Committee for Finance and Personnel

End of Session Report (September 2009 – August 2010)

Remit, Powers and Membership

The Committee for Finance and Personnel is a Statutory Departmental Committee established in accordance with paragraphs 8 and 9 of the Belfast Agreement, Section 29 of the Northern Ireland Act 1998 and under Assembly Standing Order 48. The Committee has a scrutiny, policy development and consultation role with respect to the Department of Finance and Personnel (DFP) and has a role in the initiation of legislation.

The Committee has the power to:

• consider and advise on Departmental budgets and annual plans in the context of the overall budget allocation;
• approve relevant secondary legislation and take the Committee Stage of primary legislation;
• call for persons and papers;
• initiate inquiries and make reports; and
• consider and advise on matters brought to the Committee by the Minister of Finance and Personnel.

The Committee has eleven members, including a Chairperson and Deputy Chairperson, with a quorum of five members. The membership of the Committee during the 2009/10 session has been as follows:

¹ Mr Simon Hamilton replaced Mr Mervyn Storey as Deputy Chairperson on 10 June 2008.
² Mr Ian Paisley Jnr replaced Mr Mervyn Storey on 30 June 2008 and subsequently left the Committee on 21 June 2010.
³ Mr David McNarry replaced Mr Roy Beggs on 29 September 2008 and was appointed Deputy Chairperson on 12 April 2010.
⁴ Mr Peter Weir replaced Mr Simon Hamilton as Deputy Chairperson on 4 July 2009. Mr Weir ceased to be a Member of the Committee on 12 April 2010.
⁵ Ms Jennifer McCann replaced Mr Mitchel McLaughlin as Chairperson on 9 September 2009.
⁶ Mr Jonathan Craig was appointed as a Member of the Committee for Finance and Personnel.

Figure 1: Committee for Finance & Personnel Membership at 23 September 2009

Key Activities, Outputs and Achievements

Primary Legislation

Rates (Amendment) Bill

1. At its first meeting of the 2009-10 session on 9 September 2009, the Committee took evidence from the Minister of Finance and Personnel on the Department’s request for the Rates (Amendment) Bill to proceed by the accelerated passage process. The Committee had received a number of briefings on the key provisions contained in the Bill during the 2008-09 Assembly session. The purpose of the Bill was to give effect to a number of policies arising from the Executive’s Review of Domestic Rating in 2007, to which the Committee made a significant contribution. The Bill also included issues in relation to the non-domestic rating system.
2. Whilst mindful of the importance of the Committee Stage of a Bill to the legislative process, the Committee was aware that many of the provisions of the Bill, including those which would provide rates reliefs for householders and businesses during the current economic downturn, needed to be put in place for April 2010. Having gained the necessary assurances from the Minister that he would take steps to minimise the future use of the accelerated passage procedure, the Committee agreed that it was content for the Bill to proceed by accelerated passage. The Bill was subsequently introduced to the Assembly on 14 September and received Royal Assent on 3 November.
3. Arising from the provision in the Bill to enable the rating of empty homes, the Minister subsequently consulted carefully with the Committee on the timing of the introduction of this measure. Concerns were raised by a number of Committee members, including the need for initial exemption periods to allow for ownership changes; the need to take account of potential barriers to occupying vacant properties in cases where there are ongoing disputes with Environment and Heritage/Planning Service; the importance of providing developers with a clearly specified exemption period, the duration of which should be kept under review in light of economic circumstances; and the need to take account of the outcome of the forthcoming consultation on the Landlord’s Allowance. DFP took on board these concerns and the Minister pointed out that the Committee’s valuable input led to a significantly better policy for the rating of empty homes.

Financial Provisions Bill

4. Following the completion of the Committee Stage of the Financial Provisions Bill at the end of the 2008/09 session, the Minister of Finance and Personnel subsequently advised the Committee of proposed amendments to the Bill. These included creating statutory powers for the Office of the First Minister and Deputy First Minister (OFMDFM) to incur expenditure for purposes of children and young persons and for purposes of sustainable development. The Minister also notified members of his intention to oppose the question that Clause 4 stand part of the Bill because, as drafted, it would not achieve its intended objective.
5. Having sought clarification from DFP officials, the Committee was content to support the amendments during both Consideration Stage and Final Stage of the Bill. The Bill received Royal Assent on 12 December 2009.

