NORTHERN IRELAND ASSEMBLY
Monday 5 November 2001 (continued)
The Executive and the Assembly claim to be working for the most marginalised in our community, and towards equality. Are those who live in social housing not among the most marginalised in this society, do they not deserve help? Is it right that people in social housing should have to endure longer waiting lists for the replacement of Economy 7 and room heaters? Is it right that kitchen and bathroom replacement work should be deferred because of a shortfall in the budget. I do not think so, and neither do my colleagues on the Social Development Committee.
We should not overlook the fact that my colleagues on the Committee come from parties other than mine. Like me, they have constituents to answer to. Our opinions might differ in some regards, but we are united in the view that the housing element of the Department for Social Development's budget must not be allowed to decline. Constituents who are already socially excluded and disadvantaged will remain so if this Budget is adopted.
Much has been made of the housing strategy for North Belfast, the constituency of three Social Development Committee members and the recently reinstalled Minister for Social Development. However, no provision for that strategy is made in the draft Budget. That concerns us all, and the Committee has drawn the matter to the attention of the Finance and Personnel Committee. Recently, the former Minister for Social Development, Mr Morrow, made a statement in Belfast Castle in which he promised that the £137 million for the north Belfast strategy had already been acquired. That does not seem to be the case. I urge the Minister for Finance and Personnel to ensure that that money is made available over the next six or seven years to regenerate what was described by an independent survey as "the worst housing in western Europe."
I welcome back Mr Dodds to his ministerial position, and I assure him that the Committee will continue to press him on this and other issues. He can also expect to rely on our support in his bid for a decent housing programme. During his opening remarks, the Deputy Chairperson of the Finance and Personnel Committee also mentioned the Executive programme funds and the continued lack of consultation in that regard.
I raised that matter with the Office of the First Minister and the Deputy First Minister in April. In a written reply to AQO 1345/00 I was assured that there would be proper and early consultation. Clearly, that did not happen. I accept that we can and should be proactive in encouraging the Department, but the Committee should not get into the game of putting together detailed proposals. We do not have the resources to do that, and it is not our role. However, had the Social Development Committee been consulted, we would have encouraged, indeed urged, the Social Development Minister to seek Executive programme funds to tackle fuel poverty more extensively and to address the growing problem of homelessness.
Mr Byrne:
I congratulate the Deputy Chairperson of the Finance and Personnel Committee on tabling the motion, the Committee members on their efforts, and the Minister of Finance and Personnel and the Executive for consulting the House on the stages of the draft Budget and the draft Programme for Government.
I am pleased to be able to discuss the draft Budget today in spite of the attempts on Friday by a small minority of Members to derail the institutions and to subvert the will of the people. In the words of the draft Programme for Government, the thrust of this Budget is to "make a difference", and the Budget lives up to that commitment in many key areas. I will comment on a few issues.
First, I welcome back Mr Peter Robinson as the Minister for Regional Development. I hope that this time he will be allowed to stay in office for as long as the previous incumbent, his Colleague Mr Campbell. In general I welcome the increase by 14·8% in the allocated budget for the Department and the planned expenditure of £538 million on roads, transport, water, and sewerage infrastructure.
During direct rule the North's infrastructure was developed unevenly and was concentrated primarily in the north-east of the region. That has led to a sense of social exclusion and an infrastructural deficit in other parts of Northern Ireland. Now that we have devolved power, the improvement of the North's infrastructure must take place in a balanced fashion throughout the region, so that all of our citizens have equal access to good quality roads, transport, water, and sewerage services, and also to develop the competitiveness of the region's economy.
I am pleased that an additional £8·7 million will be made available to the roads programme to avoid any reductions in planned service levels and to compensate for the effects of the aggregates tax. The capital schemes to improve some key strategic routes are also welcome. That is vital in attracting inward investment, enabling local firms to expand and enhancing safety for motorists.
The improvements to the A4 between Ballygawley and Dungannon, a trans-European network status (TENS) road, which will be financed by the Executive programme funds, are most welcome. However, I remind the Department that other important routes should not be overlooked, such as the M2/A5 TENS road, which should also be upgraded. In the constituency of West Tyrone, we have neither a mile of motorway nor a mile of dual carriageway.
I also welcome the £48 million for the purchase of new railway rolling stock. The railway network in Northern Ireland has suffered from serious underinvestment for many years, and that has compromised efficiency, passenger comfort and safety.
I am pleased that the Department of Employment and Learning's budget will increase by 6·1%. I welcome, in particular, the additional £37·3 million that is designed to increase the number of further and higher education places, as it is important for the development of the economy that we encourage more students to remain in Northern Ireland. The additional money allocated to higher and further education and student support includes resources to provide for the expansion of further and higher education places. It will also promote access to these sectors through improved student support measures that target those on low incomes and those in need of additional assistance, such as childcare support.
Improvement in the skills level of the workforce is important to create a vibrant economy, but it is also important to ensure that resources are properly targeted so that people such as the long-term unemployed are not exploited. Therefore I welcome the Minister's recent decision to conduct a review into the individual learning account (ILA) scheme which is open to possible exploitation by some unscrupulous ILA providers. Owing to the large number of adults in the North who lack basic literacy and numeracy skills, it is important that we implement a skills programme that encourages lifelong learning - it must be properly resourced and targeted to those most in need.
