Finance Committee, 27 Feb 2001

Meeting date: Tuesday, February 27, 2001

Official Report 182KB pdf

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Resource Accounting and Budgeting

I welcome Dr Peter Collings to this morning's meeting and invite him to make an opening statement to assist us with our resource accounting and budgeting inquiry.

I thought that it might help the committee if I made a few comments about how the process has been going and how prepared we are for it.

We are producing and fully auditing accounts for 1999-2000. That is taking longer than we had hoped, as we have had to produce three sets of accounts: the three-month pre-devolution account; the nine-month post-devolution account; and the resource accounts. However, we are just about there with both the Scottish Executive accounts and the consolidated accounts, where we take in the accounts for agencies and health boards. We have found that, although it is not a great problem to produce Scottish Executive accounts fairly quickly, there are many points to sort out in the accounts of each body that is being consolidated. That takes time. However, we are working with Audit Scotland on a timetable that will allow us to hit the deadline of sending our final set of cash accounts and a set of resource accounts for the current financial year to the Auditor General by the end of September.

On the issue of budgeting, the committee will know that in September we published plans on a resource basis; the budget documents and the budget bill have also been produced on a resource basis. That process has gone reasonably well and we have not found any great problems with those figures.

The committee has raised the issue of information technology systems. I should make it clear that our existing accounting system is designed to handle resource accounting; indeed, the system is rather complex, as it can handle both resource accounting and old-style cash accounting. We are replacing that system not because of the need to handle resource accounting but because we have to update the technology and improve the accessibility of information to people. The fact that we will not produce old-style cash accounts will make life somewhat simpler, because the system contained a fair amount of bespoke work that enabled us to handle the old-style and new accounts simultaneously. Most systems can handle one or the other, but do not like doing both at once.

We have done a substantial amount of training, although we have a lot more to do. A basic two-day course for finance programme managers based around RAB has been run 14 times. We have given seminars to senior staff and circulated information to staff through our intranet. We have also conducted sessions for particular groups of staff dealing with programmes on specific issues. For example, there have been seminars on water for our staff and for people from the water authorities. We will be undertaking more training as the system is introduced over the next year.

The one awkward issue that has cropped up is the halfway house in resource budgeting, where the capital charges and some other resource adjustments are scored as annually managed expenditure. At the moment, the Treasury gives us whatever we need as far as those items are concerned. However, in terms of parliamentary control—that is, control by MSPs—those items are treated as part of our budget. That arrangement is much more complex than the full system will be. As for training, we do not foresee any insuperable problems in getting people used to the full system. However, we have had to work quite hard with people on the complexities of what scores as annually managed expenditure and what scores under departmental expenditure limits. This halfway house will probably last two years. Although the arrangement was sensible—it would have been too risky to put all those adjustments straight into departmental expenditure limits where we were not used to managing those items—it just complicates matters a bit more. That is the main issue that we have found unexpectedly difficult.

I am happy to answer questions on those or any other points.

I am sure that the committee will ask you questions on those and other issues.

My first question relates to a comment made by Hugh Hall at our previous evidence-taking session. He said that, when he had met civil servants or senior officials from Scottish Homes, he found that there were different attitudes to the introduction of RAB. Some people were cynical about the system; others assumed that they knew all about it when perhaps they did not. Hugh Hall argued that, in order to get the full benefits, RAB needs to be sold hard to enable people to appreciate how it can improve the quality and quantity of information that they receive and thereby improve financial decision making. How is that approach developing?

I agree with all those points, which is why we have placed particular emphasis on senior staff, not just on the people who are working with and producing the numbers every day. People appreciate certain aspects of RAB, such as the fact that what counts at year-end is not whether the cash has been got out the door but—in the case of grants, for example—what has happened that means that grant is payable.

There is also a fairly general understanding of capital charges, although it is slightly awkward to score them under annually managed expenditure. However, we perhaps have some way to go in relating measures of output and performance with inputs. Although the general idea is widely known and accepted, we have a bit more work to do to make it a reality. What will determine how people feel about RAB is whether they see this or other committees of the Parliament using our information about costs and whether they, too, are using it in their work.

As we have frequently discussed how inputs, outputs and—increasingly—outcomes can be reflected in financial information, we will be interested in how that aspect develops over time.

