Northern Ireland Assembly Flax Flower Logo

Northern Ireland Assembly

Tuesday 24 October 2000 (continued)

11.45 am

Ms Gildernew:

Go raibh maith agat. Do the First Minister and the Deputy First Minister agree that expanding North/South co-operation can aid economic development and provide significant benefits in terms of savings and service delivery? Will they make a statement on the action, measures, targets and commitments in the Programme for Government to build on the contribution that North/South co-operation can make to our economic and social well-being? Furthermore, do they agree that the Executive could ask the Irish Government to provide additional funding for some elements of the Programme for Government?

The Deputy First Minister:

The last part of the question appeals to me because of its political content and its mischievousness. I know that the Member will not expect me to give a definitive reply.

The establishment of the new institutions has meant that expenditure decisions are now taken in a wider context. That will produce efficiencies of scale and more effective delivery of services in both parts of Ireland. Furthermore, we expect a high level of added value from this expenditure. I will give some examples. The new trade and business development body is urgently tackling the low levels of cross-border trade in Ireland, and I expect, as does that body, a fairly immediate increase in trade levels. The special EU programmes body (SEUPB) is focusing attention on the benefits of EU programmes North and South. Anybody who is aware of the problems in the border areas will immediately recognise how effective those can be if we get them right.

The new all-Ireland tourism company, which is soon to be established, will market the whole island for foreign tourism to an unprecedented level. That should not be underestimated. The potential for tourism in Northern Ireland is enormous. The relationship with the South of Ireland through that tourism company will greatly benefit Northern Ireland. As an Assembly we should focus on increasing and developing tourism, as it is an area of great potential.

Co-operation in important areas of administration including education, health, agriculture and the environment will produce major benefits for everyone on the island. I will end by returning to the Member's last point. It is something I find piquant, and I will certainly refer it to the relevant authorities.

Mr Leslie:

While responsibility for setting the rates of fuel taxation rests with Westminster, the First and the Deputy First Ministers will appreciate that people in Northern Ireland wonder if the Administration can do anything to ameliorate this problem. Do they have any means at their disposal to address that matter?

The First Minister:

Unfortunately this is a complex issue. As the Member acknowledged, fuel taxation is a matter for Westminster, and, consequently, it is not directly within our gift. However, we have done what we can. Part of the Programme for Government is about developing a strategy to target lobbying for the benefit of the people. We have discussed fuel taxation with the Treasury and with Downing Street, and we have also raised the issue at the British-Irish Intergovernmental Conference (BIIC). If there had been another BIIC then we would have raised the issue again, and we look forward to having the opportunity to do so.

We also have access to Brussels, where the issue can be raised in the European context, with regard to the effects of fuel taxation differentials. We have examined the problems in the Dutch border areas, where a degree of assistance was given to some sectors. Unfortunately, I am advised that we would have difficulty with the state aid rules in having the same arrangement here. However, it is an issue that we will continue to pursue.

Mr ONeill:

As a result of the troubles over the last 30 years the economy has been faced with difficulties in that potential investors have a particular perception of what things are like here. How does the Deputy First Minister intend to use the Programme for Government to change that international perception and make Northern Ireland a more competitive location for investment? More specifically, how does he intend to take advantage of the North/South dimension to assist in terms of investment?

The Deputy First Minister:

The obvious and immediate answer is that the perception of the North of Ireland is what we make it. In respect of business and trade, people's first reaction to what Northern Ireland is all about comes from the daily news, so if there is more stability and things become more peaceful here, there will be a greater perception that it is a place to do business in. We should not lose sight of that.

In the Programme for Government we recognise that a competitive, knowledge-based economy requires the right education, skills and infrastructure policies. I believe that they are contained in the Programme for Government.

As was mentioned in the statement, 27 specific actions have been planned in the priority area of education and skills. Business is increasingly being conducted electronically, and in order to compete effectively in the global market, we need a cutting-edge telecommunications infrastructure. The Executive will work hard to encourage this. We will also ensure that access to the opportunities provided by e-business is available to all sections of society and to all areas.

We will undertake a programme of structural maintenance for roads based on good practice treatments. In time, this will reduce the significant backlog in roads maintenance that has built up over recent months. The road infrastructure is crucially important to those wishing to invest in the North of Ireland with the sort of businesses that we hope for.

As for the second part of the question, we must strengthen gas and electricity interconnection - north, south, east and west. We need to progressively open these markets. That will help improve business competitiveness and give consumers greater choice at affordable prices. I will mention energy specifically, because the Member asked about the North/South infrastructure. We plan to take the following actions: by 31 December 2001, we will prepare an energy market strategy for Northern Ireland in an all-Ireland, all-island and European context; by April 2001, while working with our Southern counterparts, we will secure firm private-sector proposals for North/South and North/West gas pipelines; and also by April 2001, we will aim for agreement between Northern Ireland Electricity and the Electricity Supply Board on action to address the conclusions of a joint feasibility study into further interconnection between their networks.

Mr S Wilson:

The First Minister told the House about his holiday arrangements. He talked about the fact that he had gone sailing, but perhaps the words "selling" and "down the river" spring more to mind as we listen to him.

