Only a few days to go: We’re raising £25,000 to keep TheyWorkForYou running and make sure people across the UK can hold their elected representatives to account.

Donate to our crowdfunder

Second Stage

Executive Committee Business – in the Northern Ireland Assembly at 11:15 am on 3rd March 2009.

Alert me about debates like this

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Business, Enterprise and Regulatory Reform), Without portfolio, Shadow Spokesperson (Justice), Shadow DUP Spokesperson (Without Portfolio) 11:15 am, 3rd March 2009

I beg to move

That the Second Stage of the Financial Provisions Bill (NIA 6/08) be agreed.

This short Bill deals with routine financial matters that do not affect the overall quantum of Government expenditure in Northern Ireland. It is the first Financial Provisions Bill taken by the Assembly, but is the latest in a series of financial provisions Orders. The last such measure, the Financial Provisions (Northern Ireland) Order 2004, was taken forward during direct rule and came into effect on 1 April 2005.

Such a Bill is normally required every two to three years to deal with routine financial measures, including any minor and/or non-controversial amendments to governing legislation. This Bill contains five miscellaneous provisions requiring primary legislation.

The first of the financial matters in the Bill relates to the absolute privilege for reports of the Comptroller and Auditor General for Northern Ireland. At the time of original devolution, there were deficiencies in the Northern Ireland Act 1998, and a gap in the Scottish devolution legislation in that absolute privilege for the purposes of the law of defamation did not apply to publication of the Comptroller and Auditor General’s reports. The Comptroller and Auditor General’s view is that auditors should have uniform powers throughout the United Kingdom when they are reporting on the use of United Kingdom taxpayers’ money.

On 27 November 2007, the Assembly passed a motion that provided absolute privilege for the purposes of the laws of defamation on reports prepared under article 8 of the Audit (Northern Ireland Order) 1987 by the Comptroller and Auditor General and published by the Assembly through engaging section 50 of the Northern Ireland Act 1998. That motion addressed an immediate operational need and it applies to the mandate of only the current Assembly. The purpose of the provision today is to enter that measure into statute, thus avoiding successive Assemblies having to vote on it. It also ensures that the arrangements for audit and accountability under the Assembly are at least as robust as those that existed under direct rule, and are similar to those in other jurisdictions. Therefore, the Bill represents an early opportunity to address through legislation the extension of privilege to all reports prepared by the Comptroller and Auditor General.

Clause 2 of the Bill gives authority to the Department of Enterprise, Trade and Investment (DETI) to incur expenditure for activities that the Department considers benefit consumers in Northern Ireland. Support may be provided in whatever way the Department of Enterprise, Trade and Investment thinks fit, including through grants or loans, and on such terms as it thinks fit —whether repayment or otherwise. That would include, for example, expenditure in the management of consumer debt.

Currently, the Department of Enterprise, Trade and Investment lacks the specific authority to pay for the provision of debt advice. Instead, in order to make the payments, it relies on statutory powers granted to the Department for Social Development through the Social Need (Northern Ireland) Order 1986. The provision of a high-quality debt-advice service that is free of charge to the user is an important contribution to the anti-poverty strategy, and will be of particular relevance during the current credit crunch and generally difficult economic climate. DETI’s debt-advice service has the funding that it needs to continue for a further three years from 1 April 2008.

In view of the increasing need for consumer debt advice and funding, it is important that expenditure on such advice is put on a proper and firm statutory footing, rather than relying on powers granted to the Department for Social Development (DSD). The current arrangement is not considered appropriate for ongoing expenditure, and DETI wants to put such funding on an appropriate, firm and statutory footing.

Clause 3 of the Bill empowers DETI to incur expenditure for any purpose that the Department considers will benefit the development of Northern Ireland’s social-economy sector. Members are aware that a social economy enterprise is a body whose activities are:

“(a) conducted as a business; but

(b) are so conducted primarily for social, environmental or ethical purposes or for other purposes beneficial to the community, rather than for profit.”

Examples of social economy enterprises are credit unions, housing associations, co-operatives, community businesses and businesses whose profits are distributed for the benefit of communities and people in Northern Ireland. That provision in the Bill will give the Department of Enterprise, Trade and Investment — as the sponsoring Department with policy lead in that area — the legal authority to provide financial assistance to the Social Economy Network, as the representative body of the social economy sector.

The Department funds the Social Economy Network on an extra-statutory basis, through annual Budget legislation, but wishes to use the Bill in order to put that funding on a more appropriate, statutory, footing.

