Official Report: Minutes of Evidence

The Chairperson (Mr McGlone): With us today from the Department of Enterprise, Trade and Investment are Mr Eugene Rooney, head of the management services group; Mr Trevor Cooper, head of the finance division; and Ms Bernie Brankin, principal officer in the finance branch. You are very welcome to the meeting. Maybe you will start by explaining why we do not have the papers on the January monitoring round.

Mr Eugene Rooney (Department of Enterprise, Trade and Investment): Apologies for that, Chair. I understand that the papers have just been cleared. A lot of work has been being done on the draft Budget proposals, and that has taken up a lot of the finance team's resource over the past few weeks. The January monitoring paper is ready and on its way to the Committee, if it has not already reached the Committee. Officials are very happy to provide an oral briefing on it, if the Committee requires it. Apologies that it has not made it to the Committee for today's meeting. However, it has been cleared and should be with the Committee shortly, if not already. The work on the draft Budget has consumed a lot of the team's time, and you will hear shortly the nature of the issues that we have been dealing with, which has slightly delayed the work on the January monitoring paper.

The Chairperson (Mr McGlone): It is not a new feature, you know.

Mr Flanagan: But it is a new excuse.

The Chairperson (Mr McGlone): It is a new excuse — or reason.

The Committee Clerk: They arrived at 11.34 am.

The Chairperson (Mr McGlone): The papers arrived at 11.34 am today. You are well aware that I had to have a talk with the permanent secretary about papers arriving late. It is a pattern that has to be rectified. You do not need me to tell you that.

Whoever is responsible for making the opening statement, please begin.

Mr Rooney: I will make the opening statement. Thank you for the opportunity to brief the Committee on the draft Budget proposals.

The Minister of Finance and Personnel announced the draft Budget proposals for all Departments on 3 November, following the Executive's agreement of the draft Budget on 30 October. DETI was allocated £37·7 million to address commitments but was also subject to a 15·1% baseline reduction, which amounts to £27·9 million. The net effect was an increase in the 2015-16 opening baseline position of £9·8 million, or 5·3%. Following the Executive's decisions, we have been working across the Department and arm's-length bodies (ALBs) to assess how our budget changes will be managed. The work has included the identification of pressures, the level of known commitments for next year and the areas in which savings might be found. That is proving a very challenging task.

With the economic upturn, Invest NI has committed to a significant number of new projects to promote jobs and attract investment in support of the top priority in the Programme for Government and the Executive's economic strategy. That has been a very welcome development, but the projects will need to be paid for in the coming years. Invest has pressures estimated at around £35 million above its initial baseline allocation for next year. The Tourist Board also has significant inescapable pressures from support for events, such as the Irish Open golf tournament, for which commitments have already been entered into. The assessment set out in the consultation document is that the £37·7 million additional allocation would therefore be used to address the known pressures arising from events support and Invest. Hence, it does not represent new spending power to the Department. In identifying where cuts might be applied, we have sought proposals at 15·1% from across DETI's business areas and all its arm's-length bodies. I should stress that the final position may not end up as a pro rata split but as a reasonable basis for DETI, given the distribution of our budget and the levels of commitments already known. Invest NI accounts for over 60% of the DETI budget, but it also has the main pressures. Increasing protection for that priority — Invest — would mean greater reductions elsewhere in the smaller bodies.

Around 38% of the overall DETI budget is spent on administration — mainly staff. We are therefore looking particularly at reducing administration costs through not filling vacancies, through cutting back on recruitment and through reducing posts. DFP is leading on plans for workforce restructuring and the creation of a central fund to support voluntary exit schemes. We are liaising with DFP on the progress that it is making on establishing that central fund. The speed with which administration costs can be reduced through post reductions will be dependent on how quickly exit schemes are put in place, the criteria that will apply and the level of interest shown. The Department and its ALBs will be dependent on access to the central fund to help support the removal of posts.

Given the scale of the cuts required, no areas of expenditure are exempt from having to examine potential areas for savings. Each of the arm's-length bodies has been engaged in proposals for reduction, and each is identifying the potential to reduce posts. Invest NI would need to reduce the breadth and depth of support that it has been providing, and there would be significantly reduced scope to support new business projects coming forward. Given that it has so many commitments already built up and projects in the pipeline, reductions would be applied in the uncommitted areas of Invest's expenditure, which could include the assistance programmes for smaller businesses. There will also be a need for Invest to scale back on trade initiatives and campaign communications.

The Tourist Board would need to reduce marketing activity, including advertising campaigns, and its events budget is fully committed at present. The Health and Safety Executive (HSE) could suspend a number of its advertising campaigns and promotional activities. The Consumer Council would need to reduce the scope of its work programme. Further details are provided in the document that Committee members have.

The application of reductions for InterTradeIreland and Tourism Ireland is being taken forward with the relevant Departments in the South and the bodies themselves as part of the process for agreeing the 2015 business plans for Tourism Ireland and InterTradeIreland. The Minister will make decisions on allocations across the Department and its arm's-length bodies in the light of the ongoing work by the bodies on the detail of the proposals, issues that emerged during this consultation process, and decisions by the Executive early in the new year on the final Budget.

That concludes my introduction, and we are happy to take questions from the Committee.

The Chairperson (Mr McGlone): OK, thanks very much. We have had Invest NI in with us. Clearly, these are difficult economic times. How exactly do you see the Budget impacting on Invest NI?

Mr Rooney: Invest NI has had a successful half-year to date. It has been a record period/ It has been meeting Programme for Government targets over the past few years for the number of new jobs promoted and the level of investment attracted.

Invest NI has a lot of commitments already built up. A significant proportion of its baseline is already committed to projects that either have been announced or are in the pipeline. It can take two to five years for companies to draw down the amounts of money that the projects have been signed for. That means that there are commitments for next year already on our budget from contracts that were signed in previous years.

We anticipate that the Invest NI baseline is largely committed. There is limited scope in areas in which it can make reductions for next year. There are areas such as selective financial assistance, and potentially R&D, in which there is uncommitted expenditure. That will mean that Invest NI will have to reduce the scope and level of support that it provides across its programmes.

Invest NI will perhaps have to reduce support for smaller businesses, because that falls into the uncommitted areas of expenditure. It will also have to look at new projects coming forward, and it may be that Invest would not be able to support them all, given the squeeze on its budget.

The Chairperson (Mr McGlone): How would that work in cases in which the money had already committed?

Mr Rooney: With the additional allocation that has been provided, Invest should be able to support existing commitments. The problem is being able to support other programmes that are uncommitted to for next year.

The Chairperson (Mr McGlone): I think that Invest told us that 93% of its budget was already committed. If you are investing in the future with a similar level of commitment, and if Invest's budget has been squeezed at the other end, that means that the number of new jobs that you get reduces, which is kind of self-defeating in strict economic times.

Mr Rooney: That is one of the potential implications of the Budget proposals. Invest would not be able to support the level of activity that it has been recently, and fewer jobs would be promoted

The Chairperson (Mr McGlone): And created.

Mr Rooney: That is a level of detail that we are working on with Invest to see just how those implications would be best managed and how the resources that are ultimately allocated to it from the final Budget would be best used to support the range of activities to promote the economy.

We know on the basis of the current proposals that Invest would not have the scope to do the level of activity that it is currently doing. That would mean fewer business and jobs projects being able to be supported from its budget.

