Pre-Budget Statement

I have received notice from the Minister of Finance and Personnel that he wishes to make a statement on issues affecting budgetary planning and preparation for the financial year 2002-03.

The First Minister and the Deputy First Minister have already outlined the considerations that affect our approach to the preparation of Programme for Government proposals for 2002-03 in their letter to the Chairpersons of the Assembly Committees. The position report attached to their letter is the joint responsibility of the Office of the First Minister and the Deputy First Minister and the Department of Finance and Personnel. I shall complement what they say by covering the financial considerations in some more detail and emphasising some of the main points that will affect our public expenditure planning for the next year.

In the letter from the First Minister and the Deputy First Minister, especially the attached position report, and in this statement, the Executive seek to provide a basis for the Assembly’s consideration of the Programme for Government and the Budget for 2002-03. I particularly want to emphasise that our scrutiny needs to cover the full range of policy areas and actions in the public service. We must look at what is provided from the expenditure for which we are responsible. That means that our focus cannot be solely, or even mainly, on the bids that Departments have lodged for additional resources. We must look at the outputs that are being obtained to be sure that they are the best way to fulfil the Department’s objectives.

We need indicators of how Departments’ plans are progressing. We need a public service planning process, not an exercise in tallying up bids for more.

I emphasise that the development of priorities and actions in the Programme for Government must be the guide to our work on financial allocations. We need to avoid being drawn to focus mainly on financial pressures. We can ensure that we make a difference if we focus on our policy objectives and priorities. Those are set out in the Programme for Government section of the position report. I encourage all Committees and Members to take the opportunity to respond to the Office of the First Minister and the Deputy First Minister on that aspect of the work. The Programme for Government must guide the Budget, and shape our programmes and actions to emphasise the devolution difference.

Our approach this year to financial issues reflects the fact that this cycle is transitional between two Treasury spending reviews. Spending review 2000 gave us substantial increased expenditure as a consequence of the major increases announced by the Chancellor last July. Next year, the spending review 2002 will see the completion of the transition to resource accounting and budgeting with, for the first time, a need to take direct account of non-cash items in the spending plans. That will have profound and important consequences for us well above the level of technical financial analysis. In the longer term it could affect our spending power quite significantly.

At this stage of the cycle the total resources available to the Executive are fixed. Following last year’s spending review, and after the addition of £18 million a year in the Chancellor’s March Budget, we have a departmental expenditure limit (DEL) for 2002-03 of £6,091 million. That is an increase of 5·8% over the current year. The statement and the position report concentrate mainly on the expenditure in the DEL. However, the Budget will also include coverage of the main aspects of spending, which are treated as annually managed expenditure (AME).

We have not yet allocated the £18 million that was added to our DEL in March 2001. That represents a small amount of unallocated resource. Therefore we are in a very different context by comparison with the situation during last year’s spending review. Last year’s addition to our provision for 2002-03 through the Barnett formula was £580 million. A large proportion of that was required to fund ongoing services. We also held some of it back to create the Executive programme funds, which are now progressing well. However, we did not keep a general contingency reserve.

As Members are aware, there is a pattern of changes in departmental estimating. Therefore, resources tend to become available for reallocation through our monitoring system. In that context, holding unallocated provision has not been necessary and may have been unhelpful.

I emphasise that there is fast growth in our spending trends at present. As a consequence of the decisions announced by the Chancellor last year, the growth rate of spending here is as rapid, in real terms, as at any time in recent years, and it is in considerable contrast to the pattern for most of the 1990s. In that respect the context is favourable. Although we dislike the fact that the Barnett formula does not give us as high a rate of growth as that available for comparable services in England, we have still gained substantial increases in real spending power.

This is not an appropriate time for substantial discussion or analysis of the Barnett formula. However, I shall comment briefly on that important subject. We can establish that Barnett causes us difficulties on major services such as health and education, where the growth of spending has been rapid and where our needs are significant.

