Official Report: Minutes of Evidence

The Chairperson (Mr Irwin): I welcome Minister Michelle O'Neill and, from the Department of Agriculture and Rural Development, Noel Lavery, permanent secretary; Gerry Lavery, deputy secretary; and David Small, deputy secretary. You are very welcome. I ask you to give your presentation, Minister.

Mrs O'Neill (The Minister of Agriculture and Rural Development): Thank you very much, Chairperson. I am grateful for the opportunity to brief the Committee on the budget. I will start by welcoming the Dáil members behind us who have come along to your Committee today. Hopefully, you have had good exchanges on areas of common interest.

I appreciate that you are constrained by time, and I am sure that Committee members will have a range of questions. Therefore, by way of opening remarks, I intend to give you some detail that has emerged during what has obviously been a very difficult Budget period. We are all very aware of the significant pressures that are facing dairy farmers at present. In that context, I want to say that I have prioritised key measures to support the industry and to boost our rural areas. I will provide an overview of my key priorities for the 2015-16 year, as well as a summary of the key points that have arisen as a result of the consultation that closed recently.

Throughout the Budget process, I have been very clear about my key priorities. Those have been important in shaping the Department's financial position, particularly given the extent of the savings that need to be delivered in such a short time. I have also been very mindful of the various commitments assigned to my Department in the Programme for Government and of the important decisions that were made by the Executive in June 2014 on CAP reform, Going for Growth and the headquarters (HQ) relocation programme. Given that context and the need to deliver unprecedented savings of £29·9 million in a single financial year, I have identified five key priorities: the successful implementation of CAP reform, including the launch of important measures in the new rural development programme (RDP); implementing the Going for Growth action plan; delivering on the HQ relocation projects; continuing to support the measures in the tackling rural poverty and social isolation (TRPSI) programme; and continued investment in flood alleviation work.

I trust that members will recognise the importance of each of those priorities and my rationale for their prioritisation. However, with your indulgence, I want to expand a little on each one. First, CAP reform represents a very significant change for the industry and the Department. Indeed, despite aspirations to simplify the process, we are moving to a system that requires multiple payments to farmers, where previously there was one single farm payment. Therefore, I recognise the challenges involved and the need to support farmers through the migration to the new schemes and to help them gain an understanding of what CAP reform means for their business.

In the Department, we are investing in our systems, procedures and IT to ensure that the application process is made as accessible and user-friendly as possible. I encourage all farmers to use the online facility to complete the application process. That will assist them in ensuring their compliance with scheme rules, as well as helping to improve the payment processing times.

In recognition of that need, I have allocated £6·3 million to support the work in that part of the Department, as well as a capital investment of £5·3 million in our IT systems. The financial investment reflects the importance that I place on the modernisation of that function and my commitment to ensuring that the necessary processes, procedures and supports are in place to guarantee a smooth transition to the new scheme. I am under no illusion about the challenges ahead, and I am sure that there will be issues, despite the best endeavours of all involved. However, my commitment to deliver the best outcome for all in the short time that lies ahead remains unequivocal.

An equally important aspect of CAP reform is the introduction of new schemes under the new rural development programme. Members will be aware of the agreement reached by the Executive in June of last year, which included a commitment to deliver the largest ever rural development programme, with funding of up to £623 million being made available. Despite the obvious financial challenges that are facing us, I remain committed to delivering the objectives set out in the programme and to ensuring that the necessary funding is made available.

A major feature of the new programme will be implementing the recommendations that are contained in the Going for Growth action plan. The action plan has been agreed by the Executive, and funding of up to £250 million will be made available to implement it. A significant element of the funding will be required to deliver the farm business improvement scheme.

I am aware that there is significant interest in the scheme, and I am keen to get it launched as soon as is practicable. An important step in the process will be the approval of the rural development programme. As members will be aware, we submitted a programme to the European Commission in October 2014, and we had expected to receive queries from it by now. Given that delay in the response from the Commission, we now estimate that the final approval should be achieved by June 2015 at the earliest. I have discussed the funding requirements of the scheme with the Minister of Finance and Personnel. However, it is difficult to assess the likely uptake, given the obvious issues with cash flow in the industry. It is vital that any decision to invest be based on a sound business rationale so that any investment made will add value and grow the business. I have therefore secured an additional £1 million of funding as part of the final Budget process so that £2 million of funding is available to support farmers in the decision-making process and, specifically, to help them develop a business plan, which will be an important part of the application process once the grant scheme is launched.

I have also prioritised the new areas of natural constraint (ANC) scheme. As many of you will be aware, the less-favoured area compensatory allowances (LFACA) scheme is a long-standing arrangement supporting those farmers who are constrained by their natural environment. I have therefore included funding of approximately £20 million per annum over the next two years for the new ANC scheme. Throughout the consultation process, there was widespread support for that scheme. However, funding will cease at the end of the two-year period, and I have asked my officials to carry out a review to assess the future options.

Another important part of the RDP is those schemes that fall under the LEADER approach. I am conscious that the current programme is coming to an end, and it is important that we have a degree of continuity in order to maintain the level of investment in rural areas. LEADER is a compulsory part of the rural development programme. It provides important community benefits, as well as local involvement in local decision-making impacting on rural areas. It is a good way to encourage buy-in and enthusiasm among local communities, as we all have a vested interest in developing and improving the lives of rural dwellers.

We have had a superb level of interest from people seeking to participate in the new local action groups (LAGs), particularly among younger members of rural communities. Members will be aware that there is an allocation of £70 million spread across the groups, and I am committed to ensuring that those opportunities are open as soon as possible once the programme is agreed by the Commission.

