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Public corporations
8.1 This chapter sets out what public corporations are, recent developments affecting them,
how they are controlled, and how they are scored in public expenditure.
8.2 Outturn data in this chapter up to 2010-11 are National Statistics.
What's new
8.3 Tables 8.2 and 8.3 reflect the transfer of policing and justice powers to the Northern
Ireland Executive. The Scotland, Wales and Northern Ireland Offices are now included alongside
the relevant devolved administration. These changes are explained in more detail in Box 1.B in
Chapter 1.
Definition of public corporations
8.4 Public corporation is a term from National Accounts, which are based on the European
System of Accounts (ESA95). The Office for National Statistics (ONS) therefore determines which
bodies are public corporations. A body will be classified as a public corporation where
° it is classified as a market body — a body that derives more than 50% of its
production cost from the sale of goods or services at economically significant
prices. Some charge for regulatory activities, where these provide a significant
benefit to the person paying the fee, for example through quality testing;
. it is controlled by central government, local government or other public
corporations; and
. it has substantial day to day operating independence so that it should be seen as
an institutional unit separate from its parent departments.
Self financing public corporations (SFPCs)
8.5 The Treasury has designated some public corporations SFPCs. To be classified as an SFPC,
the public corporation must normally trade mainly with non-government customers and not
perform regulatory functions. In other words, its income must be from selling goods and
services into a competitive market rather than from regulatory fees. It must trade profitably and
not require subsidies or other financial support from its parent department.
8.6 SFPCs normally score in departmental AME rather than in DEL — though any subsidies
and grants exceptionally paid to them would score in DEL. They also have greater and more
individually tailored financial flexibilities. Some SFPCs are also trading funds.
Trading funds
8.7 Where activities of a government department generate income from the supply of goods
and services, those parts of the department may be designated trading funds by Parliament on
the application of the Government. Trading funds may keep unspent funds from one year to the
next without having to surrender surpluses to the Exchequer at the end of each year.
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8.8 Most trading funds are classified by ONS as public corporations in the National Accounts.
DVLA is the only trading fund that is treated as a central government body in the National
Accounts, and therefore in PESA.
8.9 Trading funds are not directly subject to central government administration costs controls.
The budgeting treatment of trading funds that are public corporations is normally the same as
that of other public corporations.
The budgeting control framework
8.10 The following transactions with and in respect of public corporations accountable to
Ministers are normally included in departmental budgets
. subsidies paid to the public corporation by the department (in resource DEL);
. capital grants paid to the public corporation by the department (in capital DEL);
. interest and dividends received from the public corporation (resource DEL, or
resource AME if a self financing public corporation (SFPC));
. equity purchase in and withdrawals from public corporations (capital DEL, or
capital AME if an SFPC) — included with net lending in Table 8.1;
. loans and public dividend capital (PDC) invested in the public corporation (capital
DEL, or capital AME if an SFPC) — also included with net lending in Table 8.1;
and
. public corporations’ market and overseas borrowing (PCMOB) where,
exceptionally, it is permitted (capital DEL, or capital AME if an SFPC).
8.11 The Crown Estate is an SFPC. Uniquely the routine subsidy that is paid to it to cover
administration costs is in AME rather than DEL, and the dividends that the Treasury receives from
it are recorded outside budgets.
8.12 When PCs are government departments in their own right, as is the case for some trading
funds, they will normally be assigned a parent department for budgeting purposes, and the
budgetary scoring described above will apply.
8.13 Public corporations controlled by local government include the businesses reporting
to Transport for London and local authority airports such as Manchester, DEL and departmental
AME include central government support to local government (in Chapter 7), some of which
may be used by them to support public corporations. However, this is not identified in PESA
as relating to public corporations. Therefore the whole of their capital expenditure is included
in the public corporations’ own-financed capital expenditure line in other AME. They are also
included in the bottom line of Tables 8.1, 8.3, 8.4 and 8.5, which show the total contribution
of all public corporations’ own expenditure to Total Managed Expenditure (TME).
