Official Report: Minutes of Evidence

The Chairperson (Mr Ross): I welcome Glyn Capper, Lisa Rocks and Patrick Barr to the Committee. You are aware that Hansard is reporting this session. That report will appear on the website in due course. Kick off when you are ready. We will open it up to questions afterwards. So, in your own time.

Mr Glyn Capper (Department of Justice): Good afternoon, Chair. Thank you for the opportunity to give you an update on the Department's finances. I plan to cover two separate areas in this briefing: an update on the Department's 2015-16 financial position and progress on planning for the Executive's next Budget. I am aware that the information that you received in advance might not be as detailed as usual, and I will explain why. However, hopefully, I will be able to bring you as up to date as possible in this session. I apologise in advance if my comments are lengthy.

We are looking, first, at the in-year funding position. By way of context, you will know that, at this stage of the year, we normally provide an update on the Department's October monitoring position. However, as the Committee will be aware, ongoing financial issues are facing the Executive, meaning that the June monitoring round has not yet concluded. Advice from DFP officials is that the January monitoring round will be the second and, indeed, final monitoring round of the financial year. Therefore, I can give you some information on this year's finances, but, unfortunately, given wider issues, I am not able to be definitive about the next steps or potential cuts.

I will begin by recapping on how this year's budget was set. I understand that Christine has provided you with slides that will, hopefully, be useful. The Committee will be aware, through its involvement in the 2015-16 budget process, that this year is extremely challenging. Very difficult funding and prioritisation decisions have been, and will be, required, which will have a major impact on the wider justice system and the services that we provide. In setting this year's budget, the starting point for all DOJ spending areas was a reduction of 15·1% in our opening baselines. An allocation of £90 million was provided by the Executive as part of the draft and final Budget process. In some areas, that funding was used to offset specific demand-led pressures. In other areas, it has been used to offset the impact of baseline cuts. Some of our organisations have cuts lower than 15·1%. Conversely, other areas have higher cuts so that funding can be reallocated to front-line priorities.

After applying the 15·1% cut to the Legal Services Agency baseline, the available funding would have been £64 million, which is approximately £40 million short of the then forecast legal aid requirement. Therefore, the Department had to increase the baseline by using some of the Executive allocation and deepening the scale of cuts elsewhere. However, even with an increased baseline in 2015-16 and the work undertaken to make savings in that area, there remains a legal aid pressure. On the basis of the agency's most recent forecast at that time, the Department bid for £23·9 million for legal aid as part of June monitoring, and we brought that before the Committee at the beginning of June. The monitoring round has not yet concluded, so a decision on the bid remains outstanding.

I will bring you up to date with our current assessment of the in-year position. The Department continues to face some significant pressures. The most recent legal aid forecast, taking into account the most up-to-date information on case cost and volume, shows a pressure of £21 million. We also face pressures in the Prison Service, where we believe that we will need to provide extra funding of around £4 million this year, and there are pressures in relation to legacy costs. It is not yet possible to quantify those, but the implications of the funding package set out as part of the Stormont House Agreement will be important because, without additional funding, those costs will remain an unfunded pressure.

Following the advice of the Finance Minister in June, asking Departments to pre-emptively halt all remaining discretionary spend, we have some potentially significant savings. As you will know from our June briefing, the Department's accounting officer asked all DOJ spending areas to identify savings in discretionary spend. We expect that we will deliver savings as a result of proactive decisions to stop spend. The PSNI has made a firm commitment to finding in-year budget cuts of 2·5%, which is roughly £15 million to £16 million, and has already identified potential savings to that level. I understand that the Policing Board was advised of that commitment by the Chief Constable in his September report. We expect the police to be in a position to firm up the detail of where cuts will come from in the next week or so.

As a result of the proactive decisions that we have made, the conundrum that we now face is that we will seek to manage our pressures and break even as a Department, but, given that the DOJ budget is no longer ring-fenced, without Executive agreement, and in the absence of a monitoring round any time soon, there is no mechanism to reallocate our budget. As I said earlier, from our understanding, the next time the Executive are due to consider an in-year monitoring round is mid-January, which, even if budget adjustments were approved, is too late. That means that we will have to continue to work closely with DFP to see how we can best, if at all, secure some flexibility to manage our budget. The other question that you may well have is about whether further cuts will come this year. Unfortunately, we do not know the answer to that yet.

