BUDGET (NO. 2) BILL
EXPLANATORY AND FINANCIAL MEMORANDUM
INTRODUCTION
- This Explanatory and Financial Memorandum has been prepared by the Minister in charge of the Bill, Dr Seán Farren, in order to assist the reader of the Bill and to help inform debate on it. It does not form part of the Bill and has not been endorsed by the Assembly.
- The Memorandum needs to be read in conjunction with the Bill. It is not, and is not meant to be, a comprehensive description of the Bill. So where a clause or part of a clause does not seem to require any explanation or comment, none is given.
- The Bill gives effect to the 2002-2003 Northern Ireland Main Estimates and authorises the issue from the Consolidated Fund of Northern Ireland of £4,962,077,000 in addition to a cash sum of £3,936,009,000 in the Vote on Account authorised by the Budget Act (Northern Ireland) 2002. The Bill also authorises the use of resources amounting to £5,710,516,000 in addition to an amount of £4,486,387,000 authorised by the Budget Act (Northern Ireland) 2002; and specifies the limits on the amount of accruing resources, including both operating and non-operating accruing resources that may be directed to be used for certain purposes for the year ending 31 March 2003; in addition, the Bill authorises temporary borrowing by the Department of Finance and Personnel and repeals a number of spent enactments.
- The sums to be issued from the Consolidated Fund of Northern Ireland for the year ending 31 March 2003 are to be appropriated for services as set out in Schedule 1 to the Bill.
- The amount of resources (including accruing resources) authorised for use for the year ending 31 March 2003 are to be used for the purposes specified in Schedule 2 to the Bill.
- Budget Bills are the legislative means by which Assembly approval is sought for voted expenditure by departments. Previously this was measured on a cash basis. However, from 2001-2002 expenditure has been measured on a resource basis (bringing the public sector into line with the private sector) whilst maintaining an overall cash limit on departmental activity.
- The requirements of the Government Resources and Accounts Act (Northern Ireland) 2001 have been taken into account in drafting the Budget (No. 2) Bill. The Budget (No. 2) Bill contains powers to authorise the issue of sums from the Northern Ireland Consolidated Fund and appropriate those sums to services. It also seeks the Assembly's authorisation for the use of resources by departments in addition to cash. This latter provision reflects the change from controls based solely on cash to a new system where limits on the use of resources for specified purposes is the main public expenditure control mechanism. In order to reflect this change, which is linked to the introduction of resource accounting and budgeting the title 'Budget' Bill is more appropriate than 'Appropriation' Bill which dealt only with cash allocations. The Budget (No. 2) Bill also sets the relevant limits on the accruing resources (including both operating and non-operating) that may be directed to be used for specified purposes.
- Budget Bills will authorise the Department of Finance and Personnel to issue money from the Northern Ireland Consolidated Fund for the services detailed in corresponding Estimates volumes and summarised in Schedules in the Bill. From 2001-2002 Budget Bills also authorise the use of resources for the services detailed in corresponding Estimates volumes and summarised in Schedules in the Bill. Estimates volumes and other relevant documents are published so as to be available when Budget Bills are introduced in the Assembly. Separate Budget Bills are taken to cover the Main Estimates (initial voted provision for a financial year) and subsequent Supplementary Estimates which increase or vary what was approved in the Main Estimates.
- At Introduction the Minister of Finance and Personnel had made the following statement under section 9 of the Northern Ireland Act 1998:
- The Minister in charge of the Bill, Dr Seán Farren, has also made the following recommendation:
PURPOSE
BACKGROUND
COMMENTARY ON CLAUSES
Clause 1 : Issue of sum out of the Consolidated Fund for year ending 31st March 2003 and appropriation of that sum
Subsection (1) authorises the issue out of the Consolidated Fund of Northern Ireland of the sum of £4,962,077,000 for 2002-2003.
Subsection (2) appropriates that sum for the purposes specified in Schedule 1.
Clause 2 : Power of the Department of Finance and Personnel to borrow
This clause authorises the temporary borrowing by the Department of Finance and Personnel of approximately half the sum covered by clause 1 (1). This is a normal safeguard against the possibility of a temporary deficiency arising in the Northern Ireland Consolidated Fund.
Clause 3 : Use of resources (other than accruing resources) for year ending 31st March 2003
This clause authorises the use of resources amounting to £5,710,516,000 for 2002-2003, for the purposes specified in column 1 of Schedule 2.
Clause 4 : Limit on use of accruing resources in year ending 31st March 2003
This clause sets relevant limits on the total amount of accruing resources, including both operating and non-operating accruing resources that may be directed to be used for certain specified purposes as shown separately in the Estimates for 2002-2003. The total amounts are specified in column 3 of Schedule 2 and may be directed to be used for the purposes specified in the corresponding entries in column 1 of that Schedule.
Clause 5 : Repeal of spent enactments
This Bill removes from the statute book two Appropriation Orders which are no longer operative.
Clause 6 : Short title
This clause sets out the title of the Act.
LEGISLATIVE COMPETENCE
"In my view the Budget (No. 2) Bill would be within the legislative competence of the Northern Ireland Assembly."
RECOMMENDATION
"As Minister of Finance and Personnel, I recommend the Budget (No. 2) Bill to the Assembly as is required by section 63 of the Northern Ireland Act 1998."