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Public Expenditure 2008-09 February Monitoring Round

Ministerial Statement – in the Northern Ireland Assembly at 10:30 am on 3rd March 2009.

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Photo of David McClarty David McClarty UUP 10:30 am, 3rd March 2009

I have received notice that the Minister of Finance and Personnel wishes to make a statement regarding the public expenditure 2008-09 February monitoring round.

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, I will make a statement regarding the Executive’s decision on the February monitoring round.

As Members will be aware, the purpose of the in-year process is to help the Executive and individual Ministers to make the most of the resources at their disposal. In the more constrained financial position facing us this year, the Executive have made full use of the opportunities arising from the process, as particularly evidenced by the significant allocations made in the December monitoring round to support the local economy.

This is the fourth and final monitoring round of the 2008-09 financial year. The February monitoring round does not normally give rise to significant reallocations, and this year is no different. Following an initial discussion on 12 February regarding the overall financial position, last Thursday the Executive unanimously agreed the approach for the short period remaining in the current financial year.

As always, the starting point of the process is the identification by Departments of resources allocated in previous Budget processes, which, for a variety of reasons, will not be spent in this financial year. In this round, Departments have identified £20 million of current expenditure reduced requirements, and £4·3 million in capital investment. The reduced requirements were for relatively small amounts, across a broad range of business areas, with the Department for Employment and Learning (DEL) and my Department surrendering the largest amounts. I have provided full details in the table attached to the circulated copies of my statement.

The level of reduced requirements declared in the February monitoring round was significantly lower than the amount surrendered at the same stage in previous years, reflecting the pattern of this year to date. Although that obviously provides less scope for the Executive to make additional allocations at this point in the financial year, more significantly, it means that Departments are achieving higher levels of delivery of public services and investment, with the latter being a real benefit to the local construction sector in these difficult times.

That lower level of reduced requirements for 2008-09 can be explained, in part, by the relatively low level of growth in the block grant from the Treasury for this financial year of 0·5% in real terms. By comparison, the block grant is planned to grow by 2·2% a year in real terms for the next two years.

As part of the management of public expenditure throughout each financial year, Departments also provide regular forecasts of their expenditure. In the latest forecast, Departments are anticipating that some £18 million of current expenditure and £500,000 in capital investment will remain unspent at the end of this year. Again, that gives a relatively positive message about the performance of Departments this year. However, it is important to appreciate that the forecasting of public expenditure is not an exact science, as the underlying programmes are, within each Department, often complex and volatile. In addition, there is a bias towards prudent forecasts, with the actual level of underspend often substantially greater than that which has been forecast previously.

The need to consider the large margin of error inherent in the forecast information that was provided by Departments was, therefore, a key issue facing the Executive in the February monitoring round. Furthermore, that issue was considered in the context of the risk of an overspend at block level against the loss of spending power from a significant level of underspend at year end. Whether the reality meets the Departments’ expectations will not be known until we receive their provisional outturn information in June. However, based on the messages that we are receiving from Departments, I expect a reduction in the level of underspend compared with the position last year, although not so great as to risk an overspend for the Executive as a whole.

Evidently, the level of overcommitment with which we concluded the December monitoring round, coupled with the low level of reduced requirements and Departments forecasting almost full spend against their current allocations, meant that the ability of the Executive to make significant allocations in this monitoring round was restricted. That had been highlighted to Departments as part of the December monitoring round, which will have provided sufficient time to adjust spending plans for the remainder of the financial year, particularly given that a large portion of spend was already skewed towards the final three months of 2008-09.

However, there were two important issues to address as part of this monitoring round. The first was the commitment from the 2007-08 Budget process that the Department of Health, Social Services and Public Safety (DHSSPS) would receive the first £20 million of available resources in the subsequent in-year monitoring processes. In order to enable the Executive to manage the emerging pressures, that money has been spread over each monitoring round, with £15 million having been allocated to date. In order to fully comply with that commitment, the Executive agreed to allocate the remaining £5 million in this monitoring round.

Secondly, Members will also be aware of the measures that were previously agreed for funding for the response to the dioxin-contaminated feed incident, including the cost of the cull and hardship payments to local producers and processors. The original costing that was agreed by the Executive has now been revised downwards, and reflecting the ongoing and pressing needs of the local agriculture sector, the Executive agreed that any savings should be recycled into an increased hardship payment to those who were affected by the incident.

