461.Sections 124-130 deal with the processes which must be complied with for expenditure out of the WCF to be regular. The normal process is that sums will only be paid out of the WCF on the authority of a Budget resolution passed by the Assembly (section 124(1)(b) and section 125). There are three sets of exceptions to this norm.
462.The first is that, in a small number of cases, sums will have been “charged on” the Fund by legislation (for an example in this Act , see section 20(5)). Sums so charged are paid out of the Fund automatically, without the need to be approved in a Budget resolution (although the AGW still has to approve the issue of the sum, having been satisfied that it is indeed charged on the WCF (section 129 and the final words of section 124(1)).
463.The second set of exceptions is where the payment out is deemed to have been authorised by a Budget resolution of the Assembly, by virtue of sections 127 or 128 (for more on which, see below).
464.The third exception to the norm applies to sums which were paid into the WCF by mistake – see sections 124(5) and 130.
465.Payments out of the WCF which have been authorised (or deemed authorised) by a Budget resolution of the Assembly, still cannot be made except to meet expenditure of a “relevant person”, or expenditure payable out of the WCF by virtue of legislation (section 124(2)). A “relevant person” for these purposes is defined, in subsection (3), as any of:
the Welsh Ministers, the First Minister or the Counsel General;
the Assembly Commission;
the AGW, or
the Public Services Ombudsman for Wales
466.Sections 125 and 126 set out the process of Budget resolutions. For each financial year, the First Minister or another Welsh Minister must move a Budget motion in the Assembly (section 125(1) and (2)). Normally, the Budget resolution for each financial year will be made by the Assembly in the previous financial year (see section 127(1)). The Budget motion must seek the Assembly’s approval for:
how much, in terms of resources, can be used on the services and purposes specified in the motion in the financial year to which it relates;
how much, in terms of accruing resources, any of the relevant persons (for which see above) can retain (rather than paying those resources into the WCF) for use on the services and purposes specified in the motion; and
how much money can be paid out of the WCF in the relevant financial year for use on those services and purposes.
467.The “use of resources”, in accepted accounting terminology, means their expenditure, consumption or reduction in value (section 125(4)). Accruing resources means income, including income from the disposal of capital assets (the latter being known as “non-operating income”).
468.There are thus two aspects to a Budget motion. First, it seeks authorisation for the maximum amount of resources which a relevant person can plan to use on services and purposes approved in the motion. At that point, the income constituting accruing resources may not have materialised in the form of a cash receipt.
469.Secondly, the motion seeks authorisation for the maximum amount of cash that can be issued out of the WCF to be spent on the services and purposes referred to.
470.The Act provides that, as a minimum, there must be one Budget motion per year, known as the “annual Budget motion” (section 125(1)). As stated above, this will normally be moved and passed before the beginning of the financial year to which it relates (section 127(1)). Supplementary Budget motions may also be moved in relation to a financial year (section 126). These may be moved before the beginning of the financial year to which they relate, in the financial year to which they relate, or in a subsequent financial year. They may vary the amounts of resources to be made available for the services and purposes specified in the annual Budget resolution or they may specify new services and purposes, and allocate resources to those. They can also vary the amounts of resources which any of the relevant persons (see above) can retain, or authorise new retentions, rather than paying these into the WCF. And finally, as with annual Budget motions, supplementary Budget motions can seek authority for the AGW to approve the issue of additional sums of cash out of the WCF, or they can vary the amounts of cash which the Assembly has already authorised to be issued out of the WCF.
471.Like annual Budget motions, supplementary Budget motions may be moved only by the First Minister or another Welsh Minister.
472.As referred to above, two of the exceptions to the norm that a Budget resolution of the Assembly is required before sums can be paid out of the WCF are contained in sections 127 and 128. Section 127 deals with the situation where no Budget resolution has been adopted by the Assembly by the beginning of the relevant financial year. In the absence of such a resolution, section 127 provides that resources may be used on services and purposes, and money issued out of the WCF accordingly, up to a specified level. This level is determined as a fixed percentage of the preceding financial year’s provision for each such service or purpose. Likewise, any of the relevant persons (for which see above) can retain resources (rather than paying them into the WCF), up to the same percentage of the amount of resources that they were authorised to retain in the preceding financial year. The percentage in question is 75% up to the end of July in a financial year. Furthermore, if a Budget resolution for the financial year has still not been passed by the end of July, then resources can be used, amounts retained, and cash issued out of the WCF, up to a further 20% of the previous year’s authorised amounts; that is, up to 95% overall.
473.Section 128 (Contingencies) is aimed at emergency situations in which:
the Welsh Ministers consider expenditure to be necessary in the public interest;
that expenditure is not authorised under an existing Budget resolution; and
it is not reasonably practicable, for reasons of urgency, for a Budget motion to be put down so as to authorise it.
474.In that situation, section 128 allows resources to be used and cash to be paid out of the WCF, up to a ceiling of 0.5% of the total amount authorised for use by, or 0.5% of the total amount of cash authorised to be issued to, the relevant person, or pursuant to a relevant enactment, for the financial year in question. On current figures, this ceiling would equate to approximately £50 million (in the case of the resource authorisation for the First Minister, Welsh Ministers and Counsel General). Where the Welsh Ministers use this power, they must, as soon as possible, lay a report before the Assembly, setting out the amount of resources and cash involved, and explaining why they considered the action they took to be necessary (subsection (7)).
475.Once payments out of the WCF have been authorised (whether by Budget resolution, by legislative provision “charging” them on the WCF, or under sections 127, 128 or 130), they still cannot be made unless the AGW has granted an approval to draw (section 129). Before doing so, the AGW will need to be satisfied that the conditions laid down in section 124 or section 130 have been met (sections 129(2) and 124(5)). Once an approval to draw has been granted, the Paymaster General, who holds the WCF, must make the funds available to the person entitled to them (section 129(4)).
476.The section makes provision for daily information on payments out of the WCF to be available to the AGW and the principal accounting officer for the Welsh Ministers (subsection (5)).
477.Subsections (6) – (8) make provision concerning the principal accounting officer for the Welsh Ministers. By subsection (6), this is to be the Permanent Secretary to the Welsh Assembly Government – i.e. the most senior civil servant serving the Welsh Assembly Government (see subsection (8)). If there is a temporary vacancy in the post of Permanent Secretary, or the Permanent Secretary is incapable of acting as principal accounting officer to the Welsh Ministers – e.g. because of illness – HM Treasury can appoint a temporary replacement.