COMMITTEE FOR FINANCE AND PERSONNEL
OFFICIAL REPORT
(Hansard)
Financial Provisions Bill
4 February 2009
Members present for all or part of the proceedings:
Mr Mitchel McLaughlin (Chairperson)
Mr Simon Hamilton (Deputy Chairperson)
Dr Stephen Farry
Mr Fra McCann
Ms Jennifer McCann
Mr David McNarry
Mr Adrian McQuillan
Mr Declan O’Loan
Mr Ian Paisley Jnr
Ms Dawn Purvis
Mr Peter Weir
Witnesses:
Mr Michael Daly )
Ms Deborah McNeilly ) Department of Finance and Personnel
Mr David Thomson )
The Chairperson (Mr McLaughlin):
I welcome officials from the Department of Finance and Personnel. We are joined by David Thomson, treasury officer of accounts; Michael Daly, head of central expenditure division, and Deborah McNeilly, head of finance and information services division.
You have been before the Committee on a number of occasions previously. As you are aware, this briefing has been scheduled in order to inform The Committee about the financial provisions Bill prior to its introduction to the Assembly, which is scheduled for 23 February 2009. The Committee Stage of the Bill will begin in late March.
As requested by DFP, the Committee has sought the views of other Committees with an interest in the Bill’s provision. Responses from the Audit Committee and the Public Accounts Committee have been included in members’ papers with responses from the Enterprise, Trade and Investment Committee. None of those Committees have raised any issues. The explanatory and financial memorandum provided by DFP is also included in members’ papers.
Mr Michael Daly (Department of Finance and Personnel):
This is an introductory briefing before the Bill is introduced to the House and ultimately goes to Committee Stage. As has been said, that process will start on 23 February 2009.
The Committee has already received the policy memorandum, the Bill, and the explanatory and financial memorandum. The papers were sent to the Committee before Christmas, and the drafts have moved on slightly since then. Members may have spotted some typographical errors in the explanatory and financial memorandum, and a change to some paragraph numbers. The version of the Bill that members have refers to the Department; the Bill itself will refer to the Minister. Other than that, the substance of the legislation has not changed.
This is the first financial provisions Bill to come before the Committee: I assure you that it will not be the last. Financial provisions legislation is routine and comes every two or three years. The last one was the Financial Provisions ( Northern Ireland) Order 2004, which was taken forward during direct rule. The purpose of these pieces of legislation is to cover routine financial matters. They adjust statutory limits and handle various non-controversial issues. They are a means of tidying up.
The Department invited contributions for the Bill in December 2007. As a result of that exercise, five items were considered for inclusion. As members will have seen, those items comprise the following: privilege for reports of the Comptroller and Auditor General and two contributions from DETI — one that deals with expenditure for consumer purposes and another that deals with expenditure relating to social economy enterprises. Although the intention of those particular clauses is to legislate in those two particular areas of expenditure, they also provide wider powers for that Department should it decide to do something in addition in future. The remaining two clauses relate to DFP: the first deals with the collection of rates, and the second is a repeal of the requirement to prepare finance accounts.
The Bill does not incur any expenditure as such. Expenditure associated with the clauses is already included in budgets, so there is nothing additional there. Section 75 issues have been considered by DFP in consultation with other Departments, and the initial screening screened out the issues for a full equality impact assessment, which was published on the DFP website. I am happy to take any questions.
The Chairperson:
That was very short and to the point, Michael. Thank you. Are there any questions?
Mr Hamilton:
Clause 4, which deals with the cost of district rates collection, authorises the issue of money from the Consolidated Fund to DFP to cover the cost of rates collection. That has happened previously. How did it happen before, and what is the necessity of this clause?
Ms Deborah McNeilly (Department of Finance and Personnel):
The Department is unable to recognise the income from the cost of collection in its accounts because there is no cash transaction involved. We cannot get the cash issued from the Consolidated Fund. Therefore, to allow alignment of our accounts with our budgeting position, which now includes this income in our budget, we require a change to the legislation to allow cash to be issued from the Consolidated Fund to the Department. The change is technical.
Mr Hamilton:
I declare an interest as a member of a local council. Does the change have any effect — negative or positive — on councils, or is it simply an accounting movement?
Ms McNeilly:
The change is necessary to allow the issue of cash. It will not have any impact on the actual calculation of the charge to the councils or how that is deducted from the councils.
Mr Hamilton:
Secondly, as regards the clause 5, which deals with a repeal of what is referred to as a redundant statutory obligation to prepare finance accounts; will that information be available elsewhere, or will we have to look at individual departmental accounts for this type of information?
Mr David Thomson (Department of Finance and Personnel):
I have started looking at some of the historical accounts that have been put into statute many generations ago and that have not been reviewed. This provision deals with the account of the Consolidated Fund; in other words, the money that comes from the Treasury and the rates and funds which go back out to Departments.
It was only this year that I noticed that we are duplicating. We have the public income and expenditure account, which is audited by the Audit Office. We then, as a statutory requirement, produce finance accounts, which are identical to the public income and expenditure accounts — virtually word for word. This is an efficiency measure, and a first step. The finance accounts are not great accounts, and I want to make them more meaningful — if Government accounting could ever be more meaningful. Nevertheless, that is the objective. There is nothing in one document that is not in the other, and that is why we want to get rid of the finance accounts.
Mr McNarry:
I accept what Mr Thomson says. Will what he has explained — the repeal of requirement to prepared finance accounts — be in writing somewhere?
Mr Daly:
Sorry?
Mr McNarry:
I understand the explanation; however, will there be something in writing to explain it to the wider audience?
Mr Daly:
The Department could undertake to include an explanatory note.
Mr Thomson:
I could explain it if more detail is required.
Mr McNarry:
I think it would be useful for the wider audience. I accept the explanation.