I have also made the HQ relocation programme a key priority. Again, it is a Programme for Government commitment that I am resolved to deliver. On financing the various schemes, I think that it is important to re-emphasise the point that the vast majority of the costs involved are capital in nature and therefore could not be offset against the resource savings of £29·9 million that the Department needs to deliver.

The second point that I will make is that the Department needs new headquarters. That is unavoidable, given the regular failings of the current accommodation at Dundonald House. This is a really significant year for our relocation programme. The results of our survey show that over 4,000 civil servants want to work closer to home in our new headquarters. By the summer, fisheries division will be in Downpatrick, while Forest Service will be in Enniskillen. We have planning approval for the new building at the Loughry campus to house Rivers Agency, and we will let that contract very soon. By the end of 2015, we will also have let the contract for Ballykelly.

I believe that the relocations will provide people and companies in rural areas with important opportunities for employment and businesses, including the construction sector. They will afford rural people opportunities to have Civil Service careers and continue to play a part in their local area. The opportunities have been recognised by the Executive, and I have been allocated a further £1 million of resource funding to progress the relocation programme, bringing the total resource and capital funding budgets to £5·4 million in 2015-16.

I am also aware that the Committee has been carrying out a review of the TRPSI programme, which is also a Programme for Government commitment. Given the important work it delivers, I have maintained the amount of funding available, which is £4·7 million. However, I have rebalanced the mix of funding between capital and resource. We received a significant amount of support for the programme during the consultation, with almost 500 responses. That is evidence of the impact that the programme has and of the vital services that it provides for the most disadvantaged people in our society.

There are a number of schemes funded in the programme, and it may be worth reflecting on some of the figures. Under the maximising access in rural areas (MARA) project, over 12,000 homes have received a visit, and over 6,000 health checks have been completed in 283 locations. We have also made 67,000 contacts with elderly people living in isolated rural areas and supported 1,100 unemployed people through the BOOST scheme. Those statistics reflect the positive benefits of just a few of the schemes and their impact on the lives of rural dwellers. It strengthens my resolve to support the TRPSI programme in the future. I will also be interested in the view of the Committee, once you have completed your report on the current programme.

I have prioritised the essential flood alleviation work carried out by Rivers Agency. I am sure that we can all relate to the devastating impact that flooding can have on people in the community. As such, it is important to continue to invest in the infrastructure in order to try to avoid the worst impacts of flooding in areas that may be impacted on. I have therefore protected Rivers Agency's operational budget as far as is practicable and allocated £8·5 million of capital funding to allow it to progress a range of projects. Indeed, that funding will allow it to progress its part of the integrated works around the greenway in east Belfast, as well as the upgrade of existing infrastructure across the North.

That is a very brief run-through of my key priorities for the next year. The Committee will have an opportunity to scrutinise the associated targets in more detail when we present the Department's business plan in due course.

I turn now to the budget consultation. We have kept the consultation open until 18 February to inform decisions in the business-planning process. The first stage of the consultation is closed, and, as I said earlier, we received a considerable number of responses. There have been 537 to date. As I mentioned, 492 of those came from the rural community sector. That is a high response rate, which reflects the importance of the work that DARD does to support the network of small rural groups.

The Committee has also received a summary of the range of issues highlighted by all respondents. In addition to the written responses, I have had a number of meetings with key stakeholders and the Finance Minister to discuss the budget proposals set out in our consultation document. My officials have also delivered presentations to a number of groups to help inform their views and receive feedback. The process has been extremely helpful, and I am very grateful to all those who have participated and provided responses.

I have touched on all the main points raised in the process, but it may be worth highlighting some of the other salient points. I will begin with staff reduction. A large number of responses raised concerns about the Department's plans to reduce its staffing complement. I fully appreciate those concerns. Given that over 50% of the DARD budget relates to staff, it is simply not possible to deliver savings of almost £30 million and not impact on the level of staffing. Plans are being developed across business areas to reduce the number of staff by 10%, and measures have been introduced to manage the process internally. We need to deliver payable savings of £5·6 million in the next financial year. That will be possible only with the implementation of a voluntary exit scheme. I repeat: it is a voluntary exit scheme.

As you will be aware, funding for such a scheme across the public sector has been secured as part of the Stormont House Agreement, and we have advised DFP of our potential requirements. Removing up to 300 staff from the organisation will have an impact, and work is ongoing to redesign the Department's operational structure following the implementation of the exit scheme. To inform the process, we are reviewing the key aspects of the Department, including the inspection regime; advisory services, including veterinary advice; and the corporate services functions. From my perspective, I want to utilise the opportunity to make the Department a more modern, leaner and more efficient organisation that reflects the needs of the agriculture industry. For example, I want to provide greater online provision so that modern-day busy farmers can complete their administration at a time of their choosing, not just within the current nine-to-five provision. I think that that type of 24/7 access is important in supporting an industry that is ambitious and wants to grow. That was certainly the feedback that I received from the Agri-Food Strategy Board (AFSB) and the Ulster Farmers' Union (UFU) when I met them to discuss the budget position. Although they both recognised the difficult financial position, they impressed on me the need to progress the Going for Growth action plan and to provide the industry with the opportunity to deliver growth in all areas of the agrifood sector.

We also received a number of responses about the delay in launching the agrienvironment scheme. I met the RSPB to hear more about its concerns and the issues that it had raised in its consultation response. It is imperative to have the necessary funding in place before launching such an initiative and, indeed, to have the necessary approvals in place. I discussed the position with the Finance Minister and will review it with him again later this year, but it is my intention to have a scheme in place by 2016.