What is the main purpose of RAB? Is it a managerial tool to allow better decision making or will it assist public accountability?

I hope that it will do both. Our accounts will never be terribly simple, partly because we do so many things. However, if we produce accounts that look more like the accounts of other UK organisations and that contain copious notes explaining the entries, there is far more chance that people who are interested in expenditure will be able to understand what is going on. As a result, I hope that RAB will add to transparency, which is an important part of public accountability.

RAB has some benefits for management, particularly the more sensible treatment of what happens at year-end. However, we should not overemphasise such benefits in relation to the Executive. One of the big changes in the system is in the way in which we treat fixed assets and capital charges. We do not manage vast amounts of fixed assets; much of our work involves funding other bodies to do that. As a result, one would expect RAB to have a fairly direct effect on assets that we own and manage, such as our offices, prisons and arguably the road network. However, we fund other more arm's-length areas such as local government and the health service, which has been running an internal system more or less based on RAB for some years. As I said, although there will be improvements, we should not overstate the change that there will be, as any change will mostly affect the assets that we manage directly.

What is the motivation behind the Scottish Executive professionals pursuing RAB? Is it that, because the system seems to have worked in the private sector, we should copy it, or is it because it will improve democratic accountability and managerial efficiency?

The answer is both. In principle, if we can work out more sensible costings for what we do, we should be able to manage those things better; if we have a balance sheet that shows our fixed assets, that will take us some way towards managing those assets.

Our accounts will not be quite the same as those from the private sector, as we have to address issues in our accounts that that sector does not face—for example, it does not give out grants. However, it is important that we have similar accounts, so that people who are interested in financial issues will see material presented in a broadly similar way. Furthermore, as accountants are trained and IT systems are produced to support the work of the private sector, it will be simpler to produce accounts that are similar to those of the private sector. Although those are all good reasons for introducing RAB, the fundamental issue is whether it will allow us to manage the assets better.

Halfway through your answer, I think that you had a slip of the tongue and said public sector when you meant private sector. Perhaps we should make it clear for the record that we are copying what the private sector does.

Yes.

Dr Shaoul, who was one of our witnesses and who is much cleverer than me, thought that resource accounting could mean that control over quangos is less good than it is at present. Do you think that there is any substance in that argument? Government finance is increasingly done through public-private partnerships, leasing and outsourcing. The argument is that resource accounting and budgeting could make control worse.

There are two separate issues. The first is how public services are delivered. That gets us into the area of public finance initiatives, PPPs and outsourcing, which also brings us into the political arena, on which I cannot comment.

Secondly, there are issues about how to account for that. Irrespective of the approach that one believes is best for the delivery of public services, one wants to produce accounts that reflect and give a true and fair view of what is happening. That is what we are endeavouring to do. I do not see the link that Donald Gorrie has suggested.

Could I ask you to clarify that point, Peter? Jean Shaoul's argument was, I think, that the introduction of capital charging was producing a revenue stream and so was a sort of precursor to PFI. Capital charging created the conditions whereby PFI could take over the provision of assets.

It is true that, under resource accounting and budgeting, we are comparing like with like when looking at the accounting treatment of publicly funded assets and of assets that are funded through PFI, whereas, under cash accounting and budgeting, we were not comparing like with like. I think that we ought to be comparing like with like, so to that extent RAB is a good thing. It makes what we are doing much clearer.

Explain to me how the system would work. Let us imagine that I am head of a school, with an old school building that has all been paid for. How am I supposed to produce a revenue stream or to account for the capital value of the school—which might be quite high—without benefiting from it?

From experience, I am aware that there is a lot of pressure on councils to sell playing fields, for example. Because councils get debited with the notional value of playing fields, they flog them off for housing. That seems to be seriously perverse. Could you cover that bad aspect as well as explaining how local managers are supposed to account?

First, resource accounting and budgeting does not apply to local government, which has its own system of accounting. That system is a mixture and includes accrual accounting, which is similar to RAB. However, local authorities fund most of their capital expenditure by borrowing and so have genuine spending on loan charges.

I will therefore have to talk about a hypothetical school that is owned by a body that is directly affected by resource accounting and budgeting. The asset would be valued according to its use as a school. That would reflect the condition of the building and, to an extent, whether its design was appropriate for the way in which education is now delivered. The valuation would also reflect the remaining life of the school and would normally be much lower than it would be for a brand-new school.

