Schedule 4: Funding: Sponsor Body’s Estimates
Part 1: Introduction
Interpretation
- Paragraph 1 defines the terms used in Schedule 4. In particular, it defines the two phases of the Parliamentary building works. "Phase one" is the period beginning on the first day on which any provision of Section 1 of the Act comes into force and ending when Parliamentary approval of the Delivery Authority’s proposals in relation to the Palace restoration works is obtained for the purposes of Section 7(2)(a) and (b). "Phase two" is the period beginning when that Parliamentary approval is obtained and ending when the Parliamentary building works are completed.
- "Phase one works" means Parliamentary building works that are not phase two works and "phase one expenditure" means expenditure in connection with those works.
- "Phase two works" means the Parliamentary building works that are to be carried out during phase two and "phase two expenditure" means expenditure in connection with those works.
Assessment of expenditure
- Paragraph 2 provides that, every six months, the Delivery Authority is required to make an assessment as to its likely total expenditure in the current phase. These assessments are defined as a "phase one cost assessment" or a "phase two cost assessment" (as the case may be). When reviewing the annual estimate, the Estimates Commission will compare these cost assessments against the expenditure limit for the relevant phase – as to which, see further below.
Part 2: Phase one
Annual estimates during phase one
- Paragraph 3 provides that, during a financial year that begins in phase one, (other than the Sponsor Body’s first financial year or a transition year), the Sponsor Body will submit two items to the Estimates Commission for review: an estimate for the financial year (which must reflect the Delivery Authority’s statement of required resources for that year – see paragraph 77 above) and the Delivery Authority’s most recent phase one cost assessment. In reviewing these items the Estimates Commission must consult the Treasury and have regard to any advice it gives. If the phase one cost assessment does not exceed the budget for phase one expenditure set by the House Commissions, the Estimates Commission will lay the estimate before the House of Commons together with any comments it has on the estimate and any comments made by the Treasury. If the phase one cost assessment exceeds the budget for phase one expenditure set by the House Commissions, the Estimates Commission can either lay the estimate before the House of Commons or reject it. If the Estimates Commission rejects the estimate, the Sponsor Body must prepare a fresh estimate for the financial year.
- Paragraph 4 provides that the House Commissions set the budget for the phase one expenditure, and can revise that budget from time to time, following consultation with the Sponsor Body and Delivery Authority.
Supplementary estimates
- Paragraph 5 requires the Sponsor Body to prepare a supplementary estimate in relation to any change in expenditure where it approves a supplementary statement of resources prepared by the Delivery Authority for a financial year during phase one.
- The procedure described in paragraphs 91 and 92 above applies to supplementary estimates as it does to the ordinary annual estimates.
Part 3: Transition Year
Transition year estimate
- Paragraph 6 sets out the procedure which the Sponsor Body will follow for submitting annual estimates during a transition year, namely a financial year which begins during phase one and during which the Sponsor Body expects to seek Parliamentary approval for the purposes of Section 7(2).
- The Sponsor Body’s estimate for a transition year must include its anticipated phase one expenditure for the financial year and its anticipated phase two expenditure for that year.
- The Sponsor Body must submit its estimate for a transition year, together with the Delivery Authority’s most recent phase one costing, to the Estimates Commission. In reviewing the estimate, the Estimates Commission must consult the Treasury and have regard to any advice given by the Treasury.
- The Estimates Commission can reject the estimate if the phase one costing exceeds the phase one expenditure limit, as described above. There is no provision to reject the estimate on the basis of anticipated phase two expenditure, because the limit in relation to the latter will not (at this stage) have been set.
- Otherwise, the Estimates Commission must lay the estimate before the House of Commons together with any comments it has on the estimate and any comments made by the Treasury.
Supplementary estimates
- Provision is made in paragraph 7 for the preparation and submission of supplementary estimates in the transition year.
Part 4: Phase two
Annual estimates during phase two
- Paragraph 8 provides that a similar process will apply to annual estimates during phase two as for phase one. The Sponsor Body will submit an estimate of its expenditure for each financial year (which must reflect the Delivery Authority’s statement of resources for that year), together with the Delivery Authority’s phase two cost assessment, to the Estimates Commission. The Estimates Commission must consult the Treasury and have regard to any advice it gives in reviewing the Sponsor Body’s estimate. If the phase two cost assessment does not exceed the funding limit approved by Parliament (for the purposes of Section 7(2)(b)), the Estimates Commission will lay the estimate before the House of Commons, together with its comments on the estimate and any comments made by the Treasury. If the phase two costing exceeds the funding limit approved by Parliament, the Estimates Commission can either lay the estimate before the House of Commons or reject it, in which case the Sponsor Body would have to submit a fresh estimate for the financial year.
Supplementary estimates
- Provision is made in paragraph 9 for the preparation and submission of supplementary estimates in phase two.