The Chairperson (Mr McGlone): It is not exactly the direction in which you want to be pointed.

Mr Rooney: No. With the economy being the top priority in the Programme for Government, we are having to look hard with Invest at how best the level of resources that it could end up with from the Budget can be used.

The Chairperson (Mr McGlone): Tomorrow, we will have, I hope, a decision by the Chancellor on corporation tax-varying powers, so, on the one hand, you could be on the cusp of something that could lead to increased foreign direct investment (FDI), yet, on the other hand, you are reducing potential support for some of those companies. That would be a bit of an anomaly.

Mr Rooney: I agree, Chair. The Budget reductions of 15% to our baseline, when we have run up so many commitments because of the successes in attracting businesses to Northern Ireland and because of the growing confidence in businesses investing here, has created a sizeable pressure on Invest's budget for next year at a time when a cut of £27·9 million is being applied to the DETI baseline. When you look at the paper, you will see that the distribution of the budget across the DETI baseline is such that Invest commands over 60% of it. Even if we were to protect Invest completely from the 15·1% reduction, it would mean that other, smaller bodies would not have any budget at all.

That is a feature of the level of cut that is being applied to DETI and the level of pressures that Invest has been able to generate through a very successful promotion and engagement with businesses, locally and internationally.

The Chairperson (Mr McGlone): OK. Thank you for that. It is an unusual situation all right.

I want to come on to the Health and Safety Executive's budget for 2014-15. DETI has a proposal to reduce spending on campaigns and promotional activities, including the carbon monoxide awareness campaign, and to suspend the farm safety campaign. We have discussed some really heartbreaking cases. What consideration has been given to the impact of the reduction in spend for those campaigns, particularly when I hear that the level of Health and Safety Executive activity on building sites has increased? Is there an issue there? We really do not want to sit through any more Committee meetings about farm safety or other incidents in which health and safety was the issue and where a visit here or there, or an increased awareness programme or event held with the likes of farmers' unions, might have helped prevent some very sad deaths. What are your views on that?

Mr Rooney: The HSE proposals reflect the fact that over £900,000 of its budget is programme and the rest is administration. To make a reduction of 15%, it has had to disproportionately target programme, as it would not be able to get —

The Chairperson (Mr McGlone): Will you define what you mean by "programme"?

Mr Rooney: Campaign activities, promotional activities and various engagements with sectors such as agriculture and construction. That is money that it used for promotional and advertising campaigns. It supports those activities through its programme budget.

The rest of its budget is entirely taken up by administration — the 130 posts in the Health and Safety Executive and the costs for those. Indeed, you will see that, to manage within its budget with a 15% reduction next year, the HSE would have to reduce its headcount by about 10%. It is planning to do that, on the assumption that it can reduce the number of posts. It can certainly not fill vacancies, and there are other posts that it will try to suppress if there is an interest in a voluntary exit scheme and it has access to central funding for that.

Therefore, it will scale back on administration, including training, travel costs and, by about 10%, posts. The remainder will fall to the sorts of activities that you outlined, Chair, which are very important in promoting the need for health and safety awareness and for avoiding injuries while in employment.

The three of us talked to the chief executive of the Health and Safety Executive last week, and we learned that the agency had looked very hard at where it can find the reductions. The areas that it has identified are the only areas in which it has discretion and in which it could guarantee to make savings next year to live within a reduced budget.

The Chairperson (Mr McGlone): OK. Thank you for that. At this point, I will hand over to the Deputy Chair —

Mr Dunne: Chair, may I make a point about that?

The Chairperson (Mr McGlone): Yes, Gordon.

Mr Dunne: I want to speak in support of what you said, Chair. The Committee has looked at health and safety, and, as you well know, the Department has responsibility for that, including farm safety. We would be very concerned about the proposal for the carbon monoxide awareness campaign and the proposal to suspend the farm safety campaign. That would be a very negative action, and we are all very aware of how dangerous farms are to everyone — children, workers, contractors and visitors.

We are all very aware of the dangers and of the accidents that have taken place throughout our constituencies. That needs to be looked at more seriously. We would find it difficult to accept cutting back on trying to raise awareness of those issues, which have been so much in the media and are of great concern to the public. Just last weekend, a farmer was killed by a bull. Again, that is a farm-safety and a life-and-death issue. That should be taken off the agenda totally. Savings need to be looked at elsewhere and not taken from life-and-death issues. We need to look more closely at where savings can be made.

The Chairperson (Mr McGlone): It would be helpful to get some reflection on that from the likes of the Ulster Farmers' Union (UFU) or the Northern Ireland Agricultural Producers' Association (NIAPA) — the farming organisations. I am sure that they would share deep concerns about that. The farm safety strategy was launched —

Mr Dunne: The Slurry, Animals, Falls and Equipment (SAFE) campaign.

The Chairperson (Mr McGlone): Yes. I attended that launch. We all bought into it and thought that it would be very good, particularly given some of the tragedies; that is what they were, and they were family tragedies too. I think that it is time to look again at that one.

Mr Kinahan: I just want to come in on that. Has the Department spoken to the Department of the Environment? All the councils work on elements of health and safety. Is there an element of joined-up thinking and a view that they should be taking on more? I think that we should explore that.

The Chairperson (Mr McGlone): Absolutely.

Mr Rooney: I know that the Health and Safety Executive is working with councils on how the work is managed and coordinated locally. The proposals were put forward, because, to find the sort of reductions that have been sought in the DETI budget, you need to look very seriously at very important areas to see whether reductions could be made. If the money is uncommitted, you can, obviously, look at that area to see whether you can scale back or suspend work on those activities. That is distinct from areas in which the money is already committed.

For example, in staff salaries next year, unless you can get staff to volunteer to leave and there is access to central funding, the pay bill will not go down next year, and you will have to find the savings from other areas. That is what the Health and Safety Executive is doing in this case. It is working with other partners to see how it can best manage the delivery of services in a constrained budget scenario. It has done what we asked it to do, which was to look at how it could live within a budget that is significantly reduced by about £1 million. The agency is also dependent on being able to reduce its headcount.

The proposals on the activities, the marketing and the campaigns, was an area that it felt it could make some savings in, not because it wanted to but because it was an area that was so far uncommitted and it was able to do that. That is the nature of the processes that are being engaged in at the moment to try to work out the savings options for the Department so that it can manage with a very significant reduction.

The Chairperson (Mr McGlone): It kind of neutralises the farm safety campaign. The importance of that campaign has been emphasised by Gordon, and Paul was the Chair of the Agriculture Committee when it was launched. It is so important when you have individuals who are working mostly on their own. We cannot do enough to heighten awareness for them, given the difficulties they face. That is clearly an issue that I am sure the Department will want to look at again very intensely.

It might also be an idea to refer the matter to the Committee for Agriculture and Rural Development. It also has an interest in it.

At this point, you will have to excuse me. I have another commitment, and the vice-Chair will take over. Thanks very much for your time and for being with us.

Mr Frew: During the last oral briefing that Alastair Hamilton gave, he suggested that promotional work for Northern Ireland plc, if you like, would enhance Northern Ireland's attractiveness for foreign direct investment and that it should be inescapable or committed expenditure. Can the Department confirm whether those areas are likely to be protected, or what that will look like?

