Finance and Personnel

Oral Answers to Questions – in the Northern Ireland Assembly at 2:45 pm on 19th March 2013.

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Photo of John Dallat John Dallat Social Democratic and Labour Party 2:45 pm, 19th March 2013

I inform Members that question 1 has been withdrawn.  Mr Gerry Kelly is not in his place

Photo of Peter Weir Peter Weir DUP

He has escaped.

Photo of John Dallat John Dallat Social Democratic and Labour Party

Order, please.  Some remarks made from the Benches just now were totally inappropriate — I do not imagine that we will hear them again.

Mr Conall McDevitt is not in his place. We move on to Mr Roy Beggs, who is in his place.

Some Members:

That is you, Roy.

Photo of Roy Beggs Roy Beggs UUP

Question 4. [Laughter.]

Civil Service: Jobs

Photo of Roy Beggs Roy Beggs UUP

4. asked the Minister of Finance and Personnel to outline how he determines new locations for Northern Ireland Civil Service jobs. (AQO 3675/11-15)

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

I am glad to see a fair degree of confusion this afternoon.

It is up to individual Departments and Ministers to consider the relocation of Civil Service facilities and jobs subject to the normal requirements of business need, value for money and affordability.

Photo of Roy Beggs Roy Beggs UUP

Apologies; I did not realise that a number of questions had been withdrawn or that a number of Members were not in their place.

Will the Minister ensure that in determining locations for civil servant jobs, business cases are made, value for money is a major consideration and that lessons are learned from other places such as Scotland and the Republic of Ireland?

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

Those are prerequisites.  In departmental relocations, there will normally be necessary capital expenditures.  There may well also be revenue consequences such as travel expenses for the initial period of relocation, the fitting-out of offices etc and staff redeployment.   All of that will require a business case, and, of course, when that is submitted, we look at the value for money, affordability and costs involved in such relocation.

Photo of Joe Byrne Joe Byrne Social Democratic and Labour Party

I welcome the Minister's comments.  Does the Minister still favour the economic merit of Northern Ireland having some decentralisation?  Will he comment further on what he means by value for money in a private sector-led office relocation?

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

As I said, it is really up to individual Ministers to decide what their Department most needs and what opportunities are available.  If there is to be a relocation or dispersal of jobs, that is usually best done when a new function comes on to the books rather than looking at existing functions.  However, there may well be occasions when existing functions can be relocated.  As far as I am concerned, that is a responsibility not for me or the Department of Finance and Personnel (DFP), and not even for the Executive, but for individual Ministers.  All that we wish to ensure — I am sure that the Member will agree with me — is that in times of financial austerity, we do not spend money simply on an ideological commitment to disperse jobs despite that requiring immediate capital expenditure and additional revenue expenditure in the long term.

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

When determining whether we get value for money, we look at the costs and benefits.

Photo of John Dallat John Dallat Social Democratic and Labour Party

I remind the Minister that he is on a two-minute limit, which he exceeded.

Photo of Adrian McQuillan Adrian McQuillan DUP

Will the Minister outline the current policy on the dispersal of Civil Service jobs?

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

The current policy is that it is up to individual Ministers to decide where best to locate the functions that their Department has to carry out.  If Ministers decide to change how and where those jobs are located, they have to make a business case to the Department of Finance and Personnel.  Some time ago, the Bain report suggested pilot schemes for the dispersal of jobs, but no pilot scheme was implemented by the Executive.  A cost of £40 million was attached to the pilot scheme, and I do not believe that that would be money very well spent in the present climate when we are looking for every penny that we can get to deliver front line services.

Review of Public Administration: Finance

Photo of George Robinson George Robinson DUP

5. asked the Minister of Finance and Personnel what is the total financial allocation for delivery of the review of public administration. (AQO 3676/11-15)

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

The Executive agreed an allocation of £47·8 million for the review of public administration (RPA) in local government.  Of that, £17·8 million will be allocated in the years 2013-14 and 2014-15.That money is to be used to fund transitional costs, such as the councillors' severance scheme, shadow councils, change management, staff induction and the winding up of old councils.  It also includes £2 million each year towards the cost of servicing the borrowing that councils will need to undertake for the convergence of ICT systems.

