5th Floor 1 Victoria Street London SW1H 0ET

James Davies T 020 7215 5369 F 020 7215 5500 Clerk of the Committee E [email protected] Business Innovation and Skills Committee i.gov.uk House of Commons www.bis.gov.uk 7 Millbank London SW1P 3JA

7 February 2013

Dear James

SUPPLEMENTARY ESTIMATES MEMORANDUM 2012-13

I am enclosing the Department for Business Innovation and Skills (BIS’s) Memorandum for the forthcoming Supplementary Estimate, a copy of which is attached. This Memorandum has been prepared with reference to the “Guide to Preparing Estimate Memoranda” and has been approved by the Departmental Accounting Officer.

Presentation and publication of the forthcoming Spring Supplementary Estimate will be made week commencing 11 February 2013.

I trust that this Memorandum provides sufficient detail for the Committee, but if more detailed explanation is required for some of the changes being made, I will be happy to provide additional information.

Yours sincerely

Howard Orme Director General Finance and Commercial

Finance and Commercial, 1 Victoria Street, London SW1H 0ET www.bis.gov.uk

Direct Line +44 (0)20 7215 5369 | Fax +44 (0)20 7215 3248 | Mincom +44 (0)020 7215 6740 Enquiries +44 (0)20 7215 5000 | Email [email protected] 1

Paragraph TABLE OF CONTENTS Page number

1-3 Introduction 3 4-5 Delivery of Objectives 3-4 6 Key Activities 4 7 Departmental Expenditure Limits Budget 5 8-10 Summary of Provision sought 5-6 11-14 Significant Changes to DEL Budgets 6-9 15 Administration Budget 9 16-17 Annually Managed Expenditure 9-12 18 Net Cash Requirement 12 19- 25 Areas of greatest risk 13 26 Additional Budget Cover 14 27 Process for preparation and approval of Memorandum 14 Annex A Glossary of Terms 15-20 Annex B Expenditure/Budget tables 21-25 Annex C Provisions for Liabilities and Charges 26-27 Annex D Autumn Statement changes 28

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Department for Business Innovation and Skills Supplementary Estimate 2012-13 Select Committee Memorandum

1. The Main Estimate for 2012-13 sought the necessary resources and cash to support the functions of the Department for Business, Innovation and Skills (BIS) and it’s Non Departmental Public Bodies (NDPBs). The purpose of this Memorandum is to provide the Select Committee with an explanation of how the resources and cash sought in the Supplementary Estimate will be applied to achieve Departmental objectives, and how the amounts compare to those set in the Main Estimate. A glossary of terms used within the Estimate is at Annex A.

2. The purpose of this Supplementary Estimate is to provide necessary changes in funding levels, classification of funding, and transfers to and from other Government Departments. This is the single opportunity for Departments to ensure that the level of funding voted by Parliament is sufficient to cover expenditure, including areas which are subject to considerable volatility. As previously explained, BIS has an extremely complex balance sheet which includes a number of risky and volatile assets. Failure to cover the associated risks would result in a breach of the Estimate and an Excess Vote.

3. For a fuller picture of the Department’s planned expenditure in 2012-13, with comparison figures for prior years, the Committee is referred to the Annual Report and Accounts. The tables at Annex B show expenditure from 2007-08 and budgets to 2014-15.

The Delivery of Objectives

4. The Government confirmed that BIS would be the Department for Growth – the Government’s number one priority. To deliver this overarching objective BIS has been tasked with delivering on five priority areas that will support the sustainable growth of the UK economy. The resources awarded for 2012-13 support the priorities of the Department in the BIS Business Plan. These are: • Knowledge and Innovation • Skills • Enterprise • Trade and Investment • Markets

5. BIS reports on delivery of the actions in its Business Plan on a monthly basis at http://transparency.number10.gov.uk/business-plan/4. Data on BIS’s impact and input 3 indicators are also published, on a quarterly basis, to provide an assessment of how efficiently reforms are being delivered and what impact they are having; and the efficiency of the Department’s running costs are published in its annual report and in the quarterly departmental scorecards.

Key Activities: 6. The Business Plan, which was updated and refreshed for 2012-13, sets out the specific structural reform actions that BIS, and it’s Partners, will undertake to deliver against our priorities, to: • Promote excellent universities and research and increase business innovation; • Promote more opportunities for individuals in realise their potential; • Make it easier to start, grow and invest in the long term; • Support UK trade overseas and inward investment; and • Create markets that serve businesses’ and consumers’ long-term interests.

BIS currently had circa thirty nine Partner Organisations (including eight Regional Development Agencies which are now wound up) supporting delivery of its key objectives, these are included in BIS’s Designation Order and will be consolidated within BIS’s 2012-13 accounts.

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Departmental Expenditure Limits Budget for 2012-13 by key activity

7. The Budget for the period from 2011-12 to 2014-15 was set through the 2010 Spending Review (prior years figures are shown at Annex C): Resource* Capital Resource Capital 2012-13 Budgets set in the Main Estimate £m DEL DEL AME AME Research Councils** 4,604.56 566.65 -45.79 Skills Funding Agency 3,603.39 278.66 3.50 Student Grants 3,766.71 16.31 Student Loans 112.26 -1,839.24 6,094.00 Higher Education Funding Council for England and Other miscellaneous Education Funding 4,032.06 108.54 -22.95 7.82 Green Investment Bank 775.00 Enterprise Finance and Small Firms Loan Guarantees 38.00 65.00 16.50 Grants for Business Innovation (over £2m) 0.95 68.68 Technology Strategy Board 271.94 29.64 UK Space Agency 194.95 21.50 Post Office network subsidy 350.00 59.60 Post Office working capital loan -4.00 750.00 Regional Development Agencies 51.73 16.25 Redundancy Payments Service 340.00 Paternity Pay 99.90 Other Programmes/Provisions including central administration 1,221.87 108.21 -19.27 Total Budgets 18,248.39 2,097.73 -1,455.03 6,851.82

Notes: *The resource figure includes £2,269m of non cash to cover depreciation and impairments and administration amounting to £766.9m of which £2m is ring fenced for the Regional Development Agencies and £38m for UK Trade & Investment. **The budgets for Science are also ring fenced.

Summary of Provision sought

8. The Supplementary Estimate requests provision totals of:

DEL AME Resource £m Capital £m Resource £m Capital £m Total 19,581 1,538 75 6,770

Including non cash of: 4,019 194 Including admin of: 717 Net Cash Requirement 23,843

9. Some wording has been added to BIS’s ambits to reflect the transfer of responsibility for URENCO from the Department of Energy and Climate Change (DECC), and to cover the

5 inclusion of some organisations which have been classified as central government and included in BIS’s Designation Order.

A footnote has been added to reflect the Machinery of Government (MoG) changes of the transfer of URENCO from DECC

Significant Changes to Departmental Expenditure Limits Budget 10. The key changes being made through this Supplementary Estimate include a non cash Reserve claim of £1.750 billion DEL in relation to student loans, budget exchange of £396 million with the matching increases spread across 2013-14 and 2014-15, and a further £503 million (capital) within the ring-fenced Green Investment Bank; transfers of £60.5m to the Department for Education for Learners with Learning Difficulties and/or Disabilities and £30m (capital) to the Department for Communities and Local Government from the Regional Growth Fund; additional capital funding which HM treasury has made available through the Autumn Statement of £10 million for technological R&D/research council infrastructure and £3m for student support.

11. The greatest increase relates to the non cash Reserve claim to cover the potential further impairment of the value of the Student Loan book, totalling £1.75 billion. BIS reviews the existing valuation of the student loan book on an ongoing basis. The reason for the increased impairment is largely due to economic factors, in particular the continuing unusually low interest rates and lower earnings growth. The amount of interest charged to students is capped at base rate plus 1% (instead of RPI) so at times of low interest rates, there is an additional cost to government as future cash flows will be lower. The modelling also provides for the impact in future years. The impact has been recalculated using the latest available economic forecasts and has increased BIS’s original forecast programme outturn by circa £900 million. Changes in forecast future loan repayments, as a result of changes to macroeconomic factors, have also had an impact on the value of the loan book.

12. Additionally, changes are being made to future years to reflect additional budget made available to BIS and efficiency savings as announced in the Chancellor’s Autumn Statement (see Annex D for details).

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13. Planned DEL expenditure for 2012-13 is being increased through the Supplementary Estimate as follows: Notes Resource Capital DEL DEL (£m) (£m) 2012-13 DEL Provision in the Main Estimate 18,248.4 2,097.7 (a) Reserve claims 1,750.0 (b) Budget Exchange -356.0 -543.0 (c) Budget transfers to the Department for Education -60.5 (DfE) (d) Capital transfer to DCLG -30.0 (e) Transfer to UKTI -13.0 (f) Autumn Statement - technological R&D/Research 10.0 Council infrastructure (g) MoG transfer of URENCO from DECC 8.1 (h) Reserve Claim for Energy Intensive Industries 6.0 Compensation (i) Budget cover transfers for the GREAT campaign -4.0 (j) Autumn Statement - further education colleges 3.3 (k) Budget transfer from the Department for 2.9 Education (DfE) (l) Resource transfer to DCLG -2.4 (m) Transfer from Security and Intelligence Agencies 1.4 (n) Transfer to the Office of Fair Trading -0.5 (o) Transfers to/from Ministry of Justice 0.2 2012-13 DEL Provision in the Supplementary 19,580.6 1,538.0 Estimate

Notes:

(a) As advised at paragraph 12, a Reserve claim amounting to £1.75bn was agreed in respect of non cash costs associated with Student Loans. The outstanding balance of student loans is an asset on the BIS balance sheet. As with other assets, its valuation will vary in line with economic factors outside the department’s control such as interest rates and inflation. This Reserve Claim covers a decrease in the valuation resulting from the macroeconomic forecasts published by the Office for Budgetary Responsibility (OBR) in December. It also includes a contingency of £850m, to cover the risk of an adverse change in the OBR’s macroeconomic forecasts in March 2013. Due to the Bank of England base rate being at a historically low level the interest charged on student loans is substantially lower than forecast. This reduces the valuation as less interest is added to the student loan book. In addition changes to forecasts of RPI and earnings growth mean that lower loan repayments are likely to be made in future years which affects the value of the student loans asset.

