, for inclusion in the annual accounts. The rates used are provided by HMT, taking account of the latest economic conditions. The rates are updated annually. Capital Annually Managed Expenditure Universal Credit Advances 48. The amount of Universal Credit advances which are being repaid over a period greater than 12 months will this year be capitalised. This is in accordance with HMT guidance. The amount included in the Supplementary Estimate is 172m, which provides a margin of cover. Expenditure Incurred by the Social Fund 49. 36m CAME is being returned to HM Treasury in relation to Social Fund debt recoveries. The Department has a strong focus on recovering debt and performance has exceeded the initial forecast. 11
Net Cash Requirement 50. The Supplementary Estimate increases the Net Cash Requirement by 1,636m. This increase relates to the cash impacts of the changes to departmental budgets as shown in the following table. Table 4 Net Cash Requirement Movement m Previous Net Cash Requirement 83,697 Net Resource Requirement 3,346 Net Capital Requirement 259 Adjustments for non-cash items (1,748) Adjustment for ALBs (29) Adjustments to reflect movements in working balances 34 Removal of non-voted budget items (225) Revised Net Cash Requirement 85,333 Figures as presented may not sum, as a result of rounding. Provisions 51. We recognise provisions in accordance with IAS37 (Provisions, Contingent Liabilities and Contingent Assets). They are valued using the best estimate of expenditure required to settle the obligation. Where the effect of the time value of money is significant we discount the estimated risk adjusted cash flows using the real rate set by HMT. Contingent Liabilities 52. As with provisions we disclose contingent liabilities in accordance with IAS37. For some statutory and non-statutory contingent liabilities the likelihood of transfer or economic benefit is remote. However, we still disclose some of these for parliamentary reporting and accountability, where this is needed under the requirements of public money. 53. Where the time value of money is material, we state contingent liabilities that we have to disclose under IAS 37 at discounted amounts, and separately note the amount reported to Parliament. Where we do not have to disclose contingent liabilities under IAS37, we state the amounts reported to Parliament. 12
Departmental Accounting Officer 54. This memorandum has been prepared with reference to the guidance in the Estimates Manual provided by HMT and available on the House of Commons and Scrutiny Unit Website. 55. The Departmental Accounting Officer has personal responsibility for the content in the memorandum and formal approval of the memorandum has therefore been obtained prior to submission to the Select Committee. 13
Annex A: Changes in Estimate Summary Control Totals Budgetary Limit Main Estimate 2017-18 Figures as presented may not sum, as a result of rounding. Movement Supplementary Estimate 2017-18 m m m Resource Departmental Expenditure Limit 6,410.1 (172.1) 6,237.9 Voted 5,923.9 (170.8) 5,753.0 Non-Voted 486.2 (1.3) 484.9 Administration 901.0 (1.6) 899.4 Capital Departmental Expenditure Limit 377.7 123.0 500.7 Voted 337.5 124.5 462.0 Non-Voted 40.2 (1.5) 38.7 Total Departmental Expenditure Limit 6,787.8 (49.1) 6,738.6 Resource Annually Managed Expenditure 176,901.0 3,198.1 180,099.1 Voted 74,630.7 2,934.0 77,564.7 Non-Voted 102,270.3 264.1 102,534.3 Capital Annually Managed Expenditure 0.0 135.9 135.9 Voted 0.0 171.9 171.9 Non-Voted 0.0 (36.0) (36.0) Total Annually Managed Expenditure 176,901.0 3,334.0 180,234.9 Voted Non-Budget 2,230.1 320.3 2,550.4 14
