COMMITTEE FOR REGIONAL DEVELOPMENT

OFFICIAL REPORT
(Hansard)

Department for Regional Development’s Draft Budget;
Investment Strategy for Northern Ireland and
Draft Programme for Government

___________

14 November 2007

Members present for all or part of the proceedings:

Mr Fred Cobain (Chairperson)
Mr Cathal Boylan
Mr Willie Clarke
Mr John McCallister
Mr Raymond McCartney
Mr George Robinson
Mr Brian Wilson

Witnesses:

Ms Michelle Bagnall ) Help the Aged
Ms Elaine Campbell ) Age Concern

Mr Frank Caddy )
Mr Michael Lorimer ) Inclusive Mobility Transport Advisory Committee
Mr Ronnie Patterson )

Ms Carolyn Brown )
Mr John Friel ) Federation of Small Businesses
Mr Glyn Roberts )

Mr Gordon Best )
Mr Johnny McQuillan ) Quarry Products Association
Mr John Shannon )

Mr Seamus McAleavey ) Northern Ireland Council for Voluntary Action
Ms Frances McCandless )

Mr Geoff Allister ) Department for Regional Development
Mrs Doreen Brown )

The Chairperson:

The first stakeholder group comprises Age Concern and Help the Aged. Welcome Ms Michelle Bagnall and Ms Elaine Campbell. Please begin.

Ms Elaine Campbell (Age Concern Northern Ireland):

We thank the Committee for the invitation to come and speak today. As you know, our organisations work for and with older people.

I will start with our first impressions of the draft Programme for Government, the draft Budget and the draft investment strategy for Northern Ireland. We will then discuss transport and water, which are two of the Department’s key work areas.

Older people, like everyone else, are looking for a better future. However, we are not sure that the draft Programme for Government will deliver that. By that, we mean that there is not enough detail in the document to gauge how successful it will be. The document is short in comparison with previous Programmes for Government, and we are worried that some of the key issues in the next few years have not been considered adequately. One key issue for us is what is termed the “demographic challenge”. The draft Programme for Government recognises that younger people will reach working age but does not give sufficient recognition to the fact that many people who are now middle aged will become the older people of the future and that the number of older people is rising rapidly. Investment strategies and infrastructure must take more cognisance of that fact in order to meet the needs of an ageing population. That has not been done in sufficient detail in all three documents.

Age Concern and Help the Aged were involved in the work carried out on the comprehensive spending review; and we are disappointed to see that some of the priorities in that review have been changed or dropped. Both of our organisations argue strongly that anti-poverty must be one of the key concerns for a better future for Northern Ireland. We also recommend that the aim of building “a better future” should be changed back to building “a shared future”. Without having a shared future in infrastructure and in investment, there is the risk that key services will continue to be duplicated unnecessarily. That is not only an issue for DRD; but for the Executive and across Government Departments.

Ms Michelle Bagnall (Help the Aged):

Both of our organisations warmly welcome the proposal to extend free travel to everyone over the age of 60. Older people, particularly female older people, have campaigned for that on the principle of equality, so they warmly welcome the move as a positive development.

In the wider context of public transport policy, we were disappointed with the review that was carried out on public transportation in 2006, and we have provided the Committee with a copy of the letter we sent to the Minister on that matter. We felt that the review lacked sufficient qualitative data to put forward a strong point of view on how older people value public transport. In many areas where there is no public transport, community transport remains important for older people, and effective, adequately-resourced, community transport schemes can provide a vital link to the wider transport network.

It is important to consider and ensure that the needs of people with a disability are taken into account, particularly as regards accessibility. Although we understand double-subsidy in principle, older people are being penalised and should not have to shoulder the burden of ineffective transport policy.

We note with interest that the draft Budget states:

“Unfortunately, public transport is underutilized locally”.

We are aware of that. Translink’s figures show that 45% of the Senior SmartPasses are not used. We would like to see an investigation, or at least some further exploration, of why that is the case. From our contact with older people we know that rural transportation is a huge issue. Comparing transport usage in rural and urban areas reveals quite a difference in usage. Focus must be repositioned towards rural transportation and how rural infrastructure could be best developed to help older people.

Ms E Campbell:

We have already addressed the Committee on water reform. We are raising the issue today to keep it on the agenda. We support the Independent Water Review Panel’s strand-one report, and we are looking forward to the strand-two report. The crucial issues for us — and we want the Committee to be aware of them — are affordability and the charging mechanism. We want to ensure that there will be effective protection for people who are on, or below, the poverty line; and, that any new charging scheme will not push those close to poverty into poverty.

Both of our organisations will be making detailed responses on the draft Programme for Government. Thank you for allowing us to talk to you today.

The Chairperson:

I will pick up on a couple of points. Rural transport is a big issue for the Committee, particularly with respect to those older people who feel socially excluded. Transport in rural areas needs to be more innovative, particularly community transport. I am not from a rural area, but I imagine that community transport is more important for people living in those areas than mainstream bus services. How can we improve the take-up of public transport in rural areas?

Ms Bagnall:

Public transport policy initiatives do not seem to be being developed as part of a comprehensive and overarching strategy. The rural transport needs of older people should be examined by a task force.

The ‘Accessible Transport Strategy Action Plan 2007-2009’ has been published for consultation, and much feedback will be received on the needs of older people. Innovative schemes need to be developed. For example, a scheme employing tokens could be a possibility: tokens could be issued to older people, who could then choose when to use them. Flexible transport methods would need to be considered with such a scheme, whether it is community transport schemes or local taxis. As far as certain older people are concerned, taxis are heavily dependent upon ease of mobility and accessibility.

Ms E Campbell:

Another problem is the lack of integrated public transport. It is important to ensure that buses and trains are available at times when people need them. That is not particularly innovative, and it does not need to cost much, but impetus is required to ensure that people are offered services where and when they need them. Many people contact us, saying, for example, that they have been unable to get to a hospital appointment because they had to get one bus, then another, and then a third: that makes it extremely difficult for people, and it is another area that we urge the Committee to examine.