8.14 Table 8.1 shows the impact on departmental budgets (DEL and departmental AME)
of public corporations accountable to Ministers. It also shows a reconciliation to the impact
of all public corporations, including those accountable to local government, on TME. In this
presentation PC gross investment in TME is shown to be the sum of:
. government capital support in budgets (investment grants and net lending to
PCs);
. PCMOB in budgets; and
. public corporations’ own-financed capital expenditure (PCOFCE).
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8.15 Grants and subsidies in budgets also include those paid to public corporations under
schemes that are generally available to the private sector. Any loans between departments and
their PCs that are written off by mutual consent will also be shown here.
8.16 1.15 Table 8.2 shows the budgetary information in Table 8.1 split by department group.
The National Accounts
8.17 TME measures the current and capital expenditure of the public sector as a whole. It is
taken from National Accounts compiled by the ONS. In relation to public corporations, TME
includes:
. subsidies paid to public corporations;
. the capital expenditure of public corporations, net of sales of assets;
. changes in public corporations’ stocks; and
. interest and dividends paid by public corporations to the private sector and
abroad.
8.18 TME is a consolidated measure of public expenditure and so most transfers between
different sectors are excluded. This applies to capital grants and net lending paid by central
government to public corporations, and interest and dividend flows between general
government and public corporations. However, payments of subsidies to, and purchases of
goods and services from, public corporations form part of TME as the use of this funding feeds
into the calculation of public corporations’ gross trading surplus, which scores as an income (or
revenue) item in the public sector accounts.
8.19 Grants and subsidies given by public corporations to the private sector and overseas,
including debt write-offs by mutual consent, are imputed to general government expenditure in
National Accounts, as grant-giving is not held to be a normal function of a commercial body.
8.20 Note that the impact of public corporations on departmental budgets differs from their
impact on TME. Accounting adjustments are used to move from DEL plus departmental AME
plus own-financed capital expenditure (other AME) to TME (see Annex D for a full explanation
of the accounting adjustments).
8.21 Table 8.3 shows the capital expenditure of each major public corporation sponsored
by a central government department, and of the biggest public corporations accountable to
local government. It also identifies those that are self-financing public corporations or trading
funds. The table does not identify separately small public corporations controlled by central
government departments nor most public corporations under local authority control — their
capital expenditure is included in the accounting adjustments. The figures include the purchase
of assets, less sales, plus any capital grants paid by a public corporation net of any received from
the private sector or abroad.
8.22 Tables 8.4 and 8.5 show the capital expenditure from Table 8.3 broken down by
function and economic category respectively. They also include the debt interest payments to the
private sector, which is the only public corporation current spending that forms part of TME.
Sources of data and data quality
8.23 Information in Tables 8.1 and 8.2 forms part of departments’ budgets and so should be
of good quality. Annex A has more information.
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8.24 Information on public corporations’ capital expenditure is largely sourced from public
corporations by departments who in turn supply the data to the Treasury. Our aim is to publish
capital spending data for all public corporations accountable to Ministers. However, information
is provided by departments primarily for PESA and does not form part of a control total. The
only appearance in a departmental publication will normally be within the regional expenditure
tables in departmental reports. Information in Tables 8.3 to 8.5 may therefore not be as up to
date or accurate as the information in the other tables in this chapter.
Further Information
8.25 More information is available in the departmental reports of government departments
and in the annual reports and accounts of individual public corporations. A fuller list of public
corporations is available on the ONS website! in Sector classification for the National Accounts.