Presumption of Advancement (Legislative Consent Motion)

6. During passage through its legislative stages in Westminster, an amendment was tabled to the Equality Bill to abolish the presumption of advancement, one of the means by which courts could allocate ownership of property between close relatives. While the provisions of the Bill did not extend to Northern Ireland, it was proposed that this amendment should be extended to abolish what remained of the doctrine here.
7. Having considered the evidence provided by DFP, together with an Assembly research paper setting out the legal situation in other jurisdictions, the Committee agreed that it was content to support the Department in seeking the Assembly’s endorsement of the legislative consent motion. The Committee prepared a short report to help inform all Assembly Members in advance of the debate in plenary. The legislative consent motion was agreed by the Assembly on 22 February 2010.

Construction Contracts (Amendment) Bill

8. The Construction Contracts (Amendment) Bill was referred for its Committee Stage on 18 May 2010. Concerning the construction industry, the purpose of the Bill is to amend the Construction Contracts Order (NI) 1997 to improve payment practices and access to adjudication when disputes arise, and which replicates recent amendments to originating legislation in GB.
9. The Committee issued a call for evidence through public notice in the local press and via email to key stakeholders and will report on the Committee Stage by 26 November 2010.

Budget Bills

10. The Committee considered three budget bills during this session. In February 2010 it considered the Budget Bill 2010, including the Spring Supplementary Estimates for 2009/10 and Vote on Account for 2010/11. The Budget (No.2) Bill, introduced in March 2010, dealt specifically with the financial implications following the creation of the Department of Justice (DoJ) and, at this time, the Main Estimates for DoJ, OFMDFM and the Public Prosecution Service were also considered. Subsequently, in June 2010, the Committee considered the Budget (No.3) Bill and the Main Estimates for 2010/11. These were based on the outcome of the Revised Spending Plans for NI Departments 2010/11.
11. To inform its deliberations on each of the budget bills, the Committee received evidence from DFP officials and also took this opportunity to highlight concerns from other statutory committees about the lack of engagement by their respective departments on the Review of Spending Plans 2010-11. Having received assurances in respect of a number of the concerns raised, the Committee agreed to grant accelerated passage to each bill. The Committee notes that the guidance issued subsequently by DFP to all departments on Budget 2010 clearly specifies the necessity for early engagement with statutory committees.
12. Members also sought procedural advice in respect of DFP’s proposed suspension of several Standing Orders for Budget (No.3) Bill and decided that its agreement was conditional on the suspension of the Standing Orders in this instance not being regarded as setting a precedent for applying such measures in respect of future Bills.

Subordinate Legislation

13. During the session the Committee scrutinised 19 statutory rules. 5 of these were subject to affirmative resolution and the Committee recommended that they be affirmed by the Assembly. The remaining 14 statutory rules were subject to the negative resolution procedure and, following scrutiny, the Committee agreed that it had no objections to the rules.
14. The Committee also considered four additional proposals for subordinate legislation, including regulations relating to the Census 2011 and Building Regulations. The Committee was content with each of these proposals.

Inquiries

Inquiry into Public Procurement Policy and Practice in Northern Ireland

15. On 23 February 2010 the Committee published its Inquiry Report following an extensive evidence-gathering exercise, which included a Stakeholder Conference as an innovative way of taking evidence. Around 100 participants attended the conference, representing government purchasing bodies, small and medium sized enterprises, social economy enterprises and umbrella bodies. The format of the event, which was professionally facilitated, included breakout sessions, short inputs from recognised procurement commentators and digi-voting on priorities and recommendations. Output from the Conference added value to the evidence base of the Inquiry.

