Draft Budget (No. 2) (Northern Ireland) Order 2004

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Lady Hermon: I was keen to hear the Minister refer to the fact that there will be an increase in the demands on the budgets for the Department of Education because of the Disability Discrimination Act 1995. Not so long ago, we considered that as a Committee. How much of the budget has been set aside to implement the obligations that we rightly have to those students with disabilities and those in special needs education?

Mr. Pearson: I do not have the figures immediately to hand, but the hon. Lady is right to raise disability discrimination and compliance with legislation. It is always the Government's intention to ensure that we fully comply with legislation. If I can rummage through the figures and provide her with an answer in my closing remarks, I will do so.

A total of £272 million is sought for the Department of Enterprise, Trade and Investment. That includes £139 million for Invest Northern Ireland to support business growth and inward investment, to promote innovation, research and development, and company training. Significant provision is also sought for economic infrastructure, so that a world-class telecommunications infrastructure is developed to support the development of Northern Ireland sites and to extend the Northern Ireland gas network.

The main estimates provision that is sought for the Department of Enterprise, Trade and Investment includes the cost of our proposals to reduce the electricity cost to non-domestic customers in Northern Ireland. However, hon. Members will be aware that the outcome of a recent informal meeting with the European Commission means that we cannot proceed with our proposals at this time. We are disappointed at that development, which came as a surprise to us, and we will continue to work with the Commission on that issue. Reducing disparity in electricity prices for industrial users is important for this Government.

The Department of Health, Social Services and Public Safety requires resources of more than £2.7 billion to be spent on the effective delivery of high-quality health, social care, family health services, training, specialised services and other initiatives. Those resources will maintain and enhance service delivery improvements and additional hospital and community capacity, especially with regard to cancer services, health screening, primary care, care for the elderly and children's services. The Department's capital budget has been enhanced by an additional £61 million under the strategic investment programme, which is mainly for key hospital developments, including an allocation of £15 million for the new

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Belfast cancer centre and £6 million for the Altnagelvin hospital upgrade.

Rev. Martin Smyth: I have already written about health issues to the Minister's colleague, the Under-Secretary of State for Northern Ireland, the hon. Member for Basildon (Angela Smith). Although I welcome what is going into the acute sector, the emphasis is on primary care.

I must declare an interest, because it has been brought to my attention that the surgery where my daughter is a general practitioner has been told that there is nothing in the budget, even up to 2005, to allow it to get the new premises that it urgently requires. The current premises is just at the 39 per cent. level and does not meet health and safety requirements, yet we are told that those at the surgery cannot even be guaranteed anything to allow them to make plans to start moving forward. Surely, it is time that we looked after the general practices, which deal with front-line care.

Mr. Pearson: I agree that we need to consider all aspects of the health economy and ensure that it is delivering effective health care. As I said, the health budget is increasing by 7.2 per cent. this year and 8.4 per cent. next year, and there is a major capital programme, too. If the hon. Gentleman has a particular issue in his locality, may I suggest that he writes to the Department, which will look into it?

The Department for Regional Development has a net resource requirement of £1.4 billion. Provision is also sought for expenditure of some £326 million to meet departmental investment in capital projects, including £113 million funded from the strategic investment programme which comprises £57 million for a number of existing and new major road schemes and £56 million to address leakage reduction, upgrading water mains and sewers and other capital works in the water industry.

The Department for Social Development requires resources of £2.8 billion in 2004–05, including £2.1 billion of non-contributory and income-related benefit expenditure and £360 million for the housing programme. When the Northern Ireland Housing Executive's rental income and capital receipts from house sales are taken into account, some £724 million of gross resources will be available for housing in 2004–05.

The estimates that we are debating today are in the best interests of people and business in Northern Ireland. I commend the draft order and look forward to an interesting and stimulating debate.

2.49 pm

Mr. David Lidington (Aylesbury) (Con): May I welcome the fact that we are serving under your chairmanship, Mr. Cran?

As the Minister said, we are debating a draft order that will authorise the expenditure of slightly more than £11 billion of taxpayers' money in Northern Ireland. That is a sizeable sum.

I want to begin on a note of harmony with the Minister before I turn to the slightly more pointed questions that I have for him. I very much associate

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myself with the commitment that he made towards seeking quality in the delivery of public services. When I did some research for the debate, I was struck by a speech that he made on 29 June when he said:

    ''The ability to deliver high quality public services must be the top priority for any new system of public administration in Northern Ireland . . . I want to remove waste and reduce bureaucracy and to redirect the resources released into front line services''.

