Official Report: Minutes of Evidence

The Deputy Chairperson (Mr Brady): The following departmental officials are here to brief the Committee on the issues raised by stakeholders and some members on the Regeneration Bill: Henry McArdle, Ian Snowden, Antony McDaid and Peter Toner. I think you are here almost as often as we are. I invite you to come forward.

I advise members that the Committee has received a late submission from Belfast City Council. Due to the lateness of this submission, the Department has not had the opportunity to address the specific issues. However, the Department has advised that most of the issues have been raised by other stakeholders and are addressed in annex 2 of its briefing paper.

I invite the officials to brief the Committee.

Mr Henry McArdle (Department for Social Development): Thank you, Mr Chairman and members, and thanks for the opportunity to respond to the evidence provided to the Committee over the last number of weeks on the Regeneration Bill. Officials from the Department attended all of the evidence sessions. We have considered all of the points raised, both in the written submissions and orally. We have provided the Committee with some detailed responses to the individual points raised. I think it is clear to see that a number of recurring issues and key points have been raised in the evidence and at the Committee. With your agreement, Chair, I would like to run briefly through those.

Among the key issues raised was the question of why there is no definition of social need in the Bill, and, leading on from that, whether we need a catch-all clause in the Bill, as drafted. Other issues raised were the retention of powers by the Department in relation to development schemes that are of significance for the whole or a substantial part of Northern Ireland; the requirements for councils to seek departmental approval if they are going to adopt a development scheme or vest property; why community development is not referred to specifically in the Bill; the role of the Department, post 2016, in monitoring performance against programmes; and the ring-fencing of the community investment fund (CIF) and other budgets.

I will go through those issues briefly, beginning with the reason why social need is not defined in the legislation. Social need is a term that is used to capture a wide range of societal issues and problems being experienced by the population. Different needs in relation to employment, education, housing, health or environment are experienced by individual groups and areas. Our understanding of social need can also change over time. For example, the impact of migration into Northern Ireland and the needs of migrant communities only emerged as significant issues over the last 15 years.

The most appropriate means of judging or measuring social need will depend upon the issue being addressed or the service to be delivered by a particular Department. For example, a measurement used in education could relate to attainment levels or the numbers in receipt of free school meals, while in economic development, economic inactivity or unemployment figures may be the relevant measurements. Given the fluid nature of social needs, the Department considers that a definition would not be helpful in legislation. In fact, we have checked, and the term "social need" is used in a number of statutes both at Westminster and in Northern Ireland without definition for that reason.

Over the last number of years, DSD has used multiple deprivation indicators as measurements in support of the neighbourhood renewal programme. From 2016, councils will be able to identify which social needs within their districts have most priority and which measurement tools they wish to adopt.

Clause 1(2) of the draft Bill allows for financial assistance to be provided for anything not falling within paragraphs (a) to (e) that a council considers would benefit a district. That has been described as a catch-all clause. It is wide-reaching and has been used flexibly by the Department over the years. Concern was been raised about that, with some suggestion that the Bill should be recast to specify those things that should be supported.

What we are seeing in response to that is that the whole purpose of local government reform and the conferral of a number of these powers on councils is to allow decisions on key local issues to be made locally. We did not seek to be definitive in the Bill as to what constitutes regeneration or social need, as that will differ for different councils, in different circumstances and at different times. Rigidly defining the type of regeneration activity that councils can take forward would inevitably constrain them in taking decisions regarding improvements that are needed in their areas.

I had a wee look through the statistics of the types of things that have been supported under the Social Need (Northern Ireland) Order 1986. They include education and health initiatives, drug awareness, crime prevention, youth projects, victim support groups, community development, public realm schemes, private sector developments, ethnic minority support projects and single parent family support — the list goes on. If we list everything in the Bill, it will not be exhaustive, but if we do not allow councils to make up their own minds about what is a priority need for their areas, the whole idea of transferring this responsibility to councils will be null and void. That would be totally contrary to the spirit of local government reform.