Annex B: Summary Analysis by Estimate Section Heading Resource Section Reference Section Description Main Estimate 2017-18 Supplementary Estimate 2017-18 Movement m m m % Spending in Departmental Expenditure Limits Voted expenditure 5,923.9 5,753.0 (170.8) (2.9) A Operational Delivery 1,838.0 2,096.3 258.3 14.1 B Health and Safety Executive (Net) 126.4 127.3 0.9 0.7 C European Social Fund 11.2 15.1 3.9 35.0 D Executive Arms Length Bodies (Net) 87.4 134.8 47.5 54.3 E Employment Programmes 636.3 290.7 (345.6) (54.3) F Support for Local Authorities 283.4 261.6 (21.8) (7.7) G Other Programmes (34.1) (63.3) (29.2) 85.6 H Other Benefits 167.9 170.4 2.4 1.5 I Departmental operating costs 2,807.4 2,720.2 (87.1) (3.1) Unallocated provision 0.0 0.0 0.0 0.0 Non-voted expenditure 486.2 484.9 (1.3) (0.3) J National Insurance Fund 457.7 457.7 0.0 0.0 K Expenditure incurred by the Social Fund 28.5 27.2 (1.3) (4.6) Consolidated Fund Extra Receipts 0.0 0.0 0.0 0.0 Total Spending in Departmental Expenditure Limit 6,410.1 6,237.9 (172.1) (2.7) Section Reference Section Description Spending in Annually Managed Expenditure Main Estimate 2017-18 Supplementary Estimate 2017-18 Movement m m m % Voted expenditure 74,630.7 77,564.7 2,934.0 3.9 Expenditure in scope of the Welfare Cap 69,160.6 72,426.7 3,266.1 4.7 L Severe Disablement Allowance 131.5 120.5 (11.0) (8.3) M Industrial Injuries Benefits Scheme 852.5 844.7 (7.8) (0.9) N Universal Credit 2,337.5 2,065.2 (272.3) (11.7) O Employment and Support Allowance 10,097.1 10,814.4 717.3 7.1 P Income Support 1,991.4 2,163.1 171.7 8.6 Q Pension Credit 5,362.1 5,398.1 36.0 0.7 R Financial Assistance Scheme 177.5 1,121.4 943.9 531.9 S Attendance Allowance 5,507.9 5,578.9 70.9 1.3 T Personal Independence Payment 8,536.6 8,940.1 403.6 4.7 U Disability Living Allowance 8,786.7 9,483.6 696.9 7.9 V Carer's Allowance 2,932.6 2,916.5 (16.1) (0.5) W Housing Benefit 20,030.3 20,526.4 496.0 2.5 X Statutory Maternity Pay 2,384.4 2,421.0 36.6 1.5 Y Non-contributory Christmas Bonus 32.6 33.0 0.3 1.0 Expenditure outside scope of the Welfare Cap 5,470.1 5,138.1 (332.0) (6.1) Z Jobseekers Allowance 1,572.7 1,484.9 (87.8) (5.6) AA Universal Credit 1,576.7 1,435.8 (141.0) (8.9) AB TV Licences for the over 75s 641.0 654.0 13.0 2.0 AC Housing Benefit 1,577.7 1,460.3 (117.4) (7.4) AD Other Benefits 104.3 106.4 2.2 2.1 AE Other Expenditure (1.8) (5.2) (3.4) 184.6 AF Other Expenditure EALBs (Net) (0.5) 1.9 2.4 0.0 15
Section Reference Section Description Main Estimate 2017-18 Supplementary Estimate 2017-18 Movement m m m % Non-voted expenditure 102,270.3 102,534.3 264.1 0.3 Expenditure in scope of the Welfare Cap 8,053.3 8,453.3 400.0 5.0 AG Incapacity Benefit 1.9 4.9 3.0 156.4 AH Employment and Support Allowance 4,729.7 4,801.7 72.0 1.5 AI Expenditure incurred by the Social Fund 2,205.3 2,564.5 359.2 16.3 AJ Maternity Allowance 458.4 435.5 (22.9) (5.0) AK Bereavement benefits 534.2 522.2 (11.9) (2.2) AM Other Contributory Benefits 123.8 124.5 0.7 0.6 Expenditure outside of the Welfare Cap 94,217.0 94,081.0 (136.0) (0.1) AM Jobseekers Allowance 335.8 242.4 (93.4) (27.8) AN State Pension 93,881.2 93,838.6 (42.6) (0.0) - Other Contributory Benefits 0.0 0.0 0.0 0.0 - Consolidated Fund Extra Receipts 0.0 0.0 0.0 0.0 Total spending in Annually Managed Expenditure 176,901.0 180,099.1 3,198.1 1.8 Non-Budget spending Voted expenditure 2,230.1 2,550.4 320.3 14.4 AO Cash paid in to the Social Fund 2,230.1 2,550.4 320.3 14.4 Total Non-budget spending 2,230.1 2,550.4 320.3 14.4 Total for Estimate 185,541.2 188,887.4 3,346.2 1.8 1. Figures as presented may not sum, as a result of rounding. 2. Section letters refer to individual sections within the Estimate to assist in cross-referencing. 3. Percentage change not applicable as not compared on a like for like basis. 16