Mr Rooney: Invest is having to look hard at which areas it could reduce next year. Apart from those where there are existing commitments, and a large part of its budget is already committed, it will need to look at areas where it could reduce without necessarily stopping them in their entirety. It means looking at some of its trade, international business and communications areas to see what aspects of those could be reduced substantially, and the consultation document highlights fewer trade missions and exhibitions and also indicates the consequences of that potentially for emerging markets and exports.

Even areas that we think are very important and that Invest has treated as a priority have to be looked at to see whether they could be reduced next year to live within the budget allocations that we have been given. Trade, international business and communications has been highlighted as an area where it would potentially scale back.

Mr Frew: So, to be clear, its actions will be curtailed.

Mr Rooney: The discussion around the Health and Safety Executive was interesting, because we have applied a pro rata reduction across all our arm's-length bodies. In Invest's case, that is a £17·5 million reduction, and it has been tasked to identify how it would live with a £17·5 million reduction as well as meeting the commitments — the projects that have been announced in recent years, even recent weeks, and the projects that are in the pipeline. If those commitments are met through the £37·7 million allocation, but they also have a £17·5 million reduction applied, then those are the sort of areas that it is looking at to see how that £17·5 million reduction would be delivered.

If £1 million is considered to be too much for areas such as the Health and Safety Executive, that would mean that, overall, we would have to find that money from somewhere else. That is the challenge in trying to find almost £28 million in a Department that has a very small budget and already has sizeable commitments. Therefore, I think that Invest would be looking to reduce areas like that.

Mr Frew: I am trying to tease out how it will affect practically the work of Invest NI. Will it mean fewer visits or will it mean more economical visits? Are you maintaining a standard that you want to be met?

Mr Rooney: We are certainly still working through the level of detail with Invest as to precisely how it would operate. We know the areas of programme that it is looking at that could potentially be reduced. However, we are still working with Invest on those issues to see whether it will be targeted visits or specific sectors. It is trying to assess what a budget like this would mean for its priorities. Ultimately, it is an issue that we will need to take to the Minister for her to make a decision. A big challenge in this budget exercise is looking at the level of existing commitments. There are commitments built into the baseline for next year, and contracts are in place, so we have to meet those. That means having to look hard at the uncommitted areas, and, in the case of Invest, that means seeing which of those uncommitted areas have a higher priority than others and how best to manage that in the level of budget that may be available to support those activities. So, it is quite a complex task to try to do that, not just with Invest but with all of the organisations and across the Department.

Mr Frew: I understand. With regard to the draft Budget, DETI is seeking to reduce the number of Civil Service posts by around 50. Of course, recruitment will probably also take a hit with that. What other measures are being taken to lessen that? Does it include overtime payments, doubling up of workloads and that type of thing? Which areas do you see these 50 jobs going from?

Mr Rooney: As a general point, the Civil Service has introduced a suspension of recruitment and substantive promotions. That is right across all Departments to try to manage the pressures across the Departments. We have had a hard look at the DETI budget. The scenario of a 15% reduction equates to £4·5 million from DETI. DETI is largely an administration-cost Department, given that it is focused mainly on policy work. Fifty posts have been identified to potentially help DETI to be able to live within its budget for next year. Ten of those posts are vacancies, so we would just not fill those vacancies. The other 40 are distributed pretty broadly across business areas in the Department, so there is no concentration in one area over another. It is about looking at areas of the Department where we could scale back.

There is not a lot of overtime in DETI. We can get very little savings from reducing that. There are very few temporary promotions and very few agency staff. We are having to look at substantive posts. How quickly we can deliver savings from a reduction of 50 posts depends on having access to a voluntary exit scheme. DFP is leading the work on workforce restructuring in the Civil Service, and we await the details of the voluntary exit scheme criteria. That will then depend on staff wishing to put themselves forward for consideration for that scheme. That will be dependent on the interest that staff have and the nature of the criteria that apply. Some of our savings are dependent on being able to access central funding to reduce our pay bill, but we have very little scope elsewhere in the Department when you look at the size of administration costs compared with the overall budget.

Mr Frew: You said that 40 posts will be distributed among DETI. Will that affect bodies such as Invest NI, the Consumer Council and the Northern Ireland Tourist Board (NITB), and if so, how?

Mr Rooney: Those figures do not include arm's-length bodies. Those are for the core Department. Arm's-length bodies have also been asked to look at reducing administration costs, and we expect that each of the arm's-length bodies will identify posts to be reduced. The arm's-length bodies will depend on also having access to central funding to be able to reduce their headcounts. They are looking at exactly the same measures that the Department is looking at, which is agency staff; overtime working; stopping recruitment, where that can be done; and not filling vacancies. So, they are looking at exactly the same range of measures that the Department is looking at, but they are not included in those 50 jobs. They will be looking at their own numbers and at how they manage their budgets going forward to bring pay bill costs down.

Mr Frew: I understand that they will have a lot of control of their own budgets and decisions to make. However, can you hazard a guess? Is there an estimate? Has there been a discussion as to what the number of vacancies will look like?

Mr Rooney: We are still engaging with them on the level of administration that they can realistically bring down next year.

Mr Frew: What does the Department reckon the figure could be? Are we talking about 10 in each arm's-length body?

Mr Rooney: No, I think that it will vary. It has to vary because the arm's-length bodies are so different in size. For the Health and Safety Executive, which has got its figures in, and we have included those here, it is 10%. About six of those posts are vacancies that it will not fill, and there are seven posts that it would seek to reduce through having access to a scheme. It is 10% in the case of the Health and Safety Executive, and I think that other bodies will be looking at similar measures. We are still working with them on the detail.

Mr Frew: Are there any issues about rolling out the voluntary exit scheme to arm's-length bodies? Are we secure in the knowledge that that can be done?

Mr Rooney: To be honest, to reduce pay bills across the public sector, arm's-length bodies would need to have access to some sort of funds to do so. Very few bodies would have the money to pay for an exit scheme as well as trying to make the reductions that are being applied. The expectation is that they would have to have exit schemes themselves. The nature of the legislation is that it is the employer who has the exit scheme. Some of the arm's-length bodies are part of the Civil Service pension scheme arrangements. I expect that they will look closely at what is being applied to the Civil Service. In DETI's case, all its arm's-length bodies would require access to some central funding to be able to effect the reductions.

Mr Frew: Finally, what consideration has been given to the impact of the proposed reductions on the economic strategy and Programme for Government commitments?

Mr Rooney: Invest has been very successful and has exceeded many of the targets set for it this year in the Programme for Government and economic strategy. However, that is a key question for 2015-16, as the level of targets should be set in line with the level of budgets that may emerge from the final budget position. We have to look at what the appropriate targets would be. Certainly, in the sort of scenario that is outlined in the consultation document, I suspect that Invest would have to scale back on the targets because it could not achieve the levels for 2015-16 that it might otherwise have thought would be achievable next year. That is something that we will be talking to Invest about. The impact on the targets is still being worked through.

Mr Frew: You can see how that grates, because, at a time of recovery, albeit slow, we really need Invest NI to be geared up and have the agility to actually go out and get investment. That is a worry that the Committee has. It is something that we need to probe and write to the Department on.

