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What are Estimates?

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 which 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 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.

How decisions on spending are reached

The key decisions on spending priorities for 2017-18 were taken and announced in the 2015 Spending Review. At that time, the new government decided to bear down on planned overall public spending within Departmental Expenditure Limits, in order to reduce the budget deficit, while protecting certain large budgets within those limits, such as the NHS, schools, the police and international aid. Other measures sought to reduce spending outside Departmental Expenditure Limits, particularly to working age benefits. While the overall effect of this was to reduce planned public spending as a share of GDP year by year, overall spending was still set to rise each year in absolute terms, albeit modestly.

The 2017-18 Main Estimates

Since the Spending Review, the Government has made a few changes to its spending plans for 2017-18, including allocating additional funding for social care, announced in the Spring 2017 Budget. Some benefits changes planned have also been modified, withdrawn or delayed.

These changes have been reflected in the 2017-18 Main Estimates, which were published before Parliament dissolved for the 2017 General Election. While published before the election, the Estimates have yet to be formally approved.

Public spending overall in 2017-18 is planned to be some 3.8% higher[1] than in 2016-17, rising from £772.8 billion in 2016-17 to £802.4 billion in 2017-18.

Parliament’s role in considering Estimates

Parliament’s role in considering Estimates is, in reality, quite limited. Normally Estimates day debates are held before Estimates are approved, and the House of Commons may reject, or propose downward amendments to, Estimates which have been selected for debate. Proposals to increase spending are not allowed, due to the Crown Prerogative (which means only the Government can initiate spending plans). In reality Estimates day debates are often only tenuously linked to the content of the actual Estimates.

The 2017 General Election has meant that the usual process of committees recommending topics for Estimates day debates to the Liaison Committee (chairs of Select committees) will not be possible, because Main Estimates have to be authorised by 5 August and committees are unlikely to be established by then. Accordingly, all Main Estimates are expected to be formally approved by the House on 4 July 2017, without debate.

The House of Lords has no role in the Estimates process, although it does pass the Supply and Appropriation Act without debate.

Proposals for reform

In the last Parliament, the House of Commons Procedure Committee published a report which made recommendations for future reform of the Estimates process. The recommendations included changing the way Estimates are selected for debate, with the intention of making debates more closely linked to the content of Estimates. Other proposals included allowing for more time to consider Estimates, improving the quality of Estimates documentation, and better explaining how funding for devolved administrations is linked to UK spending decisions.

[1] In nominal terms, i.e. before taking account of inflation.

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