Main Estimates: Government spending plans for 2023/24

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 (final spending plans). A previous Library briefing paper set out details of the government’s final spending plans for the previous financial year, 2022/23.

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.

What has changed since last year?

The Main Estimates contain requests for spending for 2023/24 that amount to the following totals:

• Resource DEL (day-to-day spending) of £472.0 billion, an increase of £0.6 billion (+0.1%) compared with last year’s final budget of £471.4 billion;
• Capital DEL (investment spending) of £110.6 billion, an increase of £3 billion (+2.8%) compared with last year’s final budget of £107.6 billion;
• Resource AME (annually managed expenditure) of £463.9 billion, a decrease of £54 billion (-10.4%) compared with last year’s final budget of £517.9 billion; and
• Capital AME (annually managed expenditure) of £93.2 billion, an increase of £55.4 billion (146.3%) compared with last year’s final budget of £37.8 billion.

There are no new drivers of spending in the 2023/24 Main Estimates of the magnitude contained in the estimates of previous years – which included significant funding packages relating to Covid-19, the war in Ukraine and measures to combat the increasing cost of living.

The main drivers of spending in 2023/24 derive from the plans laid out in Spending Review 2021 and subsequent announcements. These include the additional £5.1 billion for the NHS and social care, and £2.8 billion for schools, committed at Autumn Statement 2022; and the £2.0 billion for defence and national security priorities committed at the Spring Budget 2023.

Original departmental spending plans for this year and last year, set out in the Spending Review 2021, included budget to cover the Health and Social Care Levy (HSCL) from April 2023, and the transitional increases in National Insurance Contributions (NIC) until the HSCL came into effect. However, the September 2022 announcement of the reversal of the HSCL means this funding is no longer required.

Other notable spending changes relative to last year’s final budget include:

• £10.2 billion Resource DEL increase in education spending. Just over half this increase reflects the costs associated with the student loan book, which is revalued each year. The rest reflects increased funding plans as set out in the Spending Review, and following announcements for core school funding and childcare in the Autumn Statement and Spring Budget 2023;
• £14.0 billion Resource DEL reduction for DESNZ, largely due to a reduction of £12.5 billion for the Energy Bills Support Scheme compared to last year, and the £1.7 billion last year for the Energy Special Administration Regime that does not feature this year;
• £2.5 billion Resource DEL reduction for the Home Office. Last year the HO received an additional £2.6 billion in the Supplementary Estimates; this included £2.3 billion for pressures and new measures in the asylum system, and £0.7 billion for Afghan resettlement schemes, and some offsetting transfers out of the department. This funding has not been repeated in the Main Estimate this year;
• £2.0 billion Capital DEL increase for DSIT, of which £1.4 billion is an increase in funding for Horizon Europe, the European funding programme for research;
• £1.3 billion Capital DEL increase for FCDO. The main driver of the increase this year is an increase in the FCDO’s ODA allocation for 2023/24; and
• £2.4 billion Capital DEL reduction for DESNZ; £3.9 billion was provided for the Special Administration Regime (SAR) for Bulb Energy last year, which is not currently repeated. There is an increase in budget of £0.8 billion for Net Zero and other smaller measures that offset this figure.

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 deadline for debate applications this year was 19 June. The Backbench Business Committee considered bids for debates at a meeting on 20 June, and decisions were announced in the Business Statement on 29 June. Two days of debates on the Main Estimates are expected to take place on 4 and 5 July 2023, as follows (with links to the Library’s debate pack for each one when available):

• Tuesday 4 July:
  • The spending of the Department for Work and Pensions
  • The spending of the Ministry of Justice on the HM Prisons and Probation Service
• Wednesday 5 July:
  • The spending of the Department for Energy Security and Net Zero on measures relating to energy infrastructure
  • The spending of the Department for Education on adult education, post-16 education, further education and colleges

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.