Northern Ireland Assembly Flax Flower Logo

Northern Ireland Assembly

Monday 1 July 2002 (continued)

The First Minister:

One reason for the report is to identify targets that have been missed and provide the opportunity for dealing with them. We will follow up those matters; to some extent, the report is doing that.

I am talking from memory rather than hunting through the report, but Planning Service had a target to clear up the backlog of planning applications, and that has not been achieved.

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For a variety of reasons, including a significant increase in the number of applications and other problems with the service, it did not achieve that objective. However, in the new report, the more modest - and, I hope, achievable - objective of reducing the backlog by 60% has been set. One can thread through from the original objective to the difficulties that have occurred and the way that a fresh target has been set for the current year.

Actions that have not been achieved will continue to be monitored and reported on. Next year's annual report will include details of those, as well as the new actions that appear in the Programme for Government 2002-03. That step is to ensure that the Assembly and the public can see the progress that we make on published commitments, and all of it is to reflect our commitment to open and accountable administration.

Mr McMenamin:

As Members have already said, grant assistance has been agreed to allow the construction of a gas pipeline to the north-west and across the border. I remind the Minister that we in Strabane, Omagh and west Tyrone want the pipeline extended to our constituency, and that must be given serious consideration.

Can the Ministers confirm that, while the Programme for Government and its targets and achievements are important, it is also important that we plan for the longer term? Can they tell us what actions are in the pipeline to improve the effectiveness of public services?

The Deputy First Minister:

With regard to the gas pipeline, the Executive were able to take a decision to provide financial support for measures being undertaken by the private sector. People should not mistake what is going on. We are providing some financial assistance for a major investment by the private sector, which came forward with proposals for gas pipelines. We cannot fund pipelines or projects in areas where no one is undertaking them.

When the gas pipelines are in place, we hope to be in a position to support any other sustainable development that flows from them. It must be clear that no decision was taken by the Executive not to pipe gas to Strabane or Fermanagh; the Executive decided to support a proposal before them, along with a positive contribution and approach on the part of the Irish Government.

We have been trying to achieve significant improvement in several public policy areas, particularly in terms of how public services are delivered. We need to take that work forward, and it has been emphasised in the position report as part of our advanced thinking in the Programme for Government.

Improving service delivery is one of the four key challenges that we have said that we want to address. We can do that partly by ensuring that the focus is kept on delivering the type of commitments that are in the Programme for Government, and also by improving and developing public service agreements and service delivery agreements. The respective departmental Committees of the Assembly have a strong contribution to make to those improvements and to ensuring that we best monitor those instruments through our needs and effectiveness evaluations.

The needs and effectiveness evaluations are about trying to ensure that we understand the current and future needs that have to be met and are the real priorities in the different programme areas, and that we run programmes and services that most effectively match those needs. People should not treat the needs and effectiveness evaluations as though they are a threat to public expenditure. There is nothing in them about reducing the overall scope or scale of public expenditure. Everything in the needs and effectiveness evaluations is about ensuring that we increase the effectiveness and impact of public expenditure.

Mr Paisley Jnr:

In his reply to the Member for Lagan Valley, the First Minister said that he nearly got the statement out on time. The House is getting used to Mr Trimble's "nearlies". He nearly won 10 seats at Westminster last year. Does the First Minister agree that nearly is not good enough - whether one is pro-agreement or anti-agreement? To be frank, nearly is not good enough in the delivery of Government. Furthermore, the First Minister rightly says that the report that he has published enables the Assembly to identify where mistakes have been made. Does he agree that the fundamental mistake made by the Government was their inclusion of Sinn Féin/IRA? When will he identify that as a mistake, and what will he do to rectify it?

The First Minister: I must correct some of the Member's comments. The statement was made, and the report was published. As I came into the Chamber today, huge piles of it were stacked up for distribution to Members, so if a Member does not have a copy, it is not a failing of the system but of the Member. The statement was made, even though time was tight from when I got my copy of it. That shows the care that was put into the statement, which was checked and revised by my office and that of the Deputy First Minister.

To take up the substance of the points that the Member raised - even though they strayed some distance from the report - I agree with him that nearly is not good enough. The DUP nearly beat my party last year, but it did not. The margin will be even bigger next year, but not to the Member's advantage - as he will see.

