Arlene Foster
Fermanagh and South Tyrone · Ulster Unionist Party · Northern Ireland
“Yet, like too many projects, it has been tied up in legal wrangles. Too many infrastructure projects are being swallowed up in the courts. We need to improve the expertise in infrastructure delivery. We need better infrastructure for the next generation, but key projects being delayed by 10-plus years is unsustainable.”
“Any agreement involves compromises but NDNA had two central pillars that, I believe, remain important: ambition for devolution and a new cultural deal. The breadth and depth of issues that NDNA set us all to deliver on would have been enough to fill an entire term or perhaps more, let alone two years of government.”
“That confidence-and-supply agreement will leave a legacy but also highlights our challenges. Some £150 million has been rolled out via Project Stratum to bring broadband to rural areas and leave Northern Ireland as the best-connected region in Europe. When it is completed, the project will be transformational to our economy.”
“However, such short-term advantage comes at the cost of long-term harm to relationships. It is not a real partnership. Imbalance and instability are built in that will fester and deteriorate. If Brussels continues to think that the protocol is enough, it is in denial.”
“Colleagues inside and outside the House know very well that all periods of leadership must come to an end. That is why, when we are privileged and, indeed, honoured to hold such a position, we must not waste a moment in frivolous brinkmanship but forge ahead on behalf of those whom we represent.”
“The recommendations of the Commission on Flags, Identity, Culture and Tradition (FICT) are to be taken forward as well. I encourage all of you to do all of it, to take it forward in its totality and to speak of and implement it as one complete, independent package: a new cultural deal for Northern Ireland's new century.”
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“That demonstrated the public interest in what were seen to be excessively generous levels of redundancy pay-offs available in the public sector. There is a genuine need to ensure that exit payments funded from the public purse are seen to provide value for money for the taxpayer. The vast majority of individuals working in the public sector will not be affected by this restriction; only those with the very highest value exit packages would be affected by the cap. By way of example, in the current Northern Ireland Civil Service voluntary exit scheme, only 1% of over 7,000 applicants would have breached the cap.”
“<BR /> <BR />Other payments that are outside the scope of the cap will include payments for incapacity or death as a result of injury or illness; payments made under regulations for the firefighters’ pension scheme where the Northern Ireland Fire and Rescue Authority has determined that an individual should be retired with an early retirement pension in accordance with the fitness provisions; payments for leave due under a contract of employment where that leave is not taken; bonus payments otherwise due under a contract of employment; and payments made in compliance with an order of any court or tribunal. <BR /> <BR />Members will be familiar with the press coverage earlier this year given to large exit packages associated with the merger of local councils.”
“It should be noted at the outset that the restriction being proposed will not affect any pension that an individual has already accrued and paid for by member contributions. What is proposed is a cap on any additional funding paid for by the employer as part of an exit package. This has not been paid for by the member. It is an additional cost that is met solely by that employer and, ultimately, the taxpayer.”
“While exit payments must be reasonable and fair to public servants, we have to be mindful that these costs are met by employers and, therefore, have an impact on what can be spent on the delivery of services. The measures in the Enterprise Bill will ensure that principles for fairness, proportionality and value for money should determine how these choices are to be made. <BR /> <BR />It is proposed that the early exit payments in the scope of the restriction will include the range of employer-funded exit payments made on exit, including those made on account of dismissal by reason of redundancy, for voluntary exit, and to reduce or eliminate an actuarial reduction to a pension paid early.”
“The Enterprise Bill was introduced in the House of Lords on 16 September 2015. It contains provisions on a range of business-related initiatives. It also contains measures that would end six-figure public-sector exit payments by capping the maximum payment that an individual exiting the public service on early exit or redundancy terms can receive at £95,000. The Bill has completed its Report Stage in the House of Lords and is expected to receive Royal Assent by April 2016, with the necessary regulations being in place by summer 2016. <BR /> <BR />The matter before us today poses a relatively straightforward choice. How much do we wish to spend on exiting public servants, and how much do we want to spend on providing public services?”
“Perhaps he could read the report. <BR /> <BR />I consider that, in the year ahead, we have created the right risk balance, which is a key challenge for Ministers, Departments, the Audit Office and the PAC. I want to thank virtually everybody for taking part in the debate.”