1 httpyAvwwstatistics.gov.uk/downloads/theme_economy/MiA23.xls
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Table 8.1 Public corporations’ contribution to budgets and Total Managed Expenditure, 2006-07 to 2014-15
£ million
National Statistics
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15
outturn outtun outturnouttum outturn —plans_-—plans._—plans_plans
Resource DEL
CG dividends from PCs () 62 “10-108 64 -89 52 2B Br) 8
G interest from PCs () 69 “4 85 94 51 96 98 98 99
Subsidies to PCs 9231422 1,282 108512671245 1993478 1,125
Loan write off — mutual consent - - - - 5
Total resource DEL 7934279 40a 927 4,32 1,097 4073037983
Resource departmental AME
CG dividends from PCs () 03 5452-119 88-150 150-150-450
GG imerest from PCs (-) 258 382 284 79 3 15 4 5 6
Subsidies to PCs 45 28 312177579702 49 “43 43
Total resource departmental AME 296-495 4048374670 867203198199
Enea UTE BAI MEN 497 784 a 553 462 230 870 839 784
Capital DEL
CG investment crants to PCS 1225 307,386 SBT 22932 10123
Net lending to PCs 37 eR 180-200 4 10 65 59
Market and overseas borrowing 7485 4 86 5 1 1 0 0
Total capital DEL 18 9794675 24191 64 45 64
Capital departmental AME
Net lending to PCs 1027-566 -735 97-361 698750750750
Total capital departmental AME 1027566735 672 ae e582 750 950) 750
Total public corporations’ contribution to capital budget 157 2 288 TR BGR IA BTA
Other AME
PC ownefinanced capital expenditure? 4728 55057489 7,735 «SAT «8,266 «83048326 8,646
Accounting adjustments. 703 186 1,125 -228 434 600 0 0 100
Public corporations’ expenditure in TME®) 6,085 6,887 «8,087 «8,832 «8,233 10,000 10,000 10,000 10,300
of which:
°C current expenditure in TME 650 0 10534 at 451 700 = 700 700=S 700
PC gtoss investment in TME 5435 6,177__7,583__—-8421_—7,782__9,200_—<9,200_—«9,.200_—9,600
pata in this table differ from those shown for public corporations in Table 1.11. Central government subsidies to public corporations are classified as
central government own spending in National Accounts, and are shown as such in Table 1.11. In Table 8.1 subsidies are shown as part of public corporations’
contribution to the resource budget, Subsidies are removed in the accounting adjustments and do not form part of public corporations’ expenditure in TME.
© Includes capital expenditure by local authority public corporations
© This excludes the temporary effects of banks being classified to the public sector, See Box 5.A for details,
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Table 8.2 Public corporations’ contribution to budgets" by departmental group, 2006-07 to 2014-15
£ million
National Statistics
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15
outturn outtum = outturnoutturnouttum ~—plans_~—plans_—plans__ plans.
Resource DEL
Health 53 a 51 ad 2 60 i} 0 0
Transport 14 28 2 n 46 2 a 7 7
Communities and Local Government 14 15 10 32 “4 123 7 7 7
Business, Innovation and Ski m4 4552931522501 HO( 3H]
Defence 3 42 1 28 “At 0 0 0 0
Foreign and Commonwealth Office 183 186195193185 7 65ST 149
Environment, Food and Rural Affairs 68 37 53 49 37 35 32 29 u
Culture, Media and Sport 0 0 0 0 8 n 2B 64 64
Work and Pensions m9 192 47188202126
Scotland 36 39 49 25 80 27 2 28 28
Wales 19 0 0 3 0 1 1 1 1
Northem Irelane 294 310 313 313 307 277 282 258 230
Chancellor's Departments 0 4 0 0 0 0 0 0 0
Cabinet fice 2 4 0 0 2 2 2 2 2
Total resource DEL 793 1,279 «1,088 «= 927, 1,321,097 1,073 1,037,983
Resource departmental AME
‘Communities and Local Government SEA] 66 221 86 581 632 10 10 10
Business, Innovation and Skil 58 382-19 19 3 15 “4 5 4
Energy and Climate Change o 0 at 2 2 : :
Scotland 8 7 0
Wales 26-103 Es) 3 0 n 1 55 55
Chancellor's Departments 81 83 583 94 64 148 “148 148 “148
