Official Report: Minutes of Evidence

The Chairperson (Mr Nesbitt): Members, the papers that we received at 10.19 am begin at page 60 in your tabled pack. We welcome four officials for this session: Tony Canavan, Siobhan Broderick, Paul Geddis and Mark Browne. You are all very welcome. Mark, do you want to say a few words to kick off?

Dr Mark Browne (Office of the First Minister and deputy First Minister): Would you like me to cover all of the commitments at this point and take them all as one group or split them into two?

The Chairperson (Mr Nesbitt): It is really up to you, Mark. I am happy for you to cover all four, if that is what you planned to do.

Dr Browne: OK. First, thank you very much for the invitation to attend. In relation to Maze/Long Kesh (MLK), which is commitment 15, there is, as the Committee will be aware, no agreement, so the targets up to the end of the PFG period are red, as they were in previous quarters. Ministers continue to discuss a way forward with the regeneration of the site. The Maze/Long Kesh Development Corporation continues to meet its responsibilities with regard to maintenance, health and safety and commitment to the Royal Ulster Agricultural Society (RUAS) [Inaudible.]

. There is no development activity on the site.

In relation to the One Plan, the achievement of that commitment is on track, although there has been a delay in the delivery of some of the milestones, for which the Department has put in place mitigating measures. The development of Ebrington continues, with capital spend by Ilex of just under £6·5 million in 2013-14 and a budget of £3·1 million in 2014-15.

The Department continues to work with Ilex to ensure that that momentum is maintained. On the site, the refurbishment of building 70 was recently completed, and it will open soon as a microbrewery. In addition, a combined cafe and bicycle workshop will open in summer 2015 on the site. I do not think those two should be combined. [Laughter.]

Those ventures will be the first new businesses operating permanently on the site and will hopefully pave the way for further enterprise. DOE has leased building 71 and set up a regional office with the Minister and the chief planner.

The Ebrington development framework has also been completed. It is envisaged that, in the longer term, that will ultimately support an additional 1,800 jobs in the city and generate an additional gross value added of £42 million. There has been extensive consultation on the framework with local stakeholders to try to ensure that it meets the needs of the surrounding community. The framework was submitted for planning approval in December 2014, and, subject to normal planning approval processes, we anticipate approval in June.

Ilex is also engaging with the private, public, community and voluntary sectors to acquire tenants for Ebrington. There are 60 formal expressions of interest to establish potential businesses on the site. The creative industries hub on the site will open shortly, and the Department is considering the business case for a business growth hub, which would support 15 to 16 small to medium-sized enterprises on the site.

In terms of jobs, it is right that within the PFG the job target should be challenging, and it is pleasing to be able to report that the jobs targets for 2012-13 — 1,175 jobs — and 2013-14 — 1,670 jobs — were exceeded. Those jobs have come through small business start-ups and expansions, support from Invest NI and as a result of the City of Culture year. The jobs promotion target for 2014-15 is 1,200. That is proving challenging to meet in the current financial environment. The returns that we have so far from Invest NI, Departments and Derry City Council show that 524 jobs have been promoted this year. So there is still some way to go, and there must be doubt that that target will be met. The City of Culture year has been completed.

PFG 26 relates to the drawdown of competitive European funds and the target of increasing that by 20% over the four-year period, which equates to a target of £64·4 million. I am happy to report that we have met and exceeded that target. At the end of 2013-14, Departments had already drawn down a total of £72·7 million, exceeding the target by £8·2 million with a full year of the period to run. That has been very positive.

Commitment 77 was to agree any changes to the structures of government in the next mandate. As I have pointed out in previous briefing sessions, agreement was not reached in 2012 — clearly — and the issue continues to be considered at a political level. The Stormont House Agreement has obviously moved matters forward considerably. The participants to the agreement confirmed the reduction in the number of Departments from 12 to nine in time for the 2016 Assembly election and the reduction in the number of Assembly Members for the 2021 election. The details of the reduction in the number of Departments were considered further by party leaders in the Executive in January and February. On 2 March, the First Minister made a detailed oral statement to the Assembly, setting out the names of the future Departments and their responsibilities.

The implementation of that departmental reorganisation will be very challenging, administratively, over the coming year. A wide-ranging implementation programme has been established with senior representatives of the Departments affected. A specific project is being established for OFMDFM. Alongside that, a legislation project has been operational since January. Work on a Departments Bill is at an advanced stage, and the First Minister's statement indicated that it should be introduced in the Assembly after the Easter recess. Following that, there will be a more detailed transfer of functions order brought forward for Assembly scrutiny. Those steps should lead to the legislative framework for a streamlined departmental system being in place for the next Executive appointment process in May 2016.