I will sum up our in-year position. First, we have asked spending areas to stop discretionary spend that does not need recourse to the Department. Secondly, we continue to work closely with areas that have tabled the possibility of delivering a certain level of cuts, noting that they should continue to plan to deliver those. In the absence of anything further from the Executive, the Department plans to consume its own pressures and live within budget. That means not exceeding our budget, and we have told our areas that they should not expect any additional funding. Unfortunately for each area, it also means that further cuts might be a possibility, but we cannot say how likely that is, what the scale will be or when it might happen. We have asked them to preserve as much flexibility in their budget as possible to manage this, even it happens in January. As you can see, the situation is far from ideal. Hence, it has been difficult to provide any detail to the Committee at this stage in the year. Hopefully, today's briefing brings you as up to date as possible on our current in-year funding position.

I will say something briefly about the next spending review — the next Executive Budget. There is uncertainty there, too, because the process for that has yet to come before the Executive, but it is right that, as a Department, we begin scenario planning as soon as possible. It has not been confirmed whether the Executive's next Budget will be for one year or whether they will consider a longer period. Our sense is that it will be for one year, and, on that basis, we have this week asked all DOJ spending areas to consider the impact of two scenarios for next year. Those scenarios will examine a 5% cut and a 10% cut. We asked each area to set out the impact of the two scenarios under three headings: any back office or administration impact; any front-line impact; and any front-line and public safety impact. This should allow the Minister, the Department's strategic resources committee and, indeed, the Justice Committee to take informed decisions about the impact of cuts to each area and to the justice system as a whole. The work that we are undertaking should put us in a good position to be able to respond to the Executive's process when it is formally launched.

On overall financial planning, we feel that it is important to undertake more medium-to long-term work, and, on that basis, we plan a more strategic review of funding priorities and potential savings for the years 2017 to 2021. This work will be completed more slowly than the 2016-17 work, which we think will have a short turnaround time once commissioned by DFP.

I should also say that, on future capital commitments, DFP has asked for some early information about our long-term capital plans, with a view to informing the 2016-17 capital budget. Our slides show a very early summary of that work, with the information that we know at the minute, and we will brief the Committee as that progresses. However, there is little doubt that we will need to prioritise our capital plans to live within budget.

I hope that that has provided you with an overview of our in-year financial position and our progress and planning for the Executive's next Budget. We are happy to take any questions.

The Chairperson (Mr Ross): Thank you for sending through the slides. Members might find it useful to look at those. The slide presentation makes things very clear for us, so thank you for doing that. I do not think that anybody used it during your presentation, but it is very useful.

You mentioned the PSNI's 2·5% savings: have you any input into where the PSNI makes those savings? The sceptics among us may think that bodies such as the PSNI make savings in areas that have the highest public impact to try to get sympathy from the Policing Board and other politicians with the argument that they need more money. I know that, in the past, relationships have not been particularly good between the Department and the PSNI on sharing budgetary information. Does the Department have any input into how the police will make those savings?

Ms Lisa Rocks (Department of Justice): The Department asked all accounting officers across the departmental family to identify savings, and I suppose that the Chief Constable, along with other accounting officers, was asked to do that. It is a matter for him where he will identify those savings. As Glyn said in his introductory remarks, we will work with the PSNI over the next few weeks to understand where those savings will come from, but we do not have an input into that.

The Chairperson (Mr Ross): Has there been a marked improvement over the last year in the relationship, in information-sharing and in looking at where savings could be made through shared services and things?

Mr Capper: Yes, I think that the process for sharing financial information with the police is very good. The police are engaging with the Department and, indeed, the wider Civil Service on shared services and so on; for example, they are considering working through IT Assist, which is the NICS's wider IT service. There is lots of ongoing engagement there.

The Chairperson (Mr Ross): Is there any indication that the police underspend not so long ago will happen again or are you confident that there will not be a huge police underspend this year?

Ms Rocks: Last year's police underspend, which was £14·4 million, was 2% of the PSNI's budget, so it was not a significant proportion. A number of areas drove the underspend, one of which was uncertainty about the in-year budgeting position in 2014-15. Difficulties arose because of cuts late in the year, and the Chief Constable had to plan the budget on that basis. Spend on public disorder was not in the region expected, and legal challenges form a significant area of fluctuation. Part of the police underspend was a late legal challenge that settled for £3 million less than expected, which formed 20% of the underspend.

