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How does Parliament approve Government spending? A procedural guide to the Estimates process

Pound coins
Pound coins

What are Estimates?

Estimates are the Government's spending plans which are presented to Parliament for approval every year.

Each Government department produces its own annual Estimate, and HM Treasury compiles and publishes them together in a single Estimates report for presentation to Parliament.

Government requests to Parliament for funds for departments are made in at least two and sometimes as many as four stages throughout the year, in a process known as the 'Estimates cycle'.

Given the dependence of all forms of government activity on the availability of public finances, the Estimates process underpins all other forms of accountability and goes to the heart of the relationship between Parliament and Government.

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Rishi Sunak at the Despatch Box. ©UK Parliament/Jessica Taylor

What is the Estimates cycle?

Multi-year Spending Reviews set out headline spending plans for each Government department. Drawing on the plans outlined in the Spending Review, the Government then makes formal requests to Parliament for funds for departments for the financial year ahead. These requests are made in at least two and sometimes as many as four stages throughout the year in a process known as the 'Estimates Cycle'.

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House of Commons Select Committee session. ©UK Parliament/Catherine Bebbington

How does Parliament debate Government spending plans?

Departmental Estimates are scrutinised by departmental select committees in the House of Commons. Three days (other than Fridays) are then allotted in each parliamentary session for the consideration of Estimates in the Commons Chamber. These are known as Estimates Days. Any MP can bid, via the Backbench Business Committee, for an Estimates Day debate on one of the departmental Estimates.

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House of Commons chamber. ©UK Parliament / Jessica Taylor

How does Parliament approve Government spending plans?

Approval of the Estimates (Main or Supplementary) comes first in the form of a Supply resolution. However, such resolutions have political force, but they are not law. Consequently, legislation is also required - in the form of a Supply and Appropriation Bill - before the departmental expenditure set out in the Estimates is legally authorised by Parliament.

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The House of Commons, 1833, painting by Sir George Hayter. ©National Portrait Gallery, London

Why does Parliament approve Government spending?

The legal basis for parliamentary control of Crown (i.e. Government) expenditure dates back to the Glorious Revolution of 1688-89 and Parliament’s decision to legalise the standing army but provide its expenses only for 12 months in advance. Over time, this principle – that expenses be granted only for the year ahead – was extended to other areas of government expenditure until, by 1830, all civil government expenditure was provided on this basis. Six key principles or rules now govern what has become known as the Estimates process.

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Photo of pound notes. ©Adobe Stock/kamui29

What is a Money Bill?

A Money Bill is defined in Section 1(2) of the Parliament Act 1911. It is a public bill which in the opinion of the Speaker of the House of Commons contains only provisions dealing with national taxation public money or loans. If a bill is certified as a Money Bill by the Speaker, and is passed by the House of Commons, it will become law after one month, with or without the approval of the House of Lords.

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Citation

18:18pm, 7 March 2023

Cite this page

Hansard Society (2023), The Estimates: A procedural and constitutional guide, (Hansard Society: London)

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