Official Report: Minutes of Evidence

The Chairperson (Mr Irwin): I welcome Graeme Wilkinson, Colette McMaster and Tracey Teague, who are assistant secretaries in the Department, and Pauline Rooney, who is an acting assistant secretary. I ask you to take up to 10 minutes to make your presentation; the Committee will then ask questions.

Mr Graeme Wilkinson (Department of Agriculture and Rural Development): Thank you, Chair and members, for the opportunity to present the Department's 2015-16 business plan and, hopefully, give members an opportunity to ask any questions that they might have. I am accompanied by three of the target senior responsible officers (SROs) in the Department: Tracey Teague, Colette McMaster and Pauline Rooney.

Before I comment on the business plan, it might be helpful to give you an overview of our individual roles and responsibilities. As finance director in the Department, I am responsible for the development and coordination of the Department's annual business plan. You will see from the various targets that pretty much anything with a pound sign beside it is my responsibility. Tracey is the HR director in the Department; she is leading on the implementation of the voluntary exit scheme as well as other aspects associated with the HQ relocation. Colette and Pauline will be well known to you all. Colette leads on Going for Growth actions as well as the development of the new rural development programme (RDP); and Pauline has the unenviable task and responsibility of implementing the new area-based schemes. Hopefully, between us, we will be able to address any questions that members might have. If you require any more detail, I am more than happy to take that back to the Department and come back to you in writing.

The 2015-16 financial year will be the last year of the current Programme for Government and the final year of our two-year corporate plan. Members will recall that we presented that plan about this time last year, and the 2014-15 targets will now be replaced by the 2015-16 targets. It is also important to say that we have our strategy to 2020. That will need to be reviewed again in light of the creation of the new Department in 2016 as well as our changing financial circumstances.

Hopefully, you will all have had an opportunity to review the business plan, which is set out in annex A to your packs, and the various associated targets. The plan has been developed by the senior management team in the Department and endorsed by the Minister. I have also included annexes B to D, which include some additional contextual information, including the budget information, an additional introduction and further details on the Department's change programme. As I said, we intend to update our corporate plan with the inclusion of the new 2015-16 targets.

The Department's annual business plan is an important internal governance arrangement for us; it is also important for the performance framework. It is, therefore, essential that we set meaningful targets and ensure that appropriate oversight and accountability mechanisms are operating effectively. As well as internal reporting, we also report progress to the Committee on a six-monthly basis. To date, that has included detailed progress reports as well as oral briefings from senior responsible officers.

You will see from the report that we have maintained a similar format and style. Also similar to previous years, we have developed the targets around the Department's five strategic goals, and members will be well aware what those are.

There are 41 targets under the five goals, and they are referenced, as appropriate, to our various Programme for Government commitments. Members are aware that it has been agreed to extend the Programme for Government for an additional year to 2015-16; however, that is subject to Executive approval.

In defining the targets, we have also focused on the Minister's key policy priorities. As I set out in the covering note, those include the implementation of common agricultural policy (CAP) reform, including the new rural development programme; the relocation programme; tackling rural poverty and social isolation (TRPSI); Going for Growth; and flood alleviation.

In developing the plan, we have considered the changing financial position, particularly in relation to the targets that are set out under goal 5. We have been set an extremely stretching target of delivering savings of £29·9 million in a single year. During the last Budget process, over the last four years, we have had to deliver £40 million, and we are now talking about making savings of £29·9 million in one year. That will be extremely challenging for us and for the Department. Further details on the savings plan have been set out at annex C, which is also in your packs.

Given, as I said, that my name is attached to most of the financial targets, it would be remiss of me if I did not set out some of the risks attached to those targets. As has been previously highlighted to the Committee, our budget is quite inflexible, given that over 50% of it is related to salaries and wages. As a result, £5·6 million of our savings is dependent on the successful delivery of our voluntary exit scheme, so there are significant risks with that. Whilst that is a high risk, there is also uncertainty with additional income generation and reducing our internal running costs.

There is no doubt that 2015-16 will be a transitional year for the Department. A reduction in staff numbers will have an impact on how we deliver our services. We are also creating a new Department in 2015-16, as well as launching a new suite of programmes. Most of those issues will greatly influence what we will deliver in the future. We have, therefore, committed in our business plan to complete a number of reviews of our business operations, including reviews of corporate services, customer contact, advisory, inspection and veterinary services. We have also included a target under goal 5 to increase the uptake of digital services. Those are just a few of the planned initiatives during the current financial year that will take DARD towards becoming a more modern, leaner and more efficient organisation.