Mr Rooney: It is a concern of the Department that, at a time when there is so much business interest in investment and promoting jobs, we are also faced with the prospect of having to scale back the range of business support activities and projects that are coming forward because of the application of the 15% reduction to our baseline. It is a big concern for the Department and Invest. Given the allocation that we have been given, the document tries to set out how we might try to manage that. However, it is not something that the Department is comfortable with. There are so many opportunities. The Programme for Government lists the economy as the top priority. We have an economic strategy, and good progress has been made on that. At the same time, we have to scale back some of these activities, just when the economy is showing signs of recovery.

The Deputy Chairperson (Mr Flanagan): Has any work been done to establish the impact on economic growth as a result of the cuts to agencies such as Invest NI and the Tourist Board?

Mr Rooney: No. We got the draft Budget allocations at the end of October. We have primarily been working with the organisations to see how best they could manage with significantly reduced budgets.

We know in Invest NI's case that there will be implications if it scales back on activity — I just outlined that we are having to look at what the Programme for Government targets for next year might be with a reduced budget position — and similarly for the Tourist Board if it cannot support events and tourism activities. There are significant reductions in the Tourist Board's budget built into this document. Both those organisations could not then carry out the range of activities that they can currently do, and that certainly would impact on the economy.

As for quantification, we have not had a chance to look at that yet. That will, I think, be part of looking at the targets for next year and the appropriate level of targets to set. There is still a lot of work to do on that. Our focus really has been on how our organisations live within a reduced budget for next year and on getting views, through this consultation, as to how that looks in terms of overall prioritisation and impact.

The Deputy Chairperson (Mr Flanagan): What about the competing areas within the Department? Gordon rightly raised the issue of farm safety; you cannot put a price on that. As for return investment for every pound you put into tourism or Invest NI, has the Department done any work to see which is better for stimulating economic growth and creating jobs?

Mr Rooney: No, not to date. Table 2 in the document shows the percentage shares across DETI and its arm's-length bodies of the overall starting position. We look at the commitments that Invest and the Tourist Board already have in those budgets and at the impact of trying to take out savings in parts of the budget that are uncommitted.

We are not starting with £184 million unallocated. Invest has sizeable commitments that already account for a large proportion of its budget next year. The Tourist Board has commitments that account for its budget next year. A lot of the bodies' budgets are for staff. As I said about staff reductions, you can do something about suppressing vacancies and reducing agency work and overtime, but that does not take you very far in making significant reductions to the pay bill in the organisations and DETI. Therefore, we are constrained by the areas where we can reduce in the coming year.

The Deputy Chairperson (Mr Flanagan): In terms of the priorities for investment, you said that the number one objective of the Programme for Government is to grow the economy. To grow the economy and tackle disadvantage is the number one priority. Is there not a realisation that organisations that stimulate economic growth lead to greater prosperity and greater tax takes and benefit the public purse in the long-term? I do not mean through the Department. The British Government have repeatedly cut the block grant in real terms over the past number of years, which is the cause of this. Has the Minister made any representations through the Executive or Ministers in England that this is the impact of reducing the block grant? It will result in fewer people being in employment and a reduced tax take for the Treasury.

Mr Rooney: At this point in the draft Budget, our main representations are with the Department of Finance and Personnel, which is leading on the draft Budget proposals and is the main Department through which contacts with the Treasury are put into effect. The Executive decided this draft Budget at the end of October. This is an agreed draft Budget position. The Department has taken receipt of the proposals, and we have being working hard with our arm's-length bodies to work out what the impact of those proposals will be.

Our Minister will obviously be involved with the Executive's decisions on the final Budget, and, through the Minister and the departmental officials, we will engage with DFP on the details of the proposals set out here. From the Department's point of view, this was an Executive-agreed Budget, and, therefore, we have to look at the implications and work with the allocations we have been given.

The Deputy Chairperson (Mr Flanagan): Is the 15·1% reduction across all arm's-length bodies simply what you are looking at now, or is that what the Department's proposes to do?

Mr Rooney: It is the proposal that we have set out here. If you reduce the Invest NI share of the reduction, that would mean that the smaller bodies would have to find a much greater share. They are largely made up of administration costs, with the exception of the Tourist Board, which has a sizeable programme, some of which is already committed. So, we have not presented proposals that would ultimately necessarily be pro-rata decisions. We do not think that that will be the case. We will look at how we inter-prioritise across the various saving areas that have been identified. But, we have limited scope to go widely and say that we will not cut Invest NI at all, because that would mean applying £17·5 million in reductions to the other small arm's-length bodies, and that is why you end up with a pro-rata sharing of 15·1%, which takes into account the level of commitments and administration in those bodies. I have explained how difficult it can be —

The Deputy Chairperson (Mr Flanagan): Eugene, we have four bullet points on the 15% reduction scenario in Invest NI, and one of them says it will result in us:

Did Invest NI say that, or is the Department saying that?

Mr Rooney: We have agreed with Invest NI that that would be an implication of a 15% scenario for it. It is looking at uncommitted areas of expenditure, and the uncommitted programmes and projects in those areas would primarily be in the smaller local companies.

The Deputy Chairperson (Mr Flanagan): So, it will have a disproportionate impact on smaller locally-owned businesses as opposed to the larger ones.

Mr Rooney: Given the nature of the commitments that they have already entered into and those that they have in the pipeline this year, and looking at the implications of their uncommitted areas of expenditure then, yes, that could be the case.

The Deputy Chairperson (Mr Flanagan): Has Invest NI given any consideration to charging locally-owned businesses for providing services?

Mr Rooney: I do not have any specific details on that, but I know that, as a general point, Invest NI and, indeed, our other arm's-length bodies are looking at whether there is scope to save or raise money through initiatives other than those they have adopted before. I do not have any details on what Invest NI is currently looking at in that regard, but the general principle of looking to see how we can raise money or save money through engagements is certainly within the scope of this exercise.

Mr Humphrey: In relation to the Northern Ireland Tourist Board and Tourism Ireland, there are implications for tourism and selling this place nationally and internationally. What innovative ways is the Department looking at to deal with the cutbacks in those fields?

Mr Rooney: There has been a tourism review recently and it will be looking at how the Tourist Board positions itself for the future. I think that there was a consultation recently on that, and the conclusions of the review and the outcome of the consultation are currently being considered.

The point that you make about looking innovatively and differently is very important because, in a scenario where budgets are tight next year, and potentially in the years following that — and the Minister of Finance and Personnel has certainly been indicating that — there is a real need to look at the priorities and how best to deliver tourism.

The problem for the Tourist Board next year is that it has lost some source of funding through European funds. It has an events baseline that is already fully committed, and the issue for it will be how it plans, with a reduced budget, to make the most impact from the allocations it has.

We have not been talking to the Tourist Board, specifically — certainly, I and my team have not been talking to it — about new ways of approaching tourism promotion activity, but we are certainly encouraging it, because we feel that it is necessary for all of our bodies to be looking at this.

Mr Humphrey: You say that you are not talking to the Tourist Board, but you are encouraging it. What does that mean, exactly?

Mr Rooney: I was referring to myself specifically; I have not been talking to the Tourist Board, but I know that the review was held. The consultation has been completed on that, and the analysis of that is progressing. So, I expect that colleagues who are working on this will be looking at those sorts of opportunities, because we have now seen the budget context that has been provided.

