2008-09 December Monitoring Round and Executive Response to the Economic Downturn

Ministerial Statement – in the Northern Ireland Assembly on 15th December 2008.

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Photo of William Hay William Hay Speaker

I have received notice from the Minister of Finance and Personnel that he wishes to make a statement on the 2008-09 December monitoring round and the Executive’s response to the economic downturn.

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Business, Enterprise and Regulatory Reform), Without portfolio, Shadow Spokesperson (Justice), Shadow DUP Spokesperson (Without Portfolio)

With your permission, Mr Speaker, I will make a statement on the outcome of the December monitoring round and the Executive’s response to the downturn in economic conditions.

Earlier this morning, the Executive unanimously agreed to my recommendations on the response to the economic downturn and to the more general pressures that Departments identified in their December monitoring returns.

As a result of those decisions, I am pleased to announce to the Assembly almost £70 million in special funding allocations, focused on providing support to the local economy at this time of difficulty for business and households.

Later today, the First Minister and deputy First Minister will set out further details of the Executive’s response in a take-note debate. Although a number of challenges face the Executive, the main concern continues to be the impact of the downturn in the economy and, in particular, market conditions that are adversely affecting key sections of the construction sector.

In the early part of the decade, Northern Ireland, like the rest of the United Kingdom, enjoyed an apparently benign set of economic conditions with strong employment growth and rising incomes. However, in recent years, house prices began to rise at an unsustainable rate, creating pressures on first-time buyers in particular. That was followed by energy prices rising to record levels with the associated impact on the overall cost of living. Both bubbles have now burst, but we have yet to see the full benefits of the fall in oil prices, despite the announcement regarding gas and electricity prices — which I am sure that Members welcome. Aside from the general cost of living, the decline in house-building has had a major impact on the construction sector. That is compounded by the crisis of confidence in the credit markets, which has forced economies across the world into recession.

As the scale and nature of the problems facing people in Northern Ireland have changed, the Executive are responding by utilising the limited resources available to them to maximum effect. However, Members will appreciate that as ours is a small, open and regional economy, the Executive — despite their desire to do everything possible — controls only a limited set of levers.

The United Kingdom Government has significantly greater scope through, for example, taxation and social security, to influence economic conditions in the short term, than have the Executive or the Assembly. In recent months, the Chancellor of the Exchequer has taken significant steps to recapitalise the banking sector and has announced in the pre-Budget report a temporary reduction in the level of VAT in order to provide a stimulus to the retail sector.

In addition, bringing forward an increase in child benefit from April to January, which is worth on average an additional £22 to families, and the payment of £60 to all pensioners in the new year, will provide real support to hard-pressed households. There is also support for business, including the decision to defer the increase in the small companies’ rate of corporation tax and, through a new Her Majesty’s Revenue and Customs (HMRC) business-payment support service, allowing businesses in temporary financial difficulty to pay their HMRC tax bills on a timetable which they can meet. The Bank of England has also played a significant role by reducing interest rates to their lowest level since 1951.

The Executive has a key responsibility to ensure that the people of Northern Ireland feel the full benefits of national measures and initiatives. They also need to urge local banks to ensure that the lower cost of borrowing is passed on to households and firms, as well as the recent announcement in The Queen’s speech of additional protection to homeowners at risk of default. Tomorrow, I will be meeting the leaders of the four main local banks to discuss that.

Despite the fall in interest rates, many householders still find it difficult to pay bills. For that reason, I welcome the consultation on a protocol for mortgage repossession cases that has been initiated by the courts in Northern Ireland. I support the stance that repossession should be a last resort, and that all other possibilities should be considered first, to give hard-pressed families every chance to remain in their homes. That move comes in parallel with an initiative by the Northern Ireland Court Service that will provide a free advice service for those involved in repossession proceedings and who do not have their own legal representation.

I turn to the construction industry. The importance of that sector’s contribution to the Northern Ireland economy cannot be understated. In 2007, the industry’s output was in excess of £3·3 billion, which was a record level of output and included unprecedented investment in infrastructure. Therefore, it is of particular concern that the downturn in the housing sector has had such an impact in recent months. Whereas developers, contractors, suppliers, professional firms and many individuals working in that sector have been directly affected, in a close-knit community such as ours, the wider impact of job losses and the credit crunch touches us all in some way.

I also share the concerns raised by all industry stakeholders — many of whom I have met — regarding the need for the planned capital investment that is set out in the investment strategy to be delivered to the marketplace as quickly as possible. Clearly, delivering against our plans in the rapidly deteriorating national and international economic climate is a challenge for Departments individually and the Executive collectively. In particular, significant reductions in the level of forecast receipts — arising from prevailing market conditions — have had to be incorporated into our plans. At this difficult time, that is a challenge faced by businesses and Governments of all political persuasions across the world.

Rather than supporting all the Executive Ministers in rising to that challenge, some Members of the Assembly have sought simply to portray the issue as some sort of black hole in the Budget. That demonstrates not only a complete lack of understanding of the global economic conditions, but also contempt for the people of Northern Ireland, who we are working to serve. The fact that the Executive have put together a package to respond to those emerging issues, while continuing to deliver increased levels of investment across all areas of public service, underscores the fallacy of that argument.

The Executive have also had to manage the implications of recent legal challenges brought to the courts on certain procurements in relation to the investment strategy. Those legal issues will take some time to resolve, and Members will appreciate that I cannot comment further on the specific cases. However, I am determined to ensure that the planned construction of schools and other public-sector infrastructure continues. I can announce today that construction projects that were to be delivered using the framework agreements affected will not be stopped.

Some Members:

Hear, hear.

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Business, Enterprise and Regulatory Reform), Without portfolio, Shadow Spokesperson (Justice), Shadow DUP Spokesperson (Without Portfolio)

Instead, my Department will be working with a wide range of Government construction clients — including the Department of Education — to move the procurement of projects forward as quickly as possible on a project-by-project basis. As a result, I can announce today that contracts worth some £115 million that were due to be delivered by those frameworks will now move ahead, thus avoiding unnecessary delay and allowing those contracts to go to the marketplace in this financial year. Crucially, that means that no construction project — including major projects relating to schools and colleges — will be held up pending the outcome of legal proceedings.

In addition, I have had the opportunity, following the pre-Budget report, to accelerate capital investment from 2010-11 into the two preceding years, with a maximum of £9·4 million being accelerated into the present 2008-09 financial year. I am pleased to announce that the Executive have agreed to my proposal that the full amount is accelerated for this year.

In placing a major emphasis on ensuring that public investment in infrastructure is delivered to plan, the latest forecasts from Departments indicate that the total capital investment this year will be about £1·5 billion. That is the largest level of investment in a single year in Northern Ireland’s history, and it is well over double the level that was delivered by the last devolved Administration.

In addition, expenditure this year is some 40% ahead of this time last year. That level of expenditure represents a real and meaningful achievement by the Executive in the most difficult of circumstances. Furthermore, public-sector investment in infrastructure is due to increase over the remaining years of the investment strategy. The level of planned expenditure for the first three years of that strategy is in the order of £5 billion.

Major infrastructure projects with an estimated value of almost £1·3 billion are already under construction this year. They include seven major projects worth £265 million in the Health Service; three major projects worth £420 million on roads; 10 waste-water projects worth £89 million; the Belfast sewers project worth £127 million; four further education projects worth £83 million; 14 major schools projects worth approximately £233 million; three projects run by the Department of Culture, Arts and Leisure worth £46 million; and three urban regeneration projects worth £26 million. Those schemes are under way in this financial year.

A further range of projects is scheduled to go to the marketplace before the end of this financial year. The total value of those proposed schemes is in excess of £400 million. They include major projects in health, roads, water infrastructure, and schools and colleges. Some examples are: Beechall Health and Wellbeing Centre at a cost of £14·8 million; Shankill Health and Wellbeing Centre at £11·6 million; the A26 Ballee Road East at £7 million; water infrastructure projects at Dungannon and Moygashel worth £26 million; and a major PPP school project amounting to £50 million.