The retention by the Department of powers to allow it to carry out development schemes that are considered to be of significance to the whole or a substantial part of Northern Ireland mirrors an approach taken by the Department of the Environment, whereby it reserved the power to handle planning applications considered to be of regional significance. There are clearly defined rules about what is regionally significant in those circumstances. There seems to be confusion here over what a development scheme is. A development scheme is a statutory amendment to the area plan. It is part of the planning process that allows the Department — and councils, from 2016 — to identify an area that requires significant regeneration and to draw up a comprehensive development scheme to tackle those issues. A development scheme is not necessarily a regeneration scheme or vice versa. Lots of regeneration schemes do not need the use of development powers, which is a specific power. To put that into context, over the last 10 years the Department has pulled together one major, comprehensive development scheme, and that was Victoria Square. This is not something that happens on a daily or yearly basis, and in some councils may not happen at all.

The next issue was the requirement for councils to come to the Department for approval for the adoption of development schemes and vesting. Leading on from the last point, the vast majority of regeneration work that the Department currently carries out, and which councils will be undertaking from 2016, does not require the use of development scheme or vesting powers. However, we feel that come 2016, in circumstances where a council feels it needs to use those significant and wide-ranging powers, it is appropriate for the Department to have some oversight.

The Department has a role in monitoring programmes that are taken forward by councils. The Regeneration Bill confers powers on councils to enable them to carry out regeneration and community development; it does not transfer programmes to councils. It will be up to councils to determine how they use these new powers. As such, it is not intended that the Department will have a formal role in monitoring the councils' delivery of, effectively, their own programmes. What we are saying is that the Department will issue guidance, and has issued guidance already, relating to the carrying out of these responsibilities, and the Local Government Bill provides a range of powers for Departments to intervene if they consider that councils are not doing so properly.
The issue of community development and why it is not mentioned specifically in the Bill was raised. I go back to my first point about listing everything that can be covered by the 1986 Order. We did not feel that it was necessary to include community development; the power is in the social need powers that are being transferred to councils under the catch-all clause. If the Committee felt that we needed to mention community development in the clause, we could certainly look at that. One of the respondents suggested that we not only mention community development, but describe in the Bill how councils should go about it. We do not feel that is a role for the legislation.

My last point relates to the ring-fencing of budgets. The specific issue of the CIF budget, which is £2 million, was mentioned at the last meeting. Other budgets have been mentioned in the past and the question raised as to why we do not, for example, ring-fence the neighbourhood renewal budget. If the Department required the councils to deliver particular programmes, such as community development, community investment or neighbourhood renewal, in defined ways, or to ring-fence budgets, the purpose of transfer would be seriously undermined. The whole purpose is to give these responsibilities over to councils. They know what their priorities are in their area and how much they should spend on each, and it will be up to them to take them forward in that context and in the wider context of the community planning responsibility, which they will have from 2016.

Mr Allister: The communication of 3 April also contained the points you made this morning. Is that simply a departmental official response, or was there ministerial input?

Mr McArdle: There was ministerial endorsement for that.

Mr Allister: It was signed off by the Minister. I come to this point on clause 1 and your desire to clutch to this catch-all addition. If clause 1(2) provides that the council can do anything not falling within 1(2)(a) to (e) that the council considers will benefit the district, what is the purpose of 1(2)(a) to (e)?

Mr Antony McDaid (Department for Social Development): To highlight the types of activities that can be done.

Mr Allister: They are incidental. You are writing into this that the council can do anything, so why trouble yourself with 1(2)(a) to (e)?

Mr McDaid: I suppose to give a flavour to the type of activity —

Mr Allister: You are not saying that the interpretation of the catch-all clause is limited by virtue of what is in 1(2)(a) to (e) on a sui generis basis.

Mr McDaid: No.

Mr Allister: Really, clause 1(2)(a) to (e) could be obliterated, and the clause would have exactly the same effect.

Mr McArdle: I think the purpose was to demonstrate the type of things which typically would have been under this. Over the years, the 1986 Order has been used very widely and very successfully for the neighbourhood renewal programme by extending its usage. Those were examples of the type of —

Mr Allister: Examples, but they do not restrict, and the catch-all in fact supersedes the examples, to the point where you can do anything. I can understand a Department wanting to keep its options open and be able to do anything on a Province-wide basis, but is it not absolute folly to go down the road of giving the power to 11 different councils to adopt 11 different perceptions of what they want to do in terms of being able to do anything? Are you not going to get such a patchwork of approaches that it will be held up to ridicule? You will be able to get support for something in one council, but not in another.