Mr Humphrey: My worry is that you are doing a tourism review, and you have asked them to prioritise. If you cut the budget, what on earth are they going to be expected to deliver with a reduced budget? It is not a reduced budget for just them; it is a reduced budget for Tourism Ireland too. I have my views on Tourism Ireland and on how effective it is in selling this place internationally, but the one thing we must do is sell Northern Ireland as a tourist destination.

You mentioned Europe. Do you think that DETI or the Northern Ireland Executive, collectively across the piece, are doing enough to draw down money from Europe? Do the difficulties in our budgets at home provide us with an opportunity to go to Europe and put forward a case for greater funding? How effective has the Department been in doing that?

Mr Rooney: The Department is putting a lot of effort into using Horizon 2020 as a source of funding, and the Executive have agreed an increased target for drawdown for Horizon 2020. We are also looking at the scope to develop contacts in Europe that would help with bidding for sources of funds. We recognise that Europe is a good opportunity, and we recognise that Northern Ireland could and should do more in respect of building partnerships and accessing funds. We have been quite active in our support of the innovation strategy, which has recently been approved, to build partnerships and access funds. We have been active in using the innovation strategy and the commitment to Horizon 2020 to lever in more resources for Northern Ireland through those means.

Mr Humphrey: Regardless of whether you should do more with the innovation strategy or Horizon 2020, what more are you doing as a Department?

Mr Rooney: In terms of innovation or —

Mr Humphrey: In terms of delivering money from Europe into the Northern Ireland coffers for tourism.

Mr Rooney: We have been working with a number of other Departments on how best to —

Mr Humphrey: With respect, I have asked you those questions and you have said that we should do more with the innovation strategy, and you talk about Horizon 2020. You have answered that and did not give figures. I have asked you what the Department has done to get money. What are the figures? We are missing figures. That is what I want.

Mr Rooney: Figures for?

Mr Humphrey: Figures showing what the Northern Ireland Government, or your Department, have done to offset the cutbacks in relation to the opportunity cost or the opportunity loss that there is going to be as a result of not marketing this place because we have not got the budget to do it since you are going to cut the budget for the Tourist Board or Tourism Ireland.

Mr Rooney: The reason that it is being cut is outlined in the paper. It is a cut that has been applied across all Departments for next year. With regard to the engagement with Europe, we have been working through the national contacts, and Invest NI, in particular, has been working to establish contacts in Europe on how you lever and access programmes. Those programmes are competitive; there are applications, so there is no guarantee that you will get money from Europe to offset reductions that have been applied next year for budgets. That is the nature of the application process.

Mr Humphrey: My worry in all of this is that there are no figures, and I have asked you three times. That is my point.

Mr Rooney: I have no figure with me on moneys that would be available to support tourism and offset the reductions in those two tourist budgets, because the reductions have been applied to tourism so that we can live within our budget next year. The applications process through European competitive funds does not guarantee that you will get money in those areas; it depends on the nature of the applications and how successful they are, and it depends on the timing of that and whether you would get it for 2015-16. I do not have any numbers that say that we would get money from Europe on those areas that would offset those reductions.

Mr Humphrey: I accept that you do not have the figures. Can you provide the Committee with the figures for money that the Department has managed to achieve through Europe either on its own or working with other Departments in a joined-up way to assist the Tourist Board or Tourism Ireland to sell this place nationally or internationally, and the projects that you are working on to try to offset the cutbacks — if that is possible?

There are opportunities that will come, potentially, through the councils having greater budgets and economies of scale, because there are 11 councils and a larger rate base, and I mentioned that to representatives from Horizon 2020 last time we met as a Committee. Can more be done in relation to the Tourist Board working with those new super-councils through their regional tourism partnerships?

Mr Rooney: The short answer is yes, definitely. I think that the councils will be more involved in tourism, and I think that there will be lots of opportunities, both for Invest NI and the Northern Ireland Tourist Board to work closely with councils on tourism and economic development activities.

To return to the point on European moneys; one of the problems for the Tourist Board is the fact that the new structural funds programme has excluded tourism activities from it, so the Tourist Board will have £2 million less in receipts from EU funds next year. A decision was taken at Commission level that tourism activities that are in the current structural funds programme up to 2013 will not be included in the 2014-2020 programme. A decision has been taken by Europe to exclude tourism activities. Therefore, that makes the point that you were making even more challenging, in that the moneys that would have been available from Europe to support tourism will not be available.

Mr Humphrey: However, there are still other countries out there that will be way in front of us in drawing down those moneys, and the challenges that they will face will be the same challenges, with respect.

Mr Rooney: The councils work well in engaging with Europe and drawing down funds as well, so there is scope for —

Mr Humphrey: It is a mixed bag, to be fair, in terms of councils. I think that it is only Belfast and Londonderry that have European units.

In relation to the paper that we have in front of us, which was tabled this morning but arrived yesterday — Jim, when did the paper arrive? Was it yesterday?

The Committee Clerk: Yes.

Mr Humphrey: Why did we get this paper only yesterday to ask questions on it today?

Mr Rooney: Can I clarify? Which paper is that?

The Committee Clerk: It was 5.00 pm on Friday evening.

The Deputy Chairperson (Mr Flanagan): The briefing for the consultation document.

Mr Humphrey: Could it have been provided sooner?

Mr Rooney: We provided it as quickly as it was ready. This has been a very difficult exercise to work through after the decisions that were taken at the end of the October and announced at the start of November. It has been very difficult to work through across the Department and with the bodies to look at what the proposals would be, where the commitments are in their budgets and what the pressures are. We provided this to the Committee as soon as it was ready.

Mr Humphrey: Thanks for your answers.

The Deputy Chairperson (Mr Flanagan): So, it took you a full month to figure out what a 15% cut across the Department was.

Mr Rooney: We did the arithmetic within a few minutes. On the implications, we have spent weeks working with the bodies.

The Deputy Chairperson (Mr Flanagan): That is good to hear. I want to take you back to William's questions about European funding and the fact that there is now £2 million not available from the European regional development fund (ERDF) for tourism promotion. Was that factored into NITB's resource budget for 2015-16 or is it something that has been added on now, or taken away, I should say?

Mr Rooney: I will ask Trevor what the timing of that was. I think that it was earlier this year that the Commission indicated that, in the new programme going forward, tourism-related activity would not be part of that so that you could not put forward proposals for tourism-related activity in that programme.

Mr Trevor Cooper (Department of Enterprise, Trade and Investment): That was in the last five to six months.

The Deputy Chairperson (Mr Flanagan): So, has £2 million come out of the Tourist Board budget because of that? Is it that the Tourist Board would have had £2 million extra to play with?

Mr Cooper: That is £2 million of spending power that the Tourist Board would have had annually over the current EU programme, which is a five-to-seven-year programme.

The Deputy Chairperson (Mr Flanagan): Does the 2015-16 opening resource baseline of nearly £14 million include that £2 million, or was it £2 million additional to that?

Mr Cooper: The receipts would have been, in-year, additional.

Mr Ó Muilleoir: I declare an interest in that I have a daughter working for Tourism Ireland, not that her particular pay is a big part of all this. I want to make some points about tourism and pick up on what Mr Frew said.

It seem to me that, whatever way you cut this, it is like rearranging the deck chairs on the Titanic, because if you take funding from job-creating activities you will slow economic growth, leave people on the dole and not have more businesses. We are told that this is exactly the opposite of what London, which set this Budget, wants. Many times, we have heard our betters telling us that they want a rebalanced economy and more private sector activity, yet these cuts, surely, have to have the opposite effect.