The gross capital investment that is planned for the next two financial years is intended to be well in excess of £3 billion. We are establishing a construction industry forum procurement task group to focus on the key task of ensuring that the projects continue to be delivered on the ground. That will provide an opportunity for a wide range of key industry stakeholders, drawn from the construction industry group, to examine the procurement procedures that are used by the public sector and to increase industry understanding of public procurement.

Small businesses make an important contribution to the Northern Ireland economy, and I encourage them to form consortia to bid for contracts and to look for opportunities in the supply chains of successful tenderers. However, it is also important to maximise the opportunities that small contracting firms have to bid for public contracts. My Department will work with the industry and Government construction clients in order to establish appropriate procurement procedures to achieve that.

Public procurement policy requires that we advertise all procurement opportunities that have a value in excess of £30,000. In order to assist small businesses to respond to those opportunities, the procurement board — which I chair — has now agreed to implement a single e-sourcing system for all its procurement activities. That system will increase the visibility of tender opportunities and improve standardisation of approach to the marketplace. That in turn will help small businesses and will lead to a reduction in the time and cost of bidding.

It is important to ensure that we make every effort to address any impediments to the delivery of projects on the ground. It is often claimed that our planning system can be a major obstacle in the flow of new business for the construction sector. In response to that, the Minister of the Environment and I commissioned the performance and efficiency delivery unit (PEDU) to conduct a review of the processing of planning applications. Working in conjunction with, and with the full and enthusiastic support of the Planning Service, the review team concluded that there was significant scope to improve processing times by better managing the often-repeated and lengthy interactions between agents and consultees. The team also proposed a number of actions in relation to better performance management, the reactiveness of the senior management structure, and a need for short-term interventions in those planning divisions where performance was adrift of the required level.

Both the Minister of the Environment and I endorsed fully the detailed action plan that the Planning Service prepared to address those issues, and we expect to see a measurable improvement in performance in the short term. Once again, this is another example of this devolved Administration delivering on our commitment to proactively challenge and improve public services. I believe that it will pay dividends.

Cash flow is another key issue for local firms at this time — particularly small businesses — given the apparent hesitancy of banks to provide short-term liquidity cover. As a major purchaser of goods and services, Northern Ireland Departments have a key responsibility to provide assistance in this respect.

Each year, central Government in Northern Ireland spend more than £2 billion on goods and services. That is £2,000 million, a significant proportion of which is spent with locally based businesses. Against an economic background of very tight credit terms between businesses, and between businesses and banks, prompt payment by the public sector is essential.

In the current economic climate, we must do all that we can to support the local economy, and a direct way in which we can achieve that is by processing and paying Government bills promptly. For that reason, I have asked all public-sector organisations to reduce their targets for paying approved invoices from 30 days to 10 days.

By reducing the amount of time that businesses may be out of pocket for goods and services provided to the public sector, we seek to help reduce the pressure that local businesses may be under, owing to their cash flows, banking facilities or credit terms with their suppliers.

I have been engaged with our leading banks, and, as I mentioned, I am chairing a meeting of the four main banks to discuss how they might best assist consumers and local businesses through the very difficult economic time. It must be ensured that all assistance schemes, such as the small firms loan guarantee scheme and European investment bank funding are fully utilised.

The focus of my work was not restricted to those who need our help but included those who can help us. As a consequence of sustained dialogue with the Chief Secretary to the Treasury and the Prime Minister, an assistance package has been secured that is worth more than £900 million over this year and next. That includes access to funding to assist with our response to the current economic position, and the removal of significant cost pressures that we would otherwise have faced. Those pressures would have necessitated the diversion of funding away from front-line public services, and I am grateful to the Prime Minister for the personal attention that he has given that issue. We continue to engage on a range of other issues that faces us.

It is not only the construction industry that is feeling the impact of the economic downturn. As the decline in activity persists, local households and businesses are faced with further pressures on top of an increased cost of living in the past year.

Despite the work that has been done, and the work that we will continue to do, the Executive’s response to the economic downturn must go further. For that reason, the main focus of the December monitoring round was on the economy, and not just on the range of other pressures that Departments currently face.

In preparation for the monitoring round, Departments were asked to identify costed measures in response to the economic downturn that could be delivered before the end of the financial year. However, Members will be aware that Departments can do a great deal without the need for significant additional resources. Measures include the debt-advice and consumer-protection work that the Minister of Enterprise, Trade and Investment is undertaking.

All those proposals were discussed in the context of available resources at the Executive meetings of 27 November, 8 December and 11 December, and at the Executive subgroup meeting on 4 December.

The Executive concluded the September monitoring round with an expenditure overcommitment of £65 million. That has been offset by £72·6 million of reduced requirements that Departments identified, and a small amount from the pre-Budget report.

The Executive entered the December monitoring round with a capital-expenditure overcommitment of £103·2 million. That follows the suspension of the Workplace 2010 procurement process and the anticipated shortfall in capital receipts as a result of the capital-assets realisation team’s work. That was offset by £11·1 million from the pre-Budget report and by £31·8 million of reduced requirements.

However, the Executive were rightly concerned that the relatively low level of capital-expenditure reduced requirements meant that they would not be in a position to provide a sufficiently substantive response to the downturn in economic conditions. Therefore, Departments were asked to reconsider their capital-expenditure requirements for the remainder of the financial year. That resulted in a further £36 million of easements being identified, which were then available for the Executive to allocate.

The low level of capital reduced requirements meant that there was less for the Executive to reallocate but, as I have indicated, it also meant that more capital projects are being taken forward, hence providing immediate support for the construction sector, rather than those funds being delayed by reallocation as part of the monitoring process.

This implies, in the entirety of 2008-09, an additional £270 million in net capital expenditure, and highlights the most significant action that can be taken by the Executive and Departments in support of the local construction industry — to deliver on the ambitious plans contained in last year’s Budget.

The Executive’s key decision was how much should be allocated to the proposed measures in response to the economic downturn, against the departmental pressures identified in the December monitoring returns. Based on careful consideration of the proposals and in response to the economic downturn, the Executive have agreed the following package of measures, which focus on the construction sector and are designed to have the most immediate impact.

There will be £20 million for the farm nutrient management scheme, which has buffered the construction sector from the downturn in the property market. That funding allows for the completion of schemes in which 40% of funding comes from individual farmers, thus leveraging further support for construction firms. The extra allocation will provide additional work for construction firms worth more than £33 million. The entire scheme is worth more than £200 million to the sector. Schools maintenance will be allocated an additional £4 million; roads structural maintenance will receive £2·5 million; and there will be £1·8 million for public-transport capital works. Those measures will provide extra work for the construction sector at very short notice and improve our public infrastructure.

Fuel poverty has been at the heart of he Executive’s discussions. I welcome today’s announcements that NIE Energy’s electricity tariff will be reduced by 10·8% from 1 January 2009; that Phoenix Supply plans to reduce its prices by 22·1% from 8 January 2009; and that Firmus Energy will further extend its price cap until February 2009, in order to help customers to budget their energy needs into January — usually one of the coldest months of the year. I commend everyone involved for their work in ensuring that the tariff review process was completed speedily, which enabled those welcome reductions to be announced before Christmas.

However, the Executive believe that, at this stage, they can, and must, do more to help offset the impact of increased costs already endured by households. In December monitoring, the Social Development Minister proposed that 65,000 households should receive support with their fuel bills this year. However, I believe that we must go further.

Some Members:

Hear, hear.

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Business, Enterprise and Regulatory Reform), Without portfolio, Shadow Spokesperson (Justice), Shadow DUP Spokesperson (Without Portfolio)

It is for that reason that I today announce £15 million for fuel poverty, which amounts to a £150 payment to 100,000 households in receipt of income support or pension credits. The Office of the First Minister and deputy First Minister (OFMDFM) will state later today how those payments will be facilitated. That money will provide additional help to 65,000 households on income support, and to a further 36,000 on pension credit. Pensioners will receive the £150 on top of their winter fuel allowance of up to £250 for those aged 60 to 79 and £400 to those aged over 80.

In addition, the Executive also agreed to the following allocations. There will be £500,000 for flooding hardship in agriculture. With the downturn in the economy expected to place significant downward pressure on the price of agricultural produce, that funding will put those farmers already suffering because of the severe flooding in the summer in a more stable position as they move into increasingly difficult trading conditions.

