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Committee for Finance and Personnel
End of Session Report (September 2010– March 2011)
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 and has a role in the initiation of legislation.
The Committee has the power to;
The Committee has eleven members, including a Chairperson and Deputy Chairperson, with a quorum of five members. The membership of the Committee during the current mandate has been as follows:
Mr Daithí McKay (Chairperson) 1
1 Mr Daithí McKay replaced Ms Jennifer McCann as Chairperson on 19 January 2011, having replaced Mr Fra McCann on the Committee on 13 September 2010. Ms McCann replaced Mr Mitchel McLaughlin as Chairperson on 9 September 2009.
2 Mr David McNarry was appointed Deputy Chairperson on 12 April 2010 having replaced Mr Roy Beggs on the Committee on 29 September 2008.
3 Mr Paul Frew joined the Committee on 13 September 2010; Mr Ian Paisley Jr left the Committee on 21 June 2010 having replaced Mr Mervyn Storey on 30 June 2008.
4 Mr Paul Girvan replaced Mr Jonathan Craig on 13 September 2010; Mr Jonathan Craig had been appointed as a member of the Committee on 13 April 2010. Mr Peter Weir left the Committee on 12 April 2010. Mr Peter Weir had replaced Mr Simon Hamilton as Deputy Chairperson on 4 July 2009. Mr Simon Hamilton replaced Mr Mervyn Storey as Deputy Chairperson on 10 June 2008.
KEY ACTIVITIES, OUTPUTS AND ACHIEVEMENTS
Construction Contracts (Amendment) Bill
1. At the beginning of this session the Construction Contracts (Amendment) Bill was in Committee Stage. While there were no issues raised on any of the clauses during the public call for evidence, members sought clarification on the House of Lords judgement in the case of Melville Dundas vs. Wimpey. The Committee also used the opportunity to question DFP officials about the prompt payment of subcontractors, an issue which members have continued to pursue. The Committee welcomed measures being introduced, in conjunction with the Construction Industry Forum for NI, through a revised “Code of Practice for Government Construction Clients and their Supply Chains” which includes a “Fair Payment Charter”. The Committee has asked for regular reports from the Department on the implementation and effectiveness of the Fair Payment Charter.
2. The Committee reported on its deliberations to the Assembly on 20 October 2010, and the legislation passed through its remaining stages, receiving Royal Assent on 10 February 2011.
Budget Bill 2011
3. The Committee took evidence on 2 February 2011 from DFP officials on the Budget Bill, which includes the Spring Supplementary Estimates for 2010-11 and the Vote on Account for 2011-12. This evidence session marked the culmination of a process of scrutiny by the Committee of in-year monitoring which, in addition to the Department’s position, included briefings on the strategic and cross-cutting issues relating to public expenditure following the outcome of each monitoring round. Following this evidence session, the Committee agreed that the Bill could proceed by accelerated passage in line with the requirements set out in Standing Order 42(2).
Civil Registration Bill
4. Progress on the Civil Registration Bill has been in abeyance since the Committee reported on its scrutiny of the legislation in March 2009. The Department wrote to the Committee in November 2010, outlining a number of proposed amendments to the legislation and an evidence session with departmental officials was subsequently arranged for 16 February 2011. Members were assured that the amendments were mostly of a technical nature, with some relating specifically to amendments that are now required to the Presumption of Death Act, which the Committee also scrutinised in detail during the Assembly passage of that legislation.
5. After receiving follow up clarification on some points members were content to support the Bill and its amendments at Consideration Stage on 28 February 2011. The Bill was scheduled to pass through its remaining stages before dissolution.
Damages (Asbestos-Related Conditions) Bill
6. The Damages (Asbestos-Related Conditions) Bill was introduced to the Assembly on Tuesday 14 December 2010. Given the late introduction of the legislation to the Assembly the Committee agreed to do all in its power to facilitate the Bill’s passage through Committee Stage within the nominal timeframe of 30 working days as set out in Standing Order 33(2). This included an early call for written evidence, and beginning oral evidence sessions prior to formal Committee Stage.
7. Prior to the Bill’s Second Reading on 17 January 2011, the Committee agreed that it would not be feasible to complete the evidence gathering within the required short timeframe and that, in order to afford the Bill full and proper scrutiny, consideration would be given to requesting an extension to the Committee Stage of the Bill. The Committee also agreed to maintain an open position with regard to the principles of the Bill.
