Official Report: Minutes of Evidence

The Chairperson (Miss M McIlveen): I welcome the Minister of Education, Mr John O'Dowd; Ms Fiona Hepper, deputy secretary in the Department of Education; Mr Trevor Connolly, the Department's director of finance; and Mr Philip Irwin, the Department's director of investment and infrastructure. Thank you for attending today. Unfortunately, I will have to leave, as you are aware. My colleague Jim Shannon's father sadly passed away, and his funeral takes place this morning. I invite you to make an opening statement after which members will follow up with questions.

Mr O'Dowd (The Minister of Education): Thank you, Chair, for inviting me here today. Please pass on my sympathies to Jim Shannon on his father's passing.

I am here today to discuss the final outworkings of the Department of Education's budget. I am sure the Committee will appreciate that, after five years of year-on-year cuts to the block grant, which now stands at somewhere in the region of £1 billion less spending power for the Executive, the Department of Education, like other Departments, has faced difficult choices down through those years. However, as each year passes and you reduce your budget year-on-year, the decisions you have to make become more and more difficult. I have to say that this is the most difficult budget that I have had to prepare in my tenure as Education Minister. I suspect that many people around the table would share with me that they would not want to make the choices that have been made here today.

We are in a financial position that was, in my opinion, created by others. Our economic strategy is largely driven by others. I believe that the Executive continue to manage to mitigate some of the worst aspects of the austerity measures that are decided elsewhere. The Executive, through the Stormont House Agreement and, indeed, through the preparation of what has been a difficult Budget for all Departments, have done everything in their power to mitigate the worst aspects of those measures. Nevertheless, individual Ministers have to make decisions that have ramifications for the organisations under their control. In my case, that includes over 1,100 schools, the Education Authority and other arm's-length bodies.

Yesterday, I forwarded a detailed paper to the Committee on my final decisions around the budget. I apologise for the delay in providing the Committee with that paper, but I emphasise that decisions were being made until the evening before. We examined every line of the budget to see how we could further mitigate the worst excesses of a reduced budget. When the final decision was made, there was no delay in forwarding the paper to the Education Committee for scrutiny and in preparation for today's meeting.

You will note that, despite the very welcome additional £64 million provided to my Department as a result of the Executive's final Budget, we still face significant pressures. A funding gap of around 5% remains, which equates to around £97 million. Our capital budget is significantly impacted; there has been a reduction of almost 20%, which equates to £36·1 million. While much focus has been on our resource budget and the impact of that on front-line services, a reduction of 20% on our capital budget will have a significant impact on the delivery of minor works and the school enhancement programme throughout the year.

In the document to colleagues that I have prepared, I have outlined each area where I will be reducing my budget. I am in no way suggesting that any of the services I am reducing are not important, not doing good work or not making a positive impact on the lives of individuals and communities. However, the sums simply do not add up, and I have to provide stability to the education budget and the education service moving forward. The £97 million that we are short in terms of savings is also, then, balanced against the fact that a significant amount of those savings relate to staff costs.

I have done everything in my power to protect jobs for teachers, non-teachers and support staff throughout the boards. The way in which schools manage their budgets is delegated to them, so we are dealing with 1,137 different budget lines in which decisions will be made about staff costs. The Education Authority will have to make decisions around staff costs as well, so a lot of that is out of my control and I will have to wait until late April or May or perhaps June before I have a full understanding of exactly what savings have been made by those bodies in terms of staff costs. Therefore, I am setting aside an additional £18 million of savings to use at a later stage in the financial year either to mitigate savings not being achieved by those bodies or — and there is only a slight chance of this — inject it into front-line education services moving forward.

Over this period of time, between the Executive's announcement of the final Budget and my presentation of the paper to the Committee, I have also been revising my own budget. I have been looking at areas where we can save costs without a reduction in staff and I have accumulated quite a significant amount of money — around £28·7 million — in that regard. I am immediately reinvesting £10 million of that into the Education Authority, as you will note in the document I have presented to you. I have carried out that action for a number of reasons. We know that there are significant pressures on the Education Authority in terms of special educational needs, which are rising year-on-year. It also faces pressures in relation to pay, inflationary costs and price costs. Even with that £10 million injection, the Education Authority faces a pressure of around £9·7 million. As I have said, the £18 million that will be left from that savings pot will be used to balance the budget or invest in front-line services moving forward.

Each year I have presented the budget to the Committee it has been in difficult circumstances, but this is the most difficult one yet. I believe that we have carried out a thorough investigation of my budget and there has been a significant consultation to which there were over 23,000 responses. There was an Assembly debate in which Committee members and others expressed their views about the direction of travel of education spending, and there has been much public debate about the matter. The trade unions organised well-attended public events across the North at which there was vibrant and healthy debate.

I have attempted to protect front-line services as much as I possibly can. There are a number of unknown factors as we move forward. I will conclude by saying that although we will not know the exact savings achieved by the boards or the schools until May or June there will be a general election in May and, without wishing to interfere in the direction of travel at Westminster, I sincerely hope that the Conservatives are not returned because I believe that their economic policies are crippling this society. Whoever is returned to government needs to realise that their austerity policies are not working and that the continuing cuts to our block grant are having a detrimental impact on the services that we provide to our society.

The Chairperson (Miss M McIlveen): Thank you. I acknowledge that this has been a challenging Budget period, but I also recognise that it has been incredibly difficult for schools over a protracted period, particularly in the run-up to Christmas and beyond. I am glad that we have at least brought this to some sort of conclusion so that schools can start to make some quite difficult decisions. Although additional money has been put into the aggregated schools budget, which is very welcome, there are still savings that need to be made, particularly in relation to staff costs and increased overhead costs. Boards of governors will have to make some challenging decisions and will, perhaps, have to look towards redundancies in order to live within their budgets. Can we have a commitment from the Department and you, Minister, that any costs associated with redundancies will be met and that we will not run into the fiasco we had last year?

Mr O'Dowd: Redundancies will be paid for out of a central fund held by the Executive. We are in detailed discussions with the Department of Finance and Personnel and a programme has been set out detailing how various Departments will access funding to pay for redundancies. All Departments are feeding into the one pot. Our preparations are well advanced, and my colleagues from the Department are in detailed discussions with DFP officials and we will prepare the paperwork and the business cases in time for DFP approval. Of course, DFP has to follow its own procedures and engage with my Department on those matters if there are any questions to be asked. So, I believe that we will have the processes and procedures in place well in time. I am not overly concerned that there will not be enough money available to deal with the redundancies in education, but I cannot confirm that until all Departments have bid and DFP has made its announcements around those matters.

In relation to the pressures on schools budgets, there is a pressure of approximately £28 million in relation to staff pay in connection with schools. Schools will make individual decisions as to how they deal with those pressures. There is a £41 million surplus fund sitting at the centre. I do not expect or encourage schools to draw down that entire fund, but I think that it would be a reasonable assumption to suggest that perhaps around £10 million of that fund will be drawn down this year, which would assist schools in dealing with their financial pressures, but each school will be different. Some schools will have surpluses, some schools will have deficits and they will have to make those decisions to live within budgets. There will be a central fund for redundancies. We are well prepared to bid for that, but DFP will have to make the decisions as to how much funds can be allocated to each Department moving forward. I am reasonably confident that we will be able to cover all redundancies.