The Chairperson:

I have to say that the times when most people use buses and trains may not suit older people. We need a system specifically for older people. The timeframes of older people are different from those who work, and there is no sense in having trains or buses at 8.00 am or 9.00 am for older people when they are more likely to use trains from 10.00 am to 2.00 pm.

Ms E Campbell:

We are talking about situations such as when a person has to get a bus to the train station but misses the train by five minutes and must wait 40 minutes for the next one. There is a problem with the timetabling of services.

The Chairperson:

We are at opposite ends of the stick. The issue for older people is that they are socially excluded because the bus service totally excludes them, particularly in rural areas where they are already isolated. We want an innovative transport system that addresses the needs of people in rural areas and also the needs of older people. That would be completely different to the train and bus services that we currently have.

Mr W Clarke:

I agree with the Chairperson: there is no integrated transport system, and that causes people to use and pay for taxis: they are therefore not getting anything out of having free travel. There is also the fear of using public transport at certain times of the day, for example, at school times, when older people feel intimidated when using public transport. There is also an issue regarding the number of buses in rural areas. There should be a task force to examine in more detail why people are not availing of free travel.

Ms E Campbell:

The point you made about fear of using of transport reminds me that there are buddy schemes in some areas to encourage people who have not used public transport for a long time, or who do not know how to use it, to get into the habit of using buses. Such schemes help people to familiarise themselves with accessing and using buses. They have been successful, but they do require volunteer involvement and people to take charge of them.

The Chairperson:

Many issues, particularly regarding older people and rural areas, might be resolved by the community becoming more involved with departmental initiatives. Perhaps it might be better for local councils to be involved in conjunction with transport companies and the Department in developing innovative solutions.

I am concerned that older people will be socially excluded, and that that is more prevalent in rural areas, for example, where people are living in isolated farmhouses.

Mr G Robinson:

My point is on remoteness of location and convenience of service.

I have spoken to Ulsterbus on numerous occasions to try to obtain services to certain locations, but it has said that those services would not be viable financially because the routes were too remote and there would not be enough take-up. However, now that senior citizens are not being charged, there might be a greater take-up, at least in some areas. I take the point that we must look after the older generation as regards public transport.

Ms E Campbell:

We do not need to argue that there must be an Ulsterbus service in every single place: that would not be a viable position. However, where a service is not viable, more resources should be made available to allow community transport schemes to pick up the slack and offer a high quality service. That is what we want.

The Chairperson:

That would be the obvious solution. Buses are not needed in every area. Community transport would be better, either in the form of a direct service or linked to the public transport network, and would be cheaper. I am really concerned about this matter. The Committee was to the fore in pressuring the Department on concessions for women over the age of 60. I am disappointed that almost half the people are not availing of those concessions. It should be a major concern for both organisations represented here today that nearly half the people who are entitled to a Senior SmartPass are not using the scheme. It is certainly a major concern for the Committee. The same goes as regards the take-up of income support and other benefits. A tremendous amount of effort is needed to convince people to take up those benefits.

The Committee should take this matter up with the Department in partnership with Help the Aged and Age Concern. Perhaps the Department could come up with the resources to provide a detailed study into why almost half the people who are entitled to use free public transport are not doing so. It is probably because the vast majority are living in rural areas.

Mr McCartney:

The situation is being made worse by the fact that, according to the written submission from Help the Aged and Age Concern, 91% of pensioners do not have access to a car. That is crazy.

Mr Boylan:

I totally agree. It is astonishing that although free transport is provided, people cannot access it because it is not convenient. There is no point in having a facility if people cannot access it. That is a ridiculous situation, and we must examine it seriously with the relevant agencies.

The Chairperson:

The Chairperson:

I agree with your contention that we should have a commissioner for older people; the sooner, the better. Thank you for coming today.

I now welcome witnesses from the Inclusive Mobility and Transport Advisory Committee (IMTAC). Good morning, Mr Patterson, Mr Caddy and Mr Lorimer.

Mr Frank Caddy (Inclusive Mobility and Transport Advisory Committee):

I am the chairperson of IMTAC, which is supported by DRD to advise Government Departments about issues concerning transport for older and disabled people. We will speak about two issues: concessionary fares and rural transport.

The Government are being inconsistent in their proposed treatment of disabled people and older people as regards concessionary fares. The proposed approach goes against DRD current policy, as expressed in its accessible transport strategy, and is at odds with the equal treatment of older people and disabled people in other countries in the British Isles — England, Scotland, Wales and the Republic of Ireland. The proposed concessions for free travel for the over-60s do not extend to disabled people, and we believe that they should.

The Government have spent hundreds of millions of pounds improving accessibility to the physical transport infrastructure and have recognised the need to remove barriers for those who are potentially socially excluded because of disability. We believe that the Government are failing for reasons of affordability.

Ten per cent of those considered eligible take-up the disabled public-transport concession. However, it must be recognised that the transport system is still relatively inaccessible to disabled people. There are alternatives to help disabled people get about — for example the blue-badge scheme. Last year around 700,000 journeys were made using the half-fare concession. There are about 7·7 million journeys, about ten times more, made by elderly people using their free concession.

Due to the added difficulties that disabled people have in accessing public transport, and the fact that some have found alternative means of transport, there will not be a stampede of disabled people to take up free travel concession. However, for those who do use — or could use — public transport, such a concession would be very beneficial.

Mr Patterson:

Is it is fair that elderly people get free public transport and disabled people do not? Both elderly people and disabled people should get free transport. What do Members think?

The Chairperson:

I think that you are right Ronnie.

Mr Boylan:

I also agree, Ronnie. Michael mentioned an accessible road transport strategy, and in the previous presentation it was said that 45% of people who are eligible for a Senior SmartPass are not taking up the offer. I ask about accessibility because I represent a rural area and there is a lot to be done.