I am concerned that the planned budget for the Department of Enterprise, Trade and Investment for 2002-03 will decrease by 1·6%, especially given the effects of the events of 11 September on Northern Ireland's aerospace industry and the general economic slow down that we are experiencing. However, I am pleased that the Executive have given a clear commitment to increase investment significantly should the need or opportunity arise.
I also welcome the planned increase of 3% in the Department of Finance and Personnel's expenditure. It is important for the Department to be properly resourced so that it can provide effectively for the range of services to other Departments. The commitment to complete the major reviews of promotion and recruitment to senior positions in the Civil Service, a review of accommodation policy and the decentralisation of Civil Service jobs is particularly welcome. The decentralisation of Civil Service jobs, as I have previously said here, is something which the SDLP has consistently lobbied for over the past two years. The SDLP believes that the Executive should lead by example and relocate entire sections of Departments from Belfast to other main urban hubs. Such a policy would help to achieve more balanced growth beyond Greater Belfast.
I welcome the overall 7% increase on departmental spending programmes compared with 2001-02. I have some concern about the £48 million earmarked spending within departmental budget plans but which is coming from anticipated monitoring round reviews which take place quarterly. There is concern that some double accounting has gone on.
I am also concerned about the £2 million cut in local government spending for the incoming year, particularly on how it affects some district councils. There is concern among some of them. Smaller councils are particularly concerned that they are expected to bear significant cuts in their central government contribution. Based on last year's percentage local government grant, Omagh District Council will suffer to the tune of £109,000, Strabane District Council, also in my constituency, will lose to the tune of £120,000, and some of the other smaller councils will lose between £65,000 and £100,000. Many of the smaller councils have a low district rates base of revenue income. It would be bad if some of them were to lose out now when we are trying to implement new TSN.
I welcome the fact that the draft Budget provides for a 3% increase in overall departmental expenditure and that the Executive have made a commitment to ensure that new TSN will affect policy decisions across all Departments. New TSN and the statutory equality legislation are essential tools which should inform spending decisions in the eleven Departments and ensure that all Departments deliver upon commitments given in the draft Programme for Government to create a cohesive, inclusive and economically vibrant society.
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The Minister of Finance and Personnel (Mr Durkan):
I am grateful for the opportunity to contribute to the debate. It is a valuable way of hearing and considering the issues that concern all Members in relation to next year's spending plans. I am sure that those who have taken part in the debate, and all those who contributed at Committee level, will join me in thanking the Committee for Finance and Personnel for the efforts it has made, and will continue to make, in drawing all those issues together, not least those that were raised during today's debate.
The draft Budget was developed to deliver the Programme for Government. The allocation of resources proposed in the draft has been designed to secure the objectives and priorities of the programme. I have listened carefully to the contributions made to the debate, just as I listened carefully to the points that were made to me in questions after my original statement. With my Colleagues in the Executive I will reflect on the issues and concerns raised by Members today and also in the long-term consultative feedback that we will continue to receive.
We will also look at any constructive suggestions that have been made, particularly at Committee level. When the Committee for Finance and Personnel prepares its conclusions it will find those suggestions helpful in reaching a better understanding of the full range of opinions that have been expressed in the Assembly and in Committees. I look forward to the report and to the Committee reaching conclusions and recommendations based on the exhortations the Assembly has heard today.
Some Members referred to the fact that we produced the draft Budget earlier this year than last, allowing more time for consideration. We also used the Executive position report to set out many issues and questions for the Assembly and the Committees. It was also made available for public consultation. The Executive position report was exactly the same document that was made available to the Executive, to the Assembly and to the wider public within days of Ministers receiving it.
The process has been more open and transparent than it was before, and that is only partly due to the shift of dates for the draft Budget. In future, Executive position reports could benefit from Committees focusing more sharply than they were able to this year on the issues that have been reflected here. Many of those questions were not particular to each Committee. Many concerned key priorities for all Committees to address. I hope Members will reflect on the points that they have recommended to Ministers. They should not simply look to their own Departments but to the full range of services and broader range of responsibilities of the Assembly and its Committees in their consideration of these matters.
The revised Budget will be introduced on 3 December 2001. It will include some clarification and adjustment of the figures that go with the territory in an exercise such as the draft Budget. The Executive will consider whether changes could be made to improve the balance between spending areas. The views of the Assembly are important. However, with a fixed departmental expenditure limit, any increase will be offset by a corresponding decrease. All of us need to examine departmental planning figures for savings that could be redeployed. It is an important principle that money not required for the purpose for which it was originally allocated should be made available for reallocation by the Executive and the Assembly.
We have to use our limited resources in the best possible way and ensure that action is taken to improve efficiency and effectiveness. Actions must be targeted on a priority basis; a fact constantly emphasised in the Programme for Government and in the Budget. I am glad that it is increasingly being emphasised in the Chamber, and that people are not questioning us on what we are trying to do but on whether we are succeeding and if we are trying hard enough. That is the focus the Assembly should be bringing to bear on these issues.
