Northern Ireland Assembly Flax Flower Logo

Northern Ireland Assembly

Tuesday 14 November 2000 (continued)

Mr S Wilson:

Does the Member agree that attacking windmills is better than tilting at windmills, which he appears to be doing at present?

Dr Birnie:

I am not tilting, but some of the Member's Colleagues did so yesterday.

The Higher and Further Education, Training and Employment Committee is disappointed by the small budget allocation to the critical area of adult basic education. That is especially so given the well-documented problems of adult illiteracy and innumeracy. That may be linked to my previous point, considering that there are problems with basic mathematics in some quarters in the House regarding the proportional importance of the six North/South implementation bodies.

Mr McGrady:

I congratulate the Minister and the Executive on their first independent Budget for Northern Ireland. In many ways, however minuscule, it tries to reflect local needs rather than those of the United Kingdom. I hope that that development will continue over the years as more knowledge is gained and more flexibility can be created.

In the opening paragraph of his presentation the Minister made a very significant remark. He said that the Executive was disappointed that the increase in spending power that Northern Ireland received was markedly less than the increases applied to England, Scotland and Wales. The Minister went on to say that Northern Ireland could continue to press for a more equitable and sustainable approach to the allocation of spending.

Dr Birnie mentioned the Barnett principle, which, I think, is the kernel of the problem.

He expressed a cautionary approach, but I have no doubt that if we were to examine what has been happening over the years, we could clearly illustrate the ongoing annual shortfall in the block grant, as it is commonly known. I have listened to departmental debates for several months now, and I am shocked by how much Northern Ireland has been neglected during direct rule. This can be seen by the underspend on railways to the point where they are now unsafe, the gross and obvious underspend on the roads programme and the £80 million that is required to replace the entire water and sewerage distribution system which is also in a state of emergency. Why were we not told all of this during the years of direct rule? Why was that kept from us, and why was this neglect allowed to accumulate so that it would become a burden for the new Executive?

I recall a meeting with the then Minister, the good Lord, Lord Dubs, in December 1998 when privatisation of the shipyards was talked about, and the idea was that the resources raised from that privatisation would be used on the water system. It was obvious that they wanted to run fast with the privatisation of the harbour, but they held back on the £80 million required for the water and sewerage services so that the Assembly could deal with it. That was deliberate, and I am sure the same applied to roads, railways, water, sewerage and health; the hidden burden was being pushed forward until devolution took place, and then we would be left to deal with it.

I suggest to the Minister and the Executive that we re-examine what has happened over the last few decades, measure the shortfall in capital investment and compare it with that in England, Scotland and Wales. We should then renegotiate and say that we have been underfunded, that our block grant falls short of the requirement to sustain Northern Ireland's infrastructure on the same basis as that in the remainder of the United Kingdom. We should then request that that funding be reinstated, maybe through a 10-year programme, so that we can catch up in those areas that have been neglected in the past.

Dr Birnie suggested that in future the Barnett principle should be dealt with on a needs-assessment basis rather than on a mathematical formula, because that does not address any of the real needs and issues of the communities that we represent. I do not intend to address any constituency and parochial matters, however tempting that may be, I will merely deal with some very broad departmental issues.

I have referred to the problem that was highlighted regarding the £80 million required for the updating of our railway system to the relevant safety requirements. The Department for Regional Development must spend money to address the public safety aspect, and an attempt must be made to modernise what is an antiquated railway system, but we must be conscious of the fact that the railway system serves only a limited geographical area in Northern Ireland. Many in the Six Counties do not have access to railways, but I would like to think that there will be the same importance and the same determination to achieve funding to improve our roads infrastructure as there has been to improve the railway system. If we boil this down to safety issues, many more are killed on our roads than on our railways, although that is a very crude criterion by which to judge the importance of the spending priorities. We will have to balance what we are doing on transport infrastructure between railways and roads. Roads must be given a much greater priority. There has been a gross and obvious underspend in that area over the years, and the state of repair of our roads is deteriorating as we speak.


As I represent a rural constituency, it will come as no surprise that I have great concerns about the future of rural communities. I am not just referring to farming incomes. I am concerned about the future of our rural communities in general - farmers, rural workers, rural dwellers and small factories, all of which are currently under siege.

They are not just earning a living from the land or the locality. We should be aware they are also the custodians of the countryside and of our natural assets. Unless we address that issue in a more dynamic way, that which we all love and value, and which we should be utilising as a natural earning asset through tourism, will be dissipated.

I will give one small example. We are all aware of the problem of public safety. In my constituency the sheep farmers have been banned from using the Mournes. That has had a direct impact upon their income, yet it has been done on behalf of all of us, but they are still not getting any real compensation for this. If they are banned up to the year 2005, as is anticipated, the natural environment, which has had sheep grazing on it for centuries, will change dramatically. It will cost as much to maintain it in a normal and natural state as it would to compensate the farmers to keep them on the land. They should be engaged in that process and employed on environmental works to keep this natural resource. One can apply that argument anywhere in Northern Ireland.

We must have a more dynamic approach if we want to sustain a proper rural community. Farming is not the only way to do that. We must consider a small business approach to farming. At present we do not do that. We hive off farming to the Department of Agriculture, and we talk about stock, fodder and transport costs. However, it is much more than that. These are small businesses, and we must adopt a LEDU or IDB approach to sustaining them. We must make it possible for farm products leaving the farm gate to be deliverable on the world market and to be of the highest possible quality.

