Official Report: Minutes of Evidence
Committee for Agriculture and Rural Development, meeting on Tuesday, 26 May 2015
Members present for all or part of the proceedings:
Mr William Irwin (Chairperson)
Mr J Byrne (Deputy Chairperson)
Mr S Anderson
Mr Tom Buchanan
Mrs J Dobson
Mr Declan McAleer
Mr K McCarthy
Mr O McMullan
Mr I Milne
Mr Edwin Poots
Witnesses:
Mr Gerry Lavery, Department of Agriculture, Environment and Rural Affairs
Ms Catherine McCallum, Department of Agriculture, Environment and Rural Affairs
Mr David Small, Department of Agriculture, Environment and Rural Affairs
Ms Tracey Teague, Department of Agriculture, Environment and Rural Affairs
Workforce Restructuring: Department of Agriculture and Rural Development
The Chairperson (Mr Irwin): I welcome Gerry Lavery, David Small, Tracey Teague and Catherine McCallum. I ask you to take up to 10 minutes for your briefing, and then we will ask you some questions.
Mr Gerry Lavery (Department of Agriculture and Rural Development): Thank you, Chair and Committee members, for the opportunity to brief the Committee on what we are doing in respect of the creation of a new Department of Agriculture, Environment and Rural Affairs and what we are doing to prepare for the changes in the Department that will result from a reduction in the number of civil servants.
On my far right is Catherine McCallum, who is heading up the DARD-led project on the formation of the new Department; she will be working closely with colleagues from DCAL and DOE as work gets under way. On my left are Tracey Teague, our human resources director, and David Small, who will assist the Committee on our restructuring internally and the reduction in job levels.
I will talk first about the formation of the new Department. You have already received a briefing on that, but I will highlight a couple of points. The new Department will comprise most of the functions currently carried out in DARD, along with inland fisheries from DCAL, which has about 70 staff, and the environment and marine group from DOE, which is a much bigger group and involves around 700 staff. We will also have responsibility for the sustainability strategy, which is currently within OFMDFM. The only part of DARD that will not form part of our new responsibilities is the Rivers Agency. That will become part of a new Department for Infrastructure, and it was represented on the DRD-led project to create that new Department.
The primary aim of our project will be to create a new Department of Agriculture, Environment and Rural Affairs by May 2016 so that it can operate effectively from the first day of the new Administration following the formation of a new Executive. We have a short timescale in which to prepare for that. We have a lot of work to do to set up the new systems and processes that are necessary to get the Department up and running. There will be a new organisational structure in place, and resources and systems will be transferred from DCAL and DOE and amalgamated with those already in place in DARD so that normal business will continue without interruption.
We recognise that, over time, we will need to address the full integration of the systems, and I know that, for example, the issue of integrating inspections is dear to the Committee's heart. We will do as much of that as we can before 1 May next year. It is likely that we will have a second phase during the first year to get further integration and to streamline functions to reflect linkages, deal with any overlaps and gain efficiencies. That concludes my opening remarks on the formation of the new Department. I am happy to take questions now, Mr Chairman, or move on to the issue of job reductions.
Mr Lavery: Moving to job reductions, on the budget for the current year, the Minister has been very clear throughout about her key priorities. Those were presented to the Committee in April in connection with the business plan. We then referred to implementing common agricultural policy reform, including a new rural development programme, a headquarters relocation programme, the Tackling Rural Poverty and Social Isolation framework, Going for Growth and flood alleviation. We are prioritising those elements of our work.
When I last spoke to the Committee about the budget, I explained that we have an extremely challenging target to reduce our expenditure in resource terms by £29·9 million this year. That is without any further in-year cuts. As has been highlighted, over half of our budget is spent on staffing, so staffing cannot escape cuts. We are looking for around £5·6 million of that £29·9 million to come from a reduction in staffing. That will be dependent on the delivery of the voluntary exit scheme, with about 300 full-time equivalent staff exiting between September 2015 and March 2016. That will allow us a saving in a full year of around £11 million.