We need to work together to maximise our advantage - if such it is - in relation to the Treasury. We must also ensure that lessons learnt from the audit process are used to improve value for money, as several Members have already mentioned. It is important that Committees follow up on areas that the Public Accounts Committee has highlighted as requiring room for improvement. That would ensure more joined-up scrutiny as we move towards the audit and accountability legislation. It would ensure that areas that, as Ms McWilliams said, have been the subject of a report by the Comptroller and Auditor General, and which have in turn been considered by the Public Accounts Committee, are factored into our Budget considerations and that the reports are not just disappearing. It would show that we are checking that the recommendations are being followed. The Department of Finance and Personnel is meant to monitor the situation, but there is room for improvement and joining up the scrutiny role of the Executive. Departments may not welcome that, but it would be helpful.
I hope that Members appreciate that the Executive have to be convinced that the benefits of any proposed changes will outweigh the sacrifices that have to be made in other service areas. Many Members have said that there should be only one priority and have then proceeded to speak about others. They have welcomed the bigger increases that other Departments have received compared with the Department that they were complaining about. When speaking about priorities we need to be using that word more in the singular if we are to be serious about our efforts.
We are working in a relatively benign context. Mr Leslie referred to the departmental expenditure limits (DEL) as set by the Treasury, which show a rise for 2002-03 of 5·8%, or around 3% above general inflation. I recognise - and several Members have mentioned - that many of the costs that affect public services are rising at a much faster rate than general inflation. No one can make a special claim, and it should be no political boast for the Executive or myself, when some of these costs rise at a much faster rate than general inflation. The same argument applies equally when people make a case for inflation-busting rate increases because those increases are to support the additional expenditure on public services that we need. If people are saying that inflation should be the rule of thumb in one area it is very difficult if they then insist that it has to be disregarded and treated as irrelevant in another. There is more consistency in the Executive's approach to this matter compared with some of the people who are criticising us.
The allocations for next year build on what was a 5·5% real terms increase in 2001-02. Departments have been able to initiate important work in the Programme for Government. As I stated in my draft Budget statement we cannot expect spending to continue to rise at that rate for much longer. The type of scenario that we have been in has been as good as it gets. I would like to be able to claim credit for this and say that the significant increase has happened while I was Minister of Finance and Personnel. However, it is fortuitous that my term of office and the Executive's work on the last two Budgets has coincided with what the spending review has given us. As we move into a spending review next year and see global economic conditions recovering from what they were prior to 11 September, but even more uncertainly since then, we must recognise that the choices will become harder. Making a real meaning out of priorities will become more testing for us as an Assembly.
Several Members referred to issues relating to the Executive programme funds (EPFs). In opening the debate, Mr Leslie referred to the Finance and Personnel Committee's report on EPFs. The EPFs are the key means by which the Executive are determined to break away from the spending patterns that they inherited. We must try to ensure that resources are targeted in line with the Executive's strategic priorities.
Many people are unconvinced by the evidence, but EPFs are designed to promote cross-cutting working in line with the Programme for Government's priorities. I agree with observations that were made by some Members, notably Dr Birnie, that we must do more to promote interdepartmental co-operation in the delivery of services, and that must be reflected in the way in which we plan EPFs. I accept the point made by the Committee and others that we must ensure that the processes for managing and allocating the funds are as effective and efficient as possible. Simply throwing open EPF bids to Committees at an earlier stage will not necessarily be the best, or the only, way to do that if it just adds to the mono-departmental-focus syndrome that some people claim already exists.
We must look at whether we are using the right substructure or processes at Executive level to ensure that a cross-cutting priority comes through in planning. I have received a helpful report on EPFs from the Committee for Finance and Personnel, and my Executive Colleagues and I will consider it before responding.
Several Members of the Committee for Agriculture, especially the Chairperson, Dr Paisley, asked about provision for the findings of the vision group. The draft Budget does not include any additional resources for the provisions in the vision report. That is because the public consultation process on the report will continue until the end of December. After the consultation process, the Minister will publish a plan of action for the strategic development of the agri-food industry. At that stage, firm bids for the implementation of the report's recommendations can be developed and considered with access to the EPFs as appropriate.
Those plans must also take account of any re-prioritisation of resources within the Department of Agriculture and Rural Development. As Mr Leslie warned, we must ensure that in this or any other area we do not implement any new structures, policies or processes until we are sure that they will deliver the desired outcomes. That, again, echoes a point that the Committee for Finance and Personnel made in its report on the Executive programme funds.
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In that report the Committee suggested that the Executive were, in some ways, making funding allocations on spec because they wanted to pursue proposals in a particular area but did not have specific measures. The Committee suggested that allocations should not precede the firmer proposals with all the relevant appraisals. That would be a pertinent area of interest for the Committee for Public Accounts, which regularly questions Departments as to whether allocations have preceded firm plans. We are trying to ensure that we follow through on some of the points raised by the various Committees.
A number of Members, of whom James Leslie was the first, asked if there was greater scope for the Health Service to depart from policies that are determined in Westminster. I agree that we should try to determine and deliver policies that meet the needs of citizens in our region. We should not slavishly follow what is done elsewhere. There are already some good examples of that. There has been an integrated health and social services system for a number of years, but that is not to say that there are not gaps within that, nor that it meshes as well as the theory suggests.