The Department of Enterprise, Trade and Investment must take an interest in the huge workforce which exists in the rural community, and which has not been addressed as a workforce. They are treated as individuals who do not count. They do count. We are going to rue it if we do not give them full and proper consideration.

My greatest worry - this is true of every Member of the Assembly - relates to the provision of good quality, locally accessible healthcare. If we are all honest about it, we will admit having had personal experience of a general deterioration in the Health Service. There may be many reasons why that is so, but there are a couple of matters that should be addressed immediately. I was interested to note the reference in the Minister of Finance's paper to the creation of a service modernisation fund, with the aspirations of cutting out bureaucracy and creating efficiency and value for money.

The first target should be the Health Service in Northern Ireland. We need to remove the bureaucracy, to get away from the inefficiencies in the purchasing and supplying of services, and to redirect the funding from administration back to the delivery of the service and to the treatment of patients in our hospitals and surgeries.

More money should be released for spending locally, which is the aspiration whether we like it or not. Whether it is contrary to the dictates of the Royal Colleges or not, our people want a health service in their local areas. We need to address efficiency and bureaucracy and challenge the validity of the vested interests dictating to us over the delivery of our healthcare.

I also want to touch upon local government. A point was made in the media early this morning - in order to catch the early media worm - on the regional rate, which has gone up by 6·6%. This has always been a bug bear for those of us who have served in local government over the years - it has a long history. I remember questioning the basis upon which the regional rate was cast year after year. I now regret my response to that because I was told by Minister and civil servant alike not to rock the boat. They said I was doing all right, to keep quiet and not to fudge it. I regret that I did not insist on having a full, public, detailed analysis of how that money was being spent.

When the rates bill comes through my door, and through the doors of every household in Northern Ireland, I want to see what services will be provided with the money being demanded of me. We know the history of this. Macrory restructured local government in 1972. Responsibility for health, education, water, sewerage, roads and planning were all transferred to central Government, and the regional rate was to cover that - they were previously funded by local rates. It is only since then that the regional rate has come into being to assess ratepayers for services that were regionally provided. Depending on what everyone says about reorganisation and the restructuring of local government, we can immediately address the issue of how that regional rate is spent on health, education, water, sewerage, roads and planning, big spending areas. We can tell the ratepayers what is happening and we will be able to see whether there is efficiency or not and whether we are getting a fair deal or not. With the splitting of the regional and the local rate, there is a danger that people are being doubly taxed, and I think that matters should be made absolutely clear and precise. I would like to think that there will be greater efficiency and that the regional rate increases, that grow year on year squeezing local government, will be addressed in a more scientific and open manner.

Finally, there is the question of whether the Northern Ireland Executive should seek to have some powers in respect of local government and local taxation. Scotland took it upon itself to have a 3% tax-varying power. I am not talking about increased taxation but rather about greater flexibility in how we deliver the services we have to deliver across the board.

We have spoken of certain areas that have required an enormous amount of funding over the years. I recall an opinion poll - it did not translate into votes, which most of us will be very conscious about - that said that the English electorate would vote wholeheartedly to suffer the burden of increased taxation if it were ring-fenced and devoted to the provision of a better Health Service. I hasten to admit that that did not translate into votes at the subsequent election. I am not advocating increased taxation; I am just saying that it is something we should look at to see if we in Northern Ireland could have some flexibility with general taxation which would allow us to catch up with, or surpass, the better infrastructure of some of our neighbouring countries in this new millennium.

It would have to be equitable, and it would have to be endured by those who could afford it rather than those who could not, and with our local thinking we could come to a reasonable arrangement. I hope the Minister and the Executive will address this problem - maybe not this year but some time in the not-too-distant future.

In conclusion, I would like again to emphasise my party's appreciation to the Minister and the Executive for the Programme for Government and the Budget. I am sure it has not been an easy task. I have just one question left. It has been said in the House that the Budget follows the Programme for Government and that if we aspire to do something then we must pay for it. I suspect that, because of the block grant's construction and its finite terms, in many instances the programme follows the budget. We cannot raise the finances to pay for what we want to do. We can only decide what we can do when we get the finances. That is not good housekeeping, and it is not good government. It is not the way to address local issues and I think that is another good reason to look at some aspects of the local tax situation.

Mr Dodds:

We have been told that the Budget increase on the figure for the current financial year is approximately 7·3%. While that is quite a hefty figure, as the Minister pointed out in his statement to the House several weeks ago, it is significantly lower than Scotland, Wales and England. Therefore we are not reaping the same benefits as other parts of the United Kingdom from the Chancellor of the Exchequer's largesse running up to the next election.

I would like to press the Minister about the way Northern Ireland is being treated under the Barnett formula. I know he has made representations with others to the Treasury in the past, but I would like him to spell out what he plans to do in the medium term to address Northern Ireland's underfunding in the block grant situation.

May I also press him, although I am talking generally at this stage, about the Executive programme fund. These were praised by a number of speakers when the statement was first made in the House and have been referred to this morning. There is to be £16 million set aside in next financial year, £100 million the following year, and £200 million the year after that. Yet we have had no indication so far of what the indicative figures would be for allocations to Departments over the next two to three years. I would like to know exactly when the Minister proposes to give us those figures. We have the figures for next financial year, but I think it is important to have some idea for years thereafter - even if they are only indicative.

