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21 Feb 2007 : Column GC63
Grand Committee
Wednesday, 21 February 2007.
The Committee met at fifteen minutes to five o’clock.
[The Deputy Chairman of Committees (BARONESS PITKEATHLEY) in the Chair.]
Budget (Northern Ireland) Order 2007
The Deputy Chairman of Committees (Baroness Pitkeathley): 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. This 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.
The Lord President of the Council (Baroness Amos) rose to move, That the Grand Committee do report to the House that it has considered the Budget (Northern Ireland) Order 2007.
The noble Baroness said: We are considering the draft Budget order today as a result of the continuing suspension of the Northern Ireland Assembly. We are hopeful that locally elected representatives will soon be taking decisions on public expenditure in Northern Ireland with the restoration of devolution. However, while direct rule continues, we are determined to govern in an open and fair way to improve the delivery of public services for the people of Northern Ireland.
The draft order has two purposes. The first is to authorise revised amounts of resources and cash for 2006-07. The total revised amount of resources for 2006-07 is £16.83 billion and the total revised amount of cash from the Northern Ireland Consolidated Fund is £11.194 billion. The second purpose of the draft order is to authorise a vote on account to allow funds to continue to flow to public services for the early months of the next financial year, until the main estimates for 2007-08 can be prepared and considered. To do this, the draft order seeks Parliament’s authorisation for the use of resources amounting to £6.217 billion, and for the issue of cash from the Northern Ireland Consolidated Fund amounting to £5.05 billion.
In general, the resource and cash amounts required on account for the next financial year have been calculated as 45 per cent of the total voted provision for this year. The vote on account is not intended to seek final approval of the allocations for 2007-08. Instead, it seeks sufficient resources and cash to allow services to continue until the detailed work on the main estimates for next year has been completed in the early summer. I will not attempt to summarise the high level of financial detail contained in the Budget order and supporting documents. I will try to answer any specific points of detail raised during the discussion.
The Government’s key objective in the use of expenditure continues to be the delivery of quality
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There has been an increase in real-terms investment expenditure of 43 per cent, or more than £300 million, on the amount spent just four years ago. The planned level of investment will continue to grow, with the investment strategy for Northern Ireland setting out a sustained capital investment programme for 2005-15.
On 1 April this year, we will see the implementation of the water reform programme which will deliver significant benefits both to the public and the Northern Ireland economy. Through the new Northern Ireland water company, the Government will be putting in place the framework within which sustained investment will take place to improve the quality of our drinking water, better protect the environment and radically enhance the delivery of water and sewerage services to customers.
Considerable investment is required to improve the water and sewerage infrastructure. The Northern Ireland Asset Management Plan 2 indicated that investment in the region of £3 billion, at 2001 prices, may be needed during the 20-year period from 2003. The introduction of domestic charges and the widening of non-domestic charges will establish a secure, reliable source of funding which will deliver the scale of investment that is required to improve the water and sewerage infrastructure and the service to the customer.
The water reform programme will also benefit other public services in Northern Ireland as resources previously required to fund water and sewerage services will be available to allocate to other areas. Ultimately, when charges are fully introduced, we expect this figure to be around £300 million per year—a substantial sum which will provide much needed extra funding for our hospitals, schools and transport systems.
We want to see society and the economy transformed by using public spending wisely to invest in the services that make a real difference to peoples lives—in health and education; in the lives of 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.
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Investment must be accompanied by radical reform of how public services are planned and delivered so that front-line services are more efficient and responsive to the needs of the citizens who use them. It is in this context, therefore, that the process of implementing in full the announcements made following the review of public administration has already begun.
This Budget aims to meet the needs and expectations of this and future generations in Northern Ireland through a combination of investment and reform. I commend the draft order to the Committee.
Moved, That the Grand Committee do report to the House that it has considered the Budget (Northern Ireland) Order 2007.—(Baroness Amos.)
Lord Glentoran: I thank the Lord President for presenting the Budget as she has. I take the opportunity to welcome her back to the seat that she enjoyed for some time in the past and congratulate her on the speed with which she flew in from Iraq.
Traditionally, we use this debate as a general discussion on the Northern Ireland economy. It is the only real economic debate that we have, bearing in mind that at this end of the Palace we usually do not deal with budgetary matters. However, there are a number of issues that I am sure noble Lords will want to raise. I should like to raise some general points.
First, let us hope that this is the last time that we are asked to debate the Northern Ireland Budget. I have said that several times before, but I sincerely hope that we have arrived at the end of the road. Nevertheless, let us take a brief look at the general state of the Northern Ireland economy. People are saying that the economy is in a strong state, and it is. But I should like to be reassured that the Government, while they are in control, are aware of and taking action on a number of areas that could give cause for concern.
We currently have low unemployment—the last quarter of last year was the lowest I have seen—but it is starting to edge up again. House prices have risen at a faster rate than anywhere else in the United Kingdom in the past three months. It is already causing a significant problem for first-time buyers, a problem which has also been felt elsewhere in the United Kingdom. People are saying that a generation gap is about to appear, with a whole generation of first-time buyers unable to get on to the housing ladder. It is very important that those who are currently responsible for running the country look at the issue, make a plan, and deal with it. I declare an interest as a member of the National House-Building Council and chairman of the Northern Ireland committee.