“He says that he wonders why. Perhaps he could read the report.”
“Some people in the Chamber cannot accept that that is the case, but I am sure that he will if he reads it again.”
“<BR /> <BR />In respect of primary care prescribing, that matter was raised by Mr Beggs and Mr Clarke. DHSSPS has informed me that the Health and Social Care Board is taking forward the development of a three-year medicines management strategy. Workshops to inform that are being held and will provide the material to develop that strategy. <BR /> <BR />Mr Wells referred to tackling social housing tenancy fraud in Northern Ireland. DSD has assured me that it realises that this is a very serious issue and has taken a number of steps to deal with it. Using the Audit Office formula, in the year 2013-14, DSD has made £2 million of saving in respect of the fraud issues. <BR /> <BR />Finally, Mr Flanagan and Mr Allister referred to the Bytel project, which, of course, was before my time as Minister.”
“Internally, they are monitored by departmental audit committees and internal audit annually. The Audit Office carries out an impact assessment against commitments. So, I want to assure Mrs Kelly and the House that, once commitments are made, they are monitored. They are not just ignored and forgotten about. They are taken very seriously by Departments. <BR /> <BR />Mr Beggs went on to talk about managing and protecting funds held in court. Again, with regard to strengthening governance arrangements for the Court Funds Office, revised terms of reference for the judicial liaison group are under consideration by the Northern Ireland Courts and Tribunals Service and action is being taken to identify a consumer representative to attend meetings of that group. So, matters are under way there to deal with those commitments as well.”
“The Department of Justice informed me that it is making good progress and that three of the six PAC recommendations have been fully implemented, including identifying an individual's ability to pay, improved governance arrangements and control structures, and regularly reconciling warrants issued to the Police Service of Northern Ireland. So, work is proceeding in relation to those issues as well. <BR /> <BR />In relation to Mrs Kelly's point about the follow-up on commitments made by various Departments, it is, of course, a matter for accounting officers to ensure that the PAC commitments are implemented. DFP has established a database that records commitments, and Departments update progress against those. So, we have a live database, if you like, that looks at those.”
“Long-term affordability of borrowing is something that DFP has been monitoring for a number of years now. My predecessor provided a draft borrowing strategy to the Executive outlining the longer-term affordability of borrowing and how it might be managed. Those are issues that are routinely discussed by the Executive in the context of its Budget process, and they will no doubt be discussed in the very near future around that issue again. <BR /> <BR />Mr Girvan referred to the Committee's report on the Northern Ireland Courts and Tribunals Service trust statement for the year ending 31 March 2013.”
“No one could but argue that we must continue to encourage and support best practice in financial management and in relation to the proper conduct of public business, but, in seeking to make the improvements in the efficiency and quality of services provided to the public, we must provide balance to ensure that the system does not become paralysed by the fear of potential failure or adverse PAC or, indeed, Audit Office criticism. <BR /> <BR />I will move on to some of the issues that were raised by Members. The Chair concentrated her remarks on Belfast Metropolitan College's Titanic Quarter PPP project. My Department is content to work with OFMDFM and the Strategic Investment Board on improving the way in which PFI savings are examined. Anything that aids transparency in what, I acknowledge, is a very complex area is to be welcomed.”
“While I welcome the Audit Office guide on conflicts of interest, my Department has recognised the need for further guidance in the area. As such, officials will be developing specific guidance on conflicts of interest, which will draw on various sources already available, including our own 'On Board' guide, the lessons learned through the Public Accounts Committee and the Audit Office’s good practice guide. <BR /> <BR />Overall, to summarise the last year, much positive work has been done that will assist Departments, the Audit Office and the Public Accounts Committee in the performance of all their respective audit duties. We are, however, moving into challenging times — we should reflect on that — which will see unprecedented change.”
“<BR /> <BR />My officials have circulated the Audit Office guide on whistle-blowing to all accounting officers. That was done alongside the provision of some other additional points of good practice that arose from hearings held by the Committee. It is considered that that package of guidance will help to support earlier guidance we provided that focused on developing and promoting organisational whistle-blowing arrangements. <BR /> <BR />We fully recognise that conflicts of interest must be identified and effectively managed by public bodies. That needs to be done to ensure that public confidence in the delivery of public services is maintained and, indeed, that the integrity of staff and board members is safeguarded. As we well know, integrity is one of the seven key principles of public life.”