The Chairperson (Miss M McIlveen): In relation to the impact of reductions in real terms in the detail of this budget, how do you anticipate that that will work itself out in the school estate?

Mr O'Dowd: In terms of staffing?

The Chairperson (Miss M McIlveen): In terms of services.

Mr O'Dowd: It will have a detrimental impact on the delivery of services across the estate. No one is sitting around the Executive table claiming that our budget is sufficient or that the direction of travel is correct. Whether you are the Minister of Finance and Personnel, the Education Minister or any other Minister sitting around the table, we all have to deal with a restricted budget being given to us by the Westminster Government. I am certainly not sitting here today saying that the education budget is sufficient or that people should be able to deliver the same services on 1 April as they could on 30 March, because the budgets are significantly different. However, a number of factors need to come into play.

I mentioned the surplus. Schools will have to start looking at that surplus and the draw down on it. I will have to make assessments in May or June when I know exactly how much savings are going to be made through staff redundancies. If schools and boards are meeting those targets, I may be able to inject some more money into the system at that stage, which will alleviate some of the pressures, but, when I look across, I have pressures in a number of areas. For instance, the proposal is to spend £14 million on school maintenance this year. We spent £22 million on school maintenance last year and a significant amount more than that in the year before, so there is a pressure there. There is a resource pressure regarding materials and furniture for new schools, so there is a significant pressure there. There are pressures on the Education Authority. It is facing increasing costs around special educational needs. All those pressures remain. How I will be able to assist the various bodies moving forward depends on a number of events, particularly what savings are made through staff redundancies moving forward.

The Chairperson (Miss M McIlveen): Thank you very much. Apologies, but I have to go.

Mr Craig: I was listening with interest, because I have been one of the people sitting doing those numbers for you. What actions will you, the Department or the new authority, as it will be, in practice, when the budget really kicks in, take against schools that have, up to this point, completely ignored what I would call good financial practice and just continued to go into a deeper deficit? Nothing but nothing seems to happen to them.

Mr O'Dowd: My Department engages with the boards on a weekly basis in relation to good finances. In a more structured way, we do quarterly governance meetings with each of the managing authorities, whether it is the boards, CCMS or whoever it may be. We go through areas where we have concerns about budget lines. Managing authorities have a duty to ensure that schools are living within their budgets or ensure that they have a plan in place that will bring them into living within their budgets. There have been actions taken against schools down through that period. Schools that are in significant deficit also should not be allowed to avail themselves of other outside funding in terms of the other resources that the board may have to assist them, so it is in the interests of the schools to do that. Action can be up to and including closure because, if a school is not financially viable moving forward, it places a significant strain on the entire schools estate and is an unfair burden on schools around it that are living within their budget. Up to and including closure can be a measure taken against such a school.

Mr Craig: I am glad to hear that, and I am glad to hear that the Department will effectively tackle that issue. It has long been a running sore for schools that have tried to be financially astute and keep within their budget. The other issue I noted is that the boards seem to have lost their contingency funding. I do not know whether that is planned or is something that is a constraint of the budget here. Will there be any sort of contingency fund? A lot of schools, especially special needs schools, rely heavily on that type of funding.

Mr Trevor Connolly (Department of Education): The common funding scheme requires each funding authority to have a contingency fund. It is the decision of each individual board as to the amount that they are able to set aside, and, from our perspective, we are not in any way saying that you should not have a contingency fund. I think that you are quite right, Jonathan. It is the constraint in terms of the budget, and that, obviously, is a financial decision that each board individually has to take.

Mr O'Dowd: And the new authority.

Mr Connolly: The new authority, obviously, will have to do that from 1 April.

Mr Craig: It is a conversation maybe that the Department needs to have with the new authority because it will have a disproportionate impact, especially on special educational needs, which is worrying.

My last question is around the fact that quite a lot of voluntary organisations are now funded under education. I am looking at the likes of Sure Start and the Prince's Trust Northern Ireland. What actual budgetary impact will this budget have on the likes of those two organisations?

Mr O'Dowd: Sure Start has a distinct budget line, and, under the draft budget, we proposed taking £2 million out of Sure Start. Under the final budget, we are going to take £1 million out of Sure Start. That is the result of consultation responses and an acknowledgement of the significant positive impact that Sure Start has in our society, particularly in areas of social deprivation. The final budget for Sure Start for 2015-16 will be £22·8 million, which is still quite a significant investment in that field. In relation to the other bodies, I will forward the information from the Department. The detail of third-party organisations should be contained in the spreadsheets you have been provided with. If there are any areas of questions or concerns that we are not able to supply the information directly on now, we will forward that to the Committee in due course.

Mr Craig: Minister, obviously, Sure Start has had a major impact on the underachievement issue that we have seen in Lagan Valley. When you say that £1 million has been taken out of its budget, do you have any idea of the percentage cut in its overall budget?

Mr O'Dowd: I will tell you the exact percentage cut now. It is 4·2%. I am not suggesting that £1 million is not a significant amount of money. It is a significant amount of money; but when you are going through a budget trying to achieve over £97 million of savings, you cannot go past a budget line of around £24 million. You simply cannot do it, and that is the unfortunate thing. My officials will be engaging with the various bodies, and we will endeavour to make as much of these savings from administration rather than from front-line services. That is a discussion and a conversation that has yet to take place with these bodies.

The Deputy Chairperson (Mr Kinahan): The roll-out of Sure Start was to 20% of the most deprived wards, and the target was to move to 25%. Are you still going to try to stick to that?

Mr O'Dowd: We will attempt to stick to that target. I do not wish to cover 25% of wards with a service that is not achieving the targets of Sure Start. There has also been a significant review of Sure Start carried out, and that report has only in the last number of days arrived on my desk. I wish to have time to study that report in detail to ensure that the targets and objectives are being met or whether there is another way in which we can achieve those targets through the delivery mechanism of Sure Start. Decisions are to be made in the year ahead about how Sure Start services are delivered on the ground.

The Deputy Chairperson (Mr Kinahan): My concern throughout the budgeting is that you seem to be trying to do everything the way you have done it before. All you are doing is cutting percentages off every service you offer. Are you going to look at reviewing the sacred cows and then seeing whether you can do things differently? It just seems extraordinary that everybody will be losing jobs here and there. Are there better ways of doing things? Are you doing a total review?

Mr O'Dowd: I can assure you that we are now well into the sacred cows. Over the last five years the education budget has reduced year on year. At the start of that process you could avoid areas that you felt were so important that they could not be touched. After five years of reductions in budgets, including reduction in the block grant, we are now in amongst the sacred cows. There are services coming to an end, such as the £2 million that I started with two years for community engagement, which I think is a very good project. I have often said that we have very good teachers, but they will not be able to do this own their own. We need the involvement of the community. That has now come to an end. The £2 million budget is gone and is not to be returned.

There is going to have to be a debate about what our priorities are and where we, as a society, want to see investment going in the future. Quite rightly, every Minister is on the airwaves and in the newspapers discussing the impacts the Budget will have on their budgets, many of which are negative. But, as a society, we are going to have to decide what services, across the Executive, we are going to do without in order to invest in others. I believe that Education and Health are on the top of that list.

