Annual Report and Accounts 2000-01


REVIEW OF THE YEAR

FINANCE AND STAFF


71.  In October 2000 the Finance and Staff Sub-Committee agreed that the appointment procedure for a successor to General Sir Edward Jones as Black Rod should be subject to open competition and the post was subsequently advertised. Out of 76 applications received, Lieutenant-General Sir Michael Willcocks was selected in February 2001 and took up the appointment in May.

72.  The Finance and Staff Sub-Committee approved proposals for additional staff in many different areas to meet the requirements of Members and in response to increased levels of activity. Mention has already been made of new posts in the Information Office (paragraph 52), the Computer Office (paragraph 56) and the Printed Paper Office (paragraph 64). Amongst other new posts approved were:

      (i)  five new posts in the Refreshment Department, four in the Library and increases in the complement of Attendants, Housekeepers and security staff, all to staff the new outlets or to undertake general duties in 7 Little College Street and Millbank House;

      (ii)  a new clerk post and three new posts of Specialist Assistant to meet the needs of additional committees and to provide better support for the sub-committees of the European Union Committee;

      (iii)  a new post of Freedom of Information Officer to be placed in the Record Office and to be filled before the Freedom of Information Act comes into force in 2002.

Management Consultancy

73.  In May 2000, the Finance and Staff Sub-Committee approved the appointment of a consultant to undertake a review of the management structure of the House and the decision-making processes on domestic matters. They did so in view of important recent changes in the management of the House of Commons following two reviews by consultants, and particularly because of the implications for the Lords' Works Vote of changes in the management of Parliamentary works (see paragraph 60).

74.  Although subsequently approved by the Offices Committee, the proposal was remitted back to committees in the light of criticism expressed during exchanges in the House in June. Committees again recommended that a management review should take place with the involvement of a consultant, but they made the additional proposal that a small steering group of Members should supervise the review. The proposal was again discussed in the House in July when it was decided that the steering group should, itself, consider the wider question of the management review including whether a consultant should be engaged. The steering group reported to the Leader of the House in March 2001.

Resource Accounting and Budgeting

75.  Work continued throughout the year - in close consultation with the House of Commons - towards the introduction of resource accounting and budgeting, a new system for planning, controlling and reporting on public expenditure. The accounts for 2000-01 appear in this report (see pages 59 to 88) in a cash format but, in due course, they will also be produced in a resource or accruals format. Thereafter, cash accounting will end; and from 1 April 2001, in common with all Government Departments, the House of Lords will move to a resource based financial management system. In 2002 only a single resource account, incorporating all the financial transactions of the House, will be published.

Internal Audit

76.  The audit programme for 2000-01 was derived from the five-year strategic audit plan developed in the previous financial year. Individual audit topics were selected according to perceived risk, and with the intention of providing a spread of audit work across a broad range of House activities. In delivering the audit programme, the Internal Auditor was again assisted by specialist IT auditors from the Department for Education and Skills (formerly DfEE), whose services are bought in as required. Audit reviews were conducted in the areas of staff training; the payroll system; Record Office income; Public Bill Office printing; post implementation project review; the Refreshment Department financial systems; and IT access controls.

77.  The House continues to monitor developments in the public sector concerning Corporate Governance (the system by which organisations are directed and controlled), and will be taking steps in accordance with Treasury guidance to meet the requirement for embedded risk analysis.

Future Expenditure and the Spending Review 2000

78.  Expenditure plans for the House of Lords for the years 2001-02, 2002-03 and 2003-04, approved by the Finance and Staff Sub-Committee, were included in the Government's Spending Review 2000 when it was published in June. They now form the Departmental Expenditure Limits for the House of Lords for the three year period.

House of Lords' Accounts: 2000-01

79.  The five Accounts of the House for 2000-01 are published at the end of this volume. The Appropriation Accounts will be published by the Government in the autumn; meanwhile this Report records the financial statement of results. The two pie charts below give a percentage breakdown of the main elements of expenditure.

Administration Vote

80.  Provision in the Peers' Expenses, Administration, etc. Vote (the ìAdministration Voteî) for 2000-01 was £31,391,000. Expenditure totalled £30,553,000, leaving a small surplus of £838,000 (2.7%). No supplementary estimate was therefore required, for the first time since 1997.


81.  The net cash requirement for 2001-02 was set by the Finance and Staff Sub-Committee at £34,001,000.

Works Services Vote

82.  Provision in the Works Services Vote was £18,152,000. Expenditure totalled £15,190,000, leaving an anticipated surplus of £2,962,000 (16.3%). This was mainly due to the postponement of the scheme to replace the boiler and chiller installations in the Palace, delays in the air conditioning and fire precaution project in the Victoria Tower Archives and savings in the maintenance budget.


