Northern Ireland Assembly Flax Flower Logo

Northern Ireland Assembly

Monday 4 February 2002


Assembly Business

Assembly Business: Suspension of Standing Orders

North/South Ministerial Council: Trade and Business Development

Local Government (Best Value) Bill

Regional Transportation Strategy

Oral Answers to Questions

First Minister and Deputy First Minister

Department of Regional Development

Department of Environment

Regional Transportation Strategy

Assembly: Environment Committee

Assembly: Agriculture and Rural Development Committee

Assembly: Culture, Arts and Leisure Committee

Assembly Standing Orders

The Assembly met at noon (Mr Speaker in the Chair).

Members observed two minutes’ silence.

Assembly Business

Mr Speaker:

During the debate on the breakdown of law and order on Monday 28 January, allegations were made against Mr Gerry McHugh. Mr McHugh requested and has been granted an opportunity to reply to those allegations. I remind Members that the matter is not open for debate.

Mr McHugh:

Go raibh maith agat, a Cheann Comhairle. Following serious allegations by Mr Norman Boyd, the Member for South Antrim, in the Assembly last Monday, I wish to make a personal statement.

I place on record that at no time have I ever been charged or convicted of the murder of anyone, let alone a postal worker. Mr Boyd’s comments were without foundation, and his allegations have no connection with any material fact, nor any connection with reality. I want to make it clear that the allegations made by Mr Boyd are completely untrue. In a climate in which postal workers have been targeted by Loyalists, and in which Loyalists attack Nationalist communities daily, Mr Boyd’s remarks are thoughtless and stupid.

Members are no doubt aware of the issue of felon- setting and, in particular, the comments made in Westminster by Douglas Hogg shortly before the Loyalist murder of human rights lawyer Patrick Finucane. In that context, we need to recognise that Mr Boyd’s comments are also very dangerous. Given the seriousness of those clearly false accusations, I ask the Speaker what further measures he intends to take against Mr Boyd. Go raibh maith agat.

Mr Speaker:

It is the convention in such circumstances to ask the Member involved whether he accepts the statement and withdraws his remarks.

Mr Boyd:

I withdraw my comments on the matter.

Mr Speaker:

I must comment on this incident. In the past I have warned Members repeatedly to take more care about what they say in the Chamber. Indeed, at the start of the debate in question, I warned Members about what they would say. Why do some Members choose to ignore the advice of the Chair? Erskine May, page 386 in the current edition, makes it clear that

"good temper and moderation are the characteristics of parliamentary language".

In this case, a Member made a profoundly serious accusation without checking the facts. That is irresponsible. Why should Members make such accusations at all? The inevitable consequence of such accusations or certain other remarks must be to place the Member accused — in this case utterly wrongly accused — and his family in danger. If that is the intent of such comments, it is a criminal intent. No Member should use the cover of the privileges offered in the House to fulfil such intent. If that is not the intent, what is it other than to bolster an argument that is either weak in its content or weak in its delivery?

I call on Members again to be more careful about what they say, not just in respect of grave allegations of this kind, but also in respect of other comments that are made. I trust that from this sorry incident, all Members of the House will draw a line from which they will hold back, and that the whole House will draw a lesson to which it will adhere.

Assembly Business: Suspension of Standing Orders

Motion made:

That Standing Orders 10(2) and 10(6) be suspended for Monday 4 February 2002. — [The Minister of Enterprise, Trade and Investment.]

Ms Morrice:

I oppose the motion, which will allow the Assembly to sit this evening. We fought hard to ensure that the Assembly would adopt a modern, family- friendly approach to its proceedings. It was agreed that sittings would end at 6.00 pm on a Monday, and that should be respected.

Exceptions can be made in exceptional circumstances or where there is a tremendous backlog of work. However, that is not the case today. Why should debate on a major policy matter such as the regional transportation strategy be squeezed into an evening sitting rather than take place tomorrow?

There does not appear to be enough business for the Assembly to conduct because of a sad lack of legislation coming forward. The Executive, the Committees and private Members should bring forward legislation, as we did for the children’s commissioner, so that sittings will last for two full days in the future.

The Minister of Enterprise, Trade and Investment (Sir Reg Empey):

The decision to suspend Standing Orders was taken by a substantial majority of the Business Committee, and in those circumstances I commend it to the House.

Question put and agreed to.

