Francie Molloy (Sinn Féin)

I have received notice from the Minister of Finance and Personnel that he wishes to make a statement regarding the public expenditure 2009-2010 September monitoring round.

Sammy Wilson (DUP)

Following the Executive meeting this morning, I would like to make a statement regarding the outcome of the September monitoring round, so this is hot off the press.

The second monitoring round of 2009-2010 has the role and purpose, under the in-year monitoring process, of allowing the Executive to make optimal use of resources at our disposal by reviewing departmental expenditure plans in light of the most recent information available.

In my statement to the Assembly in July on the June monitoring round, I informed Members of the record levels of investment in the public services that were delivered by the Executive in 2008-09, and the fact that that was at least partly due to the considerable reductions in levels of underspending compared to previous years. However, I also indicated in that statement that the improved spending performance of Departments last year had implications for the management of the expenditure position going forward. I particularly highlighted the need to reduce our use of overcommitment as a tool for managing public expenditure.

The simple reality is that if, unlike under previous direct rule Administrations, Departments now spend the vast majority of money available to them, the return of significant funds to the Executive during the year or large year-end underspends cannot be anticipated. That point sets the important context for the September monitoring round, in which the key challenge for the Executive was managing the overall financial position to protect our own integrity, and that of the Northern Ireland block, by ensuring that we do not overspend against the amounts available to us, while supporting priority areas in which additional funding is needed. In anticipation that some Members may try to portray such a position as a self-inflicted wound, let me say that the contrary is true: it is a consequence of an Executive who deliver for the people of Northern Ireland on levels of spend, on sound financial management and on responsive public services.

Turning to the detail, the level of reduced require­ments declared by Departments in the September monitoring round was £26·8 million in current expenditure and £21·1 million in capital investment. Further details are set out in tables attached to my published statement.

To underpin my point about better financial performance, reduced requirements this year total only 57·7% of the amount declared at the same stage last year. I emphasise the significance of that position; it means that the amounts allocated to Departments in the last Budget are being used by those Departments for the purposes intended, rather than being returned for redistribution. They are meeting the purposes proposed by the Executive and endorsed by the Assembly following an extensive public consultation process — yet more evidence of a successful delivery against the considered needs of the people of Northern Ireland.

However, as a consequence of that performance, and of the overcommittment that existed at the end of the June monitoring round, no funds are freely available for allocation to Departments at present. Some in the House may seek to paint that situation as unduly problematic, but in reality the position highlights our progress in delivering the commitments set out in the Programme for Government.

In order to facilitate further sound financial manage­ment in Departments, the Executive have allowed Departments to move resources across spending areas when the movement reflects a proactive management decision that is taken to enable the relevant Department to manage emerging pressures within its existing baselines. Those Departments are to be commended for their actions to address pressures in that way.

It has also been necessary, largely due to technical issues, to reclassify some amounts between expenditure categories. Details of those changes are provided in the tables that are attached to the statement.

Although no amounts were available for reallocation to address departmental pressures, the Executive have agreed small allocations of £0·1 million current expenditure to the Northern Ireland Assembly and the Northern Ireland Audit Office. Those allocations reflect the bodies’ unique circumstances and the fact that their costs are agreed by their respective Committees, as opposed to being subject to the normal scrutiny and challenge that apply to other Departments. That said, and acknowledging that the amounts involved are small, I urge the House and the Northern Ireland Audit Office to recognise the financial constraints and to do all in their power to minimise their call on the wider public expenditure position. Those institutions, more than any others, must lead by example.

When viewed in light of the lower level of reduced requirements and the amount of end-year underspend in 2008-09, those charges have resulted in a reduction in the total overcommitment to a prudent level for this stage of the financial year. However, the balance between current and capital overcommitment is slightly skewed, with current expenditure being ahead of target, while capital investment is behind target. Therefore, to redress the imbalance, the Executive have agreed to reclassify £22·5 million of current expenditure as capital investment.

That reclassification brings the overcommitment position to £45·8 million for current expenditure and £20 million for capital investment, which, based on departmental spending performance in 2008-09, represents the maximum level of overcommitment for this stage of the financial year, with no scope to increase that amount to meet any pressures at this time.

Three issues were identified as being of sufficient strategic importance to warrant action by the Executive at this time: the £20 million first call on available money for the Department of Health, Social Services and Public Safety (DHSSPS), which was agreed by the Executive as part of the last Budget; the costs of addressing emerging pressures that are linked to swine flu, which, again, is a health issue; and the Bombardier CSeries project in the Department of Enterprise, Trade and Investment (DETI).

