2001-2002 Expenditure

In accordance with my usual practice, I am writing to advise the Assembly about expenditure during the last financial year and my plans for reviewing expenditure during the current financial year.

The Assembly’s budget is broken down into two categories for public expenditure purposes. The first is the Assembly’s Departmental Expenditure Limit (DEL) and is a fixed limit for a three year period. The vast majority of the Assembly’s budget is within the DEL. Most is unhypothecated and the Assembly has full discretion over its spending priorities. The Assembly is expected to meet any unanticipated DEL expenditure by making offsetting savings from other budgets that form part of the Assembly’s DEL. All unspent provision within our assigned DEL at the end of the financial year is eligible to be carried forward into the next financial year. However, the United Kingdom contribution to the Tir Mynydd Scheme is "ring-fenced". This provision is a "non-assigned" budget within the Assembly's DEL; consequently any unspent resources carried-forward may only be used on this activity. Similarly any unspent resources on the Non Domestic Rating Pool (NDR) are "ring-fenced" so, while eligible for carry-forward, may only be spent on this activity.

The second category is Annually Managed Expenditure (AME) and covers items whose provision is reviewed and set by the Treasury, usually in March, for the coming financial year. Prior to this financial year, the elements that made up the Assembly's AME were the Common Agricultural Policy Market Support Schemes and the Housing Revenue Account Subsidy. During the 2000-2001 financial year, provision for the European Union's Woodland Grant Scheme became part of Assembly's AME. In addition the Assembly's AME for the 2000-2001 financial year was increased by £1.9 million for rate relief for rural businesses affected by the Foot and Mouth outbreak. As AME is adjusted in-year, any such underspends would not be eligible for carry-forward. However, any forecast increase in AME expenditure would also be reviewed in-year.  

Subject to the final figures becoming available, the Assembly’s total expenditure during the 2001-2002 financial year was £8,890.6 million; this is 99.1 per cent of the final provision of £8,969.3  million. The percentage of spend during that financial year on the Assembly's DEL, over which the Assembly has full discretion, is 99.5 per cent of final provision.

I am delighted with this outcome, which is a significant improvement on the corresponding position during the 2000-2001 financial year. It also represents a considerable achievement in terms of the Welsh Assembly Government's agenda on public services in Wales.

The following table provides a breakdown of total Assembly 2001-2002 provision and spend by DEL and AME.

	£ million	£ million		£ million
	Final Provision	Actual spend	% of spend	Under- spend
Departmental Expenditure Limit	8,588.4	8,549.8	99.5	38.6
Annually Managed Expenditure	380.9	340.8	89.5	40.0
Total Assembly	8,969.3	8,890.6	99.1	78.7

The figures do not total due to rounding. Further details of the DEL and AME elements of each Main Expenditure Group are set out in the attached tables 1 and 2 respectively.

I propose to undertake two reviews of Assembly expenditure during the current financial year with my Cabinet colleagues. The first review will be in September (when 5 months actual expenditure is known) and the second in January (when 9 months actual expenditure is known). I will also take account of the views raised during plenary sessions and in the discussions of Assembly committees. In addition to discussing with my Cabinet colleagues any expected in-year pressures, one of the main purposes of these reviews is to help me decide whether there is any need to draw down any carry-forward of unspent resources from previous financial years (also known as End-Year Flexibility or EYF), and if so, how much. Any EYF drawn down, following the September review, will be included in a Winter Supplementary Estimate and any EYF drawn down, following the January review, will be included in a Spring Supplementary Estimate.

The first opportunity during this financial year to increase the Assembly’s Departmental Expenditure Limit to take account of EYF is at the time of the Winter Supplementary Estimate. This is likely to be in December. Subject to the Presiding Officer’s agreement, I propose to lay a motion before the Assembly, as I have done at the same time during the previous 3 years, about MEG to MEG changes, in-year transfers to and from Government Departments, the allocation of additional funds from the 2002-2003 Winter Supplementary Estimate and any transfers from the Treasury's DEL Reserve. I will also report on my discussions with my Cabinet colleagues.

If there are any queries which Assembly Members have in relation to this Statement, I would be very happy to deal with them.

Edwina Hart

Table 1

A breakdown of the 2001-2002 Departmental Expenditure Limit element of each Main Expenditure Group is shown in the following table. The notes explain the reasons for the main underspends.

	£ million	£ million		£ million
Main Expenditure Group	Final Provision	Actual Spend	% of spend	Under- spend	Notes
Health & Social Services	3311.4	3307.2	99.9	4.2
Local Government	2881.2	2881.2	100.0	Nil
Education & Lifelong Learning	951.6	958.1	100.7	-6.5
Housing & LG Other Services	352.7	352.8	100.0	-0.1
Economic Development	453.6	444.4	98.0	9.2	1
Environment, Planning & Transport	315.1	310.1	98.4	5.0
Agriculture & Rural Development	74.3	54.0	72.7	20.3	2
Central Administration	130.6	127.4	97.5	3.2
Culture, Sport & the Welsh Language	66.1	66.4	100.4	-0.3
Office of the Presiding Officer	23.4	21.0	89.7	2.4
Forestry	13.7	14.3	104.4	-0.6
Estyn	10.1	8.4	83.2	1.7
Auditor General for Wales	2.2	2.1	95.5	0.1
Other Assembly Services	1.6	1.5	93.8	0.1
Welsh Administration Ombudsman	0.9	0.8	88.9	0.1
Total Assembly DEL	8588.4 (3)	8549.8 (8)	99.5	38.6 (3)

Notes

1. Most of the underspend relates to Broadband Telecommunications. A further payment of £4.9 million was made during the first half of April. 2. Most of the underspend results from the restrictions imposed by the Foot and Mouth outbreak. 3. The figures do not total due to rounding.

Table 2A break down of the Annually Managed Expenditure by Main Expenditure Group (MEG) and activity is shown in the following table.

		£ million	£ million		£ million
MEG	Activity	Final Provision	Actual spend	% of spend	Under- spend
Local Government	Rate relief for rural Businesses	1.9	1.9	100	Nil
Housing & LG Other Services	Housing Revenue Account Subsidy	200.6	178.8	89.1	21.8
Agriculture & Rural Development	EU Market Support Schemes	177.8	160.2	90.1	17.6
Forestry	EU Woodland Grant Scheme	0.6	Nil	Nil	0.6
		380.9	340.8 (1)	89.5	40.0 (1)

Note1. The figures do not total due to rounding.