I also propose to make available £700,000 for the fishing industry in respect of harbour and light dues, so as to provide some respite in the face of rising input costs and falling quotas.

I also announce a further £20 million of current expenditure to deal with a range of other pressures that Departments have identified: £1·6 million to the Department of Health, Social Services and Public Safety (DHSSPS) for children’s funds, which follows agreement from relevant Ministers about highest-priority projects; £5 million to DHSSPS for budget flexibility, which represents a third tranche of available funding to be allocated to that Department during the year; £4 million is a further contribution to the increased cost of the special purchase of evacuated dwellings scheme, although the Department for Social Development (DSD) must take steps to meet the remainder of additional costs; £3 million to tackle pressures in a range of business areas in the Department for Regional Development (DRD); £2·6 million to the Department of Education to fund back pay and increased pay costs for part-time youth workers, following agreement on a revised pay structure; £2 million to the Department of the Environment (DOE) in respect of lost income for the Planning Service from lower than expected development activity; and a further £1·5 million to the Department of Agriculture and Rural Development (DARD) to deal with pressures in respect of animal health, because the rising market price of animals has implications for the level of compensation payments.

Most available capital expenditure is required to fund a specific package of measures in response to the economic downturn. However, it was also judged that there is scope to make a further allocation, on top of those in the previous monitoring round, of £5 million to the Department for Social Development for the housing programme. The consequence of those current and capital expenditure allocations is that the Executive will leave the December monitoring round with a planned over-commitment of £75 million in respect of current expenditure, and £10 million in respect of capital investment.

The fact that the Executive have been able to respond to those important issues serves to illustrate what can be achieved by a fully functioning devolved Administration. However, as I have already explained, much of the normal business in which the Executive and Departments engage will directly benefit Northern Ireland’s economy through capital investment and other public spending.

It must not be forgotten that although single, high-profile initiatives are, of course, valuable, often the routine and sometimes unglamorous business of day-to-day Government can make the biggest difference. Simply reducing Departments’ underspend and focusing on delivering the Executive’s well-crafted and ambitious plans will provide much of the support that is needed.

The Northern Ireland Executive have limited tax-raising powers at their disposal. However, I want to make further announcements on areas for which we have responsibility. The Executive have already taken measures to freeze the domestic regional rate, to defer water charges, and to introduce a concessionary fare scheme, as well as plans to abolish prescription charges. In addition, I have examined how reform of the rating system can provide further assistance. Members will be aware that my Department has put several measures in place in the rating system that already help households and businesses, and which will continue to provide support during these difficult economic times.

On the domestic side, the regional rate has been frozen at 2007-08 levels for the current financial year, for the next financial year, and for the financial year after that. Coupled with deferment of water charges, that will lead to substantial savings for many families. As a result of the decisions that have been taken on the regional rate and water charging, the average householder will be more than £1,000 better off during the current Assembly term than would have been the case under direct rule.

The lone pensioner allowance was introduced in April 2008. It provides pensioners who are over 70 years of age and who live on their own with a 20% reduction in their rate bill. Already, more than 20,000 pensioners have benefited from the allowance. Changes to the rules on savings in the rate relief scheme also make it easier for pensioners to claim relief. Recently, I have also set out my plans to introduce a rate deferment scheme to allow pensioners, if they so choose, to defer payments of their rates bill.

Work has also been taken forward alongside the Department for Social Development to improve the take-up of rates relief and to ensure that people who are entitled to relief receive it. At present, that is vital. Having considered the current situation and the best way forward for households and businesses, I intend to go further.

Shortly, I will bring forward details of the scheme that I announced a few months back, which, from 2010 onwards, will provide a rate rebate to people who carry out energy-efficiency improvements by bringing their homes up to modern standards of insulation. That simple step will provide an added incentive to householders to invest sensibly and effectively, help to cut Northern Ireland’s energy bill and put a little more money into people’s pockets.

A further measure that I will take forward relates to my earlier proposal to provide a five-year rates holiday to zero-carbon homes. Following public consultation earlier this year, I was persuaded to go further and to extend the scheme to include a two-year rates holiday for new low-carbon homes. That will further help house-builders by encouraging demand for energy-efficient housing, and, therefore, will provide a double benefit.

On the business front, industrial rates have been frozen at 30%, which I am sure is already providing a welcome boost to many in the manufacturing sector. Rate relief is already being provided to the freight and transport sector, which is benefiting many of our important docks and transport companies. However, I intend to provide further support to local business through further changes to the rating system. Today, I can announce that I intend to take forward a proposal for new legislation to allow a targeted small-business rates-relief scheme to be introduced.

Some Members:

Hear, hear.

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Business, Enterprise and Regulatory Reform), Without portfolio, Shadow Spokesperson (Justice), Shadow DUP Spokesperson (Without Portfolio)

Importantly, that scheme will be funded centrally and not by charging other ratepayers more. The process of bringing final proposals to the Executive and taking enabling legislation through the Assembly means that, if it is passed, the scheme will come into force in 2010. However, it is also necessary to give further help that will take effect as soon as possible.

Members will be aware of the announcement at the time of the last Budget that the non-domestic regional rate — which applies to all businesses — would increase only in line with the forecast inflation at that time over the life of the comprehensive spending review period, so as to provide much-needed certainty for businesses moving forward. However, to ensure that we provide much-needed support quickly and effectively, I propose — as an interim measure — that non-domestic rates should be frozen in cash terms for 2009-2010. That will further enhance the competitiveness of local firms, protect jobs and incomes, and represent a real saving for all the hard-pressed businesses operating in Northern Ireland during these difficult times. The measure will be worth almost £8 million to Northern Ireland businesses in 2009-2010.

Some Members:

Hear, hear.

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Business, Enterprise and Regulatory Reform), Without portfolio, Shadow Spokesperson (Justice), Shadow DUP Spokesperson (Without Portfolio)

The Executive entered this monitoring round at a time when economic conditions were in decline across the world. There is little indication that the end is in sight, despite the unprecedented measures that have been taken by a number of national Governments. The changing economic conditions impact on us all, whether in household bills or the prospects of local business.

The public sector has been described as being a “cushion” for the Northern Ireland economy, but it must be recognised that the downturn has also impacted on the level of resources available to the Executive. Today’s announcements show that we are taking action by introducing a series of measures that will provide maximum benefit to those areas most in need, while recognising the financial constraints that we face. Within the powers that are open to the Executive, this package is good for business, good for the construction industry and good for families. I commend the statement to the Assembly.

Some Members:

Hear, hear.

Photo of Mitchel McLaughlin Mitchel McLaughlin Sinn Féin

Go raibh maith agat, a Cheann Comhairle. I welcome the statement, and I commend the Minister, his Executive colleagues and his officials for taking forward such a comprehensive package in exceptionally difficult circumstances. In particular, we should welcome the meeting with the local banks; the initiatives on procurement, which are vital; and the planning-reform process that has already started. The small and medium-sized enterprise (SME) sector will particularly welcome the small-business rates-relief scheme, although there may be some concern that it will not take effect until 2010, because the wolf is already at the door in many cases.

I would hope that the Minister, given, I suppose, the necessary cross-party support, would possibly be open to reconsidering that timeline.

For some time, the Committee for Finance and Personnel has been highlighting Departments’ underperformance in financial forecasting and monitoring. Given the current economic climate, it will be intolerable if previous patterns of departmental underspend are repeated at the end of the financial year. I welcome the Minister’s comments on expenditure and the fact that we are 40% in advance of last year’s position. Last June, the then Minister of Finance and Personnel, Peter Robinson, spoke of setting incentives and sanctions at organisation and individual levels in order to raise the standard of financial management in Departments. Can the Minister advise whether progress has been made on establishing such incentives and sanctions?

The Committee for Finance and Personnel has received reports that other Committees are experiencing difficulty in obtaining timely financial information — including on monitoring rounds — from their Departments. How important is that with regard to the scrutiny role of Committees? Has the Department of Finance and Personnel (DFP) considered what immediate pre-emptive measures Departments can take in order to avoid significant end-year underspend?