Turning first to the £20 million first call on the available resources for DHSSPS, as Members will recognise, the constrained financial position that we face means that, at this time, there are no available resources to allocate against that commitment. However, the Minister of Health, Social Services and Public Safety has helpfully offered to release £10 million capital investment through proactive management of his significant investment programme, which, through some flexibility that is available to the Executive, can now be reclassified as current expenditure and returned to his Department as a first instalment against the £20 million. With respect to the balance, the Executive have agreed that making good on that commitment will be a priority for the remaining two monitoring rounds this year, when all reasonable efforts will be made to find the remaining £10 million.

At this stage, swine flu costs are still estimates, and the Health Minister has identified likely minimum requirements of £42·6 million current expenditure and £22 million capital investment. Those amounts may be subject to change; however, the Executive have agreed to move forward on that basis. Taking account of the amounts that are available in the existing DHSSPS budget, a net pressure of £27·9 million current expenditure and £11·5 million capital investment remains to be addressed.

Finally, with respect to the Bombardier C series project, DETI has identified a net capital investment pressure of £22·3 million.

I should explain that this £500 million investment — the largest ever inward investment project secured for Northern Ireland — is expected to create more than 800 new jobs over its production cycle, with many more jobs forecast to be created indirectly at peak employment. The supply-chain benefits for the UK, and for Northern Ireland in particular, are substantial. The investment will help to safeguard and further develop high-quality manufacturing skills in Northern Ireland for many years to come. That highlights the importance of the issue as a project in its own right and as evidence of the Executive’s commitment to make economic growth their number-one priority.

In dealing with those two strategic issues, the Executive have agreed that, despite the constrained financial position, they are of such significance that support must be made available to the two Departments concerned. That will come from two sources. The Executive have agreed that Barnett consequentials that were received in the Chancellor’s 2009 Budget amounting to £23·8 million will be used, first, to cover the CSeries project, with the balance set against the residual swine-flu capital costs. Before that, the Executive had intended using that funding to offset the additional efficiency reduction of £122·8 million, which will apply next year. However, given the financial position and the importance of the two issues, the consequences of the efficiencies will be addressed as part of wider work on the 2010-11 position. The Executive will consider that at their next meeting, and I will make a statement on that issue to the Assembly in due course.

As regards the balance of the swine flu pressure, the £27·9 million current expenditure and £10 million capital investment, the Executive have unanimously agreed that it will be funded by way of a pro-rata contribution from all other Departments. A table showing the total contribution by Departments is attached to that statement. However, I will continue to press the case with Her Majesty’s Treasury that the UK Government should contribute to those costs, and robust monitoring systems will be put in place so that any funding not required for swine flu will be returned to Departments.

We should not underestimate the significance of this. At a time when all departmental budgets are under significant pressure, the Executive have acted decisively and in the broader strategic interests of Northern Ireland, setting narrow departmental interests to one side. Those were difficult decisions for Ministers and there was much debate about them. However, it is important to recognise that those adjustments do not mean a reduction in overall expenditure levels; they simply represent a reprioritisation — I wish the civil servants would not use those big words in my speeches — of the funds available to the Executive as others have suggested, but without the need for a formal and time-consuming bureaucratic Budget process. The corporate approach taken by the Executive has enabled those strategic pressures to be addressed while ensuring that the overcommitment remains at a prudent level for this stage in the financial year.

Although the overall financial position means that it was not possible to address all the pressures identified in the September monitoring round, our prudent and responsible approach means that the pressures of strategic significance have been addressed, while the integrity of the Northern Ireland block has been maintained. That emphasises the importance of having a local and fully functioning Executive and delivery by the people of Northern Ireland for the people of Northern Ireland. For that reason, I commend the September monitoring position to the Assembly.

Francie Molloy (Sinn Féin)

There is a long list of Members who want to ask questions. If Members ask questions and keep them precise, everyone will get their turn; if they make statements, not everyone will be accommodated. If a Member makes a statement, I will move on to the next Member.

Jennifer McCann (Sinn Féin)

Go raibh maith agat, a LeasCheann Comhairle.

I welcome the Minister’s statement and I particularly welcome the fact that top-slicing by Departments did not have to happen in the case of the Bombardier CSeries. In view of the importance of economic investment, I ask the Minister whether he agrees that it should be distributed equitably to balance regional development across the North.

Sammy Wilson (DUP)

I welcome the Chairperson’s support of the monitoring statement and the way in which we have decided to allocate money. We were mindful, especially when looking for the CSeries money, of the impact of top-slicing across Departments.

I agree with the Member’s point; indeed, if one looks at the Executive investment portfolio at present, it is quite clear that we seek to dispense the benefits of public spending across the whole of Northern Ireland. This morning, I was interviewed about some of the views that I expressed on the Bain report — I suspect that that is what the Member was alluding to. When I was questioned on the situation in the north-west, I was able to point out that, in recent months, the Minister of Enterprise, Trade and Investment and the Minister for Employment and Learning have introduced measures there to help those who have found themselves unemployed to reskill and retrain. The Ilex programme has received £18 million, which will open up the huge Ebrington site in Londonderry and which represents substantial investment and urban regeneration for the city. New schools are also being built in the city.

