My honourable friend the Exchequer Secretary to the Treasury (Sarah McCarthy-Fry) has made the following Written Ministerial Statement.
This Statement gives notice of a resource commitment in advance of the authorisation by Parliament of supply provision for HM Treasury in 2009-10. There are no implications for cash spending.
In the 2009-10 vote on account (HC 1039) presented in November 2008, HM Treasury was voted resource provision of £142 million to cover spending on continuing services until the 2009-10 main estimates are voted by Parliament in July. The amount on account excluded any provision for financial stability-related resource consumption as, at the time, this was expected to be zero.
However, it has since been decided that a cost of capital charge should be applied to the Government’s financial stability-related loans and investments. Cost of capital charge is a non-cash resource charge, accruing on a daily basis, designed to improve transparency under resource accounting and encourage the efficient use of assets. For 2009-10, the charge is forecast to be £450 million, which will not be available until the provision in the Treasury’s 2009-10 main estimate, presented as HC 514, is voted by Parliament in July. This means that the proportion of the £450 million resources that will be consumed before the end of July (ie £135 million) will take resource spending over and above the £142 million authorised in the vote on account causing a resource commitment in advance of supply.