“The guidance will also incorporate the valuable lessons that have been learned from various investigations considered by the Committee. Additionally, the recently published Audit Office guide, which I referred to earlier, draws on existing good practice on how to manage the risk of fraud during periods of organisational change. The guide, which is entitled 'Managing Fraud Risk in a Changing Environment', has been issued by my Department for other Departments to consider. <BR /> <BR />I also want to mention two other good practice guides published by the Audit Office over the course of the last year: 'Whistleblowing in the Public Sector', which was issued in conjunction with other UK audit authorities; and 'Conflicts of Interest'. Those are both important issues that have been raised by the Committee on numerous occasions.”
“The new service sits within my Department and has been established following a commitment given to the PAC in response to its report on Northern Ireland Water's response to a suspected fraud and DRD's review of a whistle-blower complaint. The group service is now available to NICS Departments, agencies and arm’s-length bodies to utilise where fraud investigations are required to be undertaken. Since April, the group service has taken on over 20 investigations on behalf of Departments and other bodies. <BR /> <BR />With the establishment of the group fraud investigation service, fraud investigation procedures have been developed and are being refined. My Department will use those operational procedures to issue further guidance to the wider public sector in the near future.”
“That said, we should not be complacent about such issues or about the wider risks associated with change. <BR /> <BR />Indeed, as the Comptroller stated a couple of weeks ago when publishing a good practice guide, it is a widely accepted principle that during periods of significant change the risk of fraud escalates. I know that fraud has been a key theme that has featured in a number of Audit Office and PAC reports in recent years. It is timely, therefore, that, with regard to fraud investigation capacity within the Northern Ireland public sector, I am able to confirm that a group internal audit and fraud investigation service for Northern Ireland Departments has been established with effect from 1 April this year.”
“Indeed, the Comptroller and Auditor General's recent report — a report that aims to provide assurance to this House on the use of public funds — states that there has been improvement since last year in the number of accounts receiving qualifications and that the standards of financial accounting in Northern Ireland remain high. This is something that we should remember when considering cases where the expected standards have not been applied. Such cases, important though they are, should be considered within the context of the wider Northern Ireland public sector.”
“<BR /> <BR />Turning to the general audit process — and linked to my earlier comments on the fear of audit or PAC criticism becoming a key, sometimes overriding, concern — it remains important that we do not lose sight of the fact that many of the issues raised in value-for-money and PAC reports, while providing valuable lessons that can apply right across the public sector, tend to be specific to an organisation or project. In many cases they are not representative of the high standards of governance and accountability that operate across the wider public sector.”
“My predecessor, Simon Hamilton, asked departmental officials to revisit the guidance in this area to address the imbalance and to clarify for Departments the circumstances in which Ministers may wish to make comment to the media to ensure that a balanced view is portrayed. <BR /> <BR />I am aware that the Committee had some concerns about that guidance and that the previous Treasury Officer of Accounts attended the Committee in September to discuss them. However, I am fully satisfied that the revised guidance continues to recognise and respect the role and standing of the Public Accounts Committee and remains broadly in line with the formal position adopted by Her Majesty's Treasury.”
“My officials have worked hard with Departments to ensure implementation of the new guidance and believe that the overall quality of responses contained in the MORs has improved. I hope that this is a point on which the Committee would agree. <BR /> <BR />A final piece of guidance issued by my Department in September was in connection with the public audit process and commenting in the media. At the outset, I would like to say that I fully agree with my predecessor's view that, on occasions, the publicity surrounding reports was unbalanced and appeared to sensationalise certain aspects of reports for maximum media effect rather than provide a fair and balanced view — a bit like Mr Allister's contribution today.”
“I have no doubt that it also has an adverse impact on Committee preparations for evidence sessions. Perhaps we can all give some thought to reducing occurrence of this in future if it continues to be a problem. <BR /> <BR />I would also like to mention a further set of protocols agreed between my Department and the Committee for the handling of memoranda of reply. This work finished earlier this year and, again, was the product of very constructive engagement with the Committee, and I thank the Committee for its input. The protocols, as the Committee will be aware, included new guidance for the preparation of memoranda of reply. This was aimed at ensuring that MORs provide clear, direct and succinct responses to the Committee’s recommendations.”
