Official Report: Minutes of Evidence

The Chairperson (Mr Weir): I welcome Trevor Connolly, director of finance; Philip Irwin, director of investment and infrastructure; Gavin Patrick, deputy finance director; and La'Verne Montgomery, director of workforce development. I invite the officials to make an opening statement.

Mr Trevor Connolly (Department of Education): Thank you, Chair. We are grateful for the opportunity to discuss DE's proposals for the 2015-16 June monitoring round.

As you know, this is the first monitoring round this year. The Committee will be aware that in-year monitoring rounds provide an opportunity to review departmental spending plans and priorities in light of more up-to-date information. For this round, Departments have been asked to provide details of reduced requirements and bids. Details of our proposals to be submitted for consideration by the Executive have already been provided to members.

In summary, no resource or capital reduced requirements are being declared. The Department is making four resource bids, all of which are deemed to be inescapable, in the following priority order: schools surplus, £5 million; early years, £2 million; furniture and equipment for capital projects, £3·6 million; and school maintenance, £18·4 million. The Department is also making six capital bids, two of which we deem inescapable: £12·1 million for minor works, and £2·4 million for school transport. The remaining four we consider to be high priority: the schools enhancement programme (SEP), £15 million; £3 million for youth; £1·8 million for other capital; and £38 million for minor works.

You have been provided with the details of the proposals so, rather than reiterate that, I am happy to take any questions.

The Chairperson (Mr Weir): Thank you, Trevor. You have been suitably succinct today, which we appreciate, given what is before us.

I just want to ask a couple of opening questions. This may be slightly tangential, but it is about the impact of finances on the redundancies situation. The information that we have comprises the latest figures, unless there is anything that you wish to update us on. The number of teachers' redundancies stands at 211 and non-teachers at 209. We need to look at the monitoring round with a view to the overall financial position, not simply at where fresh allocations are being sought, but where emerging pressures may appear on that side of it. Those are a long distance short of the target, but how accurate or up to date are those figures? Are any further applications being processed, or is that the final tally?

Mr Connolly: Chair, I will ask La'Verne to speak to that.

Mrs La'Verne Montgomery (Department of Education): Certainly. Chair, I believe that you received correspondence on this yesterday morning. Two hundred and eleven teaching and 209 non-teaching redundancy applications are being considered by the Department. All are school-based. There is also a voluntary severance scheme launched by the Education Authority that is due to close to expressions of interest today. The latest I have is that there have been 250 expressions of interest. The latest figures will be updated later today, and we can share them with you.

The Chairperson (Mr Weir): OK, La'Verne, so we are talking about 250, 211 and 209. Are we working on the basis that those are all in the system?

Mrs Montgomery: Certainly, with regard to the school-based, yes, they are all that are in the system.

The Chairperson (Mr Weir): One of the areas of concern from a financial point of view is the target figures, and those have been 500 for teacher redundancies and 1,000 for non-teacher redundancies. You looked at school savings. Are those still realisable with what appears to be only a proportion of what was being sought?

Mrs Montgomery: To call them a target would be inaccurate, in the sense that they were never a target. Trevor and Gavin can provide details on the background work for the figures. They were figures based on the fact that 77% of the education budget was based on salaries, so it was an extrapolation of what that could mean for the budget. That is where the figure of 500 and 1,000 came from. As you know, we have local management of schools, so it will always be for individual boards of governors to examine their own budgets and make decisions in that regard.

The Chairperson (Mr Weir): On that basis, what impact do you see that having on the school budget? For different Departments, sometimes it could be a target and sometimes it could be an extrapolation on that side of things. The thesaurus has been well thumbed today in that regard. What assumption was made on those figures by way of extrapolation on the overall school budget? Bearing in mind the fact that the extrapolation has not been met, what impact does that have on your budget, particularly the schools budget?

Mr Connolly: If I bring you back to our public savings delivery plan (SDP), we recognised the potential. As La'Verne said, we said that in our initial assessment of how the £98 million funding gap was going to be achieved. At that stage, a large part of it was staff costs, and it was really a ratio of 2:1. To achieve that level of staff reductions, the number of staff who would have to go would neither be achievable nor desirable, so we re-examined the budget and identified additional savings to come out of non-staff. The workings of that meant that our savings delivery plan is £114·5 million. We still, at this point, say that our funding gap is only £97·6 million. We have headroom to build a buffer, so that, if the savings that we anticipated are not achieved, we have money to offset that. That money has not yet been allocated by the Minister.

As La'Verne said, we have gone out to schools and, on 25 February, we gave them their common funding scheme (CFS) allocation for 2015-16. They have been clearly told about, and are fully aware of, the difficulties and challenges in 2015-16, and it has also been made very clear that it is their responsibility, with their boards of governors, to balance the budget. This is a key opportunity. If you look at our aggregated schools budget (ASB), 91% of the £1·1 billion that goes to ASB is staff costs. If you are to balance your books — I know that there are members of boards of governors around the table — staff is the key criterion.

