North/South Ministerial Council: Special EU Programmes

Ministerial Statements – in the Northern Ireland Assembly on 28th May 2012.

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Photo of Conor Murphy Conor Murphy Sinn Féin

Go raibh maith agat, a Cheann Comhairle. Gabhaim buíochas leis an Aire fosta. I thank the Minister for his statement and welcome the more positive indication that was given on INTERREG spend. I know that he shares the concerns of many representatives in this House about the level of spend and some of the issues with getting INTERREG money spent.

It has been suggested to the Finance Committee that implementing more simplified decision-making arrangements for the next INTERREG programme that are similar to those in the other European jurisdictions could avoid the bottleneck and delays that have occurred in the current programme. What is the Minister’s view on that? How confident is he that all the necessary arrangements will be completed on time to ensure that the existing programme gets back on track and avoids any budget deductions?

Photo of Sammy Wilson Sammy Wilson Shadow DUP Spokesperson (Treasury)

I thank the Chairperson for the question. He is quite right: we cannot continue with the current assessment method for programmes. I would like to think that the changes will occur not for the next set of programmes, but that we will actually see material changes. In fact, we have to see material changes in the assessment method. I cannot understand why programmes and projects can be assessed and letters of offer can be out within 26 to 28 weeks in other jurisdictions, while assessment takes 56 to 58 weeks in our system.

To meet the targets for the current programme, the SEUPB has said that it will cut that assessment down to 40 weeks for the current applications that have gone in through INTERREG. That has been done in a number of ways. First, there has been an early assessment of projects, so we are now down to a shortlist of 13. Secondly, a more detailed economic assessment will then be carried out. At the same time, there should also be work with Departments and a parallel arrangement to ensure that there is input from economists in the accountable Departments.

Since, at the end of the day, the accountable Departments carry the can on this, there must be input from them. Can we marry some of the views in there, so that we get questions at an earlier stage? If it can be done in other jurisdictions for the same kind of programmes, there is no reason why it cannot be done with SEUPB. The other thing is that, perhaps in the longer run, we will need to go back and look at devolving this down again to local partnerships rather than it being centralised to SEUPB level. I hope that that will come through in the consultation when looking at further programmes.

Photo of Paul Girvan Paul Girvan DUP 12:15 pm, 28th May 2012

I thank the Minister for his statement. Unlike other Members, I am somewhat apprehensive about the way in which SEUPB delivers some of the funding. I am pleased to see, between INTERREG IVa and the cross-border project, that there are a number of applications, amounting to £190 million. What measures are being taken to ensure that that funding is being dispensed on an equality basis? I ask because we understand that certain Members make a big issue about that. I want to be sure that the community that I represent is getting a fair crack of the whip. I do not believe that —

Photo of William Hay William Hay Speaker

I ask the Member —

Photo of Paul Girvan Paul Girvan DUP

That is the question.

Photo of Sammy Wilson Sammy Wilson Shadow DUP Spokesperson (Treasury)

First of all, programme money is not allocated on a community basis. The individual projects that come forward are assessed based on how they meet the objectives of the particular themes and programmes. I am pleased to say that there appears to be a wider range of projects coming in. There is a very strong one for the north-west science park, which I know that you will be interested in, Mr Speaker, and which should benefit the whole community. Certainly, if it has the same impact that the Science Park in Belfast is having, it will be valuable to the north-west. In my own area, I am pleased that one tourist project, the Gobbins path, has already received money, and the refurbishment of Magheramorne quarry, which is not too far away, will have massive tourist potential in east Antrim. It really is up to areas and people in those areas, whether that is local authorities or businesses, to bring forward quality projects so that they can be assessed.

Photo of Leslie Cree Leslie Cree UUP

Like other Members, I have a concern about the operation of SEUPB. We were told by SEUPB some time ago that it was having difficulty meeting targets. Suddenly, it takes the step, which is to my mind a normal governance issue, of issuing a new call, and it has now got a lot more. I notice that the Minister put a note of caution in his statement: “If all of those assessments are completed on schedule and the funding allocated”.

Is he happy that that will actually happen, or is it going to be another tactic of SEUPB — stop, go, stop, go, panic, save it, panic, save it?

Photo of Sammy Wilson Sammy Wilson Shadow DUP Spokesperson (Treasury)

First of all, I do not think that I have ever been anything other than honest with the House about the difficulties that SEUPB has experienced and will always experience. I have made it quite clear that I will not defend the indefensible. Where I believe that there is something to be highlighted, I will highlight it so that Members have full transparency. Even if that leads to uneasy questions for me, I am quite happy about that.

