Official Report: Minutes of Evidence

The Chairperson (Mr Clarke): I invite John McNeill and his team, Stewart and Roddy, to come forward. John, I do not think that introductions are necessary; your team is familiar to most members. We will let you crack on with your introduction.

Mr John McNeill (Department for Regional Development): Thank you for the opportunity to present on our proposed bids in the June monitoring exercise. We outlined them to you in the briefing that was provided last week, and they are due to be submitted to DFP tomorrow. You are aware of the background to the bids from our presentation in March on the Department's final budget, both in resource and capital. The funding constraints that face the Department in 2015-16 are clear. We look forward to your support in taking the bids forward and trying to secure the additional funding that we need to provide the services that all citizens in Northern Ireland require. I intend to talk through the resource bids in some detail and then concentrate on only a couple of the capital bids.

Table 1 highlights the resource bids. There are eight in total, to a value of almost £40 million. We have classified five, worth just over £30 million, as inescapable. The first of those bids is for the skeleton service. That is the skeleton service you heard about from Peter. It is not currently funded in the budget and is being taken forward at risk, in anticipation of funding in the monitoring round. The primary reason for undertaking the services at risk is to maintain public safety on the roads. There are a number of components in that skeleton service. There is a smaller element relating to street lighting. As was highlighted earlier, our existing funding covers the energy requirements for street lighting, traffic signals and the majority of our inspection and testing requirements under the Electricity at Work Regulations. However, there is still some repair money that we need as part of the skeleton service.

No funding is available for routine road maintenance, so we have had to agree this skeleton level of service, which, quite rightly, is identified as being problematic for citizens across Northern Ireland where the grass has been cut only once. We are more frequently cutting at sight lines at bends and at junctions. Gully emptying has been targeted only at the areas we know to be susceptible to flooding. Weed spraying has been cut back only to noxious weeds. It is a very limited road maintenance function that is being carried out. On top of that, the skeleton service that we are currently undertaking at this time of year does not include winter service and, therefore, in our skeleton service bid, we are incorporating the winter service requirements for the whole year. That is based on our normal average winter. Obviously, if we do not get our winter service funded, it will create problems with congestion and increase the risk of major road safety problems. So, that is the first bid is for the skeleton service, and I think that Peter referred to it as being for just under £15 million.

We would like to do more than the skeleton service and to progress to what we have referred to as a minimum requirement. That is an additional £6·6 million, primarily to allow contractors to be employed to supplement our internal workforce and to repair all defects, rather than prioritising the road defects. That would mean grass being cut more frequently, carrying out the full schedule of gully emptying, and repairing of bridges etc. That minimum requirement is still way short of what our normal level of funding would be for road maintenance.

Our third bid relates to Northern Ireland Water. You might remember that, when we presented the final budget to you, there was a shortfall in the funding available compared with the PC15 funding requirement.

The Chairperson (Mr Clarke): John, let me interrupt you, given that we are pushed for time. The Committee has the report and the figures. Rather than you going through the detail, maybe we should go into questions, if you are happy enough with that and unless there are any specific issues that you really think the Committee is not familiar with.

Mr McNeill: I could not judge what the Committee is familiar with or not.

The Chairperson (Mr Clarke): We will maybe move into questions.

Mr McNeill: That is fine.

The Chairperson (Mr Clarke): Now that we have got rid of Peter May and have you in the chair, you can explain things. You are the finance man here. Peter has a very articulate way of trying to explain the difference in the budget from last year to this year. There are £60 million of pressures, and some of us, including even the Finance Minister, described it as 0·6%. Can you tell me what your starting budget position for resource was last year?

Mr McNeill: The starting position for the resource budget last year was £344 million.

The Chairperson (Mr Clarke): What was the starting position this year?

Mr McNeill: The starting position for this year is £336 million.

The Chairperson (Mr Clarke): So that is a difference of £8 million.

Mr McNeill: I have a simple way, and I will offer this to you —

The Chairperson (Mr Clarke): I thought that was simple: I just took £336 million away from £344 million, and it gave me £8 million. In other years, DRD came every quarter looking for more money. It seems to me that what Peter has done, probably with your assistance, is take the end of last year's figure and the start of this year's figure to come up with £60 million. I was always taught at school to compare like with like. If you started last year with £344 million and started this year with £336 million, I see a difference of £8 million. You probably robbed most of that off Translink.

Mr McNeill: Or Transport NI.

The Chairperson (Mr Clarke): Or Transport NI. The problem is that you have robbed more than £8 million.

Mr McNeill: Can I go back to —

The Chairperson (Mr Clarke): You can.

Mr McNeill: Things have taken place that are unusual or are one-off changes, which mean that the positions that you are comparing, with the £344 million and the final position of the £336 million, is not actually comparing like with like. A number of things —

The Chairperson (Mr Clarke): What like, John?

Mr McNeill: One of them was the £20 million release in value that was due from Belfast Harbour.

The Chairperson (Mr Clarke): But at the start of last year, you had £344 million and you had £336 million at the start of this year. During the year, the Executive gave you that money.

Mr McNeill: Not last year.

The Chairperson (Mr Clarke): Are you sure?

Mr McNeill: Yes. In 2014-15, there was no £20 million. There has been an adjustment between 2014-15 and 2015-16.