Rev Dr William McCrea:

Dream on, Davey, dream on.

The First Minister:

My party has beaten the Member's in every election yet.

Public Spending - June Monitoring


The Minister of Finance and Personnel (Dr Farren): With permission, I want to make a statement on behalf of the Executive about public spending allocations for 2002-03, following the June monitoring rounds. I also want to update Members on the action that we are taking to address the problems of estimating and planning.

The monitoring process is to help the Executive to make the most of the resources available. The monitoring round is our main opportunity to consider how to deal with what is available in this financial year through the carry-over of underspending from 2001-02. Savings are already emerging from updated information about the amounts required for some planned services in this financial year.

I will talk about underspending shortly. First, I want to draw Members' attention to the good use to which available resources will be put. That emphasises our ability to re-allocate shortfall to meet changes in estimates of cost or increase priority budgets and target resources at emerging priorities in a way that was not possible in the revised Budget in December.

As was emphasised by my predecessor and myself, the main purpose of monitoring rounds is to adjust the allocation of resources in line with a better understanding of where cost pressures are falling. What matters is ensuring that money is adjusted to take account of emerging changes in the delivery of public services. Changes happen all the time. It is not surprising that budgetary plans that are drawn up more than 12 months in advance of some of the actual spend become subject to adjustment. Some require more funding and others less. Unforeseen pressures emerge that require attention.

The amount of end-year flexibility - the amount left after taking account of all automatic elements and the £75 million required for the reinvestment and reform initiative - now available for reallocation is £52·5 million. That only a relatively small amount - less than 1% of the Budget - of end-year flexibility remains uncommitted is the clearest answer to the charge that money is not being well used.

Some additional resources available from the Treasury have not yet been allocated, including £1·6 million that was added to the Northern Ireland departmental expenditure limit in the April Budget and £8·7 million from the latest round of allocations in England to the Chancellor's capital modernisation fund. Although those resources came from England, they can be spent as the Executive choose; we are in no way constrained about how to use them.

In this monitoring round, Departments have declared savings of £42 million against the initial allocations for this year that were approved in the December Budget. Most of this arises from confirmation from the Department of Health, Social Services and Public Safety that the technical easement for hospital trusts, which arose in the February monitoring round, also applies to this financial year.

House sales receipts have provided £10 million, although these are related to the special purchase scheme and simply offset the additional costs of purchases under it. The Department of Enterprise, Trade and Investment completed a review of the spending requirements of its financial assistance to industry programmes, and it has been able to release nearly £7 million for reallocation. Details of all reduced requirements are set out in table 1, which is attached to copies of the statement.

Recognising that there is some continuing underspending, the Executive have decided to increase the amount to be reallocated by anticipating that at least a further £13 million of reduced requirements will emerge. Patterns suggest that that is a low-risk approach to expenditure planning and that the amount can be made good in subsequent monitoring rounds later in this financial year or at the year's end. In total, there was £118·9 million to allocate in this monitoring round.

Bids for additional resources in this monitoring round amounted to £220 million. Details of the additional reallocations agreed by the Executive are set out in table 2. I do not propose to explain in detail each and every item of additional expenditure that is being allocated at this time. However, I shall outline some of the more significant items.

Nine million pounds has been allocated to develop the important work of the Executive programme funds, including £3 million to the children's fund to ensure that a larger allocation was available to the voluntary and community sector. That will allow us, through the social inclusion/community regeneration fund, to take action if needed to address the funding difficulties facing the voluntary sector. Ministers will say more about that in due course.

The main items in the Department of Agriculture and Rural Development are £8·8 million to help the Department to meet its legal obligations for animal health compensation, an additional £1·9 million for BSE testing and £1·4 million to meet staffing pressures. The Department has been allocated a total of £14 million.

Additional allocations of £2·9 million have been agreed for the Department of Culture, Arts and Leisure, including £1 million for a Northern Ireland-wide community sports programme, £600,000 to meet commitments approved for the Golden Jubilee and £300,000 for Belfast's bid to become European Capital of Culture in 2008.

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The Department of Education is to receive an additional £12·1 million, the majority of which is in respect of the teachers' pay award and other pressures on schools. An additional £1·6 million has also been provided for support measures for north Belfast.

