CIVIL ESTIMATES

AND

ESTIMATES FOR REVENUE DEPARTMENTS

(Including PENSIONS, EDUCATION, INSURANCE AND OTHER Grants).

1927.

Memorandum by the Financial Secretary to the Treasury.

I. GENERAL.

1. Estimates appear for the first time in 1927 under the title and in the classification recommended by the Select Committee on Estimates in their First Report (H.C.59 of 1926).

The Committee stated in their Report that they were of opinion that a reclassification of certain existing Votes for the Civil Service would be of great assistance in making the Estimates present a clearer picture of the services to which Public Funds were appropriated. They therefore recommended the division into new classes of the existing Votes and drew up a detailed scheme of regrouping of them in what appeared to be their most appropriate form. The recommendations of the Committee were accepted by the Government with minor emendations and the grouping of Estimates in the present volume follows the Committee's scheme.

The Committee also recommended that Civil Service Estimates should, in future, be called Civil Estimates in order to dispel a common delusion that the bulk of the money voted in those Estimates went in the payment of Civil Servants' salaries.

The tables of expenditure in previous years appended to this memorandum have been revised under the new classification in order to preserve continuity for purposes of comparison.

2. In the abstract following and throughout the detailed Estimates, comparison is made with the total grants made for the services in the year 1926, including the Supplementary Estimates in Papers H.C.99, 104 and 140 of 1926, and 1 and 17 of 1927. This basis of comparison which has been adopted in recent years is in accordance with the recommendations contained in the Fourth Report of the Select Committee on National Expenditure (H.C.150 of 1920).

(23530) Wt. 10287/4349 1375 & 750 4/27 Harrow G.13/3

A 2

The totals are in all cases net, after deduction of receipts to be appropriated in aid.

Comparison between the 1926 and 1927 Estimates is upset by three abnormal charges which have fallen into the former year. Provision of 4,350,000l. for the Coal Mining Industry Subvention, of 3,000,000l. for Emergency Services (Importation of Coal) and of 5,471,1007. for Grants in Relief of Unemployment in 1926, compared with provisions of 80,000l., 10. and 1,461,1321. respectively in 1927, involve a difference between the two years for these three items of 11,279,9581. If the totals of Estimates shown above for the two years are adjusted by the exclusion of this increase, Estimates for 1927 show an increase over those for 1926 of 5,192,7271. The most important variations between the two years which contribute to this total are (in round figures) as follows:

Increases-Empire Marketing, 500,000l.; Oversea Settlement, 464,000l.; Ministry of Health, 1,106,000l.; Old Age Pensions, 2,522,000l.; Scottish Board of Health, 258,000l.; Beet Sugar Subsidy, 1,300,000l.; Forestry Commission, 210,000l.; Post Office, 2,750,000l.

Decreases-Middle Eastern Services, 1,049,000l.; Imperial War Graves Commission, 462,000l.; Ministry of Pensions, 2,482,0007.

The fact of there being 53 Fridays in 1927 accounts for increases (included in the above figures) of 550,000l. for Old Age Pensions and 450,000l. for the Post Office. There are also small increases on a large number of Estimates due to the same cause.

4. As in previous years, a statement appears on each Estimate showing (a) the total cost of the services provided for, including the apportioned share of expenditure for which provision is made in other Estimates or as a charge upon the Consolidated Fund, and (b) the total receipts whether appropriated in aid of the Vote or paid direct to the Exchequer.

5. The total provision in the Estimates for Northern Ireland Reserved Services is approximately 2,011,000l. Of this amount, 1,924,000l. (as compared with 1,874,000l. in 1926) is recoverable under Section 24 of the Government of Ireland Act, 1920, by deduction from the Northern Ireland share of reserved taxes.

6. The Estimates provide for certain services, the expenditure of which is recoverable in part from the Government of the Irish Free State. As in previous years, the amounts recoverable in cash are appropriated in aid of Votes.

7. The Estimates have been framed within the narrowest limits consistent with the carrying out of essential services, due regard being paid to the necessity for providing for all services which can reasonably be foreseen and to the requirements of the year being presented to Parliament in as complete a form as possible in the original Estimates. It must, nevertheless, be said that conditions both at home and abroad are still such as to affect the certainty of Estimates which provide for a period extending over a year after the date of their preparation, and that the Estimates, as a whole, cannot provide for every eventuality.

8. Every effort has been made to secure that the Estimates shall accord as closely as possible with probable expenditure. The special attention given in recent years to those Votes which have shown substantial surrenders in the past with the object of making sufficient allowance for the factors which led to over-estimating has been continued.

The percentage ratio of surrenders to Supply Grants which was 4.2 per cent. for 1924, and 1.5 per cent. for 1925, is expected to be about 1.3 per cent. for 1926-a standard of accuracy which is greater than that obtaining before the War when the average surrender over the years from 1900-01 to 1913-14 was 1.4 per cent. It is anticipated that this standard

will be maintained in 1927.

9. Provision is made in the Estimates to meet fluctuations in the cost of living bonus payable under the Scheme set out in the Appendix to each class of Estimates. In explanation of this item, it should be stated that the instructions for the preparation of Estimates issued in October, 1926, required that Estimates should be based on an index figure of 70 for the year. When Estimates had been prepared, it became evident from the higher cost of living figures for 1st November and 1st December that a higher figure than had been anticipated would be required for the six months following the revision of bonus on the 1st March. At that stage, it was impossible to alter the details of salaries shown in Estimates, and provision for the additional cost was therefore made by lump sum additions.

10. The Estimate for Expenses under the Representation of the People Act (Vote 3) shows a decrease from 305,000l. to 207,000l., due to the fact that, beginning with the year 1926, only one Electoral Register will be prepared each year instead of two.

11. The Estimate for the grant-in-aid of the Government Hospitality Fund shows a decrease of 17,000l. The provision made in 1926 included 25,000l. made by Supplementary Estimate in respect of the anticipated expenses of the Imperial Conference. The balance of the Fund on the 31st March, 1927, is expected to be 1,000l., as against a balance on the 31st March, 1926, of 7,000l.

12. The Estimate for Miscellaneous Expenses (Vote 15) shows an increase of 14,160., attributable to further provision for grants towards the interest on Overseas Loans under Section 2 of the Trade Facilities Act, 1924.

13. An Estimate will be presented later in the year in accordance with the usual practice for the repayment to the Civil Contingencies Fund of lesser sums not recovered from other sources.

14. The Estimate for Royal Commissions (Vote 21) includes provision for the London University Statutory Commission. No provision is necessary for the Oxford and Cambridge Universities Commissions and a reduced provision is made for the Unemployment Grants Committee. The net provision for Surplus Stores, &c., Liquidation remains 107., but the gross expenses have been considerably reduced on the approaching winding-up of the Liquidation Department. As from the 1st April, 1927, certain branches of work in connection with this service will be transferred to the War Office and the Ministry of Pensions, and the remainder of the service will be administered by the Treasury.

15. The Estimate for the Scottish Office (Vote 23) includes provision of an increase of 60,000l. in the payments made in respect of Unemployment Schemes. The increase is due to payments of interest and sinking fund charges on further approved capital works carried out by Local Authorities, etc.

16. The Estimate for the Foreign Office (Vote I) shows an increase of 14,4027. due mainly to an increase of 3,3047. in the provision for Travelling Expenses of Foreign Service Messengers in view of an extension of the