The Chairperson (Mr Clarke): OK. That is £20 million.

Mr McNeill: There are a number of adjustments, as I said, which are, effectively, unusual one-off type things and can confuse matters. There is no doubt about that.

The Chairperson (Mr Clarke): Can you give me some of the other ones, John?

Mr McNeill: There was another element —

The Chairperson (Mr Clarke): Let us go back to the £20 million first. At the start of last year, were you not bidding on the understanding that you would be getting the money? Therefore, your £344 million was calculated on the basis that you were already getting that from Belfast Harbour and not the Executive.

Mr McNeill: No, the £344 million was —

The Chairperson (Mr Clarke): It is the additional £20 million I am talking about.

Mr McNeill: The £344 million was reduced because it was anticipated that we would get the £20 million.

The Chairperson (Mr Clarke): It was reduced?

Mr McNeill: Yes.

The Chairperson (Mr Clarke): Right, OK.

Mr McNeill: So it should be £364 million down to £333 million.

The Chairperson (Mr Clarke): It is £336 million, but anyway. Moving on, you were going to tell me another one, John.

Mr McNeill: We have gone through this previously, including spending time with the Committee Clerk and special advisers. I am prepared to offer a simpler way, if —

Mr Byrne: Keep her simple.

The Chairperson (Mr Clarke): Yes, we are all for that.

Mr McNeill: DRD, like all Departments coming into the 2015-16 period, suffered a significant resource budget cut of 15·1%, which equates to £51 million. So, that is a £51 million reduction to our resource budget. The other thing, which Peter referred to, is that, on top of that, Northern Ireland Water had a rates pressure imposed on it —

The Chairperson (Mr Clarke): Sorry, John, I am a wee bit confused by your simple method. You are talking about taking 15% off: is this going back to issue of the £344 million going down to £336 million?

Mr McNeill: No, 15% is the amount that our budget has been reduced by as part of the Budget process for 2015-16. It is identified. I do not know if you have access to the table that we presented on 3 March.

The Chairperson (Mr Clarke): OK. Work away.

Mr McNeill: I am saying that, if you take the £50 million, equate it with the 15% reduction, add on £13 million, which is the Northern Ireland Water rates pressure, less £5 million, because we got £5 million between the draft budget and final budget, factor in a further reduction associated with loss of income from the sale of income-generating assets, that comes back to more or less £60 million of pressures. That is what we have always been saying: we have £60 million of pressures. I am sorry for confusing you and coming up with yet another version or variant of looking at the same thing.

The Chairperson (Mr Clarke): I would not like to see your complicated version because that did not seem very simple. I want to go back to my version. You are director of finance. What is the percentage reduction of £344 million down to £336 million?

Mr McNeill: It is clearly not 15%.

The Chairperson (Mr Clarke): That is right, so can we park the 15% because that is not the reality here.

Mr McNeill: No. The 15% is a reality.

The Chairperson (Mr Clarke): It is not. I am going to open this to the floor shortly, but the starting position for me was those two figures. There is a variance of £8 million. I will accept the £20 million on top of that, so it is £28 million. Where were the additional ones then, John?

Mr McNeill: There is £13 million for rates. During the 2011-15 Budget period, it was anticipated that there would be car park tariff increases —

The Chairperson (Mr Clarke): And you are putting that at £7 million.

Mr McNeill: — that would bring in £7·6 million.

The Chairperson (Mr Clarke): Can I stop you on that one? Can you go and explore that? We are hearing back from the councils that that figure has been revised and that it was never was £7 million, but considerably less. John, Stewart or Roddy, do you want to leave that one to the side and come back to us? Local government is telling us that they were told £7 million, so you have budgeted for that to make —

Mr McNeill: I think that you —

The Chairperson (Mr Clarke): Sorry, let me finish, John. You budgeted for that to make it up to £60 million. They are telling us now that it never was £7 million; it was considerably less.

Mr McNeill: There are two separate things. The £7·6 million related to tariff increases across the full range of car parks that were anticipated in two consecutive financial years, 2013-14 and 2014-15, which the Executive then decided that we, DRD, should not impose for the benefit of the economy. That money, £7·6 million, was funded to DRD in those years and then —

The Chairperson (Mr Clarke): John, this Committee was told when we were doing the inquiry that it was worth £7 million annually.

Mr McNeill: If you just let me finish, the £7·6 million was funded in 2014-15 and then that was removed from the budget as part of an opening budget adjustment by DFP, moving into 2015-16. The moneys that have transferred to councils relate only to off-street car parks. It does not relate to on-street and off-street. The £7·6 million is a combination of off-street and on-street.

The Chairperson (Mr Clarke): You still have on-street.

Mr McNeill: We still have on-street.

The Chairperson (Mr Clarke): You have not lost that. That is what I am saying. That £7·6 million includes on-street and off-street figures. You have offloaded off-street to councils. Councils were told £7 million. I will accept that £7·6 million represented both, but you have still got on-street. That is not additional pressure and loss of revenue. You still have that revenue.

Mr McNeill: We have no opportunity to regain or recover that revenue because —

The Chairperson (Mr Clarke): Sorry; you still have the on-street.

Mr McNeill: But we always had on-street. We have had on-street car parking for years. This was about additional income from on-street parking that would then, through tariff increases, earn another £7·6 million. We have offloaded the off-street element, hence there is no opportunity for us now to earn that additional income.