I want to pick up on tourism. It is clearly a burgeoning sector that is doing well, yet perhaps at half the level of Scotland or South of the border. So, it is prime for growth, yet, if we go along with this 15% cut, we will take £2 million from the NITB and £2 million from Tourism Ireland. That is bonkers and economic madness. We will have the officials in from the NITB and Tourism Ireland, who depend on marketing budgets. As you remarked, the NITB has just lost £2 million from its marketing budget. Here is another £2 million, and it seems to me that it is a real setback for those who have set up tourism businesses, which we have encouraged them to do. Invest NI has provided the support for that as well, and we are going backwards instead of forwards if we accept this.

There will be interesting discussions between now and 29 December, when the consultation period ends. I presume that there will be a united voice from many of the different sectors affected here, particularly small businesses and tourism. I presume that the Department, through the Minister, around the talks that are happening, is making it clear to the Treasury and to London that this cannot make sense. How you are supposed to build peace and create jobs with this type of savaging of budgets is beyond me. So, you will have to wait to see where the axe will fall.

Invest NI used the term "inescapable pressures". It said that it needed £37 million for commitments made and jobs committed, and it is exactly right. It does not actually work out to be that much per job when it is broken down, but these too are inescapable pressures for me. We cannot afford to take money from the front line of job creation, but that is what is happening. There needs to be a hard discussion at a level far above the Committee about getting more resources so that we can do the job we want to do, which is rebalancing the economy, creating more private-sector jobs and lifting different communities.

The question in all of that is this: can you come back and tell us what will do the most damage to job creation? If we have to have a view, that would certainly inform it. If we cut £2 million from the NITB, will that involve us losing more jobs that cutting £2 million from Tourism Ireland? If we agree that Invest NI will pull back on its small business promotion, how many jobs will that cost? Figures are going to be very helpful in the time ahead. I presume that we will not get those before 29 December. You would hardly get them next week if we ask for them, would we?

The Deputy Chairperson (Mr Flanagan): Jim has given me a note to ask for figures for Thursday, so we can discuss them next week.

Mr Ó Muilleoir: Thank you for your presentation.

The Deputy Chairperson (Mr Flanagan): Does the Executive's commitment that we will not lose out on any inward investments or any job-creation projects due to a lack of resources still stand through the draft Budget?

Mr Rooney: We assume that it does. We have not seen —

The Deputy Chairperson (Mr Flanagan): You have not been told otherwise.

Mr Rooney: The Executive have had that commitment to worthwhile projects for a number of years. That guarantee remains. We have been trying to see how best to address a budget reduction that takes into account that there are some existing commitments already built in, particularly in Invest NI. We —

The Deputy Chairperson (Mr Flanagan): Will you get clarification for us on that, Eugene?

Mr Rooney: On the —

The Deputy Chairperson (Mr Flanagan): On the question of whether job-creation schemes will be lost due to financial constraints.

Mr Rooney: Our assumption is that the guarantee still stands.

The Deputy Chairperson (Mr Flanagan): Can you find out and clarify for us? I do not mean now, but can you go and find out, and bring us back the information at the earliest possible opportunity?

Mr Rooney: OK.

The Deputy Chairperson (Mr Flanagan): All right. Gordon.

Mr Dunne: Thanks very much —

The Deputy Chairperson (Mr Flanagan): The member was not in his place when he was called last. You will have to come back to the House to apologise at some stage.

Mr Dunne: I just have a few issues. On the tourism budget, the events fund amounts to £1 million. Surely it is going to be a significant loss if we lose £1 million out of the events fund. We all recognise the success of the events. The return we get on them is very significant. It is all about marketing Northern Ireland outside our shores. In many ways, it works very well. How will the fact that the events fund is not going to open next year impact on our tourism product?

Mr Rooney: Normally, the Tourist Board has had £3 million to £4 million for events per year. Over the last few years, it has depended on getting resources through in-year monitoring to support its events programme; it does not have a substantial baseline for events. The amount in its baseline has been £1 million. That is now committed through letters of offer that it has already issued.

Mr Dunne: That is good; at least they are being honoured.

Mr Rooney: They will be honoured. The other pressure the Tourist Board has is that some of the international events, such as the golf, the Giro Gran Fondo and the Tall Ships, are commitments for next year. Therefore, they will also consume available resources that the Department has been given and has committed to.

From looking at the impact and the benefits of events, the Department recognises that they are worth doing. The problem for the Tourist Board's budget is that it does not have any money. If we apply the reductions to the Tourist Board on the pro rata basis, that will reduce its budget even further. We recognise the value of events. We recognise the points that have been made by the Committee. The Department is about promoting economic growth and generating revenue locally through visitors who come to Northern Ireland and see how successful Northern Ireland has been at hosting events and how successful the international and local events are.

The challenge that was set for the Department at the start of this month was this: "This is your allocation. How will you live within it?". How we will live within it is what the nature of this engagement has been. If we scaled back on the Tourist Board reduction, we would have to find that from one of the other bodies on the list. Given the discussion on the Health and Safety Executive or Invest, I am not sure that those would be easy choices for us to make.

Mr Dunne: I have a couple of other things —

Mr Ó Muilleoir: Can I ask for more detail on the events company?

The Deputy Chairperson (Mr Flanagan): If Gordon lets you.

Mr Dunne: Go ahead.

Mr Ó Muilleoir: Can you give us some clarification on that, because £1 million has been committed, but the Minister has said that she is not going to accept applications for the events fund, which usually affects 64 or 65 groups. That call is not going to be issued. Is that correct?

Mr Rooney: There is no money to do that under the budget allocations that we have at the moment.

Mr Ó Muilleoir: Are we referring to the same events fund?

Mr Rooney: I think so, yes. There is an international element and a national element. There are letters of offer for the nine international events. I think that the element that is mainly being looked at is the national, which is for the local events that are held up and down the country and that get sponsorship from the Tourist Board.

Mr Ó Muilleoir: Is the £1 million or so that is usually spent on that out of the budget already? I know it is hypothetical, but is it part of the £2 million reduction, or has it already been taken out?

Mr Rooney: Because the Tourist Board's baseline has been insufficient to cover the level of funding that has been provided each year, it has been dependent on getting an in-year allocation to supplement the amount that it already had. This year, the amount it already has, the £1 million, is fully committed. There are no guarantees that the Tourist Board will get the amount that it hopes to get next year, given the budgetary situation that all Departments are in. Those two factors mean that the Tourist Board did not have enough resource or confidence of getting resource to launch an events fund for next year for which an application process would be going through now. From the figures that we have, it seems that there is not money for an additional events fund. I expect that we will be talking further to the Tourist Board about that, as the Executive clarify and make final decisions on the allocations.

Mr Ó Muilleoir: If Gordon allows me, I have another question. So, the Minister has not asked you to do any work on that. Has she asked whether there is a way that we could reconstitute the events fund?

Mr Rooney: We are certainly engaging with the Tourist Board about the level of an events fund that it could manage and the options for doing that. The first thing the Tourist Board will say to me is, "We could do a smaller events fund, or we could do a different events fund." We do not have any money to do any events fund at present, and the Department has been given the budget that it is consulting on. From what we have seen in the proposals that are coming forward from all the bodies, we do not have any scope to how we would support that. Those are the issues that we are still looking at.

