Ministry of Justice permanent secretary Sir Richard Heaton has told MPs that his department’s financial state has improved in recent months but admitted that it nevertheless “remains challenging”.
In a letter to members of parliament’s Justice Select Committee, Heaton provided additional information on elements of a £1.3bn funding boost for the department’s 2019-20 budget, agreed by the Treasury in April, at the start of the financial year.
MPs had sought additional details on a £321m slice of that package that was described as being earmarked for “other policy and forecast adjustments” at a hearing last month. The overall increase took the MoJ’s main estimate for its resource Departmental Expenditure Limit to £8.05bn for 2019-20. Its capital DEL is £471.2m
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Heaton said the “most significant” element of the bundle related to savings projections made at the 2015 Spending Review that were “no-longer deliverable”; additional funding for the digital and technology element of the department’s work; judicial pensions litigation; and the cost of its arm’s-length bodies.
“You asked whether we are currently forecasting to spend more than we had received in the main estimate and whether we expected to have to make a claim as part of the 2019-20 supplementary estimate process,” he said.
“We welcome the additional funding we agreed with HM Treasury at the start of the year, which provides the department with greater certainty for the year ahead.
“Our resource funding for 2019-20 is now reaching a level which sets the department on a more sustainable footing, although our position remains challenging.
“Subject to any significant external impacts on either our income or costs, we believe that this is deliverable, though we will need to be prepared to prioritise spend and make choices should risks crystallise or demand assumptions change in year.”
Elsewhere in his update letter, Heaton told MPs that the MoJ’s prison estate had a backlog of major works costed at “around £900m”. He said combined resource and capital spending for the prison estate this year – including facilities-management contracts – was £283m.
At last month’s session, committee members had asked how much control prison governors had over capital budgets.
Heaton said the funding was “held centrally” to deliver best value for money and “ensure prioritisation of major works”.
MPs had also asked what the implications of the government's U-turn on its Transforming Probation reforms would be for the MoJ's finances.
The perm sec said that initial assessments had been made, but declined to set them out on the grounds that they included exit costs for the existing Community Rehabilitation Company contracts, which are still being negotiated.
“Releasing these figures may however compromise that negotiation and so we cannot do so at this time,” he said.