As a result of that, the health action zones, for instance, include social services. They are more comprehensive and are probably better developed than those in other areas. Our response to the new arrangements for primary care involves local health and social care groups that can turn out to be more sophisticated and more comprehensive than elsewhere. However, I readily acknowledge the point that all Members will make that the resources must be there to match the structural proposals.
Dr Paisley, George Savage and Gerry McHugh raised points about retirement schemes for farmers. Early retirement and new entrants schemes are discretionary measures that are provided by the EU rural development regulation. Such schemes, as Members will appreciate, are expensive to run. Nevertheless, the Minister of Agriculture and Rural Development commissioned a study of their value and effectiveness. The study was not conclusive, largely reflecting a lack of research in that area. On foot of that, the Minister commissioned further research from Queen's University in conjunction with University College Dublin into the economic, social and environmental aspects of such schemes. The results of that research will be available in the summer of 2002.
George Savage then drew attention to modulation and match funding as a source of money for early retirement schemes for farmers. Again, the Minister of Agriculture and Rural Development is considering that, but it is important to remember that any such scheme will be expensive. It should also be remembered that modulation money, for our purposes in the Assembly, is outside the departmental expenditure limit. There are constraints, not least because of EU policy on how modulation money and match funding can be used.
Quite a number of Members mentioned the Barnett formula. The Executive are certainly committed to addressing all those issues with determination. We must do so, not least if we are to be serious about tackling the backlog of underinvestment in infrastructure and the funding difficulties in health, education, transport and other services that many Members raised, particularly the Chairpersons of the relevant Committees.
We tell ourselves how bad the Barnett formula is, and how badly underfunded it leaves us, but we cannot ignore the fact that spending per person here is much higher than it is in England. The Treasury will point to particular areas where our spending is markedly higher and will argue that we must reprioritise.
The political reality is that the perceived wisdom across the water is that the Barnett formula is highly favourable to us. Many people there would argue that we should receive a lower share of public spending or that the tapering effect that the Barnett formula has on our future spending plans is exactly the way things should be going.
We must remember that others do not see the problem as we see it. In all political exercises we must bear in mind that not everyone will automatically move over to see things from our perspective.
As regards services for which we are responsible and which are covered by our departmental expenditure limit (DEL), we were able to spend 25%-30% more per capita than in England in 2000-01. People elsewhere will not miss that point. No matter how often we make the points about need and coming out of conflict we must remember that in some areas of the debate on the Barnett formula we will have an uphill argument.
The EU peace programme is extra to our allocation. Again, in a sense, it is easy for the Treasury to argue that that is a generous concession in relation to public spending and reflects the fact that we are coming out of conflict. To that extent they count it as part of their contribution to the peace dividend. The Treasury will also point out, in relation to the debate on the Barnett formula, that the Chancellor's initiative offered us further facilities, such as asset sales, and that the Assembly chose not to use some of those. Let us be clear: the arguments will not be all one-way. The warning was well made by Mr Leslie.
Seamus Close promised that he was going to make a new point - not one on familiar territory - so I listened closely and carefully to what he said about prioritisation. Shock, horror - I agree with him. We must consider our priorities very carefully now and more fully in next year's spending review. That is what the Programme for Government and Budget processes should be about. We have the right to choose to spend more in some areas than is spent in England. However, the corollary is that we would have to spend less in other areas - either less than is the case in England, or less than we have allocated in the past.
Mr Close said that we should not slavishly follow what has gone before and suggested we were doing just that. He talked about money being locked up in Departments, and about Departments holding on to money. I have complained elsewhere that there is a danger in that for all of us. It is not just the Departments, the Civil Service, or at ministerial level, it is also at departmental Committee level. We have had some evidence of it in the debate.
It is very easy for Departments, Ministers and departmental Committees to get locked into the "Does-my-budget-look-big-in-this" syndrome. It then becomes a matter of comparing their increases with other people's. It becomes a matter of saying that because a budget line has existed, it must continue to exist and be increased. Therefore existing budget baselines are not scrutinised, and everyone competes for additional bids.
I hope that the point will come when the Assembly will see the same degree of interest in what Departments do with the moneys they already have in their baselines as there seems to be in what happens to new bids. There is a great interest in chasing bids, particular those that have not been met, whereas the most important financial decisions relate to the moneys in the baseline. Members have said that they want more scrutiny and openness in relation to Executive programme funds. The proportion of the total Budget represented by the Executive programme funds shows that Departments are making decisions on much bigger sums of money that are not the subject of a report or scrutiny in the House or by the Committees. Therefore, the broader processes show that there is more for us to think about.
Seamus Close remarked that we were slavishly following what had gone before. He then attacked the Executive programme funds and said that we could do without them. The establishment of the Executive programme funds, following devolution, means that money does not automatically go to Departments by the traditional route. The funds allow for a more cross-cutting approach. Executive programme funds have been used for some major regional strategic initiatives such as the road improvements that Alban Maginness referred to and the gas pipeline decisions that other Members referred to. We can make those longer-term commitments because of the Executive programme funds.