Mr Lorimer:

There is no doubt that the concessionary fares scheme benefits people who live in areas with good transport links, predominantly urban areas — and particularly the Belfast area. However, that happens everywhere.

IMTAC raised several issues when the review of the concessionary fare scheme was initiated: such as the disparity in the age qualification and free travel for the disabled. We also mentioned our concerns about the people who cannot avail of the concession because of the lack of public transport in their area. That links to the other issue that we wanted to talk about — rural transport and the dire need for better transport in rural communities.

Mr Caddy:

Departmental officials need to research further the likely take-up by looking at what has happened in similar areas — such as Yorkshire — and at the informed qualitative research. Their research need not be expensive; nonetheless it would be better to base a decision on a realistic assessment of costs than on a hypothetical situation, which is what is happening now.

There are no significant proposals at present for improvements in rural transport via investment in greater infrastructure. Even with the rural transport fund — which is entirely to be welcomed — there will not be enough resources to meet the likely demand. There is a gap in knowledge about the services, how they work and how much they will cost. There seems to be a desire to extend initiatives that have worked in semi-rural areas, such as door-to-door services. For technical reasons, we strongly caution against moving in that direction; it is not a practical solution.

Some £10 million has been allocated for combating social exclusion. The absence of accessible transport is a major factor in that. There is an opportunity to establish the requirements through a programme of research. It may sound emotive, but that is preferable to rushing headlong — as it might be perceived — into investing for the sake of trying to make a provision without having looked at the complex issues and details involved in rural transport. Rural transport is not an easy problem to solve, and we think that more research should be done.

Can you provide an urban and rural breakdown of the numbers of people concerned?

For instance, how many people would be eligible for concessionary fares in urban and rural areas?

Mr Lorimer:

Mr McCartney:

Fred will be putting pressure on him; I will say that for him.

Mr McCallister:

You do not want to lose your stripes, Raymond.

[Laughter.]

The Chairperson:

On a serious note, the Committee has taken on board everything that you have said. We know how important this matter is, and we are all keenly aware of the social exclusion of older people and people with disabilities. Thank you.

I now welcome Glyn Roberts, John Friel and Carolyn Brown from the Federation of Small Businesses (FBS).

Mr John Friel (Federation of Small Businesses):

Thank you very much. Good morning everyone. I am the regional chairman of the Federation of Small Businesses in Northern Ireland. With me today are Glyn Roberts, who is the press and parliamentary officer, and Carolyn Brown, who is the policy development officer.

The FSB has long argued that Northern Ireland needs significant improvements to its infrastructure if it is to be fit for purpose in the years ahead. It welcomed the proposals and ambitions in the draft Programme for Government, but stressed that if they are to be achieved, the Executive must allocate sufficient resources. Northern Ireland has a lot of catching up to do — over 40 years’ worth — and plans appear to be in place to do that. However, it is the implementation of those plans that will make Northern Ireland a more acceptable and competitive place to do business.

That is a brief introduction, and I now hand over to Glyn.

Mr Glyn Roberts (Federation of Small Businesses):

Thank you, Mr Chairman. The organisation will be replying in greater detail to the overall draft Programme for Government consultation, the investment strategy for Northern Ireland and the draft Budget. In relation to all three documents, the federation has said, whether it is the Department for Regional Development or any Department, that delivery of the draft Programme for Government is the key, and, quite often, the devil is in the detail. The Federation of Small Businesses is looking at the overall draft Programme for Government in greater detail, and when it makes its formal submission, a copy will be given to the Committee.

A dual carriageway would be a start. However, provision must definitely be made for a motorway. By the time that a dual carriageway is built, the motorway will be overdue.

Any development has to be welcomed because the road is so bad at the moment. Glyn mentioned Strabane, which is where my sign company is based. It has a couple of vans on the road. Most of our workers work in the Belfast area, so our drivers spend half of every day on the road, which, depending on the traffic and the time of day, can mean anything from four to six hours in transit. That is not good.

In Northern Ireland, our industry has a turnover of approximately three quarters of a billion pounds. We represent 5,000 employees and we are a major contributor. Investment in infrastructure is significant to our membership. Road building companies in Northern Ireland have a proud record of delivering the best quality and value for money product of all the regions in the UK and Ireland. We also have a proud history of providing secure, long-term employment in rural areas and in those that have been designated by Government as targeting social need areas. We are a massive net contributor to the Northern Ireland economy and a major investor in local communities. We do not seek, receive handouts, or benefit from Invest NI assistance, such as that which is given to overseas companies who stay for short periods and then leave. The majority of our companies, even some of the larger ones, are family-owned. We also fulfil our corporate and social responsibilities by investing significantly in the environment and in protecting the safety of all who work on, and visit, our sites.

The need for appropriate levels of investment in our infrastructure has never been greater, and without it the Executive’s objective of growing our economy will not be realised. An infrastructure that is fit for purpose and that is well maintained is necessary because, as was pointed out in the previous presentation, in Northern Ireland we depend on roads to transport all of our freight, and the growth of our tourism industry and the safety of the travelling public depend upon the road system. Inward investors to Northern Ireland see the road system as a key aspect in the decision to come to Northern Ireland. Investing in it makes good long-term financial sense and delivers value for money.

In 2002, at the request of the Government, the industry invested significantly in the launch of the regional transportation strategy, only to have the rug pulled from under it a few years later. Given our dependency on the road network, Northern Ireland falls behind on spend in comparison with other regions of the UK and Ireland. The Committee does not have to take our word for that; in recent years comments about papering over the cracks and the corporate risk to the Department have been highlighted in the chief executive’s annual reports. The level of funding and maintenance on rural roads has been totally inadequate. The frequency in resurfacing U-class roads given in last year’s chief executive’s report was one in 68 years.

In relation to the draft Budget, the figures for roads maintenance over the next three year are set at £56 million; £71 million; and £70 million, and are totally inadequate. The Department has said that that will add £125 million to the already colossal roads maintenance shortfall of nearly £450 million.