Clause 4 of the Bill authorises the issuing of money from the Northern Ireland Consolidated Fund to the Department of Finance and Personnel (DFP) to cover the costs of collecting rates on behalf of district councils. At present, my Department is legally required to recover the cost of collecting the district rate, and to do so by deducting it from the amounts payable to district councils. Historically, that income has been retained in the Northern Ireland Consolidated Fund and accounted for in the public income and expenditure account that is laid before the House prior to 30 September each year.

Therefore, my Department has not been able to recognise that income in order to offset the departmental expenditure incurred through collecting rates on behalf of district councils. The money is already included in the Department’s budget, and the clause is entirely technical in nature in that it allows for the alignment of Estimates, budget and accounts.

The final clause in the Bill relates to the repeal of the requirement to prepare finance accounts. That is a statutory obligation under section 10(2) of the Exchequer and Financial Provisions Act (Northern Ireland) 1950, which required DFP to prepare and lay the finance accounts of Northern Ireland before the Northern Ireland Assembly, and which is now redundant. The structure of Government accounts has developed over many years and has inevitably resulted in duplication of information. The information that was previously contained only in those finance accounts is now available in the public income and expenditure account and in departmental accounts, so there is no loss of accountability. Separate finance accounts are no longer appropriate and they represent unnecessary administrative effort.

As Members are aware, the Bill provides for a number of routine and technical financial provisions. I commend it to the Assembly.

Photo of Mitchel McLaughlin Mitchel McLaughlin Sinn Féin

Go raibh maith agat, a LeasCheann Comhairle. I am grateful to the Minister for his elaboration on, and explanation of, the general principles of the Bill. That will permit me to abbreviate my comments appropriately.

On 4 February 2009, the Committee for Finance and Personnel received a pre-introductory briefing from departmental officials about the background to the Bill and the approach that they took when they consulted with other Departments. The Committee recognises that the purpose of financial provisions legislation is to cover routine financial matters, such as minor amendments to governing legislation, or to regularise an existing practice. The Committee also understands that legislation is normally required at intervals of two or three years to adjust statutory limits and handle various non-controversial issues, and is regarded as a means of tidying up.

The Committee was advised by the Department that the Bill was technical and non-controversial in nature and did not, therefore, require a public consultation. The Department further explained that it had invited contributions to the Bill from other Departments in December 2007.

As a direct result, the Department identified a number of requirements for inclusion in the Bill. Those requirements included provision to confer absolute privilege to certain reports of the Comptroller and Auditor General for Northern Ireland; provision to enable the Department of Enterprise, Trade and Investment to incur expenditure for consumer purposes and expenditure relating to social economy enterprises; provision to provide for the cost of district rates collection to be charged on and issued from the Consolidated Fund to the Department of Finance and Personnel; and provision to repeal the requirement on the Department of Finance and Personnel to prepare finance accounts.

Prior to the introductory briefing, the Committee was advised by the Department that the provisions of the Bill would be a matter of interest to the Committee for Enterprise, Trade and Investment, the Audit Committee and the Public Accounts Committee. As such, my Committee issued copies of the draft Bill to the respective Committees for scrutiny. Upon reply, no issues were raised by the other Committees in relation to the Bill.

At the briefing session on 4 February 2009, members raised a number of issues with the Department, including clarification on the account treatment of the issue of money from the Consolidated Fund to DFP in order to cover the costs of collecting rates on behalf of district councils, and clarification on whether the accounting treatment from the Consolidated Fund to DFP had any negative or positive impacts on district councils. The Committee also sought a detailed written explanation on the repeal of the requirement to prepare finance accounts. Those queries were dealt with very satisfactorily.

The Committee recognises that the Bill is, in general terms, technical in nature and does not appear to raise any substantial issues of concern at this stage. Members also acknowledged that the removal of the statutory requirement to produce financal accounts — which were identical to the public income and expenditure accounts in every respect — will avoid duplication and will provide for a more efficient approach by the Department in the preparation of Government accounts in the future.

Overall, the Committee was generally satisfied with the briefing and clarification provided by the Department. Members will engage with DFP officials and other stakeholders as part of its consultation exercise on the details of the provisions of the Bill during the Committee Stage. In the meantime, on behalf of the Finance Committee, I support the principles of the Bill and I support the motion.

Photo of Robin Newton Robin Newton DUP 11:30 am, 3rd March 2009

I am grateful to the Minister for presenting the Bill to the House. For some time, the Audit Committee has been concerned about the issue of privilege for the reports of the Comptroller and Auditor General. Those reports occasionally deal with serious issues, such as fraud and impropriety.