Members spoke of the amount of money that is tied up in the Executive programme funds. They must remember that that money applies to next year and to the year after; it is not available for one year's Budget, as some Members seem to think.
Dara O'Hagan and others raised a point about the regional rate and tax varying powers. We have covered a lot of that ground before. The projected increases suggest that the regional rate will rise by about £332 million in the 2002-03 financial year. Obviously, that contributes to all of the spending that we try to undertake. I have no problem if Members want to identify priority areas that that money could go to. I recognise that there is a lot of unhappiness about, and criticism of, the rating system - not only about how the rating policy operates, but how we deal with the issues in the budgetary process. I recognise - indeed I would be a fool to not recognise - that it is not a popular area of the financial process, but it is necessary. We need to contribute to public spending.
As a Minister of Finance who wants money to be spent on public services and who is in favour of public expenditure, I defend the rate mechanism facility as a way of supplementing what we agreed would otherwise be inadequate resources. If the Barnett formula does not give us what people say that we need and deserve, and as Members are rightly stressing the plight of many services, we must find additional money from elsewhere. There is no point in fighting the end, if we do not will the means. The Executive can spend only what they have. They cannot make money appear from nowhere. Any reduction in rates, or capping of rates increases to inflation, will not give us the money that we need and will weaken our case for additional money from the Treasury.
Joan Carson, Joe Byrne and Gerry McHugh expressed concern about the position of district councils following the decision to reallocate £2 million from the resources element of the general Exchequer grant. I am happy for the Assembly, and the relevant Committees, to consider further whether that is the best way ahead. However, as Joan Carson pointed out, the draft Budget provides an 8·1 % increase in planned spending power for the Department of the Environment. That equates to a real increase of 5 %. That was planned last year to ensure further progress in the compliance with EU environmental Directives. The costs of planned actions have proved tighter than anticipated, and that is not the only area where that has happened.
The Executive concluded that with demands on other services, such as health, education and roads, it was not possible for us to improve on the substantial, real increase provided for the Department of the Environment for 2002-03. That was one of those instances where it counts as to whether health is given priority. There is a choice, therefore, in relation to reducing support for councils, moving more slowly on environmental issues or imposing restrictions on historic building grants. I noticed that some Members questioned whether environment and heritage services needed money. That is an example of a situation where hard decisions must be made. The sentiments expressed in the Chamber show that there are competing priorities.
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Sue Ramsey, Kieran McCarthy and Joe Hendron were among the Members who raised the question about the deferral of free nursing care for the elderly in nursing homes. In May 2001, the Executive agreed in principle to introduce such care from April 2002. However, as many Members have pointed out, the Department of Health, Social Services and Public Safety faces a range of pressures, and it is unable to meet all the demands that are already placed upon it. In that context, compared to the indicative figures that were published last December with the revised Budget, some £30 million was added to the allocation for health for 2002-03. That amounted to an increase of 8·1% over 2001-02. In the Budget statement, I made the point that that was not a full extra 8·1% because there is a technical switch from the Department for Social Development, which accounts for part of that figure. Members, and the Department, have pointed that out, but they are not pointing out anything that I had not already been upfront in saying in my original statement to the House.
Such are the pressures on health and personal social services that there are not sufficient funds available to provide free nursing care without making cutbacks in existing services. The money that was allocated to the health and personal social services baseline for free nursing care is still there, but it is needed to meet other pressures as well. That decision was not taken lightly, and we recognised the fact with great reluctance. However, it would be dishonest not to represent the situation clearly to the Assembly. That deferral releases about £9 million to help maintain existing services elsewhere. It was not a decision not to give additional money - it was a decision whereby additional money, originally given for free nursing care, will go to meet other pressures in health and social services.
Esmond Birnie emphasised the importance of research as a key investment for future prosperity. The Executive recognise that university research is an important investment. The Department of Enterprise, Trade and Investment and the Department for Employment and Learning are jointly leading the preparation of a regional innovation strategy, and it should be available early next year. Higher education funding has been increased by 5%, and that includes provision for the support programme for university research (SPUR), which will receive £40 million, funded on a pound-for-pound basis with the private sector, over the next five years. A further £7 million investment for science research was announced in February 2001.
Éamonn ONeill, on behalf of the Committee for Culture, Arts and Leisure, raised several points about areas, such as the arts, museums and libraries budget, that the Committee felt were not getting the increases in funding that were needed. Those areas fared relatively well in 2001-02 in comparison with the previous year. Between them, they received an increase of £3·4 million. That significant increase has been carried forward into 2002-03. As in other areas, that does not take account of possible assistance from Executive programme funds.
I understand that development plans for the Grand Opera House, together with other capital development proposals, are being considered by the Department of Culture, Arts and Leisure, in association with other interested parties, in an attempt to establish priorities for Belfast in the context of the bid to be European city of culture 2008. We have already identified the best way to deal with such issues as they mature, in discussions with the Department of Culture, Arts and Leisure. Members often ask us not to make allocations until we have full business plans and appraisals; on other occasions, we are exhorted to make allocations before we receive those plans. We cannot do both.