The spending objectives set out in the draft Budget depend on a number of factors that are as yet undecided. The question of whether the financing of the responsibility for road drainage will come from the DRD budget or from a central fund will impact on structural maintenance and possibly capital projects. The rebates for the affordability payment for water charges that will come out the DRD budget will also impact on the delivery of adequate structural maintenance and capital projects. Other issues include the dividend payments to Northern Ireland Water Ltd, and achieving the efficiency targets that DFP have set for each Department.

Turning to the capital budget, DRD will receive £572 million instead of the £1 billion that was sought. The draft investment strategy for Northern Ireland’s 2008 gross allocations mean that a number of strategic capital projects will be deferred; such as the A6 Randalstown to Castledawson project, which will ultimately impact the construction of the dual carriageway/motorway to Derry.

When examining the public service agreements (PSAs) outlined in the Programme for Government, and in particular PSA 1, which states:

“Improve Northern Ireland’s manufacturing and private services productivity”,

we would ask how DRD is going to:

“Improve the Strategic Road Network by the advancement/completion of a range of major work schemes.”

PSA 14 includes a number of objectives to deliver a safer roads network: how can those be achieved with a budget that falls well short of what is required?

At this stage, we are unable to give a detailed view on the capital investment figures that have been published because they have been published net of receipts. Without details of those receipts, we are unable to make a concise presentation regarding the draft investment strategy and capital expenditure.

Some solutions to the problems that we have outlined include: the need for the Department to ring-fence and index-link a rolling three-year budget of appropriate structured maintenance funding of £110 million a year; the prioritisation of delivery of value for money by focusing on resurfacing activities; the need for DRD to be more aggressive in highlighting the importance of network maintenance and the capital investment programmes to other Ministers, the business community and the general public.

The wider construction industry requires certainty of workflow. The industry cannot be turned on and off like a tap. We need factual budgets in order to plan for investment and delivery of quality and value for money. The dependence on in-year monitoring rounds, particularly the one in December, needs to be reduced, if not totally removed.

Mr Johnny McQuillan (Quarry Products Association):

I want to add on a few points about the Quarry Products Association (QPA) and the construction industry. The ‘Ulster Business’ magazine recently published a list of Northern Ireland’s top 100 companies. Seven QPA members were in the top 100.

QPA has played a significant part in exporting products, including asphalts and macadams, or production of pre-cast kerbs, pipes and so on. Structural maintenance work has also been carried out by QPA members. QPA has an overall turnover of £750 million, and comprises more than 5,000 employees.

As Gordon has said, a bigger issue for the QPA is the a need for investment in the road infrastructure, which will enable us to deliver our products at the keenest rates to our customers who are investing in Northern Ireland, and to our ports for export, so that we can play our part in delivering the investment strategy for Northern Ireland. We are also concerned about any proposed deferral of the A6 Castledawson to Toome scheme, or the A2 Maydown to the City of Derry Airport.

Over the past number of years, there has been underinvestment in the maintenance of the road network, which may have been as a result of direct rule. However, we have not received planned funding for the maintenance of the road network: funding has been dependant on the inability of other Government Departments to meet their spending targets. Therefore, there has not been any planned maintenance.

A planned programme is required for the maintenance of the road network, and money needs to be ring-fenced for that in the Budget. In 2002, the figure of £75 million was indicated. We have said that £110 million will be required. Roads Service has said it could be £99 million.

It is important to note that the rising price of oil impacts on the bitumen market. In simple terms, there is currently a £50 per tonne increase for bitumen users in GB. The Northern Ireland market has yet to be informed of that. That increase equates to a 7·5% increase to the cost of surface dressing, which is an important part of maintenance, and 7·5% on the cost of straightforward wearing course materials.

Mr McCallister:

I live in a rural area so I am concerned about roads in rural areas. What is your view on road drainage? The water reform report indicates that £25 million will go from DRD.

In 2001 the Audit Office heavily criticised Roads Service on its quick-fix practice of patching roads. That advice was totally ignored. I appreciate that Roads Service has to fill in potholes. However, over the past four years, resurfacing has been reduced by 50%, but patching has increased. Therefore, we are still not delivering value for money.

The Chairperson:

Thank you for coming today.

Welcome, Mr Smyth. Please begin.

Mr Nigel Smyth (Confederation of British Industry):

Thank you Chairman. I am the Director of the Confederation of British Industry (CBI) in Northern Ireland. I welcome the chance to give a short written paper and oral evidence in response to the Committee’s questions. I warn the Committee that the CBI is in its own process of consulting with its members so the views that are given are, to some degree, provisional on that basis. The documents, particularly the draft Budget, are difficult to digest. Even with the supplementary evidence provided by DRD a week ago, it is still difficult to know how the Department is spending its money.

Our submission focuses on transportation, which is an exceptionally important area. Regional development can lead to improved connectivity, which is a major contribution to productivity. We welcome the draft Programme for Government’s focus and commitment to put additional resources into transportation, but we would like more, sooner.

We also welcome the proposals for extending free transport, although we have concerns about including the peak period in that. We welcome the draft Programme for Government’s commitment to proceed with some form of rapid transit system for Belfast, which we hope will be cost-effective.

The doubling of capital investment in the road infrastructure is a welcome aspect of the draft Budget. The question is whether that will go far enough in delivering the outcomes. Our members are particularly interested in the outcomes. Some years ago, the CBI set a target of getting the strategic road network to reach average speeds of 50 mph at busy periods. On reflection, even that target is not challenging enough, but the average speed is currently only 43 mph.

When I read the draft Budget, I initially thought that there had been an oversight because there was no reference to the M2 to Castledawson dualling, which is well along the statutory process. That is our one real concern with the draft Budget — that the high quality dualling of the road between the M2 and Castledawson will not start during the three-year Budget period. That is a major worry to the CBI. We have challenged the fact that, in the same period, money is to be spent on the Coleraine to Derry railway line. I do not know of any business in the north-west that would not ask that the road be put on a higher priority.