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Business, Enterprise and Regulatory Reform), Without portfolio, Shadow Spokesperson (Justice), Shadow DUP Spokesperson (Without Portfolio)

I thank the Chairperson of the Committee for Finance and Personnel for his comments. I agree on the issue of underspend, and I am grateful for the Committee’s co-operation and work on that subject. As I said in my statement, it is obviously good that money is being spent from capital budgets because that means that work is being delivered on the ground. However, we must guard against a situation whereby money remains unspent in capital budgets at the end of the year. I am monitoring that situation closely, and I am grateful for the Committee’s assistance in monitoring that, too. I am sure that each departmental Committee will keep that matter under review.

The Chairperson referred to the timeline for legislation. I want to enact legislation that relates to the small-business rates relief scheme as quickly as possible, and I want it to be up and running by the start of the new financial year in April 2010. Therefore, I look forward to MLAs’ co-operation on that issue, which will be widely welcomed by businesses in Northern Ireland. As I said in my statement, however, the Department is already taking action in order that some help will come through to businesses from April 2009 by freezing in cash terms the expected increase in the regional rate for businesses.

The Chairperson raised financial management issues, which the Department will continue to discuss with him and the Committee. I am conscious of the Committee’s views on those matters, and I assure the Chairperson of my continued co-operation in achieving our common purpose, which is to ensure that we get the best value for money from every pound of public expenditure in Northern Ireland for the benefit of all our people. That is why we are here.

Photo of Simon Hamilton Simon Hamilton DUP

I am sure that the House and, more importantly, the people of Northern Ireland are grateful for the Minister’s statement. I echo the comments of the Chairperson of the Committee for Finance and Personnel in welcoming the freeze on business rates — which will be a real-terms cut over the period — and the prospect of a small-business rates relief scheme.

The Committee for Finance and Personnel has taken a long-standing interest in the important ongoing Civil Service reform programmes. During the previous monitoring round, the House was told that improved rates collection from Land and Property Services would be used to fund those Civil Service reform programmes. Does the Minister still expect those important programmes to be delivered in the allotted timescales?

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Business, Enterprise and Regulatory Reform), Without portfolio, Shadow Spokesperson (Justice), Shadow DUP Spokesperson (Without Portfolio)

I am grateful to the Deputy Chairperson of the Committee for Finance and Personnel for his remarks. He referred to the £1·5 million that was allocated to address the backlog in rates arrears during the September monitoring round. Although that matter does not impact on councils’ expenditure, we must address the issue.

Of course, all of us are conscious that households and businesses are facing difficult times with respect to the bills that they have to pay. Nevertheless, that work is progressing. The money that is to be raised is to ensure that reforms take place without any extra call on money that would be spent on front-line services.

It is important to note not only the measures referred to by the Member but all the measures that have been initiated through rating reforms, this year and last year, that are bringing real benefits to households and businesses in Northern Ireland.

Photo of David McNarry David McNarry UUP 12:45 pm, 15th December 2008

I welcome the Minister’s statement, although he will appreciate that I will insist on disagreeing with the point that he made about the hole — and I hope that he is not digging one for himself and the economy. However, every little bit helps.

I welcome what he said about the vulnerable, and I particularly appreciate the relief he has offered to fishermen, including those in my own constituency. It is also very good of him to help the Father of the House over Christmas with the little bonus he has announced today. Every little bit helps.

The Chancellor of the Exchequer said that he expects the economy to be out of recession by the third quarter of next year, yet most economists predict that it will be much later, in 2010, before there is an upturn. Does the Minister agree with the Chancellor, or does he share the prediction of the economists? What contingency arrangements has the Minister in mind to assist businesses, large, medium and small, through the next two years?

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Business, Enterprise and Regulatory Reform), Without portfolio, Shadow Spokesperson (Justice), Shadow DUP Spokesperson (Without Portfolio)

I welcome what the Member has said about the measures that I have announced. He mentioned the black hole, although he did not dwell on it as much as he normally does, because he is beginning to see light at the bottom of that hole. I hope that as he continues to study the figures in more detail, he will increasingly realise the fact of the matter. I have set out the financial position, and it is clear how we are going to deal with those issues.

The Member mentioned economists; I will not get into the business of speculation or forecasting because one will get a different prediction from each economist one meets — I see that the Member is acknowledging that by nodding his head. If we are now going to listen to economists predicting when we will get out of this downturn and how things are going to work out, we should remember that six months or a year ago none of those economists predicted that the economy would be going into a downturn to the extent that it has done so. The vast majority of them were not predicting the current situation facing the banks in relation to the credit crunch or the problems with lending. Those are issues that have arisen now. Had there been consensus that this would happen, some economists would have been saying something different than what they said at the time.

I have announced substantial help for businesses. The Member will acknowledge the fact that a small- business rates-relief scheme will be introduced in Northern Ireland for the first time. In April 2009, we will take measures to remove £8 million of costs that would have been paid by businesses through rates. We have also welcomed the changes made by the national Government in the pre-Budget report, and are working with the Government on those changes — including deferment of corporation tax for small businesses and the fact that they can now spread those payments across a longer period. We will be working with the banks — and I have already been speaking to representatives of the banks and will do so again tomorrow — on the need to ensure that there is a maximum take-up of the small-loans guarantee fund and the European Investment Bank route.

It is right to point out that the Executive’s and the Assembly’s decision to endorse putting the economy at the centre of the Programme for Government has been entirely vindicated by events. Had that not been done, Northern Ireland would be in a much more difficult position now than it is. I am sure that the Member will agree that what I have announced today — building on what has already been announced, and taking account of the 30% cap on manufacturing rates, and a lot of other issues — shows that a substantial amount is being done for businesses. We will continue to work with the Construction Industry Forum for Northern Ireland, the Federation of Small Businesses, the Confederation of British Industry, the Institute of Directors, and others.

Photo of Alasdair McDonnell Alasdair McDonnell Shadow SDLP Spokesperson (Health), Shadow Minister (Europe), Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson (Northern Ireland)

I thank the Minister for his statement. I note too the mutual admiration society set up by McLaughlin. I hope that that is not a reflection — and I see that he is on the run — of the fact that there have not been any significant cuts in the budgets of Departments that are headed by the DUP or Sinn Féin. I do not have tables with me to make it exactly clear, but — [Interruption.]

Photo of Alasdair McDonnell Alasdair McDonnell Shadow SDLP Spokesperson (Health), Shadow Minister (Europe), Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson (Northern Ireland)

I want to know why the attacks on the Department for Social Development, in particular, have been so ruthless. According to my calculations, the DSD budget has been slashed by some £30 million. I — [Interruption.]

Photo of Alasdair McDonnell Alasdair McDonnell Shadow SDLP Spokesperson (Health), Shadow Minister (Europe), Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson (Northern Ireland)

If the heckling could be stopped, I would like to know whether the Minister thinks that it is a good thing to attack the homeless and the vulnerable at this time. If I am wrong — [Interruption.]

Photo of Alasdair McDonnell Alasdair McDonnell Shadow SDLP Spokesperson (Health), Shadow Minister (Europe), Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson (Northern Ireland)

If I am wrong, all I want is for somebody to clarify what the net addition or reduction is to the Department for Social Development’s budget in the December monitoring round. I may have got it wrong, and I would be very glad for the Minister[Interruption.]

I will stand corrected if I am wrong, but it strikes me that — [Interruption.]

Photo of Alasdair McDonnell Alasdair McDonnell Shadow SDLP Spokesperson (Health), Shadow Minister (Europe), Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson (Northern Ireland)

My figures suggest that the budget that is meant to help the homeless and the vulnerable has been slashed by £30 million. Let somebody put me right.

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Business, Enterprise and Regulatory Reform), Without portfolio, Shadow Spokesperson (Justice), Shadow DUP Spokesperson (Without Portfolio)

The Member talked about a mutual admiration society, but he is actually quite amiable and friendly in private. I am sorry that he felt the need to say that. However, he admitted that he was seeking information rather than making an assertion, so I accept that he may not be totally au fait with the situation.

