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What are Estimates?

One of Parliament’s longest-standing functions is the consideration and authorisation of 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 via an advance of 45% of last year’s approved spending, through what is known as the Vote on Account.

The Contingencies Act 2021 also allows, exceptionally in 2021-22, for further advances of up to 12% of last year’s budget to be made before the authorisation of Main Estimates, on top of this 45%, in order that departments do not risk running out of money in the early part of the 2021-22 financial year.

What has changed since last year?

Public spending rose significantly last year (2020-21), primarily as a result of the coronavirus pandemic, leading to unprecedented interventions from government with significant spending implications.

For 2021-22, some of this spending continues, at least for part of the year.

Because eases of lockdown have already taken place and more are planned, the amounts sought in Main Estimates generally assume winding down from June 2021 onwards, although it is very likely that further adjustments to budgets will be needed in Supplementary Estimates. For now, spending by most departments on coronavirus support measures and consequences is budgeted as being lower than for 2020-21. Notable reductions in spending include:

  • Health, where reduced spending is expected on Personal Protective Equipment, Test and Trace, NHS emergency response, other Covid-19 spending and ventilators. Despite this, 2021-22 health spending remains over £40 billion higher than in 2019-20;
  • Support for business, transport, cultural and other institutions as a result of the pandemic will continue but at a reduced level as support schemes are scaled back and wound down;
  • Devolved administrations’ funding is affected by many of the above changes in funding – as a result Scotland, Wales and Northern Ireland currently see lower levels of funding from the UK Government this year;
  • Overseas Development Assistance (ODA) funding falls following the government’s decision to temporarily reduce the UK’s ODA spending to 0.5% of gross national income (from 0.7%).

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 last week of June 2021.

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.

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