Our second point is on the revenue side. We welcome the increases, particularly in the latter years of the Budget period. On reading the draft Budget initially, my suspicions were that the increased expenditure was for an allocation for funding of road drainage. Having seen the DRD documentation, that is not the case. If that were to happen, we would hope that a budget would be allocated to cover the costs of that. The CBI shares the concerns of the QPA that the DRD budget is not sufficient to deliver adequate structural road maintenance.

The CBI welcomes the commitments to public transport made in the draft Budget. Public transport is critically important for providing access to work and for taking the wealth out of greater Belfast and into the rural community and beyond. However, one major disappointment is that the draft Budget makes no major commitment on the Belfast to Dublin Enterprise service. We understood that the service was being jointly considered by the two Governments and the Departments and companies. On the back of that, my members were surprised not to see a firm commitment.

Finally on the Budget, we were disappointed with the vague statement on trust ports. We thought that that had been reviewed and discussed for years and that some conclusions were about to be reached. However, no commitment to trust ports appeared in the Budget.

The draft investment strategy is a little repetitive. There is a strong focus on the strategic road network, which is important in order to reduce journey times and to compliment investment in public transport. In addition, there were no specific commitments to the Belfast to Dublin Enterprise service, and I wish to re-emphasise the fact that there were no proposals for the M2 to Castledawson route. I am happy to take questions.

Mr McCartney:

In your submission, you stated that the M2 to Castledawson road upgrade was a much higher economic priority than a proper rail service between Coleraine and Derry. I am from Derry, and that is the subject of a big debate in the north-west. Would you come back to the Committee on that subject?

Mr Smyth:

We would like to see investment in the rail network. However, in prioritising how to spend a limited pot of money, the strong feedback from my members is to get the investment that will sort out the roads first. Currently, there is a bottleneck on that road, and I hate to think about what it will be like if work does not begin for a further four years, which would mean that it would be six years before it would be completed. We have already seen the problems with the A1, which is going ahead and will be great. However, Newry will be a bit of a nightmare over the next two or three years — it already is.

The Chairperson:

For many reasons, there will be a major debate about roads and rail. There are bottlenecks all over the place. Nevertheless, some of us are not convinced that adding another lane to the M1 or building more roads will help congestion. The railway system could be comprehensive and might take much of the pressure off the roads. Areas in which rail services have been introduced or upgraded have seen a tripling of the number of rail passengers. We will further consider the matter in the future.

The north-west is a perfect example of the potential for railways. If we are talking about being cost effective, we are currently purchasing £40-odd million worth of new trains, but we do not have any track on which to run them. I am disappointed that the CBI, from its commercial and business perspective, is not pressing the Committee to see whether freight could be put on the rails. Not a single piece of freight is being run by rail in Northern Ireland.

Mr Smyth:

We visit approximately 150 companies a year. In the past five years, I have not heard any company saying that rail freight should be a priority. However, it was made clear to me that there has been a big move towards transport and distribution, which has been just in time. Railways work when longer distances are involved, and they have started to take off in GB. However, even when we had rail freight between Belfast and Dublin, there was an issue with handling costs. Lorries must be driven to the railway station, and freight must be taken on and off the trains. That is not economical for short journeys.

In two weeks time, the CBI is launching a major report on climate change. It will focus on three areas: building; transport; and power generation. The business sector realises that it has to take climate change seriously. There are lots of opportunities for efficiencies, even in freight transport. SDC Trailers in Toomebridge make trailers that are 15% more efficient than previous models. There is a lot of work being done in the training of drivers.

As regards to regional development, the CBI’s focus is on the need to get the road infrastructure, which is heavily congested, right. The average speed on the A5 is less than 30 mph. If one wants regional development, companies to invest and tourists to visit, there must be reasonable facilities to enable that.

Mr Boylan:

And, perhaps, reasonable public transport. We will consider those matters again. However, I would welcome seeing the report.

Mr Smyth:

There is a balance there. We are supportive of the need to invest in public transport. We are proposing — as highlighted in our paper — doing some work. Metro services close at 11:00 pm. There are a lot of companies in the service sector who employ shift workers. Employees in call centres finish work after 11:00 pm. Some of those jobs are fairly low-paid. Therefore, those employees will rely on public transport. If that transport is not there, that will not be helpful in bringing people to work.

Mr W Clarke:

Newry is fast becoming an all-Ireland economic hub. What are your views on the increasing pressure on Newry’s roads, and the need for a southern relief road around Newry?

Mr Smyth:

The CBI is very supportive, as it has been in the past. We responded to the Department’s consultation — approximately 15 months ago — when it was looking at that. We highlighted that as a gap in its current thinking. The need for that road is an absolute priority. In the short term, I am worried about even the existing ring road, and the pressure there will be on it until the new road is completed in approximately two and a half year’s time. It is important in that it should provide access to Warrenpoint, the relief of congestion in Newry, economic development and access to tourism.

The Chairperson:

Thank you.

I now welcome Mr Seamus McAleavey and Ms Frances McCandless from the Northern Ireland Council for Voluntary Action. Seamus, would you like to start?

Mr Seamus McAleavey ( Northern Ireland Council for Voluntary Action):

Thank you for the invitation to the Committee meeting. We were asked for a broad view of the Programme for Government, the investment strategy and the Budget, and to take thoughts on those from the voluntary and community sector. I will enter the same caveats as did Mr Smyth as regards to his members. We have added a list of NICVA members — which is a diverse group of organisations — as an appendix to our paper. There are 1,000 member organisations. We are only starting the consultation process. Therefore, the views expressed in our paper are the early inside views of NICVA.

We are going to five centres in Northern Ireland for consultation, and we will reflect back the views of the community and voluntary organisations.

There is much in the draft Programme for Government that our sector will welcome. That includes poverty reduction targets, a commitment to sustainable development, a focus on affordable housing, the commitment to working in partnership with our sector and to the establishment of a charity commission in Northern Ireland.