The Department for Employment and Learning has been provided with £1·4 million to cover post-graduate awards and support for the Northern Ireland Business Education Partnership.

For the Department of Enterprise, Trade and Investment, allocations have been made to cover employers' liability compensation payments following the insolvency of Harland & Wolff's insurers and the commitments arising under the research and development challenge fund. In total, £3·7 million has been provided.

Additional allocations to the Department of Finance and Personnel amount to some £6·6 million, mainly reflecting costs incurred on behalf of all Departments, essential structural repairs to Holywood Road social security office in Belfast and compliance costs arising in respect of the Disability Discrimination Act 1995.

The Health Service is again a feature of this monitoring round, receiving some £40 million of the additional allocations announced today, including £3 million in respect of an initiative to deliver rapid improvements in the provision of cardiac services. The merits of the argument have persuaded us that we should address Northern Ireland's chronic cardiac-surgery waiting list in a specific, time-bound and innovative way. It is well known, inside and outside the Assembly, that we suffer the highest such waiting lists, not only in the UK but in Europe. Heart disease is Northern Ireland's prime killer, and the Executive are determined to address that issue. A further £2 million is being provided to address other waiting lists.

Other allocations cover the continuation of the Department's anti-drugs strategy, initiatives to improve the efficiency and effectiveness of drugs prescribing and rising cost pressures in several areas. There is also an allocation of £3 million to cover the costs incurred at Craigavon Area Hospital as a result of the temporary closure of South Tyrone Hospital.

The Department of the Environment is to receive £2·2 million, mainly in respect of action to address waste management and running cost pressures associated with the transposition of EU Directives.

An allocation of £8·5 million to the Department for Regional Development is to cover several essential or high-priority services, including cost and staffing pressures in both the Roads Service and the Water Service.

As I said earlier, one major source of savings for redistribution in this monitoring round has been additional capital receipts arising from house sales in the special purchase scheme. The bulk of the £14·6 million allocated to the Department for Social Development is to meet the comparable additional costs of purchases under that scheme. Other pressures in the Department relate to the Supporting People scheme and the redundancy costs arising in the Northern Ireland Housing Executive.

Finally, an additional £3·7 million is allocated to the Office of the First Minister and the Deputy First Minister, £2 million of which is in respect of costs associated with the use of a panel of high-level independent experts in the review of public administration. Other allocations include £0·9 million for the North Belfast community action project, and smaller amounts to take forward the children's and victims' strategies.

I turn now to the issue of underspending. Members will be aware from press reports last week that expenditure in 2001-02 was, by an overall total of £365 million, below the ceiling - or departmental expenditure limit - set by the Treasury. However, I record my disappointment that some limited and misleading information was made public in advance of my statement today. It was unhelpful to everyone in the Assembly that that partial information was highlighted out of context. I appreciate the responsible way in which some Members reacted to the information.

I emphasise the principle of end-year flexibility, which was sought strongly by a previous Finance Committee in the 1980s. The principle ensures that unspent departmental resources are carried forward, either for the original purpose for which they were allocated or for reallocation by the Executive. Thus, the money is not returned to the Treasury. That is an important point that seems to have been lost on some Members. The only exception was an amount of £27·6 million comprising a few items that we were due to return. The money was not lost to Northern Ireland.

Public sector budgets represent absolute ceilings on expenditure. Therefore, although small underspends and overspends in the private sector might be viewed in the same light, in the public sector any overspend represents a breach of the authority of the Executive and the Assembly and must be viewed seriously.

When we seek approval for a Budget Bill or a set of Estimates, we are seeking the Assembly's authorisation to spend up to the ceiling set in the Estimates for each service. Government accounting includes serious strictures against overspending, including an automatic report to the Public Accounts Committee.

It is therefore inevitable that public sector managers ensure that excess spending is avoided. Equally inevitably, there is always a degree of underspending as a result. That is also the case in English Departments, in the Scottish and Welsh devolved Administrations and in the Departments of the Irish Government. Some underspending is inevitable and is a much lesser evil than overspending. Coupled with end-year flexibility, it does not mean that money is lost.

So far, no Department has had to report an excess vote to the Assembly. That shows how seriously Departments take the issue. Within the Budget and the monitoring processes, each case in which there was a risk of overspend was identified and dealt with.