The final point, you will be glad to hear, that I want to highlight is on the concerns raised by groups and individuals throughout the process about DARD budget cuts' potential impact on all those who live in rural areas. We have already seen cutbacks in hospital and transport provision in rural areas, and there has been the recent plight of many dwellers as a result of the financial issues in NI Water. I am sure that members will have many examples from their own area of their constituents being impacted on negatively as a result.

I therefore want to raise the issue of rural proofing. I know that, last week, you received a briefing on my proposals to bring forward a rural proofing Bill, on which we will be consulting publicly from 2 February to 13 March. I seek your support in progressing that legislation, which seeks to embed, much more firmly, the duty to take the needs of rural dwellers into account in government policymaking and the delivery of public services.

I have also raised the issue of impacts on the rural community with the Finance Minister and reminded Executive colleagues of the commitment to carry out a rural-proofing assessment where there are major changes to service provisions or new policies introduced. I am under no illusion that there are many challenges ahead for those who live in rural communities, and it is incumbent on us all to do everything in our power to ensure that the voice of rural people is heard loud and clear in the House and in all departmental decision-making.

Many challenges lie ahead for us for farming and rural development over the next 18 months and beyond. I have focused my priorities on addressing the challenges. The introduction of CAP reform will mean a very significant change. We have a large rural development programme, combined with the headquarters relocation functions. That will all be implemented during a time in which we will see the restructuring of Departments and reducing budgets. I do not think that anybody can underestimate the risks that that will bring. However, it is imperative that we all step up to the plate. I will certainly be redoubling my efforts to ensure that DARD delivers on what is a very ambitious programme of change.

Sorry if that was a bit long-winded, but I was trying to make sure that I covered all the bases. I am happy to take questions from members.

The Chairperson (Mr Irwin): OK, Minister. Thanks very much for your presentation.

When the Committee considered the draft Budget before Christmas, many of us had concerns over cuts affecting front-line services. You raised the issue in and around the single farm payment, or the new basic farm payment. Can you assure us that payment times will not slip and that they will be made on time?

Mrs O'Neill: We have worked very hard over the past number of years, and I know that the Committee has recognised the fantastic progress that we have made on speeding up the payment of the single farm payment. I assure the Committee that that continues to be my priority, and, when it comes to looking at how we deliver services, that is absolutely key. Given all the cash flow issues that the farming industry faces, receiving the single farm payment on time is key. Indeed, receiving the payment early will hopefully be the position in the future. I can give an assurance to the Committee that protecting those payments and making sure that we get them out to farmers is a priority for me.

Significant changes have been made, and we need to look at how we do things and how we can do things better. It is about getting more farmers to apply online and changing the Department's systems and practices. All those things are manageable. They are not without their challenges, but they are certainly manageable. Payments, and the single farm payment, will continue to be the priority, and we will continue to make progress.

The Chairperson (Mr Irwin): As Chairman, I welcome the fact that 90% of farmers who receive the single farm payment have received their payments. There is some difficulty, in that those who had remote sensing inspections carried out in May or June, and some rapid field visits after that in August or September, have still not received their payments. I have been made aware of quite a number of cases in recent days. There seems to be a problem whereby local offices are holding many of the inspections, and the information has have not yet been forwarded to Orchard House for payment to be issued. Is it right that there been a problem with the IT system and that it is not compatible with the system used by those who carried out the remote sensing inspections? What is the cause of the hold-up?

Mrs O'Neill: I think that we are at over 98%.

Mr David Small (Department of Agriculture and Rural Development): It is over 97%.

Mrs O'Neill: Over 97% have been paid, and we are endeavouring to make sure that the remaining number is paid before March.

David, do you want to pick up on any problems?

Mr Small: Yes. I would not accept that there is a problem with the IT system or its compatibility with the external company that we use in Dublin. The more integration that we can achieve, the better, but our view is that our systems and processes are working well.

As the Minister said, we have had a better year this year than ever before. We currently have around 870 single farm payment claims outstanding. Just over 400 of those are inspection cases, and the others relate to cases in which bank account details are missing or we are dealing with probate proceedings. The figure of 872 compares with a figure of almost 2,500 last year. Therefore, we have progressed very significantly this year, and we continue to process all the outstanding inspection cases. Some of them raise complex issues for us. We need to fulfil our role by examining those cases as thoroughly as we can, but we are committed to completing the payment of inspection cases by the end of March this year, which would again be well ahead of last year and the year before.

We are working very hard to ensure that our processes work as efficiently as they can and that we deploy the necessary resource to that task. I accept that, for the individual farmer still awaiting his payment, it remains a major issue, but we are working very hard.

The Chairperson (Mr Irwin): I have had a number of calls in the past few days on the matter. That is why I am making the point. I tell those people that 95% or 96% of farmers have been paid, but that is cold comfort for them. I heard from one particular farmer who had direct debits to come out of his bank account on 20 January. He thought that he would have received his single farm payment by that time, and he now has to renegotiate with his bank. Therefore, you can understand the problems. Some of the issues that are holding up payment are quite minor; they are not serious issues.

Mr Small: Payment should not be held up because of minor issues. If a case is ready for payment, payment will be made. Processing is quite quick once it reaches that stage. There should not be cases sitting around because of minor issues.

The Chairperson (Mr Irwin): OK. There has been some mention recently in the media of the reduction in the number of Departments and the possible transfer of some DOE functions to DARD. Can you tell us more about that? What DOE functions might transfer?