There is a big emphasis on the economy. We believe that a thriving economy should benefit everyone in Northern Ireland if the policies are right to support those who cannot benefit directly, such as those who are economically inactive, those who cannot work, or those who do not have sufficient skills for the modern economy. We do not think that there should be a conflict between social and economic policy.

We support the view expressed by the Minister of Enterprise, Trade and Investment, Nigel Dodds, at the annual Northern Ireland economic conference, when he said that the economic development and social welfare agendas need not be viewed as competing priorities and are complementary to each other. Our view is that modern, western economies are essentially knowledge-based economies, and developing, attracting and retaining talent is the essential prerequisite to success. No amount of financial incentive provided by Government — even if that were not ruled out by European regulation — would compensate companies for locating in the wrong place. What attracts and retains talent is the environment in which a skilled workforce lives: quality of life and issues such as housing, health, transport, universities and an education system for their children feature highly in supporting and developing an economy. For us, economic success would depend on the whole package on offer.

We welcome the focus on health and well-being in the draft Programme for Government, which is a much more proactive way of promoting good health than just to provide services for people who are sick. There is an important recognition of the links between environment, economy and quality of life.

Most of the programme for the next three years is funded from within the resources of the Northern Ireland Executive, but we are not clear about how robust the plan is, as it depends on the sell-off of unused assets. The Investment Strategy for Northern Ireland is no doubt the most ambitious programme of strategic investment that has ever been put in place in Northern Ireland. Technically, it looks reasonably sound and achievable, despite concerns that Northern Ireland needs to agree on its education system before the infrastructure provision can be put in place. There are concerns about getting the policy sorted out; otherwise there could be a delay in that part of the plan. In a worst case scenario there could be a disastrous mismatch, and schools estate could be in the wrong place and not able to meet future needs.

We recognise that there is less of an increase in this year’s budget as regards the Northern Ireland block. Northern Ireland has four sources of money — our share of UK public expenditure, which comes through the Barnett formula; money raised through regional rates; borrowing under the reinvestment and reform initiative (RRI); and EU money. No money comes from the UK allocation for water and sewerage, as those are not funded by the public sector in GB. The gap left by the expected water charges in this year’s budget is felt across all Departments, and in real terms, the annual increase is only around 1·2%.

Regardless of anyone’s position on water charges, and the anticipation of that, there is a tremendous squeeze across Departments in relation to capital. We think that there could be a gap of around £400 million and, ultimately, it will be the people in Northern Ireland who will pay for that — one way or another. We are worried about vulnerable people taking a hit on that.

There are other areas that we are not clear on. As regards housing, the Department for Social Development does not have the money for the 10,000 units of social and affordable housing, and we are concerned about that. To say that we will complete 10,000 housing units in five years causes us a lot of concern. That is predicated on the sale of assets — which is an issue in itself — but also on the contribution for developers, which is a big issue for the Committee.

To go down that route means that it is extremely important to persuade developers to make a contribution. We cannot see that working out in five years, so we are extremely concerned about that. The Programme for Government tells us:

“Sustainable economic growth and increased prosperity will provide the opportunities and means to enhance quality of life, reduce poverty and disadvantage, increase wealth, health, wealth and wellbeing”.

That will be true only if the right policies are in place. The experience in the South of Ireland was that increased prosperity did not automatically close the gap between rich and poor. It is important to have the policies to back up the aspirations.

Referring to what Nigel Smyth said earlier, the documentation and the draft Budget are so high level that at times it is difficult to see how some elements can be delivered. The draft PFG, draft Budget and Investment Strategy for Northern Ireland all reference sustainable development as a major strategic focus. From that perspective, the spending patterns are cause for concern, and the associated target to reduce the carbon footprint is confusing.

The voluntary sector is also worried about the loss of the Children’s Fund, and the loss of cross-cutting funds is a major concern. We do not mind which mechanism is used, but we are worried that the activity will not be mainstreamed into the Departments’ budgets.

The draft Budget states that £790 million will be raised through efficiencies over three years. NICVA’s view is that Northern Ireland does not make efficiency savings; it simply makes cuts. What we mean by saying that is that things are not generally done more efficiently. When budget holders receive their allocation of money and decide that they cannot meet all their commitments, they simply lop things off at the edges. They reduce programmes rather than finding efficiencies.

A major concern for NICVA is that those public services that involve voluntary organisations in their delivery are often in the front line for those cuts, because they are seen as less important, more peripheral, or because the centre protects itself. Although the services delivered by voluntary organisations may be very efficient, we worry that they may be lopped off in a process of cuts rather than one to produce efficiency savings.

Some of our concerns are based on the fact that overall there appear to be few new policies or innovative approaches contained in the draft PFG or draft Budget. Such crucial decisions such as post-primary selection and the adoption of an anti-poverty strategy remain unmade. Frances and I are happy to take questions.

Mr Boylan:

Asset disposal is vital to investment in infrastructure, particularly given the lack of infrastructure. How do you feel about that?

Mr McAleavey:

It is a good idea for Government to review their assets. It is reasonable to dispose of those assets that are not being properly used or are not required. Our view, which is the same as that of many in Government, is that those assets should not be used to meet the running costs of any budget. They should be used to reinvest, which becomes critically important.

Our major concern is that there is only ever one chance to sell off an asset. Therefore, it is critical to do the right thing, get the best return, and identify a priority that is more important than the asset. We have to be careful because should there be a huge financial squeeze, we may go off willy-nilly and flog the wrong assets at the wrong time and find ourselves stuck without land for housing because some of it has been sold off. We are concerned about the process, and there should be adequate consultation with people outside Government on it.