In previous years we have talked in this debate about public servants’ huge dependence on the economy and the public sector input to the economy. Those numbers are still way above anything that could be considered safe, solid and sensible. Although the Government have talked about that a lot, as far as I can see they have done very little to change the balance.
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We are also in an era, which is the same on this side of the water, where bank rates are rising—they have risen quite quickly recently—inflation is undoubtedly rising and significant indirect taxation has taken place. That is coming through now and—in my simple opinion; I am not an economist—is forcing the inflation rate upwards. With the addition of the on-costs of the water rates and rates, another indirect tax, I can see that the whole economy will be under enormous pressure. I should like to hear the Government’s ideas on how to manage that. Our economy has benefited considerably from the rich economy of the south and a lot of cash is still flowing northwards. In the 30 to 40 years in which I have been involved in business in Northern Ireland, the economy has always fluctuated one way or another. At the moment, Northern Ireland is benefiting from the strength of the economy in the Republic. But I would like to feel that actions are being taken to move our economy upwards and for it to be strengthened.
In opening, the noble Baroness mentioned the review of local administration. I have complained before from this Dispatch Box about the lack of movement and the huge waste in the administration of Northern Ireland. It is a classic example of serious over-government, over-regulation and over-bureaucracy. It needs to change. I know that the plans are there and that we are talking about reducing the number of local authorities from 26 to seven and streamlining the hospital trusts and the education and library boards. But when will it happen? How quickly will it happen? When and what benefits will feed into the Northern Ireland Budget system?
Further, the key cash eaters of our Budget, as they should be, are education, health and to some extent the environment. We know that the number of pupils in full-time education is dropping significantly year on year. I believe that 80,000 places are unfilled in the education system. I thank officials for helping me with that figure yesterday, and see one of them nodding now. That calls for quick rationalisation. We do not need the same number of teachers for 80,000 fewer pupils. Where is the rationalisation? When will it come? Health is also an eater of cash. My view of the health service in Northern Ireland—as an only occasional user, thank goodness—is that it is still nothing like as good as it was 25 years ago. It, too, is over-administered and over-governed.
5 pm
I turn to another bête noire of mine: the amount of money that is very often wasted on spin—on selling spin. I have in front of me the House of Commons Hansard from 19 December 2006, which contains a
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I would be grateful if we could have an explanation for those figures. It is one of the areas that I have been complaining about. The waste of money on consultations, dressed up glossy documents and the money spent on consultants is all part of the heavy, over-bureaucratic administration that we have been complaining about for some time. With those few words to start with, I leave it to my colleagues to continue.
Lord Shutt of Greetland: I thank the Minister for her statement and congratulate her on the way in which she is able to jump so quickly into discussing Northern Ireland from her previous involvement in the Chamber. I have been looking back at what I have said on this on previous occasions. We always start by saying how unsatisfactory this is, and of course it is. I said previously that we could spend on these matters every day for six weeks and still not scratch the surface of some of it. However, could this really be the last time that we have to meet like this? I am working on the basis that it might be; you never know.
As far as the Budget book is concerned, the die is cast. There are five weeks to go before the year-end, and I do not think we can say too much. I am delighted that the noble Lord, Lord Glentoran, has taken a page or two out of my book and has ferreted about. I took the view that I would not do that this time, unless it referred back to something that I had spoken about earlier, so there will be no new ferreting by me, although I am sure that would have been possible. Of course, the die is cast, and 2007-08 is based on 45 per cent of 2006-07, and we need—we hope for—a Northern Ireland Budget in Northern Ireland in June to look at the further 55 per cent and at the disposition of those resources.
I will return to some of the issues that I have referred to previously. Three years ago, I raised the issue of the budget of the First Minister and Deputy First Minister, which at that time was £50 million. That includes money for taking initiatives. When the Assembly was up and running, initiatives were taken by both the First Minister and the Deputy First Minister.
Also under that heading are some of the things that I thought were copper-bottomed by the Belfast agreement. One is the civic forum, which was basically shut down apart from a bit of ticking-over money. What will the system be for getting that up and running again? It was part and parcel of the Belfast agreement, and it should be up and running again. There should be such involvement. Indeed, it is
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I recall referring to the budget for Northern Ireland Railways. On one occasion, when the Minister was answering, I referred to tourism and asked whether there were any resources in the vast tourism budget for promoting the line from Belfast to Londonderry, particularly the western parts, which are incredibly scenic. I do not know what happened. Did anything happen? Something must have happened. The noble Lord, Lord Laird, of Artigarvan, is not here today because of illness, so we may not be treated to words about the sins of Irish waterways. As noble Lords know, he is assiduous about asking questions. One of his questions highlighted that fact that, in the past five years, there has been a 50 per cent increase in passenger journeys on that railway line. What is the position now that Northern Ireland Railways has new rolling stock and has shown that it can achieve a 50 per cent increase in the number of passengers and that the customers will come? Where is the money? Has anything been done in this period to enhance the rolling stock? Enhancement was only partial when the new rolling stock was brought in. Where are we with replacing the other rolling stock? Indeed, it is often said, particularly in the Republic, that the frequency of the railway service between Belfast and Dublin should be doubled. That can happen only if the rolling stock is there, so is there any news on whether any work has been done on that?