Total resource departmental AME 296-495 4,048 374 6708672319889
meee Sorporations: contabution to resource 497 784 4 553 462 230 870 839 184
Capital DEL
Health n 4 19 0 0 16 0 0 0
Transport 112000531 85 11-242 D 7 16 15
Communities and Local Government 6 3 0 2 23 15 0 0 0
Business, Innovation and Skils 4 15 4 4 0 1 4 4 1
Home Office 0 0 10 0 29 1 0 0 0
Defence 4 “10 39 7 an 4 0 0 0
Foreign and Commonwealth Office 36 36 7 36 3 29 2 a 5
Intemational Development 1 1 0 0 0 0 0 0 0
Environment, Food and Rural Affairs 8 16 28 25 18 B 15 ” 19
Culture, Media and Sport 0 0 0 0 0 0 0 0 0
Work and Pensions 5 4 0 7 2 1 0 0 0
Scotland 402692302 Bt 2 a 19 20
Wales 0 0 0 99 5 0 0 0 0
Northem Ireland ~46 75 93 64 36 82 Wl -27 4
Chancellor's Departments 3 3 0 0 0 0 0 0 0
Total capital DEL 118597946765 4 191 64 45 64
Capital departmental AME
Health 0 0 0 4 0 0 0 0 0
Business, Innovation and Skil “027-566-735 98-361 68 = 750-750-750
Total capital departmental AME 1027566735 CC ie a OMe Lue wer ee ner
Total public corporations’ contribution to capital budget ce ree ee et eee
Total public corporations’ contribution to budgets 6541196 -227—«0,325 1251916841634 1,598
™ Data in this table differ from those shown for public corporations in Table 1.11. Central government subsidies to public corporations are classified as
central government own spending in National Accounts, and are shown as such in Table 1.11. In table 8.2 subsides are shown as part of public corporations’
contribution to the resource budget.
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Table 8.3 Public corporations’ capital expenditure on services, 2006-07 to 2014-15
£ million
National Statistics
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15
outturn outtum —outturnoutturnouttum plans. plans_-—oplans_-—_—plans
Health
Mens ‘and Healthcare Products Regulatory 6 3 6 8 + am ’ 4 ’
NHS Estates” 1 1 0 0 4 # # # #
NHS Blood and Transplant 19 34 19 7 # # # # #
Total Health 26 37 25 25 # # # # #
Transport
Aviation Authority 5 4 4 4 # # # # #
Driving Standards Agency” 15 2 3 4 # # # #
Vehicle and Operator Services Agency”? 2 24 15 10 4 # + # #
London and Continental Railways 414 312 -10 0 # # # # #
GNER® 8 25 0 4 # # # #
Total Transport 498 318 48 14 # # # # #
Communities and Local Government
Fire Service College" 1 0 1 0 1 2 2 2 2
Housing Action Trusts? 4 3 - - - - - - -
Housing Revenue Account 2,057 2,122 3,226 3,276 3,219 3,229 3,208 3,188 3,194
Ordnance Survey" 4 10 n 39 26 B 5 20 20
QEII Conference Centre" 0 1 1 1 0 1 1 1 1
aoe foe Copan votes ne Fora 2,076 —- 2,437 3,250 3,315 3,246 = 3,285 3,226 «3,212 3,217
Business, Innovation and skills
UK intellectual Property Office” 4 0 1 4 2 1 1 1 1
Biiish Nuclear Fuels Limited(S) 26 2 - - :
Companies House" 2B 10 4 8 9 9 9 9 9
Royal Mail Holdings! 235 253 444 347 266 . . . .
Total Business, Innovation and Skills 288 265 458 359 27 2 < é é
Home Office
Forensic Science Servicel? 4 4 6 4 # # # # #
Total Home Office 4 4 6 4 # # # # #
Justice
Land Registry" 51 40 2 15 -29 6 2 6 “4
Total Justice S 40 27 AX -29 6 2 6 4
Defence
Army Base Repalt Organisation”? 4 4 - -
Defence Aviation Repair Agency? 3 3 7 7 7 7 7 ? 7
Defence Science and Technology Laboratory" 45 41 a 41 41 a2 at 4 4
Hydrographic Office”? 4 8 8 8 8 8 8 8 8
Meteorological Office” 34 26 26 6 26 27 20 a 2
Navy, Army and Air Force Institute 3 3 3 3 3 3 3 3 3
QinetiQ? 48 48 - - : - : - :
Total Defence 150 133 85 85 85 86 26 86 86
Foreign and Commonwealth Office
BBC World Service 31 3 3 29 a7 2 16 16 16
Biiish Council i 14 9 7 16 2 " 10 10
Total Foreign and Commonwealth Office 2 47 40 35 B 34 2 26 26
International Development
DC Group" 121 4 86 79 # * * . .