Ms Frances McCandless ( Northern Ireland Council for Voluntary Action):

Our concern is that assets, particularly those that are land-based, are finite. In Northern Ireland, given the sectarian geography, for example, housing can only be built in certain places. Therefore, selling off land now because we need the revenue for infrastructure is good in theory. However, if that land is not recoverable later at less than the market rate, the taxpayer will end up paying a great deal more in the long run for public services that can only be provided in certain places and in certain ways. Therefore, we must be extremely careful and take the long view on what assets might be used for, and, as yet there is no definition of those assets. The team that will be set up to look at those issues will be of key importance and should produce a robust plan.

The Chairperson:

The big problem here is that we do not want a fire sale, Seamus. That seems to be what we are headed for. No long-term strategic view of assets is taken by individual Departments. No one has explained why those assets are no longer needed. My view, as you know, is that those assets will be sold, and further down the line it will be discovered that a particular property is needed for some purpose and it has to be bought back for three times the price that it was sold at. The other major problem for the Committee is how much money the Department is paying in land values at the moment for roads and infrastructural works. It is a colossal amount.

Mr McAleavey:

We agree strongly on those points. There is one chance to do this, and we had better get it right. Not just by force or pressure, for example, by having a huge gap or deficit that we must desperately fill.

The Chairperson:

Those assets can only be sold once, Seamus. My big worry is that budgets will be inflated over two or three years by the influx of cash, and then, when there are no more assets to sell, we will be back to the routine of cutting our cloth to suit.

Pensioner poverty is another big issue for the Committee. We have consulted Age Concern and Help the Aged about that. Have you considered the impact of water charges on pensioner poverty and on those who may be driven into water poverty?

Ms McCandless:

Mr McAleavy:

You have a fair bit of experience in this, Chairman. You have been involved in the fuel poverty issue for a long time.

The Chairperson:

It is a nonsense. If you listen to some of the figures talked about in the Assembly, you will realise that people obviously do not know what they are talking about on that issue.

I take your point, Ms McCandless, that the Housing Executive could eradicate a great deal of fuel poverty by — for example — installing solar panels that in the long run may cost very little. The capital cost of investment will return free heat and free hot water. Poor families need pay nothing. That is the road that we should be travelling.

However, that is a different issue. The other issue I wanted to talk to you about was the impact that some of the proposals will have on some of the organisations affiliated to NICVA.

Mr McAleavey:

That is a concern with regard to the whole Budget. Voluntary and community organisations in 2004 in Northern Ireland had an income of around £650 million. Just over £200 million of that came from Government. The vast bulk of it was used to buy public services. It was not used to prop up voluntary and community groups. I get annoyed when people express the notion that half of the money in Northern Ireland is spent on grants for community organisations. That is simply not true.

The voluntary and community sector receives about £200 million worth of public money, lots of which goes to organisations such as Barnardo’s, which is a £10 million-a-year operation that delivers services to children. Probably about £9 million of its income would be public money. Praxis probably receives about £19 million to deliver mental-health services.

NICVA fears that, in the drive for efficiency savings — and we support fully the notion of efficiency savings, if we can achieve them — those sorts of services will be most affected by the squeeze. It would be a fire sale in reverse. That is a big concern. We are not saying that the Government should give special handouts to the community and voluntary organisations, but we want them to be treated fairly.

NICVA talked to the Department of Finance and Personnel when efficiency savings were first promoted, and it was a big issue for us. It would be really perverse if organisations that are efficient in the delivery of services were to be the first to take the hit because the centre protects itself.

Mr McCallister:

As so much of your work is voluntary, do you have any figures on the value of the outcome or end product?

Mr McAleavey:

One of the best examples of an attempt to quantify that value was carried out a long time ago. Mrs Thatcher initiated an efficiency scrutiny of the Government spend on voluntary organisations. Some people thought that she was annoyed because Shelter had been raising the issue of homelessness in London. That scrutiny found that every £1 of public investment had, in effect, another £3 added to it.

I said that the voluntary sector’s income was £650 million, £200 million of which is Government money, so the extra money comes from trusts and private individuals, for example.

The voluntary sector employs 30,000 people in Northern Ireland, but it has 78,000 very active volunteers — people who give a huge amount of their time. That is only in the part of the sector that we represent. When you take into consideration the voluntary sporting organisations, for instance, the number of volunteers is huge.

Ms McCandless:

There are probably about half a million more.

Mr McAleavey:

The added value is enormous. I mention the old scrutiny report because it seems to have been commissioned at a time when the Government were annoyed. However, their efficiency report found that the sector generated £3 for every £1 of public money.

The Chairperson:

Are members happy? Thank you.

I now welcome Geoff Allister and Doreen Brown from the Department. Geoff and Doreen, a couple of issues were raised at last week’s Committee meeting that I hope you will be able to address. I would like you to focus on the impact of the draft Budget on your areas of responsibility. That is important for us.

Mrs Doreen Brown (Department for Regional Development):

I will begin by addressing the issue of public transport, and the main positive and negative aspects of the draft Budget from the Department’s point of view. The most positive outcomes were on the capital side, in the provisions that the draft Budget and draft investment strategy for Northern Ireland (ISNI) made for the railways. Over the 10-year period of the strategy, and under the current proposals, £456 million will be made available. That outcome is set against a bid of £534 million, but bids are always expressed in optimistic terms, so that is quite a good result. We are not going to be able to do everything, so we might want to consider what might drop off the programme.

Capital provision for buses is also positive, at £157 million over ten years, although that must cover a variety of expenditure such as the bus replacement programme, workshops, improvements to passenger facilities, and IT systems. We must take time to determine where the balance will lie between procuring new buses and doing the other things that we want to do.

We are being told that Northern Ireland is out of sync with other parts of these islands in this respect.

The other issue is that concessionary fares apply only to single fares. It is ludicrous that people are being given a special dispensation to use public transport but have to buy a single ticket for the outward journey and a single ticket for their return journey. The concession is useless if, in fact, at certain times of the day it is cheaper to travel without using the concessionary fare.

Mrs D Brown:

We are already considering that issue for a different reason. A group representing disabled people told us that requiring disabled people to physically buy two tickets for a return journey creates an extra burden for them. It was for that reason that we started to consider the issue.

