CIE operating subventions and cost guidelines
The Minister gave CIE’s subventions and their shares of operating costs, noting a change in accounting treatment in 1983. He said a new funding system linked the subvention to reduced expenditure, and reported that CIE’s losses had fallen in 1983, describing this as an improvement.
asked the Minister for Communications if he will give details of Exchequer subventions to CIE in the last three years; and the proportion this figure represented of the total operating cost.
Comment on this
Exchequer subventions to CIE in the three years 1981 to 1983 were £85 million, £96 million and £86 million respectively. The subvention represented 35.4 per cent in 1981, 34.4 per cent in 1982 and 28.7 per cent in 1983 of total operating costs. CIE introduced a change in accounting practice for the 1983 accounts as a result of which certain receipt and expenditure figures are shown in gross terms, whereas those for 1981 and 1982 were in net terms. The percentage of subvention to operating costs for 1983 on the basis of net figures would be 30.3 per cent.
Comment on this
Last year the Minister laid down guidelines for the funding of CIE and he laid down certain percentages, particularly in regard to operating costs. Will he tell the House if he is satisfied that those guidelines have been adhered to by CIE?
Comment on this
The figures I have given for the three years were figures that were settled under the old system and in all cases they under-represented actual CIE losses. In effect, there was an under-provision. In mid-1983 I introduced a new system where CIE would get one-third of their expenditure as a subvention——
Comment on this
Yes, but effectively that is one-third of expenditure, provided that expenditure was reduced in real terms by 2.5 per cent per annum. Deputies will be aware that in 1983 the losses for CIE fell from £109 million to £102 million. That was the first reduction achieved in recent years. If we had taken the path on which CIE deficits had been going for 15 years, the expected loss for 1983 would have been of the order of £130 million and the outturn of £102 million was a dramatic improvement. Because so many bad things are said about CIE, I want to take this opportunity again to commend everyone in CIE for that performance. We have not yet the results for 1984, although informal figures will be available shortly. I understand that CIE losses in real terms will reduce again in 1984 and will probably turn out to be of the order of £104 million or £105 million. They are tentative figures. There has been a great improvement in the whole situation for which the Government and I are very grateful.
11.