I want to press the First Minister on some points that my Colleagues made. I noted the glowing references that he made about North/South bodies - perhaps I got it wrong last week when I heard him threatening to withdraw from them. Assuming that his figure of £11 million is correct - and we will examine last week's budget statement to see if he needs to apologise to the House again - will the First Minister tell us how many extra care packages we could have had over and above the 230 announced, had we not gone in for "North/Southery"?

How many training places for skills, which are in short supply, over and above the 500 announced could we have had? How quickly could pre-school places have been made available, had we not gone in for "North /Southery"?

Secondly, will the First Minister tell us why we are concentrating on the review of under-representation in the senior ranks of the Civil Service? Is he not of the vast under-representation of Protestants in the lower ranks in some Departments? Why has that been ignored in this Programme for Government?

Thirdly, a great deal of money has been announced for politically correct causes - the promotion of the Irish language, the equality industry, cultural diversity, and so on. Will the First Minister tell us how much money the Programme for Government is devoting to the promotion of the politically correct lobby in Northern Ireland?

The First Minister:

I am going to resist the temptation that the Member has put in front of me of trying to work out a definition of what is and what is not politically correct. For that reason I am not in a position to say how much has gone into the politically correct lobby. While I am sure that we may agree on many things, we may not agree on the definition of what is and what is not politically correct.

With regard to the review of senior Civil Service appointments, of course we want to see that the Civil Service broadly represents society. That is equally as important at senior level as it is at junior level. I am not in a position to comment on the question that the Member raised regarding junior ranks in the Civil Service, but I will look into it and correspond with him on the matter. One of the main objectives of the review - and I want to emphasise this - is to ensure that we get the best people at the high levels. The primary overall objective is to get the best people.

The function of the Northern Ireland Civil Service is changing, and it is changing in one very important respect that relates directly to this exercise. Through the direct rule years the Administration here largely replicated policies evolved across the water. Consequently there was not a great need in the Northern Ireland Civil Service for a capacity to think about and evolve policy. It was simply a matter of Ministers flying in and saying "Do this; do the same as we are doing in England." and of our making adjustments.

Now, of course, we will follow - and necessarily follow because of funding arrangements - the broad shape of public policy evolution as it takes place throughout the United Kingdom as a whole. However, there is now much greater scope for policy development and evolution here, and the capacity to evolve policy becomes much more important in terms of the senior appointments in the Civil Service. We need to look again at the criteria regarding appointments to ensure that people with that capacity are coming through. That is a very important feature of the exercise.

Once again, I am sorry to say, there has been a reference to North/South expenditure, and so on, and I can appreciate the little joke that the Member tried to engage in. If I may, I will use the phrases that are used in another place. It says here that the Northern Ireland contribution amounts to £11·1 million, and I can break that down with regard to the implementation bodies. Waterways Ireland costs are £2·26 million; the language body's costs are £3·5 million; costs in respect of the food safety promotion board are £1·46 million; those in respect of the trade and business development body are £2·88 million; £0·6 million is attributable to the costs of special EU programmes body, and in respect of Loughs and Lights they are £0·44 million.

Again I make the point that that must be put in context and weighed against the expenditure elsewhere. With regard to what is happening specifically on these matters, we are going to get value for money. I have no doubt about that - and that is important. Of course the £11 million could be spent elsewhere, and I hope that we would get the same value for money if it were.


Mr P Doherty:

A Cheann Comhairle, I welcome the publication of the draft Programme for Government. It is an important milestone in the peace process, and I congratulate the Executive on its collective effort in producing it.

Do the Ministers agree that concerted action is needed to eliminate the unequal distribution of resources and investment west of the Bann? Will they make a statement on the specific actions, measures and commitments in the Programme for Government to direct investment and investors to specific areas, for example, in my constituency of West Tyrone?

The Deputy First Minister:

I note the latter part of the Member's question, but I am sure that in the interest of the greater good he will allow me to concentrate on the wider aspects.

The Executive, through the Programme for Government, is committed to tackling poverty and economic and social disadvantage wherever it arises. It is clear that there are higher levels of poverty and economic disadvantage west of the Bann. Tackling that is a complex issue requiring action on a range of policies. Under the new TSN policy, Departments are committed to directing resources and efforts to areas of greatest socio-economic disadvantage defined by objective criteria of need. That involves, for example, differential grants for industrial development in disadvantaged areas and encouragement to investors. In the Programme for Government, Departments commit themselves to meeting all those targets and to all their actions in the TSN action plans.

The Programme for Government also emphasises that rural development will benefit the area west of the Bann, with its high rural population. The issue of rural development should be carefully looked at in the Assembly and in Committees to ensure that that strategy comes to the fruition that I believe we all want to see. It proposes balanced regional development and sets out measures to make Northern Ireland more attractive to visitors. That will benefit rural areas. We are not using our remarkable advantages, especially in rural areas, to develop what could be a burgeoning interest in tourism in Northern Ireland.

The Programme for Government commits us to tackling disadvantage in the education and training system, particularly in disadvantaged areas, and that includes 12,000 business development training places for farmers. Ultimately the agriculture industry, and all things concerned with it, is going to be crucial to the success of the Programme for Government in areas such as the Member has specified.

Mr Ford:

Given what has just been said about the development of the economy, do the First Minister and the Deputy First Minister agree that the additional 200 undergraduate places projected over four years is a little low? Also, there appears to be no mention of postgraduate places. Do they agree that the importance to Northern Ireland's economy of keeping people on higher degrees must not be underestimated? Similarly, do they also consider that the role of an information technology commission to identify the economic opportunities that may arise should be included in the Programme for Government?