Mr McArdle: Again, that is the whole purpose of local government reform. The Executive have decided that councils are best placed to decide on these matters. We are conferring the power to do that, and we are conferring the exact powers that we have used in the past, in consultation and in partnership with councils. The councils have been involved in this process all along, so why should they suddenly go off on different tangents?

Mr Allister: Because hitherto, they have only acted as your agents; now they have the steering wheel. They can take this where they want to take it, and they might take it in 11 different directions.

Mr McArdle: They might, but that is their prerogative. What we are saying is —

Mr Allister: You think that is good.

Mr McArdle: Up to now, the Department has decided where the priorities lay; but in future, councils, in the wider context of community planning, will be able to determine the priorities for their area and determine such use as they will make of these powers.

Mr Allister: I just want to flesh that out a little more. That means, for example, that one council might decide what social need is by applying the Noble indices, and another might use different criteria. You could have a range of contradictory approaches to the definition of social need across Northern Ireland. Do you think that is sensible?

Mr McArdle: There are different interpretations of social need at the minute.

Mr Allister: No, no. Take neighbourhood renewal: it is governed by the Noble principles — the Noble indices. I said "principles"; that is in my mind for another reason. What you are now saying is that councils could go off in all these contradictory directions, really with a blank cheque to spend the money on whatever they want, in whatever manner they want, with no restraint from a tight definition of regeneration as economic or anything else. It is just whatever you think. Do you think that is sensible?

Mr McArdle: It is the approach the Executive have decided on. The Executive have decided that councils will have responsibilities for these matters in the future. The Executive have decided that councils will be able to determine their priorities for their area, and within that broad context we are conferring powers on councils to take forward regeneration work in their areas. It will be a matter for them to decide. I know that some councils have already decided to take the neighbourhood renewal approach, certainly from the 1 April, but it may well be that the neighbourhood renewal approach is not suitable for other areas, and they may determine a different way. It is up to them to justify to their electorate how they deliver this responsibility which has been conferred on them.

Mr Allister: At the end of all of this, one council, for its own reasons, could decide to funnel an inordinate amount of regeneration money into some pet scheme that it is attracted to, because this legislation allows it to spend money on whatever it likes.

Mr McArdle: The legislation is —

Mr Allister: That is just a matter to shrug your shoulders at. So what?

Mr McArdle: Not necessarily. I go back to my point. The Executive have decided that this responsibility will go to councils. The powers are wide-ranging and have been used very flexibly by the Department in the past, in cooperation and in partnership with councils. Has it been unsuccessful?

Mr Allister: There is a big difference between a centralised Department having flexibility in its approach and a free-for-all across 11 councils. It is absolute folly.

Mr F McCann: Chair, I will be brief. I have sympathy with some of the points that Jim raised, especially on the Noble indices. It has near enough been a guide on how you deal with social need and deprivation for many years. I am a bit concerned that 11 councils could run how you deal with social need, deprivation and community development in 11 different ways. Each council may have projects or programmes that it believes may fit into that. It is not only recently; I have always been concerned that there has never been a proper definition of social need or community development. I think that councils have a completely different definition from that which the Department has built up over many years, and probably coalface work through necessity. I am concerned about that. If any council is not seen to be spending the money on dealing with deprivation and social need or is taking it in another direction, does the Department have the power to advise the council that it may be going down the wrong road?

Mr McArdle: There are powers in the Local Government Act (Northern Ireland) 2014 for Departments to intervene in circumstances where they feel that things are not going right. They are pretty wide-ranging powers. We are starting off on the basis that councils will take this on in a good spirit and deliver regeneration and community development in the way that it was intended, but there are call-in powers and powers for the Department to ask councils to draw up reports or whatever. We are jumping ahead in assuming that this will be a failure. We have to give councils the chance and some credit that they will do this right, bearing in mind that they will have to develop a community plan. Part of that community plan will have to reflect regeneration, community development, tackling deprivation and the priorities for that area. It will then be for councils to determine how they do that and what priority they give to certain things.