7 (b) BIS is making use of HM Treasury’s Budget Exchange mechanism to move £356m resource (£306m programme and £50m admin) and £543m (of which £503m Green Investment Bank) of capital funding from 2012-13 into 2013-14 and 2014-15. (c) A transfer to the Department for Education to fund education for people with a learning difficulty and/or disability. (d) A transfer to the Department for Communities and Local Government in respect of the Regional Growth Fund - supporting projects and programmes that lever private sector investment to create economic growth and sustainable employment across England, which aims to help areas and communities currently dependent on the public sector. (e) A transfer to UKTI for services in support of Small to Medium Sized Enterprises and High Value Opportunities. (f) Autumn Statement - technological R&D/Research Council infrastructure - £4m to the Economic and Social Research Council to support continuing investment in the equipment and infrastructure needed to build on the UK’s comparative advantage in supercomputing, using very large datasets; £4m of funding to expand the facilities at the National Composite Centre, by augmenting overall capacity, and adding high speed composite manufacturing technology and training facilities; £2m for construction of an Advanced Metrology Lab at the National Physical Laboratory which will provide new metrology facilities to support UK capabilities in nanotechnologies, quantum technology and innovative materials. (g) On 17 January 2013 it was announced that policy and ownership responsibility (this interest is held via two holding companies) for the UK shareholding in Urenco (whose main activity is the supply of enriched uranium) would transfer from DECC to BIS. This parallels other recent moves to consolidate government shareholdings within the Shareholder Executive under the Business Minister Michael Fallon and will strengthen the ability of the Government to utilise commercial expertise in the future management of its Urenco shareholding, including the ongoing work on a possible sale. (h) A Reserve Claim for Energy Intensive Industries Compensation in respect of measures to reduce the impact of energy and climate change policy on the costs of electricity for the most electricity-intensive industries. (i) BIS agreed to contribute to the GREAT campaign through budget transfers to the Department for Culture, Media and Sport (DCMS) of £3.5m and the British Council of £0.5m. (j) Autumn Statement - further education colleges - Additional funding for investment in the Further Education capital programme. (k) A transfer from the Department for Education in respect of Learning and Skills Council estates. (l) A transfer to the Department for Communities and Local Government in respect of the Local Enterprise Partnerships Capacity Fund - . The offer of core resource funding will 8 provide capacity for LEPs to drive forward their growth priorities, allow them to do long term resource planning and strengthen support and autonomy of the business led Boards. (m) Transfer for cyber security activities. (n) Transfer for the Competition and Markets Authority. (o) Various minor transfers to/from the Ministry of Justice relating to prison closures and prisoner education.

Administration Budget

14. The following table shows changes made to the 2012-13 Administration Cost Limit (the explanations are included in the notes on the previous page:

Notes Resource £m Admin Cost Limit in the 2012-13 Main Estimate 766.9 (b) Budget Exchange -50 Admin Cost Limit in the 2012-13 Supplementary Estimate 716.9

Annually Managed Expenditure (AME)

15. The Department’s 2012-13 AME Budgets set in the Main Estimate are shown in the following table:

Notes: Description Resource Capital Voted £m £m (a) Loans to Students -1,815.5 6,094.0 (b) Royal Mail Working Capital loan -4 750 (c) Redundancy Payments Service 340 (d) Paternity Pay 99.9 (e) Launch Investment Provisions -62 (f) Science Research Councils’ Pensions 50.6 (e) BIS Provisions -42.4 (e) Science Research Council provisions -41.4 (e) HEFCE Provisions -22 (e) Loan Guarantees/Capital for Enterprise Funds Provisions 16.5 (e) Insolvency Service Provisions 11.7 (g) Student Loan Debt Sale provision -9.5 (h) UKAEA provisions 7.4 (e) Skills Funding Agency provisions 3.5 (e) Student Loan Company provisions 2 (e) Advisory, Conciliation and Arbitration Service Provisions 0.9 (i) Construction Industry Training Board -1.2 7.6 (i) Engineering Construction Industry Training Board 0.3 0.2 (j) British Shipbuilders’ Liabilities Provision 0.4 Other 9.8 Total AME Budget -1,455.00 6,851.80

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Notes:

(a) The Resource amount of £(1,831.8m) includes interest payments to be received and unwinding of the discount in respect of Student Loans, whilst the Capital figure of £6,094m reflects the net movement on student loans in 2012-13. (b) The Department provides a revolving loan facility to Post Office Ltd (POL) of up to £1.15 billion. This is to help the company fund its in-branch working capital requirements to deliver services of general economic interest (such as social benefits payments). The facility matures on 31 March 2016, subject to State Aid clearance. The Resource element of £(4m) reflects interest payments to be made by POL, and the Capital element of £750 million represents an estimate of the loan figure at the year end. (c) The Insolvency Service operates the Redundancy Payments Service on behalf of HMRC. The payments made are funded by the National Insurance Fund. (d) BIS has responsibility for the policy relating to Paternity Pay, and holds the associated budget, although the payments are actually made by HM Revenue and Customs (HMRC). BIS repays HMRC on an annual basis. (e) The majority of the costs for making and increasing provisions, offset by credits arising from payments against those provisions, were moved from DEL into AME from 2010-11. (f) Payments to be made from the Research Councils Pension Fund. (g) This amount reflects credits arising when payments are made against the existing provision for the past Student Loan Debt Sale. (h) The UK Atomic Energy Authority continues to have responsibility for the Culham Jet site for which a provision has been made for decommissioning costs and for restructuring provisions. (i) The Construction Industry Training Board and the Engineering Construction Industry Training Board are levy-funded bodies whose costs are covered by the levies raised. (j) The Department has the responsibility for providing funds to the British Shipbuilders’ Corporation for liabilities arising from personal injury to former employees as a result of exposure to asbestos.

10 16. The Department’s 2012-13 AME Budget changes are shown in the following table:

Notes: Description Resource Capital £m £m AME costs in the 2012-13 Main Estimate -1,455.0 6,851.8 (a) Loans to Students 1,059.6 266.0 (b) Post Office Working Capital loan -549.0 (c) Royal Mail Shareholder loan -51.0 51.0 (d) Sale of Royal Mail pension scheme assets 218.0 150.0 (e) Redundancy Payments Service 110.0 (f) Paternity Pay 99.0 (g) BIS Provisions 61.0 (g) Science Research Councils’ Provisions 50.0 (g) UKAEA provisions 21.0 (g) Insolvency Service Provisions -17.5 (g) Launch Investment Provisions (g) Loan Guarantees/Capital for Enterprise Funds Provisions 15.0 (g) HEFCE Provisions 12.0 (g) Advisory, Conciliation and Arbitration Service Provisions -2.0 (g) Skills Funding Agency provisions 5.0 (h) URENCO dividend -50.0 Other -0.5 Total AME Budget 74.59 6,769.82

Notes:

(a). The increase (which includes a contingency of £180m) in the AME resource budget for Student Loans results from changes in the discount rate used in the unwinding of the discount and effective interest (which reflects changes in the loan book value). The increase (which includes a contingency of £150m) in the student loan capital requirement reflects an increase in loans taken out and capitalised interest partially offset by an increase in forecast repayments based on new macroeconomic assumptions. (b). A reduction of £549m in the Post Office Working Capital loan, the remaining budget includes a contingency of £240m to cover the worst case legal obligation. (c). Royal Mail Shareholder Loan – this is to reflect the correct budgetary treatment with HMT. (d). Royal Mail sale of pension scheme assets - £218m resource is to cover unrealised losses that arise from the sale of Royal Mail pension scheme assets, whilst £150m (which include a contingency of £25m) is to cover additional capital commitments arising from legal obligations to continue to fund private equity investments (e). An increase in the level of redundancy payments due to the continuing difficult economic position.

11 (f) Paternity Pay – whilst the best forecast is £58m lower than the original budget (a result of moving to a new more accurate basis for calculation), this budget has been increased by £99m, to secure a contingency of £157m to cover pressures that may arise elsewhere (g). Changes to various provisions are being made amounting to a net increase of £144m. The most notable changes are: an increase of £61m for BIS’s onerous lease provision to reflect the reduction in use of the provision and the associated reduction in AME credits; £50m for the Science research councils; and £21m for the United Kingdom Atomic Energy Authority. (h) URENCO dividend is a result of a MoG from DECC and also unusually a second dividend being paid.

Net Cash Requirement

17. The following table shows the reconciliation between the total Resource and Capital Budget figures shown above and the Net Cash Requirement. The revised Net Cash Requirement for 2012-13 is as follows:

£k Resource DEL Budget 19,580,591 Capital DEL Budget 1,538,000 Total DEL Budget 21,118,591 Resource AME, excluding elements previously described as non cash and those -565,995 relating to non-Departmental Public Bodies Capital AME excluding elements relating to non-Departmental Public Bodies 6,762,000 Plus non voted, non-budget Grant-in-Aid paid to NDPBs 14,685,455 Less Budget items with no cash requirement: DEL items which were previously described as “Non Cash” -3,787,361 DEL of NDPBs -14,546,767 Decrease in creditors 177,000 Total Net Cash Requirement 23,842,923

12 Areas of greatest risk to 2012-13

18. In addition to the risk regarding student loans which is described in paragraph 12, other risk-bearing assets on BIS’s balance sheet are as follows:

19. Clear Line of Sight Changes to the Estimates’ boundary – There are a number of changes to the Estimate resulting from further changes to the budgetary boundary, including the addition of Diamond Light Source, the Pirbright Institute; the BIS (Postal Services Act 2011) Company Limited and Green Investment Bank. Voted expenditure includes the net expenditure of all BIS’s central government partner organisations, rather than the grant-in-aid (i.e. the cash funding) made available to them. As a result of these boundary changes the Voted outturn is therefore subject to a greater degree of uncertainty as the total of grant-in-aid payments is quantifiable at the year end whilst the net income less expenditure of partner organisations is subject to changes on audit.

20. BIS has taken on responsibility for disposing of the assets of the Royal Mail pension scheme and has created the BIS (Postal Services Act 2011) Company Limited for this purpose. £28billion of assets were transferred to BIS; whilst the budgetary implications of this change are relatively limited, the unusual nature of these and volatility associated with market based valuations, result in some risks.

21. Royal Mail Holdings – the Department does not believe there is any need to impair these interests.

22. Valuations of Investments and Financial Guarantees – Changes in GDP could have an impact on the amounts that the Department needs to provide for the Small Firms Loan Guarantee scheme and Enterprise Financial Guarantees. The Department is also managing the risks arising from investments in the Enterprise Capital Funds and the UK Innovation Investment Fund and Growth Capital Fund. The amounts are not material to the BIS accounts, but there is reputational risk to the Department if public money is written off because investments do not provide the expected returns.

23. The Department provides for legal or constructive obligations, which are uncertain in respect of either timing, or amount, on the basis of the best estimate of the expenditure required to settle the obligation. Details of the Department’s (grouped by core department, agencies and NDPBs) main provisions as at 31 March 2012 were shown in the 2012 Resource Accounts extracts are included at Annex D.

13 24. Details of the Department’s main contingent liabilities are included at Part III: Note K in the Supplementary Estimate.

Additional budget cover 25. To mitigate the risk of an excess vote additional budget cover has been included in the Supplementary Estimate. However as ever best/central forecasts are provided to HMT and the OBR, both of whom understand the need to include these additional amounts. Details of the amounts included follow:- Net Cash Budgets Requirement £m £m Resource DEL - non cash Student Loans 850 Resource AME- near cash Redundancy Payment Scheme 30 30 Not specific 165 165 Resource AME- non cash Student Loans 180 Royal Mail assets - unrealised losses 100 Capital AME Student Loans - Additions 150 150 Post Office Loan 240 240 Royal Mail pension - additional capital 25 25

Grant In Aid - HEFCE 150 Movement in working cap 100 Total 1,740 860

Process for Preparation and Approval of Memorandum

26. This Memorandum has been prepared with regard to the “The Supply Estimates Guidance Manual” and has been approved by the Departmental Accounting Officer.

