Official Report: Minutes of Evidence

The Chairperson (Mr Maskey): Andrew, are you happy enough? You have the same team.

Mr Andrew Hamilton (Department for Social Development): I will hand over to Deborah.

Ms Deborah Brown (Department for Social Development): Thank you for inviting us to give you our proposals for the December/January monitoring round. Inputs for this final monitoring round are submitted to DFP in two stages. The initial stage covers the transactions that do not require Executive approval, and those are due on 3 December, and then there are transactions that require Executive approval, such as the bids and the reduced requirements, and that is due to be with DFP on Friday 2 January.

The first stage involves mainly technical issues and straightforward adjustments to budgets within and between the business areas and also includes our annually managed expenditure (AME) forecast for 2014-15. We passed the details to the Committee Clerk, and I hope that you found those helpful. I want to highlight the fact that we cannot consider the stage one in isolation, due to the aspects of the stage two; therefore, we look at both of those exercises as one. As is always noted, there can be changes to the figures that have been provided, and our proposals today are presented on the position as is. If there are any further changes, we will write to the Committee outlining those.

Moving to the proposals, you will see from the table that you were provided with last week that, in housing, we have a proposed reduction and a reallocation. We were proposing to offer up £4 million that has been provided as part of the housing association grants receipts and asking for £4 million of capital to be redeployed back to the Housing Executive. As we mentioned in the previous briefing, we are currently considering a voluntary early retirement scheme from the Housing Executive, and we are working through what that might look like and what costs would be incurred in the current financial year, and we may be submitting a bid. In that event, we will come back to the Committee with details.

We are declaring a reduced requirement on our depreciation and impairments of £2 million. We are also surrendering some moneys on the Social Security Agency. In the last round, you may recall that we were surrendering cuts of 4·4%. There was a risk that that 4·4% would increase to 6% and, as a consequence, the Department held back easements that were sitting on welfare reform, arguing that that would be contributed towards the cut rather than being given over and above the 6% cut.

As the cut was levied at only 4·4%, we are now in a position to release all of those funds. So, you will see that £10·5 million, which was essentially the element that was held back, now being surrendered from the Social Security Agency, in addition to another £2·3 million. We are also surrendering housing benefit reduced requirements of £3·5 million.

That is just a quick overview. I am happy to take any questions on the detail of that if the Committee requires it.

Mr Allister: Have you any bids?

Ms Brown: There is the early retirement scheme that the Housing Executive is considering at this point, but we do not have any bids.

Mr A Hamilton: It is very late. You cannot spend it before the end of the year. That is the difficulty with bids at this stage.

Mrs D Kelly: Apologies for being late. In relation to being on target to do some of the maintenance of the contracts that were suspended, the Housing Executive had some concerns that the timescale was going to be very tight. Are there any indications at this stage that money will be returned from your Department to DFP?

Mr A Hamilton: No. The Housing Executive is going to spend its budget, otherwise there would be an easement here. They have been working really hard with the contractors, having put some of the bad times of last year behind them. They have been working very closely with the contractors to ensure maximum spend in this financial year.

Mrs D Kelly: Presumably, like many others, advice services are experiencing increased demand, yet there is some uncertainty around the transfer under RPA. I know that it is the December monitoring round, but are you confident that the amounts of money set aside for advice services are sufficient and that they do not need additional bids at this stage?

Mr A Hamilton: We have not received a bid.

Mrs D Kelly: You have not received anything.

Mr A Hamilton: Not to my knowledge.

Mrs D Kelly: OK.

Mr Wilson: Chairman, can I just raise one point? It is not for the Department, I suppose, but the one thing that concerns me about the rush to spend the money and not have the embarrassment of sending back the maintenance money from the Housing Executive is that I am getting an increasing number of complaints from tenants who say that work has been carried out in their homes that is clearly substandard but is being signed off. I think that the Department should warn the Housing Executive that, in the bid to spend the money, it should not go short on the checking of the work that is being carried out by contractors. There is too much anecdotal evidence to suggest that maybe the checks that would normally be put in place are not being put in place.

Mr A Hamilton: I will take that back. Earlier in the year, I was getting information that they were applying the checks too robustly. Anyway, we will check that out.

The Chairperson (Mr Maskey): Thanks to the member for raising that. It is on the record now this morning. That is a concern, because we have been advised in other discussions around the table that, as you said yourself, Andrew, all the quality-control checks are being done, given the lessons of the last number of years. It is on the record this morning that it has been raised.

Mr F McCann: Just on the back of what Sammy said, sometimes it is a bit confusing, when money is handed back, why it is being handed back and why it cannot go to supplement other aspects of the budget that have a direct impact. Equally, people are concerned that maintenance or repairs that are carried out are not up to a standard. It equally applies to housing associations and how they deliver their maintenance. When you talk about the proposed reallocation of £4 million, where did that go to? Deborah said that it went back into the Housing Executive, but where would it be going to?

Mr A Hamilton: We want to make sure that that is available for capital investment in the existing housing stock. We do not want to lose it.

Mr F McCann: Has that not been done? Have they been told about it? Have they made a bid to you, saying that they need an additional £4 million?

Mr A Hamilton: The status of the landlord function as a public corporation gives them a bit of flexibility around the year end, and what we are trying to do is to get it into their budget so that it is available to help with the demands on their capital programme, starting this year and maybe running into next.

The Chairperson (Mr Maskey): Fra, you can consider your points. We made some of them earlier. When the Department comes back to us, we will consider its responses, and there will be an ongoing discussion.

No other members are indicating that they want to speak on the monitoring round, and, obviously, there are no bids to be discussed at this time. We are all probably a bit regretful about that. I thank Andrew and his colleagues for being here this morning, for both presentations and for responding as clearly as they did to all our questions and observations. Thank you very much, and we wish you well in the ongoing discussions and, in particular, in the bilateral negotiations with the Finance Department. Obviously, the Committee will have a discussion now about the presentations and think about what we might want to do by way of a submission to the Finance Committee tomorrow. Thank you, and I look forward to our ongoing discussions.