I agree with Ms Ramsey and Ms McWilliams about the health issues that they raised. They gave graphic descriptions of the pressure on the Health Service, which puts many of the smaller issues into perspective. Perhaps the Executive and Members who spoke on behalf of other Committees about other issues might reflect on that. However, we cannot simply say that money that might go elsewhere should be spent on health. As Ms McWilliams said, there is scope to examine the budget of the Department of Health, Social Services and Public Safety to see whether it is managed and organised in the best way. We should consider not only the issues relating to the overall structures of the Health Service that were raised by Dr Hendron and Mr Maginness, but the methods and means that are used.
I am glad to hear that Members and Committees are considering how we might achieve efficiency savings that would allow us to use the money in other areas. I welcome any advice on that. For example, the case was made that appropriate practices in community care would relieve some of the pressure on the acute services sector. The Department of Finance and Personnel and the Executive would not be averse to such an exercise. However, we must ensure that we work on the basis of evidence. We need a database, and work has already been done on a needs and effectiveness evaluation of health and personal social services. We must continue such work if we are to get stuck into the Barnett formula issue in the way that people want us to. It would also be useful for our own purposes, allowing us to see whether we are responding successfully to demands.
The budget for the Department of Health, Social Services and Public Safety is not the only one that contributes to health provision. The public health strategy and other cross-cutting measures have shown that other Departments make a contribution. Perhaps, when Members suggest that we should simply tax the budgets of all other Departments at a flat rate of £10 million, we should remember that other Departments' spending programmes contribute to health outcomes. For example, spending on road safety by the Department of the Environment contributes to health outcomes, as will spending on structural maintenance or improvements to roads by the Department for Regional Development, if it helps to reduce accidents.
Work is going on in other Departments that has a bearing on health and safety issues too. We need to recognise that a cross-cutting device such as the Executive programme funds does not just help health in those services managed by the Department of Health, Social Services and Public Safety; it has a bearing on our health achievements as well.
Ms McWilliams, as well as Mr Cobain on behalf of the Committee for Social Development, referred to the increases in departmental running costs for the Department for Social Development. The Social Security Agency is obviously playing a leading role in the welfare reforms and modernisation programme, which includes working alongside other Departments to deliver more modern, integrated, efficient and customer-focused services in the area of social welfare needs. Clearly that requires an investment in departmental running costs, which is really what we are looking at when people talk about this. This programme is expected to deliver significant benefits and administrative cost savings. A ring-fenced budget of £130 million over five years has been agreed with the Treasury to ensure that the programme is delivered, which accounts for the increase that has caught the eye of so many.
Several Members, in the course of making observations on other issues, pointed to the global downturn and the impact it is having on our economy, and Mrs Courtney focused on this in particular. Obviously the downturn is something that has had an impact already, and it is likely to have a further impact no matter how resilient we hope our regional economy can be. We have already seen some job losses, but it will affect us in the longer term in two main ways. We are obviously a significant beneficiary of direct foreign investment. Therefore, in so far as the downturn inhibits and reduces that which will affect us, our export sales are also clearly going to be harmed too. A lot of this is going to be dependent on the fortunes of the US economy.
Members such as Mr Byrne have emphasised their concerns about linking this to the possible or slight reduction next year in the budget for the Department of Enterprise, Trade and Investment. However, in all of this we must underscore a commitment we previously made that the Executive will be sensitive to the need to take any opportunities to support investment, especially in the difficult context that we have.
We also have to look at how effective we can be using all our policies. We need to remember that some of the issues that could arise as a result of the global downturn are not ones that call on the Department of Enterprise, Trade and Investment's budget and the sort of programmes it runs alone. Indeed, the Department for Employment and Learning could very well find some of its programmes and services being called on to deal with some of the effects and exigencies of a downturn if the worst fears being expressed by some Members are realised. It is not just the spending on direct support to industry that matters. In trying to make longer-term investments in our competitiveness and seeing beyond the recessionary cycle that we all fear we are looking at now, it is clearly important that we sustain investment in infrastructure as well so that we will be in a better position to pick things up in the future.
7.15 pm
In dealing with the wider economic context, people should remember that the Department of Enterprise, Trade and Investment is not the only Department that is, in many ways, contributing to the economy. Other Departments do so as well. That is one of the reasons the Executive are investing in infrastructure and transport. By making such an investment we recognise that although it is hard for us to find the money in the Budget that we want to spend on infrastructure, roads and transport systems, we know that we cannot spend the amounts of money needed equally across the region.
There are projects that attract particular priority, and we cannot even out, in a perfectly arithmetic way, the priority that we attach to every road or connection. I take the point that was made by Gerry McHugh, Joe Byrne and others that many areas feel they are still missing out on investment. However, if we are going to invest seriously in some major roads, we should marshal the resources for them wherever possible and then concentrate on trying to find the resources for the other roads. Spending many small amounts on all roads is a less strategic investment and is exactly the sort of thing that we are trying to get away from, because under-investment will not advance the equality agenda. We need to develop good targeted investment and spread it over time.
Alban Maginness referred to Water Service funding. In the Budget for this year there was an extra £14·5 million to deal with the most pressing needs. That is retained in the draft Budget for next year, with a small increase of 1·5%, so Water Service spending is just short of £221 million. We have to provide that money out of the Budget with absolutely no provision for it in our old friend the Barnett formula, because water and sewerage is not part of public expenditure across the water. We get no money for it.
