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Legal Costs

Volume 470: debated on Monday 7 January 2008

To ask the Secretary of State for Defence how much his Department spent, in near cash terms, on (a) legal fees, (b) legal fees incurred in relation to land acquisition/disposal and (c) legal fees incurred in relation to compensation payments, as listed in his Department’s resource account code hierarchy, in each financial year since 2000-01. (169347)

The total resource costs of the expenditure items are set out in the following table.

£ million

Financial year

Legal fees

Legal fees—land acquisition and disposal

Legal fees—compensation payments

2000-01

38.7

0.9

28.9

2001-02

1.4

1.0

0.4

2002-03

2.0

1.5

1

2003-04

3.0

0.4

1

2004-05

5.2

1.0

1.6

2005-06

21.1

0.8

3.9

2006-07

7.7

8.4

7.6

1 While the overall Operating Cost Statement (OCS) was correct, the balance relating to this resource account code in 2002-03 and 2003-04 incorrectly excluded expenditure to be offset by the utilisation of provisions resulting in an erroneous credit balance. (An estimate of the expense for the legal fee obligation is taken through the OCS in the year the obligation arises and held as a provision. When the obligation becomes a liability and the provision is utilised, a charge is made to the OCS and the provision is used to offset the expense in the OCS). The detailed data required to restate the correct expenditure for this specific resource accounting code have been archived and the restatement can be undertaken only at disproportionate cost.

Near cash expenditure is not separately identified in the final resource accounts or the centrally held supporting records. Total resource costs have therefore been provided; however it is unlikely that there are any non cash costs attributed to the expenditure items which would result in the near cash expenditure being different from the resource expenditure. The creation of legal provisions is attributed to a different resource account code to those listed in the question.