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Grand Committee
Tuesday, 4 July 2006.
The Committee met at half-past three of the clock.
[The Deputy Chairman of Committees (VISCOUNT ALLENBY OF MEGIDDO) in the Chair.]
The Deputy Chairman of Committees (Viscount Allenby of Megiddo): Before the Minister moves that the first order be considered, I remind noble Lords that in the case of each order, the Motion before the Committee will be that the Committee do report that it has considered the order in question. The Committee is charged only to consider orders, not to approve or not approve them. The Motion to approve will be moved in the Chamber in the usual way. I also remind noble Lords that if there should be a Division while the Committee is sitting, the Committee will adjourn at the earliest convenient moment after the Division Bells are rung and will resume after 10 minutes.
Budget (No. 2) (Northern Ireland) Order 2006
Lord Rooker rose to move, That the Grand Committee do report to the House that it has considered the draft Budget (No.2) (Northern Ireland) Order 2006.
The noble Lord said: We are considering this draft Budget Order today due to the continuing suspension of the Northern Ireland Assembly. For that reason the Government must come to Parliament to seek approval for the resources and associated cash requirements for Northern Ireland departments.
I think that all of us, without qualification, would prefer to see the Assembly doing the job that it is paid and elected to do; we want decisions on the Budget to be made by local politicians. That would include debating and approving departmental spending plans such as those that will be considered by the Committee today. We want to see that happening as soon as possible. Everyone knows what the agenda is: we want to see the full restoration of the Northern Ireland Assembly by 24 November. It is no good anyone coming to us on 23 November saying, “We need another three or four days”. We have repeatedly made it clear that that is the date.
For as long as direct rule continues, we need to allocate public expenditure to help secure our objectives—there should be no complaint about the fact that they must be the Government’s objectives and cannot be those of Northern Ireland politicians—of investment in priority public services and in securing the reform of how those public services are managed and delivered.
The main purpose of the draft order is to authorise the balance of resources and cash in the 2006-07 main estimates for the Northern Ireland departments. These are in addition to the amounts in the Vote on Account approved by Parliament in March of this year. That Vote on Account amounted to approximately 45 per cent of the total provision for the previous financial year. It has enabled funds to continue to flow to public
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I shall explain the kinds of sums that we are talking about. The balance of the requirements for 2006-07 amounts to almost £7.1 billion of resources and some £6.2 billion of cash. When we add those to the Vote on Account, which has already been approved, it will bring the total amount authorised for 2006-07 to some £13.3 billion of resources and £11.1 billion of cash.
This draft Budget Order also seeks approval for the use of excesses in resource and cash expenditure that occurred during the year ending 31 March 2005. Details are contained in the statement of excesses provided to Members of the Committee. The excesses have already been subject to scrutiny and report by the Public Accounts Committee of the House of Commons, which has recommended that the excesses should be authorised by Parliament by means of excess votes.
The Budget Order before us reflects the expenditure plans announced by my right honourable friend the Secretary of State and by me in December 2005. Those expenditure plans clearly demonstrated the Government’s strong commitment to improving the quality of frontline public services and to ensuring that people in Northern Ireland, now and in the future, are equipped with the education, skills and training they need to respond to the challenges of a national and international economy which places a premium on highly skilled and flexible workforces. To do this, we are targeting resources on key public services, on investment in education and training and on our infrastructure, accompanied by a radical and wide-ranging programme of public sector reform.
Providing a high quality health service remains a top spending priority, and that is reflected in the spending plans before us today. The proposed allocation to current health spending has increased by 7.5 per cent over last year’s allocation. Those additional resources are accompanied by a far-reaching reform and modernisation agenda in the health service. That is being given the highest priority by the department, and we are determined that it will lead to further improvements in waiting times for patients; that is, shorter waiting times for patients.
The proposed allocation to current education spending has increased by 4.2 per cent over last year’s allocation. As with health, this extra investment is being accompanied by a programme of major education reforms that will change and improve what our children learn, how they learn, and the environment in which they learn. They include actions to introduce revised arrangements for post-primary education. These reforms will produce significant benefits for our children, for our society and for our economy. They will allow us to maintain our focus on improving literacy and numeracy standards, particularly among disadvantaged pupils, and to continue to address the requirements of children with special educational needs.
