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Government Departments (Costs)

Volume 84: debated on Tuesday 22 October 1985

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asked the Chancellor of the Exchequer if he has any further announcement to make about the control of expenditure on the running costs of Government Departments.

My predecessor announced the Government's intention to set targets for the control of running costs in Departments on 24 May 1985. The Government propose to set limits on running costs for each Department, for the financial year 1986–87 and following years, to determine the cash available to finance departmental expenditure on administration.These limits will be set at a level which continues to apply firm control on aggregate running costs, taking account of the factors expected to affect each Department's paybill and other administrative costs. This will replace the single centrally imposed assumption about the pay increases for central Government groups (the "pay assumption") which has been applied in previous years.These limits on total running cost expenditure will be announced to Parliament, as will details of the Government's proposals on public expenditure, early next year. As with cash limits, Departments will monitor and control their running costs against these agreed limits and if, exceptionally, a limit has to be changed during the year Parliament will be informed.This change in the method of control of Civil Service costs will have consequences for the presentation of running costs in Estimates. The Government's proposals on this are being discussed with the Public Accounts Committee and the Treasury and Civil Service Select Committee.