The Chairperson (Mr Clarke): I will open it to the floor.

Mr Byrne: What is the breakdown between on-street and off-street within the £7·6 million? The £7·6 million is a given.

Mr McNeill: I do not have that to hand —

The Chairperson (Mr Clarke): What confuses me —

Mr Byrne: Is it 50:50, 60:40, 70:30? What is it?

Mr McNeill: Again, I do not have that —

The Chairperson (Mr Clarke): What is confusing us — hopefully it is confusing Joe as well — is that, when we were doing the work on the transfer of car parking, we were clearly told that the revenue that the councils would earn was £7 million. The councils are now coming back and telling us that the £7 million figure was plucked from the air because the reality is that they are not getting £7 million. That tied in with your figure, John, of losing £7·6 million, but you are now saying that that includes on-street, which you still have. The £7·6 million is made up of both. Joe, like me, is trying to —

Mr Byrne: Chair, can I get a further bit of clarification from John? You have come up with a quantum of £15 million, which you are saying is equivalent to 15%, and the 15% is a percentage of £344 million.

Mr McNeill: Yes, the £344 and the —

Mr Stewart Barnes (Department for Regional Development): We provided the Committee with a very detailed briefing on this on 3 March. It is —

Mr Byrne: Surely we can all talk about those figures and be clear and confident about what they are.

Mr Barnes: The briefing on 3 March detailed all the figures.

The Chairperson (Mr Clarke): Yes, but we are not in receipt of that information now. To go back to what you were saying, Stewart, part of the £7·6 million is on-street parking, and you still have on-street.

Mr Barnes: Yes, but we still cannot put up the amounts for that to get back that £7·6 million. We cannot put the price of on-street parking through the roof to bring back £7·6 million.

The Chairperson (Mr Clarke): Stewart, we could get you the extract of the report where we were told that the decrease of fares to £1 for four hours or five hours was actually bringing more revenue into Transport NI or Roads Service than the increased fares. What you are saying is the reverse. They said to this Committee that the £1 fare brought them more revenue than the higher charges. We can furnish you with a copy of that.

Mr Barnes: Yes, and we can come back on that.

Mr McNeill: I know that the Committee Clerk and some special advisers have already discussed with my predecessor how what appears to be a 0·4% reduction, as we are presenting, is an 18% reduction in terms of the pressures that we are facing. I am very content to go through that process again to try to get to a clear understanding of the financial position in the Department. That is fundamental to the position that we are in and the decisions that the Department is taking in having to cut back on services while safeguarding public health and public safety. If the budget reduction is so small, as you suggest, why would we be taking those decisions?

The Chairperson (Mr Clarke): I am asking you that question. There is a role reversal here, John. That is why we cannot get our heads around it; certainly, I cannot —

Mr Byrne: We are trying to see through the fog, Chairman.

The Chairperson (Mr Clarke): Did you budget for the £13 million or whatever on rates?

Mr McNeill: No.

The Chairperson (Mr Clarke): No, so that is not a pressure. That is a pressure that you brought on yourselves.

Mr McNeill: No, it is a pressure —

Mr Barnes: It was because of a DFP revaluation of rates.

The Chairperson (Mr Clarke): But you did not bid for that.

Mr McNeill: It only applied this year.

The Chairperson (Mr Clarke): At what time?

Mr McNeill: From the start of April this year. DFP did not fund that. We were looking for DFP to fund it as part of the budget settlement. It was not funded, and, therefore, it adds to our pressures.

Mr Lynch: At the end of the day, when all is said and done, realistically, what are your priorities and how much do you expect to get?

Mr McNeill: Our priorities are identified here in our inescapable bids.

What we get is not within our gift, unfortunately. Our number one priority is to secure the funding to maintain this skeleton service. A skeleton service is not adequate; it is to try to ensure that public safety is delivered, and that is our number one priority.

Mr Lynch: Is that covering risk?

Mr McNeill: It is attempting to cover the risk. We are trying to cut the grass so that at sight lines and junctions the risk of accidents —

Mr Lynch: You are saying that potential risks remain.

Mr McNeill: We have taken a risk-based approach. Similarly, we are targeting gully emptying on areas where there has been a risk of flooding in the past. That is not to say that, with an unusually heavy rainfall, other areas cannot flood. It is a targeted, skeleton service in an attempt to reduce the risk as far as possible. Do you want to add something there, Roddy?

Mr Roddy Crilly (Department for Regional Development): I agree. We cut the grass for safety reasons only. Normally, we would cut twice a year for safety reasons. We can only afford to cut once a year now, so clearly there is an increased risk. That is the simple answer.

Mr Lynch: You accept that there is a risk. You said that road maintenance is very limited. I was talking last week to cyclists who were doing a tour of my county. They said that the state of the roads is unbelievable and that they were deteriorating as the weeks go by. You say that it is way short. How short, and what will be the impact?

Mr McNeill: When you say "road maintenance", are you thinking about —

Mr Lynch: Resurfacing.

Mr McNeill: Resurfacing and structural maintenance. That is funded out of our capital budget. Our opening capital budget for 2015-16 is at an all-time low of just over £22 million.

Mr Lynch: How short is that compared with previous years?