Following the £15 million that I allocated for the fuel poverty financial assistance scheme in December 2008 for 100,000 households, the Executive have agreed to extend the coverage with regard to those households in receipt of pension credit. The Executive further agreed that the matter will be dealt with when the payments crystallise. That leaves us to conclude the February monitoring round with a current expenditure overcommitment of £63·5 million — a reduction of £11 million on the December position. That is in line with our analysis of the position based on the information received from Departments and taking account of normal forecasting tolerances.

Turning to capital investment, the low level of reduced requirements, combined with a forecast of almost full spend, means that more capital projects are being taken forward. That is in line with the emphasis that we have previously placed on ensuring that public investment in infrastructure is delivered to plan. Indeed, the latest forecasts from Departments indicate that the total net capital investment this year will amount to some £1·5 billion, which will be the largest-ever level of investment in a single year in the history of Northern Ireland. That level of spend represents a real and meaningful achievement of the Executive in the most difficult of circumstances.

In conclusion, this should be viewed for what it is: a locally elected Executive and Assembly delivering for the people of Northern Ireland. I commend the February monitoring position to the Assembly.

Photo of Mitchel McLaughlin Mitchel McLaughlin Sinn Féin

Go raibh maith agat, a LeasCheann Comhairle. I thank the Minister for his statement.

The conclusions that the Minister has drawn from the February monitoring round give us some comfort. I have acknowledged on previous occasions the proper focus that he has placed on performance and delivery, in particular on achieving the targets on underspend this year. Consistent with previous comments, I would like to continue to develop that theme.

In last year’s February monitoring round statement, forecast figures of departmental underspend in 2007-08 were £104 million in current expenditure and £49 million in capital expenditure. Subsequently, in June 2008, the provisional outturn figures showed a much greater level of underspend for the year of £177 million for current expenditure and £76 million for capital expenditure. What assurance can the Minister provide that the same pattern will not emerge for underspend in 2008-09, when we need to be maximising the use of available resource?

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. Importantly, he again raises the issue of underspend at the end of the year. He will be aware of the fact — because he pointed it out — that I have laid a heavy emphasis, in the Assembly and in the Executive, on the need for the Executive, Departments and individual Ministers to be seen to deliver on the allocations in each of their budgets.

He raised the issue of what the difference may be between the levels of underspend in actuality compared with forecasts. As I indicated in my statement, forecasts this year have, I believe, been more realistic throughout the year. Forecasting is not an exact science. Nevertheless, looking at what has been projected for the year end, we have reason to believe that the position that we have struck is the right position. At all times, we try to ensure that at no point do we end up with an overspend on the block position — which would be completely out of the question as far as the Treasury is concerned — but that, at the same time, we do not end up with a large amount of money underspent at the end of the financial year.

That is always the balance that must be struck, and I think that we have struck the right kind of balance in what we have presented throughout the year and at this stage in particular. The fact of the matter is that the amount of money that is being delivered, particularly through capital investment this year, has increased significantly from last year and is certainly on target in respect of net expenditure.

Photo of Jim Shannon Jim Shannon DUP

I thank the Minister for a very positive statement on the monitoring round. In the Minister’s statement he referred to the agriculture sector. Obviously, in the recent past, the agriculture sector has had distinct problems. I declare an interest, but not as a pork retailer — which I suppose puts me in a position. However, I lost nothing as a result of the contaminated feeds incident before Christmas other than an increase in blood pressure and a receding hairline, although I do not think that I have any hairs left to go grey because they are all grey anyway.

That apart, one concern expressed to me about that incident was the effect that it had on the pig industry in particular. It was made known to me that a number of people with whom I do business lost a lot of money in the pork industry in the three weeks before Christmas. The Minister said that increased hardship payments will be made — and that is good news. How will that money be handed out to the many producers who had to dump the finished product as a result of the dioxin scare? In addition, pig farmers in Northern Ireland had a traumatic time, and I am keen to find out how it will be ensured that the moneys allocated will find their way to those farmers who suffered and lost out.

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 Mr Shannon’s receding hairline and so on was not entirely down to the dioxin-contaminated feed incident. If so, there has been a rapid deterioration in his position.

