Northern Ireland Assembly

The sitting begun and suspended on Monday 16 October 2000 was resumed at 10.30 am (Mr Speaker in the Chair).

Budget Proposals (2001-02)

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The Minister of Finance and Personnel (Mr Durkan):

In accordance with paragraph 20 of strand one of the Good Friday Agreement, the Executive has agreed a Programme for Government, incorporating a Budget. In line with section 64 of the Northern Ireland Act 1998, I am today laying before the Assembly a draft Budget in the form of a programme of expenditure proposals for the financial year 2001-02.

As the First Minister and the Deputy First Minister have explained in the letter which Assembly Members received this morning, this Budget is fully in line with, and guided by, the priorities and actions in the Programme for Government which was agreed yesterday evening by the Executive. I understand that the First Minister and the Deputy First Minister intend to make a statement to the Assembly next week to coincide with the publication of the Programme for Government. The programme will be more far-reaching in timescale and scope and will include a wider range of policies and proposals for programmes than the Budget, which is limited at this stage to presenting proposals for expenditure plans for 2001-02.

This Budget and next week’s Programme for Government announcement constitute a very significant stage in the implementation of the agreement and the cementing of our new institutions. The fact that I am today presenting an agreed Budget on behalf of the Executive shows that sharing a wide range of public responsibilities can allow us to reach agreement on priorities and actions for our whole community. That lays an important foundation for all our future work.

In contrast to my statement in December last year, this is not a set of hand-me-down Budget proposals, simply rolling forward the plans inherited from the period of direct rule. Our plans for 2001-02 include the first evidence of how we will begin to make a difference, both through the allocation of spending in line with our priorities and through the way in which Ministers and Departments, together with North/South, East/West and European structures, carry through and implement new ways of working. The implementation of the agreement will make clear just how fundamental is the change in governance of this region.

I stress again that this Budget has been collectively agreed by the Executive, and my role is to introduce it on behalf of the Executive. The work on the Programme for Government and the Budget has involved intensive discussion between Ministers and Departments and has been among the most important collective undertakings of the new institutions so far.

The First Minister and the Deputy First Minister will have more to say about that process in their statement next week. I will therefore move on to the detail and substance of the financial proposals for 2001-02, which form an important part of this work.

Our discussions on spending plans have been taken forward following the announcement in July by the Chancellor of the Exchequer of the new total allocations for our services for the period 2001-04. The outcome of the 2000 spending round included a number of changes of detail, and not all of these had been clarified at the time of the Chancellor’s announcement.

There were discussions on provision for agriculture, and the departmental expenditure limit announced in July has been augmented by additional amounts in respect of common agricultural policy modulation, as announced in early August. Also, responsibility for the welfare-to-work programme has been transferred more fully to the devolved institutions because over the period of the 2000 spending round the funding will no longer come from the windfall tax.

As Members are aware, there was an error in the Northern Ireland departmental expenditure limit published by the Treasury. That will be corrected in a way that has a minimal effect on our spending plans. Thus, the new departmental expenditure limit for 2001-02 is £5,733·5 million and not £5,667·4 million as announced in July. Members will note that I am not claiming that this increase in the headline figure represents further new money. On the contrary, as the changes are largely technical in nature, the spending power underlying this figure is essentially the same as announced in July.

The new figure represents an 8·1% increase over the corresponding figure for 2000-01, but that is affected by the transfer of provision for welfare-to-work. When the spending power from the regional rate is also taken into account, the amount available for allocation to Departments is up by 7·3% on 2000-01 — almost 5% in real terms.

That is an important boost in our spending power. It means that these spending plans can and do include important advances and developments across a range of services. However, we remain disappointed that the share of spending power we have received is a markedly lower increase than applies in England, Scotland or Wales. As I have said, we are continuing to press for a more equitable and sustainable approach to the allocation of spending. We find the Barnett formula increasingly unsatisfactory and are determined to work for a better and fairer system of distributing resources.

In making spending decisions, we want all of the resources available to be channelled more markedly towards Programme for Government priorities. This means applying a firm steer to our resource plans, whether for ongoing activities or new initiatives and whether for recurrent or capital spending.

A new and important way in which we intend to direct resources and public services in pursuit of our region’s priorities is through the creation and use of Executive programme funds. These will serve to increase the emphasis on implementation of the priorities in the Programme for Government. This new approach should be pursued in ways that integrate the roles of the different Departments. We need to work together more effectively, with both policy and practice focused on obtaining the best possible outcome, rather than being dominated by the point of view of any individual Department. Some details of our proposals for Executive programme funds are included in the Budget document laid before the Assembly today.

The first fund that we are creating in the Programme for Government is a social inclusion and community regeneration fund. We want to use this as a focus for action against poverty and to support community measures in both urban and rural settings.

It should also cover actions in relation to community relations and cultural diversity and could be used as a further means of working in partnership with the European Commission through the structural funds and the community initiatives.

The second is a service modernisation fund. There is much to be done to promote efficiency and innovation within Departments and the wider public sector — for example, through e-government and invest-to-save measures. We are determined to promote efficiency of delivery and to constrain the overheads attached to service delivery. We want to use carefully targeted funds to lever in new actions which will be of benefit to customers.

The third is a new directions fund. We want to see innovation and change in the delivery of programmes across the spectrum of our services. There is a need to refocus away from past patterns and to set new directions, whether in the delivery of health services or in the context of working with the business sector to promote economic development.

