Source · Select Committees · Public Accounts Committee
11th Report - Excess votes 2023-24
Public Accounts Committee
HC 719
Published 26 February 2025
Recommendations
2
Accepted
Authorise additional resources for Ofqual's capital breach and mandate future accounting management plans.
Recommendation
The Office of Qualifications and Examinations Regulation (Ofqual) exceeded its Capital Departmental Expenditure Limit of £805,000 by £1,931,000 and its Capital Annually Managed Expenditure Limit of £0 by £64,000. These limits were breached due to the need to recognise a …
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Government Response Summary
The government agrees with the recommendation. Ofqual assures the Committee that it already scrutinizes forecasts monthly, maintains dialogue with HM Treasury, and engages with external auditors to ensure accounting consequences of operational decisions are understood and managed.
HM Treasury
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3
Accepted
Require Department for Business and Trade to report on Horizon Shortfall Scheme monitoring and cost estimates.
Recommendation
The Department for Business and Trade was authorised a Voted Resource Annually Managed Expenditure limit of £950,594,000. Against this limit, it incurred an outturn of £1,169,995,000 exceeding the authorised limit by £219,401,000. An announcement made by the government on 13 …
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Government Response Summary
The government agrees and will write to the Committee by 31 March 2025 detailing its monitoring arrangements for the Horizon Shortfall Scheme and disclosing cost estimate evidence in its 2024-25 annual report. They are also implementing measures to improve the redress process, including a £75,000 fixed sum award, streamlined governance, automation, and a new appeals mechanism for claimants.
HM Treasury
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6
Accepted
Electoral Commission exceeded its Voted Capital Departmental Expenditure Limit by £422,000.
Recommendation
The Electoral Commission breached its Voted Capital Departmental Expenditure Limit (CDEL) of £1,455,000 by £422,000 showing a total outturn of £1,877,000.
Government Response Summary
The Electoral Commission agrees to have Parliament provide additional resources by means of an Excess Vote, as set out in Figure 1, and HM Treasury has laid the Statement of Excesses 2023-24. These excesses are included in the Supply and Appropriation (Anticipation and Adjustments) Act 2025 which received Royal Assent on 11 March 2025.
HM Treasury
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14
Accepted
Department for Business and Trade exceeded its Voted Resource Expenditure limit by £219 million
Recommendation
The Department for Business and Trade was authorised a Voted Resource Annually Managed Expenditure limit of £950,594,000. Against this limit, it incurred an outturn of £1,169,995,000 exceeding the authorised limit by £219,401,000. 2 Office of Qualifications and Examinations Regulation (Ofqual) …
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Government Response Summary
HM Treasury has laid the Statement of Excesses 2023-24, included in the Supply and Appropriation (Anticipation and Adjustments) Act 2025, providing additional resources via an Excess Vote which received Royal Assent on 11 March 2025.
HM Treasury
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15
Accepted
Secretary of State owns Post Office, which runs four postmaster compensation schemes
Recommendation
The Secretary of State is the sole shareholder in Post Office Limited, whose principal objective is to provide retail post office services through a national network of branches. Post Office Limited will make payments to postmasters and former postmasters in …
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Government Response Summary
The government agreed to provide the Committee with information on the Horizon Shortfall Scheme, payment forecasts, settlement timelines, cost estimates, and ensuring quiet settlement of payments in line with court judgements by March 2025, and confirms they did so on 28 March 2025. They also outline actions to improve the redress process, including the introduction of a £75,000 fixed sum award and an appeals mechanism.
HM Treasury
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16
Accepted
Secretary of State committed to fund Post Office compensation if company faces adverse impact
Recommendation
As the sole shareholder in Post Office Limited, the Secretary of State has undertaken to provide funding to Post Office Limited to support compensation payments for approved claims under these schemes to the extent that the company is unable to …
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Government Response Summary
The government agreed to provide the Committee with information on the Horizon Shortfall Scheme, payment forecasts, settlement timelines, cost estimates, and ensuring quiet settlement of payments in line with court judgements by March 2025, and confirms they did so on 28 March 2025. They also outline actions to improve the redress process, including the introduction of a £75,000 fixed sum award and an appeals mechanism.
HM Treasury
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17
Accepted
Horizon Shortfall Scheme re-opened, offering a new £75,000 fixed sum award option
Recommendation
Under the Horizon Shortfall Scheme, between its launch on 1 May 2020 and its closure to new applicants in March 2021, the Post Office received 2,417 eligible scheme applications. In October 2022, the government announced that additional funding would be …
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Government Response Summary
The government agreed to provide the Committee with information on the Horizon Shortfall Scheme, payment forecasts, settlement timelines, cost estimates, and ensuring quiet settlement of payments in line with court judgements by March 2025, and confirms they did so on 28 March 2025. They also outline actions to improve the redress process, including the introduction of a £75,000 fixed sum award and an appeals mechanism.
HM Treasury
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18
Accepted
Post Office informing postmasters of scheme closing date and new fixed sum award option
Recommendation
The Post Office is in the process of writing to current and former postmasters who have not yet applied to the scheme to invite them to apply if they wish to but have not yet done so, as there will …
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Government Response Summary
The government agreed to provide the Committee with information on the Horizon Shortfall Scheme, payment forecasts, settlement timelines, cost estimates, and ensuring quiet settlement of payments in line with court judgements by March 2025, and confirms they did so on 28 March 2025. They also outline actions to improve the redress process, including the introduction of a £75,000 fixed sum award and an appeals mechanism.
HM Treasury
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21
Accepted
Department's accounting officer detailed excess expenditure and audit qualification to committee.