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Annex A: Explanation of key terms used in the Memorandum and Main Estimate

Accounting Officer A person appointed by the Treasury or designated by a department to be accountable for the operations of an organisation and the preparation of its accounts. The appointee is, by convention, usually the head of a department or other organization, or the Chief Executive of a non-departmental public body (NDPB). Accounts A report of income and expenditure outturn for a particular year. Produced on an accruals basis, in line with the Financial Reporting Manual (FReM) Administration Budget A Treasury control on resources consumed directly by departments and agencies/NDPBs that forms part of the Departmental Expenditure Limit (DEL). Includes things such as staff costs, accommodation, etc, where they are not directly associated with frontline service delivery. Ambit The ambits are set out in Part I of the departmental Estimate. Separate ambits are required for both expenditure and income in each budgetary category included in the Estimate (DEL, AME and non-budget). The ambit describes the activities for which provision sought in the Estimate will be used. Annuality The concept that provision and spending authority applies to the year to which it relates and cannot be carried forward to the next financial year. Annually Managed AME is spending included in Total Managed Expenditure (AME) Expenditure (TME), which does not fall within Departmental Expenditure Limits (DELs). Expenditure in AME is generally less predictable and controllable than expenditure in DEL. Arms length body (ALB) An NDPB, company in which the department has a significant shareholding, or other sponsored body. (The) Budget The Chancellors annual statement to Parliament on the economy and the public finances. Budgetary controls The means by which government plans and controls expenditure to meet its objectives. Capital grant (See “Grant” below). In account, a capital grant scores as resource spending but in budgetary terms it scores as capital because an asset is created within the economy. Capital income or expenditure Related to the purchase or sale of assets. The value must usually be above a certain capitalisation threshold and the asset must be expected to be used for a period of at least one year. It includes the purchase of buildings, equipment and land. The threshold is set by each body: items valued below it are not counted as capital assets, even if they do have a productive life of more than one year. Central government Departments and their executive agencies, non- body departmental public bodies, and NHS health authorities and boards. The Office for National Statistics determines which bodies are classified to central government.

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Comptroller and Auditor General (C&AG) The head of the National Audit Office, appointed by the Crown, and an Officer of the House of Commons. As Comptroller, the C&AGs duties are to authorise the issue by the Treasury of public funds from the Consolidated Fund and National Loans Fund to government departments and others; as Auditor General, the C&AG certifies the accounts of all government departments and some other public bodies, and carries out value-for-money examinations. Consolidated Fund The Governments current account, operated by the Treasury, through which pass most government payments and receipts. Consolidated Fund Extra Receipt (CFER) Income, or related cash, that passes through a department’s accounts but may not be retained by the department and is surrendered to the Consolidated Fund. Consolidated Fund Standing Service Payment for a service which Parliament has decided, by statute, should be met directly from the Consolidated Fund rather than being voted annually by Parliament. Consolidated Online Information System A Treasury database used up to 2012 holding (COINS) database public expenditure data (plans and outturn) for a number of years. Now replaced by OSCAR. Contingencies Fund A government fund enabling the Treasury to make repayable cash advances to departments for new or existing urgent services that cannot await the voting of funds under the normal Supply procedure, in anticipation of the necessary parliamentary approval. Contingent Liability Potential liability that is uncertain but recognises that future expenditure may arise if certain conditions are met or certain events happen. Departmental Expenditure Limit (DEL) A Treasury budgetary control. DEL spending forms part of Total Managed Expenditure (TME) and includes that expenditure which is generally within the departments control and can be managed with fixed multi-year limits. Some elements may be largely demand led. There is a small DEL Reserve from which the Treasury may support unavoidable costs that cannot be absorbed within the existing limit. Departmental Unallocated Provision (DUP) An element of a departments total DEL that is not allocated to particular spending, but held back by the department to meet any future unforeseen pressures. Depreciation A measure of the wearing out, consumption or other reduction in the useful life of a fixed asset whether arising from use, passage of time or obsolescence through technological or market changes. Devolved Administration The administrations established in Scotland, Wales and Northern Ireland in 1998. They are responsible for devolved public services and policies. Estimate A statement of how much money the government needs in the coming financial year, and for what purpose(s), by which parliamentary authority is sought for the planned level of expenditure by a government department.

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Estimates Memorandum An explanation of how provision sought in the Estimate is intended to be used and the relationship with other spending controls. Primarily provided for the departmental select committee but made freely available online. Excess Vote The means by which excess expenditure, or otherwise unauthorised expenditure, of cash, capital or resources, is regularised through an additional vote by Parliament. Executive Agency A body established to undertake the executive functions of government, as distinct from policy advice. They are within central government and can be departments in their own right or a part of a department. Financial Memorandum A document setting out the key principles of strategic control framework accountability for an arms-length body. Financial Reporting Manual (FReM) A technical guide for producing the accounts of public bodies. Generally Accepted Accounting Practice (UK The name given to the UK’s main commercial GAAP) accounting principles. Adapted as necessary for use by the public sector as outlined in the Financial Reporting Manual (FReM). Government Resources and Accounts Act 2000 Legislation that includes statutory powers required for the implementation of resource- based accounts and Estimates. Grant Payment made by a department, or other public body, to outside bodies to reimburse expenditure on agreed items or functions, and often paid only on statutory conditions being met. May be made for resource or for capital purposes. Grant in Aid Financing payment made by a department to an NDPB or other arms length body. International Financial Reporting Standards International accounting standards, adopted by (IFRS) government and reflected in UK GAAP. Main Estimate The means through which departments seek parliamentary approval for their spending plans for the year ahead. Presented to Parliament within five weeks of the Budget Statement. Managing Public Money A publication produced by the Treasury which is concerned with regularity and propriety and sets out the main principles for dealing with resources used by public sector bodies. National Accounts Accounts produced by the Office for National Statistics in accordance with the European System of Accounts 1995, which promotes standardisation in the way in which public sector income and expenditure is measured. National Audit Office (NAO) Office of the Comptroller and Auditor General, which audits accounts of government bodies and carries out value for money inspections within the bodies it audits. Negative Public Expenditure The term for income which offsets gross public expenditure in national accounts. National Insurance Fund (NIF) A government fund used to meet the cost of contribution-based benefits, financed mainly by contributions paid by employers and individuals. National Loans Fund (NLF) The fund through which passes most of the government’s borrowing transactions and some domestic lending transactions. Near-Cash Expenditure that has a directly related cash implication, even though the timing of the cash payment may be slightly different. For example,

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expenditure on gas or electricity supply is incurred as the fuel is used, though the cash payment might be made in arrears on a quarterly basis. Net Cash Requirement (NCR) The limit voted by Parliament reflecting the maximum amount of cash that can be released from the Consolidated Fund to a department in support of expenditure in its Estimate. In the case of a negative net cash requirement, the department must generate a surplus of at least that amount. Non-Cash Expenditure where there is no directly related cash transaction but which reflects resources used. Examples include depreciation and provisions.

Non-Departmental Public Body (NDPB) A body that has a role in the process of government but is not a government department or part of one (though NDPBs fall inside the budgetary, Estimates and accounting boundary of government departments). NDPBs operate, to a greater or lesser extent, at arm's length from Ministers. Office for National The independent body responsible for collecting Statistics, ONS and publishing official statistics about UK society and economy. Online System for Central Accounting and A Treasury database holding public expenditure Reporting.(OSCAR) data (plans and outturn) for a number of years. Propriety The principle that patterns of consumption should respect Parliament’s intentions, conventions and control procedures, including any laid down by the Public Accounts Committee. Public Accounts Committee (PAC). A committee of the House of Commons, which examines the accounting for, and the regularity and propriety of, government expenditure. It also examines the economy, efficiency and effectiveness of expenditure. Also commonly known as the Committee of Public Accounts. Public Corporation (PC) Publicly controlled trading bodies with substantial financial day to day operating independence. Provision A liability that has arisen but where the timing and/or amount of the payment is uncertain. [Note that terms such as “budgetary provision” or “Estimate provision” are usually referring to the amount for which there is authority to spend within those controls.] Regularity The principle that all consumption of resources should be made in accordance with the legislation authorising them, any applicable delegated authority and Managing Public Money. Resource income or expenditure Reflecting the consumption of resources (and the income so generated) in that year. Examples include, pay, current grants and depreciation. Revised Estimate Presented to reduce the resources, capital and/or cash requested in the Main Estimate, or to vary the way in which they are allocated. They are voted with Main Estimates before Parliament rises for the Summer Recess.

18

Second Reading The second formal time that a House of Parliament may debate a bill, although in practice the first substantive debate on its content. If successful, it is deemed to denote parliamentary approval in principle of the proposed legislation. Section An “Estimate line” within the Part II: Subhead detail table in an Estimate. Select Committee Both Houses of Parliament have select committees that scrutinise the work and expenditure of government. Responsibilities include oversight of particular government departments. Spending Review A cross-government review of departmental aims and objectives and analysis of spending programmes. Results in the allocation of multi- year budgetary limits. Statement of Excesses A formal statement detailing any departmental overspends (Excess Votes) as reported by the NAO as a result of undertaking annual audits. Presented by the Treasury, usually alongside the Supplementary Estimates each January. Subhead A single cell within a section (or Estimate line) within the Part II: Subhead detail table in an Estimate. Supplementary Estimate The means by which departments seek to amend parliamentary authority provided through Main Estimates by altering the limits on resources, capital and/or cash or varying the way in which provision is allocated. Normally presented in February each year. Supply The process whereby Parliament gives statutory authority for both the consumption of resources (for resource and capital purposes) and for cash to be drawn from the Consolidated Fund. Supply and Appropriation Acts Acts of Parliament which give formal approval to departmental Supply Estimates. There are usually two such Acts each year: the Supply and Appropriation (Main Estimates) Act is presented in July and authorises the Main Estimates, and the Supply and Appropriation (Anticipation & Adjustments) Act is presented in February/March and authorises Supplementary Estimates, Vote on Account for the forthcoming year and any Statement of Excesses relating to the prior year. Token Estimate (or section) Where a department’s expenditure within the Estimate (or the section) is wholly offset by income, so that a token amount of £1,000 is voted. Since Estimates may include negative limits (where income is greater than expenditure), a token £1,000 would only be required where income and expenditure completely offset. Total Managed Expenditure (TME) A measure defined by the Treasury to cover all public expenditure (i.e., not just central government departments). Trading Fund Public sector organisation that has a financing framework allowing it to meet outgoings from commercial revenues. In national accounts they are normally classified as public corporations.

19

Treasury Minute A formal administrative document drawn up by the Treasury, which may serve a wide variety of purposes including seeking parliamentary approval for the use of income by departments as set out in Estimates, a remission of some or all of the principal of voted loans, and responding on behalf of the government to reports by the Public Accounts Committee (PAC). Virement The use of savings on one or more sections (Estimate lines) or subheads to meet excesses on another section or subhead within the same voted limit in an Estimate. Vote The process by which Parliament approves funds in response to Supply Estimates. Voted provision That which has been authorised by Parliament in response to Supply Estimates. Vote on Account Presented to Parliament by the Treasury in January to provide necessary provision for voted resources, capital and cash for each departmental Estimate in the early months of the following financial year. For each department it generally seeks up to 45 per cent of the amounts voted in the current year’s Main Estimate.