“In the meantime, and in line with the new protocols, I expect that Departments will work constructively with the Audit Office in the production of value-for-money reports. <BR /> <BR />That will be important for the timely publication of Audit Office reports. On occasions, reports have been published very close to the dates scheduled for evidence sessions by the Committee. This has become more common over the last year or so, with some reports having been published just over a week in advance of PAC hearings. I believe that this places undue pressure on all concerned. It certainly places a lot of pressure on Departments, which, at the same time as going through the Audit Office clearance process, have to prepare for an appearance before the Public Accounts Committee on a report that can change right up to the very end.”
“It is considered that the protocols, which were issued in April, will provide for a more streamlined and timely clearance process for the Departments and the Audit Office in relation to the production of evidence-based, value-for-money reports. The overall aim, of course, is to produce a better product for consideration by the Committee. <BR /> <BR />To promote those protocols, the Audit Office and the Treasury Officer of Accounts held meetings with departmental accounting officers to discuss the key points and implementation of the new guidance. I understand that this was seen as a positive development by those involved. My officials will monitor the effectiveness of the new protocols with Departments over the next year.”
“The production of Audit Office reports is the first, and undoubtedly key, stage in the overall public audit process. After all, the scrutiny of officials by the Public Accounts Committee starts with the Audit Office value-for-money report. We all recognise and agree the importance of timely, accurate and agreed Audit Office reports as the basis for the Committee's evidence sessions. At times, that has been a challenging process for all concerned. Since the last debate, my officials have engaged constructively with the Audit Office and have agreed protocols and guidance for the agreement and clearance of Audit Office value-for-money reports.”
“I think that the Public Accounts Committee has a key role in ensuring that Departments, agencies and other public-sector bodies are able to embrace the change without the fear of Audit Office or PAC criticism being foremost in their minds, or indeed overshadowing them — or worse still, inhibiting the changes and reforms that are very necessary. <BR /> <BR />In that context, I think that some of the recent work undertaken by the Department in conjunction with the Public Accounts Committee and the Audit Office since last year's debate will assist in this. It will also help to improve overall working relationships and strengthen the public audit process. I want to take a few minutes to update Members on the nature and outcome of some of that work. <BR /> <BR />First, there is the clearance of Audit Office reports.”
“We need to acknowledge and recognise that, in managing change and the risks that emanate from that, we may not always get everything right. However, change has to be made, and it has to be taken forward responsibly. While we should be held accountable for all that we do, that does not mean that we should become risk-intolerant or risk-averse. For me, that would be the very worst thing that could happen. <BR /> <BR />I hope that the Committee will agree with me that, in times ahead, we need to embrace new ways of doing things and apply innovation and creativity where possible. However, as I have just said, that will not be without risk.”
“The review, which is being led by the Organisation for Economic Co-operation and Development (OECD) is due to report by the end of this year, and that report is going to really help us shape the future of the reform programme and inform the new Programme for Government for the 2016-2021 period. The focus will produce an outcomes-based approach that will help to ensure that the investments we make produce positive results in the areas we aim to address. So, it is not so much about looking at the process but looking more at the output. <BR /> <BR />Organisational change is therefore going to be part of our daily life in the public sector in the future, and it is something that Members in the House will have to get used to. During periods of significant changes, there will be new challenges and risks that will arise.”
“There are several ongoing projects and initiatives aimed at delivering public-sector reforms. They include the Northern Ireland public sector innovation lab, launched just last year, and the digital transformation programme. My departmental officials are fully engaged in both programmes. <BR /> <BR />As well as tackling the immediate operational challenges, reform must address the Executive's longer-term aims and identify and develop innovative and cost-effective ways to achieve these. Recognising this, we have agreed to a strategic review of public-sector reform in Northern Ireland.”
“Within that context, there remains an ongoing need to achieve efficiencies in service delivery, and last week's national spending review indicated that the Northern Ireland block will remain very constrained over the next five-year period, particularly on the resource side. Departments will therefore have to deliver these efficiencies within reduced baselines, and I hope that bodies such as the Audit Office and, indeed, the Assembly will play their part in delivering efficiency improvements. <BR /> <BR />In service delivery, I believe that reform is an essential factor in shaping how services are delivered for Northern Ireland in the future. It needs to be driven, not only by the budgetary position but by the need to transform how we develop, design and engage on the delivery of all public-sector services.”