In that context, managers must allow for uncertainty. No one would welcome a situation in which cuts were to be applied because of a sudden increase in a cost faced by a Department. The end-year flexibility arrangements were introduced because, under the previous rules, Departments would have lost any spending power that was unspent at the end of the year. Faced with a requirement that could be described as "use it or lose it", there was a tendency for money to be spent on whatever could be found as the end of the financial year approached. That was wrong, and the end-year flexibility arrangements are a major improvement.

I stress that the process of monitoring public expenditure and recycling underspends has made it possible for the Executive to cope with many unforeseen problems. We could not have responded to the foot-and-mouth disease crisis last year without a degree of budget flexibility. Our approach has made it possible to channel large amounts to the Health Service, as demonstrated by today's allocations. It has also made it possible to channel funding to other priorities and contingencies without having to impose sudden and disruptive budget cuts.

Some details of the provisional out-turn of expenditure by all Departments in 2001-02 are outlined in table 4, which is attached to Members' copies of this statement. The total underspend in 2001-02 was £365 million, and, as I have explained, all but £27·6 million of that will be carried forward. It is important to recognise that that amount represents the overall total and includes several specific amounts that we need to understand.

The following factors are important for central Government. Each Department's figures include factors that explain, and in many cases justify, the levels of underspending. Those include some cases that were known to, and are allowed for, by the Executive. No one should rush to judgement without taking the facts into account. For example, the Executive decided to set aside £75 million for the reinvestment and reform initiative that was announced on 2 May 2002. That represents the Executive's contribution to the strategic development of our infrastructure, and I understand that tomorrow the First Minister and the Deputy First Minister will announce the details of how those funds will be allocated.

The Executive have also decided to deliberately retain £40 million to meet the needs of the top priority programmes that are mentioned in last September's draft Budget; that was confirmed in the Budget that the Assembly approved in December. That was then the only prudent way in which an agreed, acceptable Budget could be secured, based on the requirements and pressures specified by Departments.

Approximately £54 million of the total came from areas in which resources are carried forward to provide for delayed European Union programmes. That amount will be retained and deployed for those programmes, which will ensure that there is no loss to the agreed objectives or beneficiaries of the European Union programmes. A further £64·8 million arises as a result of the changes in the timing of capital programmes. In that case, the timing of the work on projects is key. The money is committed and will be spent on previously approved projects. Those programmes will continue uninterrupted as a result of the Executive's previous decision to allow automatic departmental end-year flexibility for approved capital projects. There is no magic about 31 March each year, which comes in the middle of work on building projects.

A further £28·3 million was needed to fulfil the commitment under the arrangements for local management of schools. Individual schools can carry over the unspent portion of their delegated budget. That is a central feature of how schools are funded and managed, and the Executive recently agreed that that feature should apply automatically for the Department of Education, and the education and library boards.

The sum of £22·9 million is carried forward for projects under the Executive programme funds and will be retained for that purpose, ensuring that the funds' objectives are delivered. We were determined to use the Executive programme funds to make a real change in how we set priorities and manage the departmental expenditure limit. Change takes time, and the turning circle for the Executive programme funds is an important aspect of the Programme for Government.

That leaves only £52·5 million of end-year flexibility that was uncommitted at the beginning of this monitoring round. That is less than 1% of the Executive's Budget and is a matter of routine financial management.

Although what I have said puts the headline figure into perspective, one issue remains, which I have previously mentioned to Members. I continue to analyse the issues raised, with a view to presenting a final report to the Executive in the autumn. I am developing a three-point plan to reduce underspending. The first point of that plan, which is the overriding principle, states that there can be no return to the crude "use it or lose it" policy. It would be wrong to introduce incentives or procedures that would promote bad use of public expenditure. Departments have a clear responsibility to secure value for money, and I do not intend to propose any penalty for underspending that would lead to bad use of public money.

I intend to explore two steps with my ministerial Colleagues. We must explore how performance can be approved, while recognising that there will always be some uncertainty. Without risking bad spending, we could set a target for Departments that spending on the resource departmental expenditure limit should be within 2% of the ceiling.