Recommendation
The Department’s Accounting Officer wrote to the Public Accounts Committee on 28 January 2025, setting out further detail behind the excess and the Comptroller & Auditor General’s qualification of his audit opinion on the Department’s 2023–24 Annual Report and Accounts.4 …
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Government Response Summary
Following the publication of the 2023-24 excesses by the Committee, HM Treasury has laid the Statement of Excesses 2023-24, which are included in the Supply and Appropriation (Anticipation and Adjustments) Act 2025 providing the additional resources by means of an Excess Vote which received Royal Assent on 11 March 2025.
HM Treasury
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Conclusions (12)
1
Conclusion
Accepted
This Report is part of the framework of control over government spending. Resource–based Supply requires Departments to estimate and manage the financial resources they need during each financial year on an accruals basis for commitments to provide services, and on a cash basis to meet commitments as they mature. Parliament …
Government Response Summary
The government agrees, stating that it has provided comprehensive IFRS 16 Leases guidance to all departments through various resources and has committed to a post-implementation review of IFRS 16 for central government with its Financial Reporting Advisory Board.
4
Conclusion
Not Addressed
Under Standing Order of the House of Commons number 55(2) (d), the Committee of Public Accounts scrutinises the reasons behind any individual bodies exceeding their allocated resources, and reports to the House of Commons on whether it has any objection to making good the reported excesses. Once the Committee has …
Government Response Summary
The government response restates the committee's conclusion verbatim, providing no new information or action.
5
Conclusion
Not Addressed
Figure 1 shows the excess incurred in 2023–24. Parliament is being asked to approve additional budget for the excess reported in the table. 4 Figure 1: Summary of the 2023–24 Excess Department Voted Capital Voted Capital Voted Resource Departmental Annually Annually Managed Expenditure Limit Managed Expenditure Limit Expenditure Limit Excess …
Government Response Summary
The government repeats the committee's conclusion that Parliament is being asked to approve additional budget for the excess reported in the table.
7
Conclusion
Accepted
The Electoral Commission operates from offices in Belfast, Cardiff, Edinburgh and London. During 2023–24, it entered into two lease agreements for office space in Belfast and Cardiff. In accordance with International Financial Reporting Standard 16 Leases, the Commission recognised, within its Statement of Financial Position, right of use assets and …
Government Response Summary
The Electoral Commission reviewed and increased Finance team capacity, updated processes, and improved technical accounting capability by providing additional training, revising procedures, and commissioning a technical review.
8
Conclusion
Accepted
However, under the Consolidated Budgeting Guidance issued by HM Treasury, the initial recognition of a right of use asset at the start of a lease should be classified as CDEL. The Commission failed to account for the budgetary impact of the new leases appropriately in either its Main or Supplementary …
Government Response Summary
The Electoral Commission reviewed and increased Finance team capacity, updated processes, and improved technical accounting capability by providing additional training, revising procedures, and commissioning a technical review.
9
Conclusion
Accepted
The Office of Qualifications and Examinations Regulation (Ofqual) breached its Voted Capital Departmental Expenditure Limit (CDEL) limit of £805,000 by £1,931,000 showing a total outturn of £2,736,000. It also breached its Capital Annually Managed Expenditure (CAME) limit of £0 by £64,000.
Government Response Summary
The government agrees with the Committee’s recommendation. The Audit, Risk and Assurance Committee reviewed the context and detailed circumstances leading to the excess. Forecasts are scrutinised on a monthly basis, a dialogue is maintained with HM Treasury colleagues throughout the year and management is engaged with the external audit team well in advance of year-end to ensure that any such issues are surfaced and resolved in a timely manner.
10
Conclusion
Ofqual’s lease of its existing offices in Coventry was due to expire in July
11
Conclusion
In January 2024, Ofqual requested additional budget of £417,000 in its Supplementary Estimate 2023–24, as it anticipated certain preparation costs for the office move. However, Ofqual expected the move itself would take place in April 2024 and therefore would recognise a right of use asset and related liabilities in its …
12
Conclusion
However, under the terms of lease, Ofqual took the option to access the property so as to conduct its fit out works from 1 March 2024. Under International Financial Reporting Standard 16 Leases, Ofqual should have therefore recognised its lease commitment from 1 March 2024, rather than from April, as …
13
Conclusion
The impact of this earlier than expected recognition point had not been taken into account in the Main or Supplementary Estimates. The Department for Business and Trade3
19
Conclusion
Accepted
The announcement made by the government on 13 March 2024 required the Department to increase the amount it expects to pay to fund future scheme settlements made by the Post Office under this Scheme in its 2023–24 financial statements. As this announcement was made after the Supplementary Supply Estimates for …
Government Response Summary
Following the publication of the 2023-24 excesses by the Committee, HM Treasury has laid the Statement of Excesses 2023-24, which are included in the Supply and Appropriation (Anticipation and Adjustments) Act 2025 providing the additional resources by means of an Excess Vote which received Royal Assent on 11 March 2025.
20
Conclusion
Accepted
The Department’s Statement of Outturn against Parliamentary Supply highlights a total excess of £208,487,000 for its annually managed expenditure. This is because it is made up of two components, Voted and Non–Voted. The Voted limit was £950,594,000 with an outturn of £1,169,995,000, leading to an excess of £219,401,000. The Non–Voted …
Government Response Summary
HM Treasury has laid the Statement of Excesses 2023-24 and these excesses are included in the Supply and Appropriation (Anticipation and Adjustments) Act 2025 providing the additional resources by means of an Excess Vote which received Royal Assent on 11 March 2025.