Budget Bill: Second Stage

Part of Executive Committee Business – in the Northern Ireland Assembly at 7:30 pm on 9th February 2016.

Alert me about debates like this

Photo of William Irwin William Irwin DUP 7:30 pm, 9th February 2016

I will speak on behalf of the Committee for Agriculture and Rural Development. The fact that the Budget for 2016-17 relates to the newly restructured Department for Agriculture, Environment and Rural Affairs, or DAERA, has muddied the waters a little for our Committee. As Members know, DAERA will not have responsibility for the Rivers Agency. However, it will have absorbed a number of other functions, including environmental and marine responsibilities from the Department of the Environment and inland fisheries responsibilities from the Department of Culture, Arts and Leisure. It will also take policy responsibility for sustainable strategy from OFMDFM.

What we do know is that the budget for DAERA will be subject to a 5·7% cut to its resource. As a result, the new Department has been allocated a total of £197·9 million resource and £48·8 million capital. Departmental officials informed the Committee that that 5·7% resource cut will be applied pro rata across the three areas that are joining together to form DAERA. That equates to a cut of £10 million for DARD, £1·7 million for DOE functions and £0·3 million for inland fisheries.

The Committee has taken its duty to monitor DARD’s financial performance and its delivery of key services very seriously. However, it is important to note that it has been difficult for our Committee to anticipate or assess the true impact of the 5·7% cut to those areas that were previously under the remit of DOE and DCAL and, indeed, to the sustainable development functions under OFMDFM. Over the past year, DARD officials have told the Committee that there will have to be major changes in the services that are delivered and in how they are delivered by the new Department. We have heard that, to meet ongoing budgetary pressures, DAERA will have to be a more modern, leaner and digitally focused Department. The Committee is concerned that that might result in a reduction in the quality and availability of key services. However, Members also believe that the formation of the new Department presents an opportunity for efficiencies to be made. The streamlining of inspection regimes is an obvious example of that, and the Committee will certainly call for these types of savings to be realised as quickly as possible.

The Committee repeats its call for front-line services to farmers and the rural population to be protected from the worst of these cuts. In particular, the timely administration of CAP payments must remain a priority for the new Department. I am sure that all Members are aware of the falling farm-gate prices and ongoing struggles that are faced by farmers in Northern Ireland. Many of you will have read last week that farmers in Northern Ireland suffered a very significant drop in their incomes in 2015. That means that they rely more than ever on these direct payments as their major source of income.

The Committee acknowledges the work of DARD in the past year to ensure that over 96% of eligible farm businesses received their basic payment by January 2016. The Committee is anxious to see that record maintained and surpassed by DAERA, but that may prove challenging in the face of the cuts imposed by the Budget and the loss of over 300 staff to the recent voluntary exit scheme. On voluntary exit, the Committee was told last week that DARD expects to make savings of almost £5 million in staff costs in 2015-16. The first two groups left under the VES before the end of last year. The third tranche of staff left only at the end of January 2016, and the fourth group will not leave until the end of March 2016. DARD has chosen not to avail itself of a fifth tranche of voluntary exits. This means that the full impact of 300 staff leaving has not yet been felt in service delivery. The Committee feels very strongly that the departure of so many staff should not be allowed to impact the administration of all the EU payments that farmers and rural communities depend on so much.

I would now like to specifically reference the issue of TB compensation. The TB scheme costs DARD in the region of £30 million a year. This amounts to almost 15% of the resource allocation for the new Department. At a recent meeting where we discussed finances with DARD officials, the Committee was informed that there is still an outstanding pressure of £4 million for this scheme. It is alarming that DARD has not yet managed to get both the disease and the costs under control. Indeed, there are actually signs that TB rates are increasing again, which, in turn, means an even bigger call on the purse of the Department.

The funding of TB compensation has long been a concern for the Committee. DARD continues to make monitoring round bids in order to top up the funding for the scheme; this is not sustainable. Members have repeatedly called for the mainstreaming of TB compensation funding, which is, after all, a statutory obligation. We understood that this had been done, so it is very disappointing to see that DARD has had to make use of the monitoring rounds for this funding.

The Committee expects the new rural development programme (RDP) to play an important role in improving the lot of those who make their living in farming. Under the 2016-17 Budget, £5 million has been allocated to RDP. Officials confirmed to us that this will be used to fund the farm business improvement scheme, which they plan to launch in the 2016-17 financial year. This includes a capital investment element called the business investment scheme, which will provide capital support to farmers. However, the Committee has a number of outstanding concerns in relation to this scheme. For example, it has not been made clear to Members whether DAERA has received the necessary funds under Budget 2016-17 for the business investment scheme. We are also aware that DFP approval is required before any RDP-funded programmes can open. However, we have yet to be updated on the status of the business investment scheme business case. The Committee is certainly very eager to see the details of this scheme announced as soon as possible.

The Committee recently received a briefing on a major DARD IT project, the new Northern Ireland food animal information system. We were glad to hear that the procurement exercise for this is finally approaching completion. We were also reassured to hear that the project costs are likely to be less than originally estimated. The Committee was previously told that resource costs between 2014-15 and 2019-2020 were estimated to be £14·8 million. Capital costs for the same period would amount to £19 million. However, as a result of the tendering process, it seems that these projected costs can now be revised downwards.

Finally, I would like to make some brief remarks about funding to the Agri-Food and Biosciences Institute (AFBI) in the 2016-17 budget. AFBI plays a key role in Northern Ireland in providing research to our farming and agrifood industries. The Committee has received several briefings on AFBI in the past year. Members have repeatedly voiced their concerns about how budget cuts will affect the delivery of services. It is crucial to the industry that the institute’s capacity to carry out agricultural research is maintained. The plan to end several research programmes as part of AFBI’s Shrink to Grow strategy has certainly caused us concern. However, I will finish on a positive note. The Committee has been assured that AFBI’s R&D budget will be more protected in the future as a result of a change in Treasury rules. The Committee has always recognised that the success of the agrifood industry is dependent on research and development. As a result, we welcome this change.