20

ANNEX B EXPENDITURE/BUDGET TABLES

Administration Budget 2011-12 and 2012-13 Main Estimate Outturn Estimate Supplementary £m Line 2011-12 2012-13 2012-13 Science Partner Organisations A 39.9 2.1 2.6 Business Support Partner Organisations B 1.5 2.7 2.2 Market Frameworks Partner Organisations C -0.1 5.4 4.6 Central Administration F 310.7 345.9 330.6 Science Partner Organisations H 96.7 147.0 130.9 Business Support Partner Organisations I 127.5 25.9 30.0 Market Frameworks Partner Organisations J 26.6 17.6 17.9 Higher Education Partner Organisations K 58.8 66.3 64.3 Further Education and Training Partner Organisations L 150.4 154.1 133.9 Government as Shareholder Partner Organisations M 0.2 - - Total Resource DEL Administration 812.3 766.9 717.0

Note prior years data is not comparable since as a result of the most recent SR and Clear Line of Sight NDPB admin expenditure was brought within the Department’s administration limit.

21

ANNEX B

Resource DEL Programme Expenditure and Budget Main Estimate 2008-09 2009-10 2010-11 Outturn Estimate Supplementary £k Line Outturn Outturn Outturn 2011-12 2012-13 2012-13 Science and Research A 187,111 132,291 146,272 259,462 476,252 487,188 Innovation, Enterprise and Business B -255,184 30,700 -187,186 140,982 409,658 302,224 Market Frameworks C 95,154 105,019 96,422 117,628 79,156 169,966 Higher Education D 1,847,900 2,251,300 5,663,480 5,220,117 3,780,272 5,369,167 Further Education E -6,416,341 -6,717,968 -406,072 -647,879 -1,091,958 -776,570 Capability F 10,231 4,902 19,816 8,748 35,615 28,284 Government as Shareholder G 273,705 148,165 163,307 165,028 390,040 425,412 Science and Research (NDPB) net H 4,206,413 4,368,531 4,701,130 4,465,557 4,457,511 4,452,137 Innovation, Enterprise and Business I 771,074 928,094 1,022,336 543,410 266,141 328,639 (NDPB) net Market Frameworks (NDPB) net J 85,130 76,311 83,271 55,167 73,046 64,190 Higher Education (NDPB) net K 4,935,231 5,139,235 5,238,170 4,832,248 3,875,569 3,837,401 Further Education (NDPB) net L 10,584,295 11,069,969 4,321,238 4,038,601 4,730,139 4,162,745 Government as Shareholder (NDPB) M - - - -290 - 12,839 net

Total Resource Programme DEL 16,324,719 17,536,549 20,862,184 19,198,779 17,481,441 18,863,622

22

ANNEX B

Capital DEL Programme Expenditure and Budget Main Estimate 2008-09 2009-10 2010-11 Outturn Estimate Supplementary £k Line Outturn Outturn Outturn 2011-12 2012-13 2012-13 Science and Research A 92,074 106,988 88,121 -21,206 35,453 53,953 Innovation, Enterprise and Business B -923,737 -671,613 -209,229 -169,683 209,244 75,745 Market Frameworks C 13,127 1,419 -3,086 2,465 14,700 12,800 Higher Education D 10,000 34,384 -3,534 - - Further Education E -205,056 -210,900 -32,144 3,210 - - Capability F 14,134 13,943 10,083 7,133 5,500 23,689 Government as Shareholder G 1,714 -1,681 14,303 -1,105 839,600 60,000 Science and Research (NDPB) net H 865,346 1,340,930 841,466 777,147 566,647 578,147 Innovation, Enterprise and Business I 870,730 894,674 454,418 59,859 37,782 29,475 (NDPB) net Market Frameworks (NDPB) net J 6,763 4,671 2,960 1,586 1,600 1,400 Higher Education (NDPB) net K 560,250 371,972 209,689 100,709 108,300 94,907 Further Education (NDPB) net L 838,172 1,167,080 692,695 396,610 278,900 335,884 Government as Shareholder (NDPB) net M - - - - - 272,000 Total Capital DEL 2,133,517 3,027,483 2,103,660 1,153,191 2,097,726 1,538,000

23

ANNEX B

Resource AME Programme Expenditure and Budget Main Estimate 2008-09 2009-10 2010-11 Outturn Estimate Supplementary £k Line Outturn Outturn Outturn 2011-12 2012-13 2012-13 Science and Research N 59,438 46,984 45,750 49,928 62,389 83,389 Innovation, Enterprise and Business O 84,724 -80,055 9,018 -76,502 -39,171 -24,171 Market Frameworks P 465,739 559,055 545,100 448,791 451,556 193,056 Higher Education Q -739,506 432,252 -1,294,604 -1,842,686 -1,824,963 -765,336 Further Education R 263 -28 -28 -888 -27 -27 Capability S -47,985 -13,401 27,703 8,015 -42,446 18,554 Government as Shareholder T -35,461 -57,081 -19,937 739 -727 116,273 Science and Research (NDPB) net U -5,324 2,179 19,209 -10,785 -45,785 4,215 Innovation, Enterprise and Business 219,662 135,051 193,230 38,935 - - (NDPB) net Market Frameworks (NDPB) net V -824 -5,271 -1,159 -1,842 1,530 -970 Higher Education (NDPB) net W 14,071 -18,841 -23,566 -21,731 -19,970 -7,970 Further Education (NDPB) net X 12,046 54,261 -27,564 -12,112 2,581 7,581 Market Frameworks (nonvoted) Y - - - - - 450,000 Total Resource Programme AME 26,843 1,055,105 -526,848 -1,420,138 -1,455,033 74,594

24

ANNEX B

Capital AME Programme Expenditure and Budget Main Estimate 2008-09 2009-10 2010-11 Outturn Estimate Supplementary £k Line Outturn Outturn Outturn 2011-12 2012-13 2012-13 Higher Education Q 3,982,498 4,045,771 4,418,158 5,222,590 6,094,000 6,360,000 Government as Shareholder T -825,000 260,000 -261,000 239,000 750,000 402,000 Innovation, Enterprise and ---115- - Business (NDPB) net Further Education (NDPB) net X 5,919 494 1,196 7,221 7,817 7,817 Total Capital Programme AME 3,163,417 4,306,265 4,158,354 5,468,926 6,851,817 6,769,817

25

Annex C Provisions for liabilities and charges (extract from the BIS consolidated Resource Accounts 2011-12)

Provisions of the Core Department

UK Atomic Energy British Authority Shipbuilders Onerous Leases Decommissioning Other Total £’000 £’000 £’000 £’000 £’000

Balance at 1 April 2010 113,054 137,383 164,387 57,170 471,994 Transferred in - 36,938 - - 36,938 Provided in the year 86,402 37,883 9,176 25,799 159,260 Provisions not required written back (5,734) - - (76) (5,810)

Provisions utilised in the year - (28,459) - (15,552) (44,011) Borrowing costs (unwinding of discounts) 2,487 3,200 3,616 1,327 10,630

Balance at 31 March 2011 196,209 186,945 177,179 68,668 629,001 Transferred in - - - 8,478 8,478 Reclassification - - - 1,705 1,705 Provided in the year 3,934 41,970 6,946 1,850 54,700 Provisions not required written back (6,700) (3,019) - (9,567) (19,286)

Provisions utilised in the year - (31,640) (16) (16,335) (47,991) Borrowing costs (unwinding of discounts) 4,317 4,113 3,898 1,663 13,991

Balance at 31 March 2012 197,760 198,369 188,007 56,462 640,598

Provisions of the Agencies

31 March 2012 31 March 2011 (restated)

NPLM L NPLM L pension pension schem e scheme provisions Other Total provisions Other Total £’000 £’000 £’000 £’000 £’000 £’000

Balance at 1 April 28,358 6,659 35,017 31,968 2,980 34,948 Transferred in - - - 788 5,027 5,815 Provided in the year 16,630 5,150 21,780 - (306) (306) Provisions not required written back (552) (970) (1,522) (4,398) (1,042) (5,440)

Provisions utilised in the year (2,077) (4,023) (6,100) - - - Borrowing costs (unwinding of discounts) 1,528 - 1,528 - - - Balance at 31 March 43,887 6,816 50,703 28,358 6,659 35,017

26

Annex C Provisions of NDPBs and other designated bodies

31 March 2012 31 March 2011

HEI staff HEI staff liabilities STFC decommissioning Other Total liabilities STFC decommissioning Other Total £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

Balance at 31 March 262,202 49,156 86,525 397,883 282,695 31,619 91,655 405,969 Transfer out of Design Council - - (194) (194) - - - - Restated balance at 1 April 262,202 49,156 86,331 397,689 282,695 31,619 91,655 405,969 Transferred in - - (8,478) (8,478) - - - - Reclassification ------

Provided in the year 1,171 - 41,237 42,408 1,307 20,705 51,189 73,201 Provisions not required written back - (100) (17,547) (17,647) - (1,618) (7,124) (8,742) Provisions utilised in the year (28,757) (8,249) (23,744) (60,750) (29,998) (1,988) (29,214) (61,200)

Other movements - - (2,933) (2,933) - - (20,776) (20,776) Borrowing costs (unwinding of discounts) 7,342 625 893 8,860 8,198 438 795 9,431

Balance at 31 March 241,958 41,432 75,759 359,149 262,202 49,156 86,525 397,883

27 Annex D

Resource DEL Capital DEL

Autumn Statement changes 2013-14: O/W ADMIN Capital

Efficiency Savings -149,677 UK Research Partnership Infrastructure Fund 70,000 UK Space Agency 60,000 Technological R&D/Research Council infrastructure 282,000 Further education colleges 191,000 Business Bank 50,000 Startup loans 8,000 24,000 Advanced Manufacturing Supply Chain Initiative (AMSCI) 12,017 Budget Exchange 189,000 13,000 40,000

Total Change 47,323 13,000 729,017

Resource DEL Capital DEL

Autumn Statement changes 2014-15: O/W ADMIN Capital

Efficiency Savings -269,836 UK Research Partnership Infrastructure Fund 130,000 UK Space Agency 60,000 Technological R&D/Research Council infrastructure 308,712 Further education colleges 17,000 Business Bank 250,000 Startup loans 10,000 30,000 Advanced Manufacturing Supply Chain Initiative (AMSCI) 18,000

Total Change -259,836 0 813,712

Howard Orme Director General Finance & Commercial Group

Department for Business, Innovation and Skills

Introduction

This Supplementary Estimate is required for the following purposes: £

Changes in budgets, Increases Reductions Total non-budget voted provision and cash

Reserve Claims

(Section B) Energy Industries Compensation Scheme 6,000,000

(Section D) Student Loans 1,750,000,000

Budget Exchange

Administration costs

(Section F) Central administration -20,294,000

(Section F) Shareholder Executive -4,688,000

(Section L) Skills Funding Agency -25,018,000

Programme costs

(Section D) Higher Education -170,473,000

(Section I) Technology Strategy Board -135,527,000

Machinery of Government changes

Administration costs

(Section F) Transfer of URENCO from the Department 20,000 of Energy and Climate Change

Programme costs

(Section G) Transfer of URENCO from the 8,051,000 Department of Energy and Climate Change Transfers of budgetary cover to/from other government departments

(Section C) Transfer to Office of Fair Trading for work -450,000 on Competition and Markets Authority guidance

(Section D) Transfer to Department for Culture, Media -3,500,000 and Sport for GREAT

(Section D) Transfer to Foreign and Commonwealth -500,000 Office for GREAT

(Section C) Transfer to UK Trade and Investment to -13,000,000 increase UKTI services supporting Small to Medium- sized Enterprises and High-Value Opportunities