Where this is consistently not being achieved, questions will arise as to the effectiveness of estimating and planning. Any assessment of performance will have to take fair account of factors and circumstances, and the Department's available options as each year progresses.

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A similar approach could be taken to the capital departmental expenditure limit, although with a greater degree of tolerance to allow for the greater uncertainties that affect its estimating and planning. We may need to reduce underspending on the resource and capital departmental expenditure limits in the order of £50 million through such a targeting system. It would not be realistic to expect a significantly greater improvement. As a further step in an action plan, we can, and should, extend the practice of anticipating some underspending. We have done that to a limited extent in this monitoring round in the knowledge that, at this stage of the year, it is prudent to allow for unforeseen pressures.

In the next monitoring round, and in the draft Budget, I propose to include a prudent and realistic allowance for underspending and thereby set the ceilings for departmental spending at a higher level than otherwise would be the case. That will mean that if all Departments were to spend up to the new higher ceilings, we would breach the departmental expenditure limit. Our information suggests that that risk would be minimal.

I commend the Executive allocations to the Assembly. We have taken the opportunity to use our end-year flexibility in an effective way that will benefit public services in the priority areas of health, education and transport. We do not have a crisis on underspending. We plan prudent and appropriate action to make a gradual and worthwhile change in performance. The outcome is the better use of resources to achieve real progress in the delivery of the Programme for Government.

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

Go raibh maith agat, a LeasCheann Comhairle. I welcome the Minister's detailed statement on the June monitoring round. Does he agree that the monitoring rounds are not the way to plan for the future? Departments cannot depend on receiving money from the monitoring rounds and so do not have any long-term plans. If there are priorities in health, education and infrastructure, it would be right to put sufficient money into those priorities to allow Departments to deal with existing needs.

Will the Minister explain what his statement means when it states that it is misleading to say that there was a £365 million underspend over the past year, when he acknowledges that that is the case? That corresponds to £1 million a day underspent by the Executive. How else can that figure be explained?

Will the Minister agree that ratepayers will find it hard to understand why their rates should be doubled to make up for the need while, at the same time, the Executive are not spending the money they already have? That £365 million could have gone a long way towards alleviating need and hardship.

The Minister highlighted that "use it or lose it" has been an issue in the past. I am not suggesting that, but I am asking whether Departments have proposals to spend the money? Are they bidding for money and taking up the schemes afterwards?

Dr Farren:

I strongly refute the suggestion that there is a proposal to double the rates. I challenge the Member to quote chapter and verse that attributes any such proposal to me. I have made it clear, and trust that Members will recognise, that the review of the rating system is being conducted, first and foremost, because the present system is unjust and places an undue burden on ratepayers who are on low incomes.

I trust that the House joins me in seeking to ensure that the rating system is equitable and, therefore, that all Members support the Executive's initiative, which I am promoting on their behalf, to achieve just such an equitable system through the review. That should be accepted and clearly understood. If the Member can find any words of mine that suggest a proposal along the lines that he spoke of, I would be anxious for him to draw them to my attention. I challenge him by saying that I have never uttered any such words, and that, to the best of my knowledge, nor has any ministerial Colleague.

The House goes through a long process to plan the Budget. The current process commenced some time ago. Early in spring, I announced the timetable for the process, leading up to determining the Budget in December. I then invited all the Committees to become involved in close scrutiny with their Departments to ensure that they were satisfied with the bids submitted and to ensure that Departments were aware of the Committees' advice on their contents.

When the budgetary allocations are determined, it seems right for Committees to scrutinise the way in which money is spent to ensure that it is appropriate and to enable them to draw the attention of Departments to emerging pressures and to adjustments that should be made. In that way, the process becomes a two-way engagement and not one in which Committees simply bid for departmental demands that they feel should be responded to. That approach does not deal with the entire picture, but it is a feature of the way in which some Departments approach the budgetary process. This a major exercise for Committees to become involved in.

I would value comments, especially from the Committee for Finance and Personnel, which has been assiduous in discharging its responsibilities, on adjustments that could be made to the process. Certain aspects could be fine-tuned, and alternative approaches to the development of the budgetary exercise could be adopted.

I took considerable time in my statement to detail how we arrived at the figure of £365 million. I trust that the Member will examine the table setting out the basis upon which that figure is arrived at. If he is not happy with particular aspects, or requires further information, he should draw those to my attention.