All I can say is that, first of all, there was a call for projects, and that call has brought in some very good projects. Indeed, the worrying thing is that, had some of those projects been submitted at earlier stages, they would probably have got through the scoring process because they are very good projects. It is not that we are simply throwing money out and saying, “It does not matter what the project looks like, let us just get the money spent”. The 13 that are shortlisted are all good, high-quality projects. I mentioned the Magheramorne quarry regeneration project in my own area and the north-west science park, both of which are good economic drivers, and will be important.

In all the discussions with SEUPB, we have looked at what was wrong in the past, why it was taking so long and what we can do to advance the assessment. I have been given an assurance by SEUPB, as has the Minister in the Republic, that those will be assessed within the 40-week period.

Consultation groups have already been set up to assess the projects, and they are starting their work now. I think that there should be a report from the consultants by September, and then allocations can be made. Letters of offer must go out by the end of this year — I am putting that on the record in the House so that Members can make their own judgement. If that leads to questions coming back at the end of this year, I am quite happy for that to happen. Of course, it is then up to the groups to spend the money; that is the next stage. Sometimes that is slow, with spending starting around 18 months after letters of offer have been issued. So, again, that is the next big challenge: to make sure that the money is spent once it has been allocated.

Photo of Dominic Bradley Dominic Bradley Social Democratic and Labour Party

Go raibh míle maith agat, a Cheann Comhairle. Gabhaim buíochas leis an Aire as ucht a fhreagra. I thank the Minister for his statement. What progress has been made on recouping moneys from groups that were found to be in breach of the terms of their letter of offer?

Photo of Sammy Wilson Sammy Wilson Shadow DUP Spokesperson (Treasury)

First, there is a requirement that where moneys have been allocated and the terms of letters of offer have not been met, the money should be recouped. A number of things have to be taken into consideration, the first of which is the circumstances that led to the breach of the letter of offer. In some cases where genuine mistakes have been made and where the fault does not lie totally with the group concerned, the funding body has to accept some culpability.

Secondly, there has to be a proper investigation. Given that individual groups are seriously affected when money is recouped, I think that it is only fair that they should have the opportunity for comeback. Thirdly, of course, a judgement then has to be made on what percentage of funding needs to be recouped. In the past, the levels have varied from very small percentages to — I think that there are examples of this — up to 100%. All those things have to be borne in mind.

Let us just remember that many of the groups that undertake work in their community have a grave responsibility, and some of them need their hand held more than others. I do not think that we want to run in willy-nilly and penalise people who, despite acting in the best interests of their community, very often find themselves in a situation where they have run foul of the very bureaucratic system of European funding and find that their personal assets have been put in jeopardy. I think that we have to bring a bit of humanity to this as well.

Photo of Kieran McCarthy Kieran McCarthy Alliance

I am grateful to the Minister for reporting back to the Assembly this afternoon and, particularly, for his last comments. I pay tribute to all those people on the ground who work hard to bring a lot of benefits to all our communities. I have sat through many laborious and lengthy meetings with partnerships, which you mentioned. My question has already been asked, so I will ask one about the board. The last paragraph mentions the recommendation that a board be set up. That has been set aside, I think wisely, because of costs. What was the board going to do?

Photo of Sammy Wilson Sammy Wilson Shadow DUP Spokesperson (Treasury)

The board’s role was to oversee the expenditure of SEUPB. As I pointed out in the statement, only about 3% of its expenditure is for administrative purposes. The board’s only role would be to look after that expenditure, which is such a small amount. I do not support building more quangos on a cross-border basis or on a Northern Ireland-only basis. The Minister from the Irish Republic took the same view; he and I are like-minded on this. We are not quango builders. We want to knock down as many quangos as possible. It was, therefore, decided that the board probably was not necessary. However, a process has to be gone through, and we will go through it. I have the same view as the Member: why set up another unnecessary body?

Photo of Adrian McQuillan Adrian McQuillan DUP

I also thank the Minister for his statement. Has there been any work done on the future Peace IV and INTERREG V programmes?

Photo of Sammy Wilson Sammy Wilson Shadow DUP Spokesperson (Treasury)

The work on future programmes will be undertaken and chaired by SEUPB. There is probably about an 18-month lead-in period for that. The work will mostly be consultation and written submissions. We will be looking at and evaluating past programmes to see the good things and the bad things, the things you want to repeat and the things you do not want to repeat. We will be looking at what kind of themes those people who have an interest in the issue would like to see taken forward for the future, and then a report will go to the Executive as to what we see as our priorities for Northern Ireland. There will be extensive consultation, and I expect that any report on that will go to the Executive, probably towards the end of 2013.