On 15 January 2009, the Executive agreed to introduce a cull, collection and disposal scheme to deal with the removal of animals in restricted herds that cannot enter the food chain. It was agreed that the cost of slaughtering and rendering the animals will be met, and on 29 January, the Executive agreed a hardship scheme for producers and processors. The Member asked about the details of that scheme, which is a matter for the Department of Agriculture and Rural Development (DARD) and the Department of Enterprise, Trade and Investment (DETI). The overall figure is £9·6 million to cover hardship payments to producers and processors.

I am glad to say that the tendering process and a reduction in the number of animals restricted has led to a reduction of some £1·5 million in the cost of the slaughter and disposal of the animals. As I said, that money has been put in to help to increase the hardship payments. That is a positive announcement, which will provide greater help for processors and producers as well as our agriculture industry at this difficult time.

Photo of David McNarry David McNarry UUP 10:45 am, 3rd March 2009

I am not sure that the Minister fully appreciates the appreciation that I have for his problems, especially after hearing his statement this morning. The overcommitment in the February monitoring round highlights the risk that the Minister is taking in pushing Departments to spend, while, at the same time, hoping that the final outcome of underspend will equalise the overcommitment.

Following on from the probable write-off of over £10 million spent on consultants for Workplace 2010 and the loss of £4 million due to the spend on consultants for the Maze stadium project, will the Minister look at the highly paid in-house experts available to all Departments and check whether it is really necessary to employ them, as well as getting into the extravagance of contracting out to consultants?

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 raises a couple of points. As he knows, the issue of consultants has been raised by many Members, across all Departments. He mentioned two examples of the use of consultants, but he will also be aware of the considerable amounts of money being spent on consultants in the Department of Health, Social Services and Public Safety, the Department for Employment and Learning, the Department for Social Development (DSD), the Department for Regional Development (DRD) and all the other Departments. We all want to see a reduction in the money spent on consultants. There is, of course, a role for consultants — even in local councils, there are certain points when the employment of outside consultants may be appropriate. However, we all want the spend on consultants to be looked at very carefully.

The Members knows that the figure that he quoted for the cost of consultants for Workplace 2010 is on the high side, but, in any case, a considerable amount of that money was not wasted because the work is still useful.

The Member made a general point about overcommitment and its risk. It is absolutely right that I, as Finance Minister, along with the Assembly and the Executive, ask Departments to deliver on the budgets that they have been given. That is the right approach, and I cannot understand how it is seen as a risk. Departments will always have reduced requirements; the Department for Employment and Learning, the Minister of which is the Member’s party leader, has surrendered the greatest amount of reduced requirements this time. I do not see that as a criticism, although the Member described it as an inefficiency in a previous debate, a matter that I said he should take up with his party leader. However, it is sensible and prudent for Departments to surrender money that they cannot spend, so that it can be used for other purposes.

As the Member knows, when his party made its submission on the Budget, it urged the Executive to overcommit further — it said that the Executive were far too cautious in not making a greater level of overcommitment or budgeting for it. As I have indicated a number of times, Mr Beggs, who is in the Chamber today, said that if we extended the amount of overcommitment, we would be implementing one of the ideas suggested by the Ulster Unionist Party. Therefore, we are doing what the Member’s party asked, so it is a bit late for him to criticise us.

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

I recognise, and give credit for, the £1·5 billion capital spend for this year. Departments anticipate that some £18 million of current expenditure and £0·5 million of capital investment will remain unspent at the end of this year. Will the Minister explain why, as I understand to be the case, that was not formally declared for the February monitoring round?

The Minister stated:

“there is a bias toward prudent forecasts, with the actual level of underspend often substantially greater than that which has been forecasted previously.”

He also identified the:

“large margin of error inherent in the forecast information that was provided by Departments”.

From all I read, and from those two statements in particular, I do not get the impression of properly managed financial systems across the Departments, including the Department of Finance and Personnel (DFP). I wonder why high salaries and, in particular, large bonuses are paid to senior civil servants to carry out that job, as they do not appear to be doing it successfully.

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 is being slightly unfair; if something goes wrong, one could say that the salaries paid to MLAs are out of kilter, and one may ask what the monitoring Committees are doing. However, I would not be so unfair, because everyone does their best in this process.