The First Minister:

I take the Member's points on postgraduate places and information technology. They are extremely important factors in the economy of Northern Ireland, and there has been a significant expansion in the number of information technology postgraduate places in Northern Ireland. I am not in a position to comment on future trends, but no doubt we will have the opportunity to explore the matter further.

The Northern Ireland economy is doing very well, particularly in the software sector, where there have been significant year-on-year increases in the number of persons employed. A few weeks ago we had the pleasure of opening a plant for Service and Systems Solutions Ltd (Sx3). This company, which was once connected to Northern Ireland Electricity, has trebled its employment in just a few years. That is an indication of what can be done.

Also, unemployment is now at its lowest since 1984, which is a remarkable achievement. To get that down further, we will have to concentrate as much on basic skills as on skills at the top, particularly if we are to achieve the levels of social inclusion that we want. The best way to deal with the problems caused by social exclusion and to make people feel included is by getting them jobs. The people we have to get into employment to enable them to play a full part in society and to contribute to it are those who have problems with basic skills - even the ability to count, to read and to write, which are absolutely critical in this respect. What has been done in terms of IT and postgraduates has contributed to the economy and will continue to do so, but we have to balance our priorities.

Mr Speaker:

I suspect that Mr Beggs will have time to do little more than to put his question.

Mr Beggs:

Will the First Minister and the Deputy First Minister give an assurance that funding will be allocated to improve the delivery of services and that it will not be wasted in excessively increasing administration? Will they also encourage Ministers and Committees to scrutinise the funding proposed to be spent on administration in their own remit so that the benefit to the citizens in terms of delivery of services can be maximised?

Mr Speaker:

I am afraid that the time for questions is up. Therefore I shall have to ask the First Minister and the Deputy First Minister to write in response to the Member's question. Many other Members wish to ask questions, but I regret that Standing Orders restrict us to an hour. However, as the First Minister and the Deputy First Minister said, the Programme for Government will be the subject of a major debate in the near future.

Government Resources and Accounts Bill:
 Second Stage


The Minister of Finance and Personnel (Mr Durkan):

I beg to move

That the Second Stage of the Government Resources and Accounts Bill (NIA 6/00) be agreed.

Resource accounting and budgeting is a new system of planning, controlling and reporting on public expenditure. The Bill marks a major milestone on the way to the full implementation of resource accounting and budgeting in Northern Ireland Departments and demonstrates a commitment to introducing best practice accounting methods to the public sector. The Bill largely follows similar legislation recently passed at Westminster - the Government Resources and Accounts Act 2000 - and in the other devolved Administrations.

The Bill will deliver two major reforms. First, it introduces resource accounting and budgeting to government accounts and modernises the operation of other aspects of the Exchequer and Audit Act (Northern Ireland) 1921. That will improve the way in which the Assembly votes and scrutinises public spending with proper measurement of the full economic costs of government activities, better treatment of capital spending and systematic reporting of allocation of resources to objectives.

(Madam Deputy Speaker [Ms Morrice] in the Chair)

Secondly, the Bill provides enabling legislation for the preparation and audit of consolidated accounts for the whole of the Northern Ireland public sector. That information will, in turn, be included in the United Kingdom-wide government accounts to be produced by the Treasury.

The resource accounting and budgeting initiative was launched in 1993 during direct rule. Since then, Northern Ireland Departments have been actively working towards the introduction of resource accounting and budgeting. For Members unfamiliar with the technicalities of the move to resource accounting and budgeting, resource accounting applies accruals accounting techniques to central Government by focusing on resources consumed rather than cash spent. Therefore one main change from the current system is in the treatment of fixed assets.

Resource accounting will reflect the cost of consuming fixed assets, and the cost of holding them, through a charge for depreciation and the cost of capital, rather than just the cost of acquisition as under the present cash-based system of accounting. By highlighting the real costs that arise through neglect of capital assets, this system will bring home to us all, and to Departments, the true effects of financial decisions on capital assets.

Resource accounting is based on generally accepted accounting practice in the United Kingdom. It reflects the accounting and disclosure requirements of accounting standards issued by the Accounting Standards Board, and the Companies (Northern Ireland) Order 1986, to the extent that this is appropriate to central Government. Resource accounting will form the basis of resource budgeting, so that we can plan and control central Government expenditure on an accruals basis.

As I said in my budget statement last week, the public expenditure plans from 2001-02 onwards are on the new basis. Subject to Assembly approval, supply will be voted on an accruals basis under resource accounting and budgeting. Resource accounts will replace appropriation accounts, but will essentially fulfil the same function.

Resource accounting and budgeting applies the best financial reporting practices of the private sector to central Government. For the first time, we will produce the equivalent of the main financial statements in commercial accounting. That includes a balance sheet, an operating costs statement, a statement of recognised gains and losses and a cash flow statement.

However, resource accounting and budgeting goes even further. Under the new system, there will also be a summary of resource out-turns, reflecting Assembly control, and, critically, a statement of resources by departmental aims and objectives under Public Service Agreements. That will enable us to focus on outcomes, not inputs, and on the products of our spending, not just the size of our investment. In turn, we can ensure that future public spending is planned and controlled prudently. I emphasised last week that the Executive see this as a very important opportunity to improve the way we plan and manage spending.

