annual report and accounts 2002-03

Schedule 1

Summary of Resource Outturn

for the year ended 31 March 2003

							Net Total compared to Estimate Savings/ (Excess)
	Estimate			Outturn			Net Total compared to Estimate Savings/ (Excess)
	Gross Expenditure	A-in-A	Net Total	Gross Expenditure	A-in-A (note 4)	Net Total
	1	2	3	4	5	6	7
	£000	£000	£000	£000	£000	£000	£000
Request for resources 1	43,842,478	1,695,949	42,146,529	41,180,611	1,449,767	39,730,844	2,415,685
Request for resources 2	1,155,834	–	1,155,834	1,117,429	–	1,117,429	38,405
Request for resources 3	1,186,720	–	1,186,720	1,165,411	–	1,165,411	21,309
Total resources	46,185,032	1,695,949	44,489,083	43,463,451	1,449,767	42,013,684	2,475,399
Non operating cost A-in-A			494,670			373,756	120,914
Net cash requirement			28,302,972			26,991,365	1,311,607
Outturn in Respect of Prior Year The corresponding figures for 2001-02 outturn were as follows:
Total Resources (Restated) Non operating cost A-in-A Net cash requirement (Restated)						33,518,671 336,533 26,099,592
Reconciliation of resources to cash requirement
	Note	Estimate				Outturn	Savings/ (Excess)
		£000				£000	£000
Net total resources	Sch 2	44,489,083				42,013,684	2,475,399

Capital:
*Purchase of fixed assets:
– RfR 1	7/8	6,251,336				6,169,637	81,699
– RfR 2	7/8	523,852				318,690	205,162
– RfR 1 Capitalised provisions						(10,061)	10,061

New loans to the Trading Funds	9	15,000				34,200	(19,200)

Non operating cost A-in-A:

Net book value of fixed assets disposed	7/8/3	(433,022)				(360,555)	(72,467)

Net book value of investments disposed	9					(47,824)	47,824

Part proceeds of disposal of certain fixed assets payable to Consolidated Fund						44,300	(44,300)

Repayment of loans made to the Trading Funds and QinetiQ after deducting loan repayments treated as CFERs amounting to £49,900,000 shown against outturn	9	(61,648)				(9,677)	(51,971)

*Repayment of Loans from the National Loans Fund	Sch 4					1,426	(1,426)
		50,784,601				48,153,820	2,630,781

Accruals adjustments:

Non-cash transactions- Included in operating costs	Sch 4					(15,715,065)

Surplus arising on disposal of fixed assets	Sch 4					(36,863)

Revaluation reserve released on disposal of fixed assets	3					1,041

Included in net interest payable	5					(247,703)

Capitalised provisions shown above						10,061
		(17,940,817)				(15,988,529)
Cost of capital charge	17	(5,289,218)				(5,074,726)
		(23,230,035)				(21,063,255)	(2,166,780)

*Changes in working capital other than cash	Sch 4	336,569				(347,359)	683,928

*Use of provisions for liabilities and charges	16	411,837				395,323	16,514

Adjustment for movements on cash balances in respect of collaborative projects	13	–				(6,000)	6,000

Working capital movements in respect of Machinery of Government changes during the year						305	(305)

Adjustment for a prior year item included in net resource outturn	26	–				(141,469)	141,469
Net cash requirement	Sch 4	28,302,972				26,991,365	1,311,607
* Stated in accordance with Schedule 1 requirement to include accruals within the movements in the year.

Explanation of the variation between estimate and outturn (net total resources)

In respect of Request for Resources 1, the underspend of £2,416 million against Estimate relates mainly to a series of decisions taken late in the year reflecting the Departmental impact of the Quinquennial Revaluation of Fixed Assets (see Note 8.4); amended Fixed Asset lives affecting the results of the Commander-in-Chief Fleet; not writing off Spearfish Torpedoes, Fixed Asset reclassifications affecting the Chief of Defence Logistics; along with a range of other smaller provision movements. In Note 27, the underspend is analysed by TLB Holders. As part of the normal course of business resources need to be reallocated and redistributed between TLB holders as and when required in order to optimise the use of those resources in the generation of military capability and its effective use on operations. This process contributed to the in-year shortfalls and excesses shown against some of the TLB Holders. These offset each other, with no material impact on the Department's Total Resources.

There was an underspend on Request for Resources 2 of £38 million. Analysis of costs by operations conducted during the year is shown in Note 27.

The notes on pages 97 to 141 form part of these financial statements.

Explanation of the variation between estimate and outturn (net cash requirement)

The variation of Net Cash Requirement against Estimate of £1,312 million is mainly attributable to a reduction in operating costs after offsetting non-cash transactions, movements in working capital and lower capital expenditure.

Prior-period adjustments

The prior year's figure for the total resource outturn has been increased by £1,237,056,000 in respect of War Pensions and Allowances. The responsibility for the payment of these costs was taken over by the Department as part of Machinery of Government changes with effect from 1 April 2002. The opening Balance Sheet was adjusted, in accordance with Note 26, to reflect liabilities in respect of a number of overseas pension schemes.

Analysis of income payable to the Consolidated Fund

In addition to Appropriations-in-Aid the following income relates to the Department and is payable to the Consolidated Fund. (Cash receipts are shown in italics).

	2002-03 Forecast		2002-03 Outturn
	Income £000	Receipts £000	Income £000	Receipts £000
Operating income and receipts – excess A-in-A	–	–	–	–
Non operating income and receipts – excess A-in-A	–	–	–	–
Subtotal	–	–	–	–
Other operating income and receipts not classified as A-in-A	–	–	39,197	39,197
Other non-operating income and receipts not classified as A-in-A	–	–	39,427	39,427
Other amounts collectable on behalf of the Consolidated Fund	–	–	–	–
	–	–	78,624	78,624

The table above does not include loans repaid by QinetiQ amounting to £49,900,000 and an amount of
£44,300,000 in respect of sale of certain fixed assets which are repayable to the Consolidated Fund at the year end. Other non-operating income and receipts not classified as A-in-A shown above represents proceeds on part sale of QinetiQ amounting to £39,427,365.

Notes:
i. Actual Outturn – resources.

Request for resources 1: Provision of Defence Capability.

Actual amount net resources outturn £39,730,844,789.26. Actual amount of savings in resources over Estimate £2,415,684,210.74.

ii. Request for resources 2: Conflict prevention.

Actual amount net resources outturn £1,117,429,000.00. Actual amount of savings in resources over Estimate £38,405,000.00.

iii. Request for resources 3:War Pensions and Allowances, etc.

Actual amount net resources outturn £1,165,411,117.31. Actual amount of savings in resources over Estimate £21,308,882.69.

iv. Actual Outturn - cash.

Net cash requirement: Outturn net requirement was £26,991,365,062.76.

v. The amount surrenderable to the Consolidated Fund was £279,692,811.63. An amount of £39,664,440.67 was recoverable from Consolidated Fund in respect of prior year.

The notes on pages 97 to 141 form part of these financial statements.

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Last Updated: 2 Dec 03