8. Having reviewed the evidence it had received to date, the issues emerging and gaps in its evidence base, the Committee agreed at its meeting on 2 February 2011 to seek to extend Committee Stage to ensure a full and proper scrutiny of the Bill, and a Committee Motion was tabled for plenary debate, seeking approval to extend the Committee Stage until 23 March 2011. In the meantime members continued to hear evidence to help inform its opinion on the proposed legislation.
9. The extension motion was debated in the Assembly on 14 February 2011 and was subsequently negatived. In light of this decision by the Assembly, at its meeting on 16 February 2011, the Committee agreed that it was not in a position to report its opinion on the Bill or on the provisions contained therein, as provided for in Standing Order 33(2). This had not been possible due to the incomplete evidence received to date and the insufficient time available to collect and consider all of the further evidence required to enable the Committee to reach a fully informed position.
10. The Committee therefore did not take any further evidence on the Bill, beyond that which was scheduled up to 23 February 2011, which was still within the 30-day statutory period. It did however agree to publish the written submissions, research papers and Official Reports that it had received to date alongside a short factual account of the Committee’s approach to scrutinising the legislation. Evidence and papers received after 16 February 2011 were placed on the Committee’s website. The Bill passed Further Consideration Stage on 8 March 2011 and is scheduled to pass through its remaining stages before dissolution.
11. During the session the Committee scrutinised 15 statutory rules. Of these the Committee sought further clarification or briefing on 6 proposals for statutory legislation before subsequently agreeing. Four statutory rules were subject to affirmative resolution and the Committee recommended that they be affirmed by the Assembly. The remaining 11 statutory rules were subject to the negative resolution procedure and, following scrutiny, the Committee agreed that it had no objections to the rules.
12. The Committee also considered three additional proposals for subordinate legislation, including regulations relating to Land Registration and Cross-Border Mediation. The Committee was content with each of these proposals at this stage but noted that it would be for the incoming Committee to agree the corresponding statutory rules.
13. The Committee also noted two proposals for subordinate legislation relating to pensions regulations which were not subject to Assembly procedure.
Inquiry into Public Procurement Policy and Practice in Northern Ireland
14. The Committee continued to monitor the Department’s progress in implementing the recommendations arising from its Inquiry into Public Procurement Policy and Practice, which had been completed during the 2009-10 session. The Procurement Board now has an agreed action plan in place and has taken on board many of the Committee’s recommendations including:
Preliminary Inquiry into Public Sector Efficiencies
16. The Committee reported on its Preliminary Inquiry into Public Sector Efficiencies at the end of the 2009/10 session. The Committee noted that the DFP guidance on Savings Delivery Plans issued to all departments in preparation for Budget 2011-15 advised that due regard should be given to the recommendations set out in the Committee’s report. Following a short delay, DFP officials responded to the Committee’s recommendations in October 2010, both in writing and through an oral evidence session. The Committee believes that there is more to be done in this area, including further scrutiny of the work of the Performance and Efficiency Delivery Unit (PEDU), and has highlighted this in its Legacy Report.
Inquiry into the Role of the Assembly in Scrutinising the Executive’s Budget and Expenditure
17. The Committee’s Second Budget Scrutiny Inquiry Report, which had been agreed in the previous Assembly session, was debated in plenary on 20 September 2010. The Report was a co-ordinated response to the DFP review of the 2008-11 budget process on behalf of the Assembly, and it identified a number of key findings and recommendations intended to inform the establishment of a regularised budget process moving forward.
18. The Third Inquiry Report was agreed by the Committee on 21 March 2011. The Committee had begun its evidence gathering for this final stage of the Inquiry during the previous Assembly session, during which evidence was taken on the resources for supporting budget scrutiny in the Scottish Parliament and Westminster, including the role of dedicated scrutiny units and budget advisers, and also from the NI Audit Office and the Assembly’s Research and Library Services. The Committee also considered the provision of information to other legislatures, and how other legislatures set and agree their budgets. The Report identifies practical measures to be taken forward in the new mandate which will improve the future budget process and strengthen the procedures for enabling the Assembly to exercise its role in that regard.
Executive’s draft Budget 2011-15
19. Scrutiny of the Executive’s draft Budget 2011-15 formed a significant part of the Committee’s workload during this Assembly session. In preparation for the draft Budget, a range of witnesses, including representatives of the business and voluntary sectors, economists, academics and trade unions, were invited to give evidence on key public finance issues. The Committee had detailed engagement with DFP officials on both strategic issues, including the implications of the UK Spending Review for NI, and on department-specific plans. Submissions were also received from each Assembly statutory committee in relation to the spending and savings plans for their respective departments, and from the Assembly Commission and the Audit Committee.