Clause 1 of the Financial Provisions Bill has implications for the Comptroller and Auditor General’s reports in respect of absolute privilege for the purposes of the law of defamation. The devolution settlement did not give absolute privilege to those reports. Previously, the Comptroller and Auditor General for Northern Ireland had enjoyed the same absolute privilege as his counterpart in Westminster. During suspension, the Comptroller and Auditor General’s reports were published in Westminster and were, therefore, privileged.

The Audit Committee and the Public Accounts Committee (PAC) are persuaded that it is an anomaly that the reports of the Comptroller and Auditor General for Northern Ireland do not attract absolute privilege. To address that problem in the short term, on 27 November 2007 the Assembly agreed a motion — to which the Minister referred — whereby any report from the Comptroller and Auditor General that was prepared under article 8 of the Audit (Northern Ireland) Order 1987 should be printed and published under the Assembly’s authority. That gave protection to the contents of some of the Comptroller and Auditor General’s reports.

To date, that measure has been the legislative cover under which the C&AG’s reports have been published. However, the resolution applies only to the current mandate and to reports prepared under article 8 of the 1987 Order. Today, I am glad to give my support, and that of the Audit Committee, to a more concrete provision to protect the rigour of the audit functions in this Administration.

Clause 1 of the proposed Financial Provisions Bill contains a remedy to that short-term situation by extending absolute privilege, for the purposes of the law of defamation, to all reports of the Comptroller and Auditor General that are authorised or required by any statutory provision. The clause is intended to ensure that the Comptroller and Auditor General is free to present to the Assembly all relevant evidence gathered during the course of his studies and audits without having to defend defamation actions. The provision is more wide-ranging than the one agreed in the Assembly’s resolution of 2007 in that it includes reports authorised or requested by any statutory enactment, not just those prepared under the 1987 Order. That will bring the powers of the Comptroller and Auditor General into line with those available to his counterparts in Westminster and Wales.

The Committee believes that the provision is fundamental to the practice of public audit and that the Assembly’s auditors should be able to present all significant and relevant findings to the Assembly without the threat of legal challenge from third parties who are involved in the issues covered in the report. The Audit Committee supports the provision.

Photo of Basil McCrea Basil McCrea UUP

I realise that much of the Bill is technical in nature, so I do not propose to detain the Assembly unduly. I will take the opportunity to ask a number of questions, because I did not have the benefit of seeing the briefings that were given to Committees.

Mr Newton talked about absolute privilege for the purposes of the law of defamation. Presumably, defamation occurs only when people have been wrongly accused. Although I totally understand the need to ensure the timely delivery of reports and suchlike, I wonder what redress people have if they feel that they have been defamed. Perhaps the Minister will address that issue at some stage. A situation would arise only if — in ordinary circumstances and at a later date — court proceedings might take place.

Photo of Peter Weir Peter Weir DUP

I will speak through the Chair; I do not want to be chastised like I was yesterday. I want to elucidate the matter for the Member. Defamation can occur when somebody is wrongly accused.

However, truth can be a defence against defamation. Therefore, one person can defame another person, but, if he or she is speaking the truth, that can be used as a defence, in the same way as absolute privilege can be used as a defence in defamation proceedings.

Photo of Basil McCrea Basil McCrea UUP

I thank the Member for his helpful intervention. That was the point that I was trying to make. I think that I have got it right: defence against defamation can occur only if it is proven that the truth will out. Therefore, if one person said that a particular thing happened, but it was later shown that, in fact, that did not happen, in that person’s defence, it could be said that the absolute truth was not apparent.

Given that we give absolute privilege to the Comptroller and Auditor General, what procedural methods are in place for people who feel that they have been defamed, or for people who have not had a chance to put their case forward? In this instance, it is unlikely to happen, but we will have to consider who oversees the overseers. Perhaps the Minister will address that issue.

With regard to the legal position, it is interesting that, in cases such as Pepper v Hart, the comments that the Bill’s proponents make now will be party to our subsequent discussions. I ask the Minister to take that into account when he responds.

Photo of David McClarty David McClarty UUP

Devolution is working: we are getting free legal advice from a lawyer.