The key issue for us is that all schools have been given the opportunity for teaching and non-teaching redundancies to balance their books. To me, the authority will now have a key role for all controlled and maintained schools in making sure that school deficits are very tightly managed. From our perspective, having given that opportunity, if schools have said, "No, we do not need to make redundancies", then commensurate with that is that they feel that they can achieve a balanced budget without having to do that. We cannot allow people to say, "I am not going to make redundancies, but I am going to overspend", as that becomes a big pressure on the block grant for the authority.

The Chairperson (Mr Weir): OK. I understand that. Effectively, it is getting thrown in at one level, either through redundancies or in another way to the schools budget side of things in that regard. I appreciate the extent to which this is an extrapolation and that the figures have not been achieved. I have a question in mind, although I appreciate that it is not one for today, but there is a concern as to why there is a large level of interest in other sectors and that the level within the broader educational format seems to be less than if you compare with other aspect of things in it.

Mr Connolly: I joined the Department in 2011, and we have had a redundancy programme for every single year since then. As part of making the 2011-15 savings delivery plan, we had to make significant savings in the first year. People here would say that, in their experience, schools have already made very difficult decisions to achieve the balance. Our difficulty is that the 2015-16 Budget is even more challenging. That is why the Minister has had to make even more difficult decisions to balance his books, but schools also have to look again to see whether they can live within their allocation. Their allocation for 2015-16 is about £2·2 million — in cash terms — higher than 2014-15, but that means, in effect, that they have to absorb their pay and price pressures in 2015-16. That is a genuine pressure on all schools.

Mrs Montgomery: On that point, since 2011-12 the Department has effected some 1,400 teacher redundancies. That has not been the case across other parts of the public sector.

The Chairperson (Mr Weir): It is about staging. I want to turn to two other issues before I open the session to members. You have obviously outlined a range of issues in June monitoring where the bids are coming in. Members can speak for themselves and all of these are worthy and quite sensible bids, but perhaps you could explain why they were prioritised. The Committee wrote to the Department about its concerns around the Sentinus STEM school projects, the primary-school modern languages programme and the Book Trust's Bookstart scheme. Can you explain why they are not in the monitoring round?

Mr Connolly: I will start by answering the first part of your question, which was about the Minister's prioritisation. The process for school surpluses was agreed in 2011 by the Executive. We bid for any potential drawdown for that process in June, which is refined in January. That is part of the process.

As part of the correspondence from the Committee, members identified the impact on the early years fund. The Minister is on record that while he has, from the outset, always wanted to protect front-line services, he has had to make some very difficult decisions to achieve the £97·6 million savings. Those decisions have had an impact on projects that, in any other circumstances, he would want to fund. When he was here on 4 March he made the comment publicly that, because of the decisions and the financial situation that we are in, he has had to stop things that in any other circumstance he would want to continue. To my mind, all three initiatives — the primary-school modern languages programme, the Sentinus project, which was reduced by £100,000, and the Bookstart scheme — are things that we would want to keep. However, the Minister's clear focus has been on protecting front-line services.

To put that in context, the ASB is 60% of our overall budget, and we have protected that in cash terms. If you are achieving a 5% reduction in your overall budget and you then say that 60% of it is protected, it is clear that, proportionately, you have to make more cuts elsewhere. That has been the decision; because the ASB is such a large proportion of our budget it has meant that the Minister has had to make proportionately bigger cuts elsewhere.

I will give a very brief overview of furniture and equipment, and then I will ask Philip to comment. The Committee has already identified that there are issues. We reduced that budget by £7 million and there are ongoing capital projects. The Minister has made an allocation of £1·8 million, which has come out of our existing contingency fund because of the timing issue, to make sure that those projects go ahead now. We are bidding for £3·6 million as part of June monitoring.

Mr Philip Irwin (Department of Education): The reason that is being prioritised relates to the scale of the original allocation, which was significantly below where we needed to be. The Minister had asked that we take a very close look at the degree to which we would be able to reuse existing furniture and equipment when we were commissioning new accommodation. In some cases, you will be able to do that. If it is a like-for-like replacement of, say, a temporary building, you may be able to reuse equipment. However, if new accommodation is being added, such as a lab or a sports facility, where there is no existing equipment, you have to find the money to use the asset. As Trevor said, we have been able to find an additional allocation of £1·8 million, but that still leaves us £3·6 million below the total requirement for furniture and equipment for the capital works that we are undertaking in-year. We will still look to see what we can reuse to try to fill that gap and, potentially, allocate less to each individual project, but, in an ideal world, we would like to fit those buildings out.

The Chairperson (Mr Weir): That has partly covered the final question. Given that only £8 million, I think, was directly achieved in 2014-15, are you confident that you will be able to achieve all the spend on the schools enhancement programme as we move ahead?

Mr P Irwin: Absolutely. Last year's spend was to do with the timing of the programme. The schemes were going on site towards the end of the last financial year. We have 13 schemes designed and ready to go to procurement, but we do not have sufficient capital to put them on site. You will see the capital bids that we have made for the school enhancement programme. In effect, we have bid for the money to put all those schemes on site in this financial year if the capital is available.