Adtis® 2 1 1 1 + . . . .
Total International Development 123 3) 87 80 # z z é 4
Energy and Climate Change
British Energy 235 224 244 - - - - -
Total Energy and Climate Change 235 224 244 : : : : : :
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Table 8.3 Public corporations’ capital expenditure on services, 2006-07 to 2014-15 (continued)
£ million
National Statistics
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15
outturn outtum —outturn —outturnouttum = plans_-—splans_-— plans. plans
Environment Food and Rural Affairs
British Waterways 20 19 51 19 5 29 # # #
Forest Enterprise 4 0 0 0 0 0 # # #
Total Environment Food and Rural Affairs 24 -20 5 19 5 29 # # #
Culture Media and Sport
Channel Four Television Corporation 2 6 9 4 # . . .
Historic Royal Palaces Trust 4 3 1 0 # # # # #
Tote®? 5 17 ia 16 # . . . .
Total Culture Media and Sport 31 26 27 12 # . : Z 4
Work and Pensions
Remploy 3 a4 -10 10 2 # # # #
Pension Protection Fund 2 1 1 2 1 # # # #
Total Work and Pensions 5 13 9 12 3 # # # #
Scotland
Caledonian MacBrayne 10 7 8 6 6 6 0 0 0
Forest Enterprise 6 7 2 5 1 1 0 0 0
Highlands and Islands Airports 19 10 10 4 4 ) oO 0 0
Housing Revenue Account 264 24 353 430 578 579 576 572 573
Scortish Water 660 616 699 648 580 519 0 0
Total Scotland 959 864 1,073, 1,093 1,168 1,105 576 572 573
Wales
Housing Revenue Account 95 105 125 120 127 127 126 126 126
Total Wales 95 105 125 120 127 127 126 126 126
Northern Ireland Executive
Northem Ireland Driver and Vehicle Testing Agency(T) 0 2 2 1 3 2 4 2 1
Northem Ireland Housing Executive 5 93 147 103 61 65 46 34 38
Norther Ireland Public Trust Port Authority 20 48 37 4 7 35 4B n Py
Northem Ireland Transport Holding Company 34 82 47 39 64 126 115 W 79
Total Northern Ireland Executive 68 25 233 157 135 28 209 129 145
Chancellor's Departments
Crown Estate® 2239 -280 180 28 93 * . . .
Royal Mint 1 0 - . * . *
Total Chancellor’s Departments 237 -280 180 28 3 2 y ys y
Local Government
London Underground Limited"? 1306 1,333 1,653 1,515,742. . * . »
Total Local Government 1306 133346534515 1,742 é . i ql
Ee eel 5,698 5,486 7,405 6,795 6,895 6,764 ABS SSB 6876
Accounting Adjustments 263 631 148 1,626 887 2,500 7,800 2,700 2,700
Total public corporations‘ capital expenditure(5) 5,435 «6,177_—7,553_——8,421_—7,782_—94,200 9,200 ~—9,200 9,600
“Data unavailable. Capital expenditure by public corporations in years where data are unavailable form part of the accounting adjustments.
Denotes public corporation with trading fund status,
Denotes self-financing public corporation (SFPC). The estimated outturn and plans for capital expenditure by SFPCs are not shown individually in this table but
are represented by *. The figures are included in the overall total.
(Great North Eastern Railways (GNER) is classified to the public corporation sector from December 2006 to December 2007, during which time GNER operated
under an amended version of the Franchise Agreement signed in May 2005,
Housing Action Trusts are central government bodies in National Accounts but treated as public corporations in PESA.