As far as a revenue stream is concerned, we are adding to the public expenditure aggregates. We have put roughly £1.2 billion extra on the public expenditure aggregates for capital charges. Therefore, it is not the case that capital charges are having to be found from the previous revenue stream; people are operating within totals that are bigger than the totals within which they were previously operating.

The national health service has now had RAB for about six or seven years, I think.

In principle, RAB started in the health service in about 1992 and was phased in over the next three or four years.

I know that that is not under direct control, but comes, or presumably has come, under part of the consolidated account. Can you give me some examples of where RAB has had a positive effect? We have had it for six years; if it is to involve more than simply bringing us into line with the private sector and making government more open and transparent—which is welcome in itself—but is to drive management decisions, there should now be good evidence of that in the health service.

The main evidence that I have come across was in research suggesting that the effect of a capital charge regime had been to make managers look at their assets. Traditionally, the health service has held a great deal of land and buildings that have been no longer necessary or, indeed, appropriate for the delivery of services. Research has suggested that capital charges have made managers examine that fact and consider whether it is sensible to keep to the same approach.

I believe that Trevor Jones discussed with you the fact that the finances of various NHS bodies look different if they are presented on a cash basis from how they appear on an accruals basis. The accruals figures highlight some potential problems that can be addressed earlier than would be the case using a cash basis.

You said that year-end funding would be affected. That has been a matter of public concern. Last year, as every year, the annual underspend was highlighted. What effect should RAB have on year-end funding? Does the roll-on expenditure make a difference to the funding that is left at the end of the year, which is carried forward?

The amount will be calculated on a resource basis. In the case of some grants that we give, if they are allocated some months in arrears—after the activity that is being funded has happened and audited claims have been received—that expenditure will be counted in the year when the activity takes place, not when the cash is paid out. To that extent, we will be working on more realistic figures for what we have spent.

The system is not essentially changed by end-year flexibility. The calculation of the numbers changes, because of the different way of measuring the expenditure. However, there is still an arrangement whereby 100 per cent of underspends on our departmental expenditure limit can be carried forward into the following year. It will be for ministers to consider how that money is then allocated to particular expenditure programmes.

You said that the effect on the budget aggregates was £1.2 billion or so. I am interested in finding out how that is calculated, how that will change as we go forward and what that actually means. How—specifically and, in more detail, by area—was that figure of £1.2 billion, which was allocated by the Treasury, worked out?

That was worked out by us. It was what we asked the Treasury for and the Treasury agreed our numbers. The figure was based on forward projections of the fixed assets of each of our expenditure programmes. We took the figures from our accounts—resource accounts, which were produced only to a draft stage for 1998-99.

We also had to take in figures from other bodies whose accounts are not consolidated into ours, including public corporations. We took their accounts and corporate plans and, essentially, we projected forward their balance sheets. We had to project forward everybody's balance sheet and then work out what 6 per cent of the asset value was. That is how we come to the figure of £1.2 billion and to the equivalent figures for each of the later years.

That is quite clear. We will probably want to return in a few moments to how the capital values were worked out.

As you mentioned in your briefing at the start of this inquiry, there will be a transition from annually managed expenditure into the DEL, through the Barnett formula. To understand what will happen to the relevant part of the allocation, we need to know what changes will arise in the rest of the United Kingdom. Will the comparable expenditure under capital charging be compared to the expenditure for the equivalent departments in England and Wales, as with the rest of the block? Do we have an indication of the extent of capital charges in the rest of the UK, so that we can understand whether the Barnett allocations will be proportionate?

As far as the process is concerned, the assumption is that that part of the allocation will be brought into departmental expenditure limits in the next spending review, in 2002—although that to some extent depends on events between now and then. The first financial year for which that will be done will be 2003-04.

The process that I would expect to occur involves our having a baseline for our capital charges for 2003-04, which will come under our annually managed expenditure totals. That will simply be moved from annually managed expenditure—at the figure at which it stands—to the departmental expenditure limit. At the point of transition, the process will be entirely neutral.

After that, we expect changes in our overall departmental expenditure limit—including capital charges—to be determined by the Barnett formula, along the lines set out in "Funding the Scottish Parliament, National Assembly for Wales and Northern Ireland Assembly: A Statement of Funding Policy". We still have to discuss with the Treasury whether any fine tuning has to be done on that in any area.