(Section E) Transfer to the Department for Education -60,541,000 for Learners with Learning Difficulties and/or Disabilities (and other minor transfers)

(Section F) Transfer from the Department for 2,900,000 Education for Learning and Skills Council Estates

(Section G) Transfer from the Security and Intelligence 1,437,000 Agencies for Cyber Security

(Section I) Transfer to the Department for -2,438,000 Communities and Local Government for the Local Enterprise Partnerships Capacity Fund

(Section L) Transfer from Ministry of Justice for 222,000 Offender Learning

Movements between sections

Administration costs

(Section A) Reallocation of administration to reflect 530,000 mid-year review of Departmental priorities

(Section B) Reallocation of administration to reflect -473,000 mid-year review of Departmental priorities

(Section C) Reallocation of administration to reflect -801,000 mid-year review of Departmental priorities

(Section F) Reallocation of administration to reflect 9,655,000 mid-year review of Departmental priorities

(Section H) Reallocation of administration to reflect -16,140,000 mid-year review of Departmental priorities (Section I) Reallocation of administration to reflect mid- 4,128,000 year review of Departmental priorities

(Section J) Reallocation of administration to reflect mid- 292,000 year review of Departmental priorities

(Section K) Reallocation of administration to reflect -2,000,000 mid-year review of Departmental priorities

(Section L) Reallocation of administration to reflect 4,809,000 mid-year review of Departmental priorities

Programme costs

(Section A) Reallocation of programme to reflect mid- 10,936,000 year review of Departmental priorities

(Section B) Reallocation of programme to reflect mid- -139,699,000 year review of Departmental priorities

(Section B) Reallocation of programme to reflect mid- 26,265,000 year review of Departmental priorities

(Section C) Reallocation of programme to reflect mid- 25,555,000 year review of Departmental priorities

(Section C) Reallocation of programme to reflect mid- 78,705,000 year review of Departmental priorities

(Section D) Reallocation of programme to reflect mid- 13,368,000 year review of Departmental priorities

(Section E) Reallocation of programme to reflect mid- 21,535,000 year review of Departmental priorities

(Section E) Reallocation of programme to reflect mid- -468,000 year review of Departmental priorities

(Section F) Reallocation of programme to reflect mid- 7,566,000 year review of Departmental priorities

(Section F) Reallocation of programme to reflect mid- -17,797,000 year review of Departmental priorities

(Section G) Reallocation of programme to reflect mid- 54,884,000 year review of Departmental priorities

(Section H) Reallocation of programme to reflect mid- -5,374,000 year review of Departmental priorities

(Section I) Reallocation of programme to reflect mid- 200,463,000 year review of Departmental priorities (Section J) Reallocation of programme to reflect mid- -8,856,000 year review of Departmental priorities

(Section K) Reallocation of programme to reflect mid- -38,168,000 year review of Departmental priorities

(Section L) Reallocation of programme to reflect mid- -212,754,000 year review of Departmental priorities

(Section M) Reallocation of programme to reflect mid- -16,161,000 year review of Departmental priorities

(Sections E and L) Reduction in funding from the 165,000,000 -165,000,000 Department for Education for Apprenticeships

(Sections E and L) Reduction in funding from the 198,700,000 -198,700,000 Department for Education for European Social Fund

(Sections E and L) Reduction in funding from the 400,000 -400,000 Department for Education for Young People's Helpline

(Sections L and E) Increased Skills Funding Agency 897,000 -897,000 expenditure on Adult Skills Programmes Clusters funded by receipts from the Department for Education

(Sections L and E) Increased Skills Funding Agency 3,271,000 -3,271,000 expenditure and related receipts related to the Training and Enterprise Councils liquidation

(Sections L and E) Increased UK Commission for 1,046,000 -1,046,000 Employment and Skills Funding Agency expenditure and related receipts

(Sections L and E) Increased Skills Funding Agency 4,024,000 -4,024,000 expenditure on English for Speakers of Other Languages funded by receipts from the Department for Communities and Local Government

(Sections M and G) Reclassification of Green 29,000,000 -29,000,000 Investment Bank

Offsetting increases in expenditure and income

(Section E) Increased expenditure and receipts from the 1,698,000 -1,698,000 Department for Education relating to Joint Information Systems Committee (Section E) Increased expenditure and receipts from the 300,000 -300,000 Department for Work and Pensions relating to Joint Information Systems Committee

Total change in Resource DEL (Voted) 2,631,657,000 -1,299,456,000 1,332,201,000

(Section N) Revised forecasts for nuclear 21,000,000 decommissioning provisions

(Section O) Revised forecasts for Enterprise Finance 15,000,000 Guarantee provisions

(Section P) Revised forecasts for Paternity Pay 99,000,000

(Section P) Reduction in provisions and bad debts for -17,500,000 Insolvency Service

(Section P) Reclassification of Redundancy Payments -340,000,000 Service as non-voted

(Section Q) Increase in Student Loans Unwinding of 1,167,627,000 Discount

(Section Q) Decrease in Student Loans Interest -108,000,000 Receivable

(Section S) Increase in onerous lease provisions 61,000,000

(Section T) Royal Mail Fundco sale of pension scheme 218,000,000 assets unrealised losses

(Section T) Royal Mail shareholder loan interest -51,000,000 receivable

(Section T) Dividend from URENCO -50,000,000

(Section U) Revised forecasts for Medical Research 18,000,000 Council provisions

(Section U) Revised forecasts for Natural Environment 12,000,000 Research Council provisions

(Section U) Revised forecasts for Science and 20,000,000 Technology Facilities Council provisions

(Section V) Reduction in Advisory, Conciliatory and -2,000,000 Arbitration Service provisions

(Section V) Reduction in Consumer Focus provisions -500,000

(Section W) Revised forecasts for Higher Education 12,000,000 Funding Council for England (HEFCE) provisions (Section X) Revised forecasts for Skills Funding 5,000,000 Agency provisions

Total change in Resource AME (Voted) 1,648,627,000 -569,000,000 1,079,627,000

(Section Y) Reclassification of Redundancy Payments 340,000,000 Service as non-voted

(Section Y) Increased forecasts for Redundancy Payments Service 110,000,000

Total change in Resource AME (Non-Voted) 450,000,000 450,000,000

Budget Exchange

(Section L) Skills Funding Agency -40,000,000

(Section M) Green Investment Bank -503,000,000

Autumn Statement Award

(Section B) National Measurement Office 2,000,000

(Section H) Economic and Social Research Council 4,000,000

(Section I) Technology Strategy Board 4,000,000

(Section L) Skills Funding Agency 3,274,000

Transfers of budgetary cover to/from other government departments

(Section B) Transfer to the Department for -30,000,000 Communities and Local Government for the Regional Growth Fund

Movements between sections

(Section A) Reallocation of capital to reflect mid-year 18,500,000 review of Departmental priorities

(Section B) Reallocation of capital to reflect mid-year -123,299,000 review of Departmental priorities

(Section B) Reallocation of capital to reflect mid-year 17,800,000 review of Departmental priorities

(Section C) Reallocation of capital to reflect mid-year -2,400,000 review of Departmental priorities (Section C) Reallocation of capital to reflect mid-year 500,000 review of Departmental priorities

(Section F) Reallocation of capital to reflect mid-year 18,189,000 review of Departmental priorities

(Section G) Reallocation of capital to reflect mid-year -4,600,000 review of Departmental priorities

(Section H) Reallocation of capital to reflect mid-year 7,500,000 review of Departmental priorities

(Section I) Reallocation of capital to reflect mid-year -12,307,000 review of Departmental priorities

(Section J) Reallocation of capital to reflect mid-year -200,000 review of Departmental priorities

(Section K) Reallocation of capital to reflect mid-year -13,393,000 review of Departmental priorities

(Section L) Reallocation of capital to reflect mid-year 93,710,000 review of Departmental priorities

(Sections M and G) Reclassification of Green 775,000,000 -775,000,000 Investment Bank

Offsetting increases in expenditure and income

(Section B) Launch Investment 41,600,000 -41,600,000

Total change in Capital DEL (Voted) 986,073,000 -1,545,799,000 -559,726,000

Other Changes

(Section Q) Increase in student loans 327,000,000

(Section Q) Increase in student loans interest 108,000,000 capitalised

(Section Q) Decrease in receipts relating to student -169,000,000 loans

(Section T) Royal Mail Fundco assets 150,000,000

(Section T) Royal Mail Shareholder Loan - 51,000,000 capitalisation of the debtor

(Section T) Increase in Royal Mail Working Capital -549,000,000 loan repayments

Total change in Capital AME (Voted) 636,000,000 -718,000,000 -82,000,000 (Section Z) Prior Period Adjustment for Higher 4,000,000 Education Funding Council for England

Total change in Non-Budget 4,000,000 4,000,000

Revisions to the net cash requirement reflect not only -901,304,000 the changes to resources and capital as set out above but also a change in creditors.

Total change in Net Cash Requirement -901,304,000 -901,304,000 Part I £

Voted Non-Voted Total

Departmental Expenditure Limit Resource † 1,332,201,000 - 1,332,201,000 Capital -559,726,000 - -559,726,000

Annually Managed Expenditure Resource 1,079,627,000 450,000,000 1,529,627,000 Capital -82,000,000 - -82,000,000

Total Net Budget Resource 2,411,828,000 450,000,000 2,861,828,000 Capital -641,726,000 - -641,726,000

Non-Budget Expenditure 4,000,000

Net cash requirement † -901,304,000

Supplementary amounts required in the year ending 31 March 2013 for expenditure by Department for Business, Innovation and Skills on:

Departmental Expenditure Limit:

Expenditure arising from: The promotion of enterprise, innovation and increased productivity delivered through the portfolios of innovation, international trade and investment, regional investment, delivering regulatory reform, and measures to combat international bribery and corruption.

The provision of support for business, including support for specific industries, small and medium businesses, regional programmes, programmes to promote research and development, innovation and standards, best practice and sustainable development.

The promotion of strong, fair and competitive markets at home and abroad; measures to protect investors and to promote the interests of consumers; support for employment relations programmes and measures to promote a skilled and flexible labour market.

The efficient management and discharge of liabilities falling to the Department, including nuclear waste management and decommissioning and liabilities in respect of former shipbuilding industry employees.

The management of the Government's shareholder interest in the portfolio of commercial businesses wholly or partly owned by Government; providing financial assistance to public corporations, and trading funds including Ofcom; the management and administration of the Royal Mail Statutory Pension Scheme and the realisation of certain pension scheme assets.

The management of miscellaneous programmes, including payments in respect of claims for the restitution of the property of victims of Nazi persecution, compensation for distant water trawlermen and assistance to redundant steelworkers. The payment of subscriptions to international organisations to fulfil international treaty obligations.

The management of Departmental exchange risk and other guarantee losses; payments to other Government Departments and the Devolved Administrations, the expenditure of arms-length organisations and other funding to organisations in relation to programmes supporting BIS objectives, including Non-Departmental Public Bodies and the Department's executive agencies, and payments to the Department for Education.

Education-related expenditure covers payments, grants and loans to organisations in the public, private and other sectors, including employers, community, voluntary and business support organisations, to individuals and other Government Departments and the Devolved Administrations. Expenditure relates primarily to England, but in some cases includes supporting activities in other parts of the United Kingdom and abroad.