Mr Connolly: I think that that is the context, Chair. Last year, our capital budget was £180 million. When Philip and the Minister looked at the planning, we envisaged that that would, hopefully, be maintained this year. So, one of the issues was to have that pipeline of projects that would go through. Our capital budget was reduced by 20%, and that has had a knock-on effect. From Philip's perspective, 13 projects are ready to go, but we simply do not have the funds, but you will come to that when we come on to the capital.

The Chairperson (Mr Weir): OK. Obviously, it is important to not simply have the pipeline, but that things flow through it at a fast enough rate.

Mr P Irwin: There is no doubt about that. We could spend more than that in the school enhancement programme; in fact, we could spend more than the bid if we had the money. I am absolutely confident of that.

The Chairperson (Mr Weir): OK. On that confident note, I will open it up.

Mr Rogers: You are very welcome. La'Verne, I want to go back to a point that you made. A lot of reference has been made to 2011 when this started. You say that there have been 1,400 redundancies over that time. Were they school redundancies or teacher redundancies?

Mrs Montgomery: Teaching redundancies.

Mr Rogers: Over the same period, the Department has spent an additional 10% on salaries, and so on. What is the Department doing to offer redundancies to reduce administration costs?

Mrs Montgomery: Do you mean in the Department of Education?

Mr Rogers: Yes.

Mrs Montgomery: That is not my area, but I am aware that the Department of Education is very much part of the voluntary exit scheme (VES) across the NICS. Yesterday, staff would have received letters indicating whether they have been selected to go into the first tranche of redundancies, which will be at the end of September of this year. That is subject to funding. So, they are conditional letters of offer that have been given to staff in the Department of Education and across the NICS.

Mr Connolly: Seán, there are two contexts. There was a £15 million reduction in administration costs in our savings delivery plan from 2011 to March 2015. Primarily, that came out of the boards in 2011-12. Each year, there was an ongoing reduction in departmental administration. In 2015-16, departmental administration costs will reduce by £3 million, which is 9%. That is almost double the 5%, overall. The £97·6 million relates to 5% of our opening budget. So, yes, from our perspective there are reductions in cost in the Department. Moreover, in relation to the allocation that went to the authority from the block grant, we have all identified, in the SDP, that there are pay and price pressures that it too will have to absorb.

It is important to take the contextual point. For the four years up to March 2015 we have been reducing administration on an ongoing basis throughout all the non-departmental public bodies (NDPBs) and the Department. In 2015-16 there is a 9% reduction in our departmental staff costs and also, clearly, the authority has to balance its books. By giving it a small year-on-year cash uplift, like the ASB, it will have to absorb pay and price pressures, which we estimate at roughly £10 million in 2015-16.

Mr Rogers: Trevor, how will the staff complement in the Department have changed from 2011-14?

Mr Connolly: Sorry, Chair, I do not have —

The Chairperson (Mr Weir): Trevor, just on that, I appreciate that there may be some details that we are pressing you on. I do not know whether you have the figures in front of you, but I appreciate when we talk about the voluntary exit scheme that it is dependent on resources being made available by your context issue. I suppose if you can get back to us with the figures that Seán asked for in terms of the staff complement. Also, could provide us with a written reply about the voluntary exit scheme and specifically the number of expressions of interest in Departments? Has any decision been taken on the numbers that are likely to be released? I do not know if you have those to hand, but if you do not, it would be useful if you could get them to us.

Mr Connolly: Yes, absolutely.

Mr Rogers: The next question is about the June monitoring round. If it worked out, for example, that there was some money available for early years, when would you hope to communicate that to the early years people?

Mr Connolly: In normal circumstances the Executive would meet on the 25, and, as soon as those decisions are made, the Minister and the policy would be working in the knowledge that they have the funding. In the current environment, however, I am not sure what will happen about timing. In normal circumstances, the allocation of funding would come to us by the end of June or the start of July.

The Chairperson (Mr Weir): Trevor, from that point of view, and I do not know if there is a differentiation between what happens for the rest of this year and what happens beyond that. Whenever there were questions about education in the House, the Minister seemed quite responsive to the idea that the funding for early years should be in the context of quite an open call, whether that was by way of a fresh process, or whether it would simply be a question of taking groups that were previously funded and rolling the funding over. That seemed to set barriers to new groups and areas seeking that. Do you know of any additional funding that is coming in? Would any additional funding be distributed on the basis of it being an open call? Again, I appreciate it might be a slightly unfair question.

Mr Connolly: I am aware that, in response to an AQ, he said that the original fund, which was in something like 2004, was that sort of closed fund. I am not close enough to the detail to know, but, by all means, if Peter writes to us we can come back on that.

The Chairperson (Mr Weir): It may be useful to follow that up. It is an issue that the Minister touched on in questions in the House during the week. We do not know whether the bid will be successful, but if there is additional money coming in, or if money is perhaps returning to early years, the basis on which that is coming in will be important.