The remaining £30 million will be allocated in the next Budget period.  That is designed to deal with rates convergence after the mergers have taken place, and it will be across a three-year period from 2015-16 to 2017-18 and, therefore, will fall beyond the current Budget period.

Photo of George Robinson George Robinson DUP

How will rates convergence be managed?

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

We are looking at a number of models.  First, we could simply support individual ratepayers; secondly, we could support council clusters; thirdly, we could have differential rates for a period after the merger while convergence actually happens. 

We have not decided on which is the best model.  We are doing some work on how they would be implemented and the cost of implementing them.  Obviously, there will be administrative costs.  We are also looking at which model would be the most effective way of doing it and which would encourage convergence over the period.  The one thing we do not want to happen as a result of RPA is that some ratepayers find that they get a huge hike in their rates because rate levels are different in two councils that join the cluster.

Photo of Daithí McKay Daithí McKay Sinn Féin

Go raibh maith agat, a LeasCheann Comhairle.  I thank the Minister for his answer.  Has the Department made any assessment of what savings there would have been to the taxpayer had the review of public administration gone according to the original timetable?  Does he agree that we need to ensure that there is no further delay in the process?

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

We have not assessed the savings that have been lost so far, but, of course, a lot of them would have been long-term savings, such as those resulting from councils sharing services, downsizing or avoiding duplication of services, etc.  Off the top of my head, I think that the total saving was about £400 million over a 20-year period.  There would have been initial costs to the councils due to redundancies, but those costs should have quickly resulted in savings, as councils would have had fewer staff to pay, less top management and have been using shared services.

I think that it would be a mistake to have further delay in the review of public administration and the bringing together of councils.  Do not forget this: the real benefit in this is for councils, which will have additional powers and be able to do things in their areas that they cannot do currently.  It will make the councillors' job very exciting and give councils a real ability, at a micro level and at a local level, to make big changes for their constituents.

Photo of Mark Durkan Mark Durkan Social Democratic and Labour Party

I thank the Minister for his answers thus far.  He spoke of the provision for rates convergence.  I know that there is still work to be done on this, but will he explain how he foresees the money being shared out among councils?

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

Some councils will not get any of it, because, in some cases, there will be no problem of rates convergence; there will not be a huge difference between the rates in one council area that is joining with another.  I am reluctant to give the Member a list of the main places, in case I leave out an area.  If I do that, people will come to me and ask, "Why are we not getting anything; there is a difference here."  The main areas were, of course, Fermanagh, south Tyrone and Omagh, where there was a big difference.  There will be some differences around Belfast, Castlereagh.  There are other areas, and if I have not mentioned them, it is only because I have forgotten them.  Where there is a substantial difference in rates, money will, of course, be made available for convergence.  How it will be distributed will depend on whether we use the individual ratepayer method, the council cluster method or convergence over a period.

Photo of Kieran McCarthy Kieran McCarthy Alliance

This has been going on for almost 10 years.  Is the Minister convinced that, after a 20-year period of jumping through hoops, pain and agony, there will be significant savings for the ratepayer?  That is what it is all about; saving the ratepayer huge amounts of money.

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

There are two elements to RPA.  First, there will be savings.  It stands to reason that if, for example, three councils merge, there will be no need for three chief executives or three directors of environmental services, recreation services, or whatever it happens to be.  Therefore, there will be staff savings. 

Secondly, as a result of councils coming together like that, they will be able to engage in shared services.  Indeed, it is hoped that there will be shared services not only in clusters but between clusters.  That will lead to savings.  That is one aspect of it. 

To me, the more exciting aspect is that councils will now have the ability to do far more things.  They will have greater economic, vesting, planning and tourism powers; a whole range of things that they can do.  To me, that is what is really exciting about RPA.  The Member has been a councillor for a long time —

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

He still is — and an excellent councillor he is, I believe.

Some Members:

Hear, hear.

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

Of course, it depends who you speak to.  Other people might have a different view.

I am sure that he knows the kinds of things that he would love the council to be able to do, but councils do not have the powers.  After RPA, they will have those powers.  That is where the big gain from RPA lies.