Mrs O'Neill: Those are particularly the environmental functions. The proposal is that everything outside of built heritage will move into this Department. Rivers Agency would go into a new Department. In the context of the full restructuring, I have always said that we would be very open to having one flood responder. The other area that would come into this Department is from DCAL; namely, inland fisheries.

Those are the three changes: inland fisheries to come in; Rivers Agency to go out; and the environmental area of DOE to come in. All the detail of that has to be worked out, but those are the proposed function changes. It will be taken forward by a group led by the head of the Civil Service, and it is tasked with reporting to the Executive and taking forward the proposals. I think that there will be benefits for the Department. One of the areas that the Committee has raised in the past concerns the number of inspections, and whether there are opportunities to reduce the number and make efficiencies. Some work is already happening in the Department on that, and I think that there will be further opportunities with the movement of that element into DARD.

The Chairperson (Mr Irwin): That would be welcome, and hopefully improvements can be made there.

Mr Byrne: I welcome the Minister and her officials. I want to ask about the voluntary exit scheme and the reform of the Department. In what policy context will you set redundancies?

Mrs O'Neill: We must not lose sight of the fact that it is a voluntary redundancy scheme. We still do not have the detail, which is being worked up centrally through DFP. We expect to have that over the next number of weeks, hopefully. It must go to the Executive for agreement. It is not straightforward, by any means. The thing to remember, however, is that it is a voluntary scheme. There are no proposals in DARD to make anybody redundant. It is a completely voluntary scheme: if staff wish to participate in it, it is their choice.

Mr Byrne: In reforming DARD, is it an objective to make it more like a farm advisory support service, friendly to the farmer, rather than a bureaucratically controlled Department that causes greater frustration than pleasure for farmers?

Mrs O'Neill: There will always be people out there who feel that the Department is too bureaucratic, but we are always trying to cut down on red tape. I have said that on many occasions.

There are opportunities here to look at our operating model. We have already started work in the Department on how we can move to more modern technology to get more people to apply online. A sizeable number of farmers apply online, and there are more efficient ways in which to do a lot of the work that we are currently involved with. In aiming to be as efficient as possible, we should take advantage of looking at the inspection regime and at all the other areas of service, both at the coalface, where farmers interact with the Department, and within the Department itself.

There is quite a lot of opportunity for us here to improve how we do things and make things better. It will be quite challenging; there is no doubt about it. One thing that will stand to the Department is the fact that this is something that has been going on for about a year now. We have been looking at our operating model, how we do things and how we can do things better.

Mr Byrne: Can I just turn to the rural development programme? Obviously you managed to get £623 million from the Executive for rural communities, which is very welcome. In the next five years, what do you hope to achieve with the new agrienvironment scheme? When will it be finalised? Will the farm business improvement scheme be tweaked to help to sustain family-based farming, or will it be more general rural development at a community level rather than at the level of the individual farmer?

Mrs O'Neill: Yes. Obviously, it was excellent news that we were able to secure Executive agreement for up to £623 million for the rural development programme. Our programme is currently with Europe, and we await approval. As I said in my introductory remarks, it will probably be June before we have sign-off. We are certainly not just sitting back and waiting for that. We are actively involved, particularly around animation with local action groups and recruiting for them. We will also be opening up for actual applications over the next number of months. Quite a significant body of work is currently happening.

The farm business improvement scheme itself is something that I know farmers are watching with interest. They are keen to know exactly what it entails and what they may be able to apply for. It is grant aid, so one of the things that we have to do is a lot of preparatory work with farmers on what they and their businesses need; on their business cases; to upskill them in technology transfer; and to work with College of Agriculture, Food and Rural Enterprise (CAFRE) advisers. The money that we have allocated for this financial year is very much focused on doing that preparatory work to enable families to be in a position to apply to that programme for capital funding as soon as possible thereafter. The focus at the start has to be very much on working with them. I suppose that the guide that I would use is to ask farmers if it is something that improves their efficiency or if there are ways that they can work with other farmers to improve efficiency. I think that it is an interesting time. I know that farmers are very much awaiting the detail, and we want to be able to provide that detail. As soon as we have sign-off from Europe, we will be keen to start that work very quickly.

Mr Byrne: Finally, Minister, in trying to sustain smaller family farms in hill areas, is it the Department's intention to pursue some sort of scheme as a follow-on to LFACA to try and sustain those smaller family-farm enterprises?

Mrs O'Neill: Yes. LFACA and hill farmers have always been a priority of mine. I have clearly set out in the budget proposals that I will continue to prioritise those farmers. Right across all the supports that are there, everything from grant aid through a farm business improvement scheme to working with our advisers, those services and supports are there for everyone. Outside of that, specifically for hill farmers and those who farm hard-to-farm land, we have supports in place. I have guaranteed — and you will know that I fought very hard for it — a well-funded pillar 2 support package for those farmers. I have set out my stall in guaranteeing the funding for the next two years. I think that sometimes there is a little bit of confusion around the boundaries and how they are changing. The disadvantaged area will go. That is a European decision. It is certainly not my decision. I know that, last week, the Committee discussed the fact that we are going to try to create a soft landing for those people who will no longer receive that support for the disadvantaged area and that they will also receive their payment for next year this year. I was grateful to the Committee for agreeing to that piece of work going forward.

Mr Buchanan: Can we go back briefly to the single farm payments? We commend the Department on what it has already done and delivered. That has to be acknowledged. Again, like the Chair said, some people are getting on to us and saying "We have not got it. There is a problem. We are really waiting for it" and one thing and another. What is the situation? You said that some of the payments were outstanding because of bank details or something else. Is it not the case that there is a problem for a number of these, maybe up to 200, that are sort of stuck in the system somewhere? Some of them even have to be handled manually in order to be processed. Is that right or not?