Resolved (with cross-community support):

That Standing Orders 10(2) and 10(6) be suspended for Monday 4 February 2002.


North/South Ministerial Council: Trade and Business Development

Mr Speaker:

I have received notice from the Minister of Enterprise, Trade and Investment that he wishes to make a statement on the meeting of the North/South Ministerial Council in its trade and business development sectoral format, which was held in Limerick on Wednesday 23 January 2002.

The Minister of Enterprise, Trade and Investment (Sir Reg Empey):

The sixth meeting of the North/South Ministerial Council in its trade and business development sectoral format took place at the Castletroy Park Hotel. Ms Carmel Hanna and I represented the Northern Ireland Administration. The Irish Government were represented by Ms Mary Harney TD, Minister for Enterprise, Trade and Employment. Ms Hanna has approved the report, which is also made on her behalf.

The Council received a verbal report from InterTradeIreland’s chief executive, Liam Nellis, on the body’s recent achievements and the key activities in which it will be engaged in 2002. Those included progress on such initiatives as the reconciliation of trade statistics, the publication of discussion documents on all-island competitiveness, support for microbusinesses operating in the border region, the development of InterTradeIreland’s networks and the linking of businesses through high- profile events including the enterprise forum last November, a forthcoming equity network conference and the 2002 agency forum.

In September 2001 the Council approved InterTradeIreland’s corporate plan for 2002-04, which outlined the body’s strategic goals for that period. At its meeting, the Council considered and approved InterTradeIreland’s operating plan for 2002, which sets out the proposed activities of the body through which the corporate plan will be implemented during the current year. The main activities outlined in the operating plan include research, information and communications technology, e-commerce, the promotion of cross-border institutional and business alliances, the development of an all-island business model, knowledge transfer and the promotion of private equity.

The Council considered and approved InterTradeIreland’s proposals for the introduction and operation of a financial assistance scheme. The scheme sets down the general principles and arrangements that would apply to the assessment, monitoring and evaluation of assisted projects.

(Mr Deputy Speaker [Sir John Gorman] in the Chair)

The Council discussed an interim position paper on public procurement, which was commissioned by InterTradeIreland. The paper identifies an opportunity for greater co-operation and the sharing of information between the two Administrations on procurement issues, including supplier linkages, tendering and supplier databases, e-procurement and the procurement excellence model. There was a useful exchange of views on the issues raised in the consultation paper. The Council noted the paper’s key findings and asked to see the InterTradeIreland proposals that resulted from the findings and recommendations of the final report.

The Council agreed to meet again in the same sectoral format in Northern Ireland in April 2002.

Mr McGrady:

I thank the Minister for his report, which contains many interesting initiatives to promote commerce, industry and, I hope, tourism in the whole island of Ireland. Does the Minister intend — now and for the next North/South Ministerial Council meeting — to assess the consequences on trade and commerce in Northern Ireland resulting from the introduction of the euro in the Republic of Ireland on 1 January, and its potential impact on inward investment here?

I hope that the Minister will agree that the currency differential could have a serious, perhaps adverse, impact in Northern Ireland, particularly in the border regions. It is important that an urgent assessment of that impact be made. In doing so, will the Minister consider the suggestions — I will not go into those now — in respect of pilot schemes that might soften the blow and improve people’s experience of the dual currencies that exist already in most border regions?

12.15 pm

Ms Morrice:

Hear, hear.

Sir Reg Empey:

Why am I not surprised by the "Hear, hear", Mr Deputy Speaker?

That was not discussed at the meeting. Indeed, the Member will be aware that the operational and corporate plans of the Trade and Business Development Body do not contain a requirement for that body to discuss the euro specifically. However, they do address matters that are relevant to competitiveness. The Member will also be aware that my Department sponsors the Northern Ireland euro preparations forum, which did a sterling job trying to prepare our businesses for the introduction of the euro in January. That work will continue at departmental level.

The Member will know that we are used to working in a dual currency environment. The euro does have a significance that is different, in so far as it is a pan- national currency that deals with a growing amount of trade. The bulk of our trade with Europe is in the euro zone. I am happy to take on board the Member’s comments and, even if it is not appropriate for the North/South Trade and Business Development Body to deal with it, there is no reason for its not being dealt with at departmental level or between the respective Departments, North and South. I am sure the House will hear more about the euro and how Northern Ireland’s industry reacts to it.