The Deputy Chairperson (Mr Kinahan): I agree. You mentioned that you had some 20,000 responses to the consultation. Did you get a whole mass of ideas from different people? When I was talking to schools, the extended school project was something that many thought could be cut. Did you get a lot of ideas from teachers and schools?

Mr O'Dowd: Yes, and we will prepare a report on the consultation responses for the Committee. There is a variety of views out there about how we should deal with our budget. Sometimes it is based on what area of education the individual or group are concentrated in. They believe that their area is the most important.

In terms of our education system, I will repeat that schools cannot do this on their own. There have to be extended schools, there has to be community involvement, we have to bring parents in, we have to reach out beyond the school gates, and it will take some money to do that. It is becoming more and more difficult to do it in any meaningful way.

While there are many ideas about what we should do with the education budget, I would suggest that some of them are not strategic in their thinking. There is quite a significant report from the stakeholder group about the trade unions and management side, with me at the moment. It is quite a significant review of budgetary processes, which deserves further study and comment moving forward, but it depends what side of the fence you are on in relation to education.

The Deputy Chairperson (Mr Kinahan): This is my last question before we move on. Are you still looking at 1,000 redundancies or is it down to 300? Have you any feeling for the numbers we are talking about?

Mr O'Dowd: The approximate number of redundancies will be 500 teachers and 1,000 support staff. That is approximate. It is difficult to estimate because, as I said to the Chair, we have 1,137 schools that will make their individual decisions. The Education Authority will also have to make decisions about its funding lines. When all that information comes in, around May or June, that is when we will know the definitive figures that will be going.

The Deputy Chairperson (Mr Kinahan): Do you have a timescale for how those redundancies will work out through the system?

Mr O'Dowd: It is estimated that most of them will leave in September because teachers require four months' notice. As I said earlier, we are working with DFP to formalise the exit scheme. Once it is in place, we have already informed schools of the need to make redundancies and they should be putting those measures in place now, but most, if not all, the staff will now leave around September, which means you have a half-year saving.

The Deputy Chairperson (Mr Kinahan): Very good. I met with a group of principals last week and the first measure they mentioned to me was morale. Morale is so appalling low, and we need to find some way of raising it. We have a fantastic resource in our teachers and we need somehow to find a way of lifting that.

Mr Lunn: Forgive me if these things are already in the paper, Minister, but I just cannot put my eye on them the moment. One is that there is a target to expand the service in Middletown, for instance. Where does that stand in the arrangements?

Mr O'Dowd: I believe that the services at Middletown will still be able to expand. There is approximately £100,000 reduction to the Middletown budget. I would like to see that come out of administration costs, rather than front-line services, but I believe that we are still on target to expand those services.

Mr Lunn: All right. What about things like the Booktrust and Sentinus?

Mr O'Dowd: The Booktrust budget has been ended. That was a difficult decision, but it was a budget of approximately £300,000, and another way of looking at it is that it equates to approximately ten teachers. The money has gone back into front-line services elsewhere. I am also conscious that my CAL colleague, Carál Ní Chuilín, has been proactively protecting and investing in libraries. I have to look at what other Departments are doing and see whether another Department can provide a service. Libraries are free to access, and I encourage people to use them. They are a great community resource and another way of obtaining books.

The Sentinus budget is down by £100,000, to £300,000.

Mr Lunn: You rightly say you have had to make tough decisions. We had a debate about STEM subjects, and so on, the other day, and there is no disagreement about the importance of that aspect of what you do. Can you really justify taking money out of an organisation, such as Sentinus, that does such good work?

Mr O'Dowd: It is not my job to justify this budget, as strange as that may sound. I am dealing with a budget, dealt to us by the Westminster Government, which has lost a billion pounds in funding over the last four years. My job is to deal with this budget and to protect front-line services as much as I can, mitigating the worst excesses of policy set elsewhere. In normal circumstances, would I put £100,000 back into Sentinus? Yes, I would. But this is not normal circumstances. At this stage I am reallocating funds within my own Department, moving money about to try and protect services elsewhere. Sentinus still has a budget of £300,000 and will be able to do significant work with that.

Mr Lunn: I do not know what we are all going to do if the Conservative Government are not returned and we run out of that excuse. I cannot help thinking that a Labour Government will have to do exactly the same thing, but we will see.

Mr O'Dowd: If a Labour Government do the same thing it will have the same consequence on our public services.

Mr Lunn: I think there is now a four-year liability of around £35 million a year for the teachers' pension scheme. How is that catered for? It seems like a huge amount.

Mr O'Dowd: That is being dealt with centrally. It formed part of the overall Budget discussions and Budget document as far as I am aware, but it is being dealt with centrally through negotiations with DFP and HMT. There is a fund set aside to deal with that. The £35 million covers both Education and DEL, but that is being dealt with centrally.

Mr Lunn: Does that mean it is not coming out of your budget at all?

Mr O'Dowd: No, it is not a pressure on my budget.

Mr Lunn: OK. You seem to have a determination to reduce the home-to-school transport budget from £70 million per annum. Fair enough. How will you do it?

Mr O'Dowd: The review that I published, I think pre-Christmas, will go out to public consultation. In fairness, it was not a consultation. I published it to inform members and the public about what was in the review. That will have to go out to consultation. There are a significant number of recommendations in it, some of them challenging. That report will have to go through the consultation process and move forward.

How the transport budget is now dealt with in year is a discussion and decision for the Education Authority.

Mr Lunn: I have one more question, Chair, if you do not mind. We have in the papers a list of schools and the stages of the process that they are at. Do the ongoing reductions in the capital budget affect those projects? Are they pushed back? What happens in that case? For no particular reason, I will mention one project —

Mr O'Dowd: In Lagan Valley?

Mr Lunn: — only because it is one of the most recently announced. It is not in Lagan Valley. It could not be further away; it is in Enniskillen — Portora and the Collegiate. I think that that is the most recent major scheme that has been announced or decision that you have made. In the present circumstances, is there any timescale for that?

Mr O'Dowd: That project is at the very early stages of planning —

Mr Lunn: I know.

Mr O'Dowd: — and would not be affected by the 2015-16 Budget in any case. Even if, in the 2015-16 Budget, my cup runneth over with capital funds, it would not be affected.

Mr Lunn: Could you even start the process?

Mr O'Dowd: The process has begun with planning for construction. It is not just sitting on a shelf somewhere; there is quite a lengthy process from announcing to starting a building programme. That process is in train and is moving forward, and all those works are being carried out. The point I am making is that, if I had twice or three times the capital budget in 2015-16 than I have, I would not be laying any bricks in Enniskillen for that project this year.

The overall capital budget is down almost 20%, and that has had a significant impact. We have made a decision to move ahead with the major works, which will not be impacted. Minor works that are programmed and on-site will continue to move forward, but there will be a detrimental impact on the schools enhancement project.

Mr Lunn: Are those that are almost at the point of being on-site going to be held back?

Mr O'Dowd: No, they are going to move ahead.

The Deputy Chairperson (Mr Kinahan): Before I go to Chris, I want to go back to two points that Trevor raised. When you were talking about Sentinus, did you take into account the match funding and how that would affect them? If you took off so much from them, they would then lose more funding elsewhere.