The Treasury published the equivalent figures for Whitehall departments last July, when it made its spending review announcements. The white paper that was issued covered the total figures. If members look at them and at the information in "A Statement of Funding Policy" on the comparability of different departments, they will get a fair idea of what would happen.

That is what I find difficult to do. Will you give an indication of what the differentials are? I have found it difficult to establish them using the source that you have mentioned, specifically in areas of comparable spending in Whitehall departments. Is there a differential in spending between Scotland and the rest of the UK with respect to capital charges? For example, is spending 15 per cent higher or lower? I ask that because, if there is a differential, Barnett will, over a long period, produce a convergence in the capital charges aspect. We need to know where the differential lies, if there is one. Can you provide that information?

We can give you some idea about that, although that is easier for some areas of the budget than for others. A major area to consider is roads. The road network is the biggest asset on a balance sheet. I would be happy to write to the committee with information on that.

That would be helpful, particularly if it threw some light on the roads issue, which has cropped up consistently.

That would be useful, as we are having difficulties getting a Treasury official—the main source of the information—to come here.

This is a daft question, but where does the money go? Where is the £1.2 billion in the budget spent?

I am sorry; I do not quite understand the question.

There is £1.2 billion extra in the Scottish budget. Where is that money expended?

That money is not cash. We calculate our expenditure according to rules set out by the Treasury. That expenditure is compared with our budget, which has been calculated against the same set of rules. That is used to determine whether we have an overspend or an underspend. The money is not cash out the door. Separately, we receive from the Scotland Office and other sources the cash that is required in each year to allow all the expenditure to happen. That is a different figure. For the years of the present spending review, we will get the cash that we estimate is required to deliver the resource budget aggregates described.

I understand the problem because I am puzzled. Does that mean that the budget documents that we debate will include £1.2 billion of resources that does not really exist? We cannot spend it or allocate it—if not to capital, then to something else. I am struggling to grasp this.

We could allocate it to something else if we no longer had the assets that generate the capital charge. If we disposed of a massive amount of assets so that the capital charge was less than that, we could spend the difference on things that are cash going out the door.

So there is an incentive that relates to the point that Mr Ingram made earlier. In summary, there is £1.2 billion in the budget that does not exist.

It does not exist as pound notes, but it is included in the calculation of the aggregates that control our expenditure.

I understand.

I want to take that further. First, if a unit that has to meet its capital charge within its own budget fails to do so, it has to find the money, in real terms, from its income. To that extent, it is real. If the money does not meet the capital charge for any reason, you may have to forgo staff or new equipment. The money is not around to spend.

Secondly, ultimately the money is real, because the Treasury has to borrow. In a sense, therefore, there is an ultimate capital charge, which the Government meets through its gilts and other funding arrangements.

I agree with both points. The Treasury has indicated that the RAB aggregates that will be used to control expenditure fit well with the fiscal rules that have been adopted by the Treasury—the Treasury considers it more appropriate for fiscal control to use aggregates calculated on a RAB basis as opposed to on a cash basis. To that extent, and considering the points that Dr Simpson made, the whole thing is real.

I want to clarify that, as it is a difficult concept. There is a capital charge on an asset that is not being used. For example, we have hospitals that are redundant. If we can release assets by selling them, we reduce our capital charge. However, the money still comes into our budget, so we can spend it another way.

On the other hand, if we had an old hospital with an asset valuation of x, and we paid our 6 per cent capital charge, if we wanted to construct a new hospital that cost 2x, we would have twice the capital charge and would have to find the money within our budget.

That is correct, but the running costs for the new hospital would be much less than for the old one, because its design would be appropriate for the delivery of modern medicine. Therefore, the overall cost of providing the health care would be unchanged or, in some cases, reduced.

Which makes the whole thing real. That is the point: we do not hang on to assets that are either redundant or that are inappropriate due to their maintenance and running costs. We would say, "This is costing us too much from our capital flow, so we need to convert it to a more modern asset that will be cheaper to run."

It also emphasises that some of the expensive capital equipment that is in hospitals is not free, therefore it is in the NHS's interest to make maximum use of it.