The Member raised issues that individual Assembly Committees will want to take up with their respective Departments and Ministers. There may be different reasons, such as planning and so forth, why certain projects have not come to full fruition by the end of the financial year. However, Departments are undertaking considerable delivery of projects. The big reduction in the scale of reduced requirements and the extremely low level of underspend that is forecast demonstrate that all Departments and Ministers are taking more seriously the need to spend, and deliver on, the money.

If the Member has issues about non-expenditure and about forecasting, those are matters for individual Ministers, whether in DSD, DRD or DEL. Committees and Members will wish to pursue those matters with each Minister and Department, because they, not DFP, manage the process. DFP monitors and observes the process; it hears the reports and tells Departments what they have to do, but it is for Ministers to deliver on such matters. I am sure that the Member will look closely at how all Departments have performed throughout the year.

Photo of Stephen Farry Stephen Farry Alliance

I thank the Minister for his statement. The capital spend of £1·5 billion is a considerable sum. However, in the investment strategy for Northern Ireland (ISNI), the figure for this financial year is £1·8 billion. Will the Minister clarify the current status of ISNI, and, in particular, the figures contained in that document?

Will the Minister elaborate on how he foresees the additional moneys for winter fuel payments being delivered? I am not sure that the financial systems to facilitate those payments are in place. In practice, will the June monitoring round be the first opportunity to address that issue? No winter payments have been issued so far, and June is in the summer.

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

The winter fuel allowance is a matter for the Department for Social Development. DFP has made the funds available and has undertaken to find the additional amount when it is needed. The delivery, processes and timing are entirely for the Department for Social Development, and, therefore, the Member should direct his question to the Minister concerned.

I am glad that the Member pointed out that considerable amounts of money are being spent through the investment strategy. He stated the gross figure, but that includes capital receipts. In the current climate, it would have been an act of madness to go ahead and sell off assets that would not have realised value for money. If value for money can be realised in some instances, it will be sensible to proceed, but DFP would have been rightly criticised for proceeding where that was not the case.

Whether to proceed with the sale of assets is a matter for individual Departments; there is no diktat from DFP. Each Department decided that in the current climate, it was unwise to proceed with the sale of certain capital assets because that would have short-changed the taxpayers and people of Northern Ireland. The money that would have come from the sale of assets is not now available to reinvest on capital spend. However, net expenditure this year is between £1·4 billion and £1·5 billion, which is an increase of well over 30% from this time last year, and more than double the amount available in 2003-04 under direct rule.

A massive amount of capital expenditure is going on across all Departments. That is helping our construction industry and laying the foundation for a better infrastructure for the people of Northern Ireland in housing, health, education, roads, and so on for the future.

The good news is that the expenditure that is going on this year is set to increase next year, and will increase again in the year following that. When people talk about the help to the construction industry, help in jobs, and help in improving our employment prospects, that considerable amount of capital investment should be remembered.

When we concentrate on the in-year monitoring process and the small amounts that are available for reallocation, we should bear in mind that £1·5 billion in capital alone is being invested this year. In Government procurement overall, there is over £2·2 billion, which is a massive amount of investment by anyone’s standards.

Photo of Simon Hamilton Simon Hamilton DUP

The Finance Committee has taken an understandable interest in the Department’s ongoing review of the in-year monitoring process as a whole. With that in mind, does the Minister consider that the level of reduced requirements is sufficiently high throughout the year?

In seeking to avoid the perceived problems with the housing budget, and to ensure that there is ongoing support for our construction industry, does the Minister agree that the collective approach adopted by the Executive to the recent dioxins incident, where all Departments made a contribution to tackling the problem, is a pragmatic and sensible approach to a difficult issue, and one worth examining?

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 Deputy Chairperson of the Finance Committee for his question. He raises the issue of the in-year monitoring process and how that works in practice. We are committed to working on that issue and seeing how that can be improved. We are working alongside the Committee in all of that.

He also raised the issue of what can be done if it is felt that money should be found for a particular project. He cited the example of housing, and is aware that we have already taken steps in-year, by providing £20 million of extra allocations and giving the Department for Social Development flexibility to move some £10 million into social housing.

He asked about the general principle, the way in which money was allocated to deal with the dioxins incident, and whether that would apply. It could do, if the decision of the Executive was that we should reorder Budget allocations. It could be done, but as I have said previously — and some Members do not wish to pursue this aspect too readily or in too much detail — it can only be done by removing money from other budgets.