The fourth is the infrastructure capital renewal fund. The Executive has also concluded that significant funding is required for investment in the renewal of the infrastructure of the region. We have to address this in a coherent way across a range of sectors, including transport, energy and telecommunications.

Finally, there is the children’s fund. We are proposing a fund to provide support for children in need and youth at risk. This will have some similarities with the Chancellor of the Exchequer’s children’s fund but will have a wider scope, embracing aspects of the functions of several Departments. Again, this has the objective of making our services work effectively together for the good of children.

We have identified three actions which would fit within the framework of the Executive programme funds but where the Executive, for reasons of priority or urgency, has decided to proceed with an allocation through departmental budgets straight away.

First, the Budget plans include £2·2 million for this year towards a pilot programme for housing schemes designed to meet the particular needs of travellers. This is very relevant to the aims and objectives of the social inclusion/community regeneration fund.

Secondly, we are providing resources in the Budget for the development of the beef quality scheme, which is an emerging recommendation from the vision group convened by the Department of Agriculture and Rural Development. This is the kind of innovative action which would have been appropriate for the new directions fund. However, as with the pilot scheme for travellers’ accommodation, rather than delay unnecessarily, we are releasing resources for this purpose now, as a first example of the kind of measure which might be promoted in this way.

The third and final such action concerns the railways. We have considered, as a first example under the heading of the infrastructure/capital renewal fund, our response to the railways task force, which reported to the Minister for Regional Development in September. We have decided to make provision for the first stages of the safety work identified in the AD Little report and for the procurement of new rolling stock for the network. Again, this is the sort of spending proposal which would fit appropriately within the framework of the proposed infrastructure Executive programme fund. However, the Executive believes that the urgency of the need for decisions on the railways issue is such that it would be appropriate to make provision now, although, like all allocations in the Budget, individual spending items will remain subject to the usual procedures for appraisal and value-for-money consideration. This decision will allow some urgent work to proceed while some of the longer-term decisions about aspects of the network are assessed as part of the important work on the regional transportation strategy.

If we were to take the three items I have mentioned as possible first fruits from the Executive programme funds, together with the £16 million we have been able to set aside for the funds themselves for the first year of operation, that would amount to almost £40 million.

10.45 am

We also propose to set aside a minimum of £100 million in 2002-03 and of £200 million in 2003-04 for the Executive programme funds. Thus this important element of spending within the total departmental expenditure limit will be marked out and managed in new ways, with Departments and Ministers working together rather than continuing the patterns we inherited.

I will now discuss allocations to departmental programmes. We have marked out a significant allocation of £191 million for Agricultural and Rural Development — on a like for like basis, this is a 9·6% increase. The provision includes the beef quality programme, important new elements to assist the education and training of farmers and the development of the Department’s responsibilities for animal health, regulation of services and the veterinary and science services.

The plans provide for an important financial boost for Culture, Arts and Leisure, with an extra 19% for the arts, 5% for libraries, 6% for museums and an additional allocation for important aspects of sport. This will be the subject of later announcements by the Minister of Culture, Arts and Leisure.

The Budget allocates just over £1·3 billion for education, marking a 7·1% increase. This will create scope for significant increases in recurrent and capital budgets for schools. This year, special one-off allocations, worth £14·7 million, were made to schools. Not only are we continuing this, but the amount will be increased to £20 million in 2001-02. Further investment of £9·5 million is being made available to tackle deficiencies in the schools estate, including the provision of disabled access and the replacement of temporary classrooms. Further details will be announced by the Minister of Education in due course.

The headline figure for total spending by the Department of Enterprise, Trade and Investment is affected by the reduction in European structural funds as a result of the move from Objective 1 to transitional Objective 1 status. When European structural funds spending is excluded, the budget for the Department shows a 5% increase between 2000-01 and 2001-02. A share of the new peace programme, the details of which are still being worked out, is to be devoted to certain aspects of economic development. The aspects chosen will mark a unique response to the context we are working in, and they can and should make a significant contribution to cementing peace and breaking down barriers in society.

The Budget also provides for a £140 million allocation for aid to industry and a further £41 million for the small business sector. There is a specific provision of £5·6 million for the information age initiative.

The budget proposed for the Department of the Environment is £100 million — an increase of 14% on this year’s amount. We have provided for substantial developments to speed progress on the implementation of European Directives on environmental issues, including those on air quality and waste management. There is also additional provision for the Planning Service and the Environment and Heritage Service.

I should also say a word about my Department, where the total budget will be £113 million. Most of the Department of Finance and Personnel’s functions support the work of, or provide services to, other Departments. The budget for next year makes special provision for the cost of next year’s census.

In the Department of Health, Social Services and Public Safety, the budget will grow by over £150 million — or 7·2% — to some £2·3 billion. Within this total, over £1·16 billion will be available for hospital and community health services, and £460 million will be available for personal social services.

Additional provision is also being made to address winter pressures and waiting lists, while family health services show an increase in funding of over 8%. The proposals provide for further improvements to cancer services, including the recruitment of additional specialist staff and the development of palliative care services. Provision for personal social services will increase by 10·5%.

For the Department of Higher and Further Education, Training and Employment, I propose an increase of 12% for further education, including £8 million extra for capital, which will bring that budget up to almost £20 million for the coming year. There is also an increase of 11% in spending on higher education, strongly demonstrating our commitment to these important services.