It is always difficult to balance business continuity and the delivery of service against a reduced workforce. There is bound to be an impact on service delivery from taking that much of our person power out. We have been working on this for some time, and our target is to reach a staffing position of around 2,625 by March 2016. Since last summer, each business area has been tasked with reducing its staffing by around 10%. Those early plans recognise the need to reduce not only in 2014-15 but in coming years. The actions that we have taken to date include reviewing existing vacancies, tight control over recruitment, promotion, filling new posts and identification of lower-priority work areas, with the potential to release staff to higher-priority areas. We are making some progress, and we have reduced our staffing levels already by around 76, mainly through the tools that I have outlined. We are reviewing existing vacancies and determining that we will not fill existing vacancies unless they really are critical.
We also are reliant on the voluntary exit scheme to exit around 300 people. On managing the voluntary exit scheme, the Minister has set out the areas of greatest priority, and we have planned for the profile of staff who may leave. We are working to identify surplus posts and have identified in the region of 130. We have engaged with trade union side and stakeholders as part of the plans.
On the impact on the Department, we have a very wide range of services, as the Committee is aware. Although staff who are directly in contact with customers are likely to be drawn from the service delivery group and the Veterinary Service, these services require a concerted effort not just by delivery but by policy, finance, human resources and corporate services staff. Staff reductions are therefore taking place right the way across the Department. At this stage, customers are most likely to perceive an impact on service delivery in the areas of the College of Agriculture, Food and Rural Enterprise (CAFRE) industry training, rural enterprise training and on farm team support, hence I am leaning heavily on my colleague to the right, David Small, the head of the service delivery group.
Over the last number of months, the Committee will have heard of our plans to review our target operating model. We plan to move to a more modern, leaner and more digital model. We are committed in our business plan to complete a number of reviews of business operations, including reviews of customer service, customer contact, advisory inspection and veterinary services. Those are initiatives that, over the coming year, will help us move toward how we can deliver our full suite of services with a much-reduced workforce.
Mr Chairman, I will now pause and take questions. It is a time of great change for us and a time of great challenge. It is also a time of opportunity. It will be difficult and complex to manage in year, and we will just have to work our way through each issue, according to what comes at us. That concludes my introductory comments.
The Chairperson (Mr Irwin): Thank you very much for your presentation. In relation to the reduction in staff, I think that you said that the need was 300 under the voluntary exit scheme. Is that right?
Mr Lavery: That is correct.
Mr Lavery: That is right. We have about 918 applications. A number of those will be speculative; they will be people who are trying to find out how much they would get, and they will not pursue the process. A number of them will be genuine and from people who would leave if the opportunity were to present itself.
The Chairperson (Mr Irwin): Obviously, from that perspective, it looks encouraging because it is three times the number applying that you were looking for.
Mr Lavery: We believe that we could get the 300 people.
The Chairperson (Mr Irwin): You made no mention of the other bodies that DARD has responsibility for, such as the Agri-Food and Biosciences Institute (AFBI), Loughs Agency and CAFRE. I am particularly interested in AFBI's position. The Deputy Chair and I were to meet the Minister last week, but that was called off. Can you give me any update on the number of staff that is needed from AFBI and the number who have applied for the voluntary exit scheme?
Mr Lavery: It may be helpful to the Committee to understand that there is a public sector transformation fund, which, in the current year, has £200 million in it. It is being allocated in two tranches. The first tranche was for schemes that had a business case approved by 31 March, and that includes the Civil Service. The second tranche is for schemes that have a business case approved by 31 May, and it is that second tranche that AFBI is aiming to be part of. It is currently concluding development work on its business case for the voluntary exit scheme.
We do not know precisely how successful that scheme will be. The business case has to compete against others for that second tranche of funding, but they are looking for a significant contribution, as we would be. I have said that we are looking for a significant contribution to our savings, and AFBI will do the same, because, like us, a very high proportion of its costs are wages and salaries. At the moment, we are awaiting the outcome of that business case.
The Chairperson (Mr Irwin): At this stage, then, you are not sure whether the numbers that have applied for the voluntary exit scheme are high enough to ensure that AFBI can reach its target?
