The Department of Defence determines how much money will be paid to each department. For each government department, the DfID determines their discretionary grant. The Department of Trade and Industry’s discretionary grant, for example, is £11 million over two years. This is the amount given to each department.
How do discretionary grants work?
The DfID determines the money that each department must spend on discretionary grants. When a Department decides to spend money on discretionary grants, the DfID must first look for a government request for expenditure and then decide where it is being spent.
What is a request for expenditure?
A request for expenditure is the DfID’s decision to spend money on a department’s work if the DfID considers it to be warranted and there is not currently a suitable alternative where available. You must explain why you think a department would have a need for the grant money.
How much are discretionary grants?
The DfID sets limits on each department and how much money each department is able to spend. The limits may include amounts that should be exempt. For example, the maximum number of jobs to be created, the maximum number of permanent homes to be built, or the amount of money given to individuals.
Do discretionary grants come with strings attached?
Yes, the Department of Business, Innovation and Skills (BIS) will set a limit on each department to spend discretionary grants. If a department exceeds that limit, the DfID can ask any department that has exceeded the limit to return it.
How much money can a given department decide to spend on discretionary grants?
A department can choose how much it is able to spend – that is, set its discretionary grant. Each department can raise a maximum of £20m from discretionary grants. At the end of the funding period, the DfID will assess each department’s budget to see how much discretion it has. If the department does not meet its own discretionary grant limit, the DfID can ask a department to return a larger piece of money to it. In exceptional circumstances, the DfID may ask a department to raise more discretionary grant money.
When a department makes a decision that it cannot meet its discretionary grant limit, the DfID can ask the department to return its discretionary grant. However, it is the Ministry of Defence that decides when to ask a department to return discretionary grants.
What are the criteria for deciding how much to spend on
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