I have said before that we must not underestimate the great difficulty of making progress on improving the Barnett formula. We have to face the fact that our spending is high. On some services, as a result of historic patterns and post priorities, it is very high compared with that in England, Scotland and Wales. There are also profound differences in the amounts that are raised locally through the rates and in the funding of water and sewerage services. From an English point of view, we are regarded as very well funded. While we have a case to make, especially over capital assets and the future treatment of the Barnett formula under resource accounting and budgeting, we have to face the fact that making that case on Barnett will be difficult. It certainly will not lead to rapid change, and for the foreseeable future we shall have to work within the totals fixed by the current approach.

Against that background, the position report sent to Members highlights issues to be addressed as we develop the Programme for Government and the Budget for 2002-03. The Executive are determined to make a difference through the services and policies for which we are responsible. We want to take the opportunities to break away from approaches that are no longer effective and relevant to the Northern Ireland’s best interests.

Spending pressures are, not surprisingly, intensified, despite the relatively favourable conditions presented by a rising trend in real spending terms, and there are significant backlogs of investment and great demands on some programmes. For that reason, we have emphasised in the position report the need to consider seriously and extensively the scope for reprioritising spending. We must focus more carefully and effectively on the Administration’s top priorities, the region’s most strategic requirements and the community’s most pressing needs.

Efficiency must be improved. Section 2 of the position report highlights a range of activities that could ensure better use of resources. We must decide how to deal with public-sector pay, which is a major driver of our spending, and explore how private-sector finance and expertise can contribute to the delivery of services.

Some spending issues highlighted by Departments must be thought about very carefully in preparation for the Executive’s Budget deliberations in September. It is important to focus on issues and not only on bids. The value of programmes should be considered rather than additional money simply being sought. We must ask "Why?" until we are satisfied or see what alternatives could be adopted. Resource accounting and budgeting should help to break old patterns and promote our priorities.

I emphasise again, however, that we work within a fixed total. There are many substantial demands on future spending power, and resources could be put to a host of useful and desirable purposes. The plain fact is that the majority of pressures will have to be absorbed through prioritisation in individual Departments’ budgets. The indicative figures set for 2002-03 in last year’s Budget can be changed at departmental level if the Executive can agree a new pattern. However, the process is about total public expenditure plans — how best to use the money we have to fulfil the Programme for Government — and not only the bids.

It is profoundly important that, as we go through the process, we remember that what is vital is what we can produce and deliver for the services for which we are responsible. All services, to one degree or another, benefit everyone, and that should influence our judgements.

All of us, whether we are Ministers, Committee Chairpersons or other Members, need to seek a combination of spending plans that can best fulfil the new institutions’ responsibilities. That means that we must look carefully at the contribution that each Department, North/South body and service can make to the wider objectives. The needs of big programmes can easily consume substantial resources. We also need to bear in mind the opportunities for benefit through other activities, while finding the balance between that consideration and the need to ensure that the resources are well spent.

We shall need to reflect that the indicative figures, as set out in December 2000’s Budget, assumed a level of revenue from the regional rate that depended on the increases that were planned at that time. Lower increases will constrain spending provision; indeed, the lower increases that were approved earlier this year for 2001-02 will have a knock-on effect. That point is drawn out in the position report, and it would be helpful if the Assembly and its Committees could address it carefully.

This is serious and difficult business. It is at the heart of the nature of our role and responsibilities as a devolved Administration. With spending rising substantially in last year’s cycle, it was possible to give relatively generous and substantial allocations to many spending programmes. The key point this year is that those allocations have continued in large measure across many programmes, as is shown in the indicative allocations for 2002-03 that were published in last year’s Budget.