Figure 2: Declan O'Loan, Peter Weir & Dawn Purvis at a breakout group during the Stakeholder Conference

16. The Inquiry Report contained over 40 findings and recommendations directed towards the Executive, the Procurement Board, the Department of Finance and Personnel, Central Procurement Directorate and other departments where appropriate. These recommendations addressed three major themes raised by the key stakeholders during the course of the Inquiry, including: improving policy and processes; maximising social benefit; and building the capacity of purchasers and suppliers. In his initial response, the Minister of Finance and Personnel relayed his view that “the report will have a major part to play in developing procurement policy and ensuring that public procurement expenditure can be used to maximise the outcomes for the people and the economy”. Stakeholders who had provided evidence or participated in the Conference were also asked for feedback on the Committee’s final report. Overwhelmingly these were positive responses, particularly with regard to maximising social benefit an also in relation to recommendations aimed at improving access for micro and small businesses.
17. At the end of June 2010, the Committee took evidence from the Procurement Board (which includes the departmental permanent secretaries and independent members and is chaired by the Minister of Finance and Personnel) on the response to the Inquiry recommendations and related action plan.
18. The Procurement Board identified 52 action points arising from the Inquiry Report and work on implementing approximately 30 of these is already underway. The other action points will be considered by the Procurement Board in light of more detailed consideration of resource consequences, impact on value for money and any implications for compliance with legislation.
19. The Committee has given a cautious welcome to the action plan including the introduction of a Fair Payment Charter which will ensure that the benefits realised by main contractors from earlier payments are passed on to their sub-contractors. A Business and Industry Forum has been established to mirror the work of the Construction Industry Forum and there have been improvements to the e-sourcing portal. However, there is still much to be done in relation to framework agreements, improving ways to maximise social benefit and in building the capacity of community-based businesses to bid for contracts. Looking forward, the Committee will continue to monitor the implementation of the recommendations to ensure that public procurement is used more effectively by the Executive as a strategic policy tool, so that the local community can get the most out of the long-term positive social, economic and environmental outcomes it can bring.

Preliminary Inquiry into Public Sector Efficiencies

20. Given the current period of exceptional budgetary constraint for the local public sector, the Committee considered it important to undertake an initial examination of how the Executive can maximise efficiencies without having an adverse impact on essential front-line services and strategic policy priorities. The Committee’s report, debated in plenary on 21 June 2010, contained over 25 recommendations for the Executive and DFP, based on evidence from a range of expert witnesses. These recommendations focused on a number of key areas including: the need for a strategic approach to efficiency savings; planning, delivering and monitoring efficiencies; improving public sector efficiency in the future; and other related challenges. During the plenary debate, the Minister described the report as “pragmatic” and “thoughtful” and noted that it “brings forward many recommendations that we would do well to adhere to and examine”. The Committee is expecting a formal response from the Department early in the next session.

Second Report on the Budget Scrutiny Inquiry

21. The Committee commenced its Inquiry into the Role of the Northern Ireland Assembly in Scrutinising the Executive’s Budget and Expenditure in July 2008. Intended to be conducted in stages, the aim of the inquiry is to maximise the Assembly’s contribution to the budget process and enhance the role of Assembly statutory committees and members in budget and financial scrutiny. The first inquiry report, published in October 2008, formed the Committee’s submission to the Review of the NI Executive Budget 2008-11 Process being undertaken by DFP. Since then, the Committee repeatedly pressed for completion of the DFP review, believing it essential that the review should be completed to enable the establishment of a settled budget process.
22. The Department completed the review in spring 2010 and DFP officials gave evidence on the outcome of this work at the Committee’s meeting on 12 May 2010. Members considered the review recommendations in turn, having regard to the views of the other Assembly statutory committees and to practices and processes in other jurisdictions. The Committee’s second inquiry report, which formed a co-ordinated response to the DFP review on behalf of the Assembly, identified a number of key findings and recommendations which are intended to inform the establishment of a regularised budget process. The Second Report, which was agreed by the Committee on 30 June 2010, will be the subject of a debate in plenary early in the 2010-11 Assembly session.

Budget Scrutiny Inquiry: Resources to support Assembly scrutiny

23. In addition to examining and responding to the DFP Review of the NI Executive Budget 2008-11 Process, the Committee proceeded with the next stage of its inquiry, which is to review the resources available to statutory committees and Members in undertaking budget and financial scrutiny. The Committee took evidence on the role of scrutiny units and specialist budget advisers from representatives of the Scottish Parliament and the House of Commons. The Committee also took evidence from the Northern Ireland Audit Office and the Assembly’s Research and Library Services. In addition, the Committee has considered the resources available to other legislatures and sought the views of other Assembly statutory committees.
24. At its meeting on 30 June 2010, the Committee established the broad basis of the recommendations for the Third Report, which it intends to formally agree early in the 2010-11 Assembly session.