I am happy to take questions.

The Chairperson (Mr Nesbitt): OK, Mark, thank you very much. That is very useful in setting the broad scene. We are not going to rehearse Maze/Long Kesh; everybody knows that there is no political consensus at the moment in OFMDFM on the way forward.

I suppose that leaves a focus on the RUAS, which was on-site. I see in the risk register that:

That is the first current risk, and scores a perfect 5 on probability as well as on impact. What can you tell us about the current state, taking that these papers are not right up to date?

Dr Browne: The RUAS has run two successful shows at the Balmoral Park site there. On 23 March 2015, Ministers approved the relocation of the RUAS pavilion building, which is on the King's Hall site, to Maze/Long Kesh. The development corporation is finalising a planning application for that relocation. The work is scheduled to commence in June to ensure that the pavilion is relocated by December 2015, in line with the terms of the RUAS development agreement. That is an important issue for the RUAS, because it considers that the relocation of that pavilion will makes its presence on the site more sustainable and allow it to increase the number of events it hosts on the Balmoral Park site.

The Chairperson (Mr Nesbitt): What was the date when the Ministers agreed the relocation?

Dr Browne: That was 23 March 2015.

The Chairperson (Mr Nesbitt): That is two days ago — Monday. Has that been made public?

Ms Siobhan Broderick (Office of the First Minister and deputy First Minister): We have just informed the MLK Development Corporation so that it can proceed with its planning application. We will make it public in due course.

The Chairperson (Mr Nesbitt): Right, so there has not been a news release as such. That is actually a very major —

Ms Broderick: Hot off the press.

The Chairperson (Mr Nesbitt): That is a major development because, as you say, Mark, that pavilion is the core unit in the RUAS's desire to move from Balmoral to — is it Balmoral Park they are calling it?

Dr Browne: Balmoral Park, yes.

The Chairperson (Mr Nesbitt): OK, I appreciate that.

Dr Browne: There will, I presume, be a public announcement around that, but the decision was made and the communication has been made with the RUAS and MLK. That is, again, an indication of the commitment of Ministers to the development of that aspect of the site.

The Chairperson (Mr Nesbitt): So that is the first, if I can put it this way, positive news in terms of the development of MLK since the political disagreement.

Dr Browne: I would characterise it more as being consistent with the ongoing support from Ministers for the RUAS and their commitment to the site. It was envisaged in the development agreement, so this is the development agreement carrying through. It is consistent with the position that Ministers have held.

Mr Spratt: Thank you for the presentation. It is clear that the RUAS is fully committed to MLK, because in the last 48 hours or so it has put the whole King's Hall complex on the open market. In fact, I think it was advertised in the press yesterday or the day before, so it is good news to hear that about the pavilion, which is much [Inaudible.]

down there.

In relation to the MLK board, the Ulster Aviation Society has a substantial exhibition down there on-site. What is your understanding, Mark, of the connection or the responsibilities that the MLK board has with that? A number of events did not take place last year. Obviously, this is an organisation that is run basically by volunteers and depends on some very successful tourist attractions that a lot of people attended in the past. Has there been any progress there?

Dr Browne: The Ulster Aviation Society has been on the site for some time, as you know, and has a very impressive collection of aeroplanes there. It has held its open day on the site. From 2008 to 2013 —

Mr Spratt: The last one was curtailed.

Dr Browne: There was an issue the last time when administrative approval for access to the site was not received in time, and the Aviation Society felt that it had to cancel the event, and that was unfortunate. It had been there from 2008 to 2013. In September 2014, Ministers agreed to meet Jeffrey Donaldson and a delegation from the UAS board to discuss the issues, and that meeting is being arranged.

Mr Spratt: So there is a likelihood of that being sorted out. Was it due to a late application to Ministers the last time?

Dr Browne: I cannot comment on the likelihood of a ministerial decision, or what way the Ministers will decide on this, but we certainly expect an application —

Mr Spratt: I am not asking you to do that. The point that I wanted to find out was what responsibility the MLK board has in relation to the building and the Ulster Aviation Society.

Dr Browne: The MLK board has to be concerned with all the health and safety of the site, access to the site and those who come on to the site. The arrangement with the Ulster Aviation Society on the site is probably a licensing arrangement. Applications for those kinds of events come through to the Department for approval, with a recommendation from the board.

Mr Spratt: Is that because of the parking facilities and all the rest of it?