Resource accounting makes two important improvements to the outdated and outmoded present system of cash-based accounting. First, it will ensure that the full economic cost of a Department's activities is measured properly by including costs, such as capital consumption, which are not reflected in cash-based accounts. It will also match the costs to the right time period, providing the Assembly with a better basis for allocating resources. It is more realistic to bring costs or income to account when commitments are made, rather than when cash changes hands. Secondly, it will bring about improvements in the treatment of capital spending, so that instead of simply identifying the cost in full in the year of acquisition, the cost of capital will be spread over its useful life, which is obviously sensible.

In the longer term, the Treasury's aim is for resource accounting and budgeting to lead to Whole of Government Accounts (WGA), which is the natural next step. The Bill would make it possible to produce WGA for the Northern Ireland public sector, which can, in turn, be incorporated into WGA for the UK. These accounts will improve the information available to the Assembly and provide greater transparency for taxpayers.

However, to produce full audited WGA, we will need greater conformity in accounting policies, systems and procedures. That is a major challenge. A staged approach is therefore being adopted wherein we will first concentrate on delivering audited accounts covering Government Departments, agencies and non-departmental bodies. A final decision to extend coverage to the whole of the public sector will be taken in due course, when the outcomes of various developments in financial reporting and other developmental work are clear.

The Comptroller and Auditor General and his office will play a pivotal role in the implementation of resource accounting and budgeting. I fully support the work of the Comptroller and Auditor General and recognise the importance of his independence and the need for him to have wide-ranging powers to report to the Assembly. This is reflected in the detail of the Bill.

12.15 pm

However, the current draft of the Bill excludes one important clause that was included in the Government Resources and Accounts Act 2000 after a protracted debate. The clause requires the Treasury to consult an advisory board before issuing accounting guidance in order to demonstrate that any departures from generally accepted accounting practise are justified by the public sector context. This role is fulfilled by the Financial Reporting Advisory Board (FRAB) established by the Chancellor. FRAB is required to report annually to Parliament on its activities.

There are several ways in which we could deal with this issue in the Northern Ireland context. I intend to discuss this in detail with the Public Accounts Committee and the Finance and Personnel Committee with a view to tabling a suitable amendment as the Bill progresses.

As I indicated earlier, the spending review has already been conducted on a resource accounting basis, and the intention is that the estimates process should be moved to a resource accounting basis for the financial year 2001 - 2002. This means that the first resource accounts to be audited and laid before the Assembly will be in respect of the financial year 2001 - 2002.

In conclusion, Departments are already proceeding with the implementation of resource accounting budgeting systems and procedures. This has not been a trouble-free process, not least because of dual running and the other significant competing pressures faced by Departments. In the circumstances I wish to pay tribute to Departments which have done a tremendous job in developing resource accounts alongside cash accounts, and to the Northern Ireland Audit office for its support during the process.

It is not surprising that there has been some slippage, but we believe enough progress has been made to suggest that we remain on course to deliver on time. Accordingly I commend the Bill to the Assembly, and I will try to answer points raised by Members when I speak at the end of the debate.

The Chairperson of the Finance and Personnel Committee (Mr Molloy):

Go raibh maith agat, a LeasCheann Comhairle. As the Minister indicated, the Committee will review the Bill and, it is to be hoped, we will be able to advise the Assembly of future changes or recommendations. I will keep my comments to a minimum at this stage, but I would like to ask the Minister if it is valid to equate the accounting systems used in the private sector with those in the public service? The public service is not in the business of chasing profit margins and satisfying investors. Can we still maintain the services which are required as part of the public sector?

Will this Bill reduce the number of spending reviews we have seen over the last couple of years? Will it eventually wipe them out? Spending should be clearly accounted for within the resource accounting system. Can the Assembly assume that the Bill will introduce a genuinely simpler, more transparent and streamlined system of accounts for the future?

The Chairperson of the Public Accounts Committee (Mr B Bell):

I welcome the proposals contained in the Government Resources and Accounts Bill and recognise the value of resource accounting in leading to improvements in the clarity and quality of financial information available to Members of the Assembly for scrutiny purposes. It is important that Northern Ireland Departments have financial accounts that conform to best practice in the rest of the United Kingdom. The Bill will help to ensure that.

I am aware that aspects of the comparable legislation in GB have been very contentious and that Lord Sharman is currently reviewing the arrangements for public sector audit. I expect that the Department of Finance and Personnel will consider the implications of the Sharman review for Northern Ireland.

One of the areas being addressed is the right of the Comptroller and Auditor General to inspect the books of bodies that spend public money and report to the Assembly. Those rights are extensive, and the Comptroller and Auditor General audits all Departments and most public bodies. However, as the public sector develops, those inspection rights need to be kept up to date, and Assembly Members will be determined to see that access rights for the Comptroller and Auditor General are as adequate as those at Westminster.

I am glad that the Minister has said that he and his officials will meet the Public Accounts Committee shortly to discuss these matters further. Members' ability to hold the Executive to account depends on the information provided by the Comptroller and Auditor General in his reports. Therefore, his access rights are our access rights. The Assembly's auditors ought to follow public money wherever it is spent in Northern Ireland.