Lord Kilclooney:

I was interested in Mr McGrady’s comments. Does the Minister agree that the introduction of the euro in the Republic of Ireland is of some significance to Northern Ireland, and does he agree that anyone who invests tries to invest wisely, does not invest in a territory where the value of the currency is collapsing, but prefers an area where the currency is strong? Any businessman using his head would not invest in a territory where the euro was collapsing. Does the Minister agree that the euro is at its lowest level for six months, and does he realise that people in Northern Ireland, who had punts in the Republic of Ireland, are now returning those funds to Northern Ireland and the safety of the pound sterling?

Sir Reg Empey:

I am grateful for the Member’s comments.

My view remains that the euro is undervalued, not that sterling is overvalued. The last few years of stability between our currency and the American dollar has facilitated substantial growth in exports to North America and significant investment from North America. The problem was to do with the way in which the euro was introduced. At the very outset countries were admitted into the euro whose economies had not converged sufficiently, and this fudging of the issues, in an attempt to get the statistics to align, created the view that the euro was dominated more by political considerations than by economic ones. Consequently, we have been left with a huge mountain of between 25% and 30% differential to trade into the euro zone, and that is extremely difficult for exporters. However, it is useful in cases where people can buy in the euro zone and sell in the dollar zone. Some people do that and hedge their currencies.

The problem is that we are trying to squeeze economies into the single currency that have not converged and that need different interest rates to control their levels of activities. The Republic needs a higher interest rate, and countries such as Germany need a lower interest rate.

That fundamental conflict is the cause of the instability. It is still my view that it is the euro that is undervalued, and not sterling that is overvalued. I suspect that until such time as the markets believe that the driving force is economic and not political, some of that instability will remain.

Mr McHugh:

Go raibh maith agat, a LeasCheann Comhairle. I welcome the statement on the issues of all-island competitiveness, the operating plan for research, information and communications technology and e-commerce. Can the Minister tell us what further work can be done to allow more equal competitiveness and advantage to all areas in the light of the lack of broadband facilities in places such as Fermanagh and Derry?

Sir Reg Empey:

I hope, with the Speaker’s permission, to make a statement on broadband to the Assembly, in which all those issues will be addressed, later this month. It is clear from several debates in the House, and from questions I have been asked, that there is great interest in broadband, particularly in the west. We have quite a lot to say about it; actions are already in train. I have had meetings with the Ministers in the Department of Trade and Industry in London, who have responsibility for the issue, and there are a number of matters that I wish to draw to the attention of the House. If the Member will allow, I will not go into greater detail at this time.

With regard to issues that might generate further economic activity, I draw the attention of the Member to the matter of procurement. Government purchases in Northern Ireland amount to approximately £1·6 billion. In the Republic, they are in the region of £4 billion or £5 billion. Remarkably little purchasing occurs between jurisdictions. Some people from here are able to get into the procurement circuit in the Republic and vice versa, but we believe it could be far more substantial. That would have the benefit of import substitution. There may be companies capable of supplying both jurisdictions that are currently not taking advantage of that situation, partly because they do not have knowledge or understanding of the different procurement regimes. InterTradeIreland is working hard to generate further activity in that area. We believe that that will result in the creation of jobs.

Mr Shannon:

The DUP believes that practical co- operation between Northern Ireland and the Republic of Ireland is in the best interests of our constituents and the people of Northern Ireland. With that in mind, what sectoral business interests are involved in the cross-border institutional and business alliance? Will the cost of promotion be borne or shared by those businesses, and if so, to what percentage?

Sir Reg Empey:

I am not sure that I heard every point that the Member made. InterTradeIreland will initially promote some of that activity, but it is the belief of that organisation that, ultimately, the private sector should take on the responsibility. What is required is a start, and for someone to set the tone. It can be done jointly. It does not all have to be done by InterTradeIreland or by the private sector. Ultimately we want it to be done by the private sector, because that would relieve InterTradeIreland of the associated costs.

There has been a history of poor communication between business organisations, with the possible exception of the Confederation of British Industry (CBI) and the Irish Business Employers Confederation (IBEC), which have been co-operating for some years. There are other areas of activity that are virtually blank.

I have just referred to public procurement in each jurisdiction, and remarkably little attention has been paid to that. We discussed at the meeting the need to take the initiative with the clear intention of the private sector’s playing an increasing role in shouldering the burden of the costs.