This is a profound time for agriculture and rural development. The foot-and-mouth disease crisis has made it all the more important that the vision group’s work on the future of the industry addresses structural and strategic issues. Our per capita spending is high compared with that in England. That is to be expected, given the much greater significance of the agriculture sector to our economy. Much of that is driven by EU obligations on member states on matters such as animal health. We must think carefully about how the agriculture budget can best be deployed and about what changes may be necessary and appropriate.

There are new opportunities to make a difference and benefit the public through the creative application of ideas in the culture, arts and leisure sector. There are also significant spending pressures, not least from the issue of librarians’ pay.

The education sector is greatly significant for all concerned. The indicative figures do not show a sufficient uplift to cover some basic costs when compared to 2001-02. Therefore it is obvious that the indicative figures must be re-examined. Moreover, we must think carefully about the longer-term implications of the review of post- primary education. As the review body’s recommendations are not yet available, we cannot at present gauge the extent to which that issue will affect our spending plans for 2002-03. However, it must be borne in mind as we move forward.

We also want to ensure that the development of a common local management of schools (LMS) formula for all schools, which is important in the interests of equality and equity of treatment, is addressed. The education sector, like several others, faces major infrastructure issues. The Minister of Education has announced a balanced programme of conventional capital procurement and exploration of a public-private partnership approach for several important projects. Those and other issues identified in the position report must be considered seriously as we proceed.

The major developments in the enterprise, trade and investment sector that flow from strategic thinking about the future of the Northern Ireland economy are mainly for consideration in the context of the Executive programme funds. We are carefully considering the issues of infrastructure development for energy and telecommunications. We also want to look carefully at the effectiveness of spending on industrial support and industrial derating to ensure that spending on that sector is as effective as possible. That is one of our needs and effectiveness evaluations.

The main spending issues for my Department concern Government office accommodation and ensuring that the services that the Department of Finance and Personnel provides to Ministers, the Executive, the Assembly and the public are based on the best possible analysis and evidence. Alongside the Economic Policy Unit, it is important that we lead the way in improving the effectiveness of spending. Some investment in that is likely to yield worthwhile returns by improving the way spending is used. We also want to ensure that the procurement review produces results that are fully effective in pursuit of our economic and social objectives.

The 2000 Budget has provided significant resources for new student support measures to cater for the high demand for participation in post-16 and higher education. The needs and effectiveness evaluation, which is currently considering training and vocational education needs, will provide a better analysis of relative spending levels on those services.

The Department of Higher and Further Education, Training and Employment has identified several spending issues. In the area of training and employment, the uptake for the preparation for work programmes and community projects has been greater than expected. In higher and further education, pressures are expected because of the need to meet higher-than-planned pay settlements for further education lecturers and non-industrial staff, and to adapt buildings to comply with disability legislation. Savings are expected, however, in the Springvale project.

The demands and pressures on the Health Service remain significant. Extensive work is being undertaken at present by nine different working groups to analyse the need for and effectiveness of health and social care spending here. We want to be able to make the best possible analytical comparisons with other countries and regions. Those will make a major contribution to the debate that we need to have on the application of the Barnett formula.

In the meantime, there are genuine pressures on the Health Service because of unmet need and rising demand, as well as the regular introduction of new and higher clinical standards. As is the case throughout the world, expectations of health services are rising significantly. The health sector is, by a considerable margin, our largest spending programme, and it is therefore all the more important that the resources available are used as effectively as possible.

Some hard choices have already been made, and we must be realistic about what efficiency gains are achievable. However, it is vital that we make use of that spending in the best possible way. I expect that the Assembly will sometimes set aside purely local considerations in order to ensure that resources are used in the best way from the point of view of the entire region. I stress that that includes equity of treatment for all parts of the region, and that calls for careful analysis of the relevant indicators so that those decisions can be taken objectively. We simply cannot afford not to do that.