When it came to the cull and the hardship payments resulting from the dioxin incident, a formula was agreed. Money had to be found, and a formula was applied. Each of the Departments, according to the formula, gave up money to allow those payments to happen, because a sufficient degree of priority was accorded to the response. If the Executive agree that that is what should be done in respect of another matter, clearly, a formula has been set out.

Let us not forget the underlying principle — if we want to put extra money above the money that is in the baseline, in the actual budgetary allocations under the comprehensive spending review and the allocations under the three-year Budget, that money has to be found from other Department’s budgets.

Photo of Fra McCann Fra McCann Sinn Féin

Go raibh míle maith agat, a LeasCheann Comhairle. I thank the Minister and welcome his speech this morning. There are very serious problems with the rising levels of court actions for repossession of homes in England. I know that that concerns everyone. Will the Minister tell us whether, if resources become available shortly, they could be directed towards helping those people who are losing their homes?

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Business, Enterprise and Regulatory Reform), Without portfolio, Shadow Spokesperson (Justice), Shadow DUP Spokesperson (Without Portfolio) 11:00 am, 3rd March 2009

We want to do everything possible to help people who are in difficult circumstances during this time of economic hardship. I shall come to specific points in a minute.

I hear people saying that at this difficult time, the Executive, the Assembly and the devolved legislature should not be doing some of the things that they are doing to help hard-pressed families, communities, vulnerable and elderly people, and so forth. I believe that one of our primary tasks is to help ordinary individuals, families and communities to get through this difficult time — and some of the measures that we have taken, such as free transport for the elderly and the introduction of fuel credits, are important.

The issue that the Member highlighted is another important area, which, depending on the level of resources that become available, I will bear in mind. Of course, it is primarily a matter for the Department responsible for overseeing that area; that Department has a budget and, if it so wishes, it could reprioritise and reallocate that budget.

However, with respect to the overall position, any recommendations that I bring to the Executive as Finance Minister must take account of all competing demands. Nevertheless, I am aware of, and I take seriously, as do my party and others, the importance of ensuring that people are helped through these difficult times as much as possible.

Photo of Adrian McQuillan Adrian McQuillan DUP

I thank the Minister for his statement, which referred to an additional £5 million for the Department of Health, Social Services and Public Safety. Will the Minister explain how that money will benefit Northern Ireland?

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

As I said in my statement, the £5 million for the Department of Health, Social Services and Public Safety is the final instalment of the £20 million first call on available resources that was guaranteed to the Department in the 2007 Budget process. In order to manage the emerging pressures, those payments are spread out over each monitoring round.

The £5 million pounds will help in the following ways: £1 million is for improving access to elective care services; £1 million will go to cardio-vascular services; £2 million will be spent on appointing foster carers for children; and £1 million will be spent on improving long-term health provision and early-intervention services. Those measures will be widely welcomed in the community and in the Assembly.

Photo of Roy Beggs Roy Beggs UUP

I, too, welcome the Minister’s statement, which shows that Northern Ireland will not be returning funds to the Treasury. I hope that the money retained will be well spent.

The table at appendix A of the Minister’s statement on the February monitoring round is unusual because many of the headings have zeros under them. Will the Minister explain why so many zeros are appearing under those headings? I understand that sums below £100,000 are not normally included in monitoring rounds. Given that he has included figures below £100,000, would it not have been better to have included those which appear as zero also?

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 comments and for his questions. I presume that he is referring to Annex A, the reduced requirements.

There are two issues. First, Departments’ proposals to reallocate sums below a certain amount of money internally can be brought to the Executive and agreed without necessarily appearing in tables such as that one.

Secondly, these are reduced requirements that Departments are giving up to the Executive for possible reallocation elsewhere. Therefore, those amounts have been surrendered, and in the interests of clarity and openness, they are published.

I am happy to write to the Member, setting out the technical details of how small amounts of money are handled.

Photo of Mickey Brady Mickey Brady Sinn Féin

Go raibh maith agat, a LeasCheann Comhairle. I also welcome the Minister’s statement, particularly in relation to the fuel poverty financial assistance scheme. The Minister has already alluded to the logistics of payments from the scheme through DSD and deciding to include households in receipt of pension credit. Will the Minister give us some idea of the number of people involved, because, originally, 36,000 pensioners were not expected to qualify for a fuel poverty assistance payment? Subsequently, the Executive extended that. Will the Minister provide the House with the numbers of people involved?