Ms Morrice:

I would like to bring the subject back to the euro, which will be a surprise. Forgive me if I misheard the Minister, but I think he said that it was inappropriate for the body to deal with single currency and the euro. I would like to understand that better. This body discusses trade and InterTradeIreland, and the euro is vital to that. The Minister said that there is a differential of between 25% and 30% when exporting into the euro zone, which is the Republic of Ireland. What is being done to help small businesses to overcome that barrier? What is being done to encourage the hospitality industry to use the euro and to allow tourists to use the euro north of the border? I have many other questions, but I will confine myself to two.

Sir Reg Empey:

The Member partly misheard what I said. In the operating and corporate plans of InterTradeIreland no specific mention is made of the euro, but my Department has specific responsibilities for the euro preparations forum. However, I went on to say that there could be a role for competitiveness. I made that point clear to the Member for South Down, Mr McGrady.

We are a regional Administration in the United Kingdom, and we do not have responsibility for these fiscal matters, so we have to deal with the situation as it is. When there is a currency differential which varies between 20% and 30%, we do a number of things. First, the Department’s business excellence service, which is incorporated in the IDB, carries out an enormous amount of work to improve the competitiveness of our companies, large and small. We offer a wide range of advice. We have had "meet-the-buyer" and a range of other events to encourage companies to be as competitive as possible. However, the fact remains that if one trades in a different currency zone, one is at the mercy of the markets and of what people believe to be the value of the respective currencies. However, that is only one side of the coin.

In my reply to the right hon Member for Strangford, Lord Kilclooney, I referred to other companies that can use the strong sterling to purchase in the euro zone and resell in the dollar zone, which is our largest export market. Those people can make an additional margin out of that type of activity. If one purchases in sterling and sells in euros, one is at a particular disadvantage. I do not dismiss or underestimate the difficulties that have arisen, but I have to stress that it is not a straightforward, simple matter.

In the long term, one has to work out how to control the economies of different nations that have not converged. Those economies can have different rates of growth. One single interest rate is applied to all when it is clearly unsuitable for some — and that is the dilemma. No one has provided an answer to that question, and that is why, in my opinion, the markets are undervaluing the euro. A single currency works only in economies that have converged and are on a similar cycle. When economies peak and trough at totally different times and grow at different rates, attempts are made to squeeze everything into one pot, and it does not fit. Until that is resolved, there will continue to be an undervalued euro.

Mr Hussey:

I listened with interest to Mr McHugh’s question on broadband infrastructure.

I want to remind the Minister that between the constituencies of Fermanagh and South Tyrone and Foyle there is another constituency called West Tyrone. However, that is not the essence of my question.

The Minister will not be surprised that I ask him to elaborate on the section in his statement that mentions support for microbusinesses in the border region.

12.30 pm

Sir Reg Empey:

The hon Member is a member of what I call "team West Tyrone" — I will never be permitted to forget that that constituency exists between Fermanagh and South Tyrone and others. The Member has, on a number of occasions at Question Time and by other means, raised the matter of broadband infrastructure. As I said to Mr McHugh, I hope to be able to make a comprehensive statement on that at a later stage.

With regard to microbusinesses, InterTradeIreland will have a grant-giving capacity to support projects that are outside the remit of our existing agencies. Its remit will deal with assisting businesses that are straddling the border, where a small amount of resources could help. At present, such companies fall between the existing agencies of both Administrations. We will take extra care to ensure that there is no duplication, and it is not anticipated that we are talking about large amounts of money.

In some cases we have businesses that are literally on two different fields, and there are particular problems that go with that. Bearing in mind the problems that have arisen over the past 30 years, it is our view that in those areas the natural development that one would have expected was prevented by terrorism, threats, roads being closed and areas being artificially cut off, which would not otherwise have happened. We felt that it was appropriate to recognise those facts and recognise that, in those rural areas, it has not been possible to attract large multinational investments or significant locally based investments. However, there are people, particularly in the border counties, who have the desire and determination to engage in business, and we want to recognise the particular problems that they face. For that reason, we hope to provide this scheme to allow microbusinesses to grow, develop and provide much needed employment in those areas.