The Department of the Environment received significant increased spending power in 2001-02 to make up for past underinvestment in the pursuit of environmental obligations under European Directives. That programme must continue, although again we need to ensure that available resources are used as effectively and carefully as possible. Demands have been made for grants for historic buildings, which have recently been the subject of moratoria. However, it will be as important to analyse needs and effectiveness in that sector as it is in any other as the Executive move towards public spending decisions.

The Department for Regional Development faces a range of difficult infrastructure issues. Last year, we took the first step in responding to the issues of rail safety that were highlighted in the A D Little Report following the report of the railways task force. The Executive programme fund allocations included some important new road schemes. We have confirmed the growth in spending on investment in the water and sewerage infrastructure. We have that spending rolled forward into future years so that means we cannot use that money for other spending programmes.

In England, the consumer pays directly for the investment programmes for the water and sewerage service providers. Therefore, funds cannot be read across through the Barnett formula for that sector.

We must consider what steps might be required in public transport beyond the rail safety expenditure that has already been approved. The scale of the bids received from the Department for Regional Development is described as very high; it is beyond what can be afforded through available resources for 2002-03. However, it is important that we think about those profound issues so that they can be addressed in the long term.

The Department for Social Development has registered some important issues about fuel poverty and housing that must be considered carefully. The Executive are analysing the need for and effectiveness of current spending in five areas, while giving due regard to considerations of New TSN and equality of opportunity. Housing is one of those areas.

Another key area for the Department for Social Development is the development of a new regeneration strategy for Belfast. The Department is consulting with relevant organisations and groups in the public, community, voluntary and private sectors in that regard. Among the Department’s other priorities is the welfare modernisation programme, for which significant provision was made in the last year’s Budget. The programme will secure major improvements to the social security system with the key aim of providing work for those who can work, and support for those who cannot.

The Office of the First Minister and the Deputy First Minister has important responsibilities for the modernisation programme of the Executive’s Departments as a whole, and for that of a range of central co-ordination and secretariat functions that are vital to the operation of the new institutions. Our spending plans must reflect recognition of that, as we cannot advance the development of the agreement and the servicing of the devolved Administration without also willing the means in OFMDFM and other Departments.

Those are only a few of the issues that we must address in the forthcoming Budget round. The situation is covered much more fully in the position report. Some of the work that we shall carry out from now until December will be relevant, not just to 2002-03 but to the years ahead.

From early next year, we shall be engaged in a full-scale spending review with the Treasury, and we shall try to resolve how the Barnett formula will be applied to resource accounting and budgeting. There has been concern about the timetable for that process. In my statement of 29 May, I emphasised that there is scope for considerable discussion despite inevitable constraints on the timetables. We have asked for preliminary views to be brought to us quickly, but that is because the Assembly has asked for the Budget to be presented earlier than it was last year. We could provide longer for the initial stage of comment if the Assembly could wait until later in the autumn to have the Executive’s Budget proposals. However, that would not be the best way to proceed.

I accept that there is room for more improvement by way of pre-Budget input from Committees, but I would also like to point out that Committees are free to query their Department’s existing spending priorities or propose new ones. Neither my Department nor I wish to inhibit our Committees’ scrutiny of their respective Department’s spending, or the exercise of their policy development role.

We must also bear in mind the Executive’s key responsibilities and the need to ensure that the Programme for Government drives the Budget as it should. Together with all Departments and Committees, and in time for next year’s cycle, we need to establish arrangements that ensure full dialogue on the spending plans for all programmes and how they relate to the Programme for Government. Committees can and should be able to influence the approach that their Department is taking to the Programme for Government and Budget work.

I hope that all Committees and Members will now be able to play an important role during this cycle and as the process progresses. This is a preparatory stage, but the more important stage will begin after the Executive make specific proposals for the 2002-03 Budget in September. I hope that, as a result of the position report, and the deliberations of the weeks and months to come, everyone concerned will be well prepared by that stage and there can be constructive and positive engagement.

