Second Stage

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

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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.