Supply Resolution for the Spring Supplementary Estimates 2019-2020 and Supply Resolution for the Northern Ireland Estimates and Vote on Account 2020-21

Part of Executive Committee Business – in the Northern Ireland Assembly at 1:00 pm on 24 February 2020.

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Photo of Paula Bradley Paula Bradley DUP 1:00, 24 February 2020

I welcome the opportunity to make some remarks as Committee Chairperson. The spring Supplementary Estimates show significant increases in departmental net resource requirement of almost £288 million and an increase in the net cash requirement of almost £202 million. That estimate reflects changes to the budget position for 2019-2020 in monitoring rounds and annually managed expenditure forecasts (AME).

The Department has advised the Committee that the main reasons for the differences between the Main Estimates and the spring Supplementary Estimates are due to increases in demand-led benefits and provisions for annually managed expenditure. The Committee noted that there is a significant increase in AME of £116 million relating to the necessity to increase funding to the financial assistance scheme in order to protect the pensions of people whose employer has become insolvent; or where the pension scheme could not afford the benefits promised to members upon winding up; or where the pension scheme started to wind up between 1 January 1997 and 5 April 2005.

The Committee recognises that that is a precautionary step, given that the actual amount required rests on a judgement of the Court of Justice of the European Union that has yet to be delivered. This is an estimate of potential future requirements and the reason why the net cash requirement is lower than the net resource requirement. However, it may, in fact, ultimately result in an underspend if pension members are not required to receive 100% protection.

That increase in AME was partially offset by reduced requirements that the Department gave up in the September 2019 and January 2020 monitoring rounds. The Department surrendered £38·8 million of DEL resource and £36·4 million of DEL capital. While the Committee never likes to see resources surrendered, the vast majority of the reduced requirements in DEL capital is due to the need to surrender financial transactions capital (FTC) of £36·2 million. That is due to the current Office of National Statistics (ONS) classification of housing associations. While there is an ongoing derogation from Treasury, the rules still will not allow us to use FTC to build social housing until the reclassification of registered housing associations is dealt with on a legislative basis in the Assembly. The Committee acknowledges that that issue is a key priority for the Minister, and we hope that it can be resolved in the very near future.

The majority of reduced resource requirements relate to Fresh Start mitigation measures not being required due to successful PIP appeals and a lower uptake in discretionary support grants. The Committee was also informed that some welfare reform protections were not taken forward and PIP contract volumes were less than expected.

The Committee notes that less funding was also required for the rates rebate programme, a reduced requirement of around £8·7 million. That issue was raised at last week's Committee meeting and members made the point that often those people who could benefit from this programme are not aware of it. The Committee has praised the Make the Call programme and we would like to see the Department put a similar effort into raising awareness about the rates rebate programme.

The issue of departmental budgets has rarely been out of the news of late, and everything seems to be a priority. We all have a duty to ensure ongoing public service delivery, but, in doing so, we collectively will have to make some unpopular decisions. The Committee looks forward to engaging with the Minister and our stakeholders to ensure that she receives the advice and support required to make those decisions.