COMMITTEE FOR FINANCE AND PERSONNEL
MINUTES OF PROCEEDINGS
NINETY THIRD MEETING
TUESDAY, 28 MAY 2002
COMMITTEE ROOM 144, PARLIAMENT BUILDINGS
Present: Mr Francie Molloy (Chairman)
Mr Roy Beggs (Deputy Chairman)
Mr Alex Attwood
Mr Billy Bell
Mr Seamus Close
Mr Roger Hutchinson
Ms Patricia Lewsley
Mr Alex Maskey
Mr Maurice Morrow
Mr Peter Weir
In attendance: Mr Alan Patterson (Principal Clerk)
Ms Sheila Mc Clelland (Clerk)
Mr Joe Sloan (Assistant Clerk)
Miss Shauna McDaid (Executive Support)
Mr Jonathan Briggs (Administrative Support)
The Chairman declared the meeting open at 2.05 p.m. The meeting began in closed session.
1. Chairman's business
1.1 The Principal Clerk presented the Committee's briefing papers for the day's business. The Committee discussed the briefings.
1.2 The Committee considered the case for seeking to reappoint the specialist adviser on the PPP Report to advise on the Committee's response to the current consultation exercise initiated by the PPP Working Group's Report. The Committee noted the advice form the Head of Procurement that a short-term reappointment to complete the Committee's work on this issue would not be inappropriate and agreed that this should be taken forward.
Mr Morrow attended the meeting at 2.08 p.m. Mr Hutchinson attended the meeting at 2.09 p.m.
The Chairman declared the meeting open to the public at 2.09 pm.
2. Apologies
2.1 Mr Derek Hussey.
3. Minutes of Proceedings
3.1 The Committee considered the Minutes of Proceedings for 21 May 2002.
Resolved: The Committee agreed the Minutes of Proceedings of 21 May 2002.
4. Matters arising.
4.1 The Committee noted a letter from the Chairman of the Social Development Committee regarding the deadline set for bids for resources under the Reinvestment and Reform Initiative and the short consultation period with Statutory Committees before the bids were submitted.
Resolved: The Committee agreed to forward the letter to the Minister of Finance and Personnel for his comments on the issues raised.
4.2 The Committee noted the letter from the Minister of Finance and Personnel regarding the ongoing negotiations with Treasury regarding the asset transfer of security and military bases to the Executive and the associated costs of making the sites ready for use.
Resolved: The Committee noted the letter and agreed to write to the Minister to urge him to proceed with caution in further negotiations with Treasury on this subject.
4.3 The Committee noted its letter to the Minister of Finance and Personnel dated 28 May 2002 regarding the Reinvestment and Reform Initiative and the bids submitted by the Department.
4.4 The Committee noted the composite list of bids for resources from the Infrastructure Fund of the Executive Programme Funds.
Mr Weir left the meeting at 2.30 p.m.
Resolved: The Committee agreed to discuss some of the bids with officials appearing before them later that day and to write to the Minister to inform him that the Committee could not endorse the £110m bid for the Natural Gas Pipeline on the basis of the economic appraisal.
Mr Maskey attended the meeting at 2.56 p.m.
4.5 The Committee noted its letter to the Department of Finance and Personnel dated 28 May 2002 regarding the bids made by the Department under the third tranche of Executive Programme Funds.
4.6 The Committee noted its letter to the Minister of Finance and Personnel clarifying its position in relation to an erroneous article in the Belfast Telegraph regarding the Minister's evidence to the Committee on the Natural Gas Pipeline.
4.7 The Committee noted the statement by the Minister of Finance and Personnel on 27 May 2002 regarding the launch of public consultation on the Review of Rating Policy.
4.8 The Committee noted the statement by the Minister of Finance and Personnel on 27 May 2002 regarding the Executive's Public Procurement Policy.
4.9 The Committee noted the response from the Minister of Finance and Personnel in relation to the Committee's letter regarding the use of renewable fuel by the public service estate.