Mr McNeill: We are submitting a bid in this monitoring round for £104 million. That is intended to bring us up, together with some patching work, to the structural maintenance funding plan level, which is the annual expenditure that we need to undertake on the road network to maintain it in a proper condition and to stop the backlog from growing.

Mr Lynch: Is there a backlog?

Mr McNeill: There is a backlog. There is a legacy of underfunding for structural maintenance over many years. In the recent past, through monitoring rounds, we have done very well as a Department. There has been significant additional money, enabling the funding associated with structural maintenance to come close to the funding plan level; but those have been exceptional years, and there is a legacy.

Mr Lynch: I accept that.

The Chairperson (Mr Clarke): Just to remind members that it is two questions each. I will come back round again.

Mr McNarry: I begin with the first of my two questions. Earlier, we heard Dr Andrew Murray admit that his section has absolutely no money for potholes, grass verges and gully-emptying. I am pleased to see in this report that we have, under the heading "minimum requirement", a £6·6 million bid. There is a written commitment in this report by your Department to "repair all defects". If the bid is accepted, what then would be the starting date to "repair all defects", as the report tells us, and what happens to defects found after the starting date?

Mr McNeill: If the bid is accepted, it assumes —

Mr McNarry: I am sorry; may I add to that? As part of that, in the same bid, the report says that you will carry out full-scale gully-emptying, yet, on a number of occasions, you and your colleagues have told us that gully-emptying would be done in a targeted fashion. Is it targeted or is this report up the left?

Mr McNeill: Let me explain. Our first bid — I apologise for going back to it — is for funding to cover the skeleton service that we are currently doing. That includes the targeted gully-emptying and the one cut of grass for the sight lines only.

Mr McNarry: I am sorry, I am just a bit confused. Could you explain it to me? I do not have anything that tells me it is the first, second, third or fourth bid; I just have a report from your Department that says what your bid is about. Is this the bid that I need to concentrate on, or is there some other document that I need to read?

Mr McNeill: If you look at table 1 —

Mr McNarry: Yes, I looked at that.

Mr McNeill: — it says "in addition to the skeleton service".

The Chairperson (Mr Clarke): Can I stop you there, John? I am confused about this as well. Are you saying that, if the bid for the abysmal service that we already have is unsuccessful, we will not even have a skeleton service?

Mr McNeill: Yes.

The Chairperson (Mr Clarke): Correct me if I am wrong — I do not know what the other members thought — but I thought that we were on a baseline now for the skeleton service that we have and that that was part of the £336 million going forward and that any additional work would be applied to it after that. I cannot see anyone on this Committee not supporting bids for additional funding, but I have looked at your capital funding and, realistically, given what you are going to get, your figures are pie in the sky. Are you telling us that if you do not get £14·8 million for the skeleton service for street lighting, roads maintenance and the winter service, even the abysmal service we are getting is gone?

Mr McNeill: The "abysmal service" that you are getting, to use your terminology, cannot currently be afforded within the budget. That was outlined back in March, because the constraints in the Department's budget can only afford the street-lighting energy, the traffic-signal energy and the inspection and testing costs associated with —

Mr McNarry: If you do not mind me interrupting you, we have had lovely, flowery words from your permanent secretary, who is well-used to using them. Those lovely words surrounded our concerns about safety. Roddy has mentioned safety already this morning. In order for me and, I am sure, all members to be informed and to be able to inform our constituents, could you tell us this: at what juncture do we tell them that nothing is going to change, that the idea of cutting the verges twice goes out the window, that the gully-emptying will not be full-scale and that they should forget about defects and potholes being repaired? At what stage can we tell the public that there is no change to where we are?

Mr McNeill: There was an acknowledgement that something needed to be available in the public domain to —

Mr McNarry: I asked for that in the earlier session. You are scaring the life out of me at the moment.

Mr McNeill: The reality is that the skeleton service that is being provided is being undertaken at risk.

The Chairperson (Mr Clarke): Are you financing that skeleton service on a quarterly basis only?

Mr McNeill: We have taken the decision to fund a quarter's worth of the skeleton service up to the end of June.

The Chairperson (Mr Clarke): But at the start of the financial year, when you set the budget for the year, were you setting it based on the skeleton service only going for a quarter and then you were going to close your eyes and hope for the best?

Mr McNeill: No, we were setting the budget for the first quarter so that the people in Transport NI could proceed and deliver the skeleton service as it has been outlined. We were then going to incorporate the cost of that skeleton service in June monitoring in the hope and anticipation that that skeleton service would be funded.

Mr McNarry: We are still on my first question, I hope. Help me, John, if you can. Is what we are talking about in your priority list? Is the need for the money to do that a priority?

Mr McNeill: It is our absolute priority. It is our number one inescapable bid.

Mr McNarry: Your number one inescapable bid is to stop the rot.

Mr McNeill: It is to provide funding to enable the skeleton service to continue for the rest of the year.

Mr McNarry: Just the skeleton service.

Mr McNeill: Just the skeleton service.

Mr McNarry: Are you arguing for just the skeleton service?

Mr McNeill: No, but that is our first —

Mr McNarry: In other words, you are going to the table and you would be happy enough to come away with just the skeleton service. I am not knocking you for it; I am just saying.

Mr McNeill: We have put this forward —

Mr McNarry: It is a bad way to play cards.