That concludes my introductory comments. I am more than happy to take any questions that you might have.

The Chairperson (Mr Irwin): Thank you very much for your presentation. Before I ask a question, Declan needs to leave to ask a question in the House. Declan, do you want to get in first?

Mr McAleer: If that is OK with you, Chair.

The Chairperson (Mr Irwin): Go ahead.

Mr McAleer: Thank you, Chair, and thanks, Graeme. I have been looking through the targets and have noted a couple of points, one of which relates to the farm business improvement scheme (FBIS). You want to have the finalised policy papers by March 2016. I guess that the scheme will not open until after that. Is that the case?

Mr Wilkinson: No. We are already working on that scheme and getting the various elements completed. Work is ongoing. We set a target of March 2016, as the end of the financial year, to have all that work done, but it is certainly our intention to launch the scheme during the 2015-16 financial year.

Mr McAleer: A number of weeks ago, the commissioner spoke to us about the possibility of getting a letter of comfort from the European Commission to enable DARD to open up some of the schemes. What is the possibility of that happening?

Mr Wilkinson: I am not close to that. Colette, do you want to answer?

Mrs Colette McMaster (Department of Agriculture and Rural Development): Yes, I will talk about the approval of the RDP. On 31 March, we got our formal letter from the Commission that set out all the Commission observations on the draft programme that we had put to it in October. We are considering the Commission's comments and starting the formal negotiation period with it on the basis of those comments. It will be a period in which we will determine what changes, if any, we need to make to get to a point where the Commission will approve the programme.

Ideally, we hope to have approval of the programme by the summer. The commissioner mentioned that a letter of comfort might be available before that. We really need to see how this next period goes, although, as I say, ideally we would like to get approval before the summer. We mentioned in the business plan that our target was September, but that was to allow for the worst-case scenario, that the Commission might delay in getting back to us with a formal letter. We aim to have approval as soon as possible.

I would like to pick up on what was said about the farm business improvement scheme. As Graeme said, there is a range of schemes in the scheme, and we hope to launch some elements of that overall scheme during 2015-16, subject to getting RDP and relevant business case approval.

Mr McAleer: You have answered my second question. I noted that in the 2014-15 period the target was to have approval by 31 March, but that has now slipped to 30 September. However, you say that it is 30 September at the very outside and you hope that approval would be secured in advance of that.

Mrs McMaster: Yes. We were unable to achieve that target in 2014-15 because there was delay in getting the formal comments back and so on, so we have included it in 2015-16 and we aim to get that as soon as possible. We are confident that we should be able to get it by September.

Mr McAleer: I have just one last point, relating to the commissioner's comments the other week about European Bank loans. Has that been given further consideration, and does the technical document need to be amended to include that financial instrument? Has DARD given further consideration to that? I think that the Minister said that the text might have to be amended to reflect that.

Mrs McMaster: When he met the Minister, the commissioner highlighted the potential of the new EU loan guarantee fund; he talked about it quite widely during his meetings on the day. The Minister has asked officials to look at this loan scheme and to provide her with advice on it. The commissioner said that, at this stage, because our programme is not yet approved, we have the opportunity — if it were decided that we should include a reference to it — to include a reference to a programme before it is formally approved. To do that would mean that, at a point in the future, we could come back and modify the programme if we wanted to include the use of such a scheme in the programme.

Mr McAleer: Thank you for your indulgence, Chair.

The Chairperson (Mr Irwin): OK, Declan. I have a couple of questions. I see that goal 3 says:

I understood that you should receive that in April. I also see that you plan for:

Why does it take until 30 September to reduce brucellosis testing requirements if we are already brucellosis free in April?

Mr Wilkinson: I think, Chair, that it is because there is a process to be gone through. We applied for OBF status in March.

The Chairperson (Mr Irwin): I understood that we were to get it this month; maybe I am wrong.

Mr Wilkinson: No. That is a process to be gone through. What mechanisms should be put in place post-OBF are out to a consultation that will close on 17 April. I appreciate that there is a number of different stages to it, and we are working through them.