Mr Small: No. Each case will be processed in the normal way. The first critical part of that is the inspection. In some cases, it is the classical inspection process, with someone going on-farm; in other cases, there will be a remote sensing inspection, which is done by satellite image. In some cases, that requires a further field visit. We are currently working with some very, very large inspections on enormous farms. I know that that will not always be the case. Once that inspection process has been concluded, the case will be processed through to payment. We need to make sure that we do that bit of the process robustly and well and, where there are doubts over a field type, land use or areas of ineligibility, we need to make sure that we have exhausted the inspection findings and made firm conclusions so that we are confident that the case can process to payment.

Mr Buchanan: We understand that bit of it. It is fair to say that you are telling the Committee today that there is no difficulty at all with the computer systems, as far as the aerial-based inspections that were carried out or done.

Mr Small: There are no problems with the computer systems. We have been investing in a brand new geographic information system (GIS), which will roll out across the Department. The delivery of that system has been a bit slower than we had hoped, but we are currently working on the existing systems that we have used over the past four or five years. That system is in place; we are deploying that system this year. Over time, we hope to transfer everything on to a new GIS platform with additional functionality, which will bring with it improvements, but we have not reached that stage yet. That has been a bit slower than we hoped it would be; I think that may be what you are referring to.

Mr Buchanan: Maybe that will help to alleviate some of the concerns that we are hearing. Minister, the other thing is the 300 staff that you talked about going, and the voluntary exit scheme. How confident are you that we are going to get 300 staff within the Department to go on the voluntary exit scheme? What do you do if you get only 200 or 250? How do you make that up to 300? What plans have you for that?

Mrs O'Neill: That is the difficulty. We do not know the quantum; we do not know the number of staff who are going to come forward. I suppose that there is some anecdotal evidence out there to suggest that quite a number of people will want to go. However, until people and staff see the ins and outs and details of what they will be entitled to, they will not be able to make a decision. It is very much a personal decision for them. As soon as we have the detail of that, we will obviously share it with staff, and we will be able to have a proper assessment of the actual numbers that will come forward. If we do not reach 300, which is the figure that we have used in respect of the amount of money we will have to find in the budget, we will have to come back to do more analysis of what we can do within the budget that we have.

Mr Buchanan: I have one other issue, Chair.

Mrs O'Neill: Sorry, Noel wanted to add to that.

Mr Noel Lavery (Department of Agriculture and Rural Development): The launch of a voluntary exit scheme is pretty unprecedented, even for someone who has been around for as long as Gerry can remember is concerned. It is quite uncertain.

Mr Byrne: He is not a pensioner yet.

Mr N Lavery: I do not want to be accused of anything. As the Minister said earlier, the £5·6 million is an estimate. That is the budget pressure. If we are not able to release those staff savings and make those payroll savings it will be a pressure on the budget which, ultimately, will be a pressure on programme budgets, which are front-line payments in the end. That is why we are keen, but it is pretty unprecedented. We will keep the Committee informed.

Mr Buchanan: Minister, you talked about streamlining and efficiency. That is commendable, though challenging. The other thing that you talked about, which I was interested in, was rural proofing. To put the two together is a good news story in one way, but how will it affect the laboratory services in Omagh? It is the only laboratory service west of the Bann for the agriculture community west of the Bann. There is nothing else there for it, and there is concern looming around that. I appreciate that this is a constituency issue, but it is a big issue in that area. Is that safe?

Mrs O'Neill: All politics is local, so I would not expect you not to raise the issue. I will start with the Rural Proofing Bill. There is certainly room for improvement in the system that we have, particularly around ensuring that all Departments, at all times, rural proof all the decisions that they take and assess the needs of rural communities. I believe that it is doable within this mandate to introduce a statutory duty on all Departments and also local government, because, with the whole restructuring, councils will now have a key role given the service that they provide to rural dwellers. While it is a small piece of legislation, it will have a major impact on how all Departments assess their services in the future. I look forward to having a more detailed discussion with the Committee on that in the time ahead.

In relation to Omagh and the Agri-Food and Biosciences Institute (AFBI), the broader picture is that the Department has committed work of about £42 million`. We continue with that work programme, which is quite a substantial area of work around research and development and all of that. There is no proposal on my desk for a discussion around the closure of the Omagh lab, although I am quite sure that it is in the mix of AFBI's own discussions. My officials have been working very closely with AFBI around getting it to a place where it presents us with proposals for how it is going to find its 7% savings. I will ensure that all decisions are taken with a fair and balanced approach. However, as part of this draft budget process for this financial year, there is nothing on my desk as regards a decision on Omagh.

Mr Elliott: Thanks, Minister and officials. Apologies that I was not in for the start and that I will have to rush out to ask a question for oral answer; I do not want to risk the ire of the Speaker. I have a couple of points, Minister. The first is around inspections. With the conventional, traditional inspections, if people are waiting for a single farm payment, those are taken in chronological order. However, that does not seem to be the case with remote inspections. Nobody can get in contact with the external company to track progress. I have to say that the Department is very good. If you go to your local office, they will tell you where it is. If you go to Orchard House, they will tell you how long it is until payment. However, nobody can tell you about the progress of the external company. It seems that not even the departmental officials have contact.

Mr Small: I am not sure whether it is an issue, Tom. The external company, Icon, will present the Department with its findings. As I understand it, we have those findings, so everything is now within the departmental process and —

Mr Elliott: But we cannot find out about the progress of individual inspections.