Mr McNeill: We have put this forward in such a way that we are bidding for the absolute bare necessity; the skeleton service that we need. We are following it up with a second bid, which is the extra £6·6 million, which will then take us into normal — well, not quite normal; it is minimum standard but is better than the skeleton service.

Mr McNarry: Chairman, on that issue, there is a public service matter that we as a Committee should address. I am not saying that there is a bluff, but people are expecting more, and they are not satisfied with what they are getting. This is all hanging by a thread here. It is an absolute priority just to deliver a skeleton service. I have never heard anything so ridiculous in my life. I understand the situation and the feeling on that. Maybe we could put that news out.

Mr Barnes: Part of it is in recognition that resources are very scarce at the moment.

Mr McNarry: I understand that.

Mr Barnes: That is why we have prioritised the bid. The minimum is what we need. We want the whole lot, but we are saying that if there is only so much money around, that is the very minimum that we want. As a Department, we want all our bids met to provide the service —

Mr McNarry: I understand that, Stewart. It emphasises the critical state that we are in with money. I am perfectly aware of that and understand it. It is just the message going out.

The Chairperson (Mr Clarke): If that is what you are saying, Stewart, you are bidding for the skeleton, which is your minimum, and I understand your point, John, that that is the very least that you want out of this, but your skeleton is £4·8 million and you said that your minimum is £6·6 million. When are you going to bid for the ultimate of what you actually need?

Mr McNeill: We are trying to be realistic. We have other pressures as well across the Department. We are trying to balance the bids, recognising the overall funding situation that the Northern Ireland block is likely to find itself in.

Mr McNarry: If you got utopia, would that mean that you would have to employ more people, or does what you are doing mean that you are going to employ fewer people?

Mr McNeill: If the bids are met, we will start to utilise external contractors, which we have not been able to utilise since August 2014 when —

Mr McNarry: Can I go on to my second question now?

The Chairperson (Mr Clarke): I think you have had about four. We will come back round to you again; do not worry.

Mr Byrne: In relation to the resource budget that you have been earmarked for, the Chairman outlined the figure of £338 million, is that right?

The Chairperson (Mr Clarke): It is £336 million.

Mr Byrne: Within that, have you earmarked some money for routine road maintenance, or is all road maintenance being dumped into the hope of allocation coming from monitoring rounds?

Mr McNeill: All the routine road maintenance that is funded from resource budgets is included in what we are terming "skeleton service".

Mr Byrne: Please, before we get to the moneys possible from monitoring rounds, did you have some earmarked money pigeonholed for road maintenance?

Mr Barnes: The Minister recognised that not to do anything would put public health and safety at risk, so he has decided —

Mr Byrne: Hold on, guys. Keep the thing simple.

Mr Barnes: Sorry, I thought I was.

Mr Byrne: If you were to get absolutely from monitoring rounds.

Mr Barnes: He has gone at risk with certain elements of road maintenance to carry these out at the moment, so we are going at the financial risk to carry out in the first quarter, and, if we do not get any money in June monitoring, he will review that situation to see where we are. We are taking forward at risk even the basic road maintenance activities at the moment, in line, obviously, with public health and safety issues.

Mr Byrne: Let us try this one. The inescapable bid of £31·4 million and the minimum requirement roads maintenance bid of £6·6 million are in this monitoring round bid. Is that for 12 months or is that a requirement for a quarter?

The Chairperson (Mr Clarke): I think that Joe has put the total inescapable bids together. Is the £31·4 million a quarterly figure? The figure for the total inescapable bids is £31·4 million.

Mr Barnes: We are bidding for an annual figure.

Mr Byrne: So, in this monitoring round, you are bidding for a 12-month allocation.

The Chairperson (Mr Clarke): A nine-month allocation.

Mr McNeill: Yes.

Mr Byrne: It is the same for the £6·6 million. To revisit the first question, if you were not to get any of those from monitoring rounds, are you saying that you could do absolutely nothing for routine maintenance?

Mr McNeill: I think that that is what Stewart is saying. If we were to get absolutely nothing, the Minister would have to reassess what his approach would be in continuing to undertake even a skeleton service.

Mr Byrne: Do you mean that you guys would be expected to reallocate internally from your departmental budget?

Mr McNeill: That would be an option for him to consider, although, as you are well aware, there are not many easy options across the Department.

Mr Byrne: Chairman, I am happy enough for now.

Mr Dallat: Apologies if my question has been asked when I was out talking to visitors. Why was the money for community transport not an inescapable bid?

Mr McNeill: The inescapable bids have been identified primarily to address public safety concerns, such as the road maintenance-type bids, and public health concerns. There is the Northern Ireland Water PC15 bid. There are efficiencies that have been put on hold because of interactions with the trade unions in Translink. To some extent, there are Executive priorities as far as concessionary fares are concerned. That is why those bids have been classified as inescapable. We do appreciate that there has been a reduction, and, due to the scale of the overall pressures in the Department, each area across the Department, including community transport, has suffered a reduction in funding. We continue to work with the various elements that are funded by community transport to minimise the impact on users of their services ultimately. We recognise that there has been a reduction in funding, and, whilst that process is still going on, working with the various bodies, we are putting forward a bid to restore it to the funding that it was at, more or less, at the end of last year.