Mr Dallat:

I welcome the Minister’s statement and would like to follow up his encouragement for public procurement in both parts of the island. Am I to believe that this now presents a new and exciting opportunity for small and medium-sized businesses to tender for Government contracts on an all-Ireland basis? Can the Minister assure us that the procedures will be open and transparent with input from the public audit offices both here in Belfast and in Dublin?

Sir Reg Empey:

The procurement policies of this Administration and of the Irish Government remain our own and theirs respectively. The point that I am trying to make is that we have recognised that there is a huge pool of procurement year in, year out. We are wrestling with the problem of defining and agreeing what the real level of trade is between the North and the South, and I can assure the Member that it is not a simple exercise and that a great deal of work is being done on that.

A comparatively small amount of procurement is going North/South, and if you add the two together you get a pool of between £6 billion and £7 billion of trade. That has the potential to grow and allow local companies to participate in it. As that is already there, we should encourage and prepare companies to take advantage of it.

There is the matter of awareness and of drawing the possibilities to the attention of small companies. They may not be aware of those possibilities, nor understand the procurement policies and procedures in the other jurisdiction. That is an educational issue, and those companies require "meet-the-buyer" events; assistance to help them get onto select lists; and help to understand the tendering procedures. The ‘European Journal’ will still apply, but the procedures set down by the Audit Office are not affected. We are engaged in an endeavour to involve companies that do not conduct, or go after, any business in another jurisdiction. There are also those companies that do go after the business but have difficulty in managing the substantial differences in the procedures on both sides of the border. There is potential in both jurisdictions for more of the existing companies to get a slice of the business. Some have been successful in winning contracts in construction, for example. Minimal cost is involved in initiating this endeavour, but it is an educational process. It has great potential.

Mr C Murphy:

Go raibh maith agat, a LeasCheann Comhairle. I return to the issue of procurement policy, which is, as the Minister pointed out, a matter for each jurisdiction to decide upon. I am not sure whether the Southern figures that he gave were in euros or punts, but there is a substantial amount of money in the public procurement purse. Can he assure us that some cognisance of targeting social need (TSN) policies will be taken in the position paper, so that in the area of public procurement, and in InterTradeIreland’s scheme of financial assistance, TSN attitudes, ideas and policies can be used to target that substantial public money into needy areas on both sides of the border? Such areas have suffered from neglect over decades from state agencies that had responsibility for creating employment in those areas. When public money is available for procurement it should be used to target those areas that most need financial assistance and which need business directed towards them and business promoted and nurtured within them.

Sir Reg Empey:

I can advise the Member of the precise arithmetic, but we are talking about a substantial number of billions of pounds’ worth of business annually. InterTradeIreland has published its TSN action plan, which is subject to approval by the North/South Ministerial Council, and it has made its absolute commitment clear. If you look at the type of companies targeted, and the geographical areas in which we are developing businesses, you will see that they are nearly all in TSN areas. Our endeavours in relation to procurement could, of course, apply to any company in Northern Ireland, whether it is in a TSN area or not.

(Mr Speaker in the Chair)

Currently, companies lack knowledge of the potential — some feel unable to take on the responsibility, as they do not have the procedural knowledge in different jurisdictions, and some may lack tendering capabilities. We believe that we can assist those companies, draw their attention to the potential and help them with the procedures. They may require technical and professional assistance. Purchasing organisations on both sides of the border have a responsibility to ensure that details of what they are doing are disseminated widely, so that even a small company in a remote rural area is, as much as possible, on a level playing field.

There is huge potential in this area — it is money that has already been spent, and a large proportion of it is in importing. Import substitution, which would have a positive impact on the balance of payments, could therefore take place here. We could make progress on a range of issues. The key issue is that many companies, especially small ones, do not recognise the potential that exists. InterTradeIreland will have the task of getting that message across to companies. It has set that as a target, therefore it must show how it intends to deliver in that respect.

We are also trying to establish accurately the baseline for current levels of purchasing on both sides of the border, so that we can measure any improvements.

Mr ONeill:

How will the development of an all- Ireland business model, the transfer of knowledge and the promotion of private equity benefit small businesses, in particular, in their quests to access venture capital? Will there be opportunities for businesses to improve in those circumstances? What does the Minister hope will emerge from those initiatives?