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Beyond providing for the improvement of key public services in Northern Ireland, we have also put in place a major strategy to provide for sustained investment in the public sector infrastructure that will extend over the next decade and beyond. This will provide for a potential investment of up to £16 billion over that period, and over the next few years alone our planned capital expenditure is almost £4 billion. This level of investment in Northern Ireland’s future is unprecedented, and its fruits can already be seen on a daily basis by the community, whether in new construction work on hospitals and schools or the major roads improvements under way in Belfast. They are major road improvements, but while they are taking place they cause a slight hiccup from time to time, as some noble Lords have found on a daily basis, and as I discovered over the weekend. Part of that infrastructure is improving they key routes to other parts of Northern Ireland and to the south.
I am aware that the rates increases announced last year attracted considerable comment in the community. I want to make it clear that the increases were to generate revenue for the creation of three new priority funding packages: for children and young people; for skills and science; and for the environment and energy. We make no apology for what was a hefty rate increase of 19 per cent because the money was wanted for those programmes. No one has since said to me or to other Ministers that they think we should not have done the packages or that we should have chopped other expenditure to keep the rates down. We did it so that we can make a difference and we intend to make a difference to improve the prospects and life chances of future generations.
We want to see society and the economy transformed by using public spending wisely to invest in the services that make real differences to people’s lives: in health and education; in children and young people; in promoting long-term economic growth through investment in skills and training; and in protecting the environment through the development of new sources of renewable and clean energy.
Investment must also be accompanied by radical reform of the way that public services are managed and delivered to make them even more efficient and responsive to the needs of the citizens who use them. That is why we have begun the process of implementing in full the announcements that I recently made following the Review of Public Administration. It is this combination of investment and reform that will ensure the delivery of public services and a public sector infrastructure that meet the needs and expectations of this and future generations in Northern Ireland. The resource allocations to departments proposed in the main estimates and in the accompanying draft Budget Order will help to ensure that this wide-ranging programme can be taken forward for the remainder of this year.
I will not attempt to summarise the financial detail contained in the Budget Order and supporting documents, as that would not be the normal practice in this unelected House. However, I will of course try to address any specific points of detail that noble Lords may wish to raise on the expenditure covered by the order. I would much rather that I was not
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Moved, That the Grand Committee do report to the House that it has considered the draft Budget(No. 2) (Northern Ireland) Order 2006.—(Lord Rooker.)
Lord Glentoran: I thank the Minister for laying the order before us so clearly. I agree that we are not well equipped to debate the details of the order in this Committee. Would that it were being debated in Stormont.
I, too, have today read the Hansard debate, and noted a number of the issues raised there. I also noted that that debate did not go into a great deal of detail. Considering the huge amount of money—£13.3 billion—being spent in Northern Ireland, the amount of democratic examination of it is tragic. It is just not right. However, that is where we are today, and let us hope that by this time next year it will have changed.
From this side of the Committee, I have a duty to challenge the Government on how it managed that money over the past year, and look to the Minister to reassure me that things are improving. In particular, the Department of Education was reported for overspend and incompetence by the national audit committee. I may have come on too strong in saying “incompetence”—certainly, it wasted significant amounts of money. We had, and have, a wonderful education system for some. I accept that, and always have. Our education system has failed in what used to be the ghetto areas. They are no longer ghetto areas; they are nice houses, sometimes, sadly, with ghetto-type people—paramilitaries and so on—controlling and managing them. It has been extremely difficult trying to ensure that people in places such as north Shankill—I see the noble Baroness, Lady Blood, in her place—get a fair crack of the whip.
We will have another debate on that at some stage, but destroying what is in place is not the way forward. That must be to spend the education budget wisely: capital spend, new and improved curriculum systems and supporting those who work with children in difficult areas to live in—whether they be Armagh, parts of Derry or east, west or north Belfast. That must be part of the Government’s supervisory role when looking after this Budget.
On the administration of Northern Ireland, the Minister and I agree, by and large, on where we should be going. I am a bit disappointed at the pace, however. I would like some reassurance that cuts in administration services will lead not to a loss of benefits but to more efficiency. I hope that we will see the reorganisation of local government and education processes, and that the fact that the Minister is no longer part of the Northern Ireland team does not mean that impetus will have drifted away. I have great faith in his ability to drive that on at the necessary speed, so I hope that is going ahead.