I thank the Minister for his detailed statement, which contained some interesting observations. I note, in particular, his comments on public sector pay, which is a major driver of our spending. Will he also be examining the overall size of the public sector — a matter about which I have tackled him before — to check whether there is capacity to reduce the overall size of this bill?

He laid considerable emphasis on the importance of finding other means of paying the bills. In particular, the Minister made it clear that there are insufficient existing resources to address the infrastructure deficit faced by the Department for Regional Development. Has he considered pursuing other means of raising revenue, such as tolling, congestion charging or water rates, to address the deficit in a timely manner? Does he agree that the tough decision-making and the potential for short-term unpopularity that such responsibility entails are not characteristics normally associated with the party responsible for that Department?

The scale and scope of the public sector are relevant considerations in the overall review of public administration. They are also relevant to our financial planning, because we want to ensure that we are not spending money on Government activities that do not benefit our citizens. We are therefore happy to carry out the work constructively and based on policy.

We want to ensure that the Assembly and the public have a realistic understanding of the resources that we have available to fund services. Under the Barnett formula we get no money for water and sewerage, because there is no public expenditure on such infrastructure across the water. Therefore we can not be given a Barnett consequential. We must find the public expenditure needed to fund water and sewerage, and the Executive recognise that there has been historic underinvestment that needs to be remedied.

We must find the resources needed to fund this infrastructure out of funds that are essentially intended to provide other services. Our only means of supplementing the Barnett formula moneys is through the rates. The Assembly has already indicated that there are sensitivities about seeking increases in rate revenue to support our expenditure in several areas. In the context of the rating review, we have to look at alternatives while recasting the rating policy itself. We must find other ways to raise funds to support much-needed investment in services. It will be for the Department responsible for each service, rather than the Minister of Finance and Personnel, to explore the possibility of imposing charges or taxes to fund that provision.

Mr Leslie is correct to acknowledge that we must be realistic and recognise that those issues must be dealt with.

If we are not prepared to ask ourselves those questions, we shall find in any attempt to review the Barnett formula that the Treasury will be asking us those questions, perhaps in more uncomfortable terms.

I add to Mr Leslie’s welcome of the Minister’s statement. It is important that the Budget flows from the Programme for Government. Can the Minister give details as to when the needs and effectiveness reviews will be complete? If they are not ready in time for the work on this year’s Budget, will Ministers be encouraged to rigorously interrogate their Departments to ensure that wasteful bureaucracy is removed, and that the structures and quangos developed under direct rule are tested to see whether they meet the needs of Northern Ireland?

The needs and effectiveness reviews to which Patricia Lewsley referred are an important tool to help to identify all our requirements and to ascertain the degree to which we are using our resources to best effect. The initial five reviews are under way, and we expect to see some preliminary results on relative needs soon. The work on effectiveness will necessarily take longer, but I hope that useable results will emerge to inform the Budget exercise.

The Executive expect each Department to conduct its business with the greatest possible efficiency, and the review of public administration to which we are committed will look thoroughly at opportunities for improving the delivery of public services. I emphasise that each Minister should be a value-for-money Minister. I also remind Committees, in the context of the position reports going to the Committees, that each Committee should be a value-for-money Committee. Patricia Lewsley mentioned the role of Ministers; Committees should also interrogate Departments on their spending.

Will the Minister take on board concerns and allocate significant additional funding to the Health Service, the morale and staffing levels of which seem to be at an all-time low? Moreover, will finance be made available to revitalise the rural economy following the foot-and-mouth disease crisis?

I cannot pre-empt the decisions that the Executive will take on the Budget. The fact that we are making a pre-Budget statement and making available the position report, which covers the pressures facing all Departments, means that the Assembly and its Committees have a chance to address issues such as those that Gardiner Kane has mentioned.