Sir Reg Empey:

Since its inception, the Trade and Business Development Body has been tasked with examining equity capital and its availability. Work has been carried out on that. A major study by chartered accountants, which was published some months ago, indicated that, by and large, money was available at a reasonable cost. However, it also identified certain gaps in the market. There is a huge cultural problem in Northern Ireland in that people are less willing to contemplate venture capital involvement.

The Republic is ahead of us in that respect, because it has had some success, but Northern Ireland still has some way to go. The problem in the past was that venture capital tended to be available for the big boys only. However, sums of money that are within the scope of many small businesses are now available.

A business model for the island would allow us to benchmark our position and to analyse the likely impact of certain economic decisions on businesses. In that way we could identify what we must do, target resources to the businesses that need them most and identify areas of weakness where resources could be concentrated. In that sense, it is a benchmarking exercise.

The debate on venture capital and equity must continue, because there is a cultural problem. Venture capital drives much of the American economy, and it has done so for many years. However, there is resistance to venture capital here. People do not want to give up a slice of their companies. Venture capitalists can provide money to a company at a much greater risk than would a commercial bank. Understandably, they demand a percentage of the equity in the company for that service.

In North America that system has driven business, created new jobs and wealth, and encouraged the creation of new businesses. The big weakness in Northern Ireland is that our business start-up rate is lower than that of our counterparts in these islands. Anything that encourages the acceptability of venture capital and its use is therefore likely to have a positive impact throughout the economy.

Local Government (Best Value) Bill

Consideration Stage

Mr Speaker:

I trust that Members will have a copy of the Marshalled List of Amendments detailing the order for consideration and the amendments that I have grouped for debate in my provisional list. Members will note from the Marshalled List that the Committee for the Environment intends to oppose certain clauses of the Bill. That has been noted in the provisional grouping.

I propose two groups of amendments, which will be debated in turn. The first group consists of amendments 1, 3, 4, 5 and 6, and also the Committee’s opposition to clauses 2, 3, 4, 5 and 7. Members who wish to speak on any of those issues should speak during the first debate, albeit that the votes on each of them will come at the normal place. The second group consists solely of amendment 2, which is the new clause being proposed by the Minister.

If that is clear, we will proceed.

12.45 pm

Clause 1 (The duty of best value)


The Minister of the Environment (Mr Foster):

I beg to move amendment No 1: In clause 1, page 1, line 13, leave out subsections (3) to (5).

The following amendments stood on the Marshalled List:

No 3: In clause 8, page 5, line 16, leave out from beginning to end of line 17. — [Mr Foster.]

No 4: In clause 8, page 5, line 18, leave out "principal Act" and insert "Local Government Act (Northern Ireland) 1972 (c. 9)". — [Mr Foster.]

No 5: In clause 9, page 5, line 21, leave out subsection (1). — [The Chairperson of the Committee for the Environment (Rev Dr William McCrea).]

No 6: In the long title, leave out from "imposing" to "effectiveness" and insert

"placing on district councils a general duty to make arrangements for continuous improvement in the way in which their functions are exercised". — [Mr Foster.]

Before I speak on the group of amendments, I want to remind Members of the purpose of the Bill, and to explain the background to the amendments I am now commending to the Assembly. My objective has been to create best value arrangements that will deliver transparency, accountability and value for money in the use of council resources and in the provision of local services to council residents and ratepayers. It is, therefore, a Bill for local people.

Another important aspect of the Bill is the repeal of compulsory competitive tendering (CCT) of specified council services. As I said during an earlier debate, few Members will mourn the passing of CCT. I was one of its main opponents in my days as a local councillor. Best value is a much better process. Emphasis is placed on quality and level of service, rather than measured in cost terms alone.

It would be remiss of me not to take this opportunity to acknowledge the full and detailed consideration given by the Committee to my proposals. I do not deny that the Committee received significant reservations in evidence from local councils and other interested parties. However, as the debate unfolds it will become clear to Members that I have listened and reacted to those concerns. Throughout the consultation process I have taken account of constructive comments, and I have sought to introduce a best value process that best reflects the specific requirements and circumstances of local government in Northern Ireland.

The reduction of the Bill from 19 clauses to 11 recognises what is best for local government in Northern Ireland, and is balanced with the rights of local residents, ratepayers and users of local council services. Since 1998, district councils have been fully engaged in best value development through four joint working groups and a steering group. The working groups, each chaired by a council chief executive, were responsible for developing guidance, performance indicators, customer surveys, and so on. I am fully committed to that partnership approach to best value. I will ensure that it continues in the interest of all who are engaged in its implementation. I hope that the above demonstrates that neither the Department of the Environment nor I can be accused of "going it alone" on best value development, or of trying to rush through statutory provisions without taking into account the views and representations of consultees.