Budget Scrutiny

Monitoring Rounds

25. The Committee continued to closely scrutinise the quarterly monitoring rounds at both a Departmental and strategic level. As well as being briefed on the DFP position prior to the Department making its submission to the centre, members also took evidence from Departmental officials on the outcome of quarterly monitoring round and the strategic position of the Executive’s Budget.
26. Additionally, at its meeting on 20 January 2010, the Committee took evidence from DFP officials on the Department’s Review ofthe NI Executive In Year Monitoring Process. This had been undertaken to determine whether the in-year monitoring process is fit for purpose, particularly in view of the decreasing levels of reduced requirements being declared by departments. The review identified both strengths and weaknesses in the in year monitoring process and set out four possible options for change, and concluded that the rationale behind the monitoring process remained valid. However, the Committee subsequently heard on 12 May 2010 that the Minister had requested a review of the process to be put in place to underpin the Budget 2010 spending plans, including consideration of the options of creating a contingency fund or the use of overcommitment as a planning tool. Consequently, in its Second Report on the Inquiry into the Role of the NI Assembly in Scrutinising the Executive’s Budget and Expenditure, the Committee called for the Department to set out its up-to-date position with regard to the future approach to in-year monitoring.

Review of Spending Plans 2010/11

27. On 12 January 2010, the Minister of Finance and Personnel announced that the Executive had agreed to undertake a review of departmental spending plans for 2010/11, in view of a range of identified public spending pressures totalling £367m. The Minister requested that the Committee produce a co-ordinated report on the revised plans on behalf of all Assembly statutory committees by the end of February 2010 or as soon as possible thereafter. To inform its report, the Committee sought a response from each statutory committee to its respective department’s plans; however, the limited timescale available for consideration of the issues and completion of the report precluded the Committee from undertaking a wider consultation. Despite this, a number of written submissions were received from various organisations. In addition, the Committee led a ‘Take Note’ debate in the Assembly; as well as informing the Committee’s report, this also offered all MLAs an opportunity to debate the revised spending proposals.
28. In its Report on the Review of 2010-11 Spending Plans for NI Departments, published on 11 March 2010, the Committee was strongly critical of the lack of engagement by a majority of the departments with their Assembly committees and also raised concerns around the transparency of this “mini-budget” process. The Committee identified a number of measures which it believed will improve engagement on budgetary issues moving forward.

Performance and Efficiency Delivery Unit (PEDU)

29. While broadly supportive of the intention behind the creation of PEDU, the Committee continued to have concerns about its outworking. PEDU officials briefed the Committee on 14 April 2010 and, during the evidence session, members expressed concern about the effectiveness of PEDU and how that is measured. Members were also disappointed to note that, since the PEDU reviews of the Planning Service and Land & Property Services, no other Department had commissioned the services of PEDU. In its Report on the Preliminary Inquiry into Public Sector Efficiencies, the Committee called on DFP to put forward options to the Executive for ensuring that the PEDU functions are exercised effectively across all departments.

Policy Scrutiny

Performance against PSA Targets and Departmental Business Plan

30. The Committee began the 2009/10 session following up on its scrutiny of the Department’s performance against its Public Service Agreement (PSA) targets and Business Plan for 2008/09. Previously the Committee had identified discrepancies between DFP’s account of its own performance and that reported in the End-Year Delivery Report by OFMDFM. Members informed the Public Accounts Committee (PAC) of their concerns, and this was subsequently reflected in a PAC report on PSAs, published in September 2009. The Department subsequently amended its performance reporting system and the Committee continued to scrutinise DFP performance throughout the year.

Enterprise Shared Services

31. Throughout the session the Committee monitored the implementation of the Northern Ireland Civil Service (NICS) Reform Programme, including in terms of the delivery of benefits and efficiency savings. NICS has recently created Enterprise Shared Services, a shared services organisation which brings together the functions of Account NI, HRConnect, IT Assist, Centre for Applied Learning (CAL), Network NI and Records NI. The Committee plans to scrutinise each of these services in turn in the 2010/11 session.