Dr Browne: The parking facilities and the fact that when anyone comes on to the site they become the responsibility of the MLK DC board. If anything were to happen to anyone, it would be liable for that. Therefore, we have to make sure that there are proper arrangements, and all those arrangements have to be set out clearly and agreed with the corporation.

The Chairperson (Mr Nesbitt): Has there been any churn in the board of the development corporation over the last 12 to 18 months?

Ms Broderick: As far as I understand, it is still chaired by Terence Brannigan, Kyle is still the chief executive and there are nine board members; there are usually 10, but there are nine at the minute. I am not aware of any change, but I can come back and confirm that.

The Chairperson (Mr Nesbitt): That is fine.

What about budgetary pressures impacting on the MLK board, given that it is so constrained in its activities?

Dr Browne: Yes. It is not so much budgetary pressures; it is quite the opposite, in the sense that it has the potential to release budget. We have been in discussion with it around how to ensure that the budget available to it can be deployed appropriately. In light of the reduced activity on the site, we reduced the budget by £0·5 million last year, and the allocation for next year will be reduced by £600,000. That just reflects the level of activity on the site and to make sure that that money can be used productively elsewhere.

The Chairperson (Mr Nesbitt): We move on to 16, Mark: the One Plan. You gave us some pretty positive reporting on job creation for the One Plan and the year of culture. What assurances can you give us on the sustainability of job creation?

Dr Browne: The whole issue of sustainability is obviously critical. It is tricky in terms of measuring and coming back to monitor. We actually measure jobs promoted. When a business establishes on the site or an event happens on the site that gives an indication that it will create a certain number of jobs and that is approved, those jobs become promoted. Sustainability requires the monitoring thereafter of how long those jobs have been there and coming back and checking at intervals whether those jobs remain. There is quite an overhead in that.

We monitor the data through a subgroup through Ilex, which has Departments and INI involved in it. They are doing a long-term analysis of job creation in respect of the One Plan.

In the shorter term, Invest NI includes clauses on sustainability and an obligation to retain jobs when it makes its investment. Invest NI monitors that regularly; in fact, if those jobs are not sustained, there can be clawback of funding by INI. It concentrates a fairly significant proportion of the jobs that are there. There is an ongoing focus by INI, and, through the development subgroup, we are monitoring the sustainability for the other jobs.

The Chairperson (Mr Nesbitt): I hope I speak for the Committee in saying that we, obviously, would welcome the microbrewery and the cycling initiative, but they should not be concentric circles in any circumstances. [Laughter.]

The drawdown of competitive funds, obviously, has gone better than anticipated. Some time ago, another Statutory Committee was informed by a departmental official that its target for drawdown had been revised upwards to 50%. Are you aware of that?

Dr Browne: I think that was the CAL Committee. I understand where that has come from. There has been no formal decision by Ministers as to what any revised target should be in the 2015-16 revised Programme for Government. In light of our experience to date and the drawdown that we have had, we have been looking at a number of scenarios on how we should put in a more ambitious target. A target in that area has been proposed to Ministers, but Ministers have not yet agreed anything. So, it would not be correct to say that it had been agreed. A target in that area is with Ministers, and Ministers, when they decide, will, ultimately, confirm, but it would be in that region.

The Chairperson (Mr Nesbitt): What did you learn from it? Maybe this one is for you, Paul. Was the 20% a best guess? By trying to achieve it and by overachieving it, have you learned a lot about how to draw down funds in the competitive market?

Dr Paul Geddis (Office of the First Minister and deputy First Minister): The first thing was that the 20% target was not based on the evidence that we had at the time, which was some three years ago. In the intervening period, we have had the opportunity, because, when the first target was established, we did not have a baseline, so we had no recognisable baseline on what was possible. The first stage was to establish the baseline and, on projections from Departments, move forward to anchor in the 20%. In the intervening three years, we have been monitoring the drawdown not only by Department but by funding streams in Departments, and we have a sense that our arm's-length bodies and third parties can generate drawdown. We also have the liaison officer resource in the Brussels office. So, the assessment this time and the projections looking forward were made from a much more informed basis in the light of three years' accumulated knowledge. It was on that basis that officials provided advice to Ministers. The advice that was provided took into account the views of Departments and was agreed by senior officials in Departments.

The Chairperson (Mr Nesbitt): You mentioned benchmarking. Where are we with regard to what I understood to be an aspiration to benchmark against highest performing EU regions of a comparable nature, which has not happened?