Mr O'Dowd: I appreciate that, but they still have an opportunity to obtain match funding for the budgets they have and to alleviate some of the pressures that are on them. I still have pressures within my own budgets that I have to deal with.

The Deputy Chairperson (Mr Kinahan): We talked about pensions and, I think, the £37 million. Is that all still planned to come out of the pot for the next three or four years? I think we were told yesterday that four years of money has to be found.

Mr O'Dowd: I understand that is the plan moving forward. I also understand that the pension strategy is an agreed strategy at Westminster. Whichever party is in government next time around, they will still be on that pensions trajectory. That is a decision that will, hopefully, be made at Westminster, if they are going down that road. That would then allow the Executive to obtain the funds from that central pot in Westminster to deal with our own budgetary pressures here.

The Deputy Chairperson (Mr Kinahan): Does that mean that it will come of our central pot rather than the Education budget?

Mr O'Dowd: Yes.

The Deputy Chairperson (Mr Kinahan): OK, thank you.

Mr Hazzard: Thanks, Minister, for the report. I notice that you referred to a £10 million injection for the Education Authority. What will be the effect of that? How is it even possible?

Mr O'Dowd: It has been made possible from the draft Budget until now, because I have taken measures within my own budget to secure £28 million. That involved a number of projects coming to an end and a reduction in other costs but it was an attempt to balance our budget. We have £97 million of pressures, but we thought it prudent and good financial management to set aside a pot of money because there is a reliance on schools meeting their targets and the Education Authority meeting its.

We had a £28 million pot. I decided to use £10 million of that immediately and to put it into the Education Authority to alleviate the significant pressures on it. It has significant pay and price pressures and significant pressures on special educational needs, as well as other pressures. We have injected £10 million immediately. It still has a pressure of around £9·9 million that it will have to deal with. As I said, I will use the other moneys set aside at a strategic time. I might get to a point where I never have the opportunity to use them, because they may have to be used simply to balance the budget. I hope that I get to the stage where I inject them into front-line services.

Mr Hazzard: When you and the Department talk about Programme for Government commitments and business plan targets, this is obviously not the sort of financial or economic climate that you would like to be sitting in. To what extent does a budget like this hamper your ability to deliver on Programme for Government commitments? What can you do to mitigate that to make sure that you do?

Mr O'Dowd: When we were sitting down to go through the budget, we matched it against our Programme for Government targets. We did our best to ensure that we do not take actions that make it impossible to reach those Programme for Government targets, although I think that some of them will be more challenging in the future. We have to review our work programme in the context of how we move forward and match that against the available budget and what we can deliver as a Department. It is worth noting that there is a 9% cut in the Department of Education's spending power in Rathgael House and Waterside House. We will not have the same amount of resources to deliver the same number of programmes as we once hoped.

Mr Rogers: You are very welcome, Minister. You mentioned front-line services a number of times this morning. Carrying on from Chris's point, do you expect that, in a future Programme for Government, targets will have to be readjusted, considering the cuts that are impacting on us here now?

Mr O'Dowd: This is moving into 2015-16 for the Programme for Government targets. They have to be reviewed. The last Programme for Government ran in 2014-15, so those targets have to be reviewed anyhow. As I said to Mr Hazzard, as we went through our budget, we matched it against our Programme for Government targets and endeavoured to ensure that they were still deliverable. There might be significant pressures in delivering them, but we certainly did not want to make it impossible to deliver them.

Mr Rogers: Going on from that, we have all seen over the last number of years that early intervention in education really works. How can we really have effective early intervention if early years is losing £2 million, Sure Start is losing £1 million and special educational needs support is losing nearly £5 million? I spoke to a speech therapist yesterday who told me that somewhere between 20% and 50% of our children are presenting themselves with language-acquisition problems at a very early stage. If we do not get the ability to communicate right, we are on a hiding to nothing. How are we going to manage that?

Mr O'Dowd: One of the reasons I included a further £10 million for the Education Authority was that I recognised the specific pressures it has in the delivery of SEN. I have also ring-fenced SEN spending in the Education Authority. The Education Authority board members may be somewhat annoyed about that, as they may believe that I am interfering in their processes. However, but I will be ring-fencing a number of areas when I am setting the budget to the Education Authority, including SEN, youth and, I think, early years. Is that right?

Ms Fiona Hepper (Department of Education): Yes.

Mr O'Dowd: That will include a number of others, which I will supply the Committee with, but the aim is to assist and protect those services as much as possible.

I have raised this point several times with Executive colleagues. I will be making bids in year for further funds for SEN. Those costs are rising. If need be, I will attempt to assist the Education Authority as much as possible from the very limited resources from my budget throughout the year.

One budget line for early years etc has been reduced significantly, but significant investment is still going into early years spending. We will still be able to provide every child who wishes it with a preschool place. We will still be providing somewhere in the region of £23 million to Sure Start. Significant investment is still going into early years provision; £26·6 million will go into it in the next financial year. No child will be displaced from early years provision or a preschool setting.

There will be challenges for early years because of that budget reduction. There will have to be a change in some patterns around it, but I have ring-fenced that spending on SEN and will do everything in my power to obtain further funds for it.

Mr Rogers: Thanks for that. I agree that there will be early years provision, but will it have the depth and quality of the early years provision that we have at the minute? When you talk to the people who are involved in early years, Sure Start or whatever, you find that they want to enhance the programmes. That is part of the issue.

Mr O'Dowd: I am confident that we will be able to maintain the level of service. Of course, we want to enhance it. I do not think that we will be in a position to do that, but I believe that we can maintain the current level of service for our young people in early interventions. A number of Departments are involved in that. Health is involved in early intervention, and I know that DSD also spends on it. Mr McCausland will be aware of that from his time in that Department.

Mr Rogers: The next part of my question on front-line services is about the Youth Service. Some 95% of the Department's funds for the Youth Service are delivered by voluntary youth people. Is there any possibility that the £1 million reduction in its budget could be focused on reducing bureaucracy, rather than on reducing front-line services?

Mr O'Dowd: You have read my mind on that. You are referring to the Youth Council budget. There is also youth funding going into the Education Authority, as it now is, which has not been affected by any reduction. However, the Youth Council budget was £5·1 million. I will be reducing it by £1 million. Its administration costs are quite alarming. There is an administration cost of £800,000 to distribute £4·3 million. That is a 16% administration cost, and I do not think that it is acceptable.

Going back to an earlier question about our priorities and how we run our education system, I am not sure that the most effective way to deliver that funding is through a separate organisation. I think that we have to seriously consider bringing the services that the Youth Council funds under the Education Authority, cut back on administration and keep the funding for front-line youth services moving into the future. I do not think that we have the luxury any more of funding the Youth Council as a separate organisation. I think that it should be brought under the Education Authority. The targets and principles behind the Youth Council should remain, but the funding should be distributed through that one body.

Mr Rogers: Yes, that is welcome, because some fantastic work is going on there. Probably 60% or 70% of the young people involved in that come from deprived backgrounds. Thank you for that.

You mentioned in passing that the school enhancement project would be under pressure in the future. Can you elaborate a little more on that?