I accept, as I said in my statement, that there are serious pressures on the Health Service. However, there have also been significant increases in expenditure. The Executive made more money available for Health Service expenditure from the additional resources that we got from the Chancellor’s spending review than would have been the Barnett consequential for health. We therefore do recognise the priority attaching to the Health Service. We also recognise that even those significant allocations that we could make will not always enable us to keep pace with all the pressures that arise. There are technological costs and implications for services, some structural changes and the service pressures through patient and client demand.

On the rural economy, the Executive are committed to rural proofing right across their programme. In relation to support for the rural economy, we should be thinking of more than just one or two particular budget lines. We should be trying to make sure that all Departments bend and lend their programmes to ensure that the rural community is supported in every possible way. It is not a matter of getting a single turn out of a single budget.

Go raibh maith agat, a Cheann Comhairle. I too thank the Minister for his comprehensive statement. The Minister reiterated that this is not the time to further analyse the entire Barnett formula.

I want to make the point again that I would be more content if I were assured of the Executive’s commitment to securing the necessary changes to the Barnett formula to take into account the gross underfunding that a large number of our services have endured for many years.

Secondly, the Minister will be aware that it is important to build on the relationships between himself, the Department and the Committee. The Minister will know that Members have varying degrees of satisfaction, and perhaps even dissatisfaction, with the degree of timely consultation with, and scrutiny by, the Finance and Personnel Committee of financial matters in the Assembly.

Finally, the Minister has dealt with the need for such proper scrutiny in his speech. However, Departments must retain responsibility but that does not absolve the Committees. That is right, and I thank the Minister for pointing that out. There is a significant onus on the Department to ensure that there is proper sequencing of the deliveries throughout the financial year. The Department can and should lead the way. As I said, that does not remove responsibility from the Committees to do their job of scrutinising or coming forward with their own proposals, but the Minister and his Department are central to the Executive’s financial operation.

I want to reply to several of Mr Maskey’s points. I welcome his continued interest in the need for us to try to challenge and change the Barnett formula. We must raise issues that relate to the Barnett formula, not only because of the implications that the ongoing taper on our expenditure increases have for some of our key service programmes, but because of the implications of resource accounting and budgeting.

We must also deal with issues to do with our capital assets in the public sector such as water, sewerage and roads. Across the water, local authorities usually deal with those issues, so they do not count, therefore, in the departmental expenditure limit (DEL), unlike here. That not only concerns the amounts made available to us through the Barnett formula, but what capital charges are counted in the ambit of the DEL. The Executive are committed to trying to pursue those questions, and the First Minister and the Deputy First Minister are especially committed to playing a strong striker role as they represent the Administration and the region.

I acknowledge that there have been frustrations and criticisms from members of the Finance and Personnel Committee and others about the flow, cycle and availability of information at different times. With this exercise, the statement that I made on 29 May that set out an approach to timetable, the pre-Budget statement now, and the position reports sent by the First Minister and the Deputy First Minister to all Committee Chairpersons, we are trying to ensure that all Committees have an early input. I remind Members that the position reports that Committee Chairpersons received yesterday were received by Ministers only in the middle of last week. There has been no Executive consideration as such of those position reports, and no bids have been weeded or screened out. From the point of view of the Executive planning process, the Committees and their Chairpersons were furnished with information almost as soon as Executive members.

I thank the Minister for his statement. It is good to talk about those more strategic aspects of spending plans as early in the financial cycle as possible.

Will the Minister elaborate on two points that I found to be tantalising disclosures? The first concerned the needs and effectiveness evaluation relating to training and vocational education. This is the first occasion on which my Committee has been aware of that. I would be grateful for any further information, in particular on who will conduct that evaluation. External evaluation can achieve a more objective proofing of the standards of service delivery.

Secondly, can the Minister elaborate on

That could be good news for further education lecturers, who feel that their pay levels have decreased in comparison with pay levels for secondary teachers. What sort of pay settlement is envisaged for those staff?

I am surprised that the Committee for Higher and Further Education, Training and Employment was not aware of the needs and effectiveness evaluations, and I cannot understand how that has happened.