I assure all Members that all money available to us is spent. If it is not spent in-year, it is carried forward in the programmes to which it was initially allocated, or it is allocated to other programmes, either in the same Department or in other Departments. This process addresses the frequently emerging pressures in the most effective way possible.

Mr Deputy Speaker:


Dr Farren:

Many issues were raised by the Member's question, and it is not surprising that I need some more time to answer.

Mr Deputy Speaker:

Nine Members are listed to put questions to you. I must ask Members and the Minister to assist me; otherwise the business will not be completed.

The Chairperson of the Committee for Employment and Learning (Dr Birnie): I shall try to be economical with my words. I thank the Minister for his statement. In his statement on 19 March on the February monitoring round, the Minister spoke of

"a thorough and robust the problem of underspending across all Departments."

At what stage is that review? Does he agree that so-called underspending is sometimes a function of the relatively high growth in the real-term supply of funds - part of the implications of Gordon Brown's largesse? There is the problem of absorbing that - which is a pleasant problem as opposed to the reverse problem of not having the funds.

On matters specific to the Department for Employment and Learning, I welcome the success in two of the three departmental bids: postgraduate awards, and the Northern Ireland Business Education Partnership. What about the bid for university research? I have a non-financial interest in that, having been a university lecturer. Why is there no reflection of the increase in university research output as reflected in the last research assessment exercise?

Mr Deputy Speaker:

That was not a good example of brevity. We will not get through the business if we continue to use time like that.

Dr Farren:

I will try to be brief. The information I provided on underspends is the first part of that thorough review. Having conducted the analysis - and I have shared some of the key points with the House - the paper containing the full analysis is before the Executive. I am meeting the Committee for Finance and Personnel tomorrow, and we will discuss some aspects of the issue. I will introduce proposals to the Executive in early autumn. Having shared with the House some of the indications on what these proposals might contain, I trust that I have discharged my responsibility given on 19 March. We can progress the outcome of that analysis and the proposals emanating from it with the Committee for Finance and Personnel and other Committees.

The Member's question about university funding is appropriate, but it may be slightly premature. I will say no more than that.

Ms Lewsley:

I welcome the decisions announced today. I particularly welcome the funds that the Minister has said will be used to alleviate difficulties in the funding of community and voluntary groups.

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Many Members have first-hand experience of the underfunding suffered by such groups. Does the Minister have more detail on how the money can be allocated and how soon it will be available?

Does he agree with the public position of the Chairperson of the Committee for Finance and Personnel that a Department should be punished if it underspends continually? That is not a serious approach, given that the public would lose out. Can the Minister urge Mr Molloy to encourage his party Colleague the Minster of Health -

Mr Deputy Speaker:

Order. The second part of the question was not about the statement; it related to another Member's comments. Questions should relate to the statement.

Dr Farren:

We are aware of the problems experienced by community and voluntary organisations. That situation is a good example of how unforeseen pressures can emerge. In my report on the monitoring exercise I said that a certain amount could be made available to groups with genuine difficulties. Ministers and their relevant Departments are working together to decide how to respond to the pressures focused on by Ms Lewsley. I trust that early decisions can be made so that the problems of groups with genuine difficulties can be alleviated.

The Chairperson of the Committee for the Environment (Rev Dr William McCrea):

On behalf of my Committee, I register concerns at the lack of success of some essential bids by the Department of the Environment, for example, those relating to built heritage conservation and the historic buildings grant. The Department may have to introduce a further moratorium on the historic buildings grant, especially given the commitments of more than £2 million forecast for this financial year. That would affect the historic fabric of listed buildings and would amplify public criticism of the Executive's record with regard to the built heritage. A small bid for resources to carry out an impact assessment on the Environment Committee's report on the safety of school bus transport has not been met. That report was published in 2001 -

Mr Deputy Speaker:

Order. Dr McCrea, are you coming to a question?

Rev Dr William McCrea:

The second part of the question is -

Mr Deputy Speaker:

What about the first part?

Rev Dr William McCrea:

The first part concerned the historic buildings grant, for which funding has not been provided. My second question is why small bids, such as for funding to evaluate the Environment Committee's report on road safety, could not be met in this allocation?