Mr Rogers: In the present financial circumstances it is difficult to comprehend how schools are still allowed to overspend. How many schools, in the last financial year, were given permission to overspend, and for what reasons?

Mr Connolly: No school can overspend without the authority, up until March 2015, of its respective education and library board, as funding authority and, clearly, in 2015-16, the authority of the Education Authority. The authority's role is to manage deficits and surpluses. Our guidance is that it should be the lesser of £75,000, or 5%, of your allocation. That has been there for a long time, but it is a realistic estimate. Schools are not, if you like, dedicated profit centres. Take administration costs in a small school. There is a balance there as regards the practical implications.

Once people say that they are going to overspend, the plan has to be approved by the authority. If it is not approved, the authority has to challenge the board of governors and say, "Look, what are you doing about this, and how are you going to produce a balanced budget?" Certainly, from my perspective, one of the key issues for us to is to get the information out to schools that it is the responsibility of boards of governors to prepare a balanced budget. They do not have the authority to overspend.

Responsibility rests with the Education Authority to manage that tightly, because, as I said to the Chair, if schools have had the opportunity to look at their teaching and non-teaching cost base and propose redundancies, but have not done so, clearly their assumption is that they feel that they can balance their books without doing that. What they cannot do is say, "We are just going to overspend." If that happens, all schools overspend, and the authority is put in a very challenging position, because what does that mean in essence? If you have a budget of £100,000, but you spend £120,000, that £20,000 has to be found elsewhere in the block grant, and you take resources from other schools. That is the challenge for the authority.

Mr Craig: Trevor, I would like to make a point on that issue. I think that we are all aware, and my colleagues are no different from me, of schools that have been in the red for decades, and both the governors and the management have done absolutely nothing to reduce the deficit. The boards deliberately took no action; they had the power and the remit to remove the governors and replace them, but they refused to do so. Are you giving out a strong message to the new Education Authority that, if this continues, it will have to remove the governors and deal with the issue, as opposed to completely ignoring it? What I was told, Trevor, was that other schools were allowed to have massive surpluses to make up for those that deliberately buried themselves in debt.

Mr Connolly: I suppose there are two elements to that. I am not instructing the authority what options to take; what I am saying clearly is that the authority has a responsibility to manage deficits. One of the options that it has is to withdraw delegation. From my perspective, it is the role of the authority to manage that. I am not giving clearance to the decisions that it makes. The one thing that is clear is that it all depends on the circumstances of the school.

Some schools are not financially viable, and that is a systemic issue. That is where the area-based planning comes in. In other schools, you could argue that it is poor financial management on the part of the school or that the board of governors is not prepared to make financial decisions. However, that comes through in a school's financial plan, and, if its financial plan shows, for instance, that it has recurring deficits but is not making any proposals to reduce its staff costs, which are over 90% of the average budget, then, to me, the authority has to sit down with the chair and the board of governors and say, "How will you balance your budget?". If we do not have that as a basic principle, local management and the delegation of responsibility to the board of governors are in question. If each school does not do that, the authority is in a very difficult position to balance its books.

Mr Craig: What pressure will the Department put on the new Education Authority to carry out that remit? The boards signally failed on that issue.

Mr Connolly: During the four years that I have been in post, we have had quarterly meetings with the boards, and at each meeting we have gone through schools with large surpluses and deficits and referred that to educational outcomes. It is the same situation when schools have large surpluses and poor educational outcomes. That money is voted for education, and I have been challenging the boards in both respects. It is important always to bring it back to the individual circumstances of each school, because it is too easy to be totally generic. You have to look at a school's circumstances.

Is it financially viable or is it a case of poor financial management?

The Chairperson (Mr Weir): It has the sound, Trevor, of Henry II saying:

It seems that a bit of a hint is being given to the Education Authority.

At the start, I should have declared an interest that I am on the board of governors of three schools, none of which is in deficit, so, hopefully, I will not get any visitations from the Department or the Education Authority.

Mr Connolly: In the allocation letter, we have made it clear. There is no ambiguity around the responsibility to manage schools' budgets for controlled and maintained schools resting with the authority. Mr Craig has made it clear that, in his view, that has not been at an optimum level. If schools' budgets are not managed, especially in the very challenging current circumstances, there will be an overspend on the schools line, and that would have to be balanced by a further reduction in the block grant. What impact does that have? That means that services such as special education, transport, catering — those things — are impacted on. To me, it is incumbent on each board of governors to balance its budget.

The Chairperson (Mr Weir): There is a clear implication for people.

Mr Connolly: Absolutely.

The Chairperson (Mr Weir): Pat has been very patiently waiting.

Mr Sheehan: Thank you. On that —

The Chairperson (Mr Weir): Sorry, Pat. Seán has not finished.