The Executive instituted an exercise that involved five needs and effectiveness evaluations, as mentioned in my statement, and that is one of them. It has been mentioned in various communications and also in the Chamber. In future, we must ensure that any such decisions are communicated to those people who have a direct interest.

The needs and effectiveness evaluations are being done for our own purposes. This is a significant programme with a large amount of expenditure involved. It is an important area as far as the Executive’s priorities in the Programme for Government are concerned. We are also conscious that we might want to challenge — and be challenged — on some of those issues on any approach we make in relation to the Barnett formula. Like the other needs and effectiveness evaluations, it is there to assist the Executive and the region in ensuring that we have optimum public spending patterns and levels.

I want to be careful about singling out any one group on the subject of pay pressures. As well as the reference to further education lecturers, elsewhere in the statement I referred to public sector pay’s being a significant driver of our spending. I do not want to speak out of turn and imply that any one group of staff in any service is a problem, or that its pay award may lead to pressures. I hope that all Committees will note that we face significant pressures on public sector pay; the uplifts on public sector pay consume considerable amounts of our available additional resources. That means that people who need increases in services are often not getting as much as they would like.

I welcome the Minister’s statement and recognise that his area of work is complex and important. The Assembly understands that our needs are many and varied, and that the resources received from the Treasury are insufficient to meet them. Consequently, can the Minister advise the Assembly what action he has initiated to identify alternative sources of funding to augment the Barnett-based allocations, and what actions will his fellow Ministers take to help to get a greater return from the resources that we have?

I agree with the Member that public finances can be complex, but we must never lose focus on the essentials, which are to obtain an appropriate share of the resources available and to use them effectively to meet our needs.

The Executive have made no secret of the fact that we believe that a better needs-based mechanism to replace the Barnett formula is required. We are pursuing that goal, as I have already indicated.

The Executive are also determined to make maximum use of the existing funding opportunities. We have set up several needs and effectiveness studies in key areas in order to better inform policy-making. We have also announced a high-powered working group that will look at the scope for using public-private partnerships to help deliver public services. My Executive Colleagues have pledged their full support for those initiatives.

I note the Minister’s comments that the Minister of Education has announced a balanced programme of conventional capital procurement and exploration of public-private partnerships. I assume that Mr Durkan’s view of a balanced programme relates to public-private partnerships as opposed to spending from the public purse, and that it does not include the two-to-one ratio of spending that the Minister of Education announced for maintained and controlled schools, which discriminated against the controlled sector.

There was some confusion last year as to whether Northern Ireland would benefit from the "Prescott package". Can the Minister confirm that we are entitled to our element under the Barnett formula, given the case of the London Underground and other circumstances that prevailed in the UK? If that will be the case, can the Minister assure us that the money will stay in the public transport sector?

I addressed Mr Poots’s point about the balanced programme for education yesterday. The spending on schools’ capital is properly needs-based, whether it is announced by the Minister of Education with respect to his Department’s Budget allocation or by me on behalf of the Executive programme funds. Information on the working lists of projects awaiting investment has been furnished to Members who wished to see it. Decisions were properly needs-based.

If people are saying that we should only give equal amounts to school sectors regardless of the needs of particular schools, that could be discriminatory. We would be saying that we could not fund certain schools because they were in a particular sector, but that we would fund schools in another sector that had less need, or whose building project was less ready for funding.

I want to assure the House that there is no discrimination in those areas of spending. There are means available for Members to pursue issues for which they believe that equality implications arise. Members are not using those means but are continually reciting this criticism or allegation every time I make a statement on spending.

We received a Barnett share from the money announced in the "Prescott package". Large additions were made to road and rail in 2001-02 in the past year and in the Executive programme fund allocations. Although the money that we get through the Barnett formula derives from expenditure decisions across a range of programmes in England, we, as a devolved region, have discretion on how we should spend that money.

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