20. The Committee’s co-ordinated Report is a critical but constructive response to the Executive’s draft Budget proposals. As well as some forty-five key findings and recommendations, it includes numerous supplementary observations and proposals, both at a strategic and a departmental level. These include recommendations relating to: budgetary savings and efficiency gains; an enhanced role for the Performance and Efficiency Delivery Unit; preventative spending; options for revenue raising; and levers to help rebalance the economy. Many of the recommendations apply to medium and longer-term issues; the Committee will therefore recommend that the pursuance of these recommendations should be one of the first priorities of the Finance Committee in the new Assembly mandate.
21. As in previous years, the Committee has scrutinised each of the quarterly monitoring rounds during the course of the current financial year, both in terms of the overall outcome across departments and as regards the position for DFP as a Department. While accepting that in-year monitoring is a valuable process, allowing the reallocation of substantial amounts of money, the Committee considered that the diminishing levels of reduced requirements being declared in-year means that it is less able to deal with new or unforeseen pressures. In its response to the draft Budget 2011-15, the Committee therefore reiterated its call for the establishment of a regularised annual budgetary review mechanism, which would better enable the Executive to adapt its plans to deal with changing circumstances and unforeseen pressures.
Presbyterian Mutual Society Assistance Package
22. In its scrutiny of the Executive’s draft Budget 2011-15, the Committee considered funding for an assistance package for Presbyterian Mutual Society (PMS) savers, which includes additional borrowing under the Reinvestment and Reform Initiative and contributions from the Executive, HM Treasury and the Presbyterian Church. The Committee has called for clarity on a number of points in relation to the assistance package from both DFP and the Department of Enterprise, Trade and Investment, and stressed that it is incumbent on the Executive to ensure that the use of public money to assist PMS savers will see a just and fair resolution for all parties.
Performance against PSA Targets and Departmental Business Plan
23. Throughout the session the Committee continue to monitor and scrutinise the Department’s performance against the PSA Targets in the Programme for Government and against the objectives of the departmental business plan for 2010-11. Members noted the revised performance reporting system used by the Department following concerns raised by the Committee in the previous session. In January 2011, the Committee took oral evidence from DFP officials on the proposed departmental business plan for 2011-12, with follow-up information provided as requested by members. This, along with scrutiny of the Department’s spending and savings plans, provides a solid foundation on which the incoming Committee can build.
Land and Property Services
24. The Committee continued with its active monitoring the progress of Land and Property Services (LPS) in implementing the recommendations from the PEDU Review of LPS and also those from the PAC Report, taking evidence on 13 October 2010. In examining the impact of rating issues on local councils, the Committee took evidence from both LPS and representatives from Solace on 8 March 2011. The need to establish a firm baseline for LPS during the Budget 2011-15 period formed part of the Committee’s scrutiny of DFP’s spending plans.
25. The Committee has considered a range of rating issues during the session, as detailed below:
i. Following recommendations made by the Committee, members welcomed the Finance Minister’s decision to provide additional support to carers through the rating system.
ii. As part of its Budget scrutiny, the Committee considered the proposal to maintain industrial rates at 30% liability for the 2011-15 period and made recommendations for this measure to be evaluated before the end of the four-year period. The Committee also pressed for measures to be put in place for reinvesting the savings gained by manufacturing businesses through industrial derating in skills, training and research for the sector.
iii. The Committee considered subordinate legislation relating to a range of rating issues, including: the rating of empty homes; the revocation of ‘green’ rates rebates; and the reduction in the landlords allowance for the NI Housing Executive. After seeking clarification, where necessary, the Committee agreed that it was content with the policy implications of these Statutory Rules.
Senior Civil Service Pay Arrangements
26. Following on from its scrutiny of this area during the previous Assembly sessions, the Committee took evidence on the outcome of the review of Senior Civil Service (SCS) pay arrangements by the Senior Salaries Review Body (SSRB), at its first meeting on 8 September 2010. While welcoming a number of the recommendations in the report, which reflect issues previously raised by the Committee, a number of concerns still remain, such as the alignment of SCS pay to the local labour market, and proposed increases and bonuses for those at the top of their pay scales. The Committee notified the Minister of its response to the SSRB report in October 2010. The issue was also considered in the Committee’s report on the draft Budget 2011-15, when the Committee urged the Minister to conclude his deliberations on the SCS pay arrangements and, taking the concerns into consideration, set out proposed new arrangements which are cost-effective, fit for purpose and tailored to local economic conditions.