Mr McClelland:

I listened intently this morning to the exciting initiatives, new developments and breaks with the past presented to us in the Programme for Government. It is unfortunate that the same media attention is not given to this new initiative; perhaps that is because accounting procedures are not considered to be quite as exciting as other issues.

I welcome the initiative for a range of reasons. It will bring best practice in the private sector into the public sector. That is important, because good cost benefit analysis is important in both the public and private sectors. The initiative will enable the Assembly to make better-informed judgements and will make the Executive more accountable to the Assembly. We will have greater control over stock, debts and credits in the public sector. One of its most important features is that it will promote greater transparency in Government. Finally, I would like the Minister to assure us that the introduction of the measures in the Bill will not involve more expenditure on the Assembly.

The Deputy Chairperson of the Finance and Personnel Committee (Mr Leslie):

I give the Bill a qualified welcome. In time, it may emerge that several proposals may not work as smoothly and as sweetly as expected. We must be aware that, to some extent, the blind are leading the blind. This is a new departure in Treasury accounting and must be followed in the devolved institutions, although I would not be surprised if certain aspects required some revision at a later stage. That is not in any way a criticism of what is proposed here, but it may be a realistic view.

I caution the Minister against making what is a strong statement - that this is a move towards best practice; it is a move towards a practice that is common in the private sector and is best suited to the private sector. Whether that is necessarily the best practice for the Government sector may emerge and be subject to scrutiny over time.

What concerns me in relation to Treasury accounting is the propensity of the current Government to double and treble account at every opportunity - to the extent that they seem to have forgotten where they started. I commend our Minister for resisting that practice, and I trust that he will continue to do so. However, I suspect that moving to resource-based accounting may improve the Government's ability to double and treble account and make it more difficult for those scrutinising their measures to find out.

Turning to the detail of the Bill, I note the intention to value Government assets. It will be extremely useful to know the value of the Government estate.

Can the Minister tell us what valuation method is proposed? If an outside valuer is to be used in any instances, what costs are likely to be incurred? With what frequency will those assets be revalued, and what costs are likely to be incurred on those occasions? Part of the process of placing a value on those assets is that they will then be depreciated. What depreciation policies does the Minister intend to follow? Clearly, the depreciation policy for a building will be different from that for a piece of modern technology such as a computer. The private sector swings about on which depreciation model to use. Therefore, having established what we are going to do, we will need to keep the matter under review.

I have some comments about moving to an accrual basis. The essence of accruals is that the accounts reflect the intention to spend money in a time frame, irrespective of whether the cash has changed hands. It is not as straightforward to apply this method to capital assets. The essence of a capital asset tends to be that the money has been spent. One accrues the liability over time, because the use of the asset is spread over a number of years, and so its value only arises over time. However, in cash terms, the likelihood is that the money has been spent.

There is a potential contradiction between the intentions under the cash system and how capital expenditure is going to be treated. At Treasury level, that is, in effect, dealt with by the Government borrowing requirement through the gilt market. By borrowing money, say for 10 years, the cost of acquiring that asset is spread over that period until the money is repaid. Government borrowing is not hypothecated in any way - certainly not at this stage - so there is no direct link between the issue of a particular gilt and the expenditure of particular money, but there is, in essence, an indirect link. I wonder whether it will be possible to apply these measures to capital assets without putting in some mechanism to identify the borrowing relating to the acquisition of the capital asset. For example, were we to engage in a five- year programme to upgrade the railway system, we might take a 15-year view on the benefit. However, the money for the upgrading would have to be found over five years.

On the other hand, the ability to mobilise and use private finance through private finance initiatives would clearly be enhanced. That is one of the Bill's intentions, and that should be welcomed, but the Minister must focus very carefully on exactly how the accounting in these areas is going to be done.

It is important that the parallel running of the cash system and the resource-based accounting system should go on for some time, because the transition may prove to be quite difficult. It will be difficult under the resource- based accounting system - certainly in the early years - to make proper comparisons with previous years unless the old system is run in parallel.

Mr Fee:

From the Explanatory and Financial Memorandum in respect of the Bill I see that it is expected that the resource accounting and budgeting will cover only the central Government sector in the immediate future. However, the Bill permits the Department to designate other bodies such as health boards, trusts and local councils, et cetera. Has the Minister given any thought to the timescale for the application of this accounting system across all public administration?

12.30 pm

Mr Durkan:

I thank Members for their contributions and questions. Several points have been raised, and I wish to deal with as many of those as I can in the short time available.

The Chairperson of the Finance and Personnel Committee, Mr Francie Molloy, raised several questions. I welcome the fact that the Committee will be giving full consideration to this Bill. It is more than a technical financial management instrument. It has key policy implications in that it will change how policy priorities, commitments and ambitions are articulated within spending plans and the management of public expenditure.

On Mr Molloy's question as to whether it is appropriate to incorporate accounting procedures from the private sector into the public sector, I would make the point which was later made by Mr McClelland. We are trying to incorporate best practice, and that should be the business of the public sector.

With reference to the UK generally accepted accounting practice (GAAP), that is a ready-made set of rules. We are not talking about following them blindly, as some people are worried about. The Northern Ireland resource account manual interprets GAAP as being appropriate to reflect the fact that resource accounting will form part of the planning and control system for central Government and also to reflect the non-commercial nature of Government activities. We are talking about best practice relating to accounting methods but not about ignoring the fundamental nature of Government business and public-service operations. We will have due regard for the realities and requirements of both.