Resolved: The Committee agreed to forward a copy of the letter to the Committee for Enterprise Trade and Investment in relation to its Report on Energy.
4.10 The Committee noted the letter from the Department regarding the potential implications for the Department of the Human Rights Commission Bill of Rights. This matter will be considered at the Committee's meeting on 11 June 2002.
5. Inquiry - European Structural Funds and Community Initiatives.
5.1 The Principal Clerk briefed the Committee on the responses received from potential specialist advisers to the Committee on its Inquiry on European Structural Funds and Community Initiatives.
5.2 The Committee was also appraised of the options for selection by either a paper sift exercise or by interview process and were presented with a draft scoring matrix.
Resolved: The Committee agreed to select a specialist adviser by a paper sift exercise at a meeting on Wednesday 5 June 2002 in room 152.
Ms Lewsley left the meeting at 3.11 p.m.
6. Resource Budgeting - Implications for Water and Sewerage
6.1 Departmental officials Dr Andrew McCormick, Mr David Sterling and Mr Richard Pengelly attended the Committee to brief it on the implications of Resource Budgeting for Water and Sewerage in Northern Ireland.
6.2 The officials informed the Committee that the Spending Review 2002 and the local Budget 2002 process were being conducted under Resource Accounting and Budgeting (RAB) Stage 2 rules. This required a new way of thinking by Northern Ireland departments because in future capital expenditure will result in capital charges (cost of capital and depreciation being borne by the resource budget. This would impact on the ability of the departments to deliver services.
6.3 The Department of Finance and Personnel has agreed with the Treasury that non-cash costs in respect of services which are delivered by local authorities in England but by central government here should remain in Annually Managed Expenditure, rather than transfer to the Departmental Expenditure Limit for the duration of SR 2002. This is in recognition of the differing structures here, and removes one particularly problematic effect of the application of the Barnett formula in Northern Ireland. This approach is similar to that adopted at national level in respect of roads, where the Highways Agency in GB is experiencing some particular difficulties with the management of the national roads network.
6.4 The officials estimated that the total cost of capital and depreciation charges on the assets of the water and sewerage industry here could amount to £400m following the additional capital expenditure made possible by the Reinvestment and Reform Initiative. The Executive had decided to examine the possibility of water charges as part of the Rating Policy Review as one way of raising the additional revenue now needed due to the amount of under investment in water and sewerage and because of European Directives on water charges or constraints on water usage. The estimated cost of capital and depreciation charge on water and sewerage provision in Northern Ireland is currently around £250m.
Mr Weir returned to the meeting at 3.27 p.m.
6.5 The officials also told the Committee that officials from the Department for Regional Development are carrying out a study into possible new structures for the water industry here - this involves looking at practice elsewhere, for example, Scottish Water. This work has not yet been completed.
7. Executive Programme Funds - Infrastructure Fund.
7.1 Departmental officials Dr Andrew McCormick, Mr David Sterling and Mr Richard Pengelly briefed the Committee on some of the details relating to the composite set of bids for resources from the Infrastructure Fund of the Executive Programme Funds.
7.2 The officials informed the Committee that the bids for Ebrington Barracks and Crumlin Road Gaol sites had been overtaken by the Chancellor of the Exchequer's announcement in the Odyssey Centre.
7.3 The officials agreed with the Committee that some clarity and further discussion was needed on the role of the Department, and consequently that of the Committee in relation to its scrutiny of composite sets of bids for resources and the role of the Strategic Investment Authority.
Mr Maskey left the meeting at 3.40 p.m.
7.4 In response to questions, officials advised the Committee that projects submitted to the Infrastructure Fund were expected to have economic appraisals presented and these would not be taken at face value but would be examined by DFP economists. The Executive could, however, exercise its discretion to proceed with a project regardless of a poor financial appraisal if it saw other merits but that his would be an exception to normal practice.
