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PESA 2002-03

Appendix A Conventions and Economic Assumption

A.1 This appendix gives details of the various conventions used for the figures presented in this publication.

ROUNDING CONVENTIONS

A.2 The figures in this publication are generally shown to the nearest £1 million, except figures for total DEL and the DEL reserve, and aggregates that include DEL such as TME, are rounded to the nearest £100 million from 2002-2003 onwards.

REAL TERMS

A.3 A number of the tables in this publication give figures in real terms. Real terms figures are the cash outturns or plans adjusted to a constant price level by excluding the effect of general inflation as measured by the GDP deflator at market prices. The real terms figures in this publication are given in 2000-2001 prices.

2001-2002 ESTIMATED OUTTURN

A.4 The estimated outturns for individual departments for 2001-2002 are based on the latest information available from departments. The estimated outturn for resource DEL for 2001-2002 includes an allowance for shortfall of [£2] billion reflecting the difference between the sum of individual departments' estimates of outturn and the Treasury's overall assessment.

DATA IN TABLES

A.5 This edition of PESA reports budget outturns (for 2000–01) on a cash basis for the last time, in Tables 1.15 and 1.16, and in Tables 2.1 and 2.2. Otherwise budgeting data, including all spending plans for 2002–03 and 2003–04, and estimated outturns for 2001–02, are presented in resource terms. Consistent data on a resource basis are only available back to 1998–99. As a result most of the tables that show plans or projections to 2003–04 cover a period of six years, from 1998–99 to 2003–04.

A.6 For most of the tables that do not show plans years, for example most of the public sector spending tables in Chapter 3, tables for this edition of PESA are in line with previous practice and cover a period of six years, from 1996–97 to 2001–02. In these tables the first four years, to 1999–2000, use cash data, and the last two years, 2000–01 and 2001–02, use resource data, with a break in series between the cash and resource years. In a few cases, for example Table 4.5 showing central government own expenditure by function, data is shown over eight years, from 1996–97 to 2003–04, with the first four years on a cash basis and the last four years on a resource basis. All tables indicate whether the data are £ million resources or £ million cash.

A.7 There are a couple of exceptions to the foregoing general rules as regards use of cash and resource data. Central Government support to local authorities is presented in Chapter 6 on a cash basis up to 2000–01, and thereafter on a resource basis. And all data in Chapter 8 on public spending by country and region is on a cash basis; these data are outturn, up to 2000–01, only.

A.8 It is not possible to look at trends over a longer period by simply comparing figures in successive public expenditure publications as such figures are not always on a consistent basis due to changes in coverage and classification changes. This publication presents a number of summary analyses incorporating data for earlier years adjusted to current definitions to show trends over a longer period.

ECONOMIC ASSUMPTIONS

A.9 The following economic assumptions underlie the figures in this publication.

(a) Income related social security benefits are uprated annually in April in line with the change in the Rossi (a modified measure of inflation based on the Retail Prices Index) in the year up to the previous September. Other non income-related benefits are also uprated in April, but in line with the change in the Retail Prices Index over the same period. The uprating factors used for the projections in this publication were, for Rossi, 13/4 per cent in 2001-02, 13/4 per cent in 2002-03, and 21/4 per cent in 2003-04; for the RPI, 13/4 per cent for 2001-02, 2 per cent for 2002-03 and 31/2 per cent for 2003-04.

(b) UK claimant unemployment is assumed to grow from recent levels of 0.95 million to 1.00 million in 2003-04, consistent with the average of independent forecasts. This planning assumption has been audited by the National Audit Office. (See the NAO Report: Audit of Assumptions for the 2002 Budget, published as HC760).

(c) Further details on economic assumptions can be found in the April 2002 Financial Statement and Budget Report, (HC 592), paragraphs C22 to C23.

ECONOMIC GROWTH AND INFLATION

A.10 General inflation as measured by the GDP deflator is forecast to be 13/4 per cent in 2000-01, and 21/2 per cent for each year from 2001-02 to 2003-04.

A.11 GDP at market prices (money GDP) is projected to rise 21/2 per cent in 2002-03 and 2003-04.

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