There will be serious health problems and added pressures if we do not make provision. That area of expenditure clearly has a health-related outcome, as we saw with cryptosporidium, but we do not receive any money from Barnett. People need to set that against some of the concerns that are raised about rates. If we get less in Barnett than we need for the services for which Barnett allocates money, and we have to fund other services that Barnett does not provide for, we have to be realistic about the sort of money that we want to add to what Barnett gives us.
Alban Maginness also raised the matter of train replacement. This is a follow-through from significant allocations made in the last Budget, and I welcome the fact that procurement has proceeded. Leasing of trains was commended by many and was considered, but outright purchase represented better value for money. It is not that leasing was not looked at.
Edwin Poots raised several points on behalf of the Committee of the Centre. First of all, the draft Budget does provide additional resources in various areas for the Office of the First Minister and the Deputy First Minister. A bid for funding will be made next year for the review of public administration, and that is clearly understood by the Executive. I have no hesitation in sharing that with the Assembly. We clearly understand that there will be a bid for that next year.
A children's commissioner is another area that is the subject of consultation, not least in the context of the wider children's strategy. The intention is clearly to appoint a commissioner for children in spring 2002, thus making progress there. Some Members, Monica McWilliams in particular, were worried that the fact that there is no discernible provision for it here in the draft Budget could mean that that appointment was somehow going to be hostage to financial issues and could be deferred on that basis. I want to give an assurance that that will not be the case.
Edwin Poots also raised the matter of funding for victims. He identified the fact that a further bid of £750,000 is being considered in relation to the social inclusion Executive programme fund. It would be wrong for me to speculate or give any advance indication on what is likely to happen there. The Executive published a consultation document on a victims' strategy in August. We have contributed almost £1·7 million to the Peace II victims' measure. That will address needs in a variety of ways, and £500,000 from the social inclusion Executive programme fund will be available to the victims' unit this year and in each of the next two years. I hope that Members do not labour, as some people do, under the false impression that the Executive have done nothing in this area. Because they are aware of a new bid, they assume that no existing moneys have already been given.
Fred Cobain raised issues relating to the north Belfast housing strategy. There is a funding package of £5·5 million available to Ministers for the purchase of sites for the first phase of the Housing Executive's strategy to tackle serious housing problems. This total strategy has been costed at £133 million over a seven-year period. That is the type of exercise that we are looking at. Nobody is under any illusions that that strategy or the types of resources that it is going to require are going to be made good in just one Budget. Also, the URBAN II funding is being specifically directed to north Belfast. That is worth a total of £8·7 million.
There were a couple of points that were partly particular but raised some more general questions. Joe Hendron suggested, on behalf of the Committee for Health, Social Services and Public Safety, that the benefits from extra money for the Health Service in England were not coming through to health here, but were somehow being diverted elsewhere. The Executive have allocated more money to the Health Service than we received as a Barnett consequential of the increases in England. That is not to say that we have been able to match the sort of increases that there have been in England, but if people look at the exact amount that we got for health through Barnett, they will find that that and more has gone into the Health Service. We have not taken anything from the Barnett consequential that we get for health; we have been able to add to it.
To have made that sort of addition in health, as we did previously in education, in circumstances in which we were also having to carve out of the Barnett allocation money for water and sewerage and such like, shows that we are trying to prioritise. It also demonstrates that the Executive are trying to alleviate the difficult pressures facing the Health Service and, in particular, the very acute needs that the Minister of Health, Social Services and Public Safety is trying, with her officials and services, to meet.
That effort has not yet provided the resources needed by the health and social services sector. I recognised this in the original Budget statement, and I have not gone into denial on the issue since then. We need to face several major issues relating not only to the draft Budget, but, more importantly, to next year's spending review. I hope that Members and Committees will be understanding of the Executive's decisions. We have already detected that Members are making a big deal of a slight decrease in one Department's budget.
We will not be able to take the spending review seriously if we lock ourselves into a position where there can be no decrease, where the spending patterns that we have inherited cannot be reviewed, or where we cannot review whether current expenditure is achieving the intended results. For example, if we can recognise that the intended results have been achieved, then we can afford to lessen priority in those areas and focus expenditure elsewhere.
Finally, Joe Byrne expressed a general concern about double accounting and the projection of £48 million into next year's Budget from moneys released this year. There is no question of double accounting; we have been upfront on the matter and have stated clearly that based on our statement in the Executive's position report, we have been able to achieve slightly broader scope for manoeuvre. That has been done by calculating the level of moneys in this year's remaining monitoring rounds which could be carried over into next year's Budget. It is not a question of double accounting; we have received moneys in the past through monitoring rounds. However, the level of moneys available in monitoring rounds of recent years will not necessarily continue.
Members will recall that we have already retained some moneys from the June monitoring round, and, given our knowledge of the patterns that exist, we felt that we could project a level of some £48 million. That figure is based partly on a £13 million projected underspend by the Department of Enterprise, Trade and Investment this year. We have also been using the Executive programme funds as an additional guarantee. When people tell us to wipe out the Executive programme funds they must remember that that funding is taken into consideration when projecting that £48 million. That figure provides more room to manoeuvre than was available before. I hope that there is no question of double accounting.