That picture is replicated all over Northern Ireland. The £10 billion that the Executive dispense across Northern Ireland is spent on a wide range of projects. Indeed, one of the things that I have done as Minister of Finance and Personnel is to go to see some of those projects in the west, south, north and north-west of Northern Ireland.

Peter Weir (DUP)

I thank the Minister for his statement. I particularly welcome the fact that we are now seeing Departments spending their allocation, which contrasts with the situation a number of years ago in which there were large amounts of underspend and the resources were not being used efficiently.

My question follows on from the Chairperson’s question and is about the money that has been allocated to DETI on the CSeries. First, people may wonder why that money was not allocated earlier, as part of the DETI budget. Were there any particular restrictions that meant that that could not happen? Secondly, what are the implications for the economy of the allocation of money to the CSeries?

Sammy Wilson (DUP)

There was a lot of negotiation with the Treasury and Bombardier about the CSeries, and that was not finalised until after the current comprehensive spending review (CSR) period had started. Therefore, not being certain that the money would be spent, the Minister put the money back into the pot, with the understanding that, should the CSeries go ahead, the contractual obligation — it is a contractual obligation — would be met. The Executive have honoured that contractual obligation. That explains why the allocation was not in the budget of the Minister of Enterprise, Trade and Investment. Having said that, the allocation to the Department is not 100% of the funding; the Minister had to find the first £10 million and the remainder was made up from the reallocation in the monitoring round.

I have emphasised the importance of investing in the CSeries project already. At more than £500 million, it is the largest amount of money for a single inward investment project in Northern Ireland. I do not know a great deal about the technology, but it will put Northern Ireland at the leading edge of carbon fibre technology. Obviously, there are spin-off effects from that. It will generate 800 high quality, well paid, highly skilled jobs. Indeed, if the jobs that will be maintained in Bombardier as a result of the project and supply chain jobs are included, the total number of jobs over the eight years of the investment is probably more than 2,400. Obviously, it is a very important project, and we had a contractual obligation. We have sent out the right signal that we are not simply saying in words that the economy is the priority but are showing it in our deeds.

David McNarry (UUP)

It is clear that the Minister’s inheritance is creating a struggle for him. In the circumstances, I welcome what he is doing for the Department of Health, Social Services and Public Safety and for the Bombardier CSeries project.

However, the Minister says that no funds are available for allocation. That is a sweeping generalisation. Is it not an admission that DFP’s number crunching is crashing down around it, necessitating the Minister to make a full statement with bare facts, warts and all? Will he confirm whether the £380 million shortfall will be the top figure, or whether it will escalate to £480 million or £580 million? Where does the Minister stand? Does he know where he stands?

Sammy Wilson (DUP)

I anticipated that I might get such a question from the Member; in fact, I would have been disappointed had he not asked me a question along those lines. Let us look at what I, as Finance Minister, have inherited. This year, public expenditure in Northern Ireland is the highest that it has ever been; investment and capital investment are the highest that they have ever been; and Departments, which are spending to their programmes, are doing what they said that they intended to do. I am pleased to have inherited that legacy.

As I said in my statement, to some extent, those developments cause some pressures. In the past, when lots of money that was supposed to be spent was not spent, Departments declared reduced requirements, enabling any pressures that came along to be met. That is no longer possible, or, at least, it is not as easy as it was in the past. However, we should be pleased, not unhappy, about that. Even having done that, we were able to find in the September monitoring round the money for the two fairly significant pressures that I discussed.

I remind Members that we were able to find the £200 million for the deferred water charges and additional money for housing in the June monitoring round. So much for the figures being in disarray and there being some panic. Although difficult decisions will have to be made, it is unfair of the Member to say that I have inherited some kind of crumbling financial legacy that is difficult to manage.

The Member was correct to say that the Assembly is entitled to an explanation as to how we intend to go forward in the next financial year; indeed, I think that I made that point in my statement. Will £370 million be the total pressure? If it is not, how much will it be? How do we intend to address it? I made clear in my statement that once the Executive have had an opportunity to consider the paper on that matter, I will make a statement to the Assembly so that Members can ask me difficult questions about it.

Declan O'Loan (Social Democratic and Labour Party)

I note what the Minister says about the dramatic reduction in reduced requirements. That calls fundamentally into question the use of monitoring rounds as a mechanism for addressing financial pressures, and it is leading to activity that has all the hallmarks of crisis management. Does he agree that, in the medium term, a better method of managing our public finances must be put in place? The mechanism for dealing with swine flu is to top-slice from all Departments, and I am surprised at the Minister’s defence of that method.