Mr Rogers: Philip, I have another one. It concerns the schools enhancement programme and the decision to fund five of the 22 schools for furniture and equipment, and so on, while cutting the other 17's funding to zero. Can you tell me the logic behind that from a sound financial planning perspective? I will give you two examples. One is St Joseph's Primary School in Carnacaville, which is moving into a new building. OK, it is probably moving out of a mobile and taking the desks, and you could manage with that sort of stuff with you. However, a Key Stage 1 group, for example, will have a lot of play equipment, and so on, so it will need more money. Furthermore, Knockevin Special School is moving into an extra facility in Dundrum. It will have a beautiful building at Christmas, but, unless something happens, it will have nothing to put in it, because it is an extra facility. Why in such circumstances was it not decided that a certain percentage of the furniture and equipment budget would be given to those schools instead of funding five completely and leaving the other 17 adrift?

Mr P Irwin: I suppose that there is a process here, but, to be clear, first, an additional allocation of £1·8 million has been made to the furniture and equipment budget. All those SEP projects will now have sufficient budget to meet their requirements. The process began back at the point at which the budget was being considered, and I think that the Minister's view was that he wanted to defend the front-line services and staff in particular — teachers, and so on — as his primary goal. Therefore, a significantly reduced allocation was made to furniture and equipment, and we the team were asked to go and look at what options we had for reuse of existing equipment. If we had done it the other way around, and simply allocated the money and sought to remove the front-line services, once they are gone, they are gone. The decision was therefore taken to allocate a minimum resource to look at what other options we might have and to deal with pressures in-year as we progress.

Mr Connolly: It goes back to my earlier point. Say that 60% of your budget is the aggregated schools budget, which, effectively, is pure front line for all the schools, as you well know, Seán. Protecting that was the Minister's key focus. Once you have nearly two thirds of your budget protected but still have 5% of reductions to make elsewhere, you are faced with very difficult decisions. Clearly, that was one of the difficult decisions. As I alluded to earlier, when we were looking at the savings delivery plan, we went back and did a complete review of every line in the budget, identifying what were staff costs and what were non-staff costs. We had the issue of whether we would achieve the number of staff costs, especially considering the voluntary exit scheme, to balance the books. The context has been a prime example of where, in any other circumstances, the Minister would not have reduced the furniture and equipment budget. We had that down as an inescapable pressure in our draft budget, because we appreciated that the Minister had signed off on those projects, and that is what they cost. However, if you want to protect front-line teaching and non-teaching staff in schools at 60% of your budget, you have to make very difficult decisions on the rest of the budget.

Mr Rogers: I understand that, Trevor. Let us take a nominal amount of money — say £100,000 — that a school was getting for furniture, equipment and whatever else. We understand that money is tight. However, what the schools are really saying is that, if they had known that they really had to prioritise and were getting only £25,000 or £30,000 now, at least they could have moved on with planning, and so on, to see whether they could get through.

Mr P Irwin: We need to be clear that there are distinctly different types of projects. If you are moving or replacing an existing classroom, reusing equipment is a real option. If you are adding an additional facility, such as a lab or a sports hall, and, in some cases, additional facilities in a special school under SEP, where there is no existing equipment, we have to allocate the money to that. It is not a case of simply saying that everybody can get 40% of their budget. We had to be a little bit more discriminatory and say that people should reuse 90% of their equipment, where it is possible to do so. We will have to allocate the equipment to the schools that do not have equipment to reuse. A broad-brush approach of giving everyone x per cent was not the way to do it.

Mr Rogers: I do not want to labour the point, but, for Knockevin, for example, we are cutting from £340,000 to zero.

Mr P Irwin: Sorry, what was the —

Mr Rogers: For furniture and equipment, and so on. OK, that has been rectified now, but, if I apply the logic of your argument, the school's funding for furniture and equipment should not have been cut to zero. Things are hopefully better now.

The Chairperson (Mr Weir): I suppose that it is a bit difficult to get into individual cases.

Pat, you have been more patient than I thought you were going to be.

Mr Sheehan: I note that the Chair mentioned that is he is a governor of three schools, none of which is running a deficit, but he did not mention whether they are running surpluses. I think that —

The Chairperson (Mr Weir): They are all good boys and girls and are in the Department's good books.

Mr Sheehan: In a sense —

The Chairperson (Mr Weir): I am not going to get any sort of sanction letter from the Department or the Education Authority on either side.

Mr Sheehan: In a sense, that shows a certain mindset. If a school is running a deficit, it has to be mentioned, but, if it is running a surplus, it does not seem to be as bad. We see how difficult times are at the minute, and a lot of schools that are running surpluses are saying that they are saving the money for a rainy day. I heard the Minister say that the rainy day is here. If schools have surpluses of over £75,000 or over 5% of their budget, it needs to be spent, especially in schools in which there are poor educational outcomes.

I hope that the new Education Authority, under pressure from the Department, will take a new look at schools that are running surpluses. I am sure that there is more than enough money slushing around those schools that are running surpluses to cover things such as early years funding. I have no doubt about that.

Still on early years, the Minister said that, if he gets the funding for that in the June monitoring round, there will be a different scheme. In what way would that operate?

Mr Connolly: Sorry, Pat, but I do not know the detail sufficiently to answer the question. I am happy to go back to policy —

The Chairperson (Mr Weir): Yes, I take that on board.

