COMMITTEE FOR
FINANCE AND PERSONNEL
OFFICIAL REPORT
(Hansard)
Budget (No 2) Bill
4 June 2008
Members present for all or part of the proceedings:
Mr Mitchel McLaughlin (Chairperson)
Mr Mervyn Storey (Deputy Chairperson)
Mr Roy Beggs
Mr Simon Hamilton
Mr Fra McCann
Ms Jennifer McCann
Ms Dawn Purvis
Mr Peter Weir
Witnesses:
Michael Daly (Department of Finance and Personnel)
The Chairperson (Mr McLaughlin):
I welcome Michael Daly from the Department of Finance and Personnel. Agnes Lennon is unwell and will not be joining us.
Mr Michael Daly (Department of Finance and Personnel):
She telephoned me this morning and did not sound too well.
The Chairperson:
How are you?
Mr Daly:
I am fine; so far at least.
The Chairperson:
You will be ok.
Last week, the Committee was briefed on the Budget. We asked the Department for written reconciliation of the figures in the Executive’s Budget for 2008-09 and the Estimates. A helpful paper on how the Estimates link to the first year allocations of the Budget 2008-2011 has been supplied in response to that request and is included in members’ papers. The original DFP paper and the Minister’s correspondence on the need for accelerated passage are also included in the papers.
I remind members that we informed the Committee for Health, Social Services and Public Safety of the Department of Health, Social Services and Public Safety’s excess vote for 2006-07. The response, which is included in members’ papers, confirms that that Committee has noted the issue. Therefore we have fulfilled our function on that matter.
I invite Michael to address the Committee. Discussion has been ongoing on this issue and members have got their heads around it. The paper provided by the Department satisfies the information request that the Committee made last week.
Mr Daly:
I do not have a great deal to say about the paper. I am glad that it has gone some way to reconcile the original Budget and the Estimates — that is not an easy process. The main purpose of the paper is to illustrate that the Estimates do not provide additional spending power; they are merely a summary of technical movements and adjustments. It is important to bear that in mind when considering the large Estimates figures for the Department of Health, Social Services and Public Safety. Those were calculated in accordance with the convention that technical changes should not affect services and that budgets are adjusted to maintain the status quo.
The table in members’ papers outlines the adjustments that we discussed with the Committee last week. I realised, last night, that I had omitted a minor adjustment that affects DFP: it has both the main vote for the Department and the pensions vote. Committee members will realise that there is a difference of £0·1 million — £118,000; that is not a rounding error. The table omits the fact that the Budget in January showed DFP’s departmental expenditure limit as £180·7 million. The superannuation vote estimates show a figure of £118,000. That relates to the Civil Service compensation scheme, which deals with early retirements for civil servants.
It is treated in that way because with the separate scheme for civil servants, any early retirement costs or redundancy costs are picked up ultimately by the Department of Finance and Personnel. That is the final piece that I did not include in the table, but I will send an updated version for completeness and to show that the total departmental expenditure limit in the Budget can be reconciled with the Estimates. In that particular case, the departmental expenditure limit figures split into two different votes. That does not happen with the Department of Education or the Department of Health, Social Services and Public Safety because they do not have a separate compensation scheme.
I will be happy to take any questions.
Ms J McCann:
Annex A of the reconciliation document refers to an additional £1·9 million in respect of EU peace funding. Will you explain that?
Mr Daly:
I do not know whether members have a copy of the original Budget 2008-2011 document, but table 2a refers to “Unallocated EUPRP” of £3·1 million. That is separately identified because we could not get the money distributed in time. However, it has now been distributed; I think that the two relevant Departments are the Department of Finance and Personnel and the Department of Agriculture and Rural Development. Therefore, it is money that was approved in the Budget by the Assembly in February and which is now being distributed to the Departments.
Ms J McCann:
Therefore, it has nothing to do with underspend in EU peace funding.
Mr Daly:
No. It is separately identified, and, because of the timing in dividing up the Budget, it could not be incorporated in time for the final Budget document; however, it has now been included in the Departments’ baselines. That is the same scenario as with the water subsidy figure of £266·9 million that was identified separately in the original Budget and which has now been included in the Department for Regional Development’s baseline.
The Chairperson:
Paragraph 8 of the briefing paper refers to the net resource outturn Estimates figure for DFP of £190·7 million. The two current expenditure totals given for DFP in the table in annex A are £180·7 million and £185·9 million. Will you explain the differences in those figures?
Mr Daly:
The £180·7 million is the net Budget position in the January Budget document. Other adjustments in the paper that I mentioned earlier, including an additional £4·1 million from the Office of the First Minister and deputy First Minister — which is to do with the transfer of functions and reform costs — and the EU money, which Ms McCann just mentioned, have to be taken into account. I also mentioned the additional £118,000 in relation to superannuation. That makes a total, excluding the superannuation money of £185·925 million, which is the figure on page 144 of the Estimates.
We have to get from there to the Estimates figure, and you will see on page 144 of the Estimates the two items that need to be adjusted. One is in relation to notional costs that do not feature in the Budget but which have to feature in the Accounts and the Estimates; the other figure is the £4·4 million cost of collecting rates, which, again, is a transitional arrangement. The figure cannot be shown in the Budget, but, for transparency, it must be shown in the Accounts and the Estimates.
Measures will be taken in the proposed financial provisions Bill to provide the proper treatment for what will change in future. We have to show that figure somewhere in the interests of transparency.
The £185·925 million added to the £400,000 notional costs and the £4·4 million make a total of the £190·725 million in the Estimates.
The Chairperson:
You will be glad to hear that that concludes the session. Thank you for your assistance, Michael. It is a very technical issue, but a necessary part of the process.
We now have to deal with the question of accelerated passage for the draft Budget (No. 2) Bill before its introduction in the Assembly on Monday 9 June 2008.
Is the Committee for Finance and Personnel satisfied that there has been appropriate consultation with it on the public-expenditure proposals in the Budget (No 2) Bill 2008? Do members agree to the Committee’s taking a vote on whether to agree to accelerated passage?
Members indicated assent.
Question, That the Committee agrees to accelerated passage for the Budget (No.2) Bill, put and agreed to.
Mr Beggs:
It would be better if the Committee could spend more time studying the Budget Bill, but we are aware of the time constraints.
The Chairperson:
That point was made last week as well. We must send a letter to the Speaker to notify him of the Committee’s decision. It is a standard letter, a draft of which is in members’ folders. Are members content that the letter be sent to the Speaker’s Office?
Members indicated assent.
Michael, thank you very much for appearing before the Committee today.