I have already mentioned the major investment in safety work on the railways. This is a major part of the 10% increase in the budget for the Department for Regional Development. The other major increase for that Department arises because the Executive has confirmed that spending on water and sewerage will increase by £14·5 million in the year 2000-01 to sustain our progress on the essential work of improving this service.

The plans make important provision for the major welfare reform initiative in the Department for Social Development as well as for the initiative for travellers. This involves working in partnership with other interested Departments to ensure a major change in the way services are delivered to the public, and that is proceeding in parallel with the work of equivalent organisations in Great Britain. The housing budget will also increase by over £5 million.

Provision is also made for the costs of the Office of the First Minister and the Deputy First Minister, which will total some £29 million next year. This provision includes support for the new institutions including the North/South Ministerial Council secretariat, the Executive Committee secretariat and the Civic Forum. There is also provision for funding the Equality Commission, for developing the work of the Office’s equality unit and for grants to promote community relations.

These plans also provide for significant increases in spending on the North/South implementation bodies. An initial stance was adopted at the plenary meeting of the North/South Ministerial Council last month on the budget for these bodies. Today’s Budget includes confirmation that the Executive has endorsed the £11 million proposed for the Northern contribution to the work of these bodies for the calendar year 2001. The Ministerial Council and the bodies have an important contribution to make to the work planned for the immediate future, and their budget reflects that. The public spending total for the Department of Enterprise, Trade and Investment also includes a substantial element for the new North/South tourism company.

The Budget proposals also include appropriate provision for the Assembly. I understand that the proposed allocation of £38·8 million will be sufficient to allow the development of services in the Assembly itself to proceed as planned by the Assembly Commission, building on the good work and progress made this year.

These are some of the main features of the spending proposals. As well as the Treasury allocation for Northern Ireland, these plans are supported by the revenue from the regional rate. The Executive has decided to roll forward the increase of 8% in the domestic regional rate which was assumed at the time of the 1998 comprehensive spending review. It is envisaged that an increase of 6·6% in the non-domestic regional rate will be required to sustain spending levels as proposed in this Budget.

This package of spending proposals represents a significant step for our devolved institutions. We want to ensure that the resources available are aligned with our priorities and best used through new ways of working with the full range of departmental expenditure and in particular with the Executive programme funds. There is much to be done between now and December. During that period the Executive will continue to work on the detail and significance of the Executive programme funds and will consider what indicative plans to set for departmental budgets for 2002-03 and 2003-04, which are not included in the Budget document published today. I want to emphasise that our consultation with the Assembly is genuine and significant. In this context it would be premature to announce spending plans for the forward years now when we are deliberating with the Assembly and its Committees on the plans for the first year.

Many Members will be aware of the discussions over recent days on the procedures in the Assembly for bringing this Budget process to a conclusion. The Executive is committed to listening carefully to the views from the Assembly, and I am sure that all Ministers will want to have detailed dialogue on the position with their respective Statutory Committees over the next few weeks. I am particularly grateful to the Finance and Personnel Committee — it is determined to find ways to advise and assist on the overall Budget position. It is important that this work is taken forward in spite of the constraints it will place on the Hallowe’en and Christmas recesses on this occasion. I propose to bring a revised Budget forward for consideration by the Assembly in December in the light of comments made by the Assembly. I am relying on the Finance and Personnel Committee to help interpret and draw together these comments through discussion and a report.

The spending review outcome in July, and this Budget, are the first allocations made on the new basis of resource budgeting. This is a major change in procedures, which will sharpen up the relationships between targets, spending and outcomes and mean better management of capital spending. This is in line with the Government Resources and Accounting Bill that I introduced at First Stage yesterday.

I welcome the greater emphasis in the resource accounting and budgeting process on the setting of outputs and target measures. This is exactly what we are trying to achieve in the Programme for Government, and I should make it clear that the allocations proposed in this Budget will be confirmed only if there is material and significant progress on the development of this aspect of planning in the next few weeks.

We need to move beyond a narrow focus on financial inputs. We are committed to developing a clear relationship between budgets, actions and output measures through the settlement of public service agreements in the new year, which will include clear targets for delivery. It is important that the Executive and the Assembly know what they are getting for the public spending we are committing. It will not be enough for Departments simply to assume or assert that it is necessary to continue to operate existing spending patterns. We all need to understand more clearly what is being secured so that if there are deficiencies in performance and achievement, they can be rectified by intervention and change. This is an important task that all the Statutory Committees, and not least the Public Accounts Committee, will want to take a keen interest in.

Similarly, we also intend to consult widely on the impact of the Budget proposals on equality and targeting social need (TSN). This is an important priority in our determination to promote equality of opportunity in all aspects of public services. In practice, the impact on the different groupings that we need to monitor for equality purposes will derive from the more detailed level of spending by Departments. However, it is important that this Budget provides a framework that includes promoting equality and the new dimension of TSN as being of major significance.

This Budget is an important step in the evolution of our new institutions. Incorporated in the full Programme for Government, on which the First Minister and the Deputy First Minister will make their statement next week, it represents a major milestone for the Executive. It demonstrates that we can and do work together effectively in pursuit of the interests of all the people in this community.

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In commending this draft Budget to Members, I invite the Assembly to work with us in making a difference to our society and economy through the real and positive politics which the agreement has made possible.