Once upon a time, in my young days, Northern Ireland probably had the best part of the National Health Service. Now, according to the Secretary of State, it appears to be the worst. Not long ago, he said
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I want to make a point about refuse, particularly technical refuse. I took part, as I think the Minister did, wearing a different hat in a different debate about the Department of the Environment and the WEEE directive, which has come to bite Northern Ireland administrators quite severely once again. It has cost a lot of money, and I would like to know that the necessary systems are in place to manage the meeting of the WEEE directive requirements on refrigerators, radios, batteries and all the other things that have to be disposed of under the directive.
I am afraid that we on this side of the Committee are not comfortable with the Government’s ability to organise and govern this country by direct rule. I am sure that the money is spent wisely—I do not challenge many of the decisions—but I would like to see it managed more tightly, more fiercely and more aggressively in a business sense and producing better results in all the key services. I welcome in some ways the rates and water rates increases. I know that they are unpopular and that they would be difficult to bring through local government in Stormont, but we do have very low rates and we do need more money to be spent on the national infrastructure, and I very much welcome the huge capital expenditure on the Northern Ireland infrastructure today. With those few rather uneducated comments, overall I support the order.
Lord Smith of Clifton: My Lords, I, too, thank the Minister for introducing the order. I also share his view that it would be much better if Stormont was handling it rather than we here in the House of Lords. Like the noble Lord, Lord Glentoran, I, too, read the House of Commons debate, which was rather thick on generalities and rather thin on specifics. If the House of Commons is meant to provide the detailed scrutiny and the financial implications for the Budget but is not doing it—we, by convention, are not meant to do it—no one is really doing it. That very serious failing is all too typical of the way in which Northern Ireland business is treated in the Palace of Westminster.
On education and the Council for the Curriculum Examination & Assessment, there is an enormous increase from some £12.5 million in 2004-05 to just over £23 million in 2006-07. I would like an explanation. How is the issue of falling school rolls dealt with, and does this provide an opportunity for increasing the amount of integrated education in rural areas? It seems irrational and pointless to have two systems of education when there are falling rolls, and it is an opportunity to increase the amount of integrated education in Northern Ireland.
This is a mere detail, but nevertheless we had better look at details. The district councils have served a writ of summons of well over £500,000 on the Department of the Environment. Why cannot this sort of thing be
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The spend for the Department for Social Development details the community and voluntary sector funding. Formerly, £47 million came from the EU. Now, £21 million is being voted for the community and voluntary sector. That is a significant reduction by any standards—it is more than 50 per cent. One cares about that because in an economy that is too heavily reliant on the public sector the role of community and voluntary organisations is vital. Yet it is very difficult for them to get funds from such a small private sector. They do not have the opportunity that those in England and Wales, for example, have to get large donations from donors in the private sector, simply because the private sector is so small there, and a great deal of what does exist is dependent on public sector funds.
On the Department for Social Development, what is the reduction, which I think is over 50 per cent and will the community and voluntary sector be able to operate with such a considerable reduction in its funds?
Lord Laird: I am most grateful to the Minister for outlining the details of the order. I associate myself with the remarks of the noble Lord, Lord Glentoran, in that I am sorry that the noble Lord, Lord Rooker, is not a Minister in the Northern Ireland Office any more. I always appreciated his plain speaking even if I was at the butt end of it, which I was on a fair number of occasions.
I shall make a few general remarks on the Budget before going into more detail. It would appear that the Department for Regional Development’s expenditure Budget has been cut by £16 million over the next two years. Will this hit road maintenance? That will underline the original transport strategy.
The Department of Enterprise, Trade and Investment’s revenue Budget is reduced by £36 million over three years. While Invest Northern Ireland spending is more or less at previous levels, it has significant liabilities from some large projects to contend with over the next few years. The draft Budget provides little scope to support new projects if they arise. Will the Minister comment on that?
Northern Ireland needs to create more wealth and grow the overall tax-take if it is to reduce the overall subvention, currently running at about £6 billion per year. The draft Budget gives no indication that this has been considered. Indeed, the priorities that will help creation and the growth of the private sector have not yet been given the priority they deserve. The draft Budget is too expenditure-focused and no significant thought appears to have been given to the consequences of the Budget on the potential increase of the overall tax revenue.