Mr Connolly: I fully agree with whatever comments the Minister has made on that issue in Assembly questions (AQs). I am aware that one of the issues with the original scheme was that it related back to roughly 2004 and was closed to other applicants, but I am not close enough to the detail to be able to answer the question.

The Chairperson (Mr Weir): That would be very useful. I have mentioned before that, if you do not have the answers now, it is important to get the detail from the Department. It will be important to the groups out there.

Mr Sheehan: Absolutely. I have one final question, which is on the modern languages programme that has been stopped altogether. To be quite honest, I am not particularly opposed to that. I am not sure that there was any great educational advantage to the programme. The idea behind it is good, but we have seen a decline in the number of students who take modern languages at GCSE and A level, so the programme certainly has not helped to incentivise young people to take up modern languages. Are you aware of any arguments to support the reinstatement of the modern languages programme that are based on educational outcomes and improved linguistic skills?

Mr Connolly: Personally, no. However, to be fair, it is not an issue that would necessarily come to me directly. I am afraid that I will have to kick it into touch again. If the Committee Clerk wants to write to us, we will get the relevant policy side to answer the question.

The only comment that I would make — it is a general comment — is that, when the Minister was here on 4 March, he went on record to say that the reductions to Sentinus, early years, the primary modern languages programme and furniture and equipment were all specific to the exceptional circumstances. He is on record as saying that this is the most difficult budget that he has had to deliver. All that I would say is that none of those decisions has been made lightly. We have looked very carefully at all aspects of the budget.

In answer to your specific question, Pat, I am certainly not aware of any arguments, but, as I said, the issue would not necessarily come to me directly. Chair, I am happy to give that information to you in writing.

The Chairperson (Mr Weir): I am tempted to say, "Et maintenant, Robin".

Mr Newton: I thank Trevor and his team for coming up. I agree with the emphasis that you placed on early years, Chair. It is such a sensitive issue, and it is absolutely critical that it be successful. However it is got out to the early years groups, and so on, it is essential that it is got out as a matter of priority. Communication in that area will be extremely —

Mr Connolly: To be fair, I think that the Minister has said in AQs that he totally agrees with that position and that it is one of his priorities.

It is our number two bid. The reason that schools surpluses is number one is that, last year, special educational needs (SEN) was our top priority. In 2011, the Executive effectively gave a commitment to fund school surpluses. In the June monitoring round last year, we got the school surpluses bid but not the SEN bid. School surpluses is seen as an Executive commitment, so it effectively trumps our internal bidding order. Otherwise, the Minister would clearly have early years as his number one priority.

Mr Newton: I want to ask about the capital build programme for 2015. Philip, am I am right in thinking that that is £55 million?

Mr P Irwin: It is £55 million for the major works.

Mr Newton: What progress has been made?

Mr P Irwin: The programme is progressing. That budget is based on prioritising the major works programme. We are taking any projects that have been announced through the full process: technical; feasibility; economic appraisal; the procurement of a design team; and the completion of a design. We are taking it right up until the point that we are ready to go to construction. At that point, we will assess the budget situation and see whether we are able to release projects to the market.

That £55 million is based on all the projects in the plan running to plan. There will always be issues. Things happen, and there will be slight delays. At the point at which we can see any delay, we will look to reallocate any surplus that becomes available. As it stands, we are probably slightly over-programmed on the £55 million, but, under normal circumstances, we are on track to spend that budget.

Mr Newton: You are not anticipating any great downturn in the £55 million.

Mr P Irwin: No. As I said, it is predicated on a number of fairly major projects getting on-site in this financial year. As they are big projects, if they slip by one, two or three months, that will mean a loss. Effectively, the spend that was due for March will slip into next year, and the impact can became quite big, because of the number of major projects that are going on-site.

One was signed off last week, while two more are going out to procurement over the next few weeks. All of that is on track at the moment, but that is not to say that there will not be problems. There can always be problems and issues where major projects are concerned.

Mr Newton: Chair, can we get an update on that programme?

The Chairperson (Mr Weir): Yes. We get one every month anyway.

Mrs Overend: My apologies for not being here earlier. A lot of my questions have probably being asked. I will read Hansard, obviously, rather than ask you to answer them again. Just say that a question has already been answered if it has been. I am happy enough with that.

What is the situation with the voluntary exit scheme? [Laughter.]

Yes, I know that I came in at the tail end of the discussion on that, but I just want to make sure. Obviously, schools cannot plan their budgets unless they know whether teachers are being made redundant. Is that all confirmed? Do they know the situation as it is?

Mrs Montgomery: They know the situation as it is, which is —

Mrs Overend: That is a silly question, actually. [Laughter.]

Do they know the situation with their budgets and how many staff they need to make redundant?

Mrs Montgomery: We have had 211 teaching applications and 209 non-teaching, school-based applications. They have not yet been approved, because they are subject to funding. Schools know that. We have been keeping the employing and funding authorities fully advised on situation and have asked them to do the same so that individual schools, and individuals in those schools who have made applications, know exactly where their application is, what priority their application has and that we will keep them advised on the funding position.