“There has already been significant change achieved through local government reform. During 2016, the number of Northern Ireland Departments will reduce from 12 to nine. However, I believe that the new local government landscape, and the new departmental structures coming into force next year, will improve how government interacts with key stakeholders and will help deliver better and more efficient government for the people of Northern Ireland. <BR /> <BR />On top of this changing landscape, continuing budgetary pressures have led to significant staff reductions across the public sector, and this is set to continue.”
“Members are already all too aware that the months and years ahead will be crucial for Northern Ireland. Our public sector is undergoing a period of unprecedented change on a number of fronts.”
“Thank you very much, Mr Principal Deputy Speaker. As you and the House will know, this is my first experience of a Public Accounts Committee debate as Minister of Finance. One wishes that some Members had read the papers before they came into the House. Clearly, they cannot read some of the dates in some of the reports. However, that is a matter for them. <BR /> <BR />Before I move to the main business of the debate, I would like to acknowledge the work undertaken by the Public Accounts Committee and the Northern Ireland Audit Office since last year's debate. Much work has been done, and there is a lot to discuss. <BR /> <BR />I would like to make some general comments from a finance perspective that will set the scene for the coming few years.”
“Well, I would hardly call it dramatic, in relation to not having a monitoring round in January, given that we will be setting the Budget for next year and that I have said that, if anything comes forward, we will deal with the issue. I am not being prescriptive in relation to the January monitoring round. If there is a need for a January monitoring round, we will deal with it. I say to the Member, if he has concerns in relation to the Department of Culture, Arts and Leisure, it is a matter for the Committee. The Committee needs to take action in relation to that, not me.”
“And his failure to agree with welfare reform, which we are about to debate, which would squander millions upon millions of pounds, £114 million this year and £196 million next year. We look forward to his contribution to the debate on welfare reform, which is to come now.”
“Oh, is that the question? Sorry. I wish that people would read the 'Fresh Start' document. I wish that people would see that not only have we principles in respect of paramilitarism and criminality but that we have a plan to deal with it through the strategy; that we are taking action through the joint task force; that we have been allocated £160 million for the Police Service of Northern Ireland; and that we have allocated £25 million in respect of setting up a body to deal with paramilitary activity. So, while he might want to talk about paramilitary activity, some of us are taking action in relation to paramilitary activity, and he can sit back in luxury and do nothing as usual.”
“He is right that that helped us to have money to allocate. I commend colleagues for abiding by that direction. This is an issue that his ministerial colleague raised with me. Now that we have made allocations, the key point is that people live within their controlled total. That is a matter for each Minister. The ministerial letter from me is probably out of date because I have made the allocations. Therefore, it is a matter for each Minister to live within them, and I encourage them to do so.”
“The draft order process is entirely a matter for the Regional Development Minister. I am sure that she will have heard what the Member had to say. The reason I mentioned the large-scale projects in the new budgetary process is that if we set a one-year Budget, often that will not allow us to plan ahead. When we are thinking about that Budget and planning ahead, we should, at least, identify a number of large-scale projects that we will be able to roll forward into the next Programme for Government. Otherwise, we would be wasting a year's planning. That is the sort of thinking that we have at this time, but of course that will be a matter for discussion with Executive colleagues.”
“I thank the Member for his welcome in relation to the allocation to DRD. As I said, and he is fully aware of this having been the Minister for Regional Development, we have an incredible pressure in relation to capital funding. That is why I am glad that we have at least been able to allocate £5 million in capital funding, and £11·5 million for essential roads maintenance. <BR /> <BR />Whilst we would all wish it was more, and would hope to have access to more money for the construction industry, this will be welcomed. I only wish that we had more money to give to the Department. However, I know that the Minister for Regional Development is very content that we have been able to plug at least some of the gap in her budget.”