Mr Speaker:

Members have an hour for questions to the Minister.

The Chairperson of the Finance and Personnel Committee (Mr Molloy):

A Cheann Comhairle. I welcome the Budget statement. It is very important that we are dealing today with our first in-house Budget. Previously we simply got an add-on to the Budget produced by British Ministers. Does the Minister have a figure for the shortfall between the bids made by the different Departments and the allocations that have been made today? I agree with the Minister’s statement about the Barnett formula. However, how does he propose to rectify the situation? The Barnett formula does not recognise need within the community, and if we are to redress that need, we must have a change of direction.

Can the Minister give Members an assurance that in future years the Budget will be the first item on the agenda following the summer recess? This would give Committees time to adequately scrutinise it, and would facilitate the co-ordination of Committees, allowing the Finance and Personnel Committee to do its job properly and advise the Minister.

Mr Durkan:

I cannot give the exact amount by which the bids from the various Departments exceeded the amount available for departmental expenditure. Bids outstripped resources by a considerable margin. Indeed, bids will always exceed the resources available by large and unrealistic amounts.

We have to graduate from bidding, which we are all very good at, to making actual decisions and choices. This Budget will reflect the sort of priority choices and commitments that will be apparent in the Executive’s Programme for Government. In turn, the various Departments will have to make their choices and decisions in accordance with those priorities.

Mr Molloy also raised the point about the Barnett formula. The Executive has already declared its determination to seek significant improvement and change. We need to prepare best cases. It is not enough just to complain about Barnett. We have to identify a better, fairer formula, and to do that we have to take account of a variety of factors, not just here but elsewhere, because, of course, other pressures and interests are involved.

Regarding the inadequacies of the Barnett formula, even for this year, it should be remembered that through the intervention of the First Minister and the Deputy First Minister, who met the Chief Secretary to the Treasury in early summer, we got a better Barnett outcome. They were able to ensure that spending on London Transport was counted, for comparative purposes, in the Barnett formula. At that time we secured favourable treatment. We should use that as a lesson for future work, which will not be easy.

I accept Mr Molloy’s final point that the timetable for the Budget imposes constraints on Committees, Departments and the House. However, these are the circumstances in which we find ourselves. We need to get decisions on broad Budget lines in December, and that dictates the timetable.

In the next few months the Assembly will be endorsing a Programme for Government which will cover a prospectus to take us forward a number of years. I hope that will help to set some of the basic precepts for budgetary work in future years. We should be able to bring forward more advanced budget proposals at an earlier stage. I hope to be in a position to bring forward budget proposals, as has been suggested, in September rather than October. We can all ensure that that is so by treating this year’s Budget and, in particular, the Programme for Government and its implications for future years in a constructive and thoughtful way.

The Deputy Chairperson of the Finance and Personnel Committee (Mr Leslie):

I welcome the statement on the Budget. The Minister was fortunate to be able to deliver it in the warm afterglow of the largesse of the Chancellor, who is priming the pumps for a general election. Had that not been the case, it might have been a very sombre day, as he sought to meet all the demands from Departments with the previous pool of money.

The statement has a theme running through it reflecting high costs to do with devolution. In the not-so-distant past this issue was discussed, and it was asserted that in due course it would be possible to streamline the administration so that these increased costs could be netted out. When does the Minister expect to be able to bring forward proposals, perhaps in a future Budget, that reflect some rationalisation and streamlining of the costs of administration?

Mr Durkan:

If the Treasury spending review had been less generous in increases to various services in England, we would have less money to distribute. That is one of the vagaries of the Barnett formula. It does not, of itself, address our particular needs but reflects circumstances in other places. If we had fewer resources at our disposal we would still face the task of prioritising and make choices. It does not matter if we have less or a lot more. Whether or not we are successful in challenging or changing Barnett, there is still going to be a point where we have to make choices based on our priorities.

Mr Leslie raised the costs of devolution. Not everything that can be identified as a cost in relation to new institutions is actually new spending. For example, the North/South bodies will be employing some 900 people next year. However, those are not all new jobs. Many of them incorporate work undertaken under previous arrangements. They are not all new or additional costs.

It is obvious that extra costs arise where you have an Assembly, with Departments having to respond to, deal with and service the Assembly and its Committees. There are other duties such as the equality duty. Those costs are there, but Departments and the Government at large are going to have to try to manage resources to ensure that, as far as possible, spending goes into services rather than structures and systems. The Executive is determined to affect this. Proposals will develop over time in that regard.

Mr Speaker:

I encourage Members and the Minister to be as concise as possible. Standing Orders limit the time for questions to one hour. That may or may not be appropriate for such substantial issues as the Budget, but it is what the agreed Standing Orders allow. We must try to work as best we can within them.

Mr Dallat:

Can the Minister explain how the contents of this Budget will impact on issues like new TSN and equality?

Mr Durkan:

That is one of the areas on which we want to consult while the Budget is going through further consideration.

The Budget derives from, reflects, and is meant to service, the aims and ambitions of the Programme for Government. The Programme for Government has been proofed in terms of equality and new TSN. That should work through to the Budget. However, we still want to consult in relation to the Budget itself. It is up to the various Departments, when they make their detailed allocations under this Budget, to show due regard for equality and new TSN considerations. Moreover, the Executive Programme Funds will have particular regard to the equality and new TSN commitments, as well as to the priorities that will be reflected in the Programme for Government.