Dr Browne: I will kick off on that, and Paul will fill in the gaps that I will, undoubtedly, leave. The whole issue of benchmarking is very attractive, and, where we could, we would benchmark to try to get accurate comparisons on a like-for-like basis and develop the learning from that. We have found, in not only Europe but other areas where we have tried to do this, that getting precise and comparable data across different regions is extremely difficult. In many cases, funding is provided only at member state level, or, where the information is available at regional level, it is available only for particular funds. We asked the Northern Ireland Statistics and Research Agency (NISRA) to look at that for us. It did a fairly in-depth investigation around it, and it could not identify the definitive source for funding below the member state level — because we would be operating at a regional level — and which would give us the comparable information that would tell us how well we were doing. We could have continued to put lots and lots resource into that, to little effect. Therefore, the view that we have taken in the task force steering group is that the purpose of benchmarking is to identify in broad terms whether we are getting as much out of Europe as we can; to find out who is doing well in particular areas and to learn from that; and, if we are doing better than some areas, to share our learning with them and to then feed that back into our processes.

We have agreed that each Department should look in their areas at the funding streams that they access to try to get whatever comparative data they have. In some cases, they may have information below member state level. They should also work through the Brussels office, the liaison officers and other contacts in Europe to find out who are best in class in that area, because, generally, that is known. Then you can get in touch with the regions and ask them, "What are you doing at the moment?", and learn from what they are doing and apply that to our circumstances. We have taken the broader objective. The purpose of this is for us to improve our game and so forth, but we have stepped away from the detail and from chasing our tails to try to get a very detailed comparison because this simply is not worth the candle and we cannot get accurate data.

The Chairperson (Mr Nesbitt): I get that. If I am hearing you right, you are saying that we now have a sort of alert system so that, if any region is doing really well compared to us in any area, a red light will light up and we will go and find out.

Dr Browne: I would characterise it not so much as an alert system but as that we are proactively encouraging Departments, through liaison officers, to seek out regions that we can learn from. A key part of this has been that we have changed the terms of reference of the task force steering group and have put within that a focus on learning from best practice in Europe and disseminating to Europe our best practice so that this is not purely about the drawdown of funds but about influencing policy at an early stage, learning from best practice, sharing best practice, being aware of new initiatives coming down the track and being aware of the legal implications of things. It is to broaden our sense of what European engagement is about. Although the money is important, we want to make sure we continue to improve that to broaden our sense of why we engage with Europe.

The Chairperson (Mr Nesbitt): We are a week away from kicking off the Executive's EU priorities for the 2015-16 financial year, but we have not seen them.

Dr Browne: Yes, we continue to push hard to try to improve on that issue. Last year, the date by which the priorities were agreed was unacceptable. It was simply far too late in the year, although Departments would have been working on draft targets before that. It was unacceptable. We have been engaging early with Departments this year to try to get the priorities agreed, and we had hoped that we would have them agreed as early as possible and, hopefully, early in the year. We will come back to the Committee when we have those priorities in draft form. We have started early and have made more progress, but we are not yet in a position where we have draft priorities that we can share with the Committee.

The Chairperson (Mr Nesbitt): We were promised draft priorities in February.

Dr Browne: I accept that, Chair, and we are working with Departments to try to encourage the identification of targets that we can put into the overall indicative priorities. We are giving that a push and making it a priority.

The Chairperson (Mr Nesbitt): To be clear, is there a draft at the moment?

Dr Browne: There is not an agreed draft. There is nothing that the Ministers have agreed. There are early drafts that we are negotiating and discussing with Departments. It is difficult to get that agreement across so many Departments.

The Chairperson (Mr Nesbitt): Is there any update on President Juncker and the future of the task force?

Dr Browne: Paul, do you want to say a wee bit about where we are on that aspect?

Dr Geddis: Yes, Mark. The junior Ministers visited Brussels in early March, and one of the meetings that they conducted was with Commissioner Corina Cre?u, who is the Commissioner for Regional Policy. The relationship in terms of the continuation of the task force rests with her Directorate-General. She has communicated with President Juncker and indicated to him that she would like the task force to continue. She is confident that she will receive an assurance from the Commission president, and we hope that we will receive that in very early summer. We are also seeking to incorporate an inward visit by the Commissioner for Regional Policy. We hope that, over the next couple of months, we will have some good news to report on that front.

The Chairperson (Mr Nesbitt): My final question on this one is about the Northern Ireland European Regional Forum. There is a question mark over its future funding. What assurances can you give us about how you see the forum going forward this year?