Photo of John Dallat John Dallat Social Democratic and Labour Party

Before I call the next speaker, I remind Members that if they are interested in being called to ask a supplementary question, they must continue to rise in their place.  Otherwise, I have no way of knowing whether their particular questions have been answered.

Community Safety College: Funding

Photo of Ian McCrea Ian McCrea DUP

6. asked the Minister of Finance and Personnel whether he has received any requests for additional funding for the Desertcreat training college. (AQO 3677/11-15)

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

My Department has not been approached by the Department of Justice (DOJ) or the Department of Health, Social Services and Public Safety seeking additional funding for the joint Northern Ireland community safety college at Desertcreat.

On 4 March 2013, I met Minister Ford to discuss the options that the Department of Justice is considering to progress the project.  As part of that process, the Department of Justice, along with colleagues in the Department of Health, will seek measures that will reduce the cost of the project in order to ensure that it remains affordable from existing agreed budget allocations.

Along with the Justice Minister and the Health Minister, I remain committed to the project.  I hope that those difficulties can be overcome within the next few months.

Photo of Ian McCrea Ian McCrea DUP

I welcome the Minister's commitment and support to continue to provide that long-overdue college in mid-Ulster.  Will he explain what steps are being taken to keep the project on track?

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

Since the problems came to light, the programme board, which was set up by the police and the two Departments, has worked to identify and develop the best way forward.  The first step was an analysis of the additional cost that was undertaken to determine exactly what elements have resulted in the cost escalation.  As the tender costs exceed those in the business case significantly, DOJ will seek DFP approval for a revised business case.  Work on that is currently under way.  As that progresses, health estates will continue to provide advice on the best way forward.

Photo of John Dallat John Dallat Social Democratic and Labour Party

I call Mr Patsy McGlone for one supplementary question.

Photo of Patsy McGlone Patsy McGlone Social Democratic and Labour Party

Go raibh maith agat, a LeasCheann Comhairle.  Thank you very much, indeed, Mr Deputy Speaker, for your guidance as usual.

Will the Minister advise the House whether any advice or information has been provided by the programme board as to how the projected costs have been so far out of kilter with the actual tendered costs for that project?

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

Mr Deputy Speaker, you will note that the Member kept his question to one question.  He kept it succinct.  I will try to answer him succinctly while also giving him a full answer.

I have not spoken to the programme board about this, but from my conversations with DOJ and my Department's knowledge of the project, it is my understanding that the difference between the tenders and the business case relates solely to the capital costs of the project.  The Department informed me that there were a number of reasons for that: first, inaccurate cost planning; secondly, inaccurate market testing; and, lastly, failure to factor in all the additional costs resulting from the design changes.  That is the information that I have been given.  Of course, the review will go back over some of that to see where some of the costs can be taken back from the original design so that we get back within the 10% tolerance level for the budget that was allocated.

Budget: Review of Financial Processes

Photo of Alex Easton Alex Easton DUP 3:15 pm, 19th March 2013

7. asked the Minister of Finance and Personnel for an update on the review of financial processes. (AQO 3678/11-15)

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

In February 2011, the Executive commissioned a review of financial processes in Northern Ireland by my officials.  On 9 March 2012, following consultation with the key stakeholders, including the Assembly, I circulated a paper to the Executive reporting the outcome of the review.  To date, the report has not been tabled for discussion at the Executive. 

I recently held meetings with the Education Minister and the Minister for Regional Development regarding concerns that they raised on sections of the report.  I am hopeful that we will be able to agree a way forward and that the review report will be considered by the Executive shortly.  I believe that this is an opportunity for the Executive to deliver significant reform.  I also believe that the review will help the Assembly to better understand the financial processes and, therefore, be in a better position to scrutinise the way in which Ministers and Departments use the money that is allocated to them.

Photo of Alex Easton Alex Easton DUP

I thank the Minister for his answer.  Will he let us know what has delayed Executive discussions on the review report, plus the action plan?

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

The main delay has been the opposition from the Education Minister, which, as I have said many times in the House, I do not understand.  There was no response from the Office of the First Minister and the deputy First Minister (OFMDFM) or the Department of Agriculture and Rural Development (DARD), but I take their silence as an indication that they agree with the paper. 

