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an excess Vote being taken to repay to the endowment fund the capital which has been applied as income owing to a mistake which I think was not unnatural. I venture, however, to suggest to the Committee that possibly the matter might be put right in the very special circumstances if the £500 was made good, as I believe the intention is, to the capital by a Vote in the next ordinary Estimates. I think Mr. Watson may be able to say something on that point. (Mr. Phillips.) The matter appeared to us to be a rather small and technical one. It is obvious the situation must be put right, but it seemed to us a very small matter for an excess Vote, and we are proposing to deal with it in the original estimates for next year if the Committee agrees.

Chairman.] The position is a little painful for me, because I happen under the Act to be one of the trustees of this Library. But I ought to say to the Committee, without in any way reflecting on my colleagues, that the work is done by a Sub-Committee which includes very eminent lawyers who had evidently overlooked a passage in the Act under which this Library was transferred from the Advocates to the people of Scotland. It is all quite a public matter now, and I think the Committee will probably agree, subject to any question any Member may wish to ask, that we simply put it right, or agree to its being put right, in the estimate for 1927-28. That, I think, would be the strict position. That is strictly our first opportunity to put it right.

Sir John Marriott.] The total Vote appears to be under £2,000.


62. Mr. Watson will correct me if I am wrong, but the Library I think gets

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Vote, is not here, but he will be here on a later occasion. Perhaps the Committee would find it more convenient to discuss the method of accounting when he comes, if, as I think I can, I succeed in satisfying them that no excess vote is required. The point is this. There has been difficulty in the Department in meeting unforeseen requirements for research which are charged under Subheads C.1, C.2, C.3, and C.4. A few years ago the practice was instituted of making a grant in aid of research which was paid over to a separate account. But unlike all other grants in aid of which I know, the expenditure on this service continued to be charged to the vote of Parliament, whereas in all other cases of grant in aid the money is paid clean out of the vote to a separate account and all the detailed expenditure is charged to the separate account. The principle was accepted by the Committee. The whole of the research expenditure therefore is charged to the vote, and to the extent to which in any particular year the gross expenditure on research exceeds the gross grant of Parliament the deficit is met by a transfer of money out of the grant in aid account. There has been a previous case in which only an excess of gross expenditure over gross estimate was concerned; the Committee passed that, and a deficiency of some £9,000 was met out of the grant in aid account. In this case the procedure has been carried a step further, because there has also been a deficiency on appropriations in aid. To the best of my knowledge the whole of that deficiency does not seem to be connected with research, but the deficiency of appropriations in aid as well as the excess on gross expenditure over gross estimate has, on the strength of a precedent two years ago, been met by a transfer from the development grant in aid, and therefore it is not suggested that an excess vote is required. That is briefly the position.


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in an estimate, and running alongside that you have a reserve fund of grant in aid which I think the Committee would regard as rather an unjustifiable state of affairs? (Mr. Phillips.) It is a wholly abnormal arrangement applicable only to this particular vote. We should be ready to give the assurance that there is no intention to extend the

system in any circumstances to any other vote. Perhaps I might explain how it arose.



68. That would help us. Some years back we found at the end of every financial year that the vote for the Department of Scientific and Industrial Research was surrendering large sums which had been voted and not spent. In each of the years 1919, 1920 and 1921, there was over £100,000 surrendered, or 25 to 35 per cent. of the vote. looking into the matter, which did very carefully, we came to the conclusion that the real cause was that it is practically impossible to estimate in advance how much money will be spent on a particular scientific research in the next twelve months. The chances of accidents happening and expenditure being increased beyond anticipation are so very great that if the accounting officer attempts to estimate the margin at all it is almost inevitable that he will overdo it and make his vote much too high. It appeared to us in those circumstances the best course would be to insist that for each individual research the estimate should provide only the bare minimum sum which could suffice, whereas from the grant in aid we would provide a common margin out of which contingencies on all the separate researches if they arose should be met. That was a special device, and it was aimed at reducing this overspending. In that it was entirely successful. Instead of annual surrenders of £100,000, the surrenders came down to figures like £5,000 and £2,000 at the end of the financial year.

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was added two years ago. (Sir Malcolm Ramsay.) It is replenished. (Mr. Phillips.) It is replenished as the payments out diminish the amount.

