PAYMENTS AND TRANSFERS TO UK
DEPARTMENTS Contents:
Scope
Key Points
Background
Payments
Transfers Pooled Schemes /
Funds
Joint Initiatives
Scope 1. This section gives guidance on
payments and transfers of budgetary
provision from the Scottish Administration
to UK Government Departments. It also
provides guidance on the participation of
the Scottish Administration in pooled
schemes / funds or joint initiatives with
UK Government Departments.
Key Points 2. Payments to UK Departments in
consideration of their undertaking
expenditure on wholly reserved functions
would be irregular as the payments would
not be provided for in legislation. 3. There should be a presumption against
transfers of budgetary provision in
consideration of a UK Department
undertaking specific expenditure on
devolved functions. 4. There should be a presumption against
participation with a UK Department in a
pooled scheme or fund which operated in
devolved functions.
Background 5. Section 65 of the Scotland Act 1998
provides that a sum may only be paid out of
the Scottish Consolidated Fund (SCF)
if: - it has been charged on the SCF by
any enactment or is payable out of the
SCF by virtue of the Scotland Act;
- it is to meet expenditure of the
Scottish Administration; or
- it is to meet expenditure payable
out of the SCF under any
enactment.
6. Expenditure of the Scottish
Administration relates to devolved
functions as defined in the Scotland Act
plus: additional functions transferred to
Scottish Ministers under section 63 of the
Scotland Act (executive devolution);
expenditure in relation to cross-border
public authorities subject to specification
by order under sections 88 and 89 of the
Scotland Act; expenditure in relation to
jointly established bodies under section
56(4) of the Scotland Act; and functions
exercised by Scottish Ministers on an
agency basis specified by orders under
section 93 of the Scotland Act. Expenditure
payable out of the SCF "under any
enactment" relates only to other bodies
funded directly from the SCF i.e. the
Scottish Parliament Corporate Body, Audit
Scotland, the Forestry Commission and the
Food Standards Agency. The authorisation by
the Parliament of the use of resources by
the Scottish Administration and other
direct funded bodies by annual Budget Act
under section 1 of the Public Finance and
Accountability (Scotland) Act 2000 is a
separate requirement as is the need for
specific statutory authority to undertake
the activity giving rise to the
expenditure.
Payments 7. Payments to UK Departments in
consideration of their undertaking
expenditure on wholly reserved functions
would be irregular as the payments would
not be provided for in legislation. As a
general rule therefore payments to UK
Departments would normally only be
appropriate in relation to commercial
transactions e.g. the purchase of assets,
goods and services. (It should be noted
that, under the terms of the Scotland Act
1998, it is possible for agreements between
the Scottish Ministers and UK Ministers to
be legally binding.) 8. Payments to UK Departments may also
be appropriate in relation to cross-border
public authorities and jointly established
bodies or devolved functions undertaken by
a UK Department on an agency basis under
section 93 of the Scotland Act. However,
the normal funding arrangements in respect
of cross-border public authorities and
jointly established bodies should be to
make payments directly to the bodies
concerned.
Transfers 9. Transfers of planned budgetary
provision to UK Departments covering
current and/or forward financial years may
be appropriate in certain circumstances
e.g. in consideration of a UK Department
undertaking specific expenditure on
reserved functions. There should be a
presumption against transfers in
consideration of a UK Department
undertaking specific expenditure on
devolved functions. This would be
inconsistent with the principles of
devolution under which the authorisation of
the use of resources for devolved functions
is the responsibility of the Scottish
Parliament. 10. Transfers of planned budgetary
provision to and from UK Departments effect
the amount of funds available for
expenditure on devolved functions subject
to authorisation by the Parliament. Details
of all such transfers covering current
and/or forward financial years will
therefore be set out in tables in the
Annual Expenditure Reports and Budget
Documents reconciling the revised aggregate
figures for planned and forecast
expenditure with those published
previously.
Pooled Schemes / Funds 11. A pooled scheme or fund in the
context of this guidance is one held within
the budget of a UK Department to which
Scottish Ministers may be invited to
contribute planned budgetary provision.
Bids against the fund would be considered
on their merits and decided
administratively with no certainty with
regard to the level of resources allocated
to Scotland. There should be a presumption
against participation with a UK Department
in such a pooled scheme or fund which
operated in devolved functions as it would
be inconsistent with the principles of
devolution. (Consideration should therefore
be given to establishing separate
arrangements covering Scotland.)
Participation with a UK Department in a
pooled scheme or fund which operated in
reserved functions would be possible by
means of a transfer of budgetary provision
to the relevant UK Department.
Joint Initiatives 12. Participation with a UK Department
in a joint initiative which operated in
devolved functions and where each party
makes payments covering their own share of
the costs would be proper provided that all
of the relevant sums paid out of the SCF
were expended in Scotland. Payments in
respect of joint initiatives which operated
in wholly reserved functions would be
irregular.
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2004 |