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BUDGET (NO. 2) BILL

( NORTHERN IRELAND) 2010

INTRODUCTION

1.This Explanatory and Financial Memorandum has been prepared by the Department of Finance and Personnel in order to assist the reader of the Bill and to help inform the debate on it. It does not form part of the Bill and has not been endorsed by the Assembly.

2.The Memorandum should be read in conjunction with the Bill. It is not, and is not meant to be, a comprehensive description of the Bill, and where a clause or part of a clause does not seem to require any explanation or comment, none is given.

BACKGROUND

3. Budget Bills are the legislative means by which Assembly approval will be sought for departments and certain other public bodies to incur expenditure and use resources as detailed in the corresponding Estimates volume and summarised in the Schedules to the Bills. Furthermore, the Budget Bills will enable the Assembly to hold departments and public bodies accountable for managing and controlling those resources within the limits authorised.

4. The Budget Bill will not only authorise the use of resources but contains powers to authorise the issue of sums of cash from the Northern Ireland Consolidated Fund to departments and other public bodies and appropriate those sums to services. Budget Bills also set the relevant limits on the accruing resources that may be directed to be used for purposes specified in the Schedules to the Bill. Accruing resources are divided into two categories: a) operating accruing resources, which is resource income offset against the gross resource expenditure and b) non-operating accruing resources, which is capital income, mainly relating to the sale of assets, and offset against gross capital spend.

5.Estimates volumes and other relevant documents are published so as to be available when Budget Bills are introduced in the Assembly. Separate Budget Bills will be introduced relating to the Main Estimates (initial voted provision for a financial year) and subsequent Supplementary Estimates which revise that initial provision. The Budget Bill relating to the final Estimates of departments and public bodies will also provide interim resources and funding (around 45%) for the first few months of the next financial year.

PURPOSE

6. The Bill will give effect to the 2010-11 Main Estimates of the Department of Justice, the Office of the First Minister and deputy First Minister and the Public Prosecution Service for Northern Ireland in the event of Stage 2 devolution. The Bill will authorise the issue of cash from the Consolidated Fund of Northern Ireland of £1,432,778,000 during 2010-11. The Bill will also authorise the use of resources amounting to £1,369,871,000 and will specify the limits on the amount of accruing resources, including both operating and non-operating accruing resources, that may be directed to be used for certain purposes for the year ending 31 st March 2011. The cash and the resources authorised for use by the Office of the First Minister and deputy First Minister are in addition to the Vote on Account authorised by the Budget Act (NI) 2010.

7. The sums to be issued from the Consolidated Fund of Northern Ireland for the year ending 31 st March 2011 are to be appropriated for services, as set out in Schedule 1 to the Bill.

8.The amount of resources (including accruing resources) authorised for use for the year ending 31 st March 2011 are to be used for the purposes specified in Schedule 2 to the Bill.

COMMENCEMENT

9. The bill will only come into operation after Royal Assent and on and after the date of devolution.

COMMENTARY ON CLAUSES

Clause 1: Application of this Act

This clause ensures that the Bill only applies if an Order in Council is made under Section 4 of the Northern Ireland Act 1998 which provides for policing and justice matters to cease to be reserved. The Bill will only have effect on and after the date of devolution within the year ending 31 st March 2011.

Clause 2: Issue of sum out of the Consolidated Fund for the year ending 31 st March 2011 and appropriation of that sum

Sub-section (1) authorises the issue out of the Consolidated Fund of Northern Ireland of the sum of £1,432,778,000 for 2010-2011.

Sub-section (2) appropriates that sum for the purposes specified in column 1 of Schedule 1.

Clause 3: Use of resources in year ending 31 st March 2011

This Clause authorises the use of resources (other than accruing resources) by the Department of Justice, the Office of the First Minister and deputy First Minister and

the Public Prosecution Service for Northern Ireland amounting to £1,369,871,000 in 2010-2011 for the purposes specified in column 1 of Schedule 2.

Clause 4: Limit on use of accruing resources in year ending 31 st March 2011

This clause sets the limits on the amount of accruing resources, including both operating and non-operating accruing resources, that may be directed to be used for certain specified purposes in the year ending 31 st March 2011 in addition to the resources authorised by Clause 3.

Clause 5: Interpretation

This clause provides interpretation of terms used within the Bill.

Clause 6: Short title

This clause sets out the title of the Bill.

FINANCIAL EFFECTS OF THE BILL

11. As detailed above.

HUMAN RIGHTS ISSUES

12. No effect on this area.

EQUALITY IMPACT ASSESSMENT

13. No effect on this area.

SUMMARY OF THE REGULATORY IMPACT ASSESSMENT

14. No effect on this area.

LEGISLATIVE COMPETENCE

15. At Introduction, the Minister of the Department of Finance and Personnel had made the following statement under section 9 of the Northern Ireland Act 1998:

“In my view, the Budget (No. 2) Bill ( Northern Ireland) 2010 would be within the legislative competence of the Northern Ireland Assembly.”

SECRETARY OF STATE CONSENT

16. The Secretary of State has consented under section 10(3)(b) of the Northern Ireland Act 1998 to the Assembly considering this Bill.

RECOMMENDATION

17. The Minister in charge of the Bill, Mr Sammy Wilson, has made the following recommendation as required under section 63 of the Northern Ireland Act 1998.

“As Minister of Finance and Personnel, I recommend the Budget (No. 2) Bill ( Northern Ireland) 2010 to the Assembly as is required by section 63 of the Northern Ireland Act 1998.”