Mr F McCann: I understand what you are saying in that councils dealing with all this is a new proposition and that it will take a while for it to settle in. I would have thought that, given the long experience in DSD of dealing with these issues, there would be a connection to ensure that people get the hang of it. Ian will know what I am talking about in terms of community development. There has been a concern across all councils that the definition that councils have of community development does not necessarily fit with the definition that DSD has built up over many long years of hard practice and hard work in local communities. If that is taken away from it, it will not only have an impact on dealing with that provision of social need but it will move away from that well-worn, practiced position of what most people believe community development is.

Mr Ian Snowden (Department for Social Development): Yes, the Department has the power to issue guidance to the councils, and the councils will be obliged to have regard to that guidance when it is issued. The key piece of guidance will be the urban regeneration and community development policy framework, which was published in 2013. That will be the key piece of strategic guidance that will be issued by the Department. We also intend to follow that up with best practice guidance to advise councils on our experience of what has worked well and what has been effective and the potential pitfalls and lessons that they need to take account of when they are designing their schemes and programmes if they want to do something that diverges from what the Department has undertaken in the past. That will be on the basis of things like the evaluation of the neighbourhood renewal programme or the urban development grant scheme.

Mr Beggs: Thanks for your presentation. Like others, I have a concern that the whole of clause 1 could be written as "Financial assistance may be provided for anything which the council considers will benefit the district". It could literally be provided for anything.

There appears to be no restriction on that. Tell us how wide-ranging the current powers are. You have indicated that there is great diversity at present. Just what is the extent of the range of powers outside the normal neighbourhood renewal, areas of deprivation or small pockets of deprivation funding? For what other types of activity has the money been used?

Mr Snowden: This provision, which is now clause 1 of the Bill, is in the Social Need (Northern Ireland) Order 1986. It is used to support environmental improvement and public realm schemes and urban development grant funding for projects. Also, in the past, it has allowed the development of a number of schemes, for example: the community regeneration and improvement special programme (CRISP) projects; the old community economic regeneration (CER ) scheme; what used to be called the Londonderry regeneration initiative; Making Belfast Work; and then, latterly, in the past 10 years or so, the neighbourhood renewal programme and the areas at risk schemes. The kinds of projects which we have funded over that period have ranged — if you want to go in alphabetical order — from adult education classes right the way through to youth clubs and youth projects, and a very wide range of things in between. It has covered mostly health, educational, crime prevention or crime-related activities and community development.

There are different models about how you approach this. One is that we support community development workers in areas, and their job is to develop schemes and programmes which will meet the needs of those particular locations, and then they source funding from other places to deliver those health projects, youth projects or whatever it might be. A different approach, taken in some of the smaller towns, is to look at actual programmes that might be delivered through health trusts or education and library boards. There are about 360 projects under neighbourhood renewal funding at the minute, covering a whole spectrum of things.

Mr Beggs: OK. You have indicated that you see a protection existing under the local government powers of the Minister to intervene if he thinks that something inappropriate is happening. Do you accept that it would be very controversial if that were to happen?

Mr Snowden: It is the kind of power that, you hope, would never have to be used. Yes, it would be quite a significant step to have to take before you get to that point.

Mr Beggs: Do you also accept that there would be potential for an adverse effect on community relations, if a controlling group on a council decided to use this money for anything which it believed was going to be beneficial to the area? That could be very controversial and have an adverse effect on community relations.

Mr Snowden: Like every other public authority, the new councils are covered by section 75 of the Northern Ireland Act 1998, so they will have to take account of and have due regard for that. Whatever they do will need to be within the framework of the existing law around that kind of equality and good relations activity. So, no public authority has unfettered discretion to do absolutely anything that it wants. That is not to say that lots of things are not controversial, but there is a framework within which they have to operate.

Mr Beggs: From memory, I believe that the code of conduct has not been adopted. That would have given a degree of protection in the need for qualified majority voting. In its absence, have you considered introducing a qualified majority voting clause, to ensure that the funding would not be used in a controversial fashion?

Mr McDaid: No.

Mr Snowden: You would want to be careful not to make an assumption that that would never be agreed by the —

Mr Beggs: Would you also agree that it might be difficult if you assume that it will be agreed, and it never is agreed, and that there is potentially unfettered use of public funding by small majorities on councils?