The Chairperson of the Agriculture and Rural Development Committee (Rev Dr Ian Paisley):

Can the Minister assure us that the figures we have today are absolutely accurate and that there will be no announcement made later about a possible inaccuracy? Can he also tell us whether he will find extra money for the pressing needs of the farming industry? I congratulate him on his absolute honesty. In the footnote to page eight he makes clear that, although there may be a larger percentage at the end of the day, because of other matters that is seriously cut into. He knows, and this House knows, that the farming industry is in a state of catastrophe. While there may be some welcome uprise in the industry, the farming community has an albatross of debt about its head.

Agri-money amounts to many millions in Europe, but it is not released because of the failure of the British Government to match it. Did the Minister, when he talked to the Treasury, make any representations on that matter, to enable that money to come directly to those farmers who find themselves in great and terrible difficulties?

Mr Durkan:

To my knowledge, the figures are accurate. There is no known inaccuracy. This is a draft Budget, and we will possibly be coming forward with a revised Budget in December. These proposed allocations will be subject to consideration by the Committee, including Dr Paisley himself. If there are any problems or issues in relation to particular figures, I am sure they will emerge in the course of that consideration.

Dr Paisley also made the point that we have not gilded the lily in terms of the increase. I have tried to take that approach on everything. We could have made play of the headline figures in relation to the departmental expenditure limits, but we decided to treat it on the like-for-like basis. I make the point, however, that, on the like-for-like basis, 9·6% is still a considerable increase. I hope it will help the Minister and the Department in the important work that they are taking forward. Many of the issues affecting the farming community and the whole agriculture sector are, of course, the subject of consideration by the vision group. The commitment that we have made to the beef quality scheme — as one of the emerging points to come from that — shows that we will consider thoughtfully what emerges from that exercise.

Mr Close:

Does the Minister not agree that, in some respects, we have put the cart before the horse? We have Budget proposals, but we have yet to see the Programme for Government. It is like buying the bricks before the architect has completed the plans for the house. It is putting things the wrong way round. I hope that that will be corrected for future years.

Does he also agree that a proposed 8% increase in the regional rate is incorporated in the figures? It is a nebulous tax that has been criticised by virtually every councillor in Northern Ireland, and that will continue to be the case.

Does the Minister agree that it is unlikely that we will find acceptance of this type of increase from councillors who may also be Members of this House and who have criticised it in the past? We can not be hypocritical about it. Also, what increases are being proposed for Housing Executive rents?

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Mr Durkan:

Mr Close has raised several points. There is the question of putting the cart before the horse. This Budget reflects the priorities and principles of the Programme for Government that has been developed by the Executive. This will be particularly apparent to people when the programme is published next week. It is also important to remember that this is a draft Budget that is being laid before the House for consideration. Proposals for the Programme for Government will follow. These will cover a longer time span than this Budget, which is merely the draft Budget for the next financial year. Of course, there are other factors to be developed. People will see that the Programme for Government and the Budget proposals will work well and mesh well together. The real task will be ensuring quality in these developments, on the parts of the Executive, the Assembly and its Committees. There will be a vote on the Budget in December, and there will be further time to work on, develop, improve and amplify the Programme for Government. Decisions will be taken on that by the Assembly in the new year.

I understand that many councillors dislike the regional rate because it is confusing and leads to a misrepresentation of councils’ position on the district rate. We have said that we will bring forward a review of rating policy. However, without this rate increase it will be impossible to make some of the allocations announced today.

With reference to housing, the housing budget will be increasing next year. Under the comprehensive spending review further cuts were programmed, but we have reversed the situation. The figures for the housing budget, which fall within finances allocated to the Housing Executive, assume rental income figures on the basis of GDP plus 2%. If this assumption did not hold, and was not carried through, there would be a loss of £5·4 million in rental income to the Housing Executive.

Mr B Hutchinson:

I welcome this statement because it gives us an opportunity to examine the Executive’s proposals. However, I do agree with Mr Close that we have probably put the cart before the horse. The Executive’s programme funds should be welcomed, as it looks as if an attempt to intervene at the right level has been made. However, can the Minister tell us how much of the proposed Budget will be spent on quangos? Does he have any plans to streamline them considering that we have a local Assembly and local Ministers running Departments who are accountable?

Mr Durkan:

Mr Hutchinson has made a number of points, as well as welcoming the opportunity that this Budget presents. He particularly welcomed the Executive’s programme funds, and I am glad of that. I hope that Members will be able to help us develop this over the coming weeks when the Budget is considered in the Committees.

Again, on the question of whether the Budget or the Programme for Government comes first, the Assembly will have both. The First and Deputy First Ministers have indicated that the Programme for Government has been agreed by the Executive Committee. They have indicated that it is to be made clear to Members — in case they do not believe me — that the Budget does reflect the principles and priorities that inform the Programme for Government. I hope that Members are reassured by that.

On the question of the administrative costs of quangos, and so on, we obviously want to deal with all those issues as part of the broader review of public administration that has already been referred to by the First Minister and the Deputy First Minister. Clearly there are issues for the different Departments and their respective Committees to address. I make the point though that all such bodies should not be classified in the same category. They have distinctive roles and purposes — we must be sensitive to those realities and not make rash changes. However, we are determined to improve administrative efficiency as part of our efforts to ensure that these representative arrangements lead to more responsive structures.

