Revised Government spending plans for 2021/22

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. These are presented to Parliament in documents known as “Estimates”. A previous Library briefing paper set out details of the government’s initial spending plans (published in May 2021 in Main Estimates 2021-22) for the current financial year.

What are Supplementary Estimates?

As is usual, the government has now published its proposals to amend those plans, in “Supplementary” Estimates, which require the approval of Parliament in order to come into effect.

The 2021-22 Supplementary Estimates were published on 22 February 2022. They show the changes to this financial year’s 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.

Changes are further divided into spending subject to fixed limits, based broadly on the plans outlined for 2021/22 in the 2021 Spending Review, known as Departmental Expenditure Limits; and less predictable and more demand-led spending, known as Annually Managed Expenditure.

Changes to the cash block grants proposed to Scotland, Wales and Northern Ireland are also included under a separate heading.

As is usual, all these changes these will be put to Parliament for approval in early March, and if Parliament is content will be given legal effect by a new Supply and Appropriation Act before the end of the financial year, allowing access to additional funds approved.

What has changed since earlier this year?

The Supplementary Estimates contain requests for additional spending that amount to the following totals:

• Resource DEL (day-to-day spending) rises from £480.9 billion to £494.3 billion (+2.8%)
• Capital DEL (investment spending) rises from £94.0 billion to £98.5 billion (+4.8%)
• Resource AME rises from £428.4 billion to £721.2 billion (+68.3%)
• Capital AME rises from £29.7 billion to £30.0 billion (+4.2%)

Major drivers of this spending include:

• Covid-19: although additional spending on the pandemic is significantly lower than in last year’s Supplementary Estimate this still caused many of the larger changes, including an additional £11.8 billion for the Department of Health and Social Care;
• Withdrawal from Afghanistan: several departments have requested additional funding as a result of the August 2021 withdrawal and evacuation, including £657 million for the Home Office for the ‘Afghanistan Relocation and Assistance Programme’; and
• Discount rates changes: a change in the way liabilities of uncertain size and timing are accounted for has contributed to the significant increase in the (hard-to-forecast) AME budget, including £135 billion for the Nuclear Decommissioning Authority nuclear provisions. However, in most cases this does not represent a change in the expected future expenditure, or represent any additional cash spending this year.

Parliament’s role in considering Estimates

Before the latest Supplementary Estimates can be approved, Estimates day debates will take place on the floor of the House of Commons. Any backbench member was able to bid for a topic for one of these debates, which should be linked to the spending, or an aspect of spending, contained in the Supplementary Estimate of a department or other body. The Backbench Business Committee considered bids for debates at a meeting on 28 February. A day of debates on the Supplementary Estimates is expected on 9 March.

The Estimates which have been selected for debate on this occasion are:

• The Department for Education, in respect of the National Tutoring Programme and Adult Education
• The Ministry of Defence

Following the debates, the House will be 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.