The Department for Social Development stressed that the issue of fuel poverty was the priority in its approach to the December monitoring round and in relation to economic hardship. Our fuel-poverty measures go further than those sought by the Minister for Social Development. We are allocating £15 million to assist 100,000 people — including pensioners — with their winter fuel payments. The Minister for Social Development’s proposal did not include those who receive pension credit, but this proposal does.

Some Members:

Hear, hear.

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Business, Enterprise and Regulatory Reform), Without portfolio, Shadow Spokesperson (Justice), Shadow DUP Spokesperson (Without Portfolio)

I am sure that Members of this Assembly and people who receive pension credit will be delighted with that announcement.

During the last December monitoring round, £15 million was allocated for social housing. This time, £5 million has been allocated to social housing, and there is still the February monitoring round and the end-year position to come. Over the next three years, £925 million will be allocated to the social-housing budget. After reading the facts of the matter, how anyone can suggest that that is some kind of slash to the DSD budget is beyond me. I put on record that no budgets have been cut. As regards the Departments that are under the control of the Democratic Unionist Party, I understand that the only change that may be made is £2 million to cover a shortfall in receipts in relation to planning.

The Department of Enterprise, Trade and Investment (DETI) has not been allocated any extra moneys; neither has the Department of Culture, Arts and Leisure (DCAL) — despite surrendering moneys. That must also be put on record. The Executive Ministers agreed unanimously that the allocations — within our limited constraints — should be focused on the areas that can best help our construction industry, households and businesses. In the circumstances, we have formulated a package that will be warmly welcomed by many people throughout Northern Ireland.

Photo of Stephen Farry Stephen Farry Alliance

I thank the Minister and his Executive colleagues for the statement. The Alliance Party welcomes some of the new measures that were announced today. However, I should stress that several existing departmental policies have been re-announced.

Does the Minister share my disappointment that, due to the way the Executive cut the Budget, we are not able to do more to accelerate the rate of capital investment in Northern Ireland? Our colleagues in Scotland are investing an additional £100 million in social housing and, in England, the Government are investing an additional £1 billion. Furthermore, in Scotland, an additional £260 million is being invested in capital schemes and, in England, and additional £500 million will be invested in the green economy. Why are pro rata investments not being made in Northern Ireland?

Furthermore, will the Minister explain how he intends to persuade the Treasury that fuel credits meet the parity principle?

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Business, Enterprise and Regulatory Reform), Without portfolio, Shadow Spokesperson (Justice), Shadow DUP Spokesperson (Without Portfolio)

I can assure the Member that there is no difficulty in respect of his latter point.

Although I am glad that the Member welcomed some aspects of my announcement, I recognise that he must carpet some issues and, therefore, in his first point, he picked on procurement. However, the Member has chosen bad ground on which to take issue with the Executive. Already this year, £1·3 billion is being spent on construction and capital projects in Northern Ireland. In 2003-04, that figure was £676 million, so there has been a massive increase — we are 40% ahead of where we were last year.

In addition, in order to accelerate matters, two framework projects, which are under attack due to legal challenges and which would otherwise have caused other projects to be delayed, possibly until next year, will be removed from the procurement process framework and secured by individual, project-by-project procurement. That will ensure that approximately £115 million of construction work and capital investment in schools, colleges and elsewhere will proceed this year. Therefore, we are taking action to deal with the points that the Member raised.

The Member said that some of my announcements are not new. However, the small-business rates-relief scheme is new; the measure to address the amount of rates that businesses pay is new; fuel credits are new; we are introducing new procurement measures; and we are moving forward with PEDU in a new way. Therefore, when the Member examines the facts, he should come to a slightly different conclusion. Nevertheless, I welcome the fact that he welcomed some aspects of my statement, and I entirely understand that he must say some things for political reasons.

Photo of Adrian McQuillan Adrian McQuillan DUP

I welcome the Minister’s statement, which is positive and constructive. Given the importance of efficiency targets, what action has the Minister taken to ensure that efficiency savings do not impact on front-line services? In addition, will the Minister update Members about the situation in respect of civil servants’ back pay?

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Business, Enterprise and Regulatory Reform), Without portfolio, Shadow Spokesperson (Justice), Shadow DUP Spokesperson (Without Portfolio)

I thank the Member for his question. It is up to each Minister, and his or her Department, to consider efficiency savings and to produce proposals. In addition, no doubt, they will speak to their Committees about such matters, which will, as they have already, be subject to debate in the Assembly.

As for the matter of equal pay, as I told the Assembly recently, I am glad to say that intensive engagement with the Chief Secretary to the Treasury and the Prime Minister resulted in assurances that pressures that the Executive and the Assembly would otherwise have faced need not now be faced.

One matter that must be addressed is civil servants’ equal pay. However, as a result of the work that we have undertaken, we are now in a much better position to do that. It is my and my Department’s desire to settle that matter as quickly as possible — we must get money into people’s hands and pockets, not only for their sake, but in order to boost the economy. Therefore, to ensure that money is paid out, in the coming days my officials will engage intensively with individuals and with the trade unions.

Photo of Martina Anderson Martina Anderson Sinn Féin 1:00 pm, 15th December 2008

Go raibh maith agat, a Cheann Comhairle. I thank the Minister for his statement, and I note his comment that this year’s total capital investment will be double the amount that was spent, in the same period, under the previous Executive. I would have expected that fact to have elicited a reaction from other parties.

As a member of the Committee for the Office of the First Minister and deputy First Minister, I have heard a great deal of evidence from across the North, from many stakeholders and people who are suffering as a result of the levels of poverty and deprivation that exist across our society. The Minister’s announcement of £15 million to alleviate fuel poverty — including help for pensioners, which was not in the previous proposal — will be welcome news for many people.

However, today’s statement must be about more than simply reallocating moneys to programmes and projects. We must ensure that those moneys will be spent effectively and efficiently. I wish to ask the Minister about the procurement task group. If the Government are to construct buildings or maintain roads, schools, houses or bridges, or whatever else the Executive will do, can the Minister influence the terms and conditions of the contracts, so that the social requirements that are built into procurement contracts that were announced earlier this year can be implemented in a way in which will result in the creation —

Some Members:

Ask a question.

Photo of Martina Anderson Martina Anderson Sinn Féin

— of jobs for the long-term unemployed and the establishment of apprenticeships? I was asking a question.

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Business, Enterprise and Regulatory Reform), Without portfolio, Shadow Spokesperson (Justice), Shadow DUP Spokesperson (Without Portfolio)

I thank the Member for her question and for raising that issue. [Laughter.] She and other Members will know that environmental and social guidelines exist for the procurement process. Therefore, that issue has been taken on board.

We recognise that, when seeking best value and ensuring that the best projects are advanced in the best way, there are several dimensions to procurement. DFP’s Central Procurement Directorate has been working with other Departments and centres of procurement expertise to develop the type of proposal that the Member mentioned. We recognise the issue, and I am sure that Members will continue to raise it and to monitor my Department’s progress, and I welcome that.

Photo of Ian Paisley Jnr Ian Paisley Jnr DUP

Does the Minister realise that, by making such a statement on 15 December, he is in great danger of being mistaken for St Nicholas? Perhaps the new St Nigel of December will come more frequently at Christmas, bearing such welcome statements and good gifts.

I represent an agricultural constituency, so I welcome most the benefits for the farming community that the Minister mentioned, as well as those that he has identified for small-business users.

All Members received a Christmas card this morning from the Scrooge of the Executive, the Minister for Social Development, which indicated that she wants to share the future. Does the Minister of Finance and Personnel accept that the Minister for Social Development did not want to share enough when it came to the fuel-credit scheme? We very much welcome the Executive’s more ambitious action to ensure that more people — indeed, 40,000 more — will benefit from the fuel scheme that Minister Dodds has announced today.

Will the Minister tell the House what lies behind the allocation of £4 million to the special purchase of evacuated dwelling scheme? That signifies a worrying trend to those of us who are interested in the security and policing of our country.

Finally, I understand that the Minister has identified an additional £5 million that can be allocated to the social housing programme. That represents another bail-out of the Department for Social Development. When will the Minister stop bailing out DSD and insist that the Minister for Social Development runs her Department efficiently?