Dr Browne: We are looking at it at the moment, Chair. We need to look at the range of fora that contribute to our engagement with Europe. Part of the purpose and one of the key objectives when we revised the terms of reference for the task force was to look at how we can better align the various structures to ensure that the information flows to and from Europe as we need it to and that the contacts with Europe are clearer, better understood and, frankly, shorter. As part of that we want to look, with Belfast City Council, at what the future of the fora should be. We hope that some of the communication issues are being addressed through the improved website, the data on upcoming events, access to funding programmes that the Brussels office has put in place, and updates regularly — I think, monthly — setting out any new announcements from Europe, or calls around the funding programmes and setting out the various contact points. We think that the improved information flow may have picked up on some of the issues that the forum was dealing with, but we want to take a look at this alongside some of the other structures, in light of the fact that we all have to make the best use of the funds we have at the moment.

The Chairperson (Mr Nesbitt): It is not a turf war between you and Belfast City Council?

Dr Browne: No. Far from it. It is about how we can make best use of our resources collectively and make sure that we have the correct engagement with Europe.

The Chairperson (Mr Nesbitt): The final one is commitment 77, which is the post-2015 changes. As you say, maybe the deadline was missed, but the Stormont House Agreement was the game changer for agreement. Is there anything you or Tony —

Dr Browne: I will let Tony update you on this.

Mr Tony Canavan (Office of the First Minister and deputy First Minister): The current position is as set out by the First Minister in his statement on 2 March, which sets out the agreement that has been reached by the Executive on the transfer of functions and names of Departments. The next stage will be legislative, and our hope is that we will be able to get a Bill to the Assembly after the Easter recess.

At the same time, work will be going on with Departments on two levels. One will be to identify specifically the statutory functions that we need to transfer. That will become integrated into a transfer functions order that will be drafted by the legislative draftsman. Also, at a level above me, a cross-departmental programme board has been established, under the chairmanship of Derek Baker, permanent secretary of DEL. It has started to meet and involves representatives from a range of project boards. Each of the Departments affected is establishing a project board to oversee the transformation. My involvement would be in the legislation project board, and there will be cross-cutting project boards led by the Department of Finance and Personnel. A lot of administrative activity will go on between now and spring of next year.

The Chairperson (Mr Nesbitt): It is all largely technical and process now that the political —

Mr Canavan: It is technical and legislative. There are two significant bits of legislation: the Departments Bill and the transfer of functions order.

The Chairperson (Mr Nesbitt): What about OFMDFM? Are you clear, in your own minds, on the implications on functionality, staffing, funding and resourcing?

Dr Browne: I will make a few comments. The intention is that we will become the Office of the Executive, and the purpose will be to support the Executive themselves and their secretariat functions but also through the Programme for Government and developing the thinking around the Programme for Government and monitoring progress. There will be delivery functions that we will retain around, for example victims and survivors. As part of the project, we will seek to ensure that the functions that we transfer to some of the new Departments are successfully transferred and that staff move appropriately. The key thing there will be ensuring the continuity of business delivery, and, in that regard, the project in our Department will link closely with the project being set up to establish the new Departments. That will ensure that all issues that may arise in that transfer of staff and reshaping of functions are taken fully into account.

The other aspect that comes in here is that, prior to that, there will be a voluntary exit scheme, and staff will apply for that and be successful. We will have to manage the process of staff leaving on the voluntary exit scheme, any redeployment required from that, along with the transfer out, and the reshaping of the functions that remain within the Department, to make sure that it is configured in an effective way.

It is a very challenging piece of work with a number of moving parts, and we will have a broader strategic approach. We will have to respond and react to how people take advantage of the voluntary exit scheme and any other issues that emerge during the year.

The Chairperson (Mr Nesbitt): As you say, there are a lot of moving parts. When you get to the solid state, Mark, is it possible to anticipate, at this stage, whether you will have done away with the criticism that is sometimes thrown at OFMDFM, that it is bigger than the West Wing and Downing Street and all the rest?

Dr Browne: Some of those comparisons compare a Department with fairly significant delivery functions with other ones that do not. Even when the Department is reconfigured, it will retain some regionally significant delivery functions, so I do not think the comparisons are apposite.

If we are getting to the size of the Department, we anticipate that we have to work through the detail of it, but maybe somewhere in the region of 30% of our staff will transfer to new Departments. The Department will become substantially smaller at that point. How that squares with the comparisons that you mention, I could not tell you at this point.

The Chairperson (Mr Nesbitt): OK. Are Members content? In that case, Mark, Tony, Siobhan and Paul, thank you. Mark, you are staying on.