Concerns were raised about whether this could lead to fewer spending reviews. The main issue here is not so much whether there will be more or fewer spending reviews, but there will be a different way of conducting them. That is the whole point of moving from the focus's being on inputs to outcomes - what it is we are trying to buy as an Assembly.

We are talking about a system whereby the Assembly will decide to buy particular service outcomes and results from various Government Departments and public bodies, funded by public expenditure, so that will change and fundamentally improve the nature of spending reviews in the future and should allow for improved scrutiny by the Assembly and its Committees.

Mr Billy Bell spoke as Chairperson of the Public Accounts Committee, and I appreciate the fact that he was able to give a broad welcome to resource accounts and budgeting and that he recognises the importance of such accounts conforming to best practice elsewhere, which we have to take into account. The whole move to resource accounting and budgeting is not confined simply to the UK. We should follow it, not just because it is being followed elsewhere in the UK, but because it is becoming the norm in a variety of jurisdictions.

As Mr Bell said, the access rights of the Comptroller and Auditor General are being reviewed by the Sharman committee, and we will take full cognisance of anything that develops. We are keeping a watching brief on that, and we will bring forward appropriate measures for Northern Ireland in due course.

Donovan McClelland gave a broad welcome to the thrust of the Bill. I can assure him that the use of resource accounting and budgeting should not, of itself, create any extra costs in the planning and management of public expenditure. Obviously, insofar as the move to resource accounting and budgeting may have involved additional expenditure, then that has already been incurred by Departments in setting up the necessary accounting systems. I can reassure him that there will be no extra costs built into the system.

A Member asked whether this is about best practice, and I am glad to answer in the affirmative. It really is about best practice. It is not about trying to pretend that the public sector and public services are not the public sector and are not public services; it is to make it clear that we know we are in the business of responsible financial management. If we are to be properly accountable and transparent, then we need to perform to those standards.

James Leslie raised several points. I take his point that more detail will have to be considered as we take this Bill forward. I want to speak to both the Finance and Personnel Committee and the Public Accounts Committee about various aspects of the legislation.

As for the treatment and valuation of property assets, major property assets will be valued by the Valuation and Lands Office on a cyclical basis, probably every five years. That will help to spread the cost of valuation.

In regard to the public sector borrowing requirement and the Treasury, the cash system that we currently have does not bring home to public sector managers the opportunity cost of holding assets. It will make a difference if they have to account for a capital charge or for depreciation. The logic and motive should be clear. I accept that there are further issues that we need to explore on how we handle, manage and portray depreciation. That is one of the further details of the Bill that the Assembly and Committees can work through.

To date, the systems have run in parallel. That creates some difficulties and, going back to Donovan McClelland's point, incurs some cost. However, I am prepared to look at how long we should continue parallel running if people believe that it will help to improve the judgements made in relation to the value of resource accounting and budgeting.

We cannot continue parallel running indefinitely. We want to move in a committed and unambiguous way towards resource accounting and budgeting. The Assembly would find it easier to concentrate on one method, as would Departments, and, I believe, the Committees.

On Mr Fee's point, the whole of government accounts clauses address the extension of resource accounting and budgeting outside central Government. That will take a number of years to implement. At this stage, we are focussing on central Government Departments and the bodies most directly related to them. In due course, we will make proposals to extend the measures across the public sector, but we need to do that on the basis of our experience and knowledge. It would be gratuitous to set a timetable at this stage. On that basis, I thank Members for their consideration of this stage and their contributions, and I commend the Bill to the House. I look forward to further consideration of the Bill, both in the House and in the Committees.

Question put and agreed to.


That the Second Stage of the Government Resources and Accounts Bill (NIA6/00) be agreed.

The sitting was suspended at 12.42 pm.

On resuming -

2.00 pm

Committee on Procedures



That Mr Nigel Dodds be appointed to the Committee on Procedures and that Mr Ian Paisley Jnr shall replace Mr Sammy Wilson as a member of the Committee on Procedures.- [Mr Dodds]

Civic Forum


Mr Dodds:

I beg to move

That this Assembly urges the First Minister and the Deputy First Minister to take appropriate and immediate steps to appoint a representative of the Grand Orange Lodge of Ireland to the Civic Forum.

Members will recall that the First Minister and the Deputy First Minister announced the membership of the Civic Forum to the Assembly on 25 September. At that time many of us raised a number of general points of contention about the make-up of the Civic Forum. People had problems with the fact that there are 10 representatives, for instance, from the business and agriculture/fisheries sector. Compared to the representation from the voluntary and community sector, which numbers 18, there seems to be an imbalance. Victims have only two representatives on the Civic Forum. In addition we have the incongruous position whereby the First Minister and the Deputy First Minister represent - I am indebted to the Alliance Party's Mr Ford for this figure in a previous debate - only 0·00012% of the population, yet they have nominated 10% of the members of the Civic Forum. I also note that Mr Mallon appointed someone who lives and works outside Northern Ireland. It seems a strange set of criteria to use in appointing someone to the Civic Forum in Northern Ireland.