©The Government sold shares in British Energy in january 2009, but itis still currently classified by the ONS as a public corporation.
(Includes capital spending by Infracos (Metronet and Tubelines).
© This excludes the temporary effects of banks being classified to the public sector, See Box 5.A for details,
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Table 8.4 Public corporations’ current and capital expenditure on services by function, 2006-07 to 2014-15
Public corporations’ current expenditure on
services
1. General public services
of which: public sector debt interest
Total public corporations’ current expenditure on
services
Accounting adjustments
Total public corporations’ current expenditure
Public corporations’ capital expenditure on
services
1. General public services
of which: public and comman services
of which: international services
of which: public sector debt interest
Defence
. Public order and safety
Economic affairs
of which: enterprise and economic development
of which: science and technology
of which: employment polices
‘culture, fisheries and forestry
of which: transport
. Environment protection
. Housing and community amenities
7, Health
8, Recreation, culture and religion
10, Social protection
Total public corporations’ capital
expenditure on services
Accounting adjustments
Total public corporations’ capital
expenditure
National Statistics
2006-07 2007-08 2008-09 2009-10 2010-11
outturn —outturn—outturn-—outtturn—outturn
650 70 534 an 451
650 710 534 an 4st
650 710 534 at 451
650 no 534 41 451
6 -140 358 142 134
an 228 231 28 a
165 89 127 115 43
103 99 51 51 51
5 4 7 4 1
2,463 2315 2,438 2,000 2,139
571 523 736 393 31
3 14 10 10 2
2 6 2 5 1
1,887 1,800 4,710 1,592 1,824
-20 “19 St 19 5
3,095 3,163 4,549 4,577 4,564
26 7 25 25 -
cf] 26 27 2 :
2 1 1 2 0
5,698 5,486 «7,405 6,795 6,895
-263 691 148 1,626 887
5435 6,177 7,553 8,421 7,182
2011-12
plans
700
700
700
700
20
34
st
2,110
21
1,877
29
4519
6,764
2,500
9,200
2012-13
plans
700
700
700
700
2,432
288
(2013-14
plans
700
700
700
700
53
27
26
51
2,532
258
2,274
3,920
6,558
2,700
9,200
£ million
2014-15
plans
700
700
700
700
6,876
2,700
9,600
©This excludes the temporary effects of banks being classified to the public sector, See Box 5.A for details.
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Table 8.5 Public corporations’ current and capital expenditure by economic category, 2006-07 to 2014-15
€ million
National Statistics
2006-07 2007-08 2008-09 2009-10 2010-11. 2011-12 2012-13 2013-14 2014-15
outturn —outtum —outtum —outturnoutturn —plans_-—plans_-—plans_—_ plans.
Public corporations’ current expenditure on
services
Public corporations’ deb interest 650 710 534 an 451 700 700 700 700
Total public corporations’ current expenditure on ean a cA ai i ain ae Gi a4
services
Accounting adjustments ; .
Total public corporations’ current expenditure 650 710 saa att 451 700 700 700 700
Public corporations’ capital expenditure on
services
Gross capital procurement 8266 ©8512 «84097811 7,872 «691265716653 «6,981
Income from sales of assess 2616-3075 1,045 4,061 4,000,174 07S 45
Capital grants 43 49 41 45 2B % 2 20 20
eee eee t—“ SC
Accounting adjustments. -263 691 148 1,626 887 2,500 2,800 2,700 2,700
Total public corporations’ capital expenditure 5,435 GA77_——*7,553— «8,421 7,729,200 9,200 9,200 9,600
ae cepa tots expe taielre oH 6348 6,196. +~—=«7,939 «7,206 «= 7,346 = 7,484 «= 7,210 7,288 7,611
Accounting adjustments 263 631 148 1,626 887 2,500 2,800 =—-2,700 2,700
Total public corporations’ expenditure 6,085 6,887 8,087 8,832 «8,233 10,000 10,000 10,000 10,300
©This excludes the temporary effects of banks being classified to the public sector, See Box 5.A for details.
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