Francie Molloy (Sinn Féin)

I ask the Member to come to a question.

Declan O'Loan (Social Democratic and Labour Party)

I am surprised that the Minister offers that as the only solution. Does he agree that the use of an Ad Hoc Committee to reprioritise the Budget, which I have recommended here before, would be the best way forward in the short term?

Sammy Wilson (DUP)

Reprioritising the Budget would not have made a blind bit of difference to the situation that we face. Swine flu could not have been anticipated in a debate or in a reprioritisation of the Budget.

A reprioritisation of the Budget implies planning ahead in a different way from before, but those plans must still be made on the basis of certainties. When unanticipated factors arise, other mechanisms must be found to deal with them.

The Member criticised the use of monitoring rounds. However, there are only two other mechanisms for allocating funds from the block grant. At the very beginning of the process, the Member’s party and others supported having an even greater overcommitment; that would have been far more dangerous and have led to crisis management. We would have found no money forthcoming to write off the overcommitment, which would have led to dramatic changes in the last two or three months of the financial year. That would have created a real crisis; therefore it was not an option.

The other option was a contingency fund. However, Members must recognise that if we —

David McNarry (UUP)

[Interruption.]

Sammy Wilson (DUP)

I note that Mr McNarry made a comment from a sedentary position, advising me to create a contingency fund, and that the creation of such a fund was his party’s idea. It was not his party’s idea; his party’s idea was to have an even bigger overcommitment.

We must be clear what establishing a contingency fund would mean. Money would be taken from Departments now and placed into a pot to deal with an emergency that might happen during the year. The contingency fund would have to be retained until the end of the financial year, and if an emergency did not occur, a scramble would take place to spend the money. That is not good financial management.

Whatever the option taken, it will have its disadvantages. However, I am coming to the same conclusion as Mr O’Loan: if little money is released through monitoring rounds, perhaps they are not the way forward and we should perhaps examine another mechanism for reallocating funds. That would probably mean creating a contingency fund; however, that option is not necessarily pain free, and neither would it mean that Departments would not lose money.

Mr O’Loan also mentioned the top-slicing of Departments’ budgets to pay for swine flu. That was the only option that was available to the Executive for the release of those funds, after the examination of other areas from which money could be reallocated. The top-slicing arrangement is something from which many Departments benefitted in the past, and it was the only fair way of finding the money for swine flu. However, as the Member suggested, when it comes to longer-term planning we must examine the targeting of non-priorities and not fund those areas.

Stephen Farry (Alliance)

I welcome the September monitoring round, albeit in the middle of October.

Will the Minister clarify the position with respect to the use of the Barnett consequentials for the CSeries project at Bombardier and what is happening to the balance of that fund? Northern Ireland received £116 million over two years for that project. Furthermore, does the Minister recognise that the source of those funds was an economic uplift at a UK level in the form of an economic stimulus? Moreover, surely the example of what the Executive are doing in supporting Bombardier demonstrates that they should be doing more to use resources to support the economy. The point that I would make about —

Francie Molloy (Sinn Féin)

The Member has asked a question.

Stephen Farry (Alliance)

OK. Thank you, Mr speaker is in charge of proceedings of the House of Commons in..." class="glossary">Deputy Speaker. [Laughter.]

Sammy Wilson (DUP)

The Member asked a question early in his contribution and went on to ask several more. However, that is not unlike the Member; he is well known for getting good value when making contributions in the House.

The Member is correct: only one side of the Barnett consequential money that the Executive pushed to next year was used, and that was the capital side.

There is £26·5 million for current spending, which will be available to relieve pressures next year unless a decision is made this year to bring it forward into the current spending period.

With regard to the purpose for which the Barnett consequentials were used, the whole point of devolution is that Westminster will not tell us how to spend that money. There is a mechanism through which we get our share of money that Westminster spends on items that are included in the Barnett consequentials. That money is not ring-fenced or hypothecated; it is simply available to us, and we decide how we wish to spend it. The Assembly has decided its spending priorities.

If the Member looks at what we have done with capital expenditure, he will see that we have spent it in exactly the way in which he wanted it to be spent, which was to promote the economy — the private sector of the economy — a project that will bring in high-level skills, high-value jobs and contribute to economic growth and sustained economic growth over the longer period. Today’s decision falls into line with the purpose for which the extra money was received in the first place, although the Assembly will want to guard jealously its right to make decisions as to how it spends the money that comes as a result of Barnett.

Simon Hamilton (DUP)

The Minister referred to the allocation of £20 million for housing in the June monitoring round, and he will recall the condition that was placed on that allocation, which was that a further £20 million would be released immediately by the Department for Social Development for Egan contracts. Does the Minister share my concern that the Minister for Social Development has confirmed that only £8 million has been released to date? Does he also share my worry that, although the Minister for Social Development has taken the £20 million for capital expenditure, she has not kept up her end of the bargain?