Dr Farren:

Concerns about priorities should be directed to the Minister of the Environment. Ministers would like all their bids to be met in full, but that is not always possible. Approximately £220 million would have been required to meet all the bids in full. However, only £118·9 million was available, so it was obvious that some bids would fall. I hear Dr McCrea's expressions of concern, and I will convey them to the Minister responsible; however, I am sure that through his Committee, he will be able to do that even more energetically than I can.

Mr Close:

This time last year the Executive had £104 million to reallocate, and the figure is now £118·9 million. Does the Minster agree that that demonstrates the failure, or ineffectiveness, of the Executive's planning, budgetary control and allocation? Does he not also agree that it is better to plan resources for the longer term rather than on the "ad hocery" that we always get with the monitoring and reallocation of such large sums of money?

The Minister's comments on the £1 million a day will come as little comfort to people who are still waiting on hospital trolleys for emergency care. They cannot understand why they should have to suffer while, in their eyes, all this money is lying around waiting to be reallocated. In the light of the recent publicity, does the Minister not agree that £0·5 million would be better used taking people off trolleys than going to the Northern Ireland Events Company?

Dr Farren:

I have attempted to refute this allegation. I do not agree that there has been an absence of planning or that our budgetary process is informed by an ad hoc approach. Our total spending is around 90% to 98% of the allocations made. That is a respectable achievement, given the significant sums allocated for expenditure by the Administration.

I do not agree with Mr Close's general comments about the planning process. The monitoring exercises are credible and necessary. If the Member takes time to examine the allocations made as a result of this monitoring exercise, he will see that the Health Service has received a significant allocation that will help to address the needs of cardiac surgery, and there has been additional funding for other waiting lists. People who are on waiting lists will very much welcome the allocations being made for their benefit today. We can make additional funding available to our priority areas only by having an ongoing monitoring exercise in place.

The Member will note that the Health Service has received a significant proportion of the £118 million. Almost one third has been allocated to health. Education has also received a significant additional allocation. I do not accept that those key priorities are being neglected in any way. They are being addressed very effectively.

There is a problem with underfunding, but not on the scale that Mr Close and others suggest. The review of underfunding has taken place, and recommendations will come to the Executive and the House in the early autumn on how we should manage underspending in the future.

Ms McWilliams:

I also take issue with what happened last week. It was an unholy mess. I sit on Committees, and I would rather scrutinise the figures in Committees than listen to reports on the radio. When I tried to find out if those reports were valid, I was told that there would be no statement until this morning. That must stop. The way the Assembly does business must change drastically. An end of term report would say "Could do much better".

I am concerned that £10 million came in from house sales and £10 million went back out to provide for people who had been intimidated. Where is the money for all those people - as Ms Lewsley said - who tell us that they are making redundancies left, right and centre because project money has not reached them? Will the Minister of Finance and Personnel tell the House whether he has taken that crisis on board? I am concerned that £2 million is being spent on expensive consultants for the review of public administration.

Dr Farren:

I acknowledge the Member's helpful comments. Out of respect to the House, I bit my tongue on Friday, because I knew that I would be making this statement today. This is the most appropriate place to make a statement on June monitoring. I was not responsible for the leak. That was reprehensible and did not serve the Executive, the House or the Departments involved in any positive way whatsoever.

We have been made aware of the concerns from the community and voluntary sectors in recent weeks. However, I remind the Member that, because of those concerns, we took the opportunity, in the current monitoring round, to examine whether resources were available to allocate to the organisations within the sectors concerned. We are actively pursuing ways to do that and hope that we can reach decisions rapidly on those allocations.

Dr O'Hagan:

Go raibh maith agat, a LeasCheann Comhairle. I do not believe that Mr Close's question on the Department of Culture, Arts and Leisure's bid for £0·5 million for the Northern Ireland Events Company was answered. Further to that, in the light of adverse publicity and the Public Accounts Committee's ongoing questioning of that body, does the Minister intend to reassess that bid? Does the Department have any means of auditing that money? Go raibh maith agat.

Dr Farren:

All bids are subject to a considerable degree of scrutiny. Business cases must be presented and scrutinised before expenditure is approved. That is the case with the bid mentioned by the Member, as it is with all bids. All public expenditure bids are subject to the kind of scrutiny that we have become familiar with through the Public Accounts Committee and the auditors.