Mr O'Dowd: We have around 50 projects in the pipeline relating to the school enhancement programme. The projects have moved forward quite quickly, and that is a credit to Philip and his team. However, I simply do not have the budget to move them all forward as quickly as I would like at this stage. We have around 21 that will move forward, and they have been notified of that. The others will be notified today that they will be delayed, but we have them at such a stage that, if capital becomes available through the year, we will be able to use capital in-year funding. I will be making bids to in-year monitoring rounds for capital because we have those projects at that advanced stage. It used to be the case in Education that we would not have had any projects sufficiently advanced to use in-year capital, but thanks to the work of Philip and his team and others, we are now at the stage where we will be able to use in-year funding.

Mr Rogers: When do you expect that schools will receive notification of their budget allocation for next year?

Mr O'Dowd: Schools received that notification last Wednesday. There will be other programme lines and budget lines, and the various managing authorities will notify them of those as well.

Mr Rogers: I have just one more question, Chair. Will the cuts to the entitlement framework have a detrimental effect on the target that you have for schools to get the required number of GCSE and A-level subjects? Not every school has managed to reach that target yet.

Mr O'Dowd: This is no longer an add-on; it is an integral part of our curriculum. The entitlement framework has been in planning since 2006. Additional funding was provided to schools to assist them in preparation for readiness to deliver the entitlement framework. The funding was supposed to end a couple of years ago, and I have kept it in place. It has been reducing year-on-year. I argue that, even in better financial times, schools should be preparing for the end of that funding. It was never intended to be long term. It was a short-term intervention to allow schools to prepare for that, and schools should prepare for that funding to come to an end.

The Deputy Chairperson (Mr Kinahan): Minister, you mentioned the ring-fencing of SEN youth and early years. Will that be for the next four years?

Mr O'Dowd: No, I am doing only a one-year budget. Beyond that is a matter for someone else.

Mr McCausland: Minister, the curriculum development budget has been reduced from a baseline of £2 million by £1·6 million, and you are left with £0·4 million. That is an 80% cut. How will that happen? What will be left?

Mr O'Dowd: There will be an end to the languages programme in our primary schools. That is a very regrettable position to be in. Introducing young people to languages at an early stage is very important. I hope that some schools will continue to carry that practice on. Indeed, a number of schools will have enhanced the programme already and brought in additional support under the languages programme. That reduction will be achieved through the ending of the languages programme in primary schools.

Mr McCausland: Will that deliver the entire £1·6 million?

Mr O'Dowd: There will be a STEM element of that of £0·6 million.

Mr McCausland: Will that go as well?

Mr O'Dowd: Yes.

Mr McCausland: For clarity, when you say that you will end the languages in primary schools programme, is that the project that CCEA wrote out to primary schools about recently?

Mr O'Dowd: No, this is a separate programme.

Mr McCausland: We are ending the languages programme in primary schools. Will money be set aside for the project that you were writing out about?

Mr O'Dowd: I want to clarify that, and I will confirm it with you. I believe that this is to be a separate programme, but there appears to be some doubt on that. I will confirm with you one way or another whether this is a separate programme from the CCEA programme that you refer to. I think that the letters that were sent out from CCEA were about the preparation of a scheme, rather than the delivery of this scheme.

Mr McCausland: You could be in a situation where you end a scheme because there is no money and start another scheme for Irish —

Mr O'Dowd: It depends. You will appreciate that I do not have every subsection of the budget in front of me. That CCEA scheme may have already been funded out of a budget line in CCEA or elsewhere. I will confirm that all for you.

Mr McCausland: It would be helpful to get some real clarity on what the impact on curriculum development will be.

My second question is on a point that Seán Rogers raised about the Youth Council. It seems to me that a significant element of the work that the Youth Council supports is work on youth organisations, such as scouts and so on. I am not sure that it will be able to make £1 million of savings simply by "administration and support", which your paper talks about. I have no difficulty with reducing administration, but many of the organisations that deliver youth work are almost entirely reliant on volunteers. Where you have an organisation that is almost dependent on volunteers, quite often that central support is hugely important because it is volunteers who deliver. Secondly, you get a big return. There is a big multiplier factor on any investment in support, because the investment in support gets the return of all the volunteers' freely given time. Do you not have a concern that removing not the admin bit but the support arrangements will have a detrimental effect on a very large section of youth work in Northern Ireland?

Mr O'Dowd: I am not suggesting that it will have a positive impact. None, or very few, of the decisions —

Mr McCausland: Maybe I could say that it could have a devastating effect.

Mr O'Dowd: I might not agree with the term "devastating"; it is not going to have a positive impact. However, I am of the view that the Youth Council is a luxury our society cannot afford. We should deliver the money to the organisations you refer to in a different way. I believe that the best way to deliver it is through the Education Authority. The Youth Council was formed under primary legislation, and, if we remove the council, we have to remove that legislation, which will take some considerable time. I believe, however, that we have to start moving in that direction.

I do not underestimate the impact of any of the reductions I am making in spending across a wide range of budgetary areas. I do not underestimate the impact it will have on the Youth Council, but I do not find it acceptable for an organisation to spend £800,000 on administration to then deliver £4·3 million of funding. It just does not make any sense whatsoever.

Mr McCausland: Chair, the Minister said that £800,000 is on administration. Is that entirely on administration, or is some of it actually for support?

Mr O'Dowd: It is under the heading of "administration" in the documents that I have been provided with.

Mr McCausland: If it were to be the case that some of that was support for the organisations, would there be a different outcome? It might be a longer-term aim to abolish the Youth Council; I do not know whether that has been conveyed to it yet. It may be, however, that the result of stripping out all that money in the interim, whatever the long-term aim, could be the removal of support from organisations that need it.

Mr O'Dowd: I would then have to take the money from somewhere else. I have ring-fenced quite a substantial budget for youth support in the Education Authority. In total, you are probably talking in the region of £28 million in the boards; add to that the £4 million that will remain in the Youth Council, and that is £32 million going into youth projects. That is still quite a healthy budget.

Mr McCausland: I suggest that, traditionally, the view across all political parties has been that youth services have been something of a Cinderella in Education.

Mr O'Dowd: I have increased youth funding during my tenure as Minister by somewhere in the region of £4 million. I have also ring-fenced youth services, and, if the member has a suggestion about where else I should take the £1 million from, I am more than happy to listen to him.

Mr McCausland: I was not suggesting that there should be no reduction; I was simply suggesting that it be looked at again to ascertain clearly the difference between admin and support so that there is no detrimental effect on front-line organisations.

The Deputy Chairperson (Mr Kinahan): We were certainly lobbied to sort out the bureaucracy so that we would spend less on it. Equally, however, if we are going to move it to the Education Authority, we have to make sure that we do it more efficiently there too.

Mr McCausland: A huge amount of damage could be done to the organisations in the interim.

Mr O'Dowd: Whether it is administration in the Youth Council or administration in the organisations, why would you spend £800,000 — 16% of a budget — to administer? No business would run like that. Why would you spend 16%, whether it is directly inside the body or outside it? It just does not make any sense whatsoever.

Mr McCausland: It does concern me a wee bit. Some folk may have a clear understanding of how the traditional youth club works and is funded. We may not always have the same depth of understanding of how youth organisations, such as the Scouts and the Guides, operate or of the key role of that central support in maintaining a Province-wide service. I simply ask that the Minister consider looking again at the distinction between support and admin, because that will have a huge impact on the practical working of those organisations. Each element of the Scouts — each troop — does not operate totally independently; they need that central support. It is different from running a youth club.