That is another important area. I think that I am right in saying that no witness so far has come to any conclusion on separating out the fixed asset charge from the capital depreciation on equipment. That is an important issue, because there has clearly been a trend in the health service over the years to pinch from the capital equipment budget for running costs. The assets were paid for on a cash basis. When they were wanted again they were paid for on a cash basis and no depreciation was written in. Depreciation will now have to be written in. It should mean that the capital equipment budgets are treated seriously. Is that another driver within the system?

The incentives within the NHS financial system to do with capital versus current expenditure were to some extent meant to operate sensibly, but there was a mismatch between that and the way in which the health department's expenditure was controlled and worked within the Treasury's aggregates. The treatment is now the same the whole way up, with capital identified separately. That should help prevent such a mismatch.

We will now explore implementation and training. Previous witnesses have raised crucial issues on the implementation of RAB. You talked about some of the progress that you have made on that and the amount of training that has been carried out so far. What checks have you deployed to ensure that the implementation of RAB is successful and that it is accepted?

We have allocated accountants to each of the main programme areas and have asked them to keep in touch with the people who work in that area and to talk through problems with them. The issues that arise differ from area to area—we have to move from training to ensure broad awareness of the issues down to how issues affect the individual programme. That is the main check that we are doing.

The process of converting the budget from cash to resources highlighted many of the problems and misunderstandings that can appear. When we got the information about the conversion for each programme we checked it carefully to ensure that it was sensible and we went back to people when we thought that they had got it wrong. We worked with them and got it corrected. That has helped to identify issues. Clearly, we will have to continue that process.

So far, do you feel that there has been adequate buy-in from the people who are implementing RAB?

So far, but the control mechanism starts only on 1 April. We have a continuing job to do.

Some organisations, such as the police and fire services, have no funded pension. However, civil servants, teachers, local government officials and so on have a funded system. How does RAB budget for the imponderables of the unfunded pension schemes?

For the unfunded schemes, we have for some years run a system of notional funds. For example, we pay some of the money that we get from the Treasury for civil servants back to the Treasury, as an employer's payment, into a notional superannuation fund. To an extent, we are already dealing with the people in the areas of the public sector where there are no pension funds. The idea that those pensions are not free, because we employ the people, is already part of the system.

The main change that RAB will introduce is in areas such as early retirements. We have previously accounted for early retirements on a pay-as-you-go system. If someone retired five years early we would, over each of those five years, put through our accounts the cost of that person's pension, in cash, in that year. That would not come out of the notional fund. Now, we take the full cost of that person's pension, between their early retirement date and the normal retirement date, and charge that to the year when they go. That brings home to people the full cost of early retirements.

If RAB is to work, it has to be part of the management thinking as far down the line as possible. You said that you had run 14 seminars. Are the seminars for individual departments broader? Do they involve groups beyond the accountancy and finance people? In the health service, which has had RAB for a while, is there evidence that the concept is included in the lower levels of management training—the second and third-tier levels?

On the first point, the training that I mentioned was specifically for people who are not accountants and do not work in finance. We have had to do rather different, more detailed work with people who are in finance.

On your second point, I am afraid that my main awareness of NHS training is through having delivered some of the courses to do with finance. I have delivered training that involved explaining capital charges to non-executives who work in the NHS. People in management received similar training. There was a great deal of awareness among them of capital charges as an issue. However, that took some years. Early on, rather than considering it as an overall budget, there was a tendency to say, "This is the real budget, which excludes capital charges. We need to be funded for the capital charges on top of that." It was several years before managers in the NHS were able to consider the thing as a whole.

Have any evaluative studies been done of managers' attitudes, changes in attitudes, and the effects of what has happened?

The only Scottish study that I am aware of, which looked at the NHS, was done by David Heald a few years ago.

It might be worth looking at that to inform what will happen when RAB is introduced across the other departments. I am thinking in particular of the effect on groups, such as non-departmental public bodies and others, that are just beyond the central core group for which you are responsible. There are concerns that their understanding and appreciation may be too slow for them to come in at the next spending review.

Yes, I would agree with that.

I have a slightly different question. We mentioned earlier the whole business of trying to produce information that is more focused on outcomes and outputs than on inputs. You also mentioned that you are in transition and are moving to a new IT system. How far away are you from being able to produce financial information that is based on outcomes? Will the new systems facilitate that?

