Committee publication · Correspondence · 4 February 2025

Letter from the Permanent Secretary relating to the annual report and accounts for the Department for Business and Trade, 28 January 2025

Inquiry: The work of the Department for Business and Trade

Summary

The Department for Business and Trade's Permanent Secretary notifies the Business and Trade Committee that the department's first annual report and accounts (2023-24) will be laid shortly, albeit later than the Treasury's pre-Summer recess deadline. The accounts face two qualified audit opinions: a £219 million overspend on Resource AME for the Horizon Shortfall Scheme due to a ministerial decision made after budget allocations, and limitations of scope on two Horizon redress scheme provisions due to insufficient settlement data for reliable estimates.

Key findings

The 2023-24 Annual Report & Accounts is the Department's first since its formation via machinery of government changes, requiring disaggregation of predecessor department accounts and higher audit precision standards.
A ministerial decision on 13 March 2024 introduced a £75,000 fixed sum option for the Horizon Shortfall Scheme after the supplementary estimate process was complete, creating a £219 million overspend against Resource AME control totals.
The Comptroller & Auditor General has issued a qualified excess vote opinion due to insufficient budgetary funding being available for the Horizon Shortfall Scheme following the post-estimate ministerial decision.
Two Horizon redress scheme provisions (Shortfall Scheme and Convictions Redress Scheme) face audit scope limitations because actual settlement information is insufficient in volume or range to reliably inform estimates, creating significant uncertainty.
The Department expects to resolve these accounting challenges and achieve a pre-Summer recess laying date for the 2024-25 Annual Report & Accounts.

Tone

Procedural

Topics

public-financegovernment-accountspost-office-horizon

Key actors

Gareth Davies (Permanent Secretary, Department for Business and Trade), Liam Byrne MP (Chair, Business and Trade Committee), Comptroller & Auditor General, Department for Business and Trade, Post Office Limited

Notable line

“… the Department overspent against its vote Resource AME control total by £219 million. As a result, the Comptroller and Auditor General has issued an excess vote qualified audit opinion.”

Key Quotes

“On 13 March 2024, after the supplementary estimate process had been completed, a ministerial decision introduced the option to provide a fixed sum of £75,000 to the Horizon Shortfall Scheme.”
— Gareth Davies · explaining the timing and cause of the Resource AME overspend

“Due to this obligation arising after the supplementary estimate process, it was not possible for the Department to bid for sufficient budgetary funding for the scheme and as a result the Department overspent against its vote Resource AME control total by £219 million.”
— Gareth Davies · describing the budgetary consequence of the late ministerial decision

“… actual settlement information is limited in some instances and is insufficient in either its volume or range to be used as a basis for informing an estimate.”
— Gareth Davies · explaining the audit scope limitation on Horizon redress provisions

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Source · parliament.uk record ↗