Photo of Mitchel McLaughlin Mitchel McLaughlin Sinn Féin

Go raibh maith agat, a Cheann Comhairle. I thank the Minister for his answers. Will he give some clarification on the overall cost of consultants engaged in the economic appraisal of funding applications? My concern is that a lot of the basic structure of applications is similar, and it is being paid for over and over again. It could cut down both the cost and the time to complete those applications, so perhaps the Minister can comment.

Photo of Sammy Wilson Sammy Wilson Shadow DUP Spokesperson (Treasury)

I do not have the figure off the top of my head, but I think, in answer to questions on another occasion in the House, I indicated that I was concerned about the level of consultancy spend that there was through many of the European programmes. Of course, some of it is imposed on us because of the EU rules. There is a requirement that projects are properly assessed and that there is an economic case for them. That is a necessary step. If that step was not undertaken, it could be declared that the project itself is not valid.

I will come back to the Member, but the consultancy spend has come down. I have raised this with SEUPB on a number of occasions. On one occasion, when I raised the question of consultation and the cost of consultees and refused to approve it, it came back to me within a week at a 40% reduction. I sometimes think that maybe we do need to push some of the consultants, to indicate to them that this is not some easy ride where they just put their hand out and grab a lot of public money.

Photo of David Hilditch David Hilditch DUP

I thank the Minister for his answers so far. Minister, what is your opinion of the recent INTERREG IVa call?

Photo of Sammy Wilson Sammy Wilson Shadow DUP Spokesperson (Treasury)

The Member, since he represents East Antrim, will be pleased, as I am, that, in the recent INTERREG IVa programme, a major project in his own constituency — probably worth about £6 million or £7 million — has been shortlisted. That project at Magheramorne quarry will be of immense benefit to East Antrim, so, from that point of view, I am very pleased with the recent call and the outcome of the shortlisting. I would like to claim credit for it, but this is a totally objective assessment of the projects. At some later date, after it has gone through, I may have something more to say about it.

The recent call has attracted £191 million of applications, which is about five times more than the money that is available, so many are going to be disappointed. Yet, had some of those come forward at an earlier stage, when money was more readily available, they would have easily got the score to have got them through to a final selection. That shows that there are a number of very good projects out there and that, although some cynics might say that we are panicking now, that we just want to spend the money and will throw it at anything, that has not been the case. It has been a very competitive process, and I believe that the projects that have been selected will be very worthwhile and great economic drivers in the area when they finally get on the ground.

Photo of Roy Beggs Roy Beggs UUP

I thank the Minister for his statement. Does he agree with me that, when SEUPB has indicated that there are future risks for INTERREG funding, primarily coming from the lateness of the Budget, that is not a good way to spend public money?

Lessons should be learned from our Budget; it is much better to have more forward planning so that money can be better spent.

Photo of Sammy Wilson Sammy Wilson Shadow DUP Spokesperson (Treasury) 12:30 pm, 28th May 2012

There are a number of reasons for that. I have given reasons; I have not tried to hide what the problems have been. At an early stage, some of the projects coming through were not well thought out and required a considerable degree of sifting. Secondly, SEUPB has not covered itself in glory when it has come to the assessment of projects. It takes twice as long for projects to be assessed by SEUPB than it takes in other countries. That needs to be improved.

However, I would be more worried had some of the shortlisted projects looked fairly iffy; then, I think the Member’s criticism might have been more justified. Perhaps it is because of the current economic situation, but projects that would normally never have come near INTERREG are now coming. I am fairly sure that we are not throwing good money after bad with the projects that are being shortlisted. We have good, quality projects; however, I suppose it would have been better had those projects come through at an earlier stage so that work could have progressed on them much quicker.

Photo of Patsy McGlone Patsy McGlone Social Democratic and Labour Party

Go raibh maith agat, a Cheann Comhairle. One issue that has cropped up, particularly with some of the rural development projects, has been the problem that some groups are having in acquiring matching funding, especially from finance organisations. Will the Minister advise whether that has been an issue, and whether any representations have been made through his Department to financial or lending institutions to try to ease the situation and help projects develop?

Photo of Sammy Wilson Sammy Wilson Shadow DUP Spokesperson (Treasury)

There have been a couple of issues around matching funding. In some cases, letters of offer or projects have been held up because matching funding, especially from Departments in the Republic, has not been forthcoming. I discussed that issue with the Minister in Armagh. I have been given an assurance that, although the money has been held up because of budgetary considerations, it will be made available and letters of offer will go out.