While people are welcoming the Executive programme funds I take it that the Minister will be confirming that there is no extra or new money involved here. Money that would otherwise have been allocated to Departments will be held back until later in the financial year. In effect, there is not going to be the promise or indication that this is new or extra money at all. In fact, this money is part of the Northern Ireland block and will simply be taken from Departments, put into the Executive and then handed back out again.

I would also like an indication from the Minister about the Programme for Government, which we debated yesterday. A number of Members indicated that there were some broad and sweeping statements, many of an aspirational nature.

12.15 pm

When one analyses some of these statements it becomes clear that moneys have not been allocated at all in some cases, or that inadequate funds have been allocated to meet some of the targets which Departments bid for funding for. To what extent does the Minister feel that the Programme for Government and many of the actions therein have been adequately funded, and which of those have not been funded at all, in this year's Budget? That would be very interesting and enable us to measure what the impact of the Programme for Government will be in real terms. It is all very well to talk about aspirations and visions. We all know that if no money is allocated to fund these programmes, then very little is going to change in the standard of living of our constituents.

Turning to the timetable, there is a general feeling that both the way we have looked at these issues and the time we have been given have been inadequate. The Minister has been pressed on this in Committee. Can he assure us that in future years, if indeed there are future years and the Minister is still in place, we will not be in this position of having to rush our consideration of the Budget?

I welcome the introduction of resource budgeting and accounting, as this will place more emphasis on the setting of output and target measures. That is a positive step, and I hope that it will continue in years to come. I am sure that it will.

When the Minister introduced the Budget statement on 17 October he said that these would not be a set of hand-me-down Budget proposals that simply rolled forward plans inherited from the period of direct rule. He referred to the previous year, when exactly that happened, for understandable reasons. However, the Minister was at pains to stress that on this occasion we would not be doing that. He said that this would be the first evidence of how we will begin to make a difference. I imagine that that whetted the appetites of some people and led them to believe that we would see some very different approaches to issues that have been difficult in the past. Earlier, Mr McGrady mentioned one such issue, the regional rate. However, the Minister then said

"The Executive has decided to roll forward the increase of 8% in the domestic regional rate which was assumed at the time of the 1998 comprehensive spending review."

Obviously, he was not just rolling it forward from the previous year. He was taking it forward from the 1998 comprehensive spending review, despite his having said earlier that we would not be engaged in the business of bringing forward a set of hand-me-down budget proposals.

I do not see much difference under devolution this year compared to the last number of years. The percentage increase in the regional rate is going to be exactly the same - far and away above the rate of inflation. I have not seen the Minister bring forward any justification for that, except to say that without this increase we could not have made the allocations that were made in the Budget. That goes without saying. The non-domestic regional rate is to rise by 6·6%, which will have a major impact on costs for industry and employers. That will, in turn, make us less competitive.

Obviously, if we increased the regional rate by the rate of inflation, we would not have as much money. Anyone can understand that point, but where is the justification for an increase of this magnitude? Look at the outcry that there has been, and rightly so, at the suggestion. I notice that some of the people who have been waxing eloquent about this issue have become silent when it comes to the rates, an issue that clearly bears upon many householders in Northern Ireland who are on low incomes.

What about the issue of the increase in Housing Executive rents? It is suggested - or assumed - for the purposes of housing benefit that they might increase by GDP plus 2%, but people are saying that that is far too high. When I was Minister for Social Development I indicated that I wanted it brought down to the level of inflation, but this figure of 8% has been thrown out here on the grounds that that is what it was in previous years, and if it does not continue at that level, there will be less money. That is unacceptable. The Minister needs to go away and rethink this issue.

Many Members of this House are local councillors, and we know all about the misrepresentation on a rates bill. When the rates bill arrives, people pick it up and say "Look at Lisburn Council" - I cite Lisburn because I am looking at Mr Davis - "and what it is doing. Look at the size of its rates bill." I am not looking at Mr Robinson, of course, because people in Castlereagh never say that; they look at their rates bills and say "My, what a wonderfully low rates bill". They then go on to say "But look at the size of the regional rates bill". Most councils in Northern Ireland have been reasonably prudent in managing their local rates and the burden that they place on ratepayers, but year after year the Government step in and increase the regional rate far above the rate of inflation.

Mr McGrady mentioned the idea of transparency. People should know exactly what they are paying for when these rates bills come through. That is right, but the problem is that the Minister has already made it known that this is just a general means of raising money. It is a taxation measure. We pressed him on this in the Committee. We asked him if the money that is being raised through the regional rate will be linked to expenditure on water or sewerage or any issue that is ring-fenced in any way, and he admitted that it was not. It is a general tax, which goes into the general pot and is then distributed as he and this Assembly sees fit. When we talk about taxation and tax-raising powers it is therefore clear that the Minister is a tax-raising Minister as far as the regional rate is concerned.

Mr McGrady:

The Member is over-simplifying the situation. He knows well - and I am sure he will agree - that if the regional rate is not paid, then provision for the funding of water, sewerage, electricity, health and education will have to be included in the district rate. The ratepayer will still pay - as he always has done - for those services. We need transparency and then we will know whether the amount is right or wrong.

Mr Dodds:

I want to deal with how we can improve the situation. It would be wrong if we were simply to stand here and say "We should not have this rate increase" or if we were to criticise certain aspects of what the Minister proposes without suggesting alternatives. That would be irresponsible, and I will deal with the matter shortly. The point I want to make now is that it is simply unacceptable for the Minister to come here and talk in generalities about needing this because otherwise we would not get the money in.