Photo of Stephen Farry Stephen Farry Alliance

I am in the unique position of sitting on the Committee for Finance and Personnel and on the Audit Committee, so I have been at both ends. I support the Second Stage of the Bill. It is largely technical in nature, and, as much as some Members would wish to engage in debate on the issue, I fear that that will be extremely difficult. The Bill is, essentially, a tidying-up exercise, which happens every few years, and it is important that we treat it in that regard.

I have only two points to make. First, I support the extension of full and absolute privilege to the Comptroller and Auditor General. That happens elsewhere in the United Kingdom, and Northern Ireland is in an anomalous position. Therefore, we are out of line on the issue rather than the rest of the UK.

Members are aware of the work of the Public Accounts Committee and of the number of important cases that have been highlighted. No doubt, other challenging reports will need to be addressed and brought to public attention in the months and years to come. It is important that the Comptroller and Auditor General has the freedom and confidence to tell us the awkward truths that we need to hear for the sake of the public’s interest and that they are not overly inhibited through fear of the consequences of their actions.

It is also important that the Northern Ireland Audit Office is at arm’s length from the Assembly. However, the Assembly has an Audit Committee that has a relationship with accountability. There is also financial accountability through the Assembly in the allocation of resources. Therefore, that relationship is fine, and it is balanced. It is right and appropriate, we should welcome it, and the extension is worthy.

Secondly, I want to address the social economy powers. In some respects, I am surprised that the issue has not yet been addressed through legislation. We are all conscious of the importance of the social economy, particularly in the context of an economic downturn when the emphasis may shift from foreign direct investment to more indigenous activities. In that context, the role of the social economy becomes more important, and, if the legislation can enable that to be developed further on a more sound and legal basis, that is to be welcomed. Is the Minister satisfied that those powers need to be clarified only in the Department of Enterprise, Trade and Investment (DETI)?

Thus far, much work on the social economy in Northern Ireland has been delivered under Peace II, with the involvement of other sponsoring Departments, including the Minister’s own Department. Are we satisfied that there is full legal authority for the work that has been done under Peace moneys up until now? I am aware of the legal toing and froing over some aspects of the absolute legal framework. Perhaps that matter could also be clarified.

Overall, the Assembly should accept that this is a routine piece of legislation. The Alliance Party is more than happy to see it go forward.

Photo of Peter Weir Peter Weir DUP

Sometimes, Members debate legislation that is not very headline-grabbing. I doubt whether this afternoon’s ‘Belfast Telegraph’ will lead with the debate on financial provisions, and I do not expect it to be a hot topic on ‘The Stephen Nolan Show’ tomorrow morning. I suspect that the technical nature of this legislation is such that even the most technically-minded of anoraks — some of us in the Finance Committee are proud to wear that badge, and I see the Member who spoke previously nodding — would find it difficult to salivate too much over the details of the Bill.

Nevertheless, the debate has thrown up some surprises. Had someone told me this morning that the phrase “social economy” would be mentioned by a member of the Finance Committee, I would have thought that Jennifer McCann or Fra McCann might be favourites, rather than Stephen Farry. However, we have a debate in which social economy seems to be at the heart, and Jennifer McCann is not here, which is a sad loss to the debate.

I welcome the legislation. It falls into two parts. The more technical areas relate to the social economy and provisions for how collection of rates is dealt with within DFP. I echo Mr Farry’s remarks in relation to social economy issues. I assume that legislative provisions are in place to cover other Departments, but it would be helpful were the Minister to clarify that. An issue has been raised, for example, regarding the legal powers of councils with respect to Peace money: that concern may be a red herring, but it would be helpful if clarification were given.

Another issue raised is that of absolute privilege for reports of the Comptroller and Auditor General. That is an important power. As indicated by the Member who spoke previously, it will bring our practice into line with the rest of the United Kingdom and will put the Comptroller and Auditor General on the same basis as Members of the Assembly, for whom absolute privilege is a defence against allegations of defamation. The nature of the Comptroller and Auditor General’s work means that there is always the possibility that such allegations might be made. It is important that the Comptroller and Auditor General is free to bring all the facts into the public domain. Consequently, it is vital that Comptroller and Auditor General reports are covered by absolute privilege, otherwise, unwarranted protection may be given to people and we would be unable to get to the heart of issues. I am not a member of the Audit Committee, but I welcome those provisions.

With such a high level of freedom of expression comes responsibility. However, the nature of the Comptroller and Auditor General’s office is such that it is most unlikely that there will be any allegations without supporting evidence of the highest calibre. The Bill is designed to provide a safety net rather than a carte blanche for irresponsibility. It is well-grounded and has been designed to ensure that the Comptroller and Auditor General has an appropriate level of freedom when making reports.