INTERREG IVA

32. The Committee for Finance and Personnel, together with the Committee for Enterprise, Trade and Investment (CETI), investigated a number of concerns raised by the five Local Authority groups about delays in the application and approval of individual projects under the INTERREG IVA Program. The Committee took evidence from the Special European Union Programmes Body (SEUPB) and DFP’s European Division on 6 January 2010. During the course of this Assembly session the chairpersons and deputy chairpersons for CFP and CETI raised these issues during joint meetings, first with SEUPB officials and subsequently with the Minister of Finance and Personnel. CFP and CETI also co-sponsored a plenary motion, debated on 22 April 2010, which sought to highlight the delays in the implementation of the INTERREG IVA Programme and the subsequent problems faced by projects.

Procurement issues

33. Shortly after the Committee published its Inquiry report on public procurement a number of issues came to light regarding shortcomings in procurement processes within NI Water which had recently been awarded “exemplar status” during a review of Centres of Procurement Expertise (CoPEs). In light of representation from the Committee on this matter the Minister of Finance and Personnel agreed to look again at the CoPE evaluation assessment framework. The Committee also passed on its concerns to the Committee for Regional Development and the Public Accounts Committee.

Building Regulations

34. In the previous session the Committee had been briefed by Mencap on its ‘Changing Places’ campaign to introduce special toilet facilities in public buildings for people with profound and multiple learning disabilities. The Committee pursued this issue with DFP and, during the 2009/10 session, the Department advised that discussions with Mencap had been ongoing and that the next revision of Technical Booklet R “Access to and use of buildings” will provide an illustration of a Changing Places facility outlining the size, layout and fittings to be installed where such a facility is to be provided in a building.
35. At the end of the 2009/10 session DFP officials reported on the outcome of a consultation on proposals to amend the Building Regulations ( Northern Ireland) 2000 as recommended by the Committee in its report in June 2008 on the Building Regulations (Amendment) Bill.

Equal Pay

36. The Committee began the 2009/10 session by taking evidence from the Minister of Finance and Personnel on the progress to date of the Equal Pay negotiations. The Committee raised ongoing concerns around apparent anomalies arising from the subsequent settlement, including a number of groups which appeared to be omitted from the settlement. Further evidence was received from the Northern Ireland Public Service Alliance (NIPSA) on 27 January 2010 and from DFP officials on 30 June 2010 as the Committee continued to monitor the implementation of the settlement.

Senior Civil Service (SCS) Pay and Bonuses

37. The Committee continued to pursue this issue during the 2009/10 session. During evidence from the Minister of Finance and Personnel and Departmental officials on this issue at the beginning of the session, the Committee gained a commitment that it would have the opportunity to consider the draft terms of reference for the review. The Committee subsequently agreed the draft terms of reference at its meeting on 17 February 2010, noting that many of the issues raised previously by the Committee were reflected therein. On 15 April 2010 the Committee made a submission to the Senior Salaries Review Body on the review and also gained a commitment from the Minister that it would have the opportunity to make its own assessment of the review report and, if necessary, make further representations to the Minister, in advance of any final decisions being taken on the future pay arrangements for SCS in the NICS. The Committee looks forward to examining this issue in the 2010/11 session.
38. The other key policy areas which were scrutinised during the 2009-10 session included:
    • Land and Property Service
    • Rating issues
    • NICS Accommodation Strategy & Workplace NI
    • Measures of Multiple Deprivation
    • Review of Data Security
    • NICS Equality & Diversity Plan
    • Proposals in respect of Pleural Plaques
    • Sustainable Development Action Plan
    • NICS Absenteeism
    • Role of DFP in the Regional Economic Strategy
    • Progress on Dormant Accounts, and
    • Preparations for Census 2011

Other Issues

39. In addition to fulfilling its scrutiny, policy development and consultation role in respect of DFP, the Committee also examined a range of other issues of economic and social importance to the local community. These included the following:

National Assets Management Agency (NAMA)

40. The Committee kept a watching brief on developments relating to NAMA in the Republic of Ireland (RoI), particularly with regard to the implications for the Northern Ireland economy. This included a briefing from Assembly Research in December 2009. In October 2009 the Chairperson wrote to the Minister seeking assurance that there would be a Northern Ireland representative on the NAMA Board. The Committee is therefore pleased to note the creation of a NAMA Northern Ireland Advisory Committee.