The Chairperson:

When will there be an outcome on that?

Mrs D Brown:

I do not know. I understand that the IT systems that operate on buses and trains would have to be changed. At this stage, I could not tell you how much that would cost.

The Chairperson:

Surely giving people a return ticket rather than a single ticket would not require too much change?

Mrs D Brown:

It is to do with the way in which the IT system records fares for the purposes of the concessionary fares scheme. As I say, we are considering the matter, but I could not make any promises today.

The Chairperson:

It seems ludicrous to create a disincentive to use the concessionary fare. I see no sense in such an arrangement. Let us move to Geoff’s presentation.

Mr Geoff Allister (Department for Regional Development):

I will make my presentation in much the same way as Doreen did, by outlining a few of the ups and a few of the downs.

I will touch on three areas: structural maintenance; capital, which I will split into two parts; capital during the Budget period, and the investment strategy for Northern Ireland 2008-18. The third area I will talk about is service delivery efficiencies.

The Department is pleased that there has been some increase in structural maintenance, which is now showing £56·3 million, £71·8 million and £70·4 million across the Budget period. The Committee will be aware that that is about £125 million less than the level recommended in the structural maintenance funding plan. That will cause us to prioritise how we focus our attention on safety issues.

The capital proposals for the Budget period would see Roads Service receiving around £572 million over the three years to 2010-11. That is considerably less than the measure investment proposal bid that Roads Service brought to the Committee, which indicated that we were bidding for around £1 billion. Therefore, Roads Service will have to do considerable work in profiling its expenditure, taking account of land and construction inflation, to match schemes to the £572 million. In addition, more than the three-years funding must be taken into account. Most major road schemes take at least two years to build, so two years of expenditure are required. Years four and five must also be considered, as they will dictate what can be started in year three. That work is ongoing.

The investment strategy will give Roads Service around £2·7 billion. That does not include the £400 million that the Republic of Ireland has made available for the A5 road. That would take the Roads Service budget to £3·1 billion, over the period up to 2018. That is short of our bid, which was £5·2 billion. A lot of work is ongoing to try and profile our expenditure so that we can assess what we can deliver in that period of time.

There are a number of efficiencies to be made, and, without doubt, administrative efficiencies will cause the largest amount of pressure on the Roads Service. The service has efficiency targets for the generation of additional income, and it is confident that it will meet those targets. Because of the reduction in the capital budget, the Roads Service will have to sweat the assets from its direct labour workforce and get a bit more out of the working life of vehicles and depots. Other capital efficiencies can be made. Roads Service’s capital scheme covers the big strategic road improvement schemes, and the valuable local transport and safety-measure schemes such as traffic calming, collision remedial schemes, cycle lanes, bridge-strengthening and carriageway-widening. We are working to see what impact the efficiencies will have on that. It is likely that the start of some of the capital roadworks schemes will be deferred, although that will probably not include those that are focused on the key transport corridors. Work remains to be done to decide which schemes will be deferred.

Some capital schemes are being suspended or reviewed — for example the Dungiven bypass in my constituency. Will the Castledawson to Toome dualling scheme be curtailed also?

Mr Allister:

A lot of work is ongoing on the matter, and I am happy to come back to the Committee when the Department is certain about the schemes that will proceed. Primarily, the Roads Service has to form a judgement on its capital budget; how much it will be spent on the local transport and safety measures — traffic calming and accident remedial work — which are value-for-money schemes, and how much will be spent on the big strategic road-improvement schemes? The Minister will have a clear view on the answer to that. Once the Roads Service has done some work and analysis on that, it will look at the possible schemes.

OFFICIAL REPORT (Hansard)

Department for Regional Development’s Draft Budget; Investment Strategy for Northern Ireland and Draft Programme for Government

14 November 2007

Members present for all or part of the proceedings:

Witnesses:

The Chairperson:

Ms Elaine Campbell (Age Concern Northern Ireland):

Ms Michelle Bagnall (Help the Aged):

Ms E Campbell:

The Chairperson:

Ms Bagnall:

Ms E Campbell:

The Chairperson:

Ms E Campbell:

The Chairperson:

Mr W Clarke:

Ms E Campbell:

The Chairperson:

Ms Bagnall:

Mr Boylan:

Ms E Campbell:

Ms Bagnall:

Mr McCartney:

Ms Bagnall:

Mr G Robinson:

Ms E Campbell:

The Chairperson:

Mr McCartney:

Mr Boylan:

The Chairperson:

Ms Bagnall:

The Chairperson:

Ms Bagnall:

The Chairperson:

Ms E Campbell:

The Chairperson:

Mr McCartney:

Ms E Campbell:

The Chairperson:

Mr Frank Caddy (Inclusive Mobility and Transport Advisory Committee):

The Chairperson:

Mr Caddy:

Mr Ronnie Patterson (Inclusive Mobility and Transport Advisory Committee):

The Chairperson:

Mr Patterson:

Mr Caddy:

The Chairperson:

Mr Michael Lorimer (Inclusive Mobility and Transport Advisory Committee):

The Chairperson:

Mr Caddy:

Mr Lorimer:

Mr Patterson:

The Chairperson:

Mr Boylan:

Mr Lorimer:

Mr Caddy:

The Chairperson:

Mr Boylan:

The Chairperson:

Mr Lorimer:

The Chairperson:

Mr McCartney:

Mr Lorimer:

The Chairperson:

Mr Caddy:

The Chairperson:

Mr Lorimer:

The Chairperson:

Mr G Robinson:

Mr Caddy:

Mr G Robinson:

Mr Caddy:

Mr Lorimer:

The Chairperson:

Mr Lorimer:

Mr Patterson:

The Chairperson:

Mr McCartney:

Mr McCallister:

OFFICIAL REPORT
(Hansard)

Department for Regional Development’s Draft Budget;
Investment Strategy for Northern Ireland and
Draft Programme for Government