The document provides an overview of the UK and Northern Ireland public expenditure systems. The UK system is based on total managed expenditure, departmental expenditure limits, and annually managed expenditure. Northern Ireland's system derives from the Good Friday Agreement and involves setting strategic priorities and a budget through consultation. Departments then receive current and investment expenditure allocations, and spending is monitored through the year against the original budget plans.

1. UK PUBLIC EXPENDITURE SYSTEM Central Expenditure Division Department of Finance & Personnel

2. Central Finance Group Supply 3 Supply 2 Supply 1 Strategic Policy Division Rating Policy Division European Division Central Expenditure Division Accountability & Accountancy Services Division Account NI Central Finance Group

4. UK Public Expenditure Structure UK Public Expenditure System Funding Devolved Administrations Priorities and Budget Process Estimates Monitoring

5. UK Public Expenditure Structure Total Managed Expenditure (TME) Departmental Expenditure Limits (DEL) Annually Managed Expenditure (AME) Resource Budget Capital Budget Resource Budget Capital Budget

8. Spending Review Coverage 05/06 04/05 03/04 02/03 01/02 00/01 99/00 1998 Comprehensive Spending Review 06/07 07/08 Spending Review 2000 Spending Review 2002 Spending Review 2004 08/09 09/10 10/11 2007 Comprehensive Spending Review

11. Worked example of the Barnett Formula * differs for each English programme, e.g MOD = 0 because it is a UK wide programme. Change in Comparable English Programme Comparability %* NI Population % VAT Adjustment X X X Example: Department of Health + £100 million 0.995 0.0342 0.975 X X X = £3.32 million

12. Funding Sources for Devolved Functions in Northern Ireland

14. Preparation of Priorities & Budget Strategic Context & Key Priorities for NI Guidance Issued to Departments Pre-consultation with key stakeholders Preparation of Draft Priorities & Budget Public Consultation Publication of Revised Priorities & Budget June Sept Nov Dec

17. Northern Ireland Allocations for 2005-06 to 2007-08 £millions

18. Departments Expenditure: Current Expenditure 2006-07 and 2007-08

19. Departments Expenditure: Investment 2006-07 and 2007-08

23. Cash HM Treasury NIO NI Consolidated Fund Departments

25. Summary UK Public Expenditure System Funding Devolved Administrations Priorities and Budget Process Estimates Monitoring