I have referred to Ulster Savings two or three times. Ulster Savings will no longer be seen in this Budget book, but there was a savings scheme in Northern Ireland, which has now closed. Efforts have been made to trace all the people who had deposits in it, but those efforts have stopped. Even after ferreting about and looking for people, £8 million of assets are still unclaimed. There are no longer any staff in the organisation; it has been closed. I made the point that Northern Ireland money that is dormant in Northern Ireland should be used for that community. I also said that a splendid destination for it would be the Community Foundation for Northern Ireland. I made several points about this to the noble Lord, Lord Rooker. On 4 July 2005, he said, in effect, that I would have to wait for Mr Brown. I am not certain about that. I know that work is being done on unclaimed assets throughout the UK, but is this devolved money or is it Treasury money? It was in this Budget book previously, which leads me to think that it is devolved money.
For example, the moneys for the police are not in this book; we understand that. However, Ulster Savings was in this book. That needs looking at urgently. I do not want to lose it. Without speculating too much about the election, I think that we know where things stand. It is one thing the noble Lord, Lord Trimble, and the UUP being in business with the SDLP; it is rather different as regards the DUP and Sinn Fein. This is clearly uncharted ground. I am fearful of a
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I referred earlier to education and here I shall consult the Budget book. These Benches consider that it is right to look at integrated education. I cannot fathom what is meant by the wording on page 54, which states:
“All Voluntary and Grant Maintained Integrated Schools: to reduce provision in subhead A11/3 by £19,812,000. This is mainly due to a reduction of £34,438,000 reflecting a reprofiling of infrastructure expenditure to future years”.
“Reprofiling” is a popular word. “Reconfiguration” is also used. I do not really know what they mean, but I do not think that they mean enhancement. They either mean a delay or a cut. In setting out the Budget are the Government doing all that they can as regards integrated education? It does not sound like enhancement to me. My noble friend Lord Smith asks where the Bain report is going in the whole area of education and what savings it proposes through amalgamating schools.
I believe that one of my questions has been partially answered in that the domestic rates and water charges will result in a neutral effect for 2007/08. I believe that the long-term effect will be some £300 million. Will that figure arise in 2008-09 or will it be introduced gradually? Where do we see these savings? When will this major change have a positive effect on the Budget?
Looking ahead positively, I refer to policing. Policing is not mentioned in this document because it is not devolved. However, if it were to be devolved, on what basis would it be devolved financially? Will Northern Ireland be treated like Scotland in that the Barnett formula will apply, bearing in mind the incredibly enhanced moneys for Northern Ireland? Will Northern Ireland pick up what it is due on the basis of the Barnett formula in the same way as Scotland, or will it do so on another basis? These are very substantial resources—£16 billion. I trust that the Assembly will use that money wisely and look at the totality of the diversity that makes up Northern Ireland. That is its task.
Finally, I thank the officials, with whom I had a short meeting yesterday, for the help that they gave on the points that I raised.
Lord Trimble: This is a rather curious thing to be called a Budget. Normally, when you think of budgeting, you think about what your income will be, where you are going to get it from, the total of that income, and then you think about expenditure. At least one hopes that you think about it in that order. If you think about it in a different order, it can be embarrassing. But this document, called a Budget, is merely parcelling out expenditure; so it is not a Budget in the real sense. That may be because the financing of Northern Ireland operates in a different way. There are, however, a couple of sources of income that would be under the control of the devolved Administration, if there were one: the regional rate, water charges and others. But in
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5.15 pm
There is a point in making these observations. An election is going on. I do not want to fight it here any more than anyone else does, but I do note that some of those fighting the election are making a lot of noise about the need for additional resources to be given to the devolved Administration. Some months ago the Chancellor was persuaded to make a statement, although I am not sure it involved additional resources. But these parties are now calling for even more money. The Minister is undoubtedly aware of that. I would appreciate her observation on this. It is not as if—I hesitate to say this—public expenditure in Northern Ireland is currently ungenerous. But the begging bowl is being rattled and it would be interesting to see the reaction to that.
As the Budget order involves expenditure across departments, it has been traditional for those of us from Northern Ireland who take part in these debates to use them as an opportunity to raise specific issues. I shall do so but I shall be restrained; rather than gathering up all my hobby-horses, I shall pick up only two. The first—if I need to justify raising it—comes under the heading of the Department of the Environment with regard to conservation planning services, and so on, in the hope that something can be done to increase the effectiveness and efficiency of the Planning Service. I think that this comes down to additional expenditure. The Planning Service has had to deal with a tremendous increase in the number of planning applications, which is partly a reflection of the increased prosperity and is therefore welcome. But the service is having great difficulty coping with the work.
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