8. 2002 - 2003 Financial Year - Main Estimates.
8.1 Departmental officials Mr David Sterling and Mr Richard Pengelly briefed the Committee on the process and purpose of the Main Estimates and the Budget Bills 2002 - 03.
8.2 The officials also briefed the Committee on how to navigate a route through the Estimates document.
Due to division in the House the meeting was suspended at 4.06p.m.
The meeting resumed at 4.25 p.m. following division when Mr Molly, Mr Beggs, Mr Attwood, Mr Close and Mr Weir returned.
8.3 The officials answered questions on presentational issues and terminologies associated with the Main Estimates and agreed that there was some room for simplification and improvement. The officials said that the Department hoped to engage the Committee in developing a simpler Estimates process and document for next year.
8.4 The Committee considered the accelerated passage of the Budget (No.2) Bill (Northern Ireland) 2002 dealing with the Supply Resolution covering the Main Estimates 2002 - 03.
Resolved: The Committee agreed to write to the Speaker and the Minister informing them that it was content that the requirements of Standing Order 40 had been fully met in terms of appropriate consultation and agreed to accelerated passage of the Budget (No.2) Bill (Northern Ireland) 2002.
Mr Bell returned to the meeting at 4.30 pm. Mr Attwood left the meeting at 4.30 p.m.
9. Review of Public Procurement.
9.1 The Committee considered a briefing provided by the Principal Clerk on the Review of Public Procurement.
Resolved: The Committee agreed to review the new arrangements for public procurement in the autumn when it would seek an evaluative report on progress from the Procurement Board.
10. Statutory Rule - The Building Regulations (Northern Ireland) 2000 - Radon Gas.
10.1 The Committee considered the written briefing provided by the Department of Finance and Personnel on the 12 week public consultation undertaken by the Department seeking public opinion in regard to preventative measures in buildings and geographical areas for Radon Gas protection.
10.2 The Committee considered the issues under consideration by the Department following the consultation.
Resolved: The Committee agreed to write to the Minister of Finance and Personnel to point out that the result of public consultation supported the view of the Committee and it would now expect that that this consensus would be fully taken into account in urgent amendments to the regulations.
11. Statutory Rule - Births, Deaths and Marriage (Fees) Order (Northern Ireland) 2002.
11.1 The Committee considered a letter from the Department regarding the proposed increase in fees for copies of registration events, searches in the General Register Office records and for preliminaries to and solemnisation of marriage.
Resolved: The Committee agreed to write to the Department to ascertain the dates of the last increase in these fees and if these increases had been factored into financial assumptions for the 2002 - 03 financial year and reflected in the Main Estimates. The Committee agreed to seek a breakdown of the fee increases against costs.
11. Review of Rating Policy.
11.1 The Committee considered a Report from its specialist advisers on the draft Rating Policy consultation document.
Resolved: The Committee agreed to write to the Minister of Finance and Personnel to acknowledge the commencement of the public consultation period.
11.2 The Committee considered the timing of its response to the public consultation document.
Resolved: The Committee agreed to request that the Department of Finance and Personnel should provide copies of all responses to the public consultation document to the Committee and to place a public notice requesting submissions from the public to the Committee in relation to the review.
12. Correspondence
12.1 The Committee noted the publication of the Sexual Health Bulletin by the Northern Ireland Statistics and Research Agency.
12.2 The Committee noted the Departmental press release in relation to the speech by the Minister of Finance and Personnel on Public Private Partnerships to the seminar organised by the Chief Executive's Forum and the Institute of Directors.
13. Any other business.
13.1 The Committee noted its programme of forthcoming business.
14. Date of next meeting.
14.1 The next meeting was agreed as Wednesday 5 June 2002 at 12 15 p.m. in room 152 to select a specialist adviser for the European Structural Funds Inquiry.
The Chairman declared the meeting closed at 4.50 p.m.
Roy Beggs Jnr
Deputy Chairman