Ms Tracey Teague (Department of Agriculture and Rural Development): My understanding is that it is looking for around 200 staff to exit.
Mr Byrne: I welcome the presentation by you and your team. Is the target of 2,600 for DARD staff or for the new amalgamated conglomerate of a Department?
Mr Lavery: We set a target of 2,625 for our existing functions, including the Rivers Agency. We have not yet begun to translate that into the new Department.
Mr Byrne: That begs the question of whether the other parts coming into the new Department are going through a rationalisation of staff before or after joining you guys.
Mr Lavery: I am tempted to say both. Both Departments, DOE and DCAL, have applied for funding under the voluntary exit scheme and envisage making reductions in their headcount. Once the new Department is in place, we will obviously have to look at what streamlining we can do.
Mr Byrne: In the refocusing of the priorities of the Department, how much emphasis are you going to put on customer services, ie the farming community? There has been a vexed concern sometimes that the Department has been bureaucratic and maybe chosen to discipline rather than proactively work alongside the farming community.
Mr David Small (Department of Agriculture and Rural Development): I have heard that comment before, but my view is that, over the last year or two, certainly when I have been involved, we have devoted an enormous amount of resource to the customer, the farmer, through the CAFRE network in the form of education, advisory services and workshops to help farmers comply with eligibility requirements.
You are right that part of what we do is discipline in applying penalties and managing the implementation of CAP and related schemes. That is because we have to, and because we were not doing it well enough and faced disallowance issues. So, whilst we have had to ensure compliance with the various schemes, we have tried very hard to support the farmer through CAFRE and other means. When the new Department is formed, we hope to be able to maintain that same focus on the farmer and on DARD customers. The nuances of our strategic objectives may change slightly, because we will have to take account of a whole new set of strategic environmental objectives alongside our current agricultural objectives. We have some work to do on all of that, but we certainly want to maintain our focus on the customer and on the farmer.
Mr Byrne: Lastly, do you draw up the structure of your matrix for downsizing first, or do you wait to see who applies for exit and then try to fit around that? This could be disastrous unless we get the functional aspects of the Department sorted out.
Mr Lavery: In some cases, we are quite fluid and some parts of the Department will take advantage of those who apply for the voluntary exit scheme and adjust their workload accordingly. For example, that would be the case in the Veterinary Service and the Rivers Agency. In other areas, the workload is quite rigid and very specific, and we therefore have to be very specific about the structure that we are aiming for. In the event that we lose people from high-priority roles in those areas, we will have to substitute people from lower-priority areas. That is the challenge that we expect to face in the second half of the year.
Mr Byrne: Lastly, Gerry, can you give an assurance that objective criteria will be applied and that you will not just do cosy wee deals to fit individuals?
Mr Lavery: The entire system is running on the basis of value for money and of the saving to the public sector versus the cost. That is being applied to all the applications, which will then be ranked. In the case of our Department, I can give an assurance that we will take people off in accordance with a value-for-money ranking. We are not making any exceptions to that.
Ms Teague: No, none whatsoever. It is quite a blunt instrument, and it is as simple as working out the compensation costs against the pay bill savings and ranking them.
Mr Byrne: Thanks, Chairman. I am just putting questions on behalf of the general inquiring mind of the public.
Mr Poots: How many people were employed in the Department during the financial year 2011-12?
Ms Teague: I do not have the 2011-12 figures with me. I know that when we began the workforce reduction plans last June, we had 2,917 and have since reduced that to 2,841.
Mr Poots: Do we have more now than we had in 2011-12?
Ms Teague: No, we have fewer staff.
Mr Poots: The Department has increased its budget over that period.
Mr Lavery: We have increased our expenditure. Some of that increase would be because our capital spend has gone up significantly. Our resource spend has consistently come down.
Mr Poots: You referred to leaning the Department down, Mr Lavery. I have heard a lot of people who deal with the Department say that it is morbidly obese, so it should not be that difficult to lean it down.