Annex C: Transfers with Other Government Departments Para Estimate Section m Description 28 Departmental Operating Costs 28 Departmental Operating Costs 28 Departmental Operating Costs 28 Departmental Operating Costs 28 Departmental Operating Costs 28 Departmental Operating Costs 28 Departmental Operating Costs 28 Departmental Operating Costs (2.000) Transfer Fit For Work Funding to Scottish Government (0.307) Funding for Personal Independence Payments additional Tax Credits referrals to HMRC (0.710) Single Operating Platform milestone payment to Cabinet Office (0.075) Cost of administering Tax Credits debt transferred to Northern Ireland (1.810) Increasing Access to Psychological Therapies to Department of Health (0.887) Single Gateway Project funding transfer to Scottish Government (0.706) Universal Credit to HMRC 0.630 Transfer from Security and Intelligence Agencies for National Cyber Security Programme (0.710) Administration Total (5.865) Resource Total 0.0 Capital Total (5.865) Total Net Transfers to OGD Figures as presented may not sum, as a result of rounding. 17
Annex D: Outline of Changes in Annually Managed Expenditure (AME) Resource Movement Of which: Total Forecast Movement Movement in Provisions Margin m Margin % Voted: m Expenditure in scope of the Welfare Cap Severe Disablement Allowance (11.0) (13.3) 0.0 2.4 2.00% Industrial Injuries Benefits Scheme (7.8) (7.8) 0.0 0.0 0.00% Universal Credit (272.3) (312.8) 0.0 40.5 2.00% Employment and Support Allowance 717.3 93.5 420.0 203.8 2.00% Income Support 171.7 150.2 0.0 21.4 1.00% Pension Credit 36.0 22.5 0.0 13.5 0.25% Financial Assistance Scheme 943.9 0.0 916.5 27.4 2.50% Attendance Allowance 70.9 43.2 0.0 27.8 0.50% Personal Independence Payment 403.6 (241.3) 479.0 165.9 2.00% Disability Living Allowance 696.9 603.0 0.0 93.9 1.00% Carer's Allowance (16.1) (45.0) 0.0 28.9 1.00% Housing Benefit 496.0 292.8 0.0 203.2 1.00% Statutory Maternity Pay 36.6 36.6 0.0 0.0 0.00% Non-contributory Christmas Bonus 0.3 0.3 0.0 0.0 0.00% 3,266.1 622.0 1,815.5 828.6 Expenditure outside scope of Welfare Cap Jobseekers Allowance (87.8) (109.7) 0.0 21.9 1.50% Universal Credit (141.0) (209.3) 0.0 68.4 5.00% TV Licences for the over 75s 13.0 13.0 0.0 0.0 0.00% Housing Benefit (117.4) (146.1) 0.0 28.6 2.00% Other Benefits 2.2 2.2 0.0 0.0 0.00% Other Expenditure (3.4) (3.4) 0.0 0.0 0.00% Other Expenditure EALBs (Net) 2.4 2.4 0.0 0.0 0.00% (332.0) (451.0) 0.0 118.9 Total Voted Expenditure 2,934.0 171.0 1,815.5 947.5 Non-Voted Expenditure in scope of the Welfare Cap Incapacity Benefit 3.0 3.0 0.0 0.0 0.00% Employment and Support Allowance 72.0 1.1 0.0 71.0 1.50% Expenditure incurred by the Social Fund 359.2 209.2 0.0 209.2 0.00% Maternity Allowance (22.9) (25.1) 0.0 2.2 0.50% Bereavement benefits (11.9) (11.9) 0.0 0.0 0.00% Other Contributory Benefits 0.7 0.7 0.0 0.0 0.00% 400.0 176.9 0.0 282.3 Expenditure outside scope of Welfare Cap Jobseekers Allowance (93.4) (97.0) 0.0 3.6 1.50% State Pension (42.6) (229.9) 0.0 187.3 0.20% (136.0) (326.9) 0.0 190.9 Total Non-Voted Expenditure 264.1 (150.0) 0.0 473.2 Total Expenditure 3,198.1 21.0 1,815.5 1,420.7 1. Figures as presented may not sum, as a result of rounding. 2. The welfare cap is a limit on the amount that Government can spend on certain social security benefits in the five years from 2016/17. The Government introduced the cap in Budget 2014 and Office for Budget Responsibility (OBR) reports on whether the cap has been met or exceeded alongside the Autumn Statement. The welfare cap includes a forecast margin which allows for breaches of 2% when changes to forecast mean relevant welfare spending exceeds the cap. 3. The provision for Annually Managed Expenditure included in the Supplementary Estimate reflects latest outturn data, forecasting assumptions and cover against fluctuations in forecasts to yearend. 18