Mr P Robinson:

Until he rose, I thought that the Member for South Down agreed that any taxation - whether it be this Durkan tax or any other tax - must be for some specific service or product. By doing things this way, the Minister is pulling a figure out of the air and giving no justification for the amount. It is simply a top-up tax to meet his final figure.

Mr Dodds:

The Member is absolutely right. This was backed up, and the Minister agreed with that analysis at the Committee. In previous years there may have been an attempt to link the money raised through the regional rate to expenditure on water and sewerage, but the Minister has made it absolutely clear that that is no longer the case. The money goes into the general pot and is distributed widely, as the Executive sees fit. What concerns me is that no proper justification whatsoever has been given for such a large tax increase, way above the rate of inflation.

Maybe one of the reasons why the Minister felt that he had to put forward such an increase was the provision for additional departmental running costs as a result of the devolution arrangements put in place because of the Belfast Agreement.

In 2000-01 an extra £26·1 million is being spent on running the Civil Service bureaucracy, not on delivering services or giving people the things they need to improve the quality and standard of their life. There will be another £26·1 million next year. That is £52·2 million so far. It will continue in the years after that.

The proposed Civic Forum will cost £300,000 to get up and running next year. Dr Birnie and his party, as enthusiastic advocates of the all-Ireland dimension, sought to justify expenditure on the North/South bodies. However, he would have better spent his time considering the fact that £8·2 million will be spent on that.

The Minister sent a letter dated 24 October to the Finance Committee, in which he said that expenditure on North/South bodies in 2000-01 was £8·2 million. Another document from the Minister, dated 12 October, says that costs for North/South bodies for the same year were £8·9 million. Perhaps I can help the Minister to clarify that. In one letter he tries to leave out the costs of the North/South tourism body, whereas in his original letter he includes those costs. They should be included, as it is one of the North/South bodies. The total expenditure on North/South bodies next year, including the North/South tourism body and the North/South Ministerial Council, comes to almost £18·1 million.

The First Minister recently told the House that expenditure would be about £11 million. He seemed to think that that was a trivial amount - why were we getting so exercised about over £11 million? The real figure is nearer £20 million when what should be added in is added in. The Minister himself added in these factors in his letter of 12 October to the Finance Committee.

There are those who say that we should not get too exercised about expenditure on the all-Ireland dimension of the Belfast Agreement. Perhaps they can justify this to their constituents: for every million pounds spent on the all-Ireland political dimensions of the Belfast Agreement, 200 extra heart operations could be carried out, 25 houses might be built for the homeless, or 1,000 homes could be adapted for disabled people. Some money has been allocated for that in this Budget, but not enough to deal with the demand in the community.

Members who represent their constituencies face the daily demand for work to be carried out to adapt homes so that people can live in their own homes in a safe, decent and proper way. For a million pounds we could put central heating in 300 family homes. Look at fuel poverty: 170,000 homes in Northern Ireland still do not have adequate heating. Six hundred people -

Mr Leslie:

Can the Member explain the basis for his confidence that if the structures of devolved government, including the North/South bodies, were not here, and instead we had direct rule, the money saved would be spent on the services that he has mentioned, such as heart operations and heating for Housing Executive houses?

Mr Dodds:

I would have very little confidence if I were putting the matter in the hands of direct rule Ministers. However, Members will have an opportunity to vote on the matter. I hope that those who are concerned about these issues will go through the Lobbies in favour of these things. Any who so wish may vote against, but that will be a decision for them and no one else. They will be responsible, answerable and accountable, and no doubt the people will hold them accountable.

12.30 pm

I well remember the words of the Deputy Leader of the Ulster Unionist Party about a year and a half ago - I have not seen much of him since then - in one of the earliest debates we had in this House, when we raised the issue of the cost of the present system of devolved government and quangos. We have yet to see any proposals for a reduction in the number of quangos.

All we have heard about is a review of public administration. We have heard about it outside this House when it has been discussed at conferences for local government chief executives, at party political conferences, and in the media. However, there has been no ministerial statement - and we all know that we have ministerial statements on virtually every subject at the drop of a hat - about what this review of public administration is going to entail. No one has told us what it means, how long it will take, what it is going to cost, what the targets are, or what it hopes to achieve. However, Ministers have been at pains to say, in the Programme for Government, and in previous statements to this House, that one of the key reasons why it is not necessary to get so exercised about the costs of devolution is because these costs will come down when we get rid of these layers of bureaucracy. All I have seen so far is the building up of more layers of bureaucracy - the Civic Forum, North/South implementation bodies, and so on.

Then we look at the departmental running costs. I would be interested to know how the Minister will justify some of the figures that we have for increases in departmental running costs. In the case of the Office of the First Minister and Deputy First Minister - I take that as an example because it is the most glaring one - on page 37 'Budget 2001/02' speaks of an increase of 20·6% in the departmental running costs for next year. This is a Department that does not actually deliver any services directly to people. The cost is for administration and the running of various units and departments that have been set up within the Office of the First Minister and the Deputy First Minister. That is something that needs to be addressed.

Dr Birnie:

Will the Member give way?

Mr Dodds:

I have given way already, and I want to bring this to a conclusion, as other Members want to speak.

Mr Deputy Speaker:

Mr Dodds, will you bring your remarks to a close.