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Business, Enterprise and Regulatory Reform), Without portfolio, Shadow Spokesperson (Justice), Shadow DUP Spokesperson (Without Portfolio)

I am not sure about being compared to St Nicholas; I would have to grow a beard pretty quickly.

It is worth re-emphasising that, according to what we heard from DSD, clear emphasis was placed on fuel poverty. We have looked at that issue.

The Assembly and the Executive must recognise also that an enormous amount of money has been allocated to the warm homes scheme. That is a welcome initiative that was introduced by the previous devolved Administration and one under which good work continues to be done. I know that a review is under way to examine how that scheme can be made to work even more effectively.

We have gone further than what was proposed, and the addition of 35,000 to 40,000 pensioners to the pension credit scheme will be seen, especially by the older folk, as a very positive development at this difficult time.

The special purchase of evacuated dwelling scheme (SPED) is applied to individuals or families who have to move from their homes after the Chief Constable has certified that security information about them has been received. The Housing Executive is obliged to purchase the dwelling to enable the individual or family to move. It is concerning that the budget for the scheme is on the rise, and it is a matter for the Chief Constable and the Department for Social Development to discuss that in more detail. At a time when we are under budgetary pressures and when money is tight, it is deplorable that more people are being moved out of their homes under the SPED scheme, thereby bringing about the requirement for more money for the scheme.

Mr Paisley Jnr mentioned social housing. Over the next three years, £925 million will be spent on housing in Northern Ireland. The £20 million that has been allocated in the September and December monitoring rounds will be of enormous help to the social housing budget. The February monitoring round and the end-year position will provide an opportunity to consider further the social housing budget.

I can respond only to the bids that I receive and to the emphasis and priority that Ministers place on them. If emphasis is placed on a particular area of spending, we will respond to that. No Minister will receive all their bids or, indeed, the full amount of their bids. There is simply not the flexibility to do that, unless an underspend and reduced requirements are declared to the Executive. One must remember that we are not obtaining new sources of money; we are receiving money that has been reduced by other Departments and allocating it to other Departments.

Photo of Roy Beggs Roy Beggs UUP

I also thank the Minister for his statement, and I note some interesting changes in it. In 2006-07, the level of planned overcommitment was some £130 million, yet actual underexpenditure was over £250 million. However, the previous Finance Minister reduced the level of overcommitment to £100 million. Does the Minister agree that in extending belatedly the amount of overcommitment, he is reversing the decision of his predecessor and that he will be implementing one of the ideas that was suggested by the Ulster Unionist Party in its submission on the draft Budget?

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Business, Enterprise and Regulatory Reform), Without portfolio, Shadow Spokesperson (Justice), Shadow DUP Spokesperson (Without Portfolio)

I do not accept that at all. In the day that is in it, given the significance of the announcements that are being made, that sort of point will be lost on 99·99% of the population. It is interesting to hear what the Member is saying, because another member of his party talks continually about the black hole. If we were to go down the road of ever-increasing overcommitment, which is what he is talking about, we would be storing up more of a black hole.

We have taken a prudent and sensible approach that is based on previous experience as against what Departments are saying to us about the current level of expenditure. The position changes from year to year, and in this financial year, Departments are telling my Department and I — and that information is all that I can go on — that they are monitoring carefully their spending position, especially their capital expenditure, and that things are tighter this year than they have been in previous years.

However, I note that the Member generally welcomed the statement and the various announcements that were contained in it.

Photo of Declan O'Loan Declan O'Loan Social Democratic and Labour Party

I thank the Minister for his statement; it contains some good measures. However, I register a complaint that the copies that were circulated were not accompanied by the usual tables showing the full reductions and allocations across all Departments. Mr Speaker, I ask you also to consider that omission.

The Minister said that no budgets have been cut, and I know that he would not want to mislead the Assembly. Will he confirm that, in this monitoring round, the funding to the Housing Executive’s capital maintenance programme has been reduced by £30 million? Work under that programme is carried out by small and medium-sized building firms, and the materials come from small suppliers across Northern Ireland. Will he confirm, therefore, that the net effect of his monitoring round on the construction industry is not to benefit it but to damage it considerably?

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Business, Enterprise and Regulatory Reform), Without portfolio, Shadow Spokesperson (Justice), Shadow DUP Spokesperson (Without Portfolio)

I do not know where the Member got that information. In fact, an extra amount of £5 million, on top of £15 million in the last monitoring round, has been allocated to social housing. Every Department submits bids due to shortfalls, and I attempt to meet them. The Department for Social Development is required, as is every other Department, to manage its resources.

I have not made a cut, and I have not slashed the funding. How anyone could perversely interpret what is being done is beyond me, unless it is simply a wilful misinterpretation. However, it is interesting that the SDLP Members have not even mentioned fuel credit or the extra investment to tackle fuel poverty. None of them even said that they are glad that the measures that I announced go further than their Minister’s proposals. Instead, the SDLP is considering how else to have a go.

Every Department faces pressures and shortfalls. My Department met part of the shortfall in September and is meeting a further part now. The year-end position will be considered, and the February monitoring round is yet to come. The investment in social housing has not been reduced — it will, in fact, receive more money.

Some Members:

Hear, hear.

Photo of Mickey Brady Mickey Brady Sinn Féin

Go raibh maith agat, a LeasCheann Comhairle. I thank the Minister for his statement, and I welcome the inclusion of pensioners in the package on fuel poverty. The arrangements for making payments are to be announced later today; will the Minister assure Members that payment to those in greatest need will be expedited as much as possible? Go raibh maith agat.

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Business, Enterprise and Regulatory Reform), Without portfolio, Shadow Spokesperson (Justice), Shadow DUP Spokesperson (Without Portfolio)

It is important that the extra money that I announced for people on income support and poorer pensioners gets into their hands and pockets as quickly as possible. The First Minister and deputy First Minister will announce the details of the required legislation. I hope that most Members will agree that payment should be expedited, through an urgent procedure if necessary, to ensure that the power is activated as soon as possible. I agree with the honourable Member on that point.

Photo of Mervyn Storey Mervyn Storey DUP

I welcome the Minister’s statement, particularly the announcement of an additional £4 million for school maintenance and a further £2·6 million to fund back pay and increased pay for part-time youth workers. I should also place on record the appreciation of the Education Committee that school building projects have been taken out of the framework and will now proceed, because that issue has been raised, and it causes grave concern.

The recent history is one of significant underspend, and, if press reports over the weekend are to be believed, the Minister spends more time in his Department than the Minister of Education does in hers. Taking that into account, will the Minister assure the House that he is confident that sufficiently robust systems are now in place to secure the annual capital spends in all Departments, particularly the Department of Education?

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Business, Enterprise and Regulatory Reform), Without portfolio, Shadow Spokesperson (Justice), Shadow DUP Spokesperson (Without Portfolio) 1:15 pm, 15th December 2008

I thank the Member for his question and for his references to the moneys for education. I emphasised the need to deliver, and that is a matter for every Department. The Member highlighted the history of the Department of Education, and my officials, officials from the Department of Education, and other officials, are aware of the need to deliver on the expenditure committed. The Department will continue to monitor that. The Department of Education has major projects under way that run into double figures in Newry, Omagh and Ballynahinch. The Belfast Education and Library Board has a programme of £120 million under construction at five locations in north and east Belfast. The South Eastern Education and Library Board has four new schools at Towerview, Ballinderry, Brookfield and Pond Park, and there are several other issues.

The Member referred to the fact that the Department of Education was one of those Departments caught up in legal challenges to the frameworks as the result of the action taken to move those forward on a project-by-project procurement basis, which means that a substantial amount of work will go to the marketplace this financial year.

Photo of John O'Dowd John O'Dowd Sinn Féin

Go raibh maith agat, a LeasCheann Comhairle. As regards the contributions from the SDLP Benches about cuts to services for the most poor and vulnerable in our society, Sinn Féin will not support such cuts, which is why it supported the statement at the Executive meeting — as did the SDLP. The Minister’s statement referred to contributing to the most vulnerable in our society.