Mr Lavery: As David said, we have several roles. One of those is regulation and compliance. That is not a role that we can avoid, nor one that we should avoid because it underpins the ability of the industry to trade.
Mr Poots: You can also over-regulate, which does not lead to better compliance in many instances.
Mr Lavery: We have repeatedly looked at the extent of our regulation. We have asked our stakeholders to identify any over-regulation and, where they have identified anything that they have been willing to reduce, we have looked very seriously at reducing it.
Mr Poots: We had two sessions with your staff earlier. They were not looking at very many reductions and only gave us preconceived lines. That was grossly unsatisfactory, given the issues that we were discussing.
There have been significant changes on the brucellosis testing regime. With more changes to come, I assume that there will be a natural savings of jobs in that area. How many would that account for, given the numbers that were involved in carrying out that work?
Mr Lavery: The Veterinary Service has a target of reducing by 50 jobs. I think that around 40 of those are connected with a reduction in brucellosis testing.
Mr Poots: So the ceasing of those people's work will not have any impact on any services.
Mr Small: Yes. We should also be able to deliver some administrative savings as a result and as the benefits of the new brucellosis position bed in.
Mr Poots: Are there other areas where that could be achieved?
Mr Small: I can just comment on some of the areas within the service delivery group. As you know, we have introduced a new way of carrying out inspections through remote sensing. Over time, that will improve the efficiency of how we deliver inspections and will deliver some savings.
Some of the reductions that I am contemplating in the service delivery group will be from that area, recognising that we should be able to deliver our inspections more efficiently.
Mr Poots: We used to have a Department that had an advisory service that was free to use. We then seemed to have a Department that claimed to be interested only in regulation. I would rather that it advised the industry how to do things well and had good practice to be followed so that it developed the industry and grew it, as opposed to being a super-regulatory body. I encourage a new leaner Department to look again at providing qualitative advice to people in rural communities about new research emerging and all of those things so that we have one of the most proficient agriculture industries anywhere in the world.
Mr Laverty: I am happy to take that encouragement on board. We recognise the value of advice. Where possible, we work with the industry. I am happy to take the encouragement on board and look at it, particularly in the context of the new Department.
The Chairperson (Mr Irwin): I asked the question about AFBI and staffing numbers. I have been informed that the Minister answered that question in the Assembly today. None of you seemed to be aware of the answer, but the Minister has replied to that.
Mr Poots: They might answer it now. [Laughter.]
The Chairperson (Mr Irwin): It is anticipated that there will be more inspections this year in relation to the active farmer issue, which is a new issue. I am told that there have been some 2,000 applications to the regional reserve. Does that put more stress on your staff in relation to the extra inspections that it seems are going to be necessary?
Mr Small: It certainly introduces a new dynamic to what we have ahead this year. We will have a slightly reduced number of overall applications from two years ago, which will help, but, as you say, we have new greening requirements that will require an element of inspection. We have a new active farmer definition. We have very specific requirements under applications to the regional reserve or the young farmer top-up. I think that there will be a bit of a mix; we will gain in some areas, but we will have more to do in others. We have a lot of work ahead of us over the next six to nine months. Our plan is to start inspections next month, and our aim is to start making payments in December, but we have an awful lot of work ahead of us over the next six months or so. There is a lot to do.
The Chairperson (Mr Irwin): Are the possible inspections in relation to the two things I mentioned on top of the normal inspections? Will they still be a percentage?
Mr Small: Yes. The industry has made it very clear to us that we should endeavour to make payments only to genuine active farmers and active farm businesses. Because the regional reserve and the young farmer schemes introduce potential new slightly higher payments up to the regional average, we need to make sure that genuine applicants receive the new payments. The industry has made it very clear that we need a rigorous and robust inspection system around that. We are working on how we do that. It is right that we scrutinise the new applications carefully. That is an additional piece of work that we have to do.
The Chairperson (Mr Irwin): Am I right in saying that there were somewhere in the region of 2,000 applications to the regional reserve?
Mr Small: Yes. We will have a lot of work ahead of us as a result.