Increasing science and research excellence in the UK and maximising its contribution to society through the Research Councils; the Royal Society; the Royal Academy of Engineering; the British Academy; and the Higher Education Funding bodies.

The promotion of Science in Society; Public Sector Research Establishments grants; contributions to the Science and Innovation Network including payments to the Foreign and Commonwealth Office; funding Foresight projects and research base initiatives and obtaining licences for research involving animals.

Helping to build a competitive economy by creating opportunities for everyone to develop their learning and skills through further, higher and other education provision and initiatives for young people and adults; Providing research and related initiatives at institutions delivering higher education; training, skills, enterprise, assessment and advice and guidance provision for young people, adults and employers and related initiatives.

The provision of financial and other support for students and trainees including grants, allowances, access funds, loans and their repayment; the resource consequences of loans to students; support for students through Local Authorities; the cost of sales of the student loan debt; reimbursement of fees for qualifying European Union students; post graduate awards; mandatory student awards; education maintenance allowances and childcare and transport support and loans.

Funding initiatives to support, improve and promote education, training, skills and student and trainee support and investments and loans to support Private Finance Initiatives; and programmes supported by the European Union.

The residual costs of the winding up of the Training and Enterprise Councils (TECs); the distribution of residual TEC assets returned to the Secretary of State under the terms of the TEC licence.

The activities of BIS's Partner Organisations: the Regional Development Agencies; the Skills Funding Agency; the Higher Education Funding Council for England; the Student Loans Company; the UK Commission for Employment and Skills; the Office for Fair Access; other Education-related bodies; Industrial Construction Training Boards; the Research Councils and associated bodies; the UK Space Agency; the Technology Strategy Board; Capital for Enterprise; the Advisory, Conciliation and Arbitration Service, Consumer Focus, the Competition Service, the Competition Commission, the Insolvency Service, the National Measurement Office and the United Kingdom Atomic Energy Authority.

Making payments to Local Authorities in respect of Local Area Agreements and New Burdens responsibilities; funding administration costs including a share of the costs of UK Trade & Investment, the expenses of the Office of Manpower Economics and other partner organisations. Providing financial assistance to Land Registry, Ordnance Survey and the Meteorological Office, and expenditure on the activities of the Learning and Skills Improvement Service, the Wave Hub, MRC Technology, the Ufi Charitable Trust, and subsidiaries and shares in joint ventures of the Research Councils, the Regional Development Agencies and BIS, the public weather service and mapping services.

Non cash items associated with the above activities.

* Work towards securing an injection of private capital into the Royal Mail.

To provide financial solutions to accelerate private sector investment in the green economy and address market failures through the Green Investment Bank.

Income arising from: Contributions from other Government Departments supplying resources which BIS will use to fund Partner Organisations; miscellaneous receipts from other Government Departments.

The Advisory, Conciliation and Arbitration Service, the Insolvency Service, legal services, consultancy, publications, secondments, departmental administration costs, central services, executive agencies and trading funds.

Ofcom receipts, receipts from Ofcom and the Office of Gas and Electricity Markets to cover the costs of the relevant consumer bodies. Receipts from the realisation of certain pension scheme assets related to the Royal Mail Statutory Pension scheme.

Receipts from licences and levies; Launch Investment receipts, Capital Venture Funds receipts; premium income and other receipts from Financial Guarantee schemes, and of dividends; equity withdrawals; interest on loans and loan repayments from the Land Registry, Ordnance Survey and Meteorological Office, UK Intellectual Property Office and Companies House.

Contributions from the Department of Health towards the UK Centre for Medical Research and Innovation.

The Department for Education for 14-19 programmes; contributions from the National Assembly for Wales; receipts to support the UK Commission for Employment and Skills; contributions from the Scottish Executive, the National Assembly for Wales, the Northern Ireland Executive and others towards education programmes and international programmes.

Contributions from other Government Departments and other sources towards the cost of promoting UK education and training overseas; London Challenge receipts; receipts from the Department of Health; student loan interest receivable; student support receipts; further and higher education receipts from the Department for Education; receipts from the Home Office for offender education; receipts from the Department for Communities and Local Government for Faith Leader project; the Further Education improvement programme, the Skills for Life programme and the Learning and Skills Improvement Service.

European Fast Stream receipts; repayment and default recoveries by banks in respect of career development loans; receipts for student support; repayment of working capital loans; receipts from outside organisations (including the EU) in respect of advertising and publicity activities and materials; sale of research publications; receipts from the European Social Fund to cover departmental programmes; Sponsorship Funding. Receipts covering the return of assets from the Training and Enterprise Councils (TECs) as part of their winding-up process; receipts from the wind-down of Individual Learning Accounts; receipts and profit from the sale of surplus land, buildings and equipment; rental income from BIS properties including three domestic properties on the estate of the European School of Culture at Culham, Oxfordshire and from the National Physical Laboratory.

Receipts from the Land Registry, Ordnance Survey and the Meteorological Office, the Learning and Skills Improvement Service, the Wave Hub, MRC Technology, the Ufi Charitable Trust, and subsidiaries and shares in joint ventures of the Research Councils, the Regional Development Agencies and BIS, the public weather service and mapping services.

* Receipts from repayments of loans to the education sector.

Lead private sector engagement in, and raise business awareness of, cyber security.

Continued co-operation on Regional Growth Fund (RGF) supporting projects and programmes that lever private sector investment to create economic growth and sustainable employment across England, which aims to help areas and communities currently dependent on the public sector.

Annually Managed Expenditure:

Expenditure arising from: Bad debts, impairments and provisions including those in relation to BIS's Partner Organisations: the Regional Development Agencies; the Skills Funding Agency; the Higher Education Funding Council for England; the Student Loans Company; the UK Commission for Employment and Skills; the Office for Fair Access; the Research Councils, the UK Space Agency, the Design Council, the Technology Strategy Board, Capital for Enterprise, the Local Better Regulation Office, Consumer Focus, the Competition Service, the Competition Commission, the Advisory, Conciliation and Arbitration Service, the Insolvency Service, the National Measurement Office and the United Kingdom Atomic Energy Authority.

The Redundancy Payments Service.

Bad debts, impairments and provisions in relation to: departmental administration; financial guarantee schemes; regional investment and programmes; enterprise for small and medium firms; provision of support for business, including support for specific industries; support for employment relations programmes and measures to promote a skilled and flexible labour market; miscellaneous programmes, including payments in respect of claims for the restitution of the property of victims of Nazi persecution, compensation for distant water trawlermen and assistance to redundant steelworkers.

The efficient management and discharge of liabilities falling to the Department, including nuclear waste management and decommissioning and liabilities in respect of former shipbuilding industry employees.

The provision of repayable credit facilities for Royal Mail and Post Office Ltd; contributions to the Research Councils' Pension Scheme and the provision of Paternity Pay.

The provision of financial and other support for students and trainees including grants, allowances, access funds, loans and their repayment; the resource consequences of loans to students; support for students through Local Authorities; the cost of sales of the student loan debt; education maintenance allowances and loans.

The expenditure of the Industrial Training Boards. Other non cash items. Providing financial assistance to the Land Registry, Ordnance Survey and the Meteorological Office, and expenditure on the Learning and Skills Improvement Service, the Financial Reporting Council, the Wave Hub, MRC Technology, the Ufi Charitable Trust, and subsidiaries and shares in joint ventures of the Research Councils, the Regional Development Agencies and BIS, the public weather service and Ordnance Survey.

* Refund of European Space Agency tax adjustments made on UK pensions payments.

Liabilities, including those relating to various legacy pension schemes.

NESTA Trust expenditure.

Income arising from: Receipt of interest on loans and loan repayments from Royal Mail and Post Office Ltd; repayment of principal on student loans; receipts of, and levies from, the Construction Industry Training Board and the Engineering Construction Industry Training Board; repayments of student loans and receipts in respect of the charitable National Endowment for Science, Technology and the Arts.

Receipts from Land Registry, Ordnance Survey and the Meteorological Office.

Receipts from the realisation of certain pension scheme assets related to the Royal Mail Statutory Pension scheme.

* Income from Enrichment Holdings Ltd in respect of dividends from shares held by Enrichment Investments Ltd in URENCO.

Non-Budget Expenditure:

Expenditure arising from: * Prior period adjustments.

Department for Business, Innovation and Skills will account for this Estimate.

† Policy and ownership responsibility for the UK shareholding in Urenco transferred from the Department of Energy and Climate Change on 17 January 2013. Within the overall changes sought in this Estimate, the specific changes relating to this Machinery of Government change are: a) Departmental Expenditure Limit – Resource (Voted) is increased by £8,071,000; and b) the net cash requirement is increased by £8,071,000. Part II: Changes Proposed £'000 Net Resources Net Capital Present Changes Revised Present Changes Revised Admin Prog Admin Prog Admin Prog 1 2 3 4 5 6 7 8 9 Spending in Departmental Expenditure Limits (DEL) Voted Expenditure 766,949 17,481,441 -49,980 1,382,181 716,969 18,863,622 2,097,726 -559,726 1,538,000 Of which: A Science and Research - 2,057 476,252 530 10,936 2,587 487,188 35,453 18,500 53,953 B Innovation, Enterprise and Business - 2,688 409,658 -473 -107,434 2,215 302,224 209,244 -133,499 75,745 C Market Frameworks - 5,379 79,156 -801 90,810 4,578 169,966 14,700 -1,900 12,800 D Higher Education - - 3,780,272 - 1,588,895 - 5,369,167 - - - E Further Education - - -1,091,958 - 315,388 - -776,570 - - - F Capability - 345,893 35,615 -15,307 -7,331 330,586 28,284 5,500 18,189 23,689 G Government as Shareholder - - 390,040 - 35,372 - 425,412 839,600 -779,600 60,000 H Science and Research (NDPB) net - 147,048 4,457,511 -16,140 -5,374 130,908 4,452,137 566,647 11,500 578,147 I Innovation, Enterprise and Business (NDPB) net - 25,859 266,141 4,128 62,498 29,987 328,639 37,782 -8,307 29,475 J Market Frameworks (NDPB) net - 17,639 73,046 292 -8,856 17,931 64,190 1,600 -200 1,400 K Higher Education (NDPB) net - 66,312 3,875,569 -2,000 -38,168 64,312 3,837,401 108,300 -13,393 94,907 L Further Education (NDPB) net - 154,074 4,730,139 -20,209 -567,394 133,865 4,162,745 278,900 56,984 335,884 M Government as Shareholder (NDPB) net - - - - 12,839 - 12,839 - 272,000 272,000

Total Spending in DEL 766,949 17,481,441 -49,980 1,382,181 716,969 18,863,622 2,097,726 -559,726 1,538,000

Spending in Annually Managed Expenditure (AME)