Mr Ó Muilleoir: So, if there was a bid under the January monitoring round, would it be too late?

Mr Rooney: January monitoring is in year. One of the engagements that we had with the Tourist Board was that it could not do anything more in year.

Mr Ó Muilleoir: Gordon, thank you.

Mr Dunne: OK. I have a couple of other issues. As I understand it, the European regional development fund is vital for Invest NI. Are there any changes in that? You talk in your submission about the new European regional development fund. Are there any changes that would restrict funding to Invest? I understand that a lot of it is for R&D work. Is that going to change?

Mr Cooper: I do not think that we are aware of any changes.

Mr Dunne: OK, but it is the case, is it not, that the European regional development fund makes a large contribution?

Mr Cooper: Invest NI utilises a lot of ERDF money, particularly for R&D. I think that there will also be pretty significant funding for venture capital-type funds and loan funds to promote new set-ups and companies in the new programme.

Mr Dunne: Those figures do not appear here today, or do they?

Mr Rooney: The ERDF component —

Mr Dunne: In Invest figures. I am not an expert.

Mr Cooper: I believe that Invest NI will utilise about £26 million of ERDF funding next year under its forecasts.

Mr Dunne: So, is it in those figures?

Mr Cooper: Part of it is in those figures. There are two elements to ERDF funding. There is national match funding, which, I understand, under the new programme is at 40%, and there is the actual EU receipt, which would be around 60%. In resource terms, I think that there is about £26 million.

Mr Dunne: Is that in those figures?

I have a couple of other points to ask about. What is the impact of the cuts on InterTradeIreland and Tourism Ireland? Do you see a significant impact on the cross-border bodies? Tourism Ireland is going to lose about £2 million, and InterTradeIreland is going to lose about half a million.

Mr Rooney: There will certainly be an impact. Inevitably, at the level of those sorts of reductions, the scale of activity that they can embark on will be cut back. There are discussions between DETI and our counterpart sponsor Department in the South about how reductions in Tourism Ireland will be managed. I think that they will be spread across a range of Tourism Ireland's activities, such as the campaigns in various regions, marketing and some operational costs. I have no details on InterTradeIreland, but I know that DETI is engaging with the counterpart Department, the Department of Jobs, Enterprise and Innovation, on how those budgets are to be reduced. That will inform the agreed position on the business plans for those two bodies for next year, which the Departments and then the North/South Ministerial Council (NSMC) have to agree.

Mr Dunne: What about the cuts that the Republic's Government have already announced? Will they have a further impact on both those bodies?

Mr Rooney: The budgets and business plans are set through agreement between the Departments, North and South. How that is managed will have to be part of those discussions. I am not familiar with the detail of how the Southern Departments are applying reductions. There is agreement, ultimately, on the business plans for the coming year. The discussion on the budget is certainly about how those organisations could live within reduced resources.

Mr Dunne: I notice that the Health and Safety Executive plans to reduce its operating costs, including training and travel, by approximately 30%. That is basically in-house staff. Have other Departments applied the same policy?

Mr Rooney: Yes. People are looking at how to cut back on areas of expenditure that are not committed. I expect that there will be early visits to expenditure areas such as training, travel and overtime to see how much they could be reduced, because cuts in operating and admin costs potentially protect front-line activity.

Mr Dunne: Is that 30% of the total budget?

Mr Rooney: No; probably 30% of the budget that has been allocated for those sorts of operating cost activities.

The Deputy Chairperson (Mr Flanagan): Eugene, taking you back to Tourism Ireland and InterTradeIreland, is there any chance of getting a breakdown of their respective budgets and what the Executive in the North and the Government in Dublin have provided them with since 2008? The last briefing we got from InterTradeIreland said that its budget this year was 65% of what it was in 2008. So, it has already faced substantial cuts, and I think that it is reaching a level where it will have to seriously restrict or stop some of its very valuable programmes, which have a positive impact on the island's economy. This may well be the first time that the Executive or the Dublin Government have tried to make a unilateral cut to one of the North/South bodies. You said that the budget is always agreed through a business plan. Has this been agreed through a business plan, or is it an attempt by DETI to reduce the budget without talking to the Department of Enterprise, Jobs and Innovation in the South?

Mr Rooney: What is always agreed is the business plan for the arm's-length bodies between the respective Departments. The budget allocations will clearly inform what that business plan can do.

The Department is engaged with its counterpart Departments in the South about these budget reductions and DETI's overall position on how it can make savings. I understand that this is not the first time that a decision has been made to make reductions; I believe that, in the past, a Southern Department asked an arm's-length body to make cuts. The fact that we are looking for reductions has not meant that, in the past, Southern Departments have not sought reductions in North/South bodies.

The Deputy Chairperson (Mr Flanagan): What I want to see, Eugene, is a comparison of the North/South bodies with the Department itself. The implications of a cut to InterTradeIreland are that, if it is agreed, it is met with a twofold cut from the Department in the South, so it is actually getting cut by a third of what the Department proposes. I want a breakdown of the reductions in budgets of the two North/South bodies compared with the Departments since 2008. I wonder whether you could manage that by Thursday so that we can discuss it at next week's Committee meeting.

The other point I want to raise goes back to the events fund. The positive thing about the events fund is that it was a competitive process, with applicants having to demonstrate that there was a positive economic return to get investment from the Government. We do not see a similar competitive process for sponsorship from Invest NI or the Tourist Board. Between the two of them, in 2013-14 they handed out £3·5 million in sponsorship.

Will the sponsorship amounts that are given to the two arm's-length bodies to administer be reduced? Is there any chance of some of that funding being directed into a competitive process such as the events fund, instead of being used to promote the corporate brands of Invest NI and the Tourist Board?

Mr Rooney: The short answer on sponsorship is that those are the sort of areas that the bodies are having to look at because they have to make the savings. The Tourist Board has not identified that as a potential source of money for supporting events. That has not come through.

The Deputy Chairperson (Mr Flanagan): In 2013-14, it handed out nearly £2·5 million in sponsorship compared with £35,000 in 2011-12. In 2014 to date, it has spent over £500,000, so it seems that they have a considerable budget for sponsorship. As a Committee, we have no oversight of whether that is being used effectively, where it is going, whether there is a competitive process or whether it is going to events or organisations that have the best return on investment. The events fund, on the other hand, is clearly competitive and gives those events that deliver economically the greatest sums of money.

Mr Rooney: We can certainly look at that. I do not have the details of what exactly that money is being used for. We certainly expect those to be the sort of areas that they would be looking at to see what reductions they can make. I think that the problem may be that, if they are making reductions in those areas, they cannot necessarily have sufficient resource to divert to the events fund.

This will be part of the process to make sure that we understand fully what the priority areas for reduction are and what the areas that merit funding for next year are. That is part of quite a complex process —

The Deputy Chairperson (Mr Flanagan): I think the feeling that you are getting from Committee members is that priority areas for funding are not those that have the greatest return on investment.

Mr Rooney: Do you mean priority areas for funding —

The Deputy Chairperson (Mr Flanagan): For reductions.

Mr Rooney: — as far as the sponsorship is concerned?