Concerns were expressed that a best value statutory framework was being advanced at a time when several reviews of best value were being undertaken in England and Wales. Departmental officials and I were mindful of those developments. My colleagues in GB assured me that none of those reviews would change the principles and broad framework of best value as contained in GB best value legislation. However, some of the detailed implementation requirements may change. My officials and I are monitoring that carefully in the interest of developing best value guidance for councils in Northern Ireland.

It has also been suggested that progress on best value statutory provisions should await developments in the review of public administration. No one knows what will emerge from that review. My firm opinion is that best value, as a process, can be applied regardless of the structures and responsibilities of local government.

Before addressing each amendment, I want to look to the future. I welcome the Committee for the Environment’s endorsement of best value as a process that is aimed at the interests of local people. I also welcome the Chairperson’s assurance that the Committee does not oppose a statutory framework for its implementation. In the future I will consider, with ministerial Colleagues and the Committee, the establishment of a full statutory framework. We will be informed in that by reviewing council performance under the voluntary arrangements and will take into account the outcome of the review of best value in Great Britain. Progress on the review of public administration will also be considered, as will developments arising from the procurement review.

I will now turn to the amendments. In my introductory remarks, I outlined my strong belief that best value is, first and foremost, for the benefit of local residents, ratepayers and users of council services. I welcome the Committee for the Environment’s endorsement of the best value principles of transparency, accountability and value for money. I assume that all Members support those key objectives for local council services. I am pleased that the Committee recognises the importance of placing a statutory duty on councils to deliver best value in consultation with local people. Such a duty exists in England and Wales, and will soon be introduced in Scotland. It would be a disservice to Northern Ireland citizens if the Assembly denied them the same rights that are being afforded to all other citizens in the United Kingdom.

Members know that I would have preferred to establish a full statutory framework for best value, which would have given local people the assurance that councils’ implementation of best value and service performance was transparent and subject to statutory independent audit. However, I have listened carefully to the concerns expressed by the Committee for the Environment, district councils and others regarding the introduction of the framework now. Consequently, in clause 1, I propose to omit subsections 3, 4 and 5, which provide for a best value framework. Importantly, however, councils are still required to make arrangements for continuous improvement having regard to economy, efficiency and effectiveness, and in consultation with local people.

It was important in my opening remarks to demonstrate the many and varied issues that I had to consider at this key stage of the Local Government (Best Value) Bill. The proposals in amendment 1 reflect a balanced consideration of those issues. Significantly, the amended clause 1 is critical to the whole Bill, as it determines the broad principles of the best value duty.

Clause 2, for example, makes provision for the Department’s input to the statutory framework, outlined in subsections 1(3) to 1(5). Under that clause, the Department would have the statutory power to issue guidance on matters such as public consultation, service reviews, performance improvement plans, performance indicators, standards, and so on. The amendment of clause 1 renders that clause superfluous. However, those matters are all key components of best value, and the Department will continue to develop them in partnership with councils, the Committee for the Environment and others under the non-statutory arrangements.

Clauses 3, 4 and 5 make provisions regarding the auditing arrangements and responsibilities that underpin the best value framework. As I said earlier, it is important that best value be transparent and accountable. An independent audit of best value would provide further assurances to local people in that regard. Without such a statutory framework, it is not appropriate to put in place a statutory auditing arrangement. In the absence of a statutory audit of best value, I will ask my officials to consider, in conjunction with all appropriate bodies, what auditing arrangements are suitable under the non-statutory framework and also to explore, with the local government auditor, what assurances can be provided with regard to the outworking of best value under a general statutory duty.

Clause 7 was originally intended to provide a power to except specific councils from specific duties under the statutory best value framework. However, no council would be excepted from the general duty of best value under the amended clause 1. Accordingly, clause 7 is no longer relevant to the Bill. In recognising the significant impact of amendment 1 on clauses 2 to 5, I am nevertheless content that the non-statutory arrangements for best value will still be in place to ensure that the momentum and development of best value continue. Consequently, I will not be opposing the removal of clauses 2 to 5, or clause 7, from the Local Government (Best Value) Bill.