Sammy Wilson (DUP)

First, the Member is correct: when I stood here in July and made a statement on the June monitoring round, I made it clear that there was a clear condition that the £20 million for capital investment that was made available to the Minister for Social Development was in respect of disability adaptations and housing renovation grants. There was a clear condition that, with capital expenditure on a sounder footing, the Minister for Social Development would immediately release the same amount of additional current expenditure to the Egan contracts. That is contained in the Executive minutes and is on record in the Assembly. Indeed, her argument for doing so at that stage was that maintenance projects and contracts had a high multiplier effect, employed a much higher degree of local labour and could help in regenerating the construction industry in local areas. The construction industry, the public and the Assembly have expressed an ongoing interest in the matter, and I will be asking the Minister for Social Development to tell the Executive how much money she has released to the Egan projects, and I will be seeking an assurance that the full £20 million will be released by the end of the year. It is not only the multiplier effect that that will have on the construction industry that is involved; there is also the improvement in the quality and stock of homes.

Barry McElduff (Sinn Féin)

Go raibh maith agat, a LeasCheann Comhairle. Tá ceist agam don Aire, agus ba mhaith liom ceist a chur ar an Aire as a ráiteas.

Will the Minister note the importance of the Places for Sport programme operated by Sport NI? The Committee for Culture, Arts and Leisure considered the September monitoring round at its meeting on 10 September. The Committee is determined that that key programme, which benefits sporting clubs at community level, should be carried on into future funding periods.

Secondly — my question will be specific — will the Minister also note that the Committee is concerned to learn that just over £2 million that had been assigned to the Ulster-Scots Academy has been surrendered back to the Department of Finance and Personnel? That concerns us because the Committee visited various projects over the summer, including an Ulster-Scots community group in Ballymoney that needed £48,000 to continue with its programmes.

Francie Molloy (Sinn Féin)

The Member must ask a question.

Barry McElduff (Sinn Féin)

Will the Minister note the Committee’s interest in both those matters and perhaps place some conditions on the Minister of Culture, Arts and Leisure in future monitoring rounds?

Sammy Wilson (DUP)

The answer to the Chairperson’s first question is that the Minister will make bids for his future budget. If the Places for Sport programme is a priority for the Minister and the Committee, of course the Minister will make a bid, which will be considered along with all other bids.

I am not quite clear on the detail of the Committee’s visit to the Ulster-Scots group in north Antrim, but I am amazed at the Chairperson’s diversity: English, Irish and now Ulster Scots. Perhaps some day he will break into Ulster Scots in the Chamber so that he and my colleague Mr Shannon, who is not in the Chamber at present, can have a conversation.

If the money that that group sought was for an ongoing project, it was probably current expenditure, whereas I understand that the money that is being surrendered is capital expenditure. I think that I am correct in saying that, although if not I will be happy to correct myself in a letter to the Chairperson. It may seem odd that the Minister has surrendered £2 million that had been assigned to the Ulster-Scots Academy when an Ulster-Scots group needs £48,000, but the money could not have been transferred. That is not just a DFP rule but a Treasury rule. The Minister could not have transferred it from capital expenditure to current expenditure, so we are probably talking about two different things. If I am wrong, I will come back to the Chairperson.

Danny Kennedy (UUP)

I am grateful to the Minister for his statement. I wish to ask about OFMDFM departmental savings. Annex A to the Minister’s statement outlines a reduced requirement of £11·5 million under the heading “EU Match Funding”. Will the Minister explain the background to that match funding, what is meant by it, where it comes from and why it is not required at this stage?

On a wider point, can the Minister confirm that the principle of the £20 million first call on available money, an arrangement one of his predecessors and the Minister of Health, Social Services and Public Safety made, still stands and will continue to stand despite current circumstances?

Sammy Wilson (DUP)

On the Chairperson’s last point, I have already given a commitment in two ways. First, the resolution that the Executive agreed this morning included an explicit commitment to look for and find the extra £10 million that is required to facilitate the £20 million first call. Secondly, I made that commitment in my statement to the Assembly. Despite the constrained circumstances, I have made it clear that we will do what we can to meet the commitment to find an additional £10 million.

The figure of £11·5 million that was referred to is matched funding. Traditionally, money is held so that there will not be a hindrance. I will write to the Member on that issue, because I am trying to make out the writing in my notes. As far as I am aware, put simply, that money is held centrally to match fund EU programmes. Perhaps because some of the programmes have not come forward as quickly as might have been expected, it has not been necessary to draw on that matched funding, hence the reduced requirement. It is not OFMDFM money; it is money that OFMDFM holds centrally for EU programmes. That is the position as far as I understand it from the scribble that I have been given, and I hope that that satisfies the Member at a higher level. If he needs more detail, I will drop him a note to explain the exact detail of the money that was not drawn down.