Mr Dallat: I thank John for his answer and appreciate that he is doing his best to explain in simple terms how these things come about. I also appreciate that the Department is seeking to reinstate the money that was taken from that community programme. On reflection, is there not a good case to be made for including funding for community transport under the heading of "inescapable bids", given that it caters for some of the most vulnerable people, who have serious mobility problems and have critical appointments to make at hospitals, clinics, opticians, dentists and all sorts of places? It is all part of the ageing process, unfortunately; I know all about it. On reflection, has this Committee got it through to the Department that it is not just a fringe benefit?

Mr McNeill: The Minister is aware of, and supportive of, the work of the community transport organisations. Whilst there has been a cut, there is considerable funding still available to them. He is supportive of trying to address the most vulnerable in our society. I am also aware that, as a Committee, you have been active in that area by hearing from some of the providers concerned. Indeed, there are evidence sessions coming up soon, both here and in the Assembly.

Mr Dallat: That is fine. I have one last question, and it is about the road maintenance programme. One of my earliest memories of a presentation from the Department was one that told Assembly Members that, based on budgets that were not as difficult as they are now, every road might be resurfaced once in a hundred years. We were also shown some graphic slides of where roads were being undermined because of flooding. The road maintenance thing has been cut back, and gullies are not being emptied. God knows, there are two families in the north-west grieving this morning after two more deaths on the road. Is this not working against everything that you want to achieve in terms of reinvigorating the road network, which was already underinvested in, stopping the flooding, which is a major part of the undermining of the roadways, and addressing road deaths?

Mr McNeill: You have my assurance that the Department wants to invest the right amounts of money in the road network. It is vital for safety and the economy. Every citizen would support investing in the road network. We are making the best of the funding that we have been provided. That said, particularly on the capital side and the resurfacing side, we have been very successful in the last three monitoring rounds in securing additional capital funding. That is the reason why we are putting these bids forward to secure additional funding.

Mr Dallat: Chairperson, you made this point earlier: is the depending on monitoring rounds to carry out essential work not in need of a rethink?

Mr McNeill: We have made that point, and the Minister has made the point in the Budget processes that, while it may be expedient from some other perspective, it is not expedient from this Department's perspective. If there is a proper level of funding made available at the right time — ie the start of the year — the work can be planned.

The Chairperson (Mr Clarke): That is notwithstanding, John, that the Minister actually agreed to that process and has enjoyed the fruits of its benefits as well.

Mr Lyttle: Gentlemen, I extend a degree of sympathy to you. The reductions are, in some part, a result of failed political leadership in this context. Notwithstanding that context, if we take the £14·8 million needed for the skeleton service and the £6·6 million for the minimum requirement, are we saying that DRD is around £21·4 million short of being able to deliver the minimum required standards for street lighting, grass cutting, weed treatment, gully cleaning and road maintenance in Northern Ireland necessary to avoid risk to public safety?

Mr McNeill: The short answer is yes, although we believe that the skeleton service is largely addressing the public safety angle. However, we would like to go beyond the £14·8 million so that we can clean gullies and cut grass more often and repair road defects as we find them, rather than having to prioritise.

Mr Lyttle: I know that these can seem to be not as serious as certain health or education matters, but I think that every one of us knows that some of these services are absolutely vital to the day-to-day existence of our constituents and for flood avoidance, transportation and safety. There is a real urgent need for that bid to be successful. Is the budget predicated on the implementation of the Stormont House Agreement, or would the implementation of that agreement significantly improve your budgetary circumstances?

Mr McNeill: I am not at liberty to say; I honestly do not know. If the Stormont House Agreement does not go forward —

The Chairperson (Mr Clarke): I think that we can all accept that there is a bit of window dressing, Chris. If the Stormont House Agreement does not go forward, somebody else will be doing this job. Heaven knows, there are those who think that they are protecting people; they will be a lot worse off. I do not that John is at liberty to answer that.

Mr Lyttle: I understand. I suppose it was only based on the recent public statements that the Budget that is pending may be presented with the Stormont House Agreement factored into it, so my question is to establish whether officials are working on the same basis.

The Chairperson (Mr Clarke): I think that we all know that, rather than £10 million a month going back to the Treasury, it would be better if it were available in this monitoring round for each of the Departments to bid for.

Mr Lyttle: That is not the question that I am asking, but I wholly agree with what you say. The inference is that, if we are £20 million short based on the Stormont House Agreement, then we are even further short of that.

Mr Ó hOisín: After the statement yesterday on the Coleraine-Derry line, I asked about the increase to £46·4 million. Contained in the statement was a reference to a difficulty. What is the explanation for that? I asked him yesterday, and I cannot remember what he muttered back.

The Chairperson (Mr Clarke): Peter answered it today; he said that it was the £40 million they have, the additional £1 million out of the £300-and-something million, which would not be difficult to find, and the additional £5 million that would come in the next financial year, which would come out of the total capital budget.

Mr Ó hOisín: That stretches out over the two years.

The Chairperson (Mr Clarke): But it will be two years before it is delivered.

Mr McNeill: There is no implication on the 2015-16 capital. That is why —

The Chairperson (Mr Clarke): There is; there is £1 million on it.

Mr McNeill: There is no bid required in 2015-16 to carry any element of the extra cost.

Mr Ó hOisín: OK, that is a bit clearer. Thanks.