Mr Snowden: Hard cases make bad law. We would not want to get into a situation where we were trying to deal with that now, in the particular circumstances —

Mr Beggs: Would you not be better dealing with it now, and then it is dealt with, and, if there is a code of conduct, that protection will be doubly reinforced?

Mr Snowden: There is a distinct risk of having duplicated provisions in different laws, with perhaps confusion and conflict between them. It is something that you would have to take extreme care with in the drafting.

Mr Beggs: I agree entirely, but there is no current regulation on this. So do you think it would be appropriate at least to consider that, in order that controversial decisions will not be used and significant amounts of ratepayers' money will not be raised and used for controversial projects which could adversely affect community relations and, potentially, require ministerial involvement, again adversely affecting local government relationships? Would it not be better to have a safe —

Mr McDaid: Who is to determine whether it is a controversial decision or not?

Mr Beggs: Well, if there were a qualified majority voting requirement, it would ensure that there would be widespread consensus in an area.

Mr McDaid: Do you think that you should have that provision for every project and programme delivered by councils under this provision? Ian talked about 360 projects, so each one of those would have to go through a process of voting.

Mr Beggs: Sorry, just to be clear, the code of conduct was to apply to local government decisions. These will be local government decisions, so, if the code of conduct were in place, this would be covered by it and that protection would exist.

Mr Snowden: Since you raised the issue, I think that we will have to go back and consult with the Office of the Legislative Counsel and take counsel on that particular point and see if it is possible or desirable to consider that and look at it in the context of the whole framework of local government reform legislation.

Mr Beggs: In the absence of some critical parts of it.

Mrs D Kelly: Thanks for the presentation. There are a couple of points that I want to pick up on. In relation to urban renewal and neighbourhood regeneration, you are talking primarily about some of the powers being transferred, which are centred in the urban districts. I appreciate that there are areas of crossover between DARD and a lot of our rural villages, which have lost out over a number of years on CRISP. What consultation, if any, has there been with your colleagues in DARD in relation to ensuring that our rural areas can benefit from some of the regeneration powers in the budget and the powers around some of the living over the shops initiative, the shop frontages schemes or the environmental improvements?

Mr Snowden: Just to be clear, the legislation in the Regeneration Bill will allow the councils to operate throughout the entire district. The restriction that the Department has operated under for a number of years relates not to the underlying legislation, which has been transposed into the Regeneration Bill, but the legislation that creates the Department, which specifies our function as being urban regeneration as distinct from rural development, which is DARD's responsibility. Therefore, that is what creates the necessity for us to operate within our remit, which is urban areas. So, the new councils will have the ability to operate in any part of their district in any size of settlement and deliver the kinds of schemes that you have mentioned and which we have done in the past. We have been in contact with DARD in relation to the development of the legislation and the urban regeneration and community development framework and in relation to some of the issues that have been raised during the call for evidence.

Mrs D Kelly: Further to that, given the budget that the Department would have the ability to transfer with the power, is that budget then ring-fenced for urban regeneration or are we going to be able to say to local councils, "Here is money for regeneration". So, it is going to be spread a bit thinner, if you like. They will have the power but not the budget, or will they then have to look to DARD or European funding for the budget to deliver some of the regeneration projects in rural areas?

Mr Snowden: They will be able to apply the budget to wherever they want to apply it to. That is a decision to be taken by the members in each new council. DARD's rural development programme is funded by European structural funds, by and large, so it is not something that it is at liberty to delegate or devolve to local government in the same way that we can with our budgets. You are quite right that it will mean that if a council decides to lower the threshold for what is an urban settlement, they will have to spread their money further across a larger number of settlements. We can only disburse the money that we have, so, we are limited to disbursing our own urban regeneration budget.

Mrs D Kelly: I note that areas at risk are still a defined beneficiary in the scheme. How are those areas defined? It was something that was cobbled together a few years ago very swiftly, and I thought that it was time limited.

Mr Snowden: They are areas that are in the 11% to 20% band of most disadvantaged super output areas in Northern Ireland, or other communities that are identified around those. Yes, it is a time-limited initiative. Each area was to get two years of support to try to address potential decline in those areas. The Minister has taken a decision to extend, at a reduced level of support, funding for some of those areas during the last year of our activity. An area that might have received about £60,000 last year will get about £30,000,or thereabouts, this year.

