Main estimate memorandum 2024-25
Published 30 July 2024
© Crown copyright 2024
This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gov.uk.
Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned.
This publication is available at https://www.gov.uk/government/publications/government-actuarys-department-main-estimate-memorandum-2024-25/main-estimate-memorandum-2024-25
1. Overview
1.1 Objectives
The Government Actuary’s Department (GAD) is a non-ministerial department which provides actuarial and specialist analysis, advice and assurance to clients in both the public sector (UK and overseas) and the private sector where this is consistent with government policy and does not impair our ability to serve the UK government. GAD has unrivalled experience and expertise in advising the UK public service on actuarial matters.
1.2 Spending controls
GAD’s net spending is broken down into four spending totals, for which Parliamentary approval is sought. For GAD, these spending totals are:
- Resource Departmental Expenditure Limit (RDEL) – a net limit comprising day to day running costs, less income from actuarial services provided.
- Capital Departmental Expenditure Limit (CDEL) – investment in capital IT equipment and right of use assets on GAD’s leases.
- Resource Annually Managed Expenditure Limit (RAME) – a limit for a provision for a historic injury benefit.
- Capital Annually Managed Expenditure Limit (CAME) – a limit for capital dilapidation provisions arising on our property leases since the implementation of IFRS 16.
In addition, Parliament votes a net cash requirement, designed to cover the elements of the above budgets which require GAD to pay out cash in year.
1.3 Comparison of net spending totals sought
The table below shows how the net spending totals sought for GAD compared with last year:
| Net Spending total | Amounts sought this year (Main Estimate 2024-25) | Difference (+/-) compared to original budget last year (Supplementary Estimate 2023-24) | Difference (+/-) compared to final outturn last year (Outturn 2023-24) |
|---|---|---|---|
| Resource DEL | £0.001m | -£0.634m | +£0.128m |
| Capital DEL | £0.350m | -£9.500m | -£4.590m |
| Resource AME | £0.050m | +£0.020m | +£1.355m |
| Capital AME | £0.100m | -£0.300m | -£0.269m |
1.4 Key drivers of spending changes
GAD is expecting lower CDEL, CAME and RDEL in 2024-25 compared to 2023-24 because GAD moved offices in 2023-24. The office move resulted in:
- a CDEL impact due to entering into a new property lease
- a CAME impact due to the dismantling clause in the new office lease which resulted in a capital dilapidations provision
- an RDEL impact on the crystallisation of the dilapidations provision at GAD’s previous office, Finlaison House
GAD therefore requires less budgetary cover in 2024-25 than in 2023-24.
1.5 New policies and programmes; ambit changes
Not applicable.
1.6 Spending and income trends
The chart below shows overall resource RDEL spending and income trends for the last five years and plans presented in Estimates for 2024-25.
1.7 Administration costs and efficiency plans
| Net Spending total | Amounts sought this year (Main Estimate 2024-25) | Difference (+/-) compared to original budget last year (Supplementary Estimate 2023-24) | Difference (+/-) compared to final outturn last year (Outturn 2023-24) |
|---|---|---|---|
| Resource DEL | £0.001m | -£0.634m | +£0.128m |
| Capital DEL | £0.350m | -£9.500m | -£4.590m |
| Resource AME | £0.050m | +£0.020m | +£1.355m |
| Capital AME | £0.100m | -£0.300m | -£0.269m |
All resource DEL is within the administration costs limit. GAD has outsourced its payroll function to a specialist provider and has transferred its IT function to HM Treasury.
GAD continues to centralise routine analysis and data management within a specialist team (Analytical Solutions) to improve consistency and efficiency. We are also embedding project management and delivery widely within the department for key client assignments.
1.8 Funding: Spending Review and Budgets
RDEL is mainly funded through income generated by GAD from providing actuarial services to other government departments and public sector bodies.
The remaining RDEL, CDEL and AME spending is funded through the Spending Review and the Main and Supplementary Estimate process.
1.9 Other funding announcements
Not applicable.