Corporation Tax

41. At its meeting on 10 March 2010 the Committee received an oral briefing from members of the Economic Reform Group NI on the case for a reduced rate of corporation tax in Northern Ireland. Following this evidence session the Chairperson wrote to the Minister of Finance and Personnel proposing that the Executive, or an appropriate Executive sub-group, meet to urgently consider the proposals contained in the Economic Reform Group’s report. Members also voiced support for the case for Northern Ireland having a competitive rate of corporation tax during an Assembly debate on the matter in May 2010, following a motion jointly tabled by CFP and CETI.

Cost of Insurance in Northern Ireland

42. The Committee received an initial briefing on a report by the Consumer Council on this issue and received an oral briefing from the Association of British Insurers at its meeting on 16 June. Whilst this is largely a reserved area, the Committee has asked Assembly Research to prepare a scoping paper on a potential inquiry into the cost of insurance in Northern Ireland, which would: identify the issues for further exploration; assess the availability of data sources and other evidence; identify potential witnesses; and set out the respective areas of responsibility and jurisdiction. The Committee will then be in a position to consider the feasibility and scope for an inquiry and the procedural options for taking the issue forward.

Support for Carers

43. Following representations by the Committee, the Minister recently announced that work will be undertaken by DFP to determine the practicalities of providing additional support to carers through an increase in the Carer’s Premium under the low income rate relief scheme and, if this proved workable, the necessary legislation will be brought forward. The Minister acknowledged the helpful input from the Committee to the development of policy in this regard. In the wider context, Assembly Research is currently undertaking a scoping study to inform the Committee’s deliberations on whether there would be merit in a strategic review of support for carers at this stage, possibly under the auspices of an Assembly ad hoc joint committee.

Local financial sector

44. Following on from the Committee’s engagement with the local financial sector during the 2008/09 session, members received further evidence from the Northern Bank at the start of the 2009/10 session. The Committee also received representation from the Irish Banking Officials’ Association (IBOA) regarding the proposed disposal of First Trust Bank by Allied Irish Bank. In follow up, the Committee was subsequently advised that its proposal that the First Minister and deputy First Minister seek an urgent meeting with representatives of First Trust Bank employees was being taken forward.

Engagement – Informal Meetings/Events

45. During the 2009/10 Session the Committee was represented at various informal meetings and events, including the following:
    • Northern Ireland Assembly and Business Trust AGM: 7 December 2009 – the Chairperson took part in a panel discussion.
    • SEUPB: 22 February 2010 – the Chairperson and Deputy Chairperson, along with their counterparts from CETI met with officials from SEUPB to discuss concerns about the implementation of INTERREG IVA.
    • Northern Ireland Assembly and Business Trust Breakfast: 4 March 2010 – the Chairperson presented the findings of the Committee’s Inquiry into Public Procurement and answered questions from those attending.
    • Minister of Finance and Personnel: 7 June 2010 – the Chairperson and Deputy Chairperson, along with their counterparts from CETI met with the Minister of Finance and Personnel and senior DFP officials to discuss ongoing concerns about the implementation of INTERREG IVA.
    • Chartered Institute of Public Finance and Accountancy (CIPFA) : Procurement Seminar: 17 June 2010 – the Chairperson addressed the CIPFA Public Procurement Seminar on the outcome of the Committee’s Inquiry.
    • Children’s budgeting seminar: 24 June 2010 – the Chairperson gave a presentation on the role of the Committee, including its ongoing work in reviewing the Budget process.

Likely key priorities for next Session

46. The Committee’s key priority for the next session will be the Budget 2010, including the co-ordination of the responses from the other statutory committees. Other immediate issues include completion of the committee stages of the Construction Contracts (Amendment) Bill and the Damages (Asbestos-Related Conditions) Bill; scrutiny of Enterprise Shared Services; and examining the outcome from the review of Senior Civil Service Pay and Bonuses.

Detail of Committee Meetings

47. The Committee met on 33 occasions during 2009/10. Of these 33 meetings, 20 were held in open session and 13 were held in open/closed session. In terms of the latter, all 13 instances related to the consideration of draft committee reports which, following the normal procedural convention, take place in closed session. One Committee meeting was held at Bryson House in Belfast and incorporated a tour of Bryson’s recycling facility in Mallusk.

ANNEX A

Committee Expenditure

Committee for Finance and Personnel– Expenditure for the period 1 September 2009 – 31 August 2010