The Deputy Chairperson (Mr Kinahan): Your point is very much taken, but we will come back to that.

Mr Newton: I welcome the Minister to the meeting. I ask you to clarify a couple of points. Given that there was unanimity in the debate on Monday about STEM subjects and given that other Departments, particularly DETI, have given them priority, it is very disappointing to learn that Sentinus will be impacted upon. That is perhaps even more so in the case of primary schools, where we really need to encourage interest in the STEM subjects. I know you will understand the need for children to be engaged in those subjects in a manner that is interesting, innovative and encouraging before they study them seriously. That is disappointing part of the budget to understand. When we will know which third-party organisations will be affected and what the impact will be on their budget?

Mr O'Dowd: I will ensure that members are informed within the next couple of days about third-party organisations. Some of those organisations are being notified only today of their budget. I will ensure that members are informed in the next number of days.

I accept your point about the debate and vote in the Assembly on STEM in the last few days, but the Assembly also voted overwhelmingly to put money into front-line services through schools' budgets and rejected an amendment to fund youth and other services. That brings me back to Mr McCausland's point on the Youth Council. The Assembly took a conscious decision to vote in support of schools and rejected an amendment that supported other education services. I cannot spin all those plates.

The funding for STEM is additional to and above the funding for schools to deliver the curriculum. While we would like to be in a position to provide further funding for different curriculum items, schools are still given core funding to deliver the curriculum. The World Around Us, which is primary schools, is part of the curriculum. I accept that they will have used STEM resources, which are still in place, although not as much as they once were. I believe, nonetheless, that we still can and will deliver STEM through The World Around Us in our primary schools.

Mr Newton: I understand what you said about travel to school, but, given recent incidents, if there are to be changes and possible savings in that area, where will you concentrate on when looking for them?

Mr O'Dowd: I do not think that I should pre-empt the public consultation. The independent body's report, which was published pre-Christmas, sets out a significant number of recommendations. I think that it is right and proper that we put those out to consultation, which is required for that; more procedural matters do not, I think, require to go out to consultation. We will certainly be flexible on that. We should allow the consultation process to take place and take decisions after that, instead of me sitting here and saying, "Well, I think you should do A, B and C". There is an independent report; let us hear what the public have to say about it.

Mr Newton: The community education initiatives are just being wiped out. I believe that you, personally, understand the need to address community education. Many of our young people face challenges, and you have wiped out community education initiatives. You deal with tackling educational inequalities in paragraph 4.2. Many young people need the community education approach to address educational inequalities.

If we take a primary building block away, particularly in inner city areas, we will face a challenge in tackling educational inequalities.

I believe in youth work, and I particularly argue the case for detached youth work, which ties into the two areas, certainly tackling education inequalities. If we are doing away with the £2 million budget there, are we also going to see an impact on detached youth work?

Mr O'Dowd: The elements of that youth work are decisions to be taken by the Education Authority. As I said, I have ring-fenced youth services funding in the Education Authority, so how that is distributed on the ground and utilised will be a decision for that body. However, contained within that was a fund that I set up to target areas of social deprivation, which will also be ring-fenced, so that money will continue to go into those areas of social deprivation. I believe that some of that was used, particularly by the Belfast board, for outreach workers etc. I can secure the fund, but how it is used will be a decision for the Education Authority and those teams.

I established the £2 million fund for community engagement two years ago. I know the worth and value of it but I am sitting with a budget that is very difficult to establish and will be difficult for those staff and teams to deliver on the ground. There are still community initiatives and projects in place. There will still be funding for the Achieving Belfast and Achieving Derry programmes. There is still also the opportunity for the Education Authority to put funding into community schemes, as some of the boards did, so there are still funding options out there.

Many of the elements that you see before you today were additional budgets added to projects that were already being funded from elsewhere. I was topping up the budgets. Because I have removed £2 million does not mean that community projects should end. I accept that there may be fewer of them and significantly less intensity around some of them, but there are still budgets that can be utilised.

The Deputy Chairperson (Mr Kinahan): Minister, you said that no decisions have been made about home-to-school transport, even on walking distances, until you go through the whole consultation process.

Mr O'Dowd: Yes, that is correct.

The Deputy Chairperson (Mr Kinahan): OK, thank you.

Mrs Overend: I was just going to ask him about that.

The Deputy Chairperson (Mr Kinahan): Oh, sorry.

Mrs Overend: On the schools enhancement programme, you said that 21 projects have been designated. How did you define those projects?

Mr O'Dowd: By their state of readiness. They were ready to go on the ground and prepare for building works to take place.

Mrs Overend: So they have all received planning permission and are ready to go.

Mr O'Dowd: They are under way.

Mrs Overend: Will any projects that received planning permission not now be included?

Mr Philip Irwin (Department of Education): A further nine have had all the design work complete and are ready to go, and, if we had the budget, we could release those. We have held those in the date order of when the design was approved, so as and when the budget becomes available, we will be able to release those in the order they were approved.

Mrs Overend: Right, so it is not based on planning permission but design date order.

Mr P Irwin: Everything ready to go, so that would include whatever approvals are required.

Mrs Overend: Will the schools know —

Mr O'Dowd: We will be writing to the schools today.

Mrs Overend: Will they know the position they are in? Will they be able to identify the time frame and when they are going to be able to move?

Mr O'Dowd: Unfortunately, they will not be able to identify the time frame because we are not able to identify — In terms of delivery?

Mrs Overend: Yes.

Mr O'Dowd: That will depend on how successful we are, in year, in bidding for capital funds.

Mrs Overend: Will they be able to know where they are on the list?

Mr P Irwin: We are happy to let them know where they are on the list.

Mrs Overend: It will be really disappointing for the schools that have planning permission and are ready to go. They have been battling to get to this stage, but only so many are coming forward. We are talking about in-year monitoring rounds, then.

Mr O'Dowd: For this year, we are talking about in-year monitoring rounds. It will depend on what the capital budget is for the next financial year. For the first time in many years, we are in a position where we have shovel-ready projects in education. For many years, we were disadvantaged because we were not at that stage with projects. We are now there; we have shovel-ready projects that are ready to go ahead. If capital funding becomes available, we can utilise it.

Mrs Overend: There are some schools that really want new builds. Obviously, they have gone down the route of enhancement. They really are in dire need; they need an enhancement programme. Does that come into consideration at all in their priority?

Mr O'Dowd: They would not have been on the list if they were not in need in the first place. The very fact that they are on the list means that they have come through the criteria to be accepted into the schools enhancement programme. We have accepted the need for the new development at their school. The simple fact of the matter is that we do not have the money to deliver the project at this stage this year. We may have capital funds available as the year goes on; I do not know, but I assure you that we have taken every measure we can to secure whatever funds are available. We have moved as many projects forward as possible. I understand the disappointment of the schools. I can assure you that I am not looking forward to writing to those schools. Those schools are dedicated to the delivery of excellent education to their young people. They want to improve their facilities. I know that it is going to be a huge disappointment to them.