Mrs Overend: What is the timing for that?

Mrs Montgomery: We hope to be in the position of writing out to schools this week. We intend to write to them this week to advise them on those that can be approved. They will be ones that had development proposals approved by the Minister prior to 31 March 2015. Those decisions were taken prior to this financial year, so we are in a position to be able to approve them. Of the 211 teaching applications, we are looking at approximately 82 that would fall into that category. They are in development proposals that were approved by the Minister prior to 31 March 2015. The rest of the redundancies for teachers will be subject to access to the public-sector transformation fund. Our intention is to write to schools this week to advise them of the situation so that they know exactly where they are at. We will be keeping them advised. That could well be on a weekly basis, and potentially on a daily basis, depending on how things progress.

Mr Connolly: To clarify that, the reason that there is a difference is that the decision was made by the Minister before 31 March. By my rules, that means that it is a 2014-15 cost. That has been charged to the 2014-15 budgets of the individual boards. We have not yet made a final decision on the other teachers, because they are subject to affordability under VES and the Stormont House Agreement, so those are in 2015-16. It is all about the timing of the decision and whether it was made before 31 March. Where the Minister did make decisions on development proposals, they have been charged to the individual boards in 2014-15.

The Chairperson (Mr Weir): I appreciate that there is a difference. To follow up on Sandra's point, regarding the numbers, we have mentioned that, if not enough voluntary redundancies come forward, that will be a challenge to individual schools' budgets. Would some schools be faced with a situation in which, if they do not get the voluntary redundancies, they will have to step in and make compulsory redundancies?

Mrs Montgomery: The situation is that the redundancies that have been identified by boards of governors are effectively compulsory redundancies. They are redundancies that have to be made in order for the school to live within budget. The process that we operate is a transfer redundancy process. We have volunteers who come forward to take redundancy. A lot of work has to be done by the employing authorities to match up the identified redundancies in the schools that need to make those redundancies to live within budget with the individuals who have volunteered for redundancy. That matching exercise has been ongoing for the past number of months. The school that makes the redundancy may not have the individual teacher who goes forward for redundancy.

The Chairperson (Mr Weir): I understand that. Do you feel that there will be enough to do be able to do that?

Mrs Montgomery: We have 211 teaching applications, and there are over 400 volunteers in the transfer pool. The issue is being able to match the individual post to an individual teacher. That is certainly the situation that the employing authorities are managing at the moment.

On the numbers, just to be clear, there are 211 teaching applications, of which 82 relate to decisions that the Minister made on development proposals prior to 31 March 2015. When it comes to non-teaching staff, out of the 209 applications, 56 posts are part of school development proposals approved by the Minister prior to 31 March this year.

The Chairperson (Mr Weir): I think that Jonathan wants in on that point. Sorry, Sandra —

Mrs Overend: It is all right.

The Chairperson (Mr Weir): — for jumping in. It is on the same subject matter. You mentioned the 82. Presumably, if those are in development proposals, they are not part of the voluntary redundancy scheme. Who is paying for those?

Mrs Montgomery: They are part of the voluntary redundancy scheme, but they are not being funded from the public service transformation fund.

The Chairperson (Mr Weir): Who is paying for those?

Mr Connolly: They are being paid for by the boards. We funded the boards for those costs out of our 2014-15 budget.

The Chairperson (Mr Weir): Have those been allocated already?

Mr Connolly: Yes. All 211 teachers will leave at the end of August. For 80-odd of them, the decisions relate to the development proposals. Similarly, for the non-teaching staff, those costs have been charged in the 2014-15 accounts. That is when the decision was made; that is the determination that we have under our accounting rules. For the other 120-odd teachers, the decisions have not yet been made, because they are subject to affordability under the VES. Those would be charged in 2015-16 to the VES.

The Chairperson (Mr Weir): Jonathan, do you want in on that point?

Mr Craig: Yes. It is a point of clarification. I was listening with interest to La'Verne. It is the school curriculum that dictates who can and cannot go. We need to be certain about this. Whether redundancy is classified as "voluntary" or "compulsory" has little relevance. Is it not true that the post must not only be declared redundant but must disappear from the school —

Mrs Montgomery: Yes.

Mr Craig: — for it to be an effective saving for the Department?

Mr Connolly: That is a very important distinction. As La'Verne says, we have roughly 200 posts and, say, 400 volunteers, but the post is the key determinant for cost reduction. If you had it the other way around, and we had, say, 100 volunteers and 200 or 300 posts, you would be in the reverse situation of having insufficient volunteers. When we were here last June, one of the key things raised was that the number of volunteers is misleading. It is about the number of posts that the schools are putting forward. It is the post that is being made redundant and, hopefully, filled by a volunteer. That is the key determinant in the cost-reduction exercise.

The Chairperson (Mr Weir): It is useful to have that clarified.

I hand back to Sandra. Sorry.