The Chairperson (Mr Irwin): OK.

Mr Wilkinson: It is going well so far.

The Chairperson (Mr Irwin): It just seems strange that we are —

Mr Wilkinson: It has taken a long, long time, but we are in the final stages; we are getting there.

The Chairperson (Mr Irwin): The farmers look forward to that.

Mr Wilkinson: Yes.

The Chairperson (Mr Irwin): I turn to goal 5:

Why must we wait until November to publish the timetable for direct payments this year? That seems very late in the year; I would have thought that you could do it sooner. You have targets every year; why do we do it in November?

Mrs McMaster: This is a target that we have had in a number of years gone past. Lots of things happen as we go through the year that we need to process.

The Chairperson (Mr Irwin): It looks to me that this year you are concerned about what might happen.

Ms Pauline Rooney (Department of Agriculture and Rural Development): We want to make sure that when we publish the target people can understand it and we can adhere to it. Particularly this year, we do not want to create an expectation that cannot be met. At the minute, we do not even know how many applications we will get. Those things have to be taken into account, as well as the amount of effort necessary. We certainly plan to make timely payments under the basic payment scheme.

Mr Byrne: Why are we so slow to reach agreement on the rural development programme? I think that Commissioner Hogan said that we were one of the last. What are the stumbling blocks, and what can we do to get agreement?

Mrs McMaster: We submitted our programme in October of last year. At that stage, certainly, we anticipated formal feedback from the Commission in three months, or by January. The Commission, because of the number of programmes submitted from member states, has had some delay in going back formally on the programmes, so it has taken longer to get formal comments from the Commission. That is why we have not been able to get approval by March 2015, as we hoped last year. We got the letter on 31 March. From this time in, we are aiming to get approval as soon as possible, ideally before the summer. That will be a very quick turnaround and will mean a lot of work in DARD by policy and delivery officials, but it is our aim. We will work closely with the Commission to achieve that.

Mr Byrne: Chairman, I am still trying to find out through the fog where the problem is. Is it officials in Brussels or is it here? Have we been slow to refine and define the programmes that we want? I am referring to the constituent parts of the rural development programme. What are the stumbling blocks? Why the difficulty in finalising this with Europe?

Mrs McMaster: We received the formal comments on 31 March, and we are looking at them. We will come back next Tuesday, 21 April, to update you in more detail on the comments that we received from the Commission. Hopefully, that will be helpful to you. We got the comments on 31 March, and we are considering them. We are not aware at this stage of stumbling blocks. Officials are assessing the comments, and we will go into a process of negotiation and discussion with Commission officials. At this stage, we are not saying that there is a stumbling block, but we will be able to update the Committee in greater detail next week.

Mr Byrne: How far has the Going for Growth strategy been finalised, particularly in respect of the co-financing required to make it an effective policy?

Mrs McMaster: I think that you are referring to the farm business improvement scheme and the funding for it. Last June, the Executive agreed in principle to fund the scheme up to £250 million. That is subject to business case approval; it is also subject to approval by the EU Commission of our RDP, of which the farm business improvement scheme will be an important part.

What we intend to do, subject to business case approval, is to bid for that money, in line with industry uptake and with need over the next budget period. There is already some money secured in 2015-16 that would assist with Going for Growth-related actions. There is £2 million resource and £2 million capital. We hope, subject to business case approval for the relevant part of the farm business improvement scheme, to launch some of the resource-based schemes in the FBIS with the assistance of that money.

Mr Elliott: Thank you for the presentation. I note that one of the strategic goals is to:

If I was explaining that to a constituent who is a dairy farmer milking 60 cows, what does that mean for him or her?

Mr Wilkinson: In line with public finance, we are always required to challenge ourselves and deliver best value for money for the taxpayer, by making sure that there is no waste in the organisation and that we deliver efficiently and effectively. In association with the business plan, we have committed to carry out reviews across the Department, including every element of our business, to answer that question and ensure that we do things as efficiently and effectively as possible, by benchmarking ourselves against similar organisations delivering EU-wide programmes and comparing ourselves with them.

Mr Elliott: Has some of that benchmarking gone on over the last year?