The governance of the public sector is recognised as an issue, but the Budget is very light on how it will be addressed. Although I recognise that some progress is on the way, it is outsourcing various activities. The public sector is becoming an even more attractive environment to work in. Some of the initiatives of this Budget will create more administration. The Budget
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Last December’s Budget set administrative cost limits of £896 million per year for each of the three years 2005 to 2008. This is an increase since 2003-04 of £138 million; in other words, 18 per cent. However, the priorities in the Budget have increased the administrative limits to £919.9 million per year, then £921.4 million, and £922 million for each of the next two years. That is a further increase despite promises of delivering efficiencies of 2.5 per cent. Will the Government be a little more ambitious in reducing the overall administrative costs?
Perhaps I may now turn to the section that refers to the Department of Regional Development and a topic which I have raised in this forum before; that is, the development of the Northern Ireland railway system. More significant funding is required for Northern Ireland Railways over the next few years. Consideration should be given to the expenditure for the years 2008-09, 2009-10 and 2010-11. The 23 new trains that are now in service have been a tremendous success. Already there is a 30 per cent growth in just over one year on the Portadown and Bangor lines. The additional capacity provided by the new trains has been fully utilised. East Antrim services continue to be operated by old trains and there is no growth on that line. In fact, if the truth were to be told, there is still a decline in passengers.
Northern Ireland Railways has demonstrated major successes already with these new trains and needs to replace the remainder of the fleet as quickly as possible. I believe that the further 20 plus trains could deliver the 60 per cent growth targets in the regional transportation strategy 2002-12. As a matter of urgency, I would ask Her Majesty's Government to look at an indicative funding requirement of around £100 million over the years 2008-11. I should like to pay tribute to the staff and management of Northern Ireland Railways. Having been set a target of 60 per cent over 10 years, to reach half its targets with the new trains inside 18 months is a tremendous achievement.
On the Department of Health, Social Services and Public Safety, what is being done to fund adequate numbers of GPs and registrars, and adequately fund those appointed to ensure that the Northern Ireland Medical and Dental Training Agency does not stop GPs and registrars receiving their car allowances after they have been appointed? In Northern Ireland, it is estimated that there is a need for between 75 and 90 trainee general practitioners annually. The department will fund only 50, but is committed to just 49. Then there is a refusal to pay the car allowance of around £4,500 per GP. Will the Minister confirm those figures and comment? When will the Department of Health, Social Services and Public Safety become part of the Doctors’ and Dentists’ Review Body so that it can give Northern Ireland evidence and accept the recommendations without the annual delay in implementing doctors’ pay awards?
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I shall turn now to the sections in Schedules 1 and 2 which refer to the Department of Culture, Arts and Leisure. As soon as July comes, with it comes the annual Civil Service rush to find money from anywhere to pass the West Belfast nationalist festival and its partners in Ardoyne and New Lodge. The past three years’ funds were not made available easily to Unionist groups and were paid at a rate of £9 to Nationalist and £1 to Unionist festivals. Despite assurances from the Minister last year that he would not support any funny-money funding, the officials are at it again. Just for the record, last year the Ardoyne Nationalist festival funding was paid out on the previous year’s application, and the names and dates had not even been changed. Of course, the Department of Culture, Arts and Leisure does not have a wonderful record of fairness or even good bookkeeping. It once managed to pay far too much unasked-for money to Nationalist festivals. Thisgoes against a background of the impossibility of obtaining meaningful resources for Unionist or Ulster Scots projects from the department. The tricks and double-talk used by DCAL to mess around and withhold funding from projects which are not Irish will be the subject of disclosures at a later date.
This year DCAL is caught banged to rights again. It is supporting a massive £700,000 sponsorship of Rally Ireland, which is of little value to Northern Ireland, while giving only £33,000 to Orangefest each year for three years to turn the Battle of the Boyne celebration on 12 July into a tourist festival, which will benefit us all—£700,000 for a little show against £33,000 for a massive contribution to peace. What is more, DCAL is urgently trying to find extra funding for the Nationalist festivals in Belfast, which already get the best part of £1 million a year. I want to make it clear that I am not opposed to Nationalist festivals. They are entitled to funding and I like to see them get it, but I would also like to see funds being handed out on a fair basis. I am certainly not against the West Belfast festival this year, as I propose to take part in it.
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