I welcome the fact that contributions have been made to the education budget for construction and youth leaders and that the framework around school building has been unlocked. Has a bid been made to help classroom assistants in the voluntary schools sector? If such a bid has been made — and it appears to have been unsuccessful — will the Minister return to it in future? Classroom assistants in that sector are being paid at a lesser rate than those working in fully grant-aided schools.

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Business, Enterprise and Regulatory Reform), Without portfolio, Shadow Spokesperson (Justice), Shadow DUP Spokesperson (Without Portfolio)

The Member asked whether a bid had been made for classroom assistants. I remind him that the education budget as a whole amounts to about £1,800 million and, therefore, the amount of money talked about is relatively small. I would be surprised if the Department of Education were not able to deal with that issue, especially in light of the easements that have been allocated to youth workers and other areas of expenditure. The Member is aware that there will be further monitoring rounds.

As my statement made clear, there will be help for the education sector and for many other sectors. The fact that my statement received the unanimous support of all Ministers in the Executive this morning seems to run counter to some of the comments made in the Chamber. Nevertheless, that does not surprise me. However, as we are tackling major issues and introducing positive proposals, it ill behoves any party with a representative in the Executive to try to distort the position, as that is not only untrue but deeply damaging to its Minister’s Department.

Photo of Jim Shannon Jim Shannon DUP

I want to make the Minister aware of the fact that St Nicholas was the patron saint of fishermen and sailors. Perhaps the Minister is missing only a red coat and a white beard today.

Photo of David McNarry David McNarry UUP

Do you mean a black beard?

Photo of Jim Shannon Jim Shannon DUP

No — a white beard.

The Minister has made £700,000 available to the fishing industry, and he referred to harbour and light dues. Will the Minister confirm how much money that will mean to each of the fishing boats in the fleet? The Minister also referred to £1·6 million for children’s funds, which is important. Will the Minister of Health, Social Services and Public Safety have to say whether those funds go to Home-Start, Live Start, Sure Start, or Mid Start — any of those organisations that do great work with children’s groups across the Province?

How will today’s announcement on construction projects impact on small businesses? It is good to hear that jobs will be created for the delivery of big projects, but will the jobs and benefits filter down to the small construction businesses, of which Strangford, in particular, has a great many?

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Business, Enterprise and Regulatory Reform), Without portfolio, Shadow Spokesperson (Justice), Shadow DUP Spokesperson (Without Portfolio)

The allocation for fishermen and the fishing industry recognises the significant increases in input costs faced by those in that industry. I am happy to write to the Member with details on the specific issues that he raised; I do not want to bandy figures around on averages per boat, and so on. No doubt other Members will be interested in that information, too. I am sure that today’s announcement will be welcomed by fishermen and the industry in general.

The children’s fund is a matter for the Department of Health, Social Services and Public Safety in conjunction with the Office of the First Minister and deputy First Minister. Again, those details will emerge; it is a matter for prioritisation by the Department.

I mentioned in my statement the need to ensure that, as far as possible, small businesses in Northern Ireland are able to get involved in the supply and delivery of major construction projects. We must remember that, in national and European terms, most of the companies here are small or medium-sized enterprises. Not only did we introduce initiatives on rates to help businesses, but initiatives were introduced in other areas, too. Those involve procurement, the new e-sourcing, which will provide greater visibility, and the new procurement task force, which will help smaller companies to gain access to major projects. Those are initiatives that we want to discuss further and develop as much as possible.

Photo of Basil McCrea Basil McCrea UUP

I welcome the announcement on fuel credits. I would be most interested to know which Department will have responsibility for that particular budget and which Department has the infrastructure and databases to administer the scheme. I would like a specific response to that question.

I have a deep sense of unease and foreboding about the whole budgetary process. It appears that, despite the best intentions of all present, we have not got to the bottom of the issue. The Minister has put on record that there will be no cuts in any Department. However, the Department of Education submitted inescapable bids totalling £33 million, but received only £6 million. That money will have to be found elsewhere. The Department also highlighted the problem of capital receipts, and it said that not being given such receipts would lead to the slowing down, or stopping, of projects. Thus, it appears that there will be cuts. The most worrying aspect is that the Minister of Education has, I think, indicated that she is no longer dealing with the education and skills authority as an invest-to-save project, and that she will not be able to meet her efficiency targets for this year.

Can the Minister tell us how he intends to allocate the £900 million that he received? Perhaps it would have been better to have a complete and fundamental review of the Budget process, because we will have to allow for some serious revisions in the years to come.

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Business, Enterprise and Regulatory Reform), Without portfolio, Shadow Spokesperson (Justice), Shadow DUP Spokesperson (Without Portfolio)

I am tempted to say that it is very hard to take lessons in budgeting and keeping tabs on the books from the honourable Member, given what he has been through in recent times. However, the fact remains that no cuts have been announced in this statement. It is a complete fallacy and nonsense to suggest otherwise.

I note that the Member welcomed the announcement on fuel credits. I know and understand that some Members are scraping around to try to find something negative to say. I understand that entirely, but the fact that they have such a paucity of evidence to back up their argument illustrates how out of touch they are with the facts that have been presented today.

Most people in Northern Ireland recognise that we are in a very difficult economic situation. That is true not just for Northern Ireland, but for the entire United Kingdom, every member state of the European Union and the United States — for goodness’ sake, look at what the United States is going through at present. By introducing the December monitoring round, by bringing into play as many levers as possible, and through the expenditure that has been made available — which can be made available only through the surrender of money from other Departments — we are doing what we can.

I said that we had limited levers at our disposal and restricted opportunities to do what we can. However, it would have been a failing on the part of the Executive and the Assembly if, having considered what we can do for business and households, we had not convened a special sitting today.

The fact that we have been able to announce substantive and important initiatives today should — and will — be welcomed widely across the community.

Photo of P J Bradley P J Bradley Social Democratic and Labour Party

I thank the Minister for his statement. I note the further £1·5 million that has been announced to help with animal health compensation payments. Does the Minister agree that that annual allocation for compensation payments is necessary due to the lack of a proper eradication programme? I accept that the Minister had to allocate the extra money because of the rising price of animals, but does he accept that a proper eradication scheme would probably eliminate the need for compensation payments?

I take it that potato growers who lost heavily in the August flooding will not receive the necessary £1,500 for each acre to match their losses. Should livestock owners and cereal growers no longer expect 100% compensation to match the losses that resulted from the flooding?

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Business, Enterprise and Regulatory Reform), Without portfolio, Shadow Spokesperson (Justice), Shadow DUP Spokesperson (Without Portfolio)

I can respond only to the bids that I receive, and on that basis, we have allocated money for compensation for losses due to flooding.

Animal health is an important area, because spending money on the prevention of disease means that less has to be spent to deal with future outbreaks. The Member stated correctly that some of the extra expenditure is inescapable because of the rising cost of animals. The eradication programme is a matter that the Member has pursued with the Minister of Agriculture and Rural Development, and I have no doubt that he will continue to do so.

Photo of Ian McCrea Ian McCrea DUP

I also welcome the Minister’s statement. Everyone in Northern Ireland will welcome the announcement of the largest-ever investment in a single year.

The Minister has decided to bring forward construction projects in the education sector through the building of schools. Will he ensure that all Departments bring forward construction projects as a matter of urgency? I am sure that the Minister and Members are aware that the construction industry is being crippled.

I am sure that the Minister will agree that Minister Paul Goggins’s recent decision to award the design contract for the new college at Cookstown will also benefit the local economy.

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Business, Enterprise and Regulatory Reform), Without portfolio, Shadow Spokesperson (Justice), Shadow DUP Spokesperson (Without Portfolio)

The new college at Cookstown is an important project for the construction industry. It should also be noted that the Executive decided a few weeks ago to proceed with the Titanic signature project, which is a major scheme that will cost £90 million, as well as the rapid-transit system for Belfast. Those are major construction projects that will not only deliver infrastructural benefit to Northern Ireland for decades to come, but will ensure that there is help for the construction industry. The Member also highlighted the crucial issue of delivery — it is all very well to have the plans in place, but it is essential that Departments deliver with their allocated budgets for capital spend.