Mr Small: You would not get that advice from the external contractor; it would come from the Department.

Mr Elliott: Why not? If it is a conventional inspection within DARD, it can tell you, "Look, we have some problems here. We are going back to the applicant or the farmer and trying to get those problems addressed. Hopefully it will be done in a couple of weeks." However, you cannot get that update on progress from the external operator.

Mr Small: You should get it from the Department.

Mr Elliott: I have contacted the local office, and they tell me that they cannot get it.

Mr Small: I am happy to check that.

Mr Elliott: I would be grateful if you would, because there are quite a lot of those in my constituency.

Mr Small: The process is that the findings will come in to my colleagues in the Department, and we will then begin to identify what has been presented. That goes into the process of us validating what we have and then processing the —

Mr Elliott: So you are saying that your officials at county office should be able to find out about progress from the external company.

Mr Small: I will check the point and come back to you. I am happy to do that.

Mr Elliott: I appreciate that.

The second query is around a letter in today's pack — you may not be aware of it — from the Northern Ireland Environment Agency (NIEA) in DOE. It is trying to develop better relationships with regard to its inspections on farms. It says that it has initiated a root-and-branch review, in which it has brought forward four operating principles. I am a great and long-time believer in better cooperation between Departments and that there should be a single inspection mechanism between Departments. How aware are you of this review by NIEA, if at all? What input have you had into it? It does not mention you.

Mrs O'Neill: NIEA is in the lead, given that it is responsible to DOE. I am not sure if you were here earlier when we had a conversation around the change in the Departments. NIEA's moving into DARD will hopefully make it easier for us to get to the position where we have a single inspection regime.

Mr N Lavery: Terry Ahern, chief executive of NIEA, wrote to the Ulster Farmers' Union (UFU) flagging this up and copied us in, so I was aware of it. David and I are actually meeting Terry on Thursday to discuss how we can progress inspections and have a more streamlined inspection regime. Then, of course, NIEA —

Mr Elliott: But obviously you had no input to the root-and-branch review.

Mr N Lavery: No, NIEA undertook that itself. We have contacted NIEA to ask how we can work better together.

Mr Elliott: I would appreciate if you would tell it that it would have been helpful if you could have been involved in that at an earlier stage, because the two Departments really need to work together on this. Obviously you have not been, and certainly not in this root-and-branch review.

Mrs O'Neill: There is also a new factor at play now given that the Executive have agreed to the restructuring of Departments. It is key that, if that is coming into this Department —

Mr Elliott: Minister, that is why it would have been important to have that cooperation before this root-and-branch review took place.

Mrs O'Neill: Yes, that is fair enough.

Mr Elliott: Finally, has there been any progress on assistance to the dairy industry?

Mrs O'Neill: It is an ongoing issue. We are trying to do all that we can to assist the industry on a number of fronts. At EU level, we are engaging with Commissioner Hogan. We have asked him to look at the intervention price that is paid and the issue of EU dairy exports. Unfortunately, we have not had a positive response to that at this stage. However, we have not given up, and we will continue to do that. We have also raised the issue with Secretary of State for Environment, Food and Rural Affairs Elizabeth Truss. We actually wrote to her again in recent days. You will also be aware that we met the banks just before Christmas to ask them for a bit more flexibility and to show a bit of sympathy to those people who find themselves in difficulty because of cash flow issues. The Committee will also be probably be aware that the UFU has raised an issue around the potential changes to the tax system, which would have a major impact on farmers. I am certainly very supportive of that and have raised it with Simon Hamilton.

There are quite a number of challenges, and we are coming at them on a number of fronts. That is alongside all the work that the Department does with our CAFRE advisors. The one clear message that I send out to all the dairy industry is this: if you are in difficulty, seek advice as early as possible. We are finding that more and more people are waiting until things are just unmanageable for them. We in the Department want to be able to provide whatever advice we possibly can. It is quite a challenging time for the dairy industry given the falling price. The longer-term outlook is good. However, if you are sitting today struggling to pay your bills and keep yourself going, it is a very challenging time.

Mr Elliott: From when is the longer-term outlook good?

Mrs O'Neill: We are talking about the future and the markets opening up. The Russian bans are having an impact now. We have had an increase in production in New Zealand. There is quite a number of factors at play. Economists and dairy industry spokespeople all agree that the longer-term outlook is better, but we will not have the people to produce if we do not get through this very difficult period.

Mr McMullan: Minister, I thank you and your officials for your presentation. Given the importance of the TRPSI programme, are you confident that the Budget has protected it?

Mrs O'Neill: Yes. As I said, I have set out my priorities. The TRPSI budget has clearly been very effective given what has been delivered to date, not least the MARA project, the assisted rural transport project and the work on employability that we did with the youth sector. We have spent our budget right across all the areas of work that we were involved with in the previous programme. It has really been very successful on a number of fronts, not least that we were able to leverage in funding from other Departments to get involved in areas of work that they might not have been able to do if we had not been involved.

I have restructured the funding going forward so that we have a bit of a shift of the money in the resource and capital budget.

Over the next year, we hope to introduce some new initiatives on rural transport and a small capital grants scheme for rural community groups. We will do more work on rural broadband and some work on fuel poverty. So, it is quite a busy area of work for us going forward, but we have to build on what was obviously so successful in the past.

Mr McAleer: Minister, I noted that you said that one of your priorities was the relocation programme. That seems to be very popular among your staff, given the level of interest in working closer to home. Will you give me a wee update on that? As was said earlier, all politics are local, and one proposal is for DARD Direct to be developed in Strabane. Can we get an update on that, please?

