Select Committee on Procedure Appendices to the Minutes of Evidence

Letter from the Chief Secretary to the Treasury to the Chairman of the Committee

  The specific point on which you had asked for evidence is on how the Treasury would determine whether any future powers, similar to section 82 of the Welfare Reform and Pensions Act, should be laid before Parliament. I think, given that this is a straightforward factual and technical question, the best way of answering it is to answer it here in writing.

  The general principle—set out in section 2.3 of Government Accounting—is that expenditure should not normally be incurred on preparing for a new service before Royal Assent of a relevant Bill. There are exceptions—in cases of particular urgency a department may apply to the Treasury for a Contingencies Fund advance after the Bill has been given a Second Reading in the House of Commons. Within the terms of Government Accounting it is possible for a department to seek powers that, while consistent with these new service rules, allow them to undertake preliminary work on a new function in advance of the specific legislation being approved. Departments must present compelling justification for these and agree to the necessary checks and balances in order to secure sufficient and proper Parliamentary scrutiny—such as those in section 82(2) and (3) of the Welfare Reform and Pensions Act.

  As the DSS memorandum explains, other departments have not sought similar powers. The argument put forward by DSS was very strong—the new services rules caused serious problems for DSS because of the extent and complexity of its IT systems, in particular, the interdependence of those systems. DSS has one of the largest IT systems in Europe and argued that it ran a significant risk of being unable to implement welfare reforms in good time without the powers in section 82, despite Parliament's clear intention that such reforms should happen in good time.

  If other departments were to seek similar powers, having explored all available alternative options, the Treasury would have to satisfy itself that without those powers implementation would be seriously delayed, at greater risk than without such powers and would incur greater expense than would otherwise be the case—and so the power would secure improved value for money. Such problems would also need to be of a continuing nature, since a one-off problem could of course be solved by the department bringing forward a paving Bill for that project. And the Treasury would want to ensure that any such proposals included similar safeguards to those in paragraphs 2 and 3 of section 82 of the Welfare Reform and Pensions Act.

  Of course, if such proposals were to be brought forward for other departments the House of Commons would have the opportunity to debate those, both in principle and in detail, in the course of the relevant legislation.

Rt Hon Andrew Smith MP

5 October 2000

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