Estimates Day debate: Spending of the Department for Business and Trade

On Wednesday 5 March 2025, there will be an Estimates Day Debate on the spending of the Department for Business and Trade. The topic for the debate was proposed by the Backbench Business Committee, on application from the Rt Hon Liam Byrne MP, Chair of the Business and Trade Committee. Following the debate, the House will vote on whether to approve the Supplementary Estimate for the Department of Business and Trade for 2024/25.

What are the 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. Estimates, sometimes known as Supply Estimates, are the documents presented to Parliament setting out the government’s plans for spending for a given year. The process of obtaining Parliamentary approval to those plans is known as Supply. With a few specific exceptions, the government is required to obtain authority from Parliament through the supply process before it can spend public money.

The Estimates cycle

The approval of public spending through Estimates (the supply process) operates on the basis of ‘annuality’, which means that money is voted for use in a particular financial year only. The normal steps in this process are:

• Vote on Account: consideration and approval of an advance of funding for the first four months of the financial year (April to July) for each government department. The Vote on Account is normally published in February and approved by Parliament in March, in time for the start of the new financial year in April.
• Main Estimates: consideration and approval of the spending plans for the new financial year for each government department. Main Estimates are normally published in April or May and voted on in July. Money already authorised through the Vote on Account is deducted from the amounts required for the year to provide government with funding for the remainder of the financial year.
• Supplementary Estimates (where required): consideration and approval of any changes to amounts or purposes of money required by departments. Supplementary Estimates are normally published in February and approved in early March to allow for any additional funds to be spent before the end of the financial year.
• ‘Out-of-turn’ Supplementary Estimate (where required): These only occur when urgent additional provision is needed at short notice and where it is not possible to wait until the next normal Estimate round.
• Statement of excesses (where required): consideration and retrospective approval of any spending beyond the level or coverage previously approved by Parliament. This normally occurs only where inevitable spending is incurred or where mistakes have arisen and is exceptional.

Content of an Estimate

Separate Estimates and Votes on Account are produced for each government department and published together by HM Treasury in a single volume. The key components of each Estimate are spending limits and ambits, which in each case apply to a single department for a single year only.

Spending limits

Within each Estimate, spending is divided into a number of distinct budgetary limits for each department, covering spending of a specific type determined by HM Treasury. Changes to the categorisation of spending require prior consultation with Parliament.

Switches of funding are not normally permitted by the Treasury from capital to resource (although exceptions, such as for health, are sometimes made), or from AME to DEL. Once Parliament has voted the limits, savings on any voted limit (DEL or AME) are not permitted to be used in support of spending under another.

Ambits

The ambit is the description of what the spending within each of the limits will be spent upon. Government departments must ensure that their ambits are accurate and, subsequently, that no spending falls outside their scope. Should it do so, it would constitute an ‘excess vote’: illegal spending outside the authority authorised by Parliament.

Detail of spending plans

Further detail of spending plans – breaking them down into a number of lines, known as subheads, within the totals above – is given within each Main and Supplementary Estimate. These breakdowns represent the government’s best estimation of planned spending within the totals at the time the Estimates are prepared, but do not constitute limits within the totals. Government departments are free to switch resources from one subhead to another, providing they do not exceed the overall spending limits, or incur expenditure beyond the scope of the ambit.

Estimates memoranda

Government departments are required to produce an explanatory memorandum to explain the content of each Main and Supplementary Estimate. This memorandum should compare spending plans to previous years and explain the reasons for changes proposed. Select committees currently publish memoranda on their webpages and the Scrutiny Unit uses the memoranda to prepare briefings for select committees and other Members.

Departments must submit these memoranda to the relevant House of Commons Select Committee by no later than the publication of the overall Supplementary Estimates.

Department for Business and Trade Supplementary Estimate 2024/25

The Supplementary Estimates for 2024/25 were published on 11 February 2025. The Department for Business and Trade provided their explanatory memorandum alongside the Treasury document. The Supplementary Estimates contain an increase to the Department for Business and Trade’s total managed expenditure (the total of both DEL and AME budgets) of £1,838.6 million, or 44.8%. Following the uplift at the Supplementary Estimates, the Department for Business and Trade would have total managed expenditure of £5,938.1 million.

The significant uplift is predominantly allocated for Post Office compensation schemes, and to fund the British Business Bank. The Post Office compensation schemes are funded primarily through demand-led AME spending, and the British Business Bank through planned DEL spending.