83.  The net cash requirement for 2001-02 of £21,386,000 was approved, a figure substantially higher than the provision for the year agreed in the 2000 Spending Review (see paragraph 78 above). The balance can be met by Departmental Unallocated Provision of £4,085,000, to be brought forward in due course from unspent provision in 1999-2000, together, if necessary, with the surplus from 2000-01 mentioned in paragraph 82.

Resource Estimate 2001-02

84.  Non cash elements, such as accruals, prepayments, depreciation of capital assets, charges for the use of capital and a notional audit fee totalled £19,272,000. These have been added to the two net cash requirements for the purposes of the Spending Review and Expenditure Limit mentioned in paragraph 78. A Resource Estimate for 2001-02 in the sum of £70,574,000 was therefore submitted to the Treasury and approved.

Refreshment Department

85.  The Refreshment Department provides catering services through eight trading outlets, a private function service and a gift shop. Turnover for the year was £2.83m, representing a very small increase (0.6%) over the 1999-2000 results. This is the ninth consecutive year of sales growth, although the figures suggest that the Department may have exploited its potential within the constraints of the existing accommodation. After transfers and appropriations, a surplus of £650,000 was returned to the Exchequer (£580,000 in 1999-2000). All internal and external performance targets were met with the exception of the Peers' Dining Room, which was 2.3% below the gross profit margin target.

Security Fund Account

86.  Under the Appellate Jurisdiction Act 1876, security must be provided for the cost of certain civil appeals. The Security Fund Account on page 82 records lodgements of security and repayments.

Works of Art Collection Fund

87.  The Accounts of the Works of Art Collection Fund (page 85) record purchases of works of art on behalf of the House of Lords. The major purchases in 2000-2001 were three preparatory sketches by Frank Brangwyn R.A. for the British Empire panels commissioned for the Royal Gallery; two watercolours by Bernard Vogel of Tower Bridge and Piccadilly Circus; and a set of five mixed media paintings by Sally Annett based on ìThe Mabinogionî.

88.  The Panel also purchased a selection of works of art for the new offices in Millbank House and 7 Little College Street in accordance with the arrangement approved in 1999 whereby agreed sums were set aside from the Works Services Vote until the financial year 2002-03. The purchases included commissions for a series of six paintings of castles by Linda Kitson; and a number of tapestries.

Remuneration and Expenses of Members of the House

89.  Remuneration for Members of the House is restricted to Ministers, to the Leader and Chief Whip of the main opposition party, to the Chairman and Principal Deputy Chairman of Committees and to Lords of Appeal in Ordinary; of these, only the Chairman and Principal Deputy Chairman of Committees' salaries and that part of the Lord Chancellor's salary attributable to his duties as Speaker of the House are paid from the House of Lords' Vote.

90.  For other Members of the House, expenses may be reimbursed in accordance with the Peers' Reimbursement Allowance Scheme. The limits within which they may be reimbursed, applicable at 31 March 2001, are set out in Appendix E. Total expenditure on Peers' expenses in 2000-01 was £8.41mn (compared with £9.39mn in 1999-2000 and £9.49mn in 1998-99); the reduction follows the lower attendances at the House since the passage of the House of Lords Act 1999.

91.  In October 2000 the Prime Minister invited the Review Body on Senior Salaries (SSRB) to carry out a review of parliamentary pay and allowances, including the rate and structure of peers' expenses allowances. The SSRB published its report in March 2001[11]. The report concluded that it would not be appropriate to consider fundamental change to the structure of the allowances. It did, however, recommend substantial increases in the day subsistence allowance, the overnight allowance and the secretarial and incidental office costs allowance, and the provision to Lords of free postage for parliamentary correspondence[12].

92  Financial assistance to the two main Opposition parties in carrying out their Parliamentary business in the House has been provided from the Administration Vote since 1996. The sums payable are uprated annually on 1 April in line with the Retail Price Index. From 1 April 2000 a sum of £222,480 was available to the official Opposition; £66,743 to the Liberal Democrat Opposition; and £20,520 to the Convenor of the Cross Bench Peers to provide secretarial assistance. The sums paid are subject to independent audit.


11   Cmnd 4997-I. Back

12   The recommendations of the SSRB for increases in allowances were implemented by Resolution of the House on 5 July 2001. The recommendation for free postage was approved by the Finance and Staff Sub-Committee, also in July. Back


 
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