Ms Morrice:

I agree with Mr Close and Mr Hutchinson about this unusual approach. I would have preferred more time to examine the Budget proposals before we came to question the Minister on these matters.

I want to ask two specific questions. First, is there any new provision to continue bridging the gap between Peace I and Peace II funding? The Minister will be aware that funding for women’s centres, cross-border operations and others is running dry. Funding is necessary. Are there any plans to make loans available? Secondly, some years ago we were informed that there would be a substantial financial peace dividend due to the scaling down of security operations in the new political climate. Can the Minister say how much has been saved as a result of this and where the money has gone?

Mr Durkan:

With regard to the first question, I say again that the Budget could only be presented after the recent agreement on the Programme for Government. Members would have been even more critical if the Budget proposals were published in advance of agreement on the Programme for Government.

In terms of the funding gap between Peace I and Peace II, this is the Budget for the financial year beginning April next year. We are determined to work during the coming months on the structural funds, and on the Peace II programme in particular, to ensure that the operational programmes and the programme complements are agreed and that Peace II is up and running as soon as possible. If we were to make budgetary provision for gap funding out of next year’s annual Budget, people would assume that we were working on the basis that those programmes were not going to be up and running until well into that financial year. Therefore the question of gap funding will be re-examined if and when needs are highlighted — and many of those needs are not being represented to the Department of Finance and Personnel. If representations are being made, many of the details of gap funding are not available to the Department of Finance and Personnel. They are certainly not being brought to my attention. Where such problems exist, the Executive, as we have already demonstrated, will try to make some redress, but it will be in the context of this year’s funding rather than next year’s Budget.

As for the scaling down of security and the peace dividend, any subsequent savings are not part of the devolved Budget. That is part of Northern Ireland Office expenditure so I cannot say exactly what has or has not been saved.

Mr McCartney:

The Minister has laid a great deal of stress on administrative efficiency. I suppose that that means savings. A rough calculation shows that the cost of running the 11 Departments, including the Office of the First Minister and the Deputy First Minister, is £631 million. In addition to that, there is the cost of the Assembly, estimated at £40 million, making a total of £670 million for the year to 2001. Can the Minister give comparative figures for the cost of running the previous six Departments under direct rule for the same period? Secondly, can he explain why it is necessary to have 108 Members in this Assembly for a population of 1·5 million, when Scotland has 129 Members for a population of 5 million? Its Assembly has far greater administrative —

Mr Speaker:

Order. The latter part of the Member’s question is clearly outside the remit of the Minister of Finance. The first part, of course, is not.

Mr McCartney:

Does the Minister find that having 10 Departments, each with costs, is consistent with administrative efficiency?

Mr Durkan:

I make the point that I made earlier: the running costs we identify are not all new ones. Clearly additional costs were incurred in setting up Departments, and additional overheads were incurred by Departments gearing themselves to relate to the public and to the new institutions in a different way. The point about those expenses is that they should pay for themselves given the quality of outcome and output we expect to result. The Assembly will improve the work of Government Departments by making them better informed and more responsive to our local and regional needs. I will write to Mr McCartney with precise figures and other relevant information.

The question of the size of the Assembly was a matter for the agreement. Mr Ervine has suggested that we might reduce its size from 108 to 107 Members. I suppose that if we were to do that in the style of the recent television programme ‘Big Brother’ we could bet on who was most likely to be nominated.

Mr Speaker:

Order. Since I am sitting on this side of the Desk, I rule any question on the size of the Assembly inadmissible.

Rev Robert Coulter:

It is satisfying to note the increase in the health budget and the breakdown of funds to particular sections of the Health Service. Will the Minister confirm that this figure of over £150 million is the largest increase that the health budget has ever had? And can he assure the House that the public service agents concerned will spend this money primarily on patients’ needs and avoid wasting it on excessive administrative structures?

Mr Durkan:

I welcome what the Rev Robert Coulter has said about the significant increase to the health budget. In agreeing that increase, the Executive Committee was recognising the very serious pressures faced by the Health Service. The Minister has made her priority very clear: as far as possible, that money will be used to improve services. The increase in moneys will clearly go into that, and I hope that the Assembly and the departmental Committee in particular will assist the Minister and the Department in that, as the Executive Committee wishes to do.

Mr Byrne:

I welcome the setting up of the five Executive programmes funds ranging across the socio-economic spectrum. I see them as a clear indication of devolution’s contributing to policy development and promoting corrective action for the public. Will the Minister explain whether the social inclusion fund could be used to make good lower funding levels for some European Community initiatives by giving more than the minimum 25% match funding?

Mr Durkan:

Mr Byrne’s welcome for the new Executive programme funds is most heartening. The Executive has indicated that it has yet to develop the criteria, the ideas and the management plans for these funds. We are open to positive suggestions from the Assembly and its Committees on this matter.

As the paper indicates, linkages to EU structural funds and the community initiatives will be relevant to the social inclusion/community regeneration fund. Theoretically, if we decided to do so, we could use these funds to supplement or improve the minimum match funding for community initiatives. While we have received a lower allocation for some of the community initiatives than anticipated, we have received a higher allocation for others. That has seen the match-funding requirement rise for some and decrease for others. However, it is an issue that can be given further consideration.