Dolores Kelly (Social Democratic and Labour Party)

I thank the Minister for his statement. I welcome the reallocation of the strategic waste infrastructure fund (SWIF) from the capital cost to the resource cost. I hope that that will enable the Department of the Environment to allocate the resource quickly and appropriately to ensure that Northern Ireland keeps up with its waste management obligations. However, will the Minister assure the House that the SWIF funding has now been placed permanently on that footing so that future monitoring rounds do not have to be used to address the issue and so that the organisations can be allowed to move forward on their obligations?

Sammy Wilson (DUP)

Carte blanche cannot be given for moving money from capital expenditure to current expenditure. As I explained in answer to Mr McElduff, there are rules on the reclassification of expenditure in that way.

I know a bit about SWIF funding because of my previous role as Minister of the Environment. The slowdown in the projects and the decision-making means that it is not necessary to spend all the capital money in this year. Some money was required for areas such as the communications strategy, so reallocations were enabled.

We simply cannot say that, since the money for the waste strategy is from capital expenditure, it can be shifted over into current expenditure. Design work, work on planning permission, consultancy work and so on came from revenue expenditure, so a reclassification was needed. That was perfectly acceptable, because it was anticipated that such work would be covered in the capital cost of a project. The capital project was not progressing, so the money was not available and reclassification was carried out.

The general point is that a capital project of, for example, £100 million may include costs that are regarded as revenue costs because the capital work is not progressing. In such a scenario, that money can be released. As far as I understand it — if I am wrong, I will come back to the Member — a request must be made when there is a disconnect between the project starting on the ground and the preparatory work being done. That is why the problem arose in that case.

Mitchel McLaughlin (Sinn Féin)

Go raibh maith agat, a LeasCheann Comhairle. I take some encouragement from the Minister’s statement and his noting of the fact that improved performance has a direct consequence for the amount of money that will be available in future monitoring rounds. The progress that that displays in project management and financial management must be recognised.

I am also encouraged by the degree of co-operation among Ministers, which the statement acknowledges. Ministers were prepared to take a bit of pain to contribute to the allocation for the Executive’s response to swine flu. That is an encouraging sign.

With regard to the Minister of Health, Social Services and Public Safety’s creative and helpful contribution, I understand that the Minister for Social Development also made a proposition about a major project that will not go ahead as planned. She suggested that she bring forward some £70 million. That would have made a substantial contribution towards the swine flu epidemic as well as to the social housing fund.

Francie Molloy (Sinn Féin)

The Member must ask a question.

Mitchel McLaughlin (Sinn Féin)

Was an opportunity missed?

Sammy Wilson (DUP)

I thank the Minister for his question, albeit a long one. I must say that Ministers did not take the pain easily; they had to be persuaded. They fought valiantly to protect their departmental budgets, as one would expect. To a degree, they had to be dragged towards the pain. However, I suppose that the Member is correct: they took the pain.

Although it was a good example of how Ministers must fight their corner and argue their case, at the end of the day, we took a collective decision on two projects. We also looked for inventive ways of dealing with the issue. However, it was not a painless experience.

The Minister for Social Development offered to make available money from the Royal Exchange project, most of which had been set aside for vesting property. However, due to legal and other difficulties it was anticipated that it would not be spent next year and so could be brought forward to be spent this year.

The problem is that the Royal Exchange project is an important regeneration project in the centre of Belfast, to which private investors have contributed considerable sums in anticipation of help in assembling a site that would enable them to deliver the project. Had the money been brought forward, there would have been an element of bad faith. That would have sent out the wrong signals and put the project in jeopardy.

The difficulty with bringing forward and spending the £70 million in 2009 is that we would have to find it in 2010 or in 2011, which would be even worse, as we will have to deal with an even more constrained capital Budget. Although we cannot foresee circumstances after the election, we know that they will be worse than they are now. The chance of that bid being successful would have been much smaller, and an invaluable urban regeneration project might have fallen by the wayside. I am sure that the Member who is sitting on Mr McLaughlin’s right, Mr Fra McCann, would not have been happy if that had been the case.

For that reason, we decided that it was not a good idea to spend £70 million that had been earmarked for a project that the Executive want to go ahead and which would have substantial benefits for Belfast city centre. To have reneged or even hinted that we would do so would have affected investor confidence

Mickey Brady (Sinn Féin)

Go raibh maith agat, a LeasCheann Comhairle. I thank the Minister for his statement. He has answered some of my questions about money from the previous monitoring round in response to Simon Hamilton. Indeed, it is also relevant to his previous answer.