Enterprise Shared Services & Prompt Payment of Invoices
27. At the end of the 2009-10 session the Committee identified the Enterprise Shared Services organisation (which brings together the functions of Account NI, HR Connect, IT Assist, Centre for Applied Learning (CAL), Network NI and Records NI) as an area meriting particular scrutiny. Over two meetings in October 2010 the Committee examined each function in turn, with specific emphasis on Account NI and HR Connect. Members also took this opportunity to question departmental officials on the progress of the NICS in achieving the 10-day prompt payment target announced by the previous Finance Minister, Nigel Dodds, in November 2008. The Committee noted that extra investment has contributed to a significant improvement in the performance of departments in meeting the 10-day payment target but this is unsustainable in the long-term. In its report on the Executive’s draft Budget 2011-15 the Committee recommended that, whilst departments and their Arm’s Length Bodies should strive to meet the 10-day payment target, particular focus should be placed on achieving payment within the 30-day statutory period. The Committee was also encouraged by the introduction of the “Fair Payment Charter” to ensure fair payment terms and conditions for sub-contractors.
Corporate HR Issues including Equal Pay
28. The Committee has continued to monitor Corporate HR issues across the NICS including absenteeism, and equality and diversity policies. In the latest briefing from DFP officials, members have noted that the level of absenteeism across the NICS has reduced from 15.5 days in 2003-04 to 11 days on 2009-10 – a reduction of 29% over the period. However, the level of sickness absence has remained static for the previous two years and the Programme for Government target is 9.5 days. In its report on the Executive’s draft Budget 2011-15, the Committee has recommended that the Finance Minister and his Executive colleagues continue to work actively towards further reducing the existing rate of NICS absenteeism and that there is no relaxation of targets in this regard.
29. While on one level there has been a relatively smooth roll out of the Equal Pay settlement amongst eligible personnel, the Committee continues to have concerns about those who have been excluded from the settlement, particularly with regard to secondees to other public sector organisations, staff in Arm’s Length Bodies and retired civil servants. Members took oral evidence from the Civil Service Pensioners’ Alliance and wrote to the Finance Minister requesting that he meet with them to discuss their concerns. The Committee has also corresponded with both DFP and the Committee for Justice in respect of the consideration of equal pay settlements for staff in the Police Service of NI.
30. The Committee continued to highlight concerns around the implementation of the INTERREG IVA Programme and the difficulties experienced by the local authority groups in gaining approval for projects. Members had the opportunity to raise this with SEUPB officials on 8 December 2010 and also questioned the Minister of Finance and Personnel, when he reported to plenary on 7 February 2011 on his most recent North South Ministerial Council meeting on this matter.
31. Other key policy areas scrutinised by the Committee in relation to the Department include:
i. Dormant Accounts;
Cost of Insurance
32. Following on from their initial examination of this issue during the 2009-10 Assembly session, members considered two papers from Assembly research comparing the cost of insurance in NI with other UK regions. While members are aware that insurance is a reserved matter, it was noted that legal costs and compensation rates appear to be the two main contributory factors to higher premiums in respect of car insurance in NI. The Committee, therefore, wrote to the Committee for Justice and suggested that its successor committee may wish to explore these issues, which fall within the broad remit of the Department of Justice, further in the new Assembly mandate.
Local financial sector
33. Whilst banking regulation is a reserved matter, members continued to be concerned about the relationship between the position of local small and medium sized enterprises and the banking sector. During the course of the 2010-11 session, the Committee for Finance and Personnel twice met concurrently with the Committee for Enterprise, Trade and Investment to discuss these matters. On 22 September, members took evidence from local church leaders who had previously issued a statement highlighting their concerns about the relationship between local businesses and local banks. Members also heard from the Institute of Directors and representatives from the local business banking sector. In November 2010 the two committees again met concurrently to take evidence from the British Bankers’ Association (BBA) on the outcome of its recent Business Taskforce Report. The Committee welcomes the commitment from BBA to provide NI specific lending data on SMEs on a quarterly basis.
34. Committee motions on the following matters were debated in plenary during the session:
i. Second Report on the Inquiry into the Role of the Assembly in Scrutinising the Executive’s Budget and Expenditure
Detail of Committee meetings
35. The Committee met on 24 occasions during 2010/11, 18 were held in open session and 6 were held in open/closed session. In terms of the latter, all 6 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 LPS HQ in Belfast, which incorporated a tour of the facilities.