11.30 am

Mr Dodds:

Will the Minister detail the amount of money to be spent on the North/South tourism company? He indicated in his speech that the funds for that would increase substantially as part of the budget for the Department of Enterprise, Trade and Investment. Will he also state the amount from the budget for the Office of the First Minister and the Deputy First Minister that will be contributed to the North/South Ministerial Council secretariat?

There has been a substantial increase in the money allocated to the all-Ireland North/South implementation bodies — some of their budgets have increased by 100%, some by 46% and others by 34%. In view of the pressures on education, health, housing, urban regeneration, roads, water services, and so on, does the Minister not agree that that money would be better spent on improving services in Northern Ireland, rather than on the servicing and administration of all-Ireland bodies set up to forward the political agenda of the Belfast Agreement?

Mr Durkan:

As the Budget paper indicates, £5·8 million has been provided for the tourism company, whose task is to market the island of Ireland as a tourist destination. If people considered the significance of the tourism industry for economic development they would recognise that we need to invest in it, not least in marketing. There are advantages for Northern Ireland with regard to marketing in this context.

We are providing £600,000 towards the cost of the North/South Ministerial Council secretariat. Last year was the first year in which the North/South implementation bodies were operational. They were not operational for the full year, but next year we are budgeting for a full year’s operation. Mr Dodds said that some of the budgets for these bodies were being increased by as much as 100%. The budget of the Special EU Programmes Body is being increased from £0·3 million to £0·6 million, so it is coming from a very low base. We are coming to a stage, as the various new funding measures come into place, where the Special EU Programmes Body will be undertaking more work. The message that I am getting from Assembly Colleagues is that they want to see that body coming forward and doing more as those programmes develop.

Mr McHugh:

A Cheann Comhairle. I welcome the Minister’s statement, particularly with regard to agriculture. The Budget covers a lot, but there are gaps. Even though it is only a draft plan, I would have liked to see some provision for such things as grants for updating farms and farm equipment. There are also animal welfare requirements and European health and safety regulations that farmers have to meet. That will be of great cost to farmers, and there is nothing in the Budget —now or in the future — to assist them. Neither is there any installation aid, similar to that in France, to provide for young farmers going into agriculture. Is there any scope for any of those issues in the present Budget?

Mr Durkan:

I thank Mr McHugh for his question and for his broad welcome for the Budget statement. Anybody looking from the perspective of any Department can identify with what he would see as gaps in the budget. We were not able to cover all the bids that we had, and we were not able to cover the bids that we did not have. With regard to the Member’s proposals, it is up to the Minister and the Department, in consultation with the departmental Committees, to consider the potential value or benefit of other schemes. We provide a significant allocation for food and farm policy in the budget. The Department will develop the details of those policies.

The Department of Agriculture and Rural Development’s vision group has already started to indicate some emerging themes. In this Budget we have demonstrated a willingness to support some of those emerging themes.

Dr Adamson:

I thank the Minister for a well-balanced statement. Does he consider that the budget allocated to the Department of the Environment for planning and road safety is sufficient to meet its needs? Is it sufficient, given the sterling efforts of the Minister of the Department of the Environment, and also taking into consideration the Belfast metropolitan area plan and other area plans, and the terrible carnage on our roads?

Mr Durkan:

I thank Dr Adamson for his question and for the compliment on a well-balanced statement. The significant increase in allocations to the Department should help it meet the pressures it faces. The Minister has been at pains to point out the nature and extent of the pressures that the various services face, particularly the Planning Service and the Environment and Heritage Service, both of which are getting significant increases. The Committee and Members of the House have placed great emphasis on the need for further funding for road safety. We have gone a long way to meeting that case in these Budget proposals.

Mr A Doherty:

Those of us who live on the periphery of the periphery welcome the creation of the infrastructure fund. Could that fund be used to support an extension to the gas network beyond the Greater Belfast region, especially noting that the interconnector is being supported?

Mr Durkan:

The Executive programme funds announced today will be the subject of further development work by the Executive Committee. The precise terms and criteria of the respective programmes still have to be worked on, and there may be slightly different provisions with regard to the various funds, if that is the will of the Executive and if that is what comes through from the Assembly and its Committees.

Energy is one of the areas that could be covered in the infrastructure fund. As to precisely what measures would be covered, it would be premature for me to say because programme funds must work on the basis of giving thorough and proper appraisal to any bids coming from Departments or elsewhere. There are provisions for the Executive programme funds to consider a broad range of infrastructure needs.

Mr P Robinson:

I congratulate the Minister on the presentation of his first home-grown Budget. It would be churlish not to do so. While the tradition in another place is for the Chancellor to have a whiskey in front of him, the abstemious Minister just has a glass of water, which I hope is from the Department for Regional Development’s Water Service.

I also appreciate his modus operandi. There are great difficulties in operating a system wherein there are major party political difficulties in the way Departments are being operated. He has managed to stand back from that and take a more clinical and professional approach, which is appreciated by those Ministers who do not form part of the Executive Committee. I hope that my complimentary remarks will not damage him within his own party, but I think that they need to be put on record.

I welcome the good start that has been made in terms of Department for Regional Development funding. There has been major neglect of the infrastructure in this Province. It can not be turned around overnight, but a start has been made in this Budget. It is essential that this be maintained. Forward planning is absent from these proposals. Will the Minister tell the Assembly when it will have the opportunity to see the plans for further years, so that we will know whether it is a flash in the pan or part of a process to deal with the serious neglect of our infrastructure?