Major Salmon.

71. Under Sub-head C.3 on page 364 I see that payments for services rendered by scientific institutions, etc., are merged in the same Sub-head as equipment and stores. Why should not the two things be kept separate?—That is for the accounting officer.

Sir Robert Hamilton.

72. How many years do you say this has been in existence?-I think it started in 1921-22.

73. It has not been specifically discussed before?-(Sir Malcolm Ramsay.) There was a short discussion, but it was not gone into thoroughly.



The Committee clearly understand that the whole position and the principle of it will be reviewed after we have examined the witness, and it is quite open to us to make any comment we like in our report later, if the Members so decide. What I have to put to the Committee first of all is the three excess votes and ask you whether you permit me to make the usual report on these to the proper authority. (Agreed.) Secondly, I have to ask the Members whether they approve in the other two cases of quasi excess of the suggestions that have been made in the case of the National Library, Scotland, and the Department of Scientific and Industrial Research, and feel that no extra vote is necessary.

Sir John Marriott.] The whole of the second question will come up for review? Chairman.] Yes. The principle will come up again. (Agreed.)




Mr. E. C. CUNNINGHAM, C.B., called in; and examined.


74. The account is at page 12, and the matter is dealt with in paragraph 4 on page 6 of the report. The paragraph, Sir Malcolm, is formal. It deals with extra-statutory remission of duty or abandonment of claim involving a loss of £50 and upwards.-(Sir Malcolm Ramsay.) Yes. The question of remission of duty has been at various times before this Committee, and it was arranged in 1897 that where the Board of Customs exercised an extra-statutory power-if there is such a thing of remitting duty or abandoning claims, any case which involved a larger sum than £50 should be specially reported. The Comptroller and Auditor General always mentions whether or not there have been any such cases. 75. Have you any comment, Mr. Cunningham? (Mr. Cunningham.) No.

Chairman.] Then we pass to the account on pages 12 and 13, and succeeding pages. I would like to say to the Committee that I have reviewed it, and it appears to be quite in order. Νο

comment arises at all events from the Chair.

Colonel Vivian Henderson.

76. There is one point which I find rather confusing. In note B. it says: "On the provision in the Supplementary Grant for cost of work in connection with the Widows', Orphans' &c. Act 1925 £5,000." I am not at all clear to what extent the Customs still do work in connection with the Widows', Orphans' &c. Act, and is it still to some extent on the Customs Vote or entirely on the Vote of the Ministry of Health? -I think it is mainly dealt with by the Ministry of Health now, but in early days the officers of customs and excise, who are also pension officers, helped the Ministry of Health by answering certain local inquiries.

77. Are they still doing that? That is to say, is the cost of the administration of the Widows', Orphans', &c., Act, split up between the Customs and Excise Department and the Ministry of Health, or is it not?-I should like, if I may, to

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have notice of that question. I cannot answer it with confidence on the spur of the moment.


78. I think we can probably meet Colonel Henderson's point from the Treasury. I understand this was a Ministry of Health charge, but the Department of Customs and Excise having undertaken old age pension work there was a certain amount of dovetailing of one scheme into the other?-We did pay certain remuneration to our officers for doing this work on behalf of the Ministry of Health. (Sir Malcolm Ramsay.) My impression is you are still doing it? (Mr. Cunningham.) Yes.

79. I think, Mr. Phillips, the position is that that is a purely temporary state of affairs? (Mr. Phillips.) It may in fact have lasted a couple of years or so, but there is no evidence that it will go on indefinitely.

80. The point would be that it will not be a charge on the Department of Customs and Excise?-(Mr. Cunningham.) I should not care to say the extent to which it is going on.t

Colonel Vivian Henderson.] Where you get administration expenses split up between two Departments it is extremely difficult to estimate really what the actual expenditure is, and it is so easy either to blame one Department or the other Department, and for each Department to blame the other. It is much better to have all the expenditure on an item of that kind either under one head or the other, but not under two.

Chairman.] That is what I understand to be the position so far as this Act is concerned, apart from certain temporary work until the new scheme is adjusted to the old.

Colonel Vivian Henderson.] I want to find out whether it has now stopped or not. It cannot have done so evidently. Chairman.] It cannot have stopped yet. It is much too soon.