There is nothing in that with which I disagree. However, I put it to him that it sometimes seems that we are waiting quite a long time for the promised results.

That speech was made in the context of the ongoing review of public administration, which was initiated by the right hon. Member for Upper Bann (Mr. Trimble) and Mr. Mark Durkan when they held the offices of First Minister and Deputy First Minister. That was in 2002, and we are now two years on from the launch of the review, and nearly a year on from the launch of the consultation document, which, to be fair to the Minister, the Government published in autumn last year. I hope that he will say what time scale he envisages for the Government to reach conclusions and for those to be available for Members of Parliament and the Northern Ireland public to consider and to debate.

Mr. Pearson: Perhaps it would be helpful if I respond now. In the past couple of weeks, I have had further discussions with the political parties with a view to achieving as broad a consensus as possible on the reform of public administration in Northern Ireland, which is a huge issue. I explained to them that the Government intend to produce a firm proposals document in the autumn on which we will then want to consult with a view to producing legislation close to Easter next year. It will have a possible effective implementation date for local government of 2009. I hope that all that work will be taken forward by a devolved Administration, that the intensive talks that we will have in September will bear fruit and that we will have an agreed body of work that local politicians can advance.

Mr. Lidington: I am grateful to the Minister for that intervention. I am glad that progress is being made.

One of the problems that faces Northern Ireland is that a growing body of evidence in the Government's publications and in the work of the Comptroller and Auditor General for Northern Ireland indicates that the quality of Government services in Northern Ireland too often lets down the people who are using them and who are paying for them through their taxes. That is in part, although not entirely, a legacy of nearly four decades of violence.

I will give the Committee a few examples. The Comptroller and Auditor General for Northern Ireland summed up part of the problem well in the evidence that he gave to the Public Accounts Committee on 23 February. He described the system of public administration in Northern Ireland as

    ''disastrously fragmented. Almost every body in GB that carries out any function of government is duplicated on a tiny scale within Northern Ireland and that is an impediment to clarity and an enormous inefficiency.''

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There is evidence that too much money is not getting through to the sharp end, where we would all agree that it is needed. In that context, it is instructive to trace the growth of administrative costs within the Northern Ireland Departments in the past few years. The figures that I have seen are those published in the Government's current estimates document—which is before the Committee today—and in the previous estimates for 2003–04. From them, we can construct a picture of the rise and fall of the net administrative costs of each of the Departments between the financial years 2003–04 and 2004–05.

In those three years, net administrative costs rose considerably. The figures in the estimates show that overall net administrative costs in 2001–02 were £760.5 million, but the provision for 2004–05 is for Northern Ireland Departments to have net administrative costs of no less than £935.6 million. That is an increase of a little over 23 per cent. in just three years. It is fair to ask the Minister why the overheads of Northern Ireland Departments have risen so sharply in those three years, and whether he and his ministerial colleagues can be confident that the money is being spent in a way that leads to the delivery of services to customers, because we do not want too much money being held back within the machinery of government itself.

Let us take some other examples. It is not only the review of public administration that is relevant when we are talking about the quality of services. The way in which government in Northern Ireland is supervised and managed can affect the quality that the service-user receives. The Comptroller and Auditor General's general report for the last available year of 2002–03 was published a few days ago, and it states that seven out of 17 Northern Ireland accounts could not be given a clear audit opinion, but had to be qualified in some way. The Department for Social Development is singled out; the Comptroller and Auditor General points out that losses there due to fraud or errors in the payment of income support, jobseeker's allowance, disability living allowance and housing benefit, amounted to £120.9 million and that that is equivalent to no less than 7.6 per cent. of all expenditure in Northern Ireland on those four benefits.

In the work of the Northern Ireland Audit Office and the Public Accounts Committee, evidence can be found that housing associations in Northern Ireland have been applying for grants before getting planning permission for the sites concerned. The Comptroller and Auditor General described the Government's financial controls and monitoring of grants to community and voluntary groups as inadequate. There was a damning Public Accounts Committee report on the failure of the Northern Ireland Housing Executive to devise a strategy for homelessness, and the conclusion was that that has led to unnecessarily wasteful expenditure by the Housing Executive.

There have been repeated breaches of government rules on the hiring of consultants. To take just one example from the Northern Ireland Audit Office report, the Department of Health, Social Services and Public Safety is said to have spent £105,000 on a

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communications study without a business case or public tendering, and without a review after the study had been completed.

The most recent bit of evidence that I have uncovered was in a written answer from the Minister on 29 June about the amount of time, and therefore of public money, lost in the Northern Ireland Departments due to staff sickness.

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