The Education Minister's concern is that he does not seem to want scrutiny of his budget.  He would rather have one budget line, which, I think, is about £1·5 billion, because, provided that is not broken down, he would not have to explain the moving of money between one part of his Department's expenditure and another.  I have had discussions with him, and he has made some suggestions, which do not change the one big, broad budget line but which would give greater transparency to what goes on within it, and my officials and I are looking at that.

The Minister also expressed some concern about the Education and Skills Authority (ESA) being included in this and the fact that there would not be a dry run for it, which could create problems with the Northern Ireland Audit Office.  We have undertaken to speak to the Northern Ireland Audit Office to illustrate that, in the first year, there may be information that cannot be easily transposed into the new arrangements and that the Department of Education should not be penalised for that.

We are trying to make some progress but, to date, we have not been able to get the paper to the Executive.  Since all parties in the Assembly have raised this matter with me on many occasions, I want to point out that, if we do not get a decision made fairly quickly, we will not be able to get the necessary legislative changes through before the end of this Assembly period.

Photo of Megan Fearon Megan Fearon Sinn Féin

Go raibh maith agat, a LeasCheann Comhairle.  Does the Minister accept that progress could be made if individual Ministers were assured that reform of the financial process would not impact on their existing control of their budgets?

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

I find that fairly difficult to understand because Ministers do, of course, have control over their own budgets.  The first thing to say is — I have been criticised by the Public Accounts Committee over this — that we do not want to micromanage Departments' budgets, and we have never sought to do that.  Indeed, we have been criticised for not scrutinising savings delivery plans enough and for not giving enough guidance on them.  The argument that we have always put forward is that we do not want to tell Ministers how to run their Departments.

There is considerable scope for Ministers to use their own budgets.  For example, there is a £1 million de minimis level below which they do not have to seek approval from the Department of Finance and Personnel.  They can also make proactive management changes, which they simply notify to the Executive in monitoring rounds after the event.  I cannot think of any time when a Minister has been refused that.  Ministers can also make bids at monitoring rounds.  Even for money that they have to surrender, they can make bids to have it brought back into their budget.  Very often, that happens as well. 

There is no reason why a Minister should argue that the changes remove the scope for him or her to manage their budget.  The Assembly ought to be concerned about a Minister who wants to do that, since the Assembly votes money to Departments for specific purposes.  I doubt that anyone in the room would want a Minister, after having bid for money and the Assembly having voted for that money, to have the power to spend it on something different.

Photo of Leslie Cree Leslie Cree UUP

I note what the Minister said.  It is certainly not a matter of holding people to account for any particular reason; it is to make it open, transparent and accountable.  The existing system is poor enough.  Does the Minister not think it a failure of government that the matter has not been resolved because of the delay with one particular Minister, who clearly does not understand the issue?

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

I regard it as a failure of the Executive not to have agreed this, but I point out to the Member that that is not a failure of all the parties in the Executive.  The majority of the parties in the Executive signed up to it, welcome it and understand the reason for it.  A thinking Minister would welcome it.  If we do not have that transparency, Ministers could hide money that was voted for one purpose and use it for another, so that they would not surrender it at monitoring rounds.  Ministers who could have used that money for a higher priority or something that would perhaps have been more effective in dealing with a social or economic problem do not have access to it.  A thinking Minister would want to have that transparency, so that money that is not spent is surrendered back to the centre to be used for the most profitable purpose possible.

It is all part of the Minister of Education's desire to have some kind of financial autonomy.  Events over the past week have shown that that autonomy is not used very effectively by him.  In fact, it is sometimes used for the most disgraceful populist exercises.

Narrow Water Bridge

Photo of Karen McKevitt Karen McKevitt Social Democratic and Labour Party

8. asked the Minister of Finance and Personnel when he will announce the additional funding for the Narrow Water bridge project. (AQO 3679/11-15)

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

I congratulate the Member on her persistence.  I think that she has tried to ask this question at three Question Times.  It is normally about number 15 on the list.  She must thank the Member for North Belfast and her colleague from South Belfast that we have got this far in Question Time today.