Voted Expenditure - -1,455,033 - 1,079,627 - -375,406 6,851,817 -82,000 6,769,817 Of which: N Science and Research - - 62,389 - 21,000 - 83,389 - - - O Innovation, Enterprise and Business - - -39,171 - 15,000 - -24,171 - - - P Market Frameworks - - 451,556 - -258,500 - 193,056 - - - Q Higher Education - - -1,824,963 - 1,059,627 - -765,336 6,094,000 266,000 6,360,000 S Capability - - -42,446 - 61,000 - 18,554 - - - Part II: Changes Proposed £'000 Net Resources Net Capital Present Changes Revised Present Changes Revised Admin Prog Admin Prog Admin Prog 1 2 3 4 5 6 7 8 9 T Government as Shareholder - - -727 - 117,000 - 116,273 750,000 -348,000 402,000 U Science and Research (NDPB) net - - -45,785 - 50,000 - 4,215 - - - V Market Frameworks (NDPB) net - - 1,530 - -2,500 - -970 - - - W Higher Education (NDPB) net - - -19,970 - 12,000 - -7,970 - - - X Further Education (NDPB) net - - 2,581 - 5,000 - 7,581 7,817 - 7,817

Non Voted Expenditure - - - 450,000 - 450,000 - - - Of which: Y Market Frameworks - - - - 450,000 - 450,000 - - -

Total Spending in AME -1,455,033 - 1,529,627 - 74,594 -82,000 6,769,817

Non-Budget spending

Voted Expenditure - - - 4,000 - 4,000 - - - Of which: Z Prior Period Adjustments - - - - 4,000 - 4,000 - - -

Total Non-Budget Spending - - - 4,000 - 4,000 - - - Total for Estimate 766,949 16,026,408 -49,980 2,915,808 716,969 18,942,216 8,949,543 -641,726 8,307,817 Of which: Voted Expenditure 766,949 16,026,408 -49,980 2,465,808 716,969 18,492,216 8,949,543 -641,726 8,307,817 Non Voted Expenditure - - - 450,000 - 450,000 - - -

£'000

Present Changes Revised Plans Plans

Net Cash Requirement 24,744,227 -901,304 23,842,923 Part II: Revised subhead detail including additional provision £'000

Revised Plans

Resources Capital Administration Programme Gross Income Net Gross Income Net Gross Income Net 1 2 3 4 5 6 7 8 9 Spending in Departmental Expenditure Limits (DEL) Voted expenditure 797,785 -80,816 716,969 19,910,573 -1,046,951 18,863,622 29,736,000 -28,198,000 1,538,000 Of which: A Science and Research - 67,587 -65,000 2,587 490,386 -3,198 487,188 53,953 - 53,953 B Innovation, Enterprise and Business - 2,215 - 2,215 319,419 -17,195 302,224 273,745 -198,000 75,745 C Market Frameworks - 4,578 - 4,578 275,186 -105,220 169,966 12,800 - 12,800 D Higher Education - - - - 5,369,167 - 5,369,167 - - - E Further Education - - - - 110,253 -886,823 -776,570 - - - F Capability - 346,402 -15,816 330,586 48,069 -19,785 28,284 23,689 - 23,689 G Government as Shareholder - - - - 440,142 -14,730 425,412 28,060,000 -28,000,000 60,000 H Science and Research (NDPB) net - 130,908 - 130,908 4,452,137 - 4,452,137 578,147 - 578,147 I Innovation, Enterprise and Business (NDPB) net - 29,987 - 29,987 328,639 - 328,639 29,475 - 29,475 J Market Frameworks (NDPB) net - 17,931 - 17,931 64,190 - 64,190 1,400 - 1,400 K Higher Education (NDPB) net - 64,312 - 64,312 3,837,401 - 3,837,401 94,907 - 94,907 L Further Education (NDPB) net - 133,865 - 133,865 4,162,745 - 4,162,745 335,884 - 335,884 M Government as Shareholder (NDPB) net - - - - 12,839 - 12,839 272,000 - 272,000 Total Spending in DEL 797,785 -80,816 716,969 19,910,573 -1,046,951 18,863,622 29,736,000 -28,198,000 1,538,000

Spending in Annually Managed Expenditure (AME) Voted expenditure - - - 440,594 -816,000 -375,406 15,971,817 -9,202,000 6,769,817 Of which: N Science and Research - - - - 83,389 - 83,389 - - - O Innovation, Enterprise and Business - - - - -24,171 - -24,171 - - - P Market Frameworks - - - - 193,056 - 193,056 - - - Part II: Revised subhead detail including additional provision £'000

Revised Plans

Resources Capital Administration Programme Gross Income Net Gross Income Net Gross Income Net 1 2 3 4 5 6 7 8 9 Q Higher Education - - - - -54,336 -711,000 -765,336 8,013,000 -1,653,000 6,360,000 R Further Education - - - - -27 - -27 - - - S Capability - - - - 18,554 - 18,554 - - - T Government as Shareholder - - - - 221,273 -105,000 116,273 7,951,000 -7,549,000 402,000 U Science and Research (NDPB) net - - - - 4,215 - 4,215 - - - V Market Frameworks (NDPB) net - - - - -970 - -970 - - - W Higher Education (NDPB) net - - - - -7,970 - -7,970 - - - X Further Education (NDPB) net - - - - 7,581 - 7,581 7,817 - 7,817 Non-voted expenditure - - - 450,000 - 450,000 - - - Of which: Y Market Frameworks - - - - 450,000 - 450,000 - - - Total Spending in AME - - - 890,594 -816,000 74,594 15,971,817 -9,202,000 6,769,817

Non-Budget spending Voted expenditure - - - 4,000 - 4,000 - - - Of which: Z Prior Period Adjustments - - - - 4,000 - 4,000 - - - Total Non-Budget Spending - - - 4,000 - 4,000 - - - Total for Estimate 797,785 -80,816 716,969 20,805,167 -1,862,951 18,942,216 45,707,817 -37,400,000 8,307,817 Of which: Voted Expenditure 797,785 -80,816 716,969 20,355,167 -1,862,951 18,492,216 45,707,817 -37,400,000 8,307,817

Non Voted Expenditure - - - 450,000 - 450,000 - - - Part II: Resource to cash reconciliation £'000

Present Changes Revised Plans Plans

Net Resource Requirement 16,793,357 2,865,828 19,659,185

Net Capital Requirement 8,949,543 -641,726 8,307,817

Accruals to cash adjustments -998,673 -2,675,406 -3,674,079 Of which: Adjustments to remove non-cash items: Depreciation -95,867 -3,912,767 -4,008,634 New provisions and adjustments to previous provisions -777,210 676,531 -100,679 Departmental Unallocated Provision - - - Supported capital expenditure (revenue) - - - Prior Period Adjustments - -4,000 -4,000 Other non-cash items -10,415 10,000 -415 Adjustment for NDPBs: Remove voted resource and capital -14,752,740 195,300 -14,557,440 Add cash grant-in-aid 14,502,925 182,530 14,685,455 Adjustments to reflect movements in working balances: Increase (+) / Decrease (-) in stock - - - Increase (+) / Decrease (-) in debtors - - - Increase (-) / Decrease (+) in creditors - 177,000 177,000 Use of provisions 134,634 - 134,634

Removal of non-voted budget items - -450,000 -450,000 Of which: Consolidated Fund Standing Services - - - Other adjustments - -450,000 -450,000

Net Cash Requirement 24,744,227 -901,304 23,842,923 Part III: Note A - Statement of Comprehensive Net Expenditure & Reconciliation Table £'000

Revised Plans

Gross Administration Costs 749,290 Less: Administration DEL Income -80,816 Net Administration Costs 668,474

Gross Programme Costs 21,815,401 Less: Programme DEL Income -29,046,951 Programme AME Income -816,000 Non-budget income - Net Programme Costs -8,047,550

Total Net Operating Costs -7,379,076 Of which: Resource DEL 19,440,460 Capital DEL -27,072,261 Resource AME 252,725 Capital AME - Non-budget -

Adjustments to include: Departmental Unallocated Provision (resource) - Consolidated Fund Extra Receipts in the budget but not in the SoCNE -

Adjustments to remove: Capital in the SoCNE 27,072,261 Non-Budget Consolidated Fund Extra Receipts in the SoCNE -

Other adjustments -38,000

Total Resource Budget 19,655,185 Of which: Resource DEL 19,580,591 Resource AME 74,594

Adjustments to include: - Adjustments to include: - Prior period adjustments 4,000

Adjustments to remove: Consolidated Fund Extra Receipts in the resource budget -

Other adjustments -

Total Resource (Estimate) 19,659,185 Part III: Note B - Analysis of Departmental Income £'000

Revised Plans

Voted Resource DEL -1,127,767 Of which: Administration Sales of Goods and Services -72,750 Of which: A Science and Research -65,000 F Capability -7,750 Other Income -8,066 Of which: F Capability -8,066 Total Administration -80,816

Programme EU Grants Received -350,062 Of which: A Science and Research -62 E Further Education -350,000 Sales of Goods and Services -166,289 Of which: A Science and Research -3,136 B Innovation, Enterprise and Business -17,195 C Market Frameworks -96,173 E Further Education -30,000 F Capability -19,785 Interest and Dividends -17,030 Of which: C Market Frameworks -2,300 G Government as Shareholder -14,730 Other Grants -506,823 Of which: E Further Education -506,823 Taxation -6,747 Of which: C Market Frameworks -6,747 Total Programme -1,046,951

Part III: Note B - Analysis of Departmental Income £'000

Revised Plans

Voted Resource AME -816,000 Of which: Programme Interest and Dividends -816,000 Of which: Q Higher Education -711,000 T Government as Shareholder -105,000 Total Programme -816,000

Total Voted Resource Income -1,943,767

Voted Capital DEL -28,198,000 Of which: Programme Other Grants -28,000,000 Of which: T Government as Shareholder -28,000,000 Other Income -198,000 Of which: O Innovation, Enterprise and Business -198,000 Total Programme -28,198,000

Voted Capital AME -9,202,000 Of which: Programme Repayments -9,202,000 Of which: Q Higher Education -1,653,000 T Government as Shareholder -7,549,000 Total Programme -9,202,000

Total Voted Capital Income -37,400,000

Part III: Note C - Analysis of Consolidated Fund Extra Receipts

In addition to income retained by the Department the following income is payable to the Consolidated Fund: £'000

Present Changes Revised Income Receipts Income Receipts Income Receipts

Income in budgets surrendered to ------the Consolidated Fund (resource)

Income in budgets surrendered to ------the Consolidated Fund (capital)

Non-budget amounts collectable on behalf of the Consolidated - - -14,400,000 -14,400,000 -14,400,000 -14,400,000 Fund (in the SoCNE)

Total - - -14,400,000 -14,400,000 -14,400,000 -14,400,000

Detailed description of CFER sources

£'000

Present Changes Revised Income Receipts Income Receipts Income Receipts

Non-Budget Proceeds from the Postal Services - - -14,399,000 -14,399,000 -14,399,000 -14,399,000 Act Company BNFL Pension Liabilities - - -1,000 -1,000 -1,000 -1,000

Total - - -14,400,000 -14,400,000 -14,400,000 -14,400,000 Part III: Note D - Explanation of Accounting Officer responsibilities

The Accounting Officer prepares resource accounts for each financial year.