Mr Dodds:

I will be very brief.

The Minister - I mean the Member; I do not want to elevate him too soon, although after this morning's performance he may get an approach - had an opportunity to say something on a number of issues, some of which I have already highlighted, during his own remarks.

I have already mentioned issues such as fuel poverty. I have mentioned homes being adapted, and so on. Money could be diverted from some of the expenditure on political correctness, bureaucracy, and all-Ireland, political North/Southery. That money would be better spent on addressing issues like fuel poverty. Other Members will have an opportunity to raise other issues. There are issues such as kitchen and bathroom replacements in the homes of people on low incomes who desperately need them. There are issues like the North Belfast strategy, which is one of the Housing Executive's main priorities in view of the very pressing housing needs on both sides of the community in that area. There is also the need to maintain a proper, decent and adequate spending level on the maintenance of Housing Executive properties.

England and Wales are now paying the price of under- investment in maintenance over the years. They are now facing a massive bill to try and make up for under- investment. We in Northern Ireland have kept up a reasonable standard of maintenance. That must not be allowed to drift. We need to put more money into it. We need to look at the supporting area of weak community infrastructure. Money needs to be spent on that as well.

I urge the Minister to think carefully before he proceeds with the allocations he proposes in terms of the all-Ireland machinery and to divert that money to better uses.

The sitting was suspended at 12.34 pm.

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

2.00 pm

Mr J Kelly:

Go raibh maith agat, a LeasCheann Comhairle. I will address the lack of impact which this budget has had on the state of our health services. At a time when the media are telling us every day about the serious state -

Mr Leslie rose in his place and claimed that fewer than 10 Members were present. Assembly counted, and 10 Members being then present -

Mr J Kelly:

We learn of the crisis affecting the Health Service - bed shortages, patients on trolleys, waiting lists for cardiac and orthopaedic surgery, shortages of nurses, acute services in turmoil and insufficient primary services provision. In addition, winter pressures are bearing down on us earlier than was anticipated, while the problem with our Ambulance Service continue. The historic and ongoing underfunding of all levels of NHS health care must be acknowledged by the Assembly and by whoever is attempting to fund essential services in this part of Ireland.

The new revenue and investment on a per capita basis should be at least equivalent to the NHS national plan in Britain - this point should be indisputable. Nevertheless, in a recent 'Belfast Telegraph' article, John Simpson said that the Barnett formula, which was introduced in the late 1970s, has been responsible for reducing the differential between the per capita spend on health in the North of Ireland and that in England. In 1984, the per capita expenditure on health in the North of Ireland was 25% higher than that in England. This differential has now been reduced to five per cent. The formula for the division of extra money is calculated on the basis of the population of an area. The health needs of the people of the North of Ireland are much greater than the needs of the people of England. For instance, the coronary heart disease mortality rate is 20% higher in Northern Ireland than it is in England. John Simpson argues that, as a result, per capita expenditure on cardiology and cardiac surgical services in Northern Ireland should be 20% higher.

We could examine the history of how the Health Service in the North of Ireland has been diluted, underfunded and neglected over the years. Reckless, long-standing neglect of health services here is inextricably linked to the present acute crisis, and to deal with that there will have to be more planning than there has been to date. I suggest that a five-year plan, perhaps even a 10-year plan, is required to fund the Health Service, rather than periodic bandages in between recurring crises. That is how we have been treating the Health Service. We have not been caring as we ought for those at the cutting edge of the shortages in it.

The challenge for the Assembly, a LeasCheann Comhairle, is to agree a strategy which will address the current emergency and enable our hospitals to deliver the first-class service which our patients and our old and infirm deserve well into this century. This Budget does not even begin to address our current problems, let alone our future.

The Minister might well ask where the money is to come from. In her proposal to the Executive, she requested £275 million. People said that that was money for a wish list. But as we look now at the formidable task before us, we can see that £275 million was far from money for a wish list. The £154 million that she received will do no more than put a sticking plaster on the predicament which confronts us.

Whatever our political differences, we always agreed that the health of the people in the North of Ireland required our urgent attention. It is something that affects every Member of the Assembly, and it affects our families and the community. If we stand idly by we will be complicit in the neglect that has been inflicted on the Health Service over the last number of years. We must take some measures, however painful. We will not be forgiven if we do not treat this matter with the urgency it deserves.

We have to go back to the Exchequer. We must make an urgent case to the Treasury, and those members of the Executive who are centrally involved in this must beg, plead or borrow to get the money from somewhere. However, we must not only address our existing problems but also formulate a strategy which will insure against repetition of this crisis. A neglected Health Service must become a thing of the past, and if it does the Assembly will be seen to have addressed health and the care of our old, young and infirm as our first priority.

Mr Close:

This draft Budget is inextricably linked to the draft Programme for Government that was discussed yesterday. For the sake of consistency I pose the same question as I posed yesterday. What opportunity have the statutory Committees had to consider this draft Budget? I use the word "consider" deliberately, because that was the word used by the First Minister and the Deputy First Minister when they introduced the draft programme.

I want to emphasise that statutory Committees have a more important responsibility. The statutory Committees have a duty, a duty enshrined in law, to do much more than consider the draft Budget and the draft Programme for Government. They are obliged to scrutinise these documents, and scrutinise means to "examine in minute detail". I contend that it is only after the completion of this scrutiny that they should come to the Assembly, we hope, for final agreement on a cross-community basis.