I have not been made aware of the problem that the Member raised about financial institutions not being prepared to make matching funding available for projects. I would have thought that any group going to the bank with a guarantee that they were getting EU money for the project and knowing that the amount of money coming from the bank would probably be a fairly small proportion of the total funding package would have been offering the bank good collateral. However, I meet banks on a regular basis, and if the Member is aware that this is a widespread problem, I would love him to give me the details and I will take it up.

Photo of William Humphrey William Humphrey DUP

Since the Minister has made it clear that all politics is local, I commend the SEUPB for its funding for the Shankill Women’s Centre in north Belfast recently. Credit must also be given to our Ministers and MEPs who have been lobbying for a Peace IV; I hope that happens in the near future.

Evidence was given by the chief executive of the SEUPB to the Committee, and members raised a number of concerns in relation to funding, applications being made and the length of time it took for the letters of offer to be sent. In administration, financial governance and management, as well as practice and structure —

Photo of William Hay William Hay Speaker

The Member should come to his question.

Photo of William Humphrey William Humphrey DUP

The Minister should be aware that lots of groups have struggled to get letters of offer. That affects their output, outcomes and delivery to the community and impedes them in their work. That means that, when they come to review, the work has not been maximised because of that system. Will the Minister give an assurance that the process will be shortened?

Photo of Sammy Wilson Sammy Wilson Shadow DUP Spokesperson (Treasury)

I want to look at all of the issues, and I have asked the SEUPB to look at all of the issues that lead to the delay. If one reason is the stringency of the governance arrangements that are required to be put in place, that needs to be addressed. However, I point out to the Member that, since we are dealing with public money and since there very often will be matched funding from other public bodies in Northern Ireland, we cannot simply hand money out willy-nilly to groups whose credentials have not been established.

There has to be a balance; there has to be proper governance and accountability to make sure that money does not go astray because, as sure as you relax the rules, things go wrong, and, as sure as things go wrong, there will, quite rightly, be a barrage of questions around this room about what was being done with public money.

Photo of Jim Allister Jim Allister Traditional Unionist Voice

Is the Minister satisfied with how SEUPB conducts itself in regard to its investigation of funding spend by groups? I refer in particular to how it has treated the victims’ group Families Acting for Innocent Relatives (FAIR). The investigation denied FAIR the basic rules of natural justice by denying it the opportunity to comment on the report before it was concluded and as issues emerged. Does that Minister think that that indicates that SEUPB handles matters in a fair and even-handed manner?

Photo of Sammy Wilson Sammy Wilson Shadow DUP Spokesperson (Treasury)

I made it quite clear in an earlier answer to another Member that, since the outcomes of many of the investigations can be fairly draconian for the people who are involved in the groups, it is absolutely right that every opportunity is given to groups to explain why they breached the rules if they did so. There should also be a proper investigation into the severity and the intention because if something has been done unintentionally, the penalty should be much less than where somebody simply says, “Those are the rules, but we don’t think that the rules are very good”, and throws them over their shoulder and decides to go their own way.

I have met the Member privately about FAIR. I have made my views known to SEUPB, and I am quite happy to state publicly that, a report having been done and it being clear that the police did not believe that there was anything worthy of prosecution, the group should at least have had an opportunity to bring forward some points and state how it saw the investigation as being inadequate, because that may well have changed the view of what sanctions should be imposed. I expect SEUPB to give the group that opportunity.

Photo of Tom Elliott Tom Elliott UUP

I thank the Minister for the detail. Although I appreciate the answer that he gave to Mr Humphrey about being certain of certain projects, is there any possibility of a speedier resolution from SEUPB on some of the economic projects that come through the cross-border bodies like the Irish Central Border Area Network (ICBAN)? There are serious delays, which jeopardise the investment of private investors.

Photo of Sammy Wilson Sammy Wilson Shadow DUP Spokesperson (Treasury)

It seems to have been the theme of this statement that people are unhappy about the speed. Of course, as the Member has quite rightly pointed out, that can have severe economic consequences for an area in which there is perhaps a good project. Sometimes, the timing of the projects is quite important because you are aiming for certain events or times or whatever. All that I can do is to continue to emphasise to and plague SEUPB to make sure that the shorter time commitment that it has now given is met. It should not be complacent about that, and it has to look at ways of bringing that down since it is quite clear in other jurisdictions that 40 weeks or 58 weeks is not the norm; half of that is the norm. That is what we should aim for.