The following individuals are responsible for the expenditure within this Estimate:

Accounting Officer: Martin Donnelly

In accordance with Chapter 3 of Managing Public Money (issued by the Treasury), the following individuals are NDPB Accounting Officer appointments:

NDPB Accounting Officers:

Martin Donnelly Advantage West Midlands (RDA) John Taylor Advisory Conciliation & Arbitration Service (ACAS) Mary-Anne Geary Arts and Humanities Research Council (AHRC) Prof Douglas Kell Biotechnology & Biological Sciences Research Council Geraldine Swanton British Hallmarking Council Rory Earley Capital for Enterprise Ltd Charles Dhanowa OBE Competition Service David Saunders Competition Commission Mark Farrar Construction Industry Training Board Mike O'Connor Consumer Focus Martin Donnelly East Midlands Development Agency Martin Donnelly East of England Development Agency Professor Paul Boyle Economic & Social Research Council Prof David Delpy Engineering & Physical Sciences Research Council David Edwards Engineering Construction Industry Training Board (ECITB) Iain Smith Film Industry Training Board Sir Alan Langlands Higher Education Funding Council for England (HEFCE) Graham Russell Local Better Regulation Office Sir John Savill Medical Research Council Geoff Mulgan NESTA Trust Professor Duncan Wingham Natural Environment Research Council Martin Donnelly North West Development Agency Sir Martin Harris Office for Fair Access (OFFA) Martin Donnelly One North East (RDA) Prof John Womersley Science and Technology Facilities Council Martin Donnelly South East England Development Agency Martin Donnelly South West of England Regional Development Agency Ed Lester Student Loans Company Iain Gray Technology Strategy Board (TSB) Steve Cowley UK Atomic Energy Authority Michael Davis UK Commission for Employment and Skills (plus 23 SSCs) Martin Donnelly Yorkshire Forward (RDA) Stephen Haddrill Financial Reporting Council Limited Martin Donnelly BIS (Postal Services Act 2011) Company Limited Shaun Kingsbury UK Green Investment Bank plc Kim Thorneywork (interim) Skills Funding Agency Kim Thorneywork Learning and Skills Improvement Service Martin Donnelly has personal responsibility for the proper presentation of the department's resource accounts and their transmission to the Comptroller & Auditor General, and is also responsible for the use of public money and stewardship of assets.

In discharging these responsibilities, particular regard is given to:

- observing any accounting and disclosure requirements (including any Accounts Direction) and applying suitable accounting policies on a consistent basis;

- making judgements and estimates on a reasonable basis;

- stating whether applicable accounting standards, as set out in the Financial Reporting Manual (FReM), or an organisation’s version of it, have been followed, and explain any material departures in the accounts; and

- preparing the accounts on a going concern basis.

The responsibilities of an Accounting Officer, including responsibility for regularity and propriety of the public finances for which an Accounting Officer is answerable, for keeping proper records and safeguarding assets, are also set out in Chapter 3 of Managing Public Money.

In accordance with Managing Public Money requirements, the relationship between the Principal Accounting Officer and Additional Accounting Officer(s), and with their Ministers, together with their respective responsibilities, is set out in writing. Similarly, the relationship between the Principal/Additional Accounting Officer and the NDPB Accounting Officer(s) is set out in writing. Part III: Note E - Non-Departmental Public Bodies £'000

Section in Part II: Body Resources Capital Grant-in-aid Subhead Detail

I Technology Strategy Board 349,045 29,475 449,818 I Capital for Enterprise 3,880 - 3,631 J ACAS (Advisory, Conciliation and 49,471 1,100 48,971 Arbitration Service) J Consumer Focus 9,362 - 11,224 J Competition Service 4,001 - 3,985 J Competition Commission 19,287 300 18,755 H United Kingdom Atomic Energy Authority 5,981 1,700 6,410 I Regional Development Agencies 5,701 - 10,700 H Arts and Humanities Research Council 98,535 - 103,916 H Biotechnology and Biological Sciences 367,371 103,300 524,000 Research Council H Economic and Social Research Council 152,550 23,400 176,877 H Engineering and Physical Sciences 769,150 65,000 847,550 Research Council H Medical Research Council 594,349 30,600 660,400 H Natural Environment Research Council 332,473 36,600 353,796 H Research Councils projects 130,678 807 H Science and Technology Facilities Council 441,880 106,393 496,088

H Higher Education Funding Council for 1,690,078 210,347 2,050,425 England (HEFCE) - Science K Higher Education Funding Council for 3,794,494 90,300 3,921,930 England (HEFCE) - Education K Office for Fair Access to Higher Education 1,000 - 1,118

K Student Loans Company 106,219 4,607 146,130 L Skills Funding Agency 4,226,013 330,232 4,497,936 L UK Commission for Employment and 70,597 5,652 71,295 Skills M Green Investment Bank 12,839 272,000 280,500 U Biotechnology and Biological Sciences 900 - - Research Council U Economic and Social Research Council -1,000 - - U Engineering and Physical Sciences -1,090 - - Research Council U Medical Research Council 7,000 - - U Natural Environment Research Council -3,350 - - U Arts and Humanities Research Council -1,475 - - U Science and Technology Facilities Council 7,630 - - Part III: Note E - Non-Departmental Public Bodies £'000

Section in Part II: Body Resources Capital Grant-in-aid Subhead Detail

U United Kingdom Atomic Energy Authority -4,400 - -

V ACAS (Advisory, Conciliation and -1,067 - - Arbitration Service) V Competition Commission 100 - - V Competition Service 5 - - V Consumer Focus -8 - - W Higher Education Funding Council for -10,000 - - England (HEFCE) - Education W Student Loans Company 2,030 - - X Skills Funding Agency 8,500 - - X UK Commission for Employment and - - Skills X Construction Industry Training Board -1,196 7,567 - X Engineering Construction Industry 277 250 - Training Board

Total 13,237,810 1,319,630 14,685,455 Part III: Note F - Accounting Policy changes

Prior Period Adjustments This note provides details of Prior Period Adjustments (PPAs) impacting on this Estimate.

Voted

The Supplementary Estimate includes a voted PPA to reflect an omission in the outturn figures for 2011-12 that will be corrected as part of the preparation of the 2012-13 Annual Report and Accounts. No adjustments are required for 2012-13 or 2010-11.

£'000

2010-11 2011-12 2012-13

In 2011-12 the Higher Education Funding Council for England (HEFCE) treated recoverable grants as prepayments in their accounts, this treatment was mirrored - 4,000 - in the accounts of the BIS Group; having reviewed this policy, these are now classified as loans. Part III: Note G - Expenditure resting on the sole authority of the Supply and Appropriation Act

The following subheads contain provision sought under the sole authority of Part I of the Estimate and of the confirming Supply and Appropriation Act

Section in Part II: Service £'000 Subhead Detail

As in existing provision Part III: Note K - Contingent Liabilities

Nature of liability £'000

The following liabilities fell to be met from the Department's Estimate:

Statutory Liabilities Charged to Resource Estimates:

Liabilities that arise from the transfer of Training and Enterprise Councils (TEC)/Chambers of 1,000 Commerce Training and Enterprise Councils (CCTE) functions to successors, including from staff who have transferred or been made redundant, and who as a result of the transfer seek redress through the Employment Tribunal.

The Department is responsible for liabilities arising from deeds of indemnity given to liquidators of 1,000 TECs, covering the funds that they have returned to the Department as part of the dissolution process.

European Patent Office: the UK, as one of the contracting states, has a potential liability under Unquantifiable Article 40 of the European Patent Convention of 1973.

World Intellectual Property Organisation: the UK, as a contracting state to the Patent Co-operation Unquantifiable Treaty of 1970, has a potential liability under Article 57 of the Treaty.

Home Shipbuilding Credit Guarantee Scheme. 3,039

A guarantee has been given to the Financial Reporting Council that if the amount held in the Legal Unquantifiable Costs Fund falls below £1 million in any year, an additional grant will be made to cover legal costs subsequently incurred in that year.

Any liabilities imposed by section 9, British Aerospace Act 1980. Unquantifiable

Local Network Indemnities. 3,484

Callable capital subscription for the Common Fund for Commodities. 1,960

Paid in capital subscription for the Common Fund for Commodities. 2,240

The Department has a range of civil nuclear liabilities arising through its association with the United Unquantifiable Kingdom Atomic Energy Authority and British Nuclear Fuels Limited as well as ensuring that the Government complies with its obligations under the various international nuclear agreements and treaties.

Indemnities given to the UK Atomic Energy Authority by the Secretary of State to cover certain indemnities given by the Authority to carriers and British Nuclear Fuels Limited against certain Unquantifiable claims for damage caused by nuclear matter in the course of carriage.

Indemnities equivalent to those given to civil servants under the Civil Service Management Code have been given to persons appointed to the Board of the Office of Fair Trading, including the Unquantifiable Chairman. Part III: Note K - Contingent Liabilities

Nature of liability £'000

Indemnities given to Bankers of the Insolvency Services against certain liabilities arising in respect of non-transferable "account payee" cheques due to insolvent estates and paid into the Insolvency Unquantifiable Service's account.

The Police Information Technology Organisation (Home Office) provides BIS with access to data Unquantifiable from the Police National Computer (PNC). BIS has indemnified the police against any liabilities which they might incur as a result of providing that access.

Non-Statutory Liabilities Charged to Resource Estimates:

The Cabinet Secretary has provided a Government wide indemnity to Independent Public Unquantifiable Appointment Assessors (IPAAs). This will ensure that IPAAs will not have to meet any personal civil liability incurred in the execution of their IPAA functions. BIS carries out around 200 appointments per annum which are scrutinised by IPAAs.

Post Office Limited: the department has since October 2003 made available to Post Office Limited a 1,150,000 revolving loan facility of up to £1.15 billion. This is to help the company fund its working capital cash requirements in branch to the extent that they are connected with the provision of services of general economic interest. The package was agreed against the background of the migration of State benefits payments to a system of direct payment, alongside a Government commitment that benefit recipients will still be able to collect their benefit, in cash and in full, from Post Office branches. Post Office Ltd began utilising this facility on 1 December 2003. The facility matures on 31 March 2016 subject to state aid clearance.

A contingent liability in respect of risk associated with the Department assuming responsibility for Unquantifiable uplifts in pension contributions for the UK Atomic Energy Authority’s non-actives.

The Department is responsible for a liability to pay rent in respect of a lease (originally leased for the 2,000 Quality Improvement Service) in the event that the current tenant defaults.

Science and Technology Funding Council is responsible for Institute Laue Langevin staff related 12,000 commitments and costs associated with reprocessing fuel elements

Science and Technology Funding Council is liable for the decommissioning costs associated with the 2,000 dismantling of the European Synchrotron Radiation Facility (ESRF).

Incidents/Accidents Insurance claims for exposure to ionising radiation pursued outside the existing Unquantifiable UKAEA insurance scheme.

Outstanding claims under the Enemy Property Claim Scheme are still being considered. Unquantifiable

There is a possibility that other liabilities exist in relation to nationalised, and former nationalised, Unquantifiable industries that, if they crystallised, may fall to the Department.

Indemnities have been given to the Directors appointed by the Department to Enrichment Holdings Unquantifiable Limited, Enrichment Investments Limited and Urenco Limited against personal liability following any legal action against the Company. Part III: Note L - International Subscriptions

Section in Part II: Body £'000 Subhead Detail

A4-DEL UK Space Agency 177,498 C4-DEL World Trade Organisation 6,063 F4-DEL External Legal Fees 120 D4-DEL EUI Bursaries 274 D4-DEL EUI Subscriptions 32,323 H4-DEL Science and Technology Facilities Council 225,693