We raised many issues relating to the general make-up of the Civic Forum when the matter first came before the Assembly on 16 February 1999. On 25 September the First Minister time and again referred to the fact that it was a bit late for Members to raise issues because the Assembly had previously agreed on a way to nominate members to the Forum. He failed to point out that many Members had spoken out and voted against that system. On 16 February, 28 Members went into the Lobbies against the proposed make-up of the Civic Forum. There is no point in representatives of the First Minister coming here today, as they did on 25 September, and telling us that everything is agreed. It was agreed on a vote, but it was not agreed by many who sit on these Benches, so we are quite entitled to raise these matters.

I also noted when I went through the record of the debate of 16 February that Mr Ford of the Alliance Party had an interesting suggestion, which was that members of the Civic Forum be rotated. That that is an interesting observation in the light of some of the criticisms he has since made about the principle of rotation.

After the Assembly's approval in February 1999 of the way in which the Civic Forum was to be made up, we all expected that there would be a realistic attempt to achieve balance, fairness and inclusivity and a general willingness to see that the principles of equality were implemented. On 25 September Mr Mallon told the House that the body should incorporate the total width of views in Northern Ireland. Anyone who looks down the list of members can see that we have ex-terrorists involved, we have a failed politician involved and we have a whole litany of "Yes" people involved. With a few honourable exceptions, there is little room for people who have a different view on the Belfast Agreement or for people who represent the Grand Orange Lodge of Ireland at a high level. That is a grave omission, which once again cuts across pledges and promises that were made not only in the House but outside it as well.

Whatever members of the various parties in the House may think of the Orange Order - and as a member of that Order I have to declare an interest - they have to accept that it is one of the largest Protestant organisations in Northern Ireland. It has many thousands of members. It has a vital role to play in the cultural identity of the Protestant and Unionist people of Northern Ireland. It is a grave omission indeed that the First Minister and the Deputy First Minister have not seen fit to recognise the Grand Orange Lodge of Ireland in a proper and fitting way by having a member from it on the Civic Forum.

In the debate on 21 September Mr Mallon stated that he wants the Civic Forum to be a body that is uncomfortable for the Assembly. It certainly will not cause much discomfort to Mr Mallon and his party, or to the pro-agreement parties, because there are not many voices in it that will be raised in disagreement with their political point of view.

I have no doubt that when the Ministers come to reply to this debate, they will suggest that our raising this issue and our expressing an interest in the Forum membership implies support for the idea of the Civic Forum. Nothing could be further from the truth. The Civic Forum has been appointed, and we have a right to express a view on its membership. However, nothing we say should be taken as an endorsement of the idea of the Civic Forum.

One of the Ulster Unionist Party's leading research aides, who perhaps wrote Mr Nesbitt's speech today, has expressed concerns about the Civic Forum in the local press. We all know why it was set up and who was behind its setting up. One political party has good reason to support its creation because it is the only place in which it can get any sort of representation.

On 25 September the First Minister said that because Members had raised the omission of Grand Orange Lodge representatives, or even one representative, this somehow was to misunderstand the nature of the process. No doubt this tired old excuse will be trotted out today by the Ministers. The reality is that we fully understand the nature of the nomination process. Sectors were identified, applications were invited, and interview panels were set up.

The First Minister said that it would be inappropriate to give a specific body like Grand Lodge power to nominate. We understand that. However, he is missing the point. The reality is that having appointed someone - and I make no comment or cast any aspersions whatsoever on the integrity or ability of the person appointed by the First Minister - who would be representative of the Orange Order, it would have been appropriate for the First Minister and the Deputy First Minister to have looked at who had applied for membership from within Orange ranks. At least two members of the Grand Orange Lodge of Ireland applied for membership of the Civic Forum. They were unsuccessful, but it was open to the First Minister and the Deputy First Minister to look at those applications and say "If we are going to appoint somebody who knows about Orange views, who is representative of the Orange Order, we will appoint someone from Grand Lodge."

We have often heard it said that people should be appointed to various groups by a process of consultation, that what that group or sector thinks itself should be taken on board. You should empower groups so they have a real role to play, but the First Minister and the Deputy First Minister are saying "We know better than the Grand Orange Lodge as to who should be representative of Orange views." That is not acceptable.

By not appointing a member of Grand Lodge to the Civic Forum they have done the Orange Order, one of the largest Protestant and Unionist groupings in Northern Ireland, a grave disservice.

I note that the Deputy First Minister said that there would be a review of the operation of the Civic Forum 12 months after its appointment. I also note that the Deputy First Minister, in saying that the Civic Forum should reflect all views in Northern Ireland, said

"I ask the Assembly to accept that, and if I am wrong I will make the matter right very quickly."

I appeal to the Office of the First Minister and the Deputy First Minister to have a review in less than 12 months, in view of that statement made by the Deputy First Minister a couple of weeks ago, to see if this matter can be put right quickly. If they refuse to review the matter, that will compound the error they made in the first place. This is an important matter. There are many people in the community we represent who are very resentful that an ex-terrorist can be appointed to the Civic Forum. Those representing few people in Northern Ireland have been appointed, and yet an organisation that speaks for tens of thousands of people and has contributed a lot to the Protestant community over the years has been completely ignored.

2.15 pm

Madam Deputy Speaker:

Many Members want to participate in this debate and we have a two-hour limit. Members are asked to keep their remarks to less than five minutes in length. When Members have 10 seconds left, I will advise them to bring their remarks to a close.

