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CONFIDENTIAL
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5.
5.1
EXPLANATORY AND FINANCIAL MEMORANDA
Most important Bills have financial implications and will require a Money Resolution (see 11.1). Such Bills must be prefaced on introduction into either House of Parliament by an Explanatory and Financial Memorandum. Other Bills may be prefaced by an Explanatory Memorandum, and all but the shortest and simplest Bills should be so prefaced. The Memorandum should briefly explain the proposals in the Bill and how they affect the existing law, and should avoid being argumentative or controversial. They must in all cases include forecasts of any changes (or postponement of changes) in the non-industrial and industrial staff of Government departments which are expected to result from the Bill. The forecasts should relate so far as possible to the change in the work-load which is expected to arise when the new statute is in full operation. But if this is likely to be markedly higher or lower than the volume of work arising at the outset, a forecast of the staffing requirements in the transitional phase should also be included. The Division should obtain forecasts from any
other departments likely to be affected by the Bill.
5.2
If the Bill is likely to lead to changes in public service manpower in a wider sense, eg by affecting the staffing requirements of local authorities or non-departmental public bodies, these results should also be forecast as far as possible. For much of the public sector these implications cannot be forecast with any approach to accuracy, and Memoranda should not give figures which are so speculative as to be misleading. Where figures cannot usefully be given it may be best to refer in general terms to the possibility or likelihood that a Bill will lead to some increase or decrease in the staff of, for example, local authorities. In all cases the dominant consideration should be the need to give Parliament, in as simple and helpful a form as possible, such material as may be necessary and available for an understanding of the manpower implication of Bills.
5.3 As regards financial effects, Memoranda should give estimates of expenditure expected to fall on the Consolidated Fund, distinguishing between (a) standing charges enacted once for all and charges by means of annual Votes
Votes (including Votes of the Department and of common service departments);
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and (b) estimates of expenditure expected to fall on the National Loans Fund, In addition Memoranda should give an estimate of the financial consequences of the Bill in terms of total public expenditure, where this differs from the direct cost to the Consolidated Fund
National Loans Fund.
Such estimates should normally relate to the full-year cost of implementing the new statute. "Total public expenditure" here has the same meaning as in the annual public expenditure surveys, ie
ie the total current and capital expenditure of Government departments and local authorities, and the total outgoings of the insurance funds plus the capital expenditure of public corporations. *
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*Treasury Circular 4/68 of 31 October 1968.
CONFIDENTIAL