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

It was suggested originally that people on income support would be entitled to the fuel poverty financial assistance scheme, but the Executive decided to extend that provision to pensioners who receive pension credit. They wanted to ensure that no pensioners who were in receipt of pension credit would be left out. The total number of people who are eligible for fuel poverty assistance is around 150,000, but the delivery of that scheme is a matter for DSD.

Photo of Ian Paisley Jnr Ian Paisley Jnr DUP

I thank the Finance Minister for his statement and for outlining the prompt and agile response to the dioxin-contaminated food incident. Furthermore, I welcome his allocation, since December, of £15 million to the fuel poverty financial assistance scheme. Many of my constituents are feeling the practical benefit of that scheme, and I welcome that. Most people in Northern Ireland welcome the skilled moves that were put in place to deliver that effective reality for our constituents.

Will the Minister provide the House with more detail on the type of capital projects that will be implemented as a result of the remarkable package of £1·5 billion. Once that money is allocated and spent, it will be the single largest allocation of funding towards capital projects to have been made in the history of Northern Ireland. That should not go unmentioned in the House.

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 comments on the dioxins issue and the fuel credit. They are important initiatives that are of benefit to his constituents and to many of our constituents across the Province. The Member is right also to refer to the investment that will be made through the capital expenditure programme. As I said previously, this year’s planned investment will increase by 6% next year, and it will be more than 30% higher than that of last year.

Mr Paisley Jnr asked for examples of investments that will be made. It is important to highlight the type of projects that money is being spent on, and I have mentioned some of them already. One can see the improvements that have been made to the Westlink, and the work that is being done there, for instance. The Department for Regional Development invested money in that project, as it did on the Dungannon to Ballygawley road and at Newry.

In the Health Service, £113 million has been invested in critical-care development and £6·8 million in pharmaceuticals at the Royal Victoria Hospital. We invested £40 million in the Ulster Hospital redevelopment; £50 million in the Downe Hospital, which will be an enhanced local hospital; and investment was made at Altnagelvin Hospital as well.

Some £127 million has been invested in Northern Ireland Water for the Belfast sewers project, and the 10 waste-water treatment projects that are under construction will receive an aggregated value of £90 million.

There are a number of education projects under construction in DEL, which will total £83 million. They include the South Eastern Regional College projects, over five locations, which have a total value of £49 million; the South West College, with a value of £9 million; the Northern Regional College, with a value of £9 million; and the North West Regional College, with a value of £16 million. Furthermore, work valued at £120 million is ongoing in the Belfast Education and Library Board. Those are just a few examples of the planned capital expenditure.

By way of putting that expenditure into perspective, one should remember that the figure for 2003-04 was £680 million, and in 2007-08, it was £1·126 billion. This year, we are looking at a figure close to £1·5 billion. That is good news and shows that devolution is delivering for the people of Northern Ireland.

Photo of Carál Ní Chuilín Carál Ní Chuilín Sinn Féin

Go raibh maith agat, a LeasCheann Comhairle. I thank the Minister for his statement.

As he said, the February monitoring round is not usually the time for significant reallocations. However, is the Minister confident that the necessary scrutiny of Ministers and the adherence to good financial governance are occurring? The Minister mentioned the surrendering process, which is in keeping with good financial governance. The Minister for Social Development surrendered money and, subsequently, referred to it as a smash-and-grab raid by the Executive. In my capacity as a member of the Committee for Social Development, I ask the Finance Minister to comment on that.

More specifically, as a Member who wants to scrutinise the monitoring round, I am concerned that I still find it difficult to do so. Does DFP intend to make that process easier for us all?

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

In response to a question from the Deputy Chairperson of the Committee for Finance and Personnel about the monitoring process, I have already indicated that I am happy to consider that process; we will work on that issue.

There is no doubt that the in-year monitoring process is an effective way to manage budgets of this scale; the same process is used elsewhere. The alternative would be simply to take a slice off every budget, put those moneys into a fund and wait to see what needs emerge. However, we could end up with vast amounts of money sitting in a fund doing nothing all year and then have a mad dash towards the end of the year to spend it. That would be a completely daft approach to public expenditure. The process is designed to ensure that the maximum amount of money is being spent in-year on the programmes and projects that have been set out in departmental plans.