Mrs Overend: I am sure that you will appreciate that this will have a knock-on effect on their ability to save money elsewhere. If they do not have those facilities, they are going to have to go outside the school and pay for facilities outside. They are not going to be able to make the savings in the school.

Mr O'Dowd: Well, I am not going to write them a blank cheque either.

Mrs Overend: I do not think that they want a blank cheque, with respect.

Mr O'Dowd: Schools will have to live within their budget. They will have to agree their plan with the Education Authority, and they will have to go through all those processes. If there are issues that they believe are unique to their school, they will have to have discussions with their managing authority about funding management.

Mrs Overend: Thank you for the responses. I think that my other questions on STEM and youth services etc have all been answered. Thank you for your time this morning.

Ms Maeve McLaughlin: Thank you, Minister. Will you clarify a couple of points? Is the youth service budget — I ask this as somebody who has a background in community and youth work — in the region of £32 million?

Mr O'Dowd: Between the Education Authority and the Youth Council.

Ms Maeve McLaughlin: You indicated that the evaluation roll-out of the particular programmes is down to the new Education Authority. What mechanisms are in place to ensure the correct outcomes? I ask that because, when we look at £800,000 in terms of admin, it brings up many challenges. Quite often, immensely valuable work goes on in the sector; there is no doubt about that. Often, however, they may not have delivered the outcomes that are required. I am keen to know what mechanism the Education Authority can use in terms of its requirements to ensure proper outcomes in areas of need.

Mr O'Dowd: We introduced a new youth policy called Priorities for Youth two years ago. Youth work is to be planned and measured against that policy. That will be the measuring stick for the Education Authority moving forward, as it has been for the last number of years for the boards.

On priorities and delivery, the Education Authority will make those decisions, although, as I said, I have ring-fenced the Education Authority's youth service budget. I am also ring-fencing the additional money that I provided a number of years ago for areas of social deprivation. How that funding is used on the ground will be a matter for the authority; it will be best placed, in conjunction and discussion with local communities, to decide how that money provides the best outcomes for young people and youth services. I have taken measures to protect the funding.

Ms Maeve McLaughlin: In a similar vein, is the additional £10 million that you made available in the last round for targeting social need now in the overall schools budget?

Mr O'Dowd: Yes, but the common funding formula scheme that we put in place last year remains. The £10 million injection has been targeted at schools in areas of high social deprivation.

Ms Maeve McLaughlin: Is that clearly in place?

Mr O'Dowd: Yes.

Ms Maeve McLaughlin: I want to understand the overall context, Minister, because this is important when we look at some of the issues that we have seen in other Departments' budgets. I am thinking specifically about the protection and uplift in health. One of the key challenges in that is the hard discussion around money going in the right directions. Indeed, the Finance Minister has alluded on a number of occasions to those concerns. Are you convinced that your spend direction in priority policy is going the right way? Following on from that, the restructuring of Departments, particularly in terms of early intervention and, potentially, children's services, would suggest at this stage that there will be an increased function and role for the Department of Education. Is there and does there need to be a conversation in the Executive about the protection of education going forward?

Mr O'Dowd: I would argue quite strongly that there needs to be a conversation about the protection of education moving forward. I am of the view that, in our society, health and education are vital and that both feed into the economic well-being of our society, so it is not a case of ignoring the economy. I believe that education is crucial to a successful economy. I also believe that a well-educated populace is a healthier populace and is more likely to be in work than those who have poor educational outcomes.

Earlier, the Deputy Chairperson asked me about priorities. Our society, the Assembly, politicians and political parties, along with the trade unions and the third sector etc, are all going to have to have a serious conversation about what their priorities are in this society, what they want to invest in and what those outcomes are going to be, not just in a year's time but in five, 10 and 15 years, and start to look forward.

When it comes to my funding priorities, I believe that I have prioritised as best we can, moving forward, but I do not believe that we have enough money going to all those priorities. There needs to be an injection of money into our public services. Mr Lunn asked me what I am going to do about excuses around the Tories if Labour is returned. I do not care what the party is called; if its policies are the same, they have the same impact. I sincerely hope that, if the Labour Party is returned to power at Westminster, it will inject money into public services.

Mr Lunn: Minister, we have had a good discussion about STEM. There are certain aspects of what we do here that are regarded in a worldwide sense as quite important and beneficial to children, so I will not go back to STEM. However, it is widely held now that the ability to learn and speak a second language is beneficial to a child's overall education. That argument is used in terms of the Irish language, but I am thinking more of foreign languages. You really took me by surprise when you said that not only are you affecting the primary school languages budget, but you are doing away with it. Where does that stand in terms of prioritising what is best for our children? It is a popular programme. I do not know how much it costs but it is not just being reduced; it is being discontinued.

Mr O'Dowd: Again, I make the point that this is additional funds towards schools to carry out activities. That does not mean that schools have to stop carrying out language programmes. I also make the point that a number of schools also brought in their own language teachers over and above what we were providing through this funding. I am not suggesting for one second that this is not going to have an impact on our schools or our languages programme, but it does not mean that they should stop. This was always additional money.

One of the difficulties, sometimes, in setting up earmarked funding is that it becomes the sole funder of a programme or a part of the curriculum, moving forward. When the consultation responses were returned to me and when the Assembly discussed this matter, it was overwhelmingly in support of me putting money directly into the aggregated schools budget. I have protected the aggregated schools budget to the best of my ability. There are still pressures there, but our primary and post-primary schools will still be able to deliver the curriculum, and languages are included in the curriculum. I hope and expect that many of our schools will continue to develop the languages courses that they already have in place.

Mr Lunn: I want to ask you about the new Education Authority. We had Gavin Boyd here last week or the week before — maybe you were here too — and he more or less told us that there would not be any more staff savings because the number of people who had already left the boards was about as far as it was possible to go. There has been a lot of talk about administration costs and, in a different context a few minutes ago, you said that you would not run a business like this. The reduction in staff, as far as I can tell, has been only about 15%. We are talking about five major authorities going into one. Are you satisfied with that? Do you think that a 15% reduction, after all we have been through — some of us regret the loss of ESA, but we are where we are — is a satisfactory figure in terms of savings on staff costs?

Mr O'Dowd: You will appreciate that I was not here when the discussion took place around the EA with Mr Boyd. I am always uncomfortable when we talk about staff reductions and whether we need 15% or 20%. I much prefer to talk about employing people rather than reducing the number of employees.

I appreciate the point that you are making, which is that, if we are reducing costs, we should be putting resources into front-line services and schools etc. The Education Authority will have to make decisions in the year ahead, driven by a number of factors, but largely by its budget. It still has £9·9 million of savings to achieve. Some of that will have to be through staff reductions. I do not see where else it is going to achieve those reductions. It also has to look at what savings it can achieve because of the fact that it is bringing five organisations together that used to deliver five separate and different functions across the boards. I am reluctant to respond to your direct point because I was not here when Mr Boyd was here, but the EA is going to have to make that £9·9 million saving next year. Its long-term plans are going to have to be worked out but I expect money to be delivered into front-line services and I expect to see a reduction in administration where there is administration for administration's sake.