Does the Minister not recognise that many in the community who need services and provision will see the waste of expenditure on the Civic Forum, on having 10 Departments where half a dozen would have done, and on rampant "North/Southery"? Is there not a requirement to audit the value of these services rather than spending money for political purposes? We could be doing a real job in improving the day-to-day life of people in this Province, rather than improving the pockets of politicians and those on the periphery of politics.

Mr Durkan:

I thank Mr Robinson for what I assumed to be compliments in the earlier part of his remarks. I have said before that I am very conscious that, as a Minister, I have taken a Pledge of Office that I will serve all the people of Northern Ireland equally. That means that, as Minister of Finance and Personnel, I have to have regard to all the services that the people of Northern Ireland depend on. I repeat that the Budget I am presenting today has been agreed by the Executive Committee and is in line with the Executive Committee’s Programme for Government. I am not calling it my Budget. That and the whiskey are the significant differences between our budgetary presentation and what happens elsewhere.

As regards further years, we will be providing the figures for the second and third years of the spending review period in December, when we bring forward the revised Budget. We are tabling this as a draft Budget for next year. The Programme for Government looks not only at our aims for next year but also at some precepts for how we will approach things beyond that. However, it would have been out of turn to present indicative allocations for years two and three at this stage. We are still open to revision on year one. When the revised Budget is presented in December, indicative figures will be there for years two and three.

As for "North/Southery", let us remember that these North/South bodies relate to services that people use and need. Do not make the mistake of thinking that there are no services related to these. We do have more Departments than we had before, but those Departments are able to deal with, meet with and respond to their respective policy commitments in a way that was not the case with the six old Departments. The organisation of those Departments was somewhat incongruous.

I am not aware of any proposal from a departmental Committee that a Department should be done away with, that it performs a superfluous function. Members probably feel more capable of contributing to the improvement and development of the Departments’ work under the present distribution of responsibilities than they would have under the previous structure that had six Departments.

11.45 am

Dr O'Hagan:

Go raibh maith agat, a Cheann Comhairle. I welcome the new children's fund as a positive step forward. Can the Minister assure Members that this fund will address the deficit accrued in the Western Board area, caused by a lack of funding under the Children (Northern Ireland) Order 1995 and 'Children Matter'? Will the additional resources for improved public transport include free transport for senior citizens, putting the North of Ireland on a par with the South? Go raibh maith agat.

Mr Durkan:

The children's fund is an Executive programme fund, and its terms of reference, scope and criteria will be subject to development in detail. We wanted to embrace the scope of the Chancellor's children's fund and go further by relating it to the work of several Departments. Dr O'Hagan mentioned the pressure on some of the child services in the Western Board. There is an increased allocation of £3·5 million for the child services within the Department of Health, Social Services and Public Safety's budget. We should focus on this budget allocation, rather than on the children's fund. The children's fund is designed to assist Departments to improve their work for children and to improve the work they do together or, to be more honest, that they do not do together at this stage.

The Member will be aware that the Minister for Regional Development's proposals on public transport have been discussed. The Minister, and certainly the Executive, should look carefully and sympathetically at proposals for any service or assistance to our senior citizens.

The Chairperson of the Education Committee (Mr Kennedy):

I give a broad welcome to the announcement of additional funding for education contained in the statement. I also welcome the consolidation of Gordon Brown's announcement in March of additional money for schools, and I want an assurance that it will, as in the rest of the United Kingdom, go straight into the classrooms. There will be broad agreement on this in the Education Committee, and we look forward to scrutinising the overall figures when they are presented to us.

I refer the Minister, in particular, to Gordon Brown's announcement of last July on additional school funding. Can he confirm that this additional funding was taken into account in his announcement this morning and that the moneys will be channelled to the classroom rather than used for administration costs?

Mr Durkan:

I am glad that the Member welcomes the continuation into next year of this one-off funding to schools, with an increase of £20 million. I am also aware of the Minister of Education's commitment to improving school budgets. It will be for him to announce in due course how this money will be used, and no doubt there will be full consultation with the Education Committee in that regard.

The Chancellor's announcement in July included details of other moneys, and if Members were to look at the Barnett consequentials for Northern Ireland that will follow on from that announcement, they would see that these budget proposals are giving the Department of Education more money than it would have been given and that any of the extra money coming to Northern Ireland as a result of the Chancellor's announcement - and, indeed, more - will be going to the Department of Education.

Mr McMenamin:

I would like to congratulate the Minister on his statement. It has been suggested that other Chancellors drink whiskey, but could it be the Minister is drinking Irish dew? Can he tell us what amount of money is being allocated to address the disadvantage that travellers are under?

Mr Durkan:

To answer the first part of Mr McMenamin's question, this is pure water. In fact, there is none left.

Rev Dr Ian Paisley:

Is it holy water?

Mr Durkan:

It is not holy water, unless you want to do something about it, Dr Paisley, in the spirit of evolution that we were talking about earlier.

As I indicated in the Budget statement, the Executive Committee considered the possibility of allocating moneys to travellers from the Executive programme funds, but, given the priority that we attach to dealing with these issues, we decided to advance a direct allocation through the Department for Social Development for the pilot scheme arising from work on the new accommodation policy for travellers. A total of £2·2 million will go to that scheme in the first year.

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