We debated the DSD issue earlier, and the Minister for Social Development is keen to draw a line under all that, because the situation moved on pretty rapidly when the facts of life were spelt out. I am always keen to facilitate Ministers as much as possible when they bring forward bids. At the time that the social housing budget was reviewed, the emphasis was on fuel poverty. DSD was demanding money for that area, and accommodation was made for it.

That was done, so to then be accused of not doing what DSD wanted has left many colleagues perplexed and concerned, given that the matter had been agreed unanimously by the Assembly, including the Minister for Social Development. As we move forward, we want to recognise that the social housing budget is extremely important. I am committed to ensuring that we deliver on the housing targets — including newbuild maintenance, among other issues — over the period of the Programme for Government. We will continue to work alongside DSD to achieve that.

Photo of Peter Weir Peter Weir DUP

I thank the Minister for his statement. As we move forward with monitoring and the broader budgetary process over the next few years, the national economic picture will be vital. Therefore, will the Minister outline any further information that he has after his discussions with the Prime Minister about efficiency savings?

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 Member for his question, which flags up an important issue. I have already had discussions with my Scottish and Welsh counterparts, and I will have further discussions next week with those Scottish and Welsh Ministers, as well as the Chief Secretary to the Treasury, on that and other matters. The First Minister and deputy First Minister have also had discussions with the Prime Minister on efficiency savings because according to the Chancellor’s pre-Budget report, so-called efficiencies are not coming back to Northern Ireland in 2010-11, and that is a serious concern.

At the time of the financial settlement and the comprehensive spending review, it was agreed that all efficiencies that were made in Northern Ireland would be retained in Northern Ireland, and we intend to hold the Government to that commitment. All parties in the Assembly need to adopt a united approach to the matter. It is, perhaps, unfortunate that one party in the Executive is now agreeing to press ahead with not only those efficiency cuts but greater cuts.

I refer to the — what is it, “Conservative Ulster”? I refer to the Ulster Conservatives and Unionists - New Force, which includes Owen Paterson, the shadow Secretary of State for Northern Ireland, and is on record as saying in its policy document that it wants to see greater so-called efficiencies introduced from April 2009. It is important that the Assembly says that that is not what the people of Northern Ireland want, and it is not what the Assembly and the Executive believe to be the position. That must be made clear to the Prime Minister and the Chancellor. Unfortunately, they may use that against us in our negotiations.

Photo of David Simpson David Simpson Shadow Spokesperson (Education), Shadow Spokesperson (International Development), Shadow Spokesperson (Transport) 11:15 am, 3rd March 2009

I thank the Minister for his statement. I also thank him for his commitment to support the extension of the fuel poverty payment scheme to households on certain benefits. Will the Minister clarify the position on the reallocation of approximately £10 million from the Department for Social Development urban regeneration programme to support the Housing Executive’s maintenance and improvement scheme? Is that money safe or has it been surrendered?

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 Member for his comments on winter fuel payments. The proposal to reallocate £10 million came from DSD, and I was happy to accede to the request to move money from urban regeneration into the housing budget. As I understand it, that money has been allocated and is, therefore, safe for expenditure on the programmes that the Member mentioned. The fact that that could be done shows that sometimes Departments can, from the considerable budgets that have been allocated to them, take action to deal with some of the pressures that emerge — and that is just one example.

The money that comes in an in-year monitoring round — which could be £50 million or £100 million — is small beer compared to the £4 billion in the Department of Health, Social Services and Public Safety or the £2 billion in the Department of Education. All Departments have vastly more money at ministerial disposal than the DFP Minister and the Executive have at any in-year monitoring round.

It is important to point out that the initiative taken by the Minister for Social Development shows that if Ministers face a pressure, they can say that that pressure is more important than something else and that they could use their considerable budget — money that may not be spent — for other things rather than asking me for money from another Department. Therefore, that initiative was a good example of what can be done. It shows that Committees should be pressing Ministers. Instead of Committees saying that they need more money, they should be asking Ministers how they are using their budgets now and what they could be doing better with their money now, and ask them why are they are asking other Departments for help. Is there not something that Ministers could be doing, given the considerable resources at their disposal?