The Narrow Water bridge project is progressing through the agreed INTERREG IVa programme assessment process, and is under review by DFP, which is the accountable Department.  We are undertaking the essential internal critical analysis of the project in conjunction with work that is being carried out by the Department of the Environment (DOE), which is responsible, of course, for the planning conditions that have been attached to it, and the Development for Regional Development (DRD), which has to make sure that all the statutory approvals about navigable waterways and whatnot have been sought.  All that information has to be in place before a final decision can be taken, so no funding has been or will be allocated to the project until all the approvals have been obtained.

We are aware of the time constraints associated with the project.  I have received numerous letters and requests from Members about this.  We will seek to reach a decision as promptly as we can, but I am sure that the Member will understand that, with so much public money involved, it is right that all the proper processes be gone through.

Photo of Karen McKevitt Karen McKevitt Social Democratic and Labour Party

I thank the Minister for acknowledging the popularity of this project.  I know that he is quite keen for it to proceed.

Minister, in or around 4 December, you indicated that the investigation would possibly take six weeks.  Has the First Minister or the deputy First Minister ever made representations to you, either jointly or individually, on the delay associated with providing the balance of funding that is required to allow the Narrow Water bridge project to proceed?

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

I am not aware of either the First Minister or the deputy First Minister having raised this issue with me or with officials in my Department.  However, it really would not matter who made representations. 

Given the amount of money that is going to be spent on this project, statutory processes have to be gone through and checks have to be made by us.  The money also has to be spent within a certain time period, or it will be lost totally.  Until we have made all those checks and have all the information, we cannot make a decision.  There was a debate in the Assembly on this project, and numerous Members have written to me, contacted me and questioned me about it.  However, we have to go through those processes and make sure that the planning conditions, the statutory approvals and the financial case that has been made are sound.

Photo of Christopher Hazzard Christopher Hazzard Sinn Féin

Go raibh maith agat, a LeasCheann Comhairle.  Does the Minister agree that the bridge, in conjunction with the infrastructure that is there, will act as a powerful driver for sustainable economic growth in south Down in the years ahead?

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

Since I am the Minister who will make the final decision, I do not think that the Member would expect me to be drawn — to prejudice the decision one way or the other — on whether I believe that the bridge is a good thing or a bad thing for the area.  I have to wait until all the information is in front of me. 

During the debate in the Assembly, accusations were made that, because this is a cross-border project, somehow or other I was prejudiced against it.  All the INTERREG IVa spend is cross-border, so my political opinion on cross-border issues does not really matter.  I have to make an objective assessment, and I will do so, once all the information is available to me.

Photo of David McIlveen David McIlveen DUP

Will the Minister update us on the position of local groups under the INTERREG IVa programme?

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

At one stage, there was quite considerable interest in the local groups aspect, because it was feared that they were not going to spend all the money that was available to them.  They have achieved substantial funding.  To date, 36 projects worth £46·7 million have received letters of offer, and one project worth £13·9 million is progressing through the accountable Department.  I have been assured that we are in line to spend the money that has been allocated to the local groups.  Of course, the local dimension of the future of the cross-border programme is to be determined through research.

Income Tax

Photo of Phil Flanagan Phil Flanagan Sinn Féin

9. asked the Minister of Finance and Personnel for his assessment of the mechanisms currently being developed by Revenue and Customs to administer the Scottish rate of income tax as a means of providing a more accurate figure for income tax generated locally. (AQO 3680/11-15)

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

Clearly, the mechanisms being developed by HMRC to administer the Scottish rate of income tax will make it possible to determine the Scottish share of UK income tax with a high level of precision.  However, the Member has to recognise that those mechanisms are being developed as part of the process to devolve increased income-tax-varying powers to the Scottish Government, and there will be fairly significant administrative and IT costs associated with that for Scotland.  Given that the scale of those costs is not clear, I doubt whether putting similar mechanisms in place, solely for the purpose of obtaining data for Northern Ireland, would represent value for money.  I also doubt very much that HMRC would be willing to undertake such work, unless, of course, we were prepared to pay it to do so.  Whether that would be a good use of resources is debatable.