Legislative authorisation for objects of expenditure
33.11It is a general principle of constitutional propriety that new functions which are to be exercised on a continuing basis and which are to be financed out of ‘money to be provided by Parliament’ through the annual Appropriation Acts should be authorised by specific Act, supported by a financial resolution, and not by the Appropriation Act alone. This general principle is subject to certain recognised exceptions in cases where the Government incurs expenditure in the exercise of functions and powers derived from the royal prerogative, for example in relation to defence. In the past the Government sought to assert Parliament's legal power to authorise any expenditure or services by the Appropriation Act alone, and its own corresponding right to invite Parliament to exercise that power. The Committee of Public Accounts, however, has upheld the general principle stated above, and the Treasury has agreed that practice should normally accord with the view of the Committee.1 Some government bills are introduced with the principal or sole purpose of giving effect to this practice, which are sometimes referred to as ‘Concordat’ or ‘Baldwin convention’ bills.2 The abbreviated procedure now prescribed in Standing Order Nos 54 to 56 for the House's consideration of Supply Estimates and Consolidated Fund and Appropriation Bills3 provides additional justification for the maintenance of the principle.
The same principle applies, a fortiori, to the inclusion in the Supply Estimates and the Appropriation Acts of financial provisions or objects of expenditure which are inconsistent with, or which override, the express provisions of other Acts. The Committee of Public Accounts has expressed the view that ‘such a procedure should be resorted to as rarely as possible, and only to meet a temporary emergency’.4 In 1995, when deciding the issue whether the Home Secretary was acting lawfully in introducing, under prerogative powers, a criminal injuries compensation scheme at variance with the provisions of a scheme laid down in an Act of Parliament (though not yet brought into force), the Court of Appeal (in a judgment subsequently upheld by the House of Lords) held that the inclusion in the Appropriation Act 1994 of financial provision for the prerogative scheme had no bearing on the lawfulness of the Home Secretary's actions.5
As an alternative to financing a service or object of expenditure from money provided by Parliament through the annual procedure of voting the Supply Estimates and passing the Appropriation Acts, a charge to public expenditure may be imposed directly upon the Consolidated Fund. In that case the Act of Parliament and financial resolution which authorise the necessary expenditure also provide the once for all authority for the appropriation of the money necessary to meet the expenditure. By far the largest single item among these so-called Consolidated Fund standing services is the regular stream of payments to the National Loans Fund to service the National Debt. Examples of other such items are payments to international organisations including the European Union; the remaining payments in respect of the Civil List;6 the salaries of the Speaker, of the Leader of the Opposition and two senior Opposition Whips, of judges, of the Comptroller and Auditor General, of the Parliamentary Commissioner for Administration, of the Information Commissioner and of the Electoral Commissioners; and the expenses of returning officers at parliamentary elections.
- 1. In the 1932 concordat with the Public Accounts Committee (the Baldwin convention) the Treasury undertook to ‘aim at the observance’ of the principle that ‘where it is desired that continuing functions should be exercised by a Government Department (particularly where such functions involve financial liabilities extending beyond a given year) it is proper that the powers and duties to be exercised should be defined by specific statute’, Second Report from the Committee of Public Accounts, HC 93 (1931–32) para 3; Epitome of the Reports from the Committees of Public Accounts, Vol I (1857–1937), HC 154 (1937–38) pp 723, 725, 730–31. See also National Audit Office Resource accounting and budgeting in government—the white paper proposals, HC 334 (1995–96) pp 2, 16.
- 2. See, for example, the Loans to Ireland Bill (2010–12) and the High Speed Rail (Preparations) Bill (2012–13).
- 3. See paras 34.26, 34.39.
- 4. First Report from the Committee of Public Accounts, HC 166 (1908) para 11; Epitome of the Reports from the Committees of Public Accounts, Vol I (1857–1937), HC 154 (1937–38) p 497.
- 5. R v Secretary of State for the Home Department, ex p Fire Brigades Union  1 All ER 896, 909. For a dissenting opinion by Hobhouse LJ, see ibid 904–5, 908.
- 6. This remains the case for continuing payments under the Civil List Acts (see, for example, Civil List Act 1952, s 8), but the Sovereign Grant is authorised as part of the annual Estimates process and the Sovereign Grant Act 2011 ended the large majority of payments under the Civil List Acts: see Sovereign Grant Act 2011, ss 1(6), 10 and sch 1.