I further contend that the opportunity for proper scrutiny has not yet been afforded to the Committees. It will not be possible to fulfil this statutory function adequately given the predetermined timescales within which we are operating. I would like to give Members a couple of examples.

The Finance and Personnel Committee has spent weeks scrutinising the Ground Rents Bill. The Ground Rents Bill may well be an important piece of legislation. However, in terms of giving priority to scrutiny, and to the depth of that scrutiny, should we spend more time on a Ground Rents Bill than on a Budget that will affect every man, woman and child in this community. I know what my answer is. We should have been spending that time on our Budget. We should have been spending that time on ensuring that we get the Budget right. I feel, sadly, that we are being railroaded towards a vote on a Budget without proper scrutiny. That places a huge question mark over the word that has been used by so many people: "transparency". It also places a question mark over the word to which we should all bow the knee, as it were: "accountability" - accountability to the people who elected us.

Having got that off my chest, I see that my primary role here today - this was mentioned by the Chairman of the Committee - as a member of the Finance and Personnel Committee, a Committee that should have an overarching role in budgetary matters, is to listen to the views of Members from other Committees in the House. No doubt there will be other opportunities for further constructive criticism of the Budget.

However, as the regional rate falls directly within the purview of the Finance and Personnel Committee, I wish to take this opportunity to object in the strongest possible terms to the proposed 8% increase on this nebulous and iniquitous tax. I do so for a number of reasons, one of which was referred to by Mr Dodds when he quoted what the Minister said when he introduced the Budget on 17 October. The Minister told us

"this is not a set of hand-me-down Budget proposals" -

note these words -

"simply rolling forward the plans inherited from the period of direct rule."

That is a laudable approach which I commend.

However, what happened then? When it came to the regional rate, we were told

"The Executive has decided to roll forward the 8% increase in the domestic regional rate which was assumed at the time of the comprehensive spending review".

How could anyone in the House support that iniquity? Anyone who has been a member of a local authority, as the Minister has, for a number of years could not, cannot and should not support this iniquity that is called the regional rate. It is beyond me how anyone could support such a tax. I have been a councillor for 27½ years, and - hand on heart - in this time I have never heard a councillor throughout the land support the regional rate.

2.15 pm

The tax is despised by every councillor and local authority in this land. Why? Because when district councils strive honourably to keep -

Mr S Wilson:

Does the Member agree that every tax is despised and that the regional rate is no different? Since he has been a fairly vociferous proponent of tax-raising powers for the Assembly, can he tell us what less despicable tax he would like the Minister to use to raise finance?

Mr Close:

I thank the Member for that intervention. I will address his questions. No doubt the Member will stay to hear.

I also hear a lot of calls to resign. I hope they are not addressed to me because I do not know what I would resign from - I am not a Minister or a member of a Government that hopes to inflict such a penal taxation on the Northern Ireland people.

District councils strive valiantly each year to keep the district rates at a level acceptable to their electorate. They are consistently horrified at the extent to which the regional rate is increased. Until this year we blamed those swingeing increases on a non-accountable, unsympathetic, direct-rule regime - unaccountable to anyone living in Northern Ireland. What will be the accountable politicians' excuse after the Budget is passed? Whom will they blame?

Several Members:

Mark Durkan. [Laughter]

Mr Close:

That is your starter for 10, and you have answered correctly.

What will the excuse be? How will those who insist on this type of tax face the people when, we having been given power over our own affairs, they do exactly the same as those we heaped scorn on in the past? The word "hypocrisy" springs to mind.

Just a few days ago the increase in electricity costs was debated in the House. Members from every quarter justifiably expressed their horror, disgust and contempt for this swingeing increase, and I supported them. Are they now going to turn a blind eye to bringing about an increase that will affect those they claimed to protect when they were shouting about electricity costs - housewives and those running a family on a small fixed budget?

Mr Leslie:

Does the Member not agree that there is a fundamental difference between electricity costs, where the revenue passes mainly to the electricity company, and partly to its shareholders as dividends, and the regional rate, which is redistributed in its entirety to the Northern Ireland economy?

Mr Close:

Yes, sophisticated arguments like that work well. However, I am referring to the ordinary individual - you might call him Joe Citizen - who receives a bill in which he sees a 9% increase in electricity costs, or, if this proposal is carried, an 8% increase in the regional rate. He will draw no distinction between the two increases because the pound in his pocket will have been equally affected in each case.

Consider the effect on small businesses, which are the backbone of this economy. They will be hit by an escalating rates bill. What are we to say? Whom are we to blame? The Minister? The Government? I will go further than that: I will blame anyone, any elected representative, who supports this increase. I am making it clear that neither I nor my party will indulge in this type of hypocrisy. The Alliance Party will support neither a budget nor a Programme for Government that is funded, even in part, by an 8% increase in the regional rate.

Mr Kennedy:

Given the history of the Alliance Party, and its differences, is the Member entirely confident that all his Colleagues will subscribe to his policy?

Mr Close:

Members should appreciate that sometimes the best way of saving face is to keep the lower end of it shut. This is a classic example. How members of the party opposite can criticise the Alliance Party and refer to divisions in it really does defy belief.

Mr S Wilson:

Does the whole party agree with you, or is there division? I can understand your response to the Member for Newry and Armagh -

Madam Deputy Speaker:

Order. Will the Member address the Chair, please?