Major Salmon.

81. Are the officers doing this work receiving extra remuneration for doing it?

The Customs and Excise Department has ceased work in the administration of the Widows and Orphans Contributory Pensions Act, except as regards the changed conditions regarding Old Age Pensions. The cost of work in regard to Old Age Pensions is shown in Ministry of Health Estimates as an allied service rendered by the Customs and Excise Department.-F. P."


-They are not now receiving extra remuneration for doing it.

82. Is it proposed that they should?No.

83. But they did temporarily?—In the year we are discussing now they did receive certain extra remuneration, but they do not do so now.

84. The point is that they did do the work and received remuneration for it. They received that remuneration because they were doing the work outside the ordinary time? Yes.

85. In other words, it was extra work? -Yes, it was additional work.

Sir Frederic Wise.

86. I notice that the amount under Subhead G (Construction, Purchase, and Maintenance of Vessels and Boats) is increased by £750. How does that compare with 1914 as regards the number of vessels you had then?-The number of vessels and boats remains about the same. That excess is in respect of payments to the Office of Works for stores supplied.

87. How do your vessels compare with 1914? There is about the same number.

Mr. Briggs.

88. I see that Subhead K is "Allowances for use of Private Rooms for official purposes." That item seems rather a large amount. What does that refer to? It means this. In certain smaller country towns the excise officer, instead of being provided with a public office at the expense of the Office of Works, provides a room in his own house which is used for official purposes.

89. Permanently ?-As long as the arrangement goes on, yes.

90. Is there a room definitely allocated to his work in his house?-He sets aside a room in his house which he uses for official purposes. He is not bound to use it for no other purpose, but he fits it up as an office, with an office table, and presses, and so forth, and drawers to keep his papers. He sets it aside for use as an office.

91. Have you a definite record of such rooms?-Oh, yes. But the practice is extending-it is constantly extending-of providing a public office for this purpose instead of resorting to this arrange


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92. It will be a practice of economy, will it not, to use the private rooms ?Oh, yes. I should think it is an economy. But the officers do not like it, and it is not so convenient for the public.

Sir Fredric Wise.

93. I notice that Civil Pay is a new item? It is not exactly a new item, but it was the aftermath, so to speak, of the payments made under the Sutton judg


Mr. Pethick-Lawrence.] I think we ought to congratulate the Department on the very close estimate.

Sir Robert Hamilton.

94. What is the number of the personnel now?-All told we have about 12,000.

95. Does that show any increase over the previous year?-Yes; but it is about stationary now.


96. Has there been no increase in respect of recent Acts of Parliament ?-An increase for the Betting and other new duties, but relatively little.

Sir John Marriott.

97. When is it anticipated that this extra payment for Widows' and Orphans' Pensions will come to an end?-The extra payment has come to an end.

98. How did the Department of Customs and Excise come into that at all? -They came into it because they were on the spot as pension officers and were in a better position to make any inquiries and deal in the preliminary stage with the new scheme.

99. They have nothing to do with the payments? No, they have nothing to do with the payments. but they make investigations.

100. They merely make preliminary inquiries? That is so.






101. This is page 420 of the large volume. On this, Sir Malcolm, you have no note, I think?--(Sir Malcolm Ramsay.) No.

Chairman.] I will put to the Committee pages 420, 421 and 422.

Mr. Briggs.

102. I see on page 422 there is reference to a matter which has been before us previously, I believe, of £6,000 odd which has been written off. What has happened to the person who was dishonest? The Sessions Clerk who gave the false certificates went to prison for eighteen months, and recently returned to Stornoway and had a public reception, I believe.

Major Salmon.

103. Is the amount under Subhead B an increasing figure or is it going to be a decreasing figure?-It is going to be a decreasing figure, because of the transfer from the non-contributory to contributory pensions when the Committees will have less to do.

104. There will be a staff economy?— There will be a local staff economy with the local Pensions Committee. The only staff we have is the staff in my own accounting office who audit their claims to expenses.

105. I see. You have no central staff? --The committee work is entirely done by Committees appointed by the local autho rity.

(Mr. Cunningham withdrew.)

(Adjourned to Tuesday at 2.15 p.m.)

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