34.11The expenditure totals which are subject to parliamentary control – the budget boundaries and the cash requirement for each Estimate – are expressed in net terms. Parliament gave up control over income limits as part of the Clear Line of Sight reforms in 2011–12.1 The Treasury may, under the Government Resources and Accounts Act 2000, s 2, issue a direction permitting income included in a departmental Estimate to be retained and offset against related expenditure. The direction takes the form of a set of rules laid out in the Main Estimate booklet.2 The rules direct that income within the relevant income ambits may be applied against gross expenditure within that Estimate. Without such authority, the cash must be surrendered to the Consolidated Fund as Consolidated Fund Extra Receipts (CFERs).

Certain services are financed and accounted for through trading funds, which operate outside the Supply Estimates system. A trading fund is characterised by the fact that by law its revenues consist principally (that is to say, more than half of such revenues) of receipts in respect of goods and services provided through the fund. Such a fund, established under the Government Trading Funds Act 1973 (as amended by the Government Trading Act 1990, the Finance Acts 1991, 1993 and 2001 and the Government Resources and Accounts Act 2000) and generally having public corporation status, has standing authority to use its receipts to meet its outgoings without the need for annual sanction. Similarly, moneys in the hands of a trading fund at the end of the financial year do not have to be surrendered to the Consolidated Fund. The separation from the Supply system is not, however, absolute, because a department may make payments from Estimates to a trading fund by way of subsidy, provided that the statutory requirement for funding to consist principally of receipts in respect of goods and services provided through the fund is not thereby breached.

Departmental income and receipts might be expected to be presented as Consolidated Fund Extra Receipts (CFERs) rather than used to offset expenditure where:

  • income is of a type not anticipated by the department and therefore outwith the scope of the income ambit;
  • the income is classified by HM Treasury as non-budget; or
  • legislation specifically dictates that income should be paid into the Consolidated Fund.3


  1. 1. For control over income, principally through the procedures in respect of appropriations-in-aid, see Erskine May (24th edn, 2011), pp 728–29, 737.
  2. 2. See s 4 of Central Government Supply Estimates 2018–19, Main Supply Estimates April 2018, HC (2017–19) 957.
  3. 3. Some taxes and revenues in Scotland, Wales and Northern Ireland pass to the Consolidated Funds of the devolved administrations; some are collected on behalf of the UK Government and passed onto those administrations (including sums raised as a result of Scottish income tax rates).