Mr Moutray: How much has been set aside in your budget in relation to compensation for people damaging cars in potholes?

Mr McNeill: The total amount for public liability claims in general is in the region of £4·5 million a year, but that includes vehicle damage and personal liability. I think it also includes employee liability. It includes a whole —

The Chairperson (Mr Clarke): Did you increase that from last year?

Mr McNeill: No.

Mr Moutray: Chair, that is what I was going to come to. Given that there is virtually no work being done in relation to potholes, and the potential for none at all to be done, how are you going to factor that into your budget as we go forward?

Mr McNeill: Obviously, there is a risk that the number of claims will increase —

Mr Moutray: It was 500 last year. Those are the figures that I have.

Mr McNeill: The number of vehicle damage claims, if you start to go into the detail, has actually been coming down over the recent past, maybe partly because of the additional structural maintenance and resurfacing work that has been going on. As yet, we have not seen any upward trend. Typically what happens, particularly with vehicle damage claims, is that immediately after something like a really bad snow event there would be an escalation of claims, as opposed to in the routine —

The Chairperson (Mr Clarke): But, John, you enjoyed a degree of protection in the past. There is a piece of legislation that protected you to do with the depth of potholes. I cannot remember how it worked, but there was a certain depth and you had a certain time to fix it. If we are saying now that we are not fixing potholes, we will not need a snow event, because everybody who drives down the road is going to hit a pothole. They are appearing now. That piece of legislation that protected you previously cannot protect you, because you may be inspecting them but you are not repairing them.

Mr McNeill: We are repairing, we are inspecting and we are prioritising.

The Chairperson (Mr Clarke): But I think Stephen's question is in relation to whether it disappears entirely, because you are only bidding for it now for the next quarter, so there is no guarantee after the end of June that we will have any service going forward.

Mr Moutray: John, I am sorry, but I have to disagree with you in relation to what you said about snow events. Certainly, in the constituency that I represent, there is a lot more than snow events. It also seems that I am the only person who is picking the potholes up and reporting them. I do not know where the inspection teams are.

Mr McNarry: Victor Meldrew is good at it. [Laughter.]

Mr Moutray: Anyway, thanks for the answer.

The Chairperson (Mr Clarke): Did you want back in, David?

Mr McNarry: I did, yes; thanks, Chairman. I have just one question. This is inquisitive. Northern Ireland Water has a £2·7 million pressure, according to the report. Is the pay deal that was done with the Northern Ireland Water workers included in that pressure?

Mr McNeill: The pay deal that Northern Ireland Water has settled with its workers is included in its budget. That is for them to manage. The £2·7 million is a historical underfunding between the amount that the Department can fund —

Mr McNarry: No, I understand. Briefly, how greatly reduced would that pressure be if they had not done the pay deal?

Mr McNeill: It would not be reduced at all. It is for Northern Ireland Water to manage that. It is not for the Department.

Mr McNarry: A pressure is a pressure, John.

Mr McNeill: It is within Northern Ireland Water. Part of the pay deal — I am not that familiar with it — is associated with productivity-type improvements and whatnot. The Department is obligated to fund Northern Ireland Water to a certain degree in line with the regulator's PC15 settlement. We were short by £4·7 million. Northern Ireland Water has made some improvements and reduced that to £2·7 million. Northern Ireland Water is looking after its own internal pressures.

Mr McNarry: It does not matter to us and it is of no concern to any other Department about paying over the odds and breaking pay agreements?

Mr McNeill: It was approved by DFP and signed off.

The Chairperson (Mr Clarke): There is a feeling that most of us in the room are lacking oxygen because some of this is hard to comprehend. Your capital money for structural maintenance at the start of this year versus the start of last year — give me those two figures, John.

Mr McNeill: It is £22·3 million this year, and it was about £40 million last year.

The Chairperson (Mr Clarke): It started off at £40 million last year and £22 million this year, and you are bidding for £141 million in the monitoring round.

Mr McNeill: We do not realistically think that we will get £104 million.

The Chairperson (Mr Clarke): I am glad.

Mr McNeill: We would love to get it. Roddy would love to get it. If we did not bid for the total amount —

The Chairperson (Mr Clarke): We would criticise you, of course.

Mr McNeill: — then somebody would say that we have not bid for enough.

The Chairperson (Mr Clarke): Where did you finish up last year in capital money? You do well in monitoring rounds.

Mr Crilly: It was £97 million.

The Chairperson (Mr Clarke): You finished up at £97 million? You started this year at £22 million, which leaves you £75 million short, and you are bidding for £141 million in one go. Is there not a sense in this one that DFP will not even take you seriously?

Mr McNeill: The pattern in the past has been that we have bid for the full structural maintenance funding plan.

The Chairperson (Mr Clarke): I absolutely understand that, but the difference between where you started this year and where you finished last year is £75 million. In the first quarter of this year you are bidding for £141 million. Imagine if you were to get that; you would finish up with £70 million more than you finished with last year, and that is after the first quarter. If I was in DFP and you put that in front of me, I would ask whether the DRD officials had lost the plot.

Mr Barnes: DFP is well aware —

The Chairperson (Mr Clarke): What — that you have lost the plot?

Mr Barnes: No, the whole situation with structural maintenance, which is recommended to be around £137 million. As John said, it would be remiss of us not to bid up to the level that has been recommended.