Mr Weir:

I find myself in a fairly unusual position. With the possible exception of the junior Minister, who will be speaking on behalf of the Executive, I may well be the only Ulster Unionist to speak in this debate. I am also in the very unusual position of advising the First Minister to review the situation and his previous decision, which is something unnatural to me.

In supporting the motion I have to declare that I regard myself as agnostic at best on the benefits of the Civic Forum. Down the years, Northern Ireland has been ruled too much by quangos, and the creation of another quango at public expense concerns me. Whatever the criticisms of the Assembly are, its advantage is that it has been elected by the people of Northern Ireland, and if we reach another Assembly election, the people will be able to give their verdict on individual politicians. The same will not be the case with the Civic Forum - it does not have that same representative quality.

Having got a Civic Forum we need to have it strive to be reflective and representative of society in Northern Ireland. While the Executive will carry a certain amount of baggage, the Civic Forum, if it operates correctly, will be able to command the respect and support of the whole of Northern Ireland. This is one of my reasons for supporting the motion.

Within the Orange Order is a community principally drawn from a Unionist society that feels disillusioned and aggrieved with this process. It is up to the Civic Forum to ensure that it commands the support of a lot of those people. I am disconcerted by the fact that an organisation as large and important within the political life - indeed the entire life - of Northern Ireland as the Orange Order is not officially represented. To be able to provide a true reflection of society here there needs to be at least one representative from Grand Lodge.

The key word in this motion is representative. It could be argued, and has been argued by the First Minister when this matter has been raised, that he himself selected and appointed a member of the Orange Order. I cast no aspersions on the abilities of Richard Monteith, who is a good advocate for the Unionist and Orange cause, but the reality is that he is not there as a representative - he is an appointee who happens to be an Orangeman. Let us look at the other sectors. There are people representing the trade union sector; there are also people representing other sectors who are trade unionists, but are not there as representatives of the trade unions. There are two people representing victims, and I would be surprised if among the other 58 members there was not at least one who has been a victim in some way. Various people, who are in the Civic Forum through other routes, can also reflect a different point of view. The fact that someone who has been appointed also happens to be a member of the Orange Order does not ultimately make him a representative of the Order. That is the crucial difference.

The First Minister and the Deputy First Minister should take this opportunity to look at the overall make-up of the Civic Forum. By necessity, it was delegated to various sectors to nominate members. The one disadvantage in that is that the situation in Northern Ireland as a whole is not reflected.

I urge the First Minister to evaluate the situation in order to ensure there is direct representation from the Grand Orange Lodge. It is important to see the wider picture and to understand where the weaknesses in the Civic Forum are with regard to representation. The First Minister must ensure that new proposals are brought before the Assembly, perhaps to expand the number of people in the Civic Forum so that it fully represents Northern Ireland society. Whatever our feelings about its initial set-up we should have a Civic Forum that fully reflects the views, and carries the respect, of all the people in Northern Ireland. I urge Members to support the motion.

Ms Hanna:

I oppose the motion. It is a typically opportunistic motion from the DUP and is a case of closing the stable door after the horse has bolted. The DUP, in keeping with its negative attitude to the institutions set up by the Good Friday Agreement, did not participate in the cross-party study group that was set up to advise the First Minister and the Deputy First Minister on the composition of the Civic Forum. However, now it is giving its views on that forum.

There is another reason why this motion is so fundamentally dishonest. Not only was the DUP opposed to the institutions set up under the agreement, it was particularly opposed to the idea of the Civic Forum from the outset. I quote from a statement issued by Mr Paisley Jnr on 25 September, the day the membership of the Civic Forum was announced in this Chamber. These are some of the pejorative phrases he used to describe the Civic Forum: "the cronies Forum;" "nodding dogs;" "yes men;" "a comfort blanket for the pro-Agreement parties;" "a toothless wonder". Despite this, DUP Members have come to the Assembly today to demand seats for the Orange Order. It puts me in mind of a line from Groucho Marx:

"I don't want to belong to any club that will accept me as a member".

In his statement, Mr Paisley Jnr also complained that there are too many trade unionists in the forum, that voluntary groups have double the representation of business and agriculture, and that the number of the First and the Deputy First Minister's appointees is triple the number of victims' representatives. However, there is not a word in that statement about the alleged under-representation of the Orange Order. What has changed in the last month? The first time I heard the DUP mention the Orange Order with reference to membership of the forum was in this Chamber when the membership was announced.

There is another matter, which is one that only the Orange Order itself can decide. This relates to whether the Orange Order is a religious, a political, or a cultural organisation. If the Order has applied for membership of the forum, under which heading has it applied? If it has not applied, why not? The Civic Forum is a body, which, as the Deputy First Minister said, should represent all views. Indeed he is on record as saying that he would have welcomed a recommendation from the Orange Order, or from the Apprentice Boys. The Civic Forum is not bureaucratic. There are many imaginative independent thinkers who will discuss and debate the thorny issues of this society such as the transfer test, the relationship between poverty and ill health, sectarianism, the economy, and many other issues.

The SDLP wholeheartedly supports the purpose of the Civic Forum. We believe that it has a very positive role to play in the public life of Northern Ireland. It will also foster pluralism and diversity. It will, through time, prove its worth to all. This is the first opportunity for civic society to take ownership of the peace process and to have its voice clearly heard.


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