In the light of continuing and emerging pressures on social housing provision, will the Minister continue to prioritise it if money becomes available in future monitoring rounds? With respect, although I accept that Belfast has priority to a certain degree, the need for social housing in my constituency is as great as it is anywhere.

Sammy Wilson (DUP)

First, as regards the Member’s last point, one has only to look at the number of capital projects and at where money is currently being spent to realise that the Executive are addressing problems right across Northern Ireland.

The Rates (Amendment) Bill, the Final Stage of which took place earlier today, will affect businesses all over Northern Ireland. That is particularly relevant to sub-post offices in rural areas as they will get enhanced help with their rates.

We are also taking a range of other measures. For example, the cap on the manufacturing rate is not specific to Belfast or the greater Belfast area; rather, it applies across Northern Ireland. The measures that we are undertaking apply across the whole of Northern Ireland, and that is right. I do not want people in parts of Northern Ireland to feel that they are not benefiting from the decisions that are being made here; rather, I want people to feel collectively that they have ownership of the project here and of what results from that.

Secondly, priority has been given to social housing. The difficulty is that capital receipts have not been as high as we had anticipated. They are worth about £20 million less than we expected them to be this year. However, Members should not underestimate the fact that the recession has also given us the opportunity to get more for our money. As we all know, prices of new houses have fallen dramatically, in some cases by 40%. However, the Minister for Social Development’s housing budget has not fallen by 40%. Therefore, we should not automatically assume that we will get fewer houses because less money is available. In fact, despite the reduction in revenue as result of the fall in capital receipts, the potential exists to get substantially more for our money by buying wisely, and that is the important point.

Sammy Wilson (DUP)

First, I made it clear that I alone will not be seeking additional money from the Treasury. I spoke to the Scottish and Welsh Finance Ministers, and collectively we will raise the issue at our next meeting with the Chief Secretary to the Treasury. We already raised that issue in writing; however, we have not had a very positive response. Nevertheless, we will not let up on trying to get additional funding.

If anything should qualify for contingency funding from the Treasury, swine flu should, given the nature of the problem and the spending that it entails. However, the Treasury has said that it believes that the devolved Administrations should find the additional money in their budgets. Indeed, it expects the Department of Health in England to find additional money in its budget. The issue is being pursued. Of course, the First Minister and deputy First Minister also raised the issue at the last Joint Ministerial Committee plenary meeting. The two other Finance Ministers and I will follow that up when we meet the Chief Secretary to the Treasury.

The Member asked about making health a priority. I reiterate what I said on about four other occasions — in the agreement that was signed at the Executive meeting; in today’s statement; and in the answers that I gave to Members — we will make our best endeavours to find the £10 million gap in the £20 million first call in the December and February monitoring rounds.

David Ford (Alliance)

I join my colleague Stephen Farry in welcoming the Minister’s “October monitoring round” statement. The Minister has correctly identified that, as Departments become more efficient in spending money, the amount of money that becomes available at monitoring rounds becomes smaller. In that light and without wishing to sound too much like Declan O’Loan, does the Minister agree that it will be necessary to have a proper Budget — however time-consuming and bureaucratic, as he described it, that may be — that can drill down into priorities, rather than merely dealing with money that is voluntarily surrendered by Departments? Does the Minister accept that, although top-slicing all Departments to cover the cost of swine flu may be the only available short-term remedy, it is not a good example of dealing with prioritisation?

Sammy Wilson (DUP)

Seven months in advance of the next financial year, I took the step of identifying the pressures that I knew existed at that stage. Some Members have said that that £370 million might not be the end of the story because, for example, the equal pay claim had not been factored in, and we do not know what the final outcome of that will be. Nevertheless, I gave my Executive colleagues the picture, as I understood it, seven months in advance, so that we could have exactly the type of debate that the Member mentioned.

Instead of top-slicing, I would much rather that we could reassess the relevance of programmes from two or three years ago. Such programmes may have been created with the best of intentions, but we could decide whether those programmes have been effective and whether they should be continued. Some programmes must be given a high priority, and, if we do not have enough money, we could decide to cut those projects that are lower down the priority scale. That would be the sensible way forward and the right way of doing it. However, that still would not deal with an unforeseen crisis.

Knowing the pressures that are coming down the line, we plan ahead and try to deal with those in such a way that they do not become crises. However, occasionally, we will still be hit with things that we did not foresee. Such circumstances can emerge overnight and require payment almost immediately. In those circumstances, going back to the departmental budgets — to top-slice, to take action or to cut a particular programme — cannot be ruled out. No Department is going to offer to supply all the money for an unforeseen issue or emergency, especially if it falls outside that Department’s remit. Therefore, we cannot totally rule out top-slicing.

We will have a debate on prioritisation. To be frank, I do not care if that comes in the form of a ministerial statement or a tabled debate; that depends on how it is to be presented to the Assembly. However, I think that that is probably a much more sensible approach to dealing with those types of pressures.