Mr Wilkinson: We have started the process. We have started to look at activity-based costing, at the cost of transactions and our inspections and how that compares to other EU countries. We are still at a very early stage in that process; the reviews have only just been commissioned. It is very much a work in progress.

As public servants, it is incumbent on us to make sure that we are always trying to improve what we do by looking at efficiency and for ways to improve our services. Hopefully, you will see from the business plan that we are trying to drive the Department to become much more efficient. There is a definite emphasis on doing things online and much more digitally. The industry is moving on; it wants to become more efficient. Doing paperwork or applications online means that farmers can do so at a time of their choosing and not just from nine to five when DARD Direct offices are open. It is a matter of looking at different ways and making sure that we are at the cutting edge when it comes to delivering the service to our customers.

Finally, as I mentioned in my opening comments, we saved £40 million over the last four years; we now have to save £30 million in a single year. For any business, making savings of that magnitude is an indication of efficiency and effectiveness.

Mr Elliott: I am referring to the table showing the strategic goals and the business targets for 2014-15 and 2015-16. Item 5.9 for last year reads as follows:

That is not in this year's. Does that mean that it is complete?

Mr Wilkinson: It has not been completed; it is a continuous piece of work. We have our estate framework, which is already in place. We are doing our asset management plan in the Department. I suppose that the focus originally was on getting the strategy right; now it is on making sure that we deliver the asset management plan. It is done at the lower levels, in our corporate balance score card, as opposed to being a business plan target. It is something that we are continuing to do.

Mr Elliott: It is difficult to establish from that table what has been completed. Some of it has not been carried over to this year, so we do not know whether it has been completed. I pick that out as an example; there is nothing specific about it. I just wonder, out of that whole table, what is complete and what is not. There is nothing there to tell us where the Department is with it all.

Mr Wilkinson: We will be coming back to the Committee with our out-turn report for the end of March to advise the Committee of what we have and have not achieved. As part of that briefing, I can advise of the things that have not been carried forward into this programme. One of the challenges for us is that we have 41 targets in this document. Our problem is trying to keep it strategic. A huge amount of business goes on in the Department, and if everybody had their own target in this it would be a massive document. We are trying to make sure that we have the right targets, that they are strategic and that we do not end up with a massive document that is very difficult and unwieldy.

Mr Elliott: Finally, I notice in the same table that the figures 5·8 for last year and 5·9 for this year are exactly the same. Last year's plan says that the goal is to reduce the days lost per member of staff through sickness to 7.5 days by March 2015; in this year's, it says 2016. Does that mean that there has been no progress on that target whatsoever?

Mr Wilkinson: That is a ministerial target that was set quite a number of years ago, and we have decided to roll it forward. We have had difficulties in achieving it over the last number of years, but, rather than change a ministerial target, we have kept it the same. We have included interventions to try to improve things, but we are seeing an increase in sickness.

Mr Elliott: I am sorry for asking this, but I do not know: what is the level of sickness in the Department?

Mr Wilkinson: Tracey knows the detail.

Ms Tracey Teague (Department of Agriculture and Rural Development): The latest is that we are 28% above that target. We are at 9·6 working days lost against the target of 7·5 working days, so we are certainly not meeting the target; our sickness level is significantly above it. As Graeme said, the target was set in 2010. It is a ministerial target that was set for five years and will be carried forward, so it will remain at 7·5 days. Unfortunately, despite the interventions that we have made — we continue, as has the whole of the NICS, to introduce as many new interventions as we can to manage sickness absence — our trend is still not good.

Mr Elliott: Has it come down in the last year?

Ms Teague: It has come down slightly.

Mr Elliott: Have you any idea from what figure?

Ms Teague: I can give you the figures on that. In the middle of the year, it stood at about 10 working days. This is a target that we will be measuring again. We were at 9·6 working days in February. We need the delay to take on board what happened in March, and we will report on it, as Graeme said, at the end of the March business plan.

Mr Elliott: Have you any idea how many days are lost per year through sickness in the farming community?

Ms Teague: No, I do not.

Mr Elliott: It might be interesting to do a survey on that, try to find it out and make a comparison. Have we any idea what is lost, even in the private sector, say, to agrifood processors?