The Deputy Chairperson (Mr Kinahan): May I come in on a similar line, Minister? You indicated that there would be 1,000 non-teaching redundancies by September 2015. The Education Authority business case indicates that there will be almost no redundancies in the authority's headquarters staff. Will those 1,000 redundancies be schools-based? Will it be classroom assistants? Before Christmas, we were looking at a £20 million cut to the education and library boards' block grant and yet we now have £10 million going in. It seems that we are not cutting the bureaucracy but doing it all at the schools.

Mr O'Dowd: The non-teaching staff figures were always envisaged across schools and across the boards' administration. The £9·9 million that the boards have to achieve will have to involve staff reductions across the board areas, and that is a decision that the Education Authority will have to make. As I said to Mr Lunn, it is about bringing together services that used to operate back-to-back rather than front-to-front and engaging with each other on many services. There are difficult decisions for the Education Authority moving forward, but they are its decisions to make.

The Deputy Chairperson (Mr Kinahan): It makes it look as if the business case was wrong.

Ms Hepper: If you recall, when we had that discussion a couple of weeks ago, it is the net figure in the business case that shows that the Education Authority has only a minor number of further staff to shake out of the system. There is a grouping around the middle management tranche where there are somewhere between 30 and 50 staff that it has to shake out.

The boards have cut quite significantly at the lower levels and are possibly below sustainable levels in the lower grades. There might have to be a small amount of recruitment there. However, as the Minister rightly said, that will be a decision for the Education Authority in the context of its budget, where it now has to find a £9·9 million saving. It is not that anything was wrong with the business case; it is just to be clear on the net figure versus the individual figures around the different gradings and what has to be shaken out of the system.

The Deputy Chairperson (Mr Kinahan): Can we take that as a guarantee that that will not have a knock-on effect on the schools and that it will not be the classroom assistants or the other staff who help to run schools?

Ms Hepper: That particular issue is pertinent to the five boards coming together into one education authority, so it is headquarters, if you like to call it that, figures.

The Deputy Chairperson (Mr Kinahan): It still comes down to this: can we have a guarantee from the Minister that there will not be a knock-on effect down to the schools such that they lose their classroom assistants and other key people?

Mr O'Dowd: It depends under what circumstances each decision is made. The Department of Education has a duty to approve the Education Authority's budget and we will be scrutinising very closely that the decisions it makes are, to the best of its ability, protecting front-line services. It is difficult to give guarantees around an issue that has yet even to be discussed with the authority, or, indeed, before the authority has got around a table and started to scrutinise the figures.

Mr Lunn: The question that I asked was whether you are satisfied with the situation that appears to be evolving here. The five boards have struggled manfully, and I do not deny that they have had a difficult few years while we have wrestled with their future. They have managed to operate with the staff reductions that have been happening through natural wastage, through people taking flight, people getting fed up and people acting up. It now appears that, apart from the 30 or 40 that you mentioned, Fiona, there is no more to be saved. This is five into one. I will repeat it: you said that you would not run a business like this. I am not looking to sack people, but if this were the final outcome and you only managed to shed another 30 middle-management jobs, would you be satisfied with that?

Mr O'Dowd: We have been involved in a reduction in staff in the education and library boards over four or five years. They have been through a significant staff reduction. I will be satisfied with a plan brought forward to me by the Education Authority that, to the best of its ability, protects front-line services. If, by doing that, it reduces administration and middle-management staff, so be it. There would be quite significant savings from 30 staff going at middle-management level. We will be scrutinising it very closely but we must first allow the Education Authority to be formed, to meet and to have these discussions. We have to allow the process to evolve. It is dealing with a difficult budget. It is not dealing with a budget as difficult as it was pre-Christmas: £20 million would have been extremely difficult for it to achieve. It still faces significant pressures, and it still has to estimate the rising pressures around SEN etc. Allow the Education Authority to do its job, and I assure members of the Committee that I will scrutinise its budget very closely to ensure that it has done everything in its ability to protect front-line services.

Mr Lunn: Sorry for interrupting you, Chair.

The Deputy Chairperson (Mr Kinahan): Thank you. It concerns me still that there are 1,000 redundancies to be made and you talk of just 30.

Mr O'Dowd: Some of those will be school-based redundancies from non-teaching staff, not necessarily from the Education Authority. There will be school-based redundancies as well.

The Deputy Chairperson (Mr Kinahan): Schools need all that they can get.

Mr Rogers: You put a lot of emphasis on the Education Authority, and it has not got going yet, but do you, as Minister, have a vision that there will be a net reduction in the cost of education administration over the next five years?

Mr O'Dowd: That goes back to Mr McCausland's point: define administration. I want to ensure that we reduce senior management and bureaucracy down to the stage where as much money as possible is going into front-line services. The EA will still be running quite a significant budget that will require administration to run. I am repeating myself, but it is important to note that, when I scrutinise the budget coming to me from the Education Authority or how it proposes to spend its budget, I will be looking at it from the point of view of how it is protecting front-line services. We do not want to get into a situation where we have a bloated administration, and I do not think that members of the Education Authority want to get into a position where we have a bloated administration. Those are decisions that, first, they have to make and then need to be signed off by the Department of Education. Let the conversation begin.

Mr Newton: Building on what Trevor and Seán were saying, on the last occasion when your officials were with us, they indicated that they would send us the critical path analysis document that they were working to in the formation of the ESA.

The Committee Clerk: We just received it yesterday evening. It will be included with next week's papers.

Mr Newton: That is OK.

Mr O'Dowd: I knew you would ask that question. Robin Newton will be on about change management.

Mr McCausland: There was a note in some of our papers about a review of the operation of CCMS, CnaG, NICIE and the Youth Council. Are those reviews under way at the moment?

Mr O'Dowd: Yes.

Mr McCausland: When will they be completed?

Mr O'Dowd: A number of them are complete, but the actions coming out of them have not yet been agreed. Others are still to be commenced. Decisions are to be made on whether it is worthwhile holding a review or taking more substantive action.

The Deputy Chairperson (Mr Kinahan): Minister, I know you have reached the allotted time, but Sandra would like to come in with a question.

Mrs Overend: Sorry to delay you slightly. You wanted to find some reductions in school catering. How do you propose to do that?

Mr O'Dowd: Through additional funding provided over a number of years to prepare schools for the nutritional element of school catering — the improvement in nutrition. That investment has taken place over a number of years. Schools and equipment have been invested in. We are now going to remove that, which is around £4·4 million of investment in the meals nutritional standard, but we do not believe that there should be any reduction in the nutritional value of meals being served in school canteens.

Mrs Overend: So you think they have learned it all and should be able to implement what they know: is that what you mean?

Mr O'Dowd: Well, we are in a much more advanced state than we were five or six years ago. That funding has been in place since 2007, so that is seven years of investment in equipment, training etc. High-quality school meals are being produced, and I do not believe that will be reduced.

The Deputy Chairperson (Mr Kinahan): Minister, I thank you, Fiona, Philip and Trevor for your time. I still have great concerns about the redundancies and the cuts to STEM, but those will come out in the future.

Mr O'Dowd: I share those concerns. I do not believe that the budget that we are being presented with is the way forward for education, but decisions are being made elsewhere that force the Executive to carry out measures that I do not believe they want to take. However, I believe that, in the absence of the Executive, our education, health and other services would be decimated by others of a different political philosophy.

The Deputy Chairperson (Mr Kinahan): OK. Thank you very much for your time.