The best thing is just to look at the budget documents. It is clear from them that for some expenditure programmes we have quite reasonable measures of outputs and targets; for others there is a need to improve the quality. We are starting on that and we need to work on it.

The outcomes thing is much harder, partly because there are often significant time lags, which require considerable study, and partly because it is quite hard to see the causality between the inputs and the outputs—often there is a series of different inputs and it can be hard to see which were critical. I think that there is a long way to go before we have anything that looks like a comprehensive system—if we ever reach it. Particular studies of particular policy areas can consider that sort of issue. We are getting there on outputs, but on outcomes we have further to go.

I have two separate points.

Adam Ingram made some points about Jean Shaoul's evidence. At the time, I could not quite agree with her about the incentive that RAB could provide for taking assets off the balance sheet, but I can perhaps see it now from what you said a moment ago, so I want to clarify the point that you made. You said that the £1.2 billion is notional; it is an accounting mechanism to provide a charge on assets for departments. However, if the assets were put off balance sheet, people would have access to their capital charges as revenue expenditure, which they could then allocate to other aspects of their budget. Is that the case?

All the most obvious mechanisms for acquiring assets and having them off balance sheet require that cash be paid out. If the assets are on balance sheet, there is an associated capital charge; if they are off balance sheet, there is typically a charge for the finance of that asset, which will be a similar amount to the capital charge. Therefore, there is a level playing field between assets off balance sheet and assets that are on balance sheet.

The key point in all of this is to prove that the 6 per cent and the value are essentially neutral, which is something that is of interest. I take it that the 6 per cent is taken from the standard public sector discount rate.

Yes.

The market value of borrowing could be higher or lower than that, depending on how well things are going. To that extent, the 6 per cent is almost random, because it reflects other things and does not reflect the market price of borrowing capital.

You are probably better equipped than I am to comment on that, because the work is done by economists in the Treasury. One of the factors that is taken into account in working out the opportunity cost of capital is market rates, but it is by no means the only factor. A lot of other factors are considered.

That is something that we could explore with the Treasury official.

The other side of the coin is the value itself: the £1.2 billion that you have calculated. The confusing thing is that the evidence that we received from KPMG and from the chap who did the water financing was that, in the case of the water boards, the capital valuation was done on the basis of the net present value of future income streams. In another sector, however, the valuation was done on the basis of the cost of replacing the capital, and in yet another it was done on the basis of market valuation. I think that Historic Scotland also did valuations on the basis of income streams. How is that decision made? To what extent is the balance across the £1.2 billion, on the basis of future income streams, based on market value or replacement value?

Very few assets are valued at market value. That would normally be appropriate only for an asset that we expect to dispose of. Assets are valued at value for their present purpose. Most commonly, that is based on the depreciated replacement cost. There are particular difficulties with that in the water industry, where many of the assets are extremely old and it is hard to assess what would be a sensible valuation. I think that water is the main area where depreciated replacement cost has been departed from. Most other valuations are based on that.

Would you be able to give us a note of how the £1.2 billion breaks down?

I can certainly do that.

That would be terrific. Thanks.

The 6 per cent seems to be a rather blunt figure. Different assets have different values. Having a uniform capital charge for roads and capital depreciation of equipment, for example, seems somewhat superficial. As we progress, will that be an adequate mechanism to drive the system, or is it likely that we will move to a system in which charges vary according to different asset valuation systems, as Andrew Wilson has outlined?

Depreciation rates will vary according to the type of asset, so it is only the 6 per cent that is uniform. Different assets will be depreciated over different lifetimes, so that part of the calculation will vary according to the type of asset. I do not immediately see the case for applying different rates to different types of asset. The only obvious circumstance in which one might want to do that would be where a trading body was competing with the private sector. There, one might want a cost of capital that reflected costs in the private sector so that one had a level playing field for competition. Apart from that, I am not clear why one would have different rates just because the nature of the asset was different. It is meant to be about the opportunity cost of having that asset.

Is it possible to separate out, in the information about the £1.2 billion, the 6 per cent capital charges and the depreciation that you mentioned? We have not yet seen what part of the figure is depreciation and what part is the 6 per cent.

Yes. We can certainly give the depreciation figures separately from the 6 per cent.

We look forward to receiving that information. I thank Dr Collings for coming here to discuss RAB further with us. I am sure that we will take a keen interest in how things develop.

Meeting adjourned.

On resuming—