A summary of the process and details of the 2020-21 Main Estimates, the way in which Parliament approves the Government's spending plans.
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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 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 new Contingencies Act 2020 also allows – for the next two years – further advances to be made before the authorisation of Main Estimates, up to 50% of past spending, on top of this 45%, so that departments do not risk running out of money.
The 2020-21 Main Estimates
The 2020-21 Main Estimates were published on 4 May 2020. They show the initial budgets which the government is seeking for each department, divided into separate limits for current, day-to-day spending (also known as Resource) – 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 2020-21 in the 2019 Spending Round, 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
As is usual, it is expected these will be put to Parliament for approval in July, and if Parliament is content will be given legal effect by a new Supply and Appropriation Act.
What has changed since last year?
Spending is rising significantly, primarily, but not exclusively, as a result of the coronavirus pandemic. The current situation has led to unprecedented interventions from government with significant spending implications. Alongside additional spending on health and social care, an array of support arrangements and schemes have been announced for individuals and businesses, to be paid and accounted for by a range of departments – from BEIS, HMRC, DWP, MHCLG and others.
Notable spending increases include:
- £10.2 billion extra for health, including £3.3 billion specifically as a result of coronavirus, plus a further extra £1.1 billion health investment spending;
- £63 billion for employment support as a result of the lockdown, including the job retention scheme (also known as the furlough scheme), self-employed income support and statutory sick pay;
- £24.5 billion in extra financial support for business, including business support grants, business interruption loans and business rate relief;
- £16.2 billion extra forecast on benefits, such as Universal Credit;
- £3.4 billion for extra transport investment including HS2, local authority transport, potholes and Network Rail;
- £2.1 billion to keep railways operating for key workers and cover revenue losses due to fewer people travelling;
- Further science and research funding of £1.3 billion channelled through BEIS and UK Research and Innovation;
- Funding for recruitment of extra police officers: £0.75 billion extra for Home Office supports the government’s plans to recruit an additional 20,000 police officers over time;
- Planned increased funding for Ministry of Justice: MoJ receives an additional £0.5 billion, to partly restore reductions made over the last ten years;
- Some extra funding for defence: there are increases to MoD’s budgets of £1.8 billion for personnel and equipment;
- Extra capital funding for MHCLG, totalling £4.7 billion including £2.4 billion to respond to housing market conditions, and £0.9 billion for cladding remediation;
- Extra flood defence funding for DEFRA of £0.2 billion; and
- Extra funding for devolved administrations of
- £4.6 billion resource, £1 billion capital for Scotland;
- £2.4 billion resource, £0.2 billion capital for Wales and
- £0.8 billion resource, £0.2 billion capital for Northern Ireland.
Parliament’s role in considering Estimates
Before the latest Main Estimates can be approved, Estimates day debates will take place on the floor of the House of Commons. 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, contained in the Main Estimate of a department or other body. The Backbench Business Committee will consider bids for debates at a meeting in June, and decisions will be announced in a future business statement. Two days of debates on the Main Estimates are expected around the first week of July 2020.
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. Advances from the Contingencies fund are repaid.