Mr S Wilson:

I meant no disrespect. I am sure the Member will agree that the DUP is not a divided party and will therefore answer the question.

Mr Close:

A day or two ago this Member was described in the House as being a slow learner. I am tempted to repeat that, but I will watch with interest, through you, Madam Deputy Speaker, to see how the Democratic Unionist Party votes on the regional rate. I will also watch with interest when we come to discuss the proposed increase in Housing Executive rents. We will wait and see.

As Members have already stated, I have long articulated, both in the House and outside it, the need for the Assembly to have tax-varying powers - not tax-raising powers, as a Member said earlier. It may well be necessary to raise taxes in certain circumstances. I do not run away from that possibility, as Mr McGrady suggested. There are many advantages in ring-fencing particular taxes and making them attributable to certain increases in public expenditure. For example, I have no doubt that the people of Northern Ireland would agree to pay increased taxes to fund additional intensive care beds, and that is a different argument from the proposal to use the regional rate as a vehicle to increase taxes.

I am diametrically opposed to such use of the regional rate. Why? Because the regional rate fails all tests of what is a fair tax. It takes no account of one's ability to pay. It is a regressive tax. It attacks those on fixed incomes. It militates against property improvements. A further tenet of good taxation is that those who strike and levy taxes should be accountable to the people on whom they levy those particular taxes. The Assembly must therefore be accountable to those whom it taxes. That would not happen with this "sleight of hand tax", which in effect, passes the buck and the bill - at least in the eyes of the people - from the Assembly to local government. That is fundamentally wrong. Councillors are accountable to the electorate for the district rates they levy against their electorate. Councillors must not continue to be the whipping boys and girls for the actions of this, or any other, Assembly.

I have referred to another area which gives me great cause for concern: the refusal of the Minister for Social Development to give an assurance to this House that Housing Executive rents will not increase beyond the level of inflation. We have heard many excuses for this refusal, but the reality appears to be that people were on the side of the poor Housing Executive tenants until they found themselves in positions of power. Only then were they prepared to burden those same tenants with inflation plus increases. How can anyone be so barefaced and then face the electorate?

I give notice that the Alliance Party will not accept such above inflation increases. We will honour our social consciences, and I call on other Members of this House to honour theirs. I realise my critics will point and say "It is easy to say 'Do not put this up, do not put that up, but where are you going to find the resources to fulfil a Programme for Government?' " This is where I return to my starting point. If only the Statutory Committees of the Assembly were given their proper scrutiny roles, I have no doubt we could find the necessary money. That could be done by cutting out wastage. Administration in every Department has merely rolled on from direct rule, although the Minister said we were not going to have anything rolling over. Have any of us in our Statutory Committees had the opportunity to look for efficiencies and savings which do not affect services? Have savings been found which do not cut back on services which people are expecting and demanding?

Mr A Maginness:

Does the Member not agree that the Executive is examining public services and local government and that savings may well ensue from this scrutiny?

Mr Close:

This topic came up yesterday during the so-called debate on the Programme for Government. The Executive in its wisdom has produced a document containing strategies, public service agreements and promises about what will happen. The Assembly has existed since 1998. We are fighting the same battles as last year. We are trying to get powers vested in Statutory Committees to do the jobs for which we were elected. We have a scrutiny role we have been unable to fulfil because we are told we have to work to predetermined timetables. That is wrong. We have to get our priorities right.

I will give a further example. The Public Accounts Committee, of which I am a member, has had the opportunity to examine some Northern Ireland Audit Office reports. Anyone who has even a cursory glance through these reports will see the millions of pounds that have been wasted through inefficiency, inaccuracy and the mistaken expenditure of public money. We are an accountable body, and we must demonstrate that accountability by ensuring that all past wastage and maladministration is subjected to scrutiny, with improvements being made. I would much prefer to see that happening than to turn a blind eye and levy an 8% increase in the regional rate, the same as was enacted under an unsympathetic direct rule regime.

2.30 pm

The Chairperson of the Committee for Social Development (Mr Cobain):

I wish to speak on some Budget issues raised in the Social Development Committee. Various Ministers told the House that Targeting Social Need would be at the heart of all departmental spending policies. Nothing in this draft Budget comes remotely close to fulfilling that assurance. It will make the poor poorer and increase the economic and social exclusion felt by many in society.

I will illustrate that by making three or four brief points. Last year the Housing Executive budget was reduced by £14 million. Some additional resources were found later in the financial year, but the cut was still severe. Many of us thought that in this financial year, with local Ministers in charge, there would be a real possibility of an increase in that budget. How wrong we were. The Housing Executive budget will be reduced in real terms this year for the sixth consecutive year. The difference this year is that these cuts will be imposed by Ministers elected to this Assembly by the people of Northern Ireland.

As a result of the cuts in the Housing Executive budget, the planned housing programme for North Belfast has been, at best, shelved, yet few would disagree that the area has some of the worst housing conditions in western Europe. Where does cutting the Housing Executive budget, which has resulted in the north Belfast programme being taken out of the plans, fit into the overall strategy of targeting social need?

Rents are programmed to rise next year by 2% above gross domestic product (GDP), or 4·5%. If the Social Development Committee were to recommend reducing rents in line with inflation, £5 million or £6 million would have to be cut from the Housing Executive budget. That would result in bathroom and kitchen replacement schemes for Housing Executive tenants having to be cancelled, another first for Targeting Social Need.