The Chairperson (Mr Clarke): That is still taking you over £150 million. You will have £163 million if you get £141 million.

Mr Barnes: No, I am sorry; it is £104 million.

The Chairperson (Mr Clarke): It is £141 million plus the £22 million you got.

Mr Barnes: No, it is £104 million.

The Chairperson (Mr Clarke): The total capital bid is £141 million.

Mr Barnes: Yes, but that is for all sorts of other things, not structural maintenance. This is specifically —

The Chairperson (Mr Clarke): I was talking about your capital. I asked you about your capital money at the start of this year and the capital money last year. You started at £40 million last year and £22 million this year.

Mr McNeill: No, no; I apologise for misleading you. I misunderstood your question. I thought you were talking about the structural maintenance capital money at the start of this year and the start of last year. I do not know if I have that information to hand.

The Chairperson (Mr Clarke): Do you want to hazard a guess?

Mr Barnes: It is £328 million this year and I think it was around £370 million last year.

Mr McNeill: Yes, it is down £70 million.

Mr Barnes: You cannot compare one capital year with another because you are doing different projects. There are roads projects, strategic road improvement (SRI) projects and so on.

Mr McNeill: Big schemes have their own spend profiles depending on where they are.

The Chairperson (Mr Clarke): OK. Do members have anything else?

Mr Ó hOisín: There was a discussion on 'Talkback' just now about the effects of roadworks and maintenance, particularly on business, and the whole idea of the prioritisation of jobs. The coordination of work is something that, perhaps, requires a more in-depth look. I am sure that John will confirm that in recent years, Main Street in Limavady has been dug up about nine different times. There have been huge disruptions to business there. It seems to me that if there was better coordination and prioritisation, savings are bound to be made across the board. There would be hidden savings because of the detrimental effect on businesses, particularly in smaller towns. It is just a thought. Perhaps a piece of work is required.

The Chairperson (Mr Clarke): Most people would agree with that.

Mr McNeill: Roddy could maybe speak to that, because there is ongoing liaison between the Department and the various utility companies to try to minimise that.

The Chairperson (Mr Clarke): We all appreciate that, John, but the difficulty is that although there is an agreement, there is nothing to stop them coming in. You cannot prevent them. You have no power to prevent them in the future. Is that not right, Roddy?

Mr Crilly: Yes, it is. We have a computer system called Northern Ireland Street Works Register and Notification System (NISRANS), and any of the utilities' works and any of the Transport NI works that are going on are put onto it. Its purpose is to coordinate works. I agree that you can have NIE, NI Water or BT coming in. It is very hard to coordinate that type of work from a health and safety point of view and from where the utilities are going. One of the benefits of it is that, if, for example, we do a resurfacing contract, the utilities are not allowed to come into that for a year in most cases and two years in some cases, unless it is an emergency, a breakdown or whatever.

Mr McNarry: Does compensation arise in those circumstances? There is a situation in east Belfast where businesses are nearly put out of business because of roads being dug up and dug up. Is there compensation for the potholes that Stephen mentioned?

Mr Ó hOisín: There is also another issue. I have noticed that in recent times, particularly in my constituency, that relatively small resurfacing jobs were going on, perhaps even in rural areas, and those roads were being sealed off in their entirety for two to three weeks at a time. That is an issue.

Mr McNarry: Diversions?

Mr Ó hOisín: I have not seen that before, because there was always a convoy system, traffic lights or whatever else. There is work to be done there.

Mr Barnes: I have to say that last year's capital budget was over £390 million.

The Chairperson (Mr Clarke): There is roughly £70 million of a difference.

Mr Barnes: Yes, about £70 million.

Mr McNarry: I mentioned east Belfast and what is going on there with people nearly going out of business. Is there a compensation direction for businesses terminally affected by —

The Chairperson (Mr Clarke): That is an NI Water scheme, is it not?

Mr Lyttle: Not alone, Chair. If you do not mind, David, I will supplement what you are saying. It appears that there are multiple road maintenance schemes in east Belfast at the moment —

Mr McNarry: Everybody is having a go at it.

Mr Lyttle: — which does not quite correlate with the crisis that confronts the rest of the region.

Mr McNarry: Can you claim?

Mr McNeill: I am not aware. I honestly do not know.

The Chairperson (Mr Clarke): It is a question we can ask, maybe, and feed that back.

Mr McNeill: I know that some of those works are associated with capital programmes. In east Belfast, there have been works on the Newtownards Road etc associated with Belfast rapid transit preparations.

Mr McNarry: It seems as though you just had some money to offload at the end of the year, and everybody decided to offload it on the one spot.

Mr Lyttle: In fairness to John, I think that he is right in terms of the mix between capital and resource and schemes overlapping at the same time. It is a question of coordination. Everybody welcomes road improvements and capital road improvement schemes, but there seems to have been a lack of coordination, given that so many of them have happened at the same time. One of the key ones causing most difficulty is NI Water.

The Chairperson (Mr Clarke): It seems to be. OK, members, we have given this a reasonable hearing. It is ambitious, John. I cannot see that the Committee will resist seeking additional money — I think that we would all welcome it — but, realistically, I suppose that other things will stand in its way before that is decided on. Thank you for coming. It was a difficult one today, but we are sympathetic to the position.

Mr McNeill: Thank you very much.