Amendment 3 to clause 8 would omit the interpretation provided for "the principal act", on the understanding that the reference to the Local Government (Northern Ireland) Act 1972 would not be required in clause 9, if amendment 5 were carried. In accordance with my earlier conclusions on the statutory framework as it relates to the audit of best value, I will not be opposing amendment 5.

Amendment 4 is a further amendment to clause 8 that would remove the reference to the "principal act" in line 18, in keeping with amendment 3. Amendment 6, which amends the long title, makes provision for a general duty on councils

"to make arrangements for continuous improvement in the way in which their functions are exercised."

The duty is further clarified in clause 1, subject to amendment 1.

I commend these amendments to the Assembly.

The Chairperson of the Committee for the Environment (Rev Dr William McCrea):

On behalf of the Environment Committee, I ask the House to support the amendments put forward by the Committee and the Minister. I take the opportunity to thank the Minister for his kind words, which are appreciated by myself and, I am sure, by the Committee members.

I suppose that even as recently as two weeks ago, no one on the Environment Committee would ever have imagined that I would rise to support the Minister. At the same time, we never imagined that the Minister would support the Committee’s proposal for this Bill. However, a week is a long time in politics and where there is a will, there is often a way. I thank the Minister and his officials, some of whom are present, for their willingness to consider the propositions, proposals and amendments suggested by the Committee.

It is important at this stage to clear up any misunderstanding that Members or others outside this House may have about the stance of my Committee towards best value. We do not oppose the principle. We support the work carried out by councils over the past three years on a voluntary best value basis, and we desire to see that work enhanced and continuing.

Paragraph 52 of the Committee’s report on the Bill states

"This Committee does not oppose a statutory framework for the implementation of Best Value within Northern Ireland and readily endorses the Best Value principles of transparency, auditability, accountability and value for money for Council services."

The ratepayers and residents of Northern Ireland deserve the best possible framework appropriate to Northern Ireland. It is clear to all that its development will require proper consultation achieved by genuine listening to all key stakeholders.

The councils and other interested bodies expressed concern and opposition to the Bill as originally proposed, because they believed that it was flawed and that many of its proposals were premature. We are delighted that the Bill before the House today has taken into consideration many of the concerns of elected representatives on district councils and other interested bodies, and especially those of the Environment Committee.

However, the Committee consistently opposed what we saw as a flawed and premature attempt at a Bill to legislate for a prescriptive best value framework. Some might suggest that the members of the Environment Committee are merely putting forward their own views or pursuing their own interests on the issue. Nothing could be further from the truth. I contend that few Committees in this House have consulted as widely and as fully as my Committee did on best value.

Why are we convinced that the Bill brought before this House in July 2001 was flawed, premature, and overtly prescriptive, and did not deserve our support? I wish that I could give one simple answer, but that is not possible. At this stage I am not inclined to deal in any depth with the reasons of the Minister and his officials for thinking that the Bill deserved our support at that time.

1.00 pm

In its comprehensive report, the Committee disproved every argument that was put forward by the departmental officials. For example, the Department already has sufficient legislative authority to empower the local government auditor to carry out value-for-money audits. The Committee’s report provided overwhelming evidence that, if the Bill had proceeded as it was originally presented to the House, it would have been a serious mistake with far-reaching consequences.

The Committee supports the Minister’s amendments to clause 1 and the long title. In particular, the Committee is pleased to note that in clause 1, subsection 2, the Minister intends to introduce a general duty for best value, along with a requirement for consultation with ratepayers and others. He is content not to proceed with the rest of clause 1. That significant change has also been reflected in the changes to the long title.

I ask the Assembly to join the Committee in opposition to clauses 2, 3, 4, 5 and 7 standing part of the Bill. Those clauses were originally included to support a detailed statutory framework for best value, and are no longer needed. The Minister has indicated that he will not oppose such amendments, and I once again put it on record that the Committee appreciates and welcomes the Minister’s response.

It is proposed that clause 6 remain in the Bill. It is an important enabling clause that will allow for amendments to the current list of non-commercial matters in the interests of councils promoting key policies. The Committee has scrutinised and consulted on the clause, and asks the House to support it.

The Minister has proposed a minor consequential amendment to clause 8. The Committee has no hesitation in supporting that amendment, and I ask the House to support it also.


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