Consequently, I echo the remarks of the Finance Committee, the Audit Committee, and those Members who spoke previously, all of whom welcomed the Bill. I hope it passes.

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 Members who have taken part in this short debate. I welcome the remarks of the Chairperson of the Committee, and I thank the Committee for its deliber­ations. If the Bill is passed today, I give a commitment that my officials will continue to work with the Committee when the Bill is in its Committee Stage. As has been said, the Bill is a short but necessary piece of legislation.

Several Members raised a number of points. Mr McCrea, Mr Farry and Mr Weir talked about the Comptroller and Auditor General and his reports. It is worth bearing in mind that until devolution, his reports were published with the presumption of parliamentary privilege, which is a long-standing practice at Westminster. It is one of the principles of public audit that an auditor of a legislature, a Parliament, or an Assembly should be able to present all relevant evidence to that legislature without threat of legal proceedings. Absolute privilege for reports is intended to ensure that the Comptroller and Auditor General will be able and free to present to the Assembly, without having to defend an action for defamation, all relevant evidence that has been gathered during the course of his studies or audits.

An audit has to deal with issues such as fraud and impropriety, and it needs to report fully on such matters, even when the evidence that is available is not to the highest judicial standards. Without absolute privilege, there is the potential for third parties who are involved in report issues to take legal action that will impede or delay the Assembly’s access to full knowledge of cases in which there will be a significant degree of public interest. That could be seen as inhibiting the Comptroller and Auditor General from reporting freely and frankly to the Assembly. Through an earlier decision, the Assembly has provided absolute privilege to the Comptroller and Auditor General already. Therefore, the purpose of this provision is to put that into statute on a permanent basis.

Mr Farry also raised the issue of the social economy.

Photo of Basil McCrea Basil McCrea UUP 11:45 am, 3rd March 2009

Before the Minister moves on to the next point, I want to say that I agree with and understand the need for the Comptroller and Auditor General to have absolute privilege so that he can bring information to the Assembly. However, there will be occasions when people feel that they have not had a chance to put their side of the story, for example. Normally, they would have redress to go to the courts. However, that will no longer be the case. I think that at the moment, people cannot even approach the PAC or the Audit Committee. Therefore, in the unlikely event that people have been misinterpreted, is there anything that we should be considering?

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

I understand where the Member is coming from. However, the process and approach of absolute privilege, which is being put into permanent statutory form, is not new. It is long-standing in most Parliaments and legislatures everywhere. Therefore, the Member’s point is not new either. Obviously, individuals and companies, or whoever may be affected, will be concerned, but as Mr Weir said, normally reports are undertaken with the utmost seriousness and propriety. I think that there are procedures open to anyone, or any body, that is affected by the reports. The Member will know through his own research how that matter is dealt with elsewhere and how it has been dealt with here previously.

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

I did not speak earlier because I was broadly comfortable with the different proposals in the Bill, which we will see in more detail when it reaches Committee Stage. However, in the light of what the Minister has just said, I want to ask him a question. Obviously, the Comptroller and Auditor General will use the protection that is given to him with due seriousness. The Minister said that the Comptroller and Auditor General might include matters in his reports on the basis of evidence and information that he has but that might not stand the ultimate test of judicial proceedings. That is what I understood the Minister to have meant. If that were the case and if such information were published, what would be the position for someone who reports on, or copies, that report? Would they have the same protection, and if so, is that covered by the legislation?

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

Those are matters of detail, which will be explored when the clauses are examined by the Committee. I am talking about the broad principle of whether it is right that there should be an absolute privilege. That has already been agreed, and the Bill will simply put that into statute. The Member raised a fair point, and it can be legitimately teased out in detail at Committee Stage. I would be interested in coming back to that point at that stage. Today, there is wide agreement on the general principle, and matters can be teased out and considered in detail at the Committee Stage.

Mr Farry raised a point about the social economy. He mentioned the fact that DETI says that it has no specific legal authority, and the Bill will grant that. He asked about the position in other Departments. The provisions have arisen as a result of asking Departments what issues they thought needed to be put into the Financial Provisions Bill. I have not received any indication from any Department of any requirement to take similar action. I will confirm that in full to the Member and to the House, but my understanding is that there is no need to take any further legislative action.

I commend the Bill to the House.

Question put and agreed to.

Resolved:

That the Second Stage of the Financial Provisions Bill [NIA 6/08] be agreed.