Statement
My right honourable friend the Secretary of State for Defence (John Hutton) has made the following Written Ministerial Statement.
Subject to parliamentary approval of the necessary supplementary estimate, the Ministry of Defence departmental expenditure limits (DEL) will be increased by £626,555,000 (voted and non voted) from £37,510,083,000 to £38,136,638,000. Within the DEL change, the impact on resources and capital are as set out in the following table:
Voted Non-Voted Voted Non-voted Total Resource 764,301 33,254 37,891,603 179,450 38,071,053 Of which: Administration Budget - -64,153 2,294,096 - 2,294,096 Near-cash in RDEL 271,362 33,254 26,101,150 409,964 26,511,114 Capital 329,000 - 8,312,045 851 8,312,896 Depreciation* -500,000 - -8,237,825 -9,486 -8,247,311 Total 593,301 33,254 37,965,823 170,815 38,136,638
*Depreciation, which forms part of resource DEL, is excluded from the total DEL since capital DEL includes capital spending and to include depreciation of those assets would lead to double counting.
The changes to the resource and capital elements of the DEL arise from:
a net increase in the RfR2 of near cash resource of £237,000,000 and near cash capital DEL of £65,000,000; and a further indirect (non-cash) resource DEL request of £500,000,000 to reflect the forecast costs of peace keeping operations in Iraq, Afghanistan and Balkans;
the take up of resource end-year flexibility (EYF) of £45,000,000 and capital end year flexibility of £214,000,000;
transfers in from the Foreign and Commonwealth Office of £1,800,000 for helicopter pilot training for counter narcotics operations (RfR1); transfers in from the Department for International Development of £300,000 being reimbursement for locally employed contractors in Iraq (RfR2), £18,899,000 as a contribution to the Global Conflict Prevention Costs Pool (RfR2), and £917,000 as a contribution to the Iraq Stabilisation Aid Fund (RfR2);
transfers out to the Department for Innovation, Universities and Skills being the MoD’s contribution to the new Government Skills Strategy initiative of £235,000 (RfR1); and a transfer out to the FCO of £15,350,000 being the MoD’s contribution to the Stabilisation Aid Fund (RfR2);
additional fiscal capital DEL provision of £50,000,000 relating to the MoD’s planned sale of its Spectrum holding;
to re-allocate Royal Hospital Chelsea (RHC) costs of £9,224,000 from non-voted expenditure to other current voted expenditure to correct a misalignment in the Winter Supplementary Estimates;
to re-allocate DEL grants in aid from DEL to non budget grants in aid (non-voted) to reflect a further classification changes for the Council of Reserve Forces & Cadets Association of £29,081,000;
to increase grants in aid funding for the Royal Naval Museum of £773,000; the Council of Reserve Forces and Cadet Association (CRFCA) of £3,000,000; and the RAF Museum of £400,000; by reducing resource DEL current costs and increasing non-budget grants in aid with no overall impact on resource;
to increase operating appropriations in aid by £180,700,000 and non-operating appropriations in Aid by £25,879,000 to reflect current forecasts of outturn offset by corresponding changes to resource and capital spending with no overall effect on resource or capital DEL; and
to revise sub-head provisions to reflect resource and capital revisions in allocations between top- level budget holders to match required defence outputs, with no overall impact on DEL.
The changes to resource DEL and capital DEL will lead to an increased net cash requirement of £626,555,000.