Annex E: Departmental Expenditure Limit 5 Year Outturn Comparison Limit Outturn Variance Administration m m m 2012-13 Outturn 1,252 1,180 72 2013-14 Outturn 1,276 1,091 185 2014-15 Outturn 1,208 894 314 2015-16 Outturn 1,058 837 221 2016-17 Outturn 942 880 62 2017-18 Supplementary Estimate 899 Resource 2012-13 Outturn 7,523 7,366 157 2013-14 Outturn 7,401 7,359 42 2014-15 Outturn 7,217 7,152 65 2015-16 Outturn 6,508 6,476 32 2016-17 Outturn 6,260 6,161 100 2017-18 Supplementary Estimate 6,238 Capital 2012-13 Outturn 427 375 52 2013-14 Outturn 199 186 13 2014-15 Outturn 281 249 32 2015-16 Outturn 227 184 43 2016-17 Outturn 307 292 15 2017-18 Supplementary Estimate 501 1. 2012-13 figures published in the Department for Work and Pensions 2012-13 Annual Report and Accounts. 2. 2013-14 figures published in the Department for Work and Pensions 2013-14 Annual Report and Accounts. 3. 2014-15 figures published in the Department for Work and Pensions 2014-15 Annual Report and Accounts. 4. 2015-16 figures published in the Department for Work and Pensions 2015-16 Annual Report and Accounts. 5. 2016-17 figures published in the Department for Work and Pensions 2016-17 Annual Report and Accounts. 6. Figures as presented may not sum, as a result of rounding. 7. Detailed explanations of the variance between outturn and funding are provided in the latest published set of the Department s Annual Report and Accounts. 19
Annex F: Changes to Departmental Expenditure Limit funding for 2017-18 following the Spending Review (SR) 2015 Description Resource Capital Total m m m Spending Review 2015 6,446.0 374.0 6,820.0 Main Estimate 2016-17 Closing Position 6,475.4 377.7 6,853.1 Supplementary Estimate 2016-17 Closing Position 6,469.2 377.7 6,846.9 Main Estimate 2017-18 Closing Position 6,410.1 377.7 6,787.8 Supplementary Estimate 2017-18 Closing Position 6,237.9 500.7 6,738.6 Figures as presented may not sum, as a result of rounding. 20
Annex G: Key Terms Departmental Expenditure Limit (DEL) Spending within the Department s direct control which can therefore be planned over an extended period, such as the costs of its own administration, payments to third parties e.g. within Employment Programmes, Housing Benefit administration subsidies to Local Authorities, and the European Social Fund. Annually Managed Expenditure (AME) In the Department for Work and Pensions, Annually Managed Expenditure is primarily demand led expenditure on social security and social assistance benefits. Annually Managed Expenditure spending does not fall within the Departmental Expenditure Limit. It is generally less predictable and controllable than expenditure in Departmental Expenditure Limit. Voted Funds Parliament consents in principle to the use of public funds through legislation to enable specified policies. It approves use of public resources to carry out those policies year by year as defined by the specific ambits of the Department by voting on the published Parliamentary Supply Estimates in the House of Commons. Non-Voted Funds Although such expenditure appears in the departmental Estimate it is not voted by Parliament but may nevertheless fall within the budget and/or accounts. This expenditure mainly relates to Contributory Benefits such as Contributory Retirement Pensions and Employment and Support and Jobseeker s Allowances which are financed from the National Insurance Fund. Budget and Non-Budget Funds The term Budget and Non-Budget terms apply to whether the funds impact the HM Treasury Budgetary Controls. Funds specified as Budget will impact HM Treasury controls whereas funds defined as Non-Budget will not impact HM Treasury controls. Items covered within this include Social Fund expenditure such as Cold Weather Payments. 21
Distribution list Secretary of State Ministers Special Advisers Permanent Secretary Finance Director General Phill Wells Andy Cartner Shaun Butcher Charu Gorasia Tara Smith 22