Mrs O'Neill: I have prioritised the relocation of headquarters to Ballykelly, the fisheries division to south Down, Forest Service to Enniskillen and Rivers Agency to Loughry, and it is full steam ahead on all of those. We hope to be in Enniskillen and south Down by the summer and will have let the contract for Rivers Agency and Ballykelly by the end of this year. You referred to the number of staff who have indicated a willingness to move. That clearly shows that there is a demand in the public sector for a better work/life balance. There is a demand for people to find employment closer to home. To me, that shows that it is the right policy. Staff have clearly voted with their feet on that one, so we are moving forward with that.

One of the benefits of Strabane DARD Direct is that it is a co-location project with other services. The fact that DSD and DEL are also moving on to that site allows us to make efficiencies. Given the economic climate, we should all strive to do that, so I am keen to get that delivered. It will be the first opportunity for us to enter into a joint venture. For me, the advantage of Strabane is the ability to co-locate with other services.

Mr McAleer: Thank you. Minister, you said that it could be June at the earliest by the time the Commission signs off on the draft programme. I know that this might be difficult to project, but do you know how soon after that the programme will be open for applications? I am thinking about the farm business improvement scheme or even any of the priority 6 programmes.

Mrs O'Neill: The work on priority 6 is ongoing. We will finalise the LAG board members this week, or, if not all this week, certainly over the next couple of weeks. Animation work has already commenced, so that will allow us to open to applications in advance of June. We are not waiting until we get the approval. You will remember that one of the criticisms of the current programme was that it took so long to get spending on the ground and get things moving. We definitely do not want that to be the case this time. We have put in place everything needed to be able to hit the ground running and get the spend out there as soon as possible. I expect that, maybe by about April, we will be accepting applications. We are working through the detail of the farm business improvement scheme, but it will be towards the end of the year that we start doing the work, which I talked about earlier, on assisting farmers, identifying their needs and looking at what would be advantageous for their individual farm business.

Mr N Lavery: In advance of that, we hope to be able to launch the discussion groups, which will be a forerunner to that.

Mrs O'Neill: Yes. As part of the farm business improvement scheme, one of the areas that we looked at was forming discussion groups. They have been welcomed by the industry, so we hope to get those started in June.

Mr Small: Later this year.

Mr McAleer: What is a discussion group? What does it consist of?

Mr Small: It is a business development group: a group of farmers come together and are facilitated and assisted with a range of issues, one of which will be the business investment scheme. It will involve planning for the scheme, thinking about their business plan for what they intend to do and making sure that it is viable and makes good business sense for them. It is a process whereby farmers are brought together in a group and learn from one other. They learn through peer learning and are facilitated in doing that.

Mrs O'Neill: It tries to help farmers to help themselves by upskilling them and giving them confidence. It allows an exchange of views and experiences and helps farmers to make the best decisions. Even if they are getting grant aid, they have an investment to make, so it is about trying to help them to work through that whole process.

Mr Small: It is an arrangement that has been used in the South and proved very successful.

Mr Anderson: Thank you, Minister and your team, for coming along today. Most of the points that I was hoping to speak about have been touched on, but I want to ask about staffing. You talked about needing 300 staff and the possibility of not getting 300. Will they be spread across different areas in the Department? If a number were to come out of one area, surely that would have an effect on that operation. Will you be looking at that and saying to certain staff, "Sorry, but I don't think that you'll be able to leave here. We need you here because of the number of staff leaving"? Will there be such restrictions?

Mrs O'Neill: The detail of the scheme is still being worked up. That is a problem for every Department, so the head of the Civil Service, in drawing up the scheme, is factoring that in. If you were to take everybody out of any area of service, the service would not exist. Nurses are one example that was used: if every nurse in a ward decided to leave, that would not be manageable. So, we have been working, and I think that we are a bit more advanced on this than other Departments, on looking at how we can improve things and where there is room for a bit more movement. Gerry has been working on a lot of the detail.

Mr Anderson: Gerry, have you looked at the numbers yet? I am sure that you know the position that you are moving into. Someone, maybe you, must have looked at the possible numbers coming from different areas and the possibilities that will present themselves.

Mr Gerry Lavery (Department of Agriculture and Rural Development): We have, but, as the permanent secretary said earlier, there is no recent experience of a voluntary exit scheme in the Civil Service, so, as far as knowing what the appetite for the scheme will be, we have nothing to build on. We have begun to prepare mechanisms that will allow us to work quickly after the scheme to work out where the people are coming from and how we will move staff into those areas to replace those leaving. So, it will be a case of identifying the priority services that we really must deliver, and we referred to some of them earlier. The Minister referred to the basic payment scheme. There are priority areas that we must deliver on and ensure that they are staffed to deliver that service within the available budget. That will mean moving staff around. So, we are already talking to staff and telling them that they will need to be more flexible than they maybe were in the past. They will need to be prepared for a change in their job and being asked to work in a different system. We should, I hope, know what the appetite for the scheme is in the spring, with the first people leaving in the autumn. So, we will have a bit of time in between to prepare the ground.

Mr Anderson: You talked about the forestry and fisheries functions going to different locations. Will you ask them to consider long-distance travel or move house, or will you try to facilitate the staff being looked after in such a way that they will not be pushed into decisions? I think that you know where I am coming from.