Ms Teague: I do not have the figures with me, but we benchmark against the private sector and other public-sector organisations. I can give you more detail on that. I should probably say that the key cause of sickness absence remains stress, and we are taking forward initiatives with the Health and Safety Executive. We are bringing it into DARD to work with our staff to identify the causes of stress. We kicked that off recently; it will, hopefully, have an impact during 2015-16.

The other issue — I report on this regularly — is compliance with managing attendance. There is an issue with making sure that attendance is robustly managed by all line managers throughout the Department. Those are the two key things that we will make sure we have good governance on: making sure that there is compliance with managing it and regular contact with anyone who is off sick. We also need to think about the cause of sickness. As I said, the main issue is stress. However, we have no comparison with farmers.

Mr Elliott: Finally on that point, and I am sorry to labour it, are the figures in the private sector smaller? Are they under 7·6 days?

Ms Teague: Yes, they are lower than our figures.

Mr Elliott: Is there an indication that the stress levels for those who work in the private sector are not as great as those who work in the public sector?

Ms Teague: We could surmise why those figures differ. There are a number of issues. A lot of it is down to terms and conditions and the fact that farmers are self-employed, so a number of factors come into play. An awful lot of research has gone into trying to analyse the triggers that make to make people come back to work and those that make people go off sick. There is a vast range of issues, but I can come back to you on it if you wish.

Mr Buchanan: I have just one issue: it is the reduction of the staff complement by 300 by 2016 through the voluntary redundancy scheme. If you do not meet the target by that date through the scheme, have you a plan B?

Mr Wilkinson: As I said in my opening comments, there are certainly risks with it. As part of the budget process, we had originally assumed that staff would start to leave in September. We now know that it will be phased between September and March. However, we do not know which staff will be leaving or what savings there will be. You are right. It will be an iterative process throughout the implementation of the voluntary exit scheme. If we do not generate enough savings, if we do not deliver the £5·6 million, then, yes, we will have to return to our budget and look for options to find savings. We are always assessing and reassessing our financial position and looking at opportunities, whether traditional efficiencies, raising additional revenue from other sources, or stopping things. We will have to look at that when we see the workings of the voluntary redundancy scheme. However, there are risks attached to it.

Mr Buchanan: You do not really have a plan B, then. For example, if you get only150 out of 300, you will have to find savings in the Department to keep those 150 on board.

Mr Wilkinson: We will have to find savings to balance our books, ultimately. I do not think that I have ever been through a financial year where we start off with a budget and it ends up being exactly that at the year end. That is the world of financial planning that we live in. We are always assessing and reassessing where we are and taking corrective action. There is no doubt that we will have to take some form of corrective action in the course of this financial year. We have a plan, and we are working towards it. Will it end up exactly as it is written down at the minute? I suspect not; but that is the challenge that lies ahead.

Mr Buchanan: Fair enough.

The Chairperson (Mr Irwin): OK. I refer you to the target under goal 4, which states:

I know that this is a continuation of the target from the 2014-15 business plan. Can you explain what exactly is meant by the agricultural land use strategy; who is on the expert working group; and what are the perceived outcomes of that group?

Mr Wilkinson: The establishment of an agricultural land use working group was one of the recommendations in 'Going for Growth'. The working group is made up of a range of experts who will look at land use and, in particular, try to get the balance right between increasing agricultural output from land and, at the same time, make sure that we do not impact adversely on the environment. It is about getting the balance right. The group is chaired by John Gilliland and has eight sectoral experts: Russell Scott, Billy O'Kane, John Best, Aileen Lawson, Sue Christie, Patrick Casement, Martyn Blair and James Brown. The group is also attended by Norman Fulton and John Speers from the Department. The group has been constituted for 12 months; it has had two meetings so far, and the third meeting is due later this month.

The Chairperson (Mr Irwin): I presume that this is to anticipate where possible grant aid may be given to help.

Mr Wilkinson: I think, Chair, that it is really about seeing what —

The Chairperson (Mr Irwin): What is needed.

Mr Wilkinson: Yes, what is needed, what is the outcome and then looking at what interventions are required.

The Chairperson (Mr Irwin): Yes, there would be no sense in doing it just for the sake of doing it.

Mr Wilkinson: That would be a bad idea.

The Chairperson (Mr Irwin): Listen, that is OK. Thank you very much. Have members any other questions? No, everyone is happy. Thank you very much.

Mr Wilkinson: Thank you, Chair.