By Tash Shifrin
11 March 2010
The Home Office has been forced to ask Parliament for almost £80m in extra funds after failing to set aside enough to cover the possibility of losing a court case over police pensions.
The bailout is revealed in two reports – one from the government and one from the Commons Public Accounts Committee – on ‘excess votes’. This is the parliamentary mechanism for providing extra cash when Whitehall departments spend more than agreed in each financial year.
The Home Office was hit by a £130m bill for back payments owed to police pensioners as a result of a judicial review, forcing it to seek an extra £79m on top of money already voted to it by Parliament.
The Home Office had backdated the application of new pensions calculations to October 2007. But the Police Federation won a ruling in March last year that payments should be backdated to December 2006.
The PAC report said the Home Office had reviewed the risks and financial consequences of the legal action. But it had decided ‘it was probable the case would be won and so the provision made would be sufficient’.
The PAC said the Home Office had ‘breached the expenditure limit authorised by Parliament’ because it had not fully anticipated the consequences of losing the legal battle. But the excess vote could not be ‘attributed wholly to this failure’, the MPs decided.
Financial management at the Home Office had improved since a critical PAC report in 2006, but had ‘not reached the stage of maturity’ where it was part of ‘business as usual’.
A Home Office spokeswoman said it ‘did make a provision for the cost of losing’ the judicial review. She added: ‘However, the necessary information on which to make an accurate provision was not available until after the Spring Supplementary Estimates had been finalised.’
The government’s official Statement of Excesses 2008/09 also confirms the Treasury’s unauthorised allocation of £24bn to cover expected losses from the Asset Protection Scheme, part of measures aimed at stabilising the banks. The excess prompted the National Audit Office to qualify the Treasury’s accounts in July for the first time in a decade.
The PAC’s report said that the Ministry of Defence had not provided ‘sufficient evidence to support the accuracy’ of troop numbers put to Parliament so the ministry could not report on whether it had exceeded its estimates.
The UK Atomic Energy Authority pension schemes also requested an extra £6.4m after earlier failing to seek resources to cover the transfer of staff to the Nuclear Decommissioning Authority Pension Scheme.
The Department for Business, Innovation and Skills had failed to tighten up its oversight enough to prevent an excess vote for the second year running, the PAC warned.
11 March 2010
The Home Office has been forced to ask Parliament for almost £80m in extra funds after failing to set aside enough to cover the possibility of losing a court case over police pensions.
The bailout is revealed in two reports – one from the government and one from the Commons Public Accounts Committee – on ‘excess votes’. This is the parliamentary mechanism for providing extra cash when Whitehall departments spend more than agreed in each financial year.
The Home Office was hit by a £130m bill for back payments owed to police pensioners as a result of a judicial review, forcing it to seek an extra £79m on top of money already voted to it by Parliament.
The Home Office had backdated the application of new pensions calculations to October 2007. But the Police Federation won a ruling in March last year that payments should be backdated to December 2006.
The PAC report said the Home Office had reviewed the risks and financial consequences of the legal action. But it had decided ‘it was probable the case would be won and so the provision made would be sufficient’.
The PAC said the Home Office had ‘breached the expenditure limit authorised by Parliament’ because it had not fully anticipated the consequences of losing the legal battle. But the excess vote could not be ‘attributed wholly to this failure’, the MPs decided.
Financial management at the Home Office had improved since a critical PAC report in 2006, but had ‘not reached the stage of maturity’ where it was part of ‘business as usual’.
A Home Office spokeswoman said it ‘did make a provision for the cost of losing’ the judicial review. She added: ‘However, the necessary information on which to make an accurate provision was not available until after the Spring Supplementary Estimates had been finalised.’
The government’s official Statement of Excesses 2008/09 also confirms the Treasury’s unauthorised allocation of £24bn to cover expected losses from the Asset Protection Scheme, part of measures aimed at stabilising the banks. The excess prompted the National Audit Office to qualify the Treasury’s accounts in July for the first time in a decade.
The PAC’s report said that the Ministry of Defence had not provided ‘sufficient evidence to support the accuracy’ of troop numbers put to Parliament so the ministry could not report on whether it had exceeded its estimates.
The UK Atomic Energy Authority pension schemes also requested an extra £6.4m after earlier failing to seek resources to cover the transfer of staff to the Nuclear Decommissioning Authority Pension Scheme.
The Department for Business, Innovation and Skills had failed to tighten up its oversight enough to prevent an excess vote for the second year running, the PAC warned.