Of course, some will attempt to argue that, since 80% of Housing Executive tenants claim housing benefit, these rent increases will affect only the remaining 20%. The argument is that 80% of tenants are protected from any increase, and since housing benefit is paid from the consolidated fund rather than the Northern Ireland block, this is a method of increasing Housing Executive moneys.

That may be true, but it shows a cynical disregard for the 20% who must pay full rents, including many senior citizens who have worked all their lives and accumulated small occupational pensions. These hard-earned pensions place such people above the benefit threshold, and they have to pay the Housing Executive rent, plus any increase, in full. While pensions rise by 2% this year, in line with inflation, Housing Executive rent increases, if unchecked, will rise by the same amount on average. Consequently, those people will be left even worse off.

Many Housing Executive tenants in low-income jobs must pay the full rent. It is inevitable that those people will consider leaving employment and returning to welfare. If Targeting Social Need has any aim, surely it is the elimination of the poverty trap. Despite that, I stand here in a legislature that is supposed to be locally accountable, and contemplate the potential for widening that poverty trap.

Benefits are the only source of income for many people living on the margins of society. Last year alone, £7 million of income support benefit was unspent - moneys that should have gone to those in need. Unfortunately, this does not reveal the whole picture. Income support, as we all know, is a passport to other benefits. In reality, when we consider an underspend of £7 million in income support, we have to recognise that once other unallocated benefits are taken into account the real sum is probably in the region of £10 million to £12 million. What is the response of the Department for Social Development? It reduces, in real terms, the amount of money we allocate to advice services throughout the Province. I suppose that is in keeping with our policy of targeting social need.

How can we cut housing executive budgets, increase rents, reduce expenditure on advice giving services - all matters that impinge on the lives of people living on the margins in this society - while at the same time increase spending by £50 million to ensure that we can get the trains to run on time?

Ms Lewsley:

I commend the Minister on his Budget proposals and welcome the opportunity to comment on them. In particular, I would like to touch on the areas of equality, disability and education.

I welcome the commitment to a single equality Act because it will help develop a cross-departmental approach to community development. I also commend the policies relating to gender, race and disability. I ask the Minister what the impact will be on the statutory work of the Equality Commission if the £500,000 deficit in funding is not met.

There is ongoing consultation between the Equality Commission and the Office of the First Minister and the Deputy First Minister with regard to this matter. Now that the issue of funding has been raised, I hope that it will be seriously addressed in future Budgets, if we are to take into consideration the recommendations made by the disability task force. Those recommendations would greatly enhance what is already in progress here in Northern Ireland in relation to equality.

If the Equality Commission is to engage in a full programme of activities, it is important to eliminate discrimination and promote equality across the range of issues for which the commission has responsibility, such as fair employment, gender equality, disability, race and, in particular, the statutory duties. Significant funding needs to be allocated to this.

I very much welcome the £1 million allocated for disability within the commission and hope that it will help to target social need and promote social inclusion for one of the most disadvantaged sections of our population. This is a positive move towards redressing the current imbalance in provision for people with disabilities. I take this opportunity to add that I was delighted to see the issue of disability addressed in their own budget proposals across three of the Departments collectively in this Government.

The Department of Enterprise, Trade and Investment proposes to create 400 places on the access to work programme, 50 places on the employment support programme and 60 work trials under the job introductory scheme. In addition, the Department for Social Development has allocated moneys to the Housing Executive to facilitate an increase in the number of adaptations to existing buildings, to provide access to about 1,500 buildings for people with a disability. This will go some way to improving the access for disabled to avail of these increased jobs and training opportunities. Adding to that, the Department of Culture, Arts and Leisure has committed itself to making 40 venues across Northern Ireland accessible for people with a disability by 2001. With this combined effort across Departments, it can only be seen to promote access in both social and work facilities and a very positive move for inclusion for the future.

I turn now to the additional moneys made available for education. It appears that the allocation only allows for the maintenance of current spending, plus some extra to cover inflation. Northern Ireland is not getting a fair deal in money for education. Money allocated for education is not ring-fenced, unlike that in England, which goes directly from the Chancellor to schools.

Northern Ireland, along with Scotland and Wales, is evaluated under the Barnett formula, and the money actually goes into the block grant. Under the Barnett formula, only 3·3% is awarded, calculated on an overall population basis, which means that, in reality, there is a shortfall of some £7 million, compared to the allocation of extra funds in England. In fact, to have any impact we would have had needed at least 5%, and I am asking for the matter to be addressed in the revised Budget.

I had hoped that extra money would be allocated to help alleviate some of the areas of hardship in many schools, especially illiteracy, innumeracy and special educational needs. However, it appears that will not be the case. Under the social inclusion section of the Programme for Government, it is acknowledged that these areas will have a significant impact on social disadvantage. But in order for that to happen effectively, the £9·5 million earmarked for schools estates would need to be doubled. That will, in turn, help to address the current problems, continue development on an ongoing basis to ameliorate the issue.

The funding of education is an investment in our future, and we need to invest, not only to stop the system from deteriorating any further, but to develop a comprehensive and inclusive system of education which will reap benefits for our society in the short, medium and long terms.

There is a lot to be commended in the draft Budget proposal, and I appreciate that it is difficult to divide up the cake between competing Departments. However, it is imperative that we address the current inequalities and begin to work towards upgrading those services most in need, such as equality, education and disability.


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