Mrs Overend: That is fine. We can all work together as a Committee. That is the way in which it works. [Laughter.]

The Chairperson (Mr Weir): Hopefully, nobody will be made redundant on that basis. [Laughter.]

Mrs Overend: Very good.

I do not expect you to answer this question twice, but I see that you have the early years bid in. Will the early years provisions that did not get the money that was wanted have to put in a new application? In what way does that work?

Mr Connolly: As I said earlier, and I think that it was Pat and you, Chair, who asked about this, I do not have enough detail to know what the Minister's views —

The Chairperson (Mr Weir): I think that there were various items arising out of that. At the end, I will get —

Mr Connolly: I am not close enough to it to know the process.

The Chairperson (Mr Weir): — the Department to come back to us with how it intends to operate any additional funding for early years.

Mrs Overend: That is fine.

Finally, on the bids for capital spend, the previous time that you were in front of the Committee, there were 20 that had been included previously, and then there was a waiting list. Will that waiting list be re-prioritised, or will the ones that were at the top be the next ones to go?

Mr P Irwin: Are you talking about the schools enhancement programme?

Mrs Overend: Yes.

Mr P Irwin: The 22 that are gone have been released. For the 13 that have been held, have been designed and are ready to go to procurement, the bid is based on all those effectively going, so we are asking for the capital that we would need to get those on-site in-year and the money that we would spend in-year. It is the same 13 as we had before.

The Chairperson (Mr Weir): Finally, I want to touch on some of the arm's-length bodies. Can you give us a bit of information on where there are either emerging pressures or savings to be made? Can you outline where we are with the budget-setting process for the Education Authority? La'Verne mentioned the 250 people earlier. One of the bits around staff savings was that the business case was at about 13%. Would the process meet that 13%? Where are we at with that? Are there any targets or extrapolations that the Education Authority is faced with in its budget?

Mrs Montgomery: With the business case, the focus was very much on savings at the most senior levels in the Education Authority, and it was a reduction along the lines of from 55 to 22 posts. That is where the focus lies, but, because this is a voluntary exit scheme, the 250 expressions of interest will come from right across the Education Authority. Some may be school-based and centrally funded by the Education Authority, but, in the main, they will be headquarters staff across the Education Authority. It will be for the authority to examine those expressions of interest and see where it can afford, in the sense of being able to continue to deliver a service, to allow people to go. The Education Authority will make those decisions.

The Chairperson (Mr Weir): There are three other bodies: one emerging and two existing. In the business case, there was due to be reviews of the functions of the Council for Catholic Maintained Schools (CCMS) and the Northern Ireland Council for Integrated Education (NICIE). Has that taken place, and, arising out of that, are there any anticipated savings in the in-year budget?

Mr Connolly: I am aware that work is ongoing. I do not know the actual position. I am not aware of any substantive emerging pressure either in CCMS or NICIE, no. Clearly, they, like all our NDPBs —

The Chairperson (Mr Weir): You say "emerging pressure", which I suppose is the other side of the coin, but are you aware of any related savings to be made in either of those bodies?

Mr Connolly: I am not close enough to it to know whether the review was to go there. I do not have the information in front of me on whether savings were got or not, but, from our perspective, we have made it clear to all our NDPBs, including the authority, that they must live within their allocated budget. I am not clear on whether the purpose of the reviews was to identify further savings, but, if the Committee Clerk wants to contact us, we can get that information.

The Chairperson (Mr Weir): Again, we will try to get some —

Mrs Montgomery: I can update you on those three reviews. There was a review of NICIE, Comhairle na Gaelscolaíochta (CnaG) and CCMS. The reviews of NICIE and CnaG are complete, while the CCMS review is ongoing. The sponsor teams in the Department are working with NICIE and CnaG on implementing the recommendations from the reviews.

The Chairperson (Mr Weir): You will be pleased to hear that this is the final question. Part of the Education Act involved the creation of the Controlled Schools' Support Council (CSSC): has the business case for it been approved? Is there any projected spend for CSSC this year?

Mr Connolly: I am not clear on where we are with the business case. I know that we are in discussion with DFP about how that body is classified — whether it is a non-departmental public body or a third-party organisation. That is an ongoing discussion. Is the budget around £1.5 million?

Mr Gavin Patrick (Department of Education): It is circa £1 million, and we are in discussions on that.

The Chairperson (Mr Weir): I appreciate that you seem to be a little unclear on where the business case is, but is it likely that that £1 million will be spent or is it simply ring-fenced? What is likely to happen? Do we know?

Mr Connolly: The amount will have been allocated against it, so it is there to spend. I am not close enough to it to know about the spending plans.

The Chairperson (Mr Weir): I appreciate that we have asked questions on areas that probably lie a little bit outside your direct remit. It may be useful if the Committee Clerk can outline those areas, and we can then pick up from Hansard whether anything has been missed. The Committee Clerk has indicated to me that we will clarify it after. I suspect that you will get a few letters from us asking for information. Thank you for your evidence.

Mr Connolly: Thank you.