“As the Member is aware, there is a consultation, which I think is still ongoing, on childcare, and it is hoped that, once the consultation is finished, we will be able to chart the way forward for childcare. Childcare is one of those issues that, frankly, no Department wanted to take ownership of. OFMDFM had to step in and take ownership of the strategy and is now moving forward to make sure that it will be well resourced and well dealt with in the future. I agree with the Member that an effective childcare strategy unlocks a lot of issues, not least the economic potential of those people who would otherwise have had to stay at home and been unable to access the world of work. In the future, we will be sympathetic to any money being sought for a childcare strategy.”
“I thank the Member. The issues that he raised about the TB strategic partnership group are not matters for me but for the Department of Agriculture and Rural Development. I am sure that, if the Minister wants to bring an issue to the Executive, it will be considered by all her colleagues. It is good to be able to allocate £3·9 million to DARD for the TB compensation scheme and £1·1 million to DCAL for its health and safety obligations. That is the budget line under which those have been allocated.”
“Indeed, the police returned nearly £20 million during this exercise. However, in the Department of Justice, as I am sure the Member is aware, there is quite a large hole because of legal aid pressures. It was felt, therefore, that that money should be used to deal with those pressures. With budget management, I am sure that he will know that one of the benefits of a quiet summer is that we have money available from the Police Service of Northern Ireland. Frankly, I would rather that we had a quiet summer and money to reallocate in October monitoring than the alternative. Whilst DFP stands ready to assist Departments or arm's-length bodies in any way, I am sure that the police would say exactly the same about the situation.”
“As I indicated, I can allocate only the money that I have. Indeed, I have overcommitted in resource DEL and capital DEL. However, we have been able to deal with quite a number of bids, as the Member could see from those that were made. I did not receive a bid from DSD in relation to the matters that he raised, and I cannot allocate unless I have a bid. However, as I indicated, if bids come forward and we have money available in January, we will certainly look at those bids.”
“We had the £114 million of welfare fines and all the consequences relating to that, and, because of the Stormont House Agreement, we now have all the flexibilities that the Budget was predicated on, and more, because, as you know, Mr Speaker, we have been able to achieve more money for the Executive through the Stormont House Agreement and Implementation Plan. So, that is good news for Northern Ireland, and it just shows what hard work, determination and taking responsibility can do.”
“We all remember back to June of this year, when a number of Members took great delight in telling me that I was setting a fantasy Budget. It was not a phrase that I was particularly fond of, I have to say, and I hope that those who doubted the good efforts of us all will now reflect on what they had to say. Back then, we had the pressures of not having access to the voluntary exit scheme money, and, as well as not having access to that money, we could not benefit from the in-year savings that we have now been able to achieve.”
“Yes, the £500 million that was negotiated last year is still there, as are all the flexibilities and money allocated from last December. What we have been able to achieve in the current negotiations is more flexibility in relation to that money, but, principally, the subject matter is still shared education and other ways of moving Northern Ireland forward in a shared and integrated way. So, I hope that the party that she represents will welcome that; and it will allow us to move money around for a better future for everyone.”
“I thank the Member for his question. If I am not exhausted by now after the talks process, I will never be exhausted. Financial transactions capital is different from other capital funding, in so far as it only has to be allocated in this financial year; it does not have to be spent in this financial year. Therefore, I am confident that it will be dealt with. It takes it off the balance sheet, and that is why it is a very useful way of dealing with the issue. So, they had asked for in and around £10 million more, but that was all that we had to allocate. So, we have allocated it now, and, therefore, it is gone. It is off the sheet and it does not have to be spent by the end of this year.”
“I, too, welcome the proposal for an independent fiscal council. I think that it will give us a fresh and new look at how we approach financial settlements here. Of course, we have already asked the OECD to report on what is happening here, and I hope to have that report towards the end of this month or at the beginning of next month. That will give us a starting point for our financial processes, so I welcome it. If we recognise that we do not have a monopoly on the wisdom in how we deal with things, we should not be afraid to listen to outside, independent views on how we do things.”
“As I said, we are now in a very tight situation because of the turnaround for next year's Budget. We have the comprehensive spending review next week, on 25 November. We then have a very short time to set the Budget for 2016-17. I believe that we have addressed the highest priority pressures in this monitoring round. I do not currently envisage a huge amount of money becoming available to warrant another full monitoring round in this year. However, if money becomes available, I will keep that position under review. We have agreed that there will be a technical monitoring round in January, so, if any issue arises in the interim, we will be able to deal with that there.”