2. Spending and income detail
2.1 Explanations of changes in spending and income
The table below compares GAD’s Resource DEL for the 2024-25 Main Estimate and the 2023-24 Supplementary Estimate as follows:
| 2024-25 Main Estimate (£m) | 2023-24 Supplementary Estimate (£m) | Variance (£m) | Commentary | |
|---|---|---|---|---|
| Resource DEL | ||||
| Income | -25.850 | -26.014 | 0.164 | The prior year extensive demand for valuations work is expected to reduce in 2024-25 due to the cycle of pensions valuations. |
| Expenditure | 25.851 | 26.649 | -0.798 | GAD’s cost base has been adjusted in line with its expected income. |
| Net Resource DEL | 0.001 | 0.635 | -0.634 |
The table below compares GAD’s Capital DEL for the 2024-25 Main Estimate and the 2023-24 Supplementary Estimate as follows:
| 2024-25 Main Estimate (£m) | 2023-24 Supplementary Estimate (£m) | Variance (£m) | Commentary | |
|---|---|---|---|---|
| Capital DEL | 0.350 | 9.850 | -9.500 | CDEL spend in 2023-24 was higher than previous years due to GAD relocating to a Government Hub (and therefore entering into a new property lease) which results in a CDEL impact under IFRS 16. There is no ongoing impact in 2024-25 as a result. |
The table below sets out GAD’s Resource AME for the 2024-25 Main Estimate and the 2023-24 Supplementary Estimate as follows:
| 2024-25 Main Estimate (£m) | 2023-24 Supplementary Estimate (£m) | Variance (£m) | Commentary | |
|---|---|---|---|---|
| Resource AME Provisions | 0.050 | 0.030 | +0.020 | GAD’s RAME spend is for a historic injury provision. |
The table below sets out GAD’s Capital AME for the 2024-25 Main Estimate and the 2023-24 Supplementary Estimate as follows:
| 2024-25 Main Estimate (£m) | 2023-24 Supplementary Estimate (£m) | Variance (£m) | Commentary | |
|---|---|---|---|---|
| Capital AME | 0.100 | 0.400 | -0.300 | There was higher CAME in 2023-24 due to the dismantling clause in GAD’s new office lease which resulted in a capital dilapidations provision. |
2.2 Restructuring
Not applicable.
2.3 Ring fenced budgets
Within the totals, the following elements are ring fenced i.e. savings in these budgets may not be used to fund pressures on other budgets.
| Ring fenced budgets | Amounts sought this year (Main Estimate 2024-25) | Difference (+/-) compared to budget last year (Supplementary Estimate 2023-24) | Difference (+/-) compared to budget last year (Supplementary Estimate 2023-24) | Difference (+/-) compared to final outturn last year (Outturn 2023-24) | Difference (+/-) compared to final outturn last year (Outturn 2023-24) |
|---|---|---|---|---|---|
| £m | % | £m | % | ||
| Depreciation | £0.700m | -£0.215m | -23% | -£0.129m | -16% |
GAD had a higher depreciation charge in 2023-24 due to the overlap between GAD’s previous office lease and its current office lease.
2.4 Changes to contingent liabilities
Not applicable.
3. Priorities and performance
3.1 How spending relates to objectives
GAD’s administration costs support all of its objectives. Hence all the expenditure in the Estimates support all of the objectives set out in 1.1 above.
3.2 Measures of performance against each priority
GAD’s annual business plan sets out the high-level objectives for the year. The business plan is published internally and is not publicly available.
The monthly Management Information packs report performance under the high-level objectives set in the business plan. This is done through a balanced scorecard which is made up of four quadrants: financial, clients, processes, and people, each of which has key performance measures which are agreed as part of the business planning process. The targets for 2024-25 are as follows:
| 1. Finance | Aim 2024-25 |
|---|---|
| 1.1 Break even | £0.0m |
| 1.2 Average utilisation | 60% |
| 2. Clients | Aim 2024-25 |
|---|---|
| 2.1 Business Development effectiveness | 100% |
| 2.2 Client value | 95% |
| 3. Processes | Aim 2024-25 |
|---|---|
| 3.1 Maximise project management capability in client delivery | 60% |
| 3.2 AST work as % of total income | 42% |
| 3.3 Proportion of planned improvement projects completed | 100% |
| 4. People & Inclusion | Aim 2024-25 |
|---|---|
| 4.1 Annualised employee turnover rate | 12% |
| 4.2 Successful use of L&D offer | 10 days |
The performance pack is reviewed by both the Department’s Executive Committee and Board.
3.3 Commentary on steps being taken to address performance issues
NAO findings and conclusion from 2022-23 audit of Annual Report and Accounts:
The NAO did not identify any material misstatements or issues.
GIAA findings and recommendations:
The GIAA have issued five final reports from the 2023-24 audit programme. The reports cover GAD’s key finance controls including counter fraud arrangements, IT service provision, learning and development, quality assurance and business development.
These reports have recommended a number of actions which GAD management have accepted and are in the process of implementing.
3.4 Major projects
Not applicable.
4. Other information
4.1 Additional specific information required by the select committee
Not applicable.
5. Accounting Officer Approval
This memorandum has been prepared according to the requirements and guidance set out by HM Treasury and the House of Commons Scrutiny Unit website.
The information in this Estimates Memorandum has been approved by me as Departmental Accounting Officer.
Fiona Dunsire
Accounting Officer
17 July 2024