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MoJ fears revealing ‘shaky’ budget numbers

Officials pushed by MPs over failure to provide spending plans in annual report

18 October 2016

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The Ministry of Justice has admitted it is struggling to ‘marry-up’ projected spending with budget allocation as it bids to halve its administrative spend by 2020.

Facing the Justice Select Committee today, former Whitehall barrister Richard Heaton, the permanent secretary to the MoJ, and Mike Driver, the ministry’s chief financial officer, told MPs that ‘challenging’ financial targets and a ministerial reshuffle had led to an omission of its spending plans in their department’s 2015/16 annual report.

The two revealed a ‘fear of revealing shaky numbers’ and pledged to publish the ministry’s spending plans in April 2017.

The committee’s session came the day after the National Audit Office published an overview of the ministry’s performance in the year ending March 2016. According to its 2015/16 report, the MoJ’s gross expenditure was £9.6bn with income of £1.83bn, reducing the final net public expenditure to £7.73bn – an increase on the £7.6bn recorded in 2014/15.

Heaton gave reassurances that the MoJ’s aim was to ‘re-prioritise spend’, not ‘salami slice’, and that over the next 18 to 24 months a transformation review of his department would be carried out.

Among the ministry’s planned major projects is the HMCTS reform programme, which aims to modernise and transform the court system to increase efficiency and improve service quality at an estimated cost of £700m.

However, the NAO flagged concerns raised by the Infrastructure and Projects Authority’s annual report on major government projects. Under its traffic light risk assessment system, the report rated the likely of success of the court reforms as amber or red. Of even more concern, the MoJ had the third highest number of projects rated in such a fashion.

The ministry’s controversial plans to shut 86 courts across England and Wales, as part of the changes to raise funds towards its reform programme, were also discussed by the committee.

Driver, who was appointed CFO at Petty France in April, following a stint at the Department for Work and Pensions, stressed that ‘capital income generated from court sales was a fundamental mechanism for the court reform programme’. He added that closing the courts would raise £40m for reinvestment and save £27m per year, with a total of £300m expected to be collected.

However, MPs remained concerned over the possibility of a shortfall in capital spending with the sales of courts in London (10) and the South East (19) set to be hit amid uncertainty in the commercial property market post-Brexit.

In spite of this Driver said that there would be ‘no fire sale on selling properties in London’ in what is a ‘volatile market’ but admitted a ‘20 per cent optimism bias’ had been made.

Matthew Rogers is a legal reporter at Solicitors Journal matthew.rogers@solicitorsjournal.co.uk | @sportslawmatt

 

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