Mrs O'Neill: Yes. There are couple of points. First, I always give the assurance that, as part of the relocation projects, it was never my intention to force anybody to move anywhere. As Gerry said, we have to look at where the priority areas are and at how people can be moved around. Until we get the actual number of people interested in moving, those things are still in flux, and we will have to work our way through them. The other point is that we are talking about people's livelihood, so any changes, particularly those concerning staff, have to be done in consultation with them and their trade union representatives. That has been important to me, and I have expressed very strongly in the Department the view that that is how I want it taken forward.

Mr Anderson: I come back to the rural development programme and the formation of the LAGs. I think that you talked about young people coming forward. What is the present situation with getting the LAGs set up for the commencement of the programme? Are there past lessons from previous programmes? I had occasion to sit in on previous programmes and saw some of the difficulties. Have we learnt lessons that will be of benefit this time for the smooth running of the new programme as it rolls out the £623 million over the next five years?

Mrs O'Neill: Absolutely. First, on the recruitment of new members, over 2,000 people applied in the end. That is really significant. You will know from sitting in on a LAG that, sometimes, it is hard to get people to come forward, volunteer their time and get involved. We are very grateful to all those people. There will be a role for all of them in the wider LAG. We are finalising — I think that this is the same right across the board — the recruitment to the board, which is the smaller group of people who will be involved in taking the day-to-day decisions. David will keep me right, but I think that that is being completed this week. It is certainly over the next couple of weeks.

Mr Small: It is within the next couple of weeks. As the Minister said, we have had a very positive response from people expressing interest in joining the wider LAG and becoming LAG members.

Mrs O'Neill: We focused on trying to recruit women and young people. That was clearly evidenced in the number and range of people who came forward. Lessons have absolutely been learned — they had to be. That was very much part of the process with the wider rural development stakeholder group that comes together. We concentrated on people involved on the ground: for example, the application forms are similar whether you want grant aid of £1,000, £10,000 or, taking it to extremes, £100,000. That should not be the case. We looked at practical ways in which we could improve things. That is certainly what we have been striving to do. Have we got it all right? Time will tell, but we have certainly improved things. I am confident that there will be a marked improvement in some things.

Mr Anderson: We all realise that lessons have to be learnt. A number of projects got bogged down in logjams in the system. I would like to think that we learnt a lot and that processes have been streamlined so that the programme can be rolled out a lot more efficiently and effectively. I look forward to that. Finally —

The Chairperson (Mr Irwin): Sydney, we are very pushed for time.

Mr Anderson: OK.

The Chairperson (Mr Irwin): Kieran is the only person who did not get to ask a question, so I want to give him a quick opportunity.

Mr McCarthy: Mr Chairman, thanks very much. Apologies for not being here earlier, Minister. Forgive me if my question has been asked and answered, but I will ask it anyway. It is about the fishing industry. You had some success at your December meeting, which we are all very grateful for. A lot of work is still to be done. Do you forecast better prosperity for our fishing fleet as the year goes on? Your Department cannot sit still and wait until December next year before trying to get more of the crumbs coming from the Brussels table.

Mrs O'Neill: We go to Europe every December to get a quota for the following year. I do not even agree with that process. I think that even Simon Coveney, the Minister in the South, would agree that the annual allocation and quota are not sufficient to allow the fishing community to plan for the future. It is like any business: if you are working year-on-year, it is very difficult to plan for the future.

That aside, the Department is working closely with the industry. You know that I have established the fishing task force, which is working to look at the challenges, opportunities and needs. We expect that some positive work will come out of that. The decommissioning scheme and all those things are being discussed by that task force. We have a very strong fisheries division. You will know that we are moving it to south Down, which, being nearer to ports, will mean that it is closer to the fishing community. Outside of all that, quite a substantial body of work is going on. There are Going for Growth targets for the fishing industry, and I am interested in the aquaculture industry and how we can assist it. We are to have an all-island conference on aquaculture, which we have taken forward through the North/South Ministerial Council. So, there is quite a gamut of work in support of the fishing industry.

Mr Byrne: We have a concern that the £3 million cut to the Agri-Food Strategy Board will affect future research related to the Going for Growth strategy. Will you give serious consideration to encouraging joint research in the sector between AFBI and Teagasc in the Republic? I am conscious of the fact that we have had our fellow Committee from the Dáil here today. It would seem to make sense, given the economies of scale and the expertise in research and innovation, that encouragement be given to AFBI collaborating with Teagasc. I would like you, Minister, and the Department to give serious consideration to that.

Mrs O'Neill: Absolutely. I fully support that. I spoke to Teagasc about that and raised it with Colm McKenna at AFBI. He recently met Teagasc to talk about which areas can be explored further. In this climate, we have to work together — it makes sense.

There is potential for collaboration in quite a number of areas, not least the beef industry and genomics. There are opportunities, absolutely, and I have encouraged AFBI to explore them. I know that Teagasc is also up for that. That is positive, and we need to push it as far as we can.

The Chairperson (Mr Irwin): Many on the Committee have concerns about the proposal to spend £25 million to £30 million on the new Northern Ireland Food Animal Information System (NIFAIS). Some thought that it was over the top and that we were going for the Rolls Royce of systems. Has the Department looked at that again? What is its current position?

Mrs O'Neill: I have listened to that concern. You have to remember what the system does. It underpins the traceability of our industry and can provide an assurance of our produce, so you must not underestimate its value. The headline figure probably sounds large, but break it down into year-on-year costs. Everything is built into the cost, including the ongoing maintenance of the system. If you look at it that way, you are talking about approximately £4 million a year for something that is value for money and very beneficial.

Mr N Lavery: I think that the Committee will be briefed on this next week.

The Chairperson (Mr Irwin): OK. The time has gone. Thank you very much for your presentation and for taking our questions.