This briefing discusses Parliament's approval of the Government's spending plans. It includes a summary of each government department's spending plans for 2018/19.Jump to full report >>
One of Parliament’s longest standing functions is the consideration and authorisation of the Government’s spending plans, requiring the Government to obtain parliamentary consent before spending public money.
Main Estimates are the documents that contain the detail of those spending plans for a particular year. There is a separate Estimate for each Government Department. Changes are presented at the end of each year through Supplementary Estimates. Each of the Estimates must be authorised by Parliament before they take effect. In the early part of the year, funding is provided through an advance, known as the Vote on Account.
The 2018-19 Main Estimates were published on 19 April 2018. They show the initial budgets which the Government is seeking for each department, divided into separate limits for current, day-to-day spending, on staff and other running costs, on goods and services and grants; and capital (investment) spending, covering purchase and sale of assets, loans and capital grants. Costs are further divided into spending subject to fixed limits, based broadly on the plans outlined for 2018-19 in the 2015 Spending Review, known as Departmental Expenditure Limits; and less predictable and more demand led spending, known as Annually Managed Expenditure. Cash block grant proposed to Scotland, Wales and Northern Ireland is also included under a separate heading.
Public spending overall (including that within Estimates) in 2018-19 is forecast to be 1.9% higher than in 2017-18, rising from £797.4 billion in 2017-18 to £812.9 billion in 2018-19.
Day-to-day spending on health is up by £2.2 billion (+1.8%) and on education by
£2.4 billion (+3.8%) compared to last year. Both are likely to face increased costs and rising demand, as the numbers of elderly and school age children rise. Increases in budget reflect both the original Spending Review plans, including commitments to protect health and schools funding, and additional money announced since.
Day-to-day spending on defence is also up by £0.5 billion (+1%) and may rise further later in the year, when the costs of any military operations are better known. The day-to-day budget for Foreign and Commonwealth Office (FCO) also rises by £0.1 billion (+6%).
Most other budgets for day-to-day spending are lower than their equivalents last year, with the biggest reductions arising on justice and on local government (where business rates are increasingly devolved).
In terms of investment budgets, an extra £2.4 billion has been allocated to the Ministry of Housing, largely for housing investment (+35%), with transport also seeing a rise – planned in the Spending Review – as HS2 costs start to increase.
Spending on benefits and pensions overall remains broadly flat, with DWP’s share rising and HMRC’s falling as tax credits are increasingly replaced by Universal Credit. The overall share of spending on working age benefits as a share of the whole continues to fall, while spending on pensions and on disability benefits rises. Working age benefits rates continue to be frozen, while other benefits and pensions rates have continued to be uprated.
Before the latest Main Estimates can be approved, Estimates day debates will take place on the floor of the House of Commons. Under new arrangements introduced in February 2018, any backbench member may bid for a topic for one of these debates, which should be linked to the spending, or an aspect of spending, of a department or other body presenting an Estimate.
The Backbench Business Committee will consider bids for debates at one of its forthcoming meetings, and decisions will be announced in a future business statement. Two days of debates on the Main Estimates are provisionally scheduled for the first week in July.
Following the debates, the House is invited to agree motions on those Estimates selected for debate. Members may agree or reject these motions, or suggest amendments reducing expenditure. There is a further “roll up motion” covering the remaining Estimates, which members may accept or reject. Under the “Crown prerogative” only Government can propose spending, so amendments to increase spending are not permitted.
Once motions have been authorised, a Supply and Appropriation bill is presented. Unlike most bills there is no committee stage, and as with other financial legislation the House of Lords’ role is purely formal. On receiving Royal Assent, departments are able to draw upon the agreed funds set out in the Act for the purposes Parliament has authorised.
Commons Briefing papers CBP-8302
Author: Philip Brien