The Deputy Chairperson (Mr Flanagan): No. In overall terms, we want to see money invested where it will have the greatest potential impact on the wider economy. We do not want to see money taken out of things that are having a huge benefit for the local economy. That is the message that we want fed back to the Department and its arm's-length bodies.

Mr Rooney: That is absolutely what we are looking at, yes.

Mr McKinney: I would maybe like to hoover up a couple of specifics and figures. Forgive me if you touched on them, but I did not hear the figures. What proportion of the allocated budget is contractually committed?

Mr Rooney: Do you mean overall?

Mr McKinney: Yes.

Mr Rooney: I will have to come back to you on that. That would take account of the Department and all its bodies. Invest and the Tourist Board have contractual commitments, such as letters of offer. There are also commitments, such as administration costs, where people are in post. We can check with Trevor whether there is any information on the level of contractual commitments. I know that Invest's budget is very heavily committed, but I do not know what it is across the Department and the other bodies.

Mr Cooper: The Department is heavily committed as well. Essentially, its budget is made up of administration costs for people. On the non-admin side, the vast majority of the rest of the budget relates to liabilities on Harland and Wolff. That is effectively committed, so the core Department is very heavily committed as well.

Mr McKinney: It would be helpful if we got a breakdown of those figures. Does the Minister have discretion or prioritisation powers within the allocated budget? Is anything set aside?

Mr Rooney: Discretion over what?

Mr McKinney: Discretion over allocation. I am trying to see whether there is a picture of how much money is available, how much discretion there is and whether the Minister has —

Mr Rooney: The Minister will ultimately decide on all the allocations across the Department and our arm's-length bodies. Within the allocation that the Executive determine, on the basis of a consultation exercise, priorities and levels of commitment, she will decide how best to distribute the resources that are available to her.

Mr McKinney: It would be helpful if we could, for Thursday, get some detail on the inescapable pressures.

I cannot help but read your notes upside down, and I see that you have more details on the figures than we have. Why is that?

Ms Bernie Brankin (Department of Enterprise, Trade and Investment): This is the draft paper that we are reading from.

Mr McKinney: I am reading from a different draft paper. Mine has less information than yours.

Mr Dunne: The answers are on his.

The Deputy Chairperson (Mr Flanagan): Where are the questions?

Mr McKinney: Why did we get less information? For example, you have broken it down into programme costs, admin costs and so on. Surely that would be helpful.

Mr Cooper: We will happily share that and break it down for you. It is not something that we are —

Mr McKinney: We are trying to get an overall picture as quickly as possible ahead of the deadline. That would be helpful.

Mr Rooney: We have split some of the admin and programme costs. We refer to that in the narrative, but we can provide the table.

The Deputy Chairperson (Mr Flanagan): Can you give us the document that you are briefing us from?

Mr Rooney: The document I have is the consultation document that you are using. The reference is to the split between admin and programme costs. That is referred to in the narrative, but we can provide the table to show you what that looks like. The point I was making is that, in a lot of the smaller bodies and the Department, most of the budget is admin. Therefore, reducing admin costs quickly depends on being able to effect pay bill reductions.

Mr McKinney: That covers it more.

I want to ask about the process by which you engage with arm's-length bodies on the 15·1%. Is there a table, or are there specific questions to inform that discussion and to allow for the arm's-length body to consider prioritising its activity over the cut?

Mr Rooney: Our engagement has been on identifying with them the areas that are committed and not committed, areas of administration, the areas that they propose to make savings from and the quantification of those. We then engage with them on whether — this is a point that some members raised — those are the right areas as far as the Department is concerned.

Mr McKinney: I am really asking whether we can see the thought process that you go through with those arm's-length bodies. Are there questions that we can see that would allow us to say that they have at least gone through the exercise of prioritising, or is it just a loose discussion? Is this a funding exercise or a form exercise? By "form", I mean —

Mr Ó Muilleoir: A checklist.

Mr Rooney: We need certain information from them to know what their pressures are, what the levels of commitments in their baseline are and what areas they would make savings from. We have then used that as the basis for meetings with them to go through and —

Mr McKinney: Yes, but can we see questions? It is actually on function. All the members here have been asking the same question, although in different ways, on the specifics. We are generally concerned that the cuts are prioritised over function and that, somewhere in the middle of this, vital work on promoting jobs etc, will get lost. So, can we see the questions that are asked?

Mr Rooney: There is no problem with that. Much of what Invest does is about promoting jobs, so, areas it finds savings from will impact on —

Mr McKinney: With respect, everything that we have been hearing is on the 15%. That is the driver, and, in some ways, it is an understandable driver. What is being done to mitigate the damage, if you like, of that 15%, and what measures are you asking it to ensure that it commits to first so that the cut, if it has to happen, does so in the most appropriate area?

Mr Rooney: OK. We will see what we can provide.

Mr McKinney: Obviously, DETI got some privilege, as did the Departments of Health and Education. Will that extend to the monitoring rounds?

Mr Rooney: Do you mean that those Departments got some privilege in year?

Mr McKinney: In the October Budget. Will that extend to future monitoring rounds?

Mr Rooney: No, I think that that was very specific to the in-year position and the resource pressures in year. Most Departments are asked to make reductions in year. We had to make a reduction of over 4%, but we also got allocations in October monitoring to address our inescapable pressures in Invest. Health was protected, and Education was partially protected, but I think that that was very specific to October monitoring and will not be applied next year. I think that the draft Budget is attempting to sort out all the allocations for all Departments for next year.

Mr McKinney: Is there a logic to that?

Mr Rooney: I think that the measures that were taken in June and October monitoring were to address very specific pressures that were arising this year. They will not necessarily be the same pressures as those for next year. So, I do not think that it will be repeated. I think that they are trying to address all that up front in the Budget for next year.

Mr McKinney: You handed back £10 million in financial transactions capital, specifically in agrifood. What is being done to make sure that that does not happen again or that substantial moneys do not get handed back? In other words, how will you maximise financial transactions capital?

I have a further question after this.

Mr Rooney: We are working very closely with Invest on financial transactions capital. There are certain conditions on the use of financial transactions. Not necessarily all programmes or, indeed, all Departments can use it. To take the specific example of agrifood, there was a much lower uptake in farmers' use of that fund than had initially been anticipated, primarily because they were able to go to the banks. The funding itself at one level acted as a catalyst to get further engagement through getting loans from banks, but it meant that the Department and Invest could not use the money. So, we gave it back on that basis.

It is very difficult in some of these schemes to know how much is likely to be needed, because it depends on demand. We set up the scheme with an anticipated drawdown, but as conditions change, it may not be needed. The mechanism on which we are working with DFP and other Departments means that there are tools for handing that back so that other Departments can use it. That is what we want to do, and we would certainly give DFP early notice if we thought that take-up would be less than we had anticipated.

Mr McKinney: Maybe I have got the mechanics of this wrong, but could companies that might want to look for assistance in one way be migrated to that to free up the resource?

Mr Rooney: We have been encouraging Invest to look at financial transactions capital as a source of funding. Certainly, we have been liaising with DFP on the potential scope for its use. That is part of the wider engagement on how best to use resources through either financial transactions capital or, indeed, resource. At the moment, there is less pressure on financial transactions capital than there is on the other two budgets. If there is scope to support businesses through using that, we are promoting that as a basis of support.

The Deputy Chairperson (Mr Flanagan): Thanks very much for your presentation. You are free to go.