Leslie Cree (UUP)

I thank the Minister for his statement and his frank and honest answers. I know that he has a difficult job. In light of the fact that the reduced require­ments represent 57·7% of the amount declared at the same stage last year and following the Minister’s announcement that the overcommitment will be significantly reduced, does he believe that there is a danger that the Executive will break Treasury rules this financial year? Can he outline the consequences if that were to happen?

Sammy Wilson (DUP)

Apart from being embarrassing, I believe that the consequences would be quite dire. The Treasury would not look very kindly on that. That is why we could not, as some have suggested, simply fund pressures through over­commitment and why we could not leave the overcommitment at the level at which it stood. Therefore, we put some money towards reducing the overcommitment.

The Member has identified the issue very well: the Treasury will not tolerate overspend. We feel that we have got the overcommitment down to a level that is just on the edge of being prudent. We cannot afford to allow spending to slip and thus increase the overcommitment.

As we approach the end of the year, we will have to tighten up.

The Member mentioned the reduction in requirements. However, even if the trend in that reduction, which is currently 57% of that declared at the same time last year, were to continue in the December and February monitoring rounds, we would probably be in a position to bring the overcommitment down to an acceptable level.

Danny Kinahan (UUP)

I thank the Minister for his statement. He will agree that it is in the public interest to have increased visibility in all departmental finance issues.

Why has the Minister left the departmental bids out of his statement? When will he provide us with the detail of those bids?

Sammy Wilson (DUP)

The departmental bids were left out of the statement, because we dealt with only certain bids. We did not accept the other bids, so we were not considering them. We were able to consider only the bids relating to swine flu and the CSeries project. However, each Committee will be aware of and, presumably, will have discussed the departmental bids; they may even have had some input into those bids.

I am quickly looking through my statement, but it only details the reduced requirements. However, it should be possible to supply the Member with details of all the bids that were made.

Mary Bradley (Social Democratic and Labour Party)

Seven health trusts are telling us that they will overspend by tens of millions of pounds this year if they do not cut front line services. As no more money has been allocated, is the Minister telling those trusts to cut front line services?

Is there any help to address the issues around Civil Service equal pay claims and the relevant back pay, because I do not see any in the statement?

Sammy Wilson (DUP)

All Departments have pressures. Indeed, there was no Department that did not seek additional money for one thing or another. The Member who asked the previous question mentioned departmental bids, and the Committees will be aware of the detail of those bids. Every Department would like to spend more money: that is the nature of any Government Department or business.

The Health Minister has to manage his budget within the agreed limits. I remind the Member that when the three-year Budget settlement was agreed, the Health Minister said that he had got a good deal for health. Those were his words, not mine. He negotiated what he felt was a deal and, like every other Minister, he must live within his allocation. When efficiencies have to be made, I prefer them to be made in ways that do not hit front line services. However, it will be up to the Health Minister and the trusts to decide how to live within their budgets.

The Member’s second point was about equal pay in the Civil Service. We cannot factor in anything for equal pay at the moment; £100 million is available from the Treasury for pressures, including equal pay. I do not know what the final figure for equal pay will be, but, as I said to other Members, if that pressure arises this year, we will have to revisit existing budgets. If it arises next year, it will be included in the debate that the Executive must have about pressures. I have already identified £370 million of pressures. If there are additional pressures as a result of the equal pay issue, they will be included in that debate.

Cathal Boylan (Sinn Féin)

Go raibh maith agat, a LeasCheann Comhairle. Cuirim fáilte roimh ráiteas an Aire. I welcome the Minister’s statement. I refer him to the money for road safety that was returned by the Department of the Environment. The Minister may be aware that road fatalities are up compared with this time last year and, indeed, the year before. Will the Minister clarify what that returned money was for, and does he agree that the Department should use that money properly to address road safety issues and introduce measures to reduce road facilities?

Sammy Wilson (DUP)

Again, the Department of the Environment is responsible for the detail of why that money was returned. I understand, however, that there was a depreciation and cost-of-capital cover which the Department did not require in this financial year. That money could not have been spent on, for example, an advertising campaign. Therefore, it had to be returned.

I would rather see money being returned than simply being spent without any real planning. The proper way to use money which becomes available as a result of a reduced requirement is through a programme of planned spending, rather than spending it quickly. If the Minister identified money that could not be used for the purposes for which it was allocated, then he did the right thing in returning it.

Francie Molloy (Sinn Féin)

As the next item of business is Question Time, I propose, by leave of the Assembly, to suspend the sitting until 3.00 pm.

The sitting was suspended at 2.36 pm.

On resuming (Mr speaker is in charge of proceedings of the House of Commons in..." class="glossary">Deputy Speaker [Mr McClarty] in the Chair)