In addition to the matters that I mentioned already, it is important to put on record that the Minister for Employment and Learning intends to implement two additional innovation projects for transport and cancer medicinal chemistry next year. Those projects will cost £2·7 million and will be conducted by Queen’s University Belfast. Although no additional funding is available for those projects at present, the Minister is proceeding with them, and he is welcome to submit bids for them in future monitoring rounds.

It is important to emphasise that no Minister is successful in all, or, in some cases, part of the bids that he or she submits. The purpose of monitoring rounds is to keep the situation under review from quarter to quarter.

Photo of Jennifer McCann Jennifer McCann Sinn Féin 1:30 pm, 15th December 2008

Go raibh maith agat, a LeasCheann Comhairle. I thank the Minister for his statement. In particular, I welcome his comments about local banks passing on the lower cost of borrowing to households and businesses and that the repossession of people’s homes should be a last resort.

It is hoped that credit unions may soon be able to offer enhanced financial services, including the depositing of child trust funds. Will the Minister consider establishing, in the near future, a special fund such as the one already operating in Britain to help the growth and development of credit unions?

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Business, Enterprise and Regulatory Reform), Without portfolio, Shadow Spokesperson (Justice), Shadow DUP Spokesperson (Without Portfolio)

I thank the Member for her question. There are issues to be explored with the banks, and we will continue to explore those issues. Like the Member, I welcome the courts’ initiative regarding the protocols on house repossessions which has been taken forward during a difficult time and with householders under pressure. It is important that the repossession of someone’s home be regarded as the last resort.

I note the Member’s point on credit unions. Such matters are the responsibility of the Minister of Enterprise, Trade and Investment rather than for me, and I will ensure that the matter is drawn to the Minister’s attention, and I am sure that she will want to examine it carefully.

Photo of David Ford David Ford Alliance

I thank the Minister for his statement. On behalf of the opposition, I join my colleague Stephen Farry in welcoming parts of it. It is regrettable that the statement is being made later than we hoped for. Certain aspects of it, such as the 10-day period for the payment of invoices to small businesses, are welcome. However, that was announced by Lord Mandelson in early October. To compensate for that, will the Minister assure us, at least, that when he says that he has asked public-sector organisations, he uses the word “asked” in the same sense as the Treasury does when it asks Departments to do things, and that he will ensure that that happens?

As regards fuel poverty, although the one-off payment to 100,000 households in poverty is clearly welcome, would it not have been better to have put some of that money into a major expansion of the warm homes scheme? Would that not have had environmental benefits as well as benefits to small firms that need business at the moment? Would it also have ensured that people were protected against exorbitant charges in future?

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Business, Enterprise and Regulatory Reform), Without portfolio, Shadow Spokesperson (Justice), Shadow DUP Spokesperson (Without Portfolio)

The Member made several points. First, my statement is not late; it is early. Normally, the statement on the December monitoring round is made after Christmas, in January. It was our view that we should make this statement on 15 December, despite the fact that it was resisted by some on the Ulster Unionist Benches. There was a bit of an outcry that we should not have had a special meeting of the Assembly today. I am glad that the Assembly has met and that we are able to make these announcements today. However, I notice that one or two of those were most vocal about today’s meeting are absent from the Chamber.

Secondly, Lord Mandelson’s announcement about payment of invoices was confined to England and Wales. This is for Northern Ireland, and it is something with which we have been keen to proceed. I assure the Member that it is my hope that edicts and statements from the Department of Finance and Personnel will be regarded in the same way in Northern Ireland as edicts and statements from the Treasury are regarded in England and Wales. I hope that other Departments are listening to what Lord Mandelson and I are saying about that matter, and will agree with it.

Thirdly, the Member raised an interesting point about fuel poverty. He asked whether it would be better to spend the money as a one-off fuel credit or to put it into the warm homes scheme. Shortly, no doubt, we will be criticised and be asked why there is no money for the warm homes scheme. The Member will have to take that matter up with the Department for Social Development because the scheme was not identified as a priority when the Minister expressed her views about how the money should be spent. The choice was there.

We ended up in the worst of all worlds, because not only was there no more money going into the warm homes scheme, but there was not enough going into the fuel credit scheme to make it the proper scheme that was desired. Consequently, we took steps to increase the impact of that scheme by giving money to pensioners that are poorest in Northern Ireland and ensuring that they will be sufficiently covered, and not just by the DSD scheme.

Photo of Lord Maurice Morrow Lord Maurice Morrow DUP

I, too, welcome that scheme. Most of the SDLP foxes must have been shot this morning, because they are distinctly quiet. Despite the fact that that party tried to turn this into a negative morning, it is a positive one, which the SDLP should recognise by standing up and so saying. It is a pity that the SDLP Minister is not here. However, I suspect that she has another duty to perform.

I particularly welcome the fact that two major water-infrastructure schemes, amounting to £26 million, are to go ahead at Dungannon and Moygashel. Those are welcome and long overdue. In the Minister’s statement, he welcomed NIE’s announcement today that it will decrease its tariff by 10·8%. It is good news that prices are going in the right direction. However, I am sure that the Minister agrees that those price reductions must go further. We will watch developments with interest. We urge the Minister and the Executive to keep a very close eye on that matter.

Furthermore, I am pleased that, rather than doing what others have decided to do, the Minister of Finance and Personnel has stepped in to take the lead on the issue of fuel poverty. Fast-track payments will provide some relief to pensioners in Northern Ireland. Does the Minister agree that the rolling-out of the scheme is imperative? Does he also agree that that should be done effectively, efficiently and quickly?

Many struggling pensioners will take considerable comfort from the measures that the Minister outlined in his statement. I ask the Minister again to give an assurance that fast-track payments will be expedited as quickly as possible. It is a fact that the Executive will make a payment of £150 to more than 100,000 householders who are in receipt of income support and pension credit — 65,000 and 36,000 respectively. That is to be welcomed. I commend the Minister for his positive attitude. If others had adopted the same attitude earlier in the year, that measure could have been implemented before Christmas.

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Business, Enterprise and Regulatory Reform), Without portfolio, Shadow Spokesperson (Justice), Shadow DUP Spokesperson (Without Portfolio)

I thank the Member for his contribution. He mentioned the water projects at Dungannon and Moygashel. Four major Northern Ireland Water projects, with an aggregated value of £44·5 million, will come to market between now and the end of financial year. Those projects are welcome for the construction industry and for building the foundations of a sound infrastructure for Northern Ireland. In the Member’s constituency, the Castor Bay to Dungannon trunk main is worth some £21 million, and the Moygashel waste-water treatment plant is worth £5·5 million. For Members who represent North Antrim, there are two water projects of note: one at Bushmills, which is worth £8·2 million; and one at Toome, which is worth £9·8 million

The Member, among others, emphasised the need for speed on the issue of fuel credits. They said that the matter must be progressed quickly. I know that my colleagues in the Office of the First Minister and deputy First Minister have been apprised of that and will be announcing details of how we are to proceed. I am sure that the Member’s words will echo around the House, and among other Members, and will build the case for the Bill’s accelerated passage to ensure that that is done as quickly as possible, so that the money goes to pensioners and those on income support.

Photo of William Hay William Hay Speaker

I call Mr Billy Armstrong. I ask that the Member be brief when asking his question, because time is almost up.

Photo of Billy Armstrong Billy Armstrong UUP

I welcome the news that the planned construction of schools will continue. I also welcome the proposed investment that will benefit mid-Ulster. In the light of the Minister of Education’s flawed decision to close the soundly constructed Maghera High School, can Minister Dodds assure me that money will be prioritised for the construction of a newbuild high school at Magherafelt, which is also supposed to accommodate the pupils from Maghera High School? If the Minister cannot provide that assurance, will he join with me in calling on the Minister of Education to keep Maghera High School open, at least until Magherafelt High School is rebuilt.

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Business, Enterprise and Regulatory Reform), Without portfolio, Shadow Spokesperson (Justice), Shadow DUP Spokesperson (Without Portfolio)

I can briefly say, Mr Speaker, that, as far as I am concerned, I am very hopeful that the Magherafelt school project will proceed in the near future. I am grateful for the Member’s supportive comments.

Photo of William Hay William Hay Speaker

That ends questions to the Minister on his statement.