Mrs D Kelly: I have one final question, Chair. It is not so much to do with the Bill but the staffing resource, from the departmental perspective, once the Bill is enacted. What plans are there with regard to moving resources, including staff, to district councils, if any?

Mr Snowden: I will maybe have to go back to the beginning and explain how this works. Because we are conferring the powers on the council, as opposed to transferring a function, the TUPE regulations do not apply to the staff who are currently engaged in this activity in the Department. So, we have agreed an arrangement with the councils that they will advise us of the number of staff that they expect to require to deliver the function and activity under the new dispensation, and then they will let us know how many people they want. We will offer those opportunities amongst the staff that are there currently and, hopefully, fill all of the requirements that way. At this point, we expect that not all of the currently employed staff in the development offices will be transferring to council under that arrangement. So, the rest of the staff will, effectively, become surplus and will be redeployed in other parts of the Civil Service.

Mrs D Kelly: Chair, perhaps we could see the business case or plans in relation to that. I would be interested in seeing how the scheme is going to work out — not right away, but over time.

Mr Snowden: The details of the scheme have already been worked up, and they have been forwarded to the councils. We can provide that to the Committee if it is interested.

Mrs D Kelly: I think that would be useful, Chair.

The Chairperson (Mr Maskey): I have a couple of points, just to recap. On the last point that Dolores raised — we raised it before at previous sessions — you are saying that most of the rural end of things, such as the DARD funds, for example, are ESF. They cannot be transferred. Is that right?

Mr Snowden: They are European funds, but not necessarily ESF. If it is still called the same thing, it is the European agricultural guidance and guarantee fund.

The Chairperson (Mr Maskey): Your paper states that, unlike the DSD programme, DARD's rural development programme is funded by European structural funds.

Mr Snowden: You are thinking of the European social fund; that is the ESF. "Structural funds" is the generic term.

The Chairperson (Mr Maskey): Sorry. DARD cannot transfer that over, but clearly DARD has to be a key component of the community planning process, so all of that has to be taken into account. There needs to be a joining up so that we are not running two parallel processes with possible duplication. That would not make sense.

I go back to monitoring and what would be required to be monitored, an issue that was raised by a number of members. We are saying that we are transferring a function over to local government and we are not going to tell them how to do it. Paragraph 2 of your papers tells us that you do not intend to monitor but, ultimately, the Department has the power to require reports and so on. At what point would you know that you might want to require a report, when you do not monitor?

You made the point about powers being transferred. On the face of it, it seems that people can, more or less, do as they choose, council area by council area, but that is all still within a framework of local government powers, equality legislation, community planning provisions, call-in measures and councils having to have due regard to guidelines, and so on. So, there is a framework. I say this respectfully: I do not think you acquitted yourself very well in the earlier part of the session in outlining that. There is a framework; it is not the case that councils can do whatever they like. I think there is more protection than that. However, it may not be enough, and I have concerns around that. Will you elaborate on that, because I think it was left as if councils can, more or less, do whatever they wish. I do not think anyone would want that. Even if the provisions do not go far enough, I do not think they are as laissez-faire as it might have appeared.

Mr Snowden: The response was drafted in the context of the kinds of comments that were made during the evidence session. It was suggested that we needed to monitor the activity of the councils — in other words, monitor how they are carrying out their functions, how they spend their money, and so forth. If we get into that, it raises the question, "Why do you bother transferring the responsibility of the powers at all?". So, we are not proposing to have any kind of activity-monitoring where we will be checking or auditing what the councils get up to. However, we are looking at putting into place some kind of framework to monitor outcomes that the councils achieve and deliver, so that we will be able to monitor how things are progressing in town centres or in disadvantaged areas. The use of the oversight powers would have to be related to what kind of outcomes are being achieved by councils. So, if a local authority is completely failing to address any of the issues that are emerging in their area, and the outcomes are showing a downward trend against what we would expect, you might want to look at whether you need to step in or to offer advice, guidance, support or assistance.

The Chairperson (Mr Maskey): OK. No other members have indicated that they wish to speak. If you are happy to do so, we will leave it at that. Thank you very much.