I will respond in writing, or during a further consideration of the Budget, to other Members' questions. I appreciate Members' comments. I look forward to seeing the Committee for Finance and Personnel's digest of their points and its cogent advice on where the real priorities should lie, where we should be drawing lines through issues, and where we should be trying to move forward. As an Assembly we are becoming much more thoughtful and strategic in our approach to certain budgetary issues.
7.30 pm
Mr Leslie:
I thank the Members for their contributions to what has proved a very useful debate. I thank the Minister for his comments, and I thank those Members who have endured until the death. My recollection is that the Minister entertained us for an hour and seven minutes last year. It would be welcome if he could stick to a 7% reduction each year, but I thank him for the thorough way in which he has dealt with all the points. It does have the advantage that Members will get less from me, because they have had more from him.
The Committee for Finance and Personnel will publish a report in mid-November. That report will emphasise the points made by the Committees in their written submissions and matters that have arisen today.
I would like to comment on the conceptual issues that a number of points highlighted, rather than on specific finance matters. Some Members who made exceedingly pointed remarks to me as Deputy Chairperson of the Committee for Finance and Personnel assumed that that Committee allocates the money. That is not the case. If you regard the Minister and the Executive Committee as Butch Cassidy and the Hole in the Wall Gang, we in the Committee are organising the posse. We can try to influence events, but we do not have carriage of the outcome.
The Minister referred to comments made about the Barnett formula, which I remarked on earlier. When people ask for a review of Barnett, that is usually a coded request for more money. It is always nice to have more money, but in debating and allocating the Budget, we can focus only on what we have. It is not particularly useful to go on and on about the need for more money. We would always be able to spend more money if we had it.
If we do want more money, there are only three ways to get it: we can raise the rates, about which we have had plenty of debates; we can increase taxes, which we have also debated from time to time; or we can apply the principle of "user pays". Mr Maginness did not mention that principle in his remarks about transport and infrastructure, but we shall have to look at it in a serious way if we want to increase our overall level of spending.
Sadly, Mr McHugh has left us. Therefore, I will make the point to Sinn Féin. Its Members always invite us to copy the wonderful example of what happened south of the border. They should address themselves to what happened south of the border in the late ?s and early ?s when tax levels were increased to penal levels and a huge number of high earners fled the country. I was working in Dublin in the early ?s and observed that. It became more apparent as the ?s progressed. One of the key planks in the Republic of Ireland's economic growth in the past decade has been a reversal of those penal taxation rates. There is an obvious lesson to be learnt there.
Mr Close raised a conceptual issue with an overall resonance about sticking to the inherited formula. Mr ONeill made the point that the Department of Culture, Arts and Leisure was landed with a commitment from the Department of Education to provide an extra £10 million for a library review. I am not sure if that means that Mr ONeill thinks that they should not do that. It is however, an example of that principle. Mr McHugh was the only person to make the point that the focus should be on outcomes rather than on inputs.
That points in the same direction as the remarks made by Mr Close. I relate that to what Mr Kennedy said about education. The general thrust of the debate was that the key priority of the Executive is health. Mr Kennedy proposed that education was the number one priority and that economic benefits can evolve from education that may enable us to address other problems.
The two areas have something in common. If children are taught to grow up healthier the Health Service will not, in due course, have to meet the same bills as it does now. I appreciate that we have to pay for the consequences of what has gone before and that it will take some years to get that out of the system, to work the ill health out of people's systems.
If education were to be made the priority then the priorities within education should be for children to learn how to be healthier and how to protect the environment by learning not to throw litter all over the place. Councils spend enormous amounts of money collecting that litter. Children should learn about recycling waste, sustainable energy and a number of other related matters which, taken together, would make a considerable financial saving to the public service in Northern Ireland. One only needs to look at the situation in New Zealand - an example I often quote in the Chamber - to see how much better things can be done. However, the process has to be started at the beginning of the education cycle.
The Planning Service - another favourite example of mine - is constantly sucking in resources. It has received a considerable increase in resources over the last two or three years and is still looking for more. If the planning rules relating to rural development were tightened to the English levels, for instance, and if those relating to urban and industrial development were eased, the planning process would be considerably simplified. That would make it cheaper to administer, and you would get the stimuli in the right places. I say that with some hesitation with my good friend Mr Savage sitting beside me. However, I also live in a rural area and if the people who live in those areas bore the true costs of living there then most of them would not. That is something Members can conjure with for a while.
The Minister has undertaken to take full account of the Committee for Finance and Personnel's report. It is the Committee's duty to ensure that he does. When the final Budget comes forward in December following consideration of all these matters, I trust that it will reflect the issues that have been raised in the Committee's written submissions and in today's debate. I look forward to debating the matters in further detail at that time.
Question put and agreed to.
Resolved:
That this Assembly takes note of the Draft Budget announced on 25 September 2001 by the Minister of Finance and Personnel.
Adjourned at 7.39 pm.
2 November 2001 / Menu / 6 November 2001