There is no absence of scrutiny, and where problems, real or alleged, are identified, they are thoroughly examined. Given our recent experience of the nature of the scrutiny that has been carried out, we have become familiar, and have become increasingly satisfied, with the extent to which we scrutinise public expenditure on behalf of those we seek to serve. As a Minister, I would not approve any expenditure that did not have a robust business plan associated with it.

Rev Robert Coulter:

I welcome the Minister's statement, and, in particular, I welcome the finance allocated for the Health Service. Will the Minister tell the House how that initiative and policy change on the question of positive decisions rather than endless consultation documents on the Health Service came about? What effect is it likely to have on a problem that has bedevilled healthcare for the best part of 15 years?

2.00 pm

Dr Farren:

There have been several allocations to the Department of Health, Social Services and Public Safety; I trust that the Member is referring to the allocation made in respect of cardiac surgery. The Department has been anxious to address that need for some time. The Department of Finance and Personnel has been made aware of the needs of patients and their families who have experienced considerable suffering because of the Department's inability to deal with the problem as expeditiously as it would have liked.

The Department is now providing heart patients with a choice and a new way of quickly addressing their urgent needs. Not all patients wish to travel outside of Northern Ireland to receive treatment, but that choice will now be available to them. The Department responded once the necessary resources were made available, and it is hoped that the response will be welcomed and seen as positive, however long overdue it might be.

Mr Bradley:

I am a member of the Committee for Regional Development, and I welcome the allocation to that Department. It reflects the priority afforded to essential areas such as roads and water. Does the Minister agree that it is important that the Assembly retain the ability to allocate certain funds in-year in order to meet priorities as they emerge? Can he confirm that his ideas to address the underspend will come before Committees as they become final proposals?

Dr Farren:

I can so confirm. Departmental officials will liaise first with the Committee for Finance and Personnel. However, I have attempted to underscore the importance that I attach to all Committees beginning to address - more rigorously than hitherto - the return from investments made. I trust that that will become a feature of Committee work from now on.

The Assembly should not dispense with the monitoring exercise. It provides the Department with the means to respond to unforeseen pressures, as easements are identified in expenditure on programmes that have had allocations made to them in the overall budgetary exercise. That is a prudent and necessary process, and one which it appears that Members deeply appreciate. Apart from the references made to the Northern Ireland Events Company, I have not heard any Member object to the allocations made. I therefore assume that there is a general welcome for the allocations. Maybe some of the allocations are not as great -

Ms McWilliams:

Two million pounds is being spent on consultants for the review of public administration.

Dr Farren:

I accept that as a correction to what I have just said, and I did not remember to respond to it in my answer to Ms McWilliams, but I will in correspondence to her. There has been a welcome for the allocations, and queries have only arisen around two.

Mr Beggs:

I welcome the re-allocation of £40 million to the Health Service - almost one third of the money that was available in the monitoring round.

With regard to the £64·8 million underspend as a result of delayed capital projects, will the Minister agree to provide the Assembly with a list of those projects so that the area can be further examined? Assembly Members and the public are concerned about underspending. Has the Minister received any constructive proposals from Committees or Assembly Members on possible alternative budgetary arrangements to deal with end-year flexibilities and accountability of the Executive for expenditure decisions?

Dr Farren:

I will supply the information that the Member requests: I do not have in my head a list of the capital projects referred to in the table attached to the statement.

The Executive, through the establishment of the Executive programme funds and the introduction of the indicative minima that were made last year with respect to the current budgetary exercise, have been responding to the existence of underspending. The programme funds have provided the Executive with one mechanism whereby we can attempt to deal with that in a strategic, innovative and imaginative way.

As the Executive gain experience with the programme fund mechanism, we will want to refine it, but it has come out of a reflection on the existence of underspend. It has therefore been an attempt to break the mould with respect to traditional approaches to underspend, and I trust that Members will acknowledge that.

The fact that indicative minima were adopted with respect to allocations to Departments has also come out of the Executive's reflection on the existence - or anticipated existence - of underspends. It enables the Executive to make Departments think much more effectively about their spending responsibilities and then force them to address the whole question of underspend with us.


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