The Chairperson (Mr Ross): We had a relatively good summer, so I was wondering whether any money will be returned. Does the Minister have to surrender that to the central pot?

Mr Capper: That sort of discussion will form part of the information that we hope to get from the police in the next week or so on where this year's cuts might come from. My expectation is that there will be proactive decisions in policing to make savings this year.

The Chairperson (Mr Ross): If that money comes back, the Minister will have to surrender it to the centre. He cannot reallocate that money within his own budget, can he?

Ms Rocks: That depends on the DFP processes. As Glyn mentioned, in areas for which Executive approval is needed, we would have to submit a bid as part of a monitoring round. The PSNI, along with all our other bodies, has proactively identified savings, so we would see how those could be allocated against our pressures. That, too, would need Executive approval.

The Chairperson (Mr Ross): Where will the public see the impact of stopping discretionary spend? Which bodies are feeling the impact of that, and where are they making the savings or stopping discretionary spend?

Mr Capper: We have asked bodies to stop discretionary spend that does not need recourse to the Department. Hopefully, it will be discretionary spend within each organisation's gift, and, therefore, stopping it will have a low impact. The first tranche of that should be in areas that have a relatively low front-line and public impact.

The Chairperson (Mr Ross): We are not talking about the money that goes to community groups and things like that, are we?

Mr Capper: Not in the first instance. We do not know whether further cuts are coming, but, from the discretionary spend that we have identified thus far, we are not in that space yet.

The Chairperson (Mr Ross): I want to touch on legal aid issues. There is an ongoing court case: the challenge to the Department from the Bar Council and Law Society. That will not have an impact this year, I presume, but, next year and the year after, it could have a significant impact. Has that been factored into the 5% and 10% scenario planning?

Mr Capper: We have just launched the 5% and 10% scenario planning. It would not be appropriate to comment on the ongoing court case at this stage. When the Legal Services Agency produces its next forecast, I imagine that it will be based on the assumption of savings already made, and the implications of the new rules in place will be factored in. The outcome of the court case may well change that forecast, but the forecast will be based on the rules as they stand.

The Chairperson (Mr Ross): You mentioned where the shortfall is in meeting this year's legal aid budget. I presume that, if the Department is not in a position to pay that this year, it will mean a double whammy next year. So there is an incentive to get it paid this year in order to help your budgeting for next year.

Ms Rocks: Yes.

The Chairperson (Mr Ross): How has the voluntary exit scheme worked in DOJ? What was the uptake, and what were the savings?

Mr Capper: I will defer to Lisa on that. I think that we have hard facts and figures.

Ms Rocks: We have some facts and figures, but some of it will depend on the outworkings of the remainder of the scheme for the remainder of the financial year. As part of the Department's savings delivery plans for the current financial year, we assumed that £4 million in savings would be achieved through the voluntary exit scheme. In tranche 1, 81 of the Department's staff left yesterday, which will generate savings of approximately £1·3 million. In tranche 2, 74 staff have opted to leave. That will be at the end of November and will generate savings of £700,000. In tranche 3, 147 staff have received the offer to leave, and we will not know until the end of October how many have accepted that.

Mr McGlone: What triggered my interest was the statement that the process of sharing information with the police is very good. It does not seem that the police are very good at sharing their information with Access NI. They are saying that it is for budgetary reasons, but I do not know whether that is so or whether it is inefficiency.

If you bear with me, I have just received an email from a solicitor acting on behalf of a man. At the end of April, this man was successful in getting a job with a trust. Access NI sent for clearance in the first week of May. As that process takes 60 days, the man's schedule was to leave his then present employment at the tail end of June. There is, allegedly, a 60-day turnaround. He was unable to take up the job with the trust until the PSNI had confirmed and returned the Access NI check. In June and July, he lived on his savings. In August, he had to resort to benefits and did not receive clearance until 24 September. It should be emphasised, Chair, that he had no criminal record whatever. I really do not know whether that is down to inefficiency or cuts. I just do not know what is going on there. However, to my mind, that person has been seriously disadvantaged. He had to dip into his savings to keep himself ticking over and then to resort to benefits, all because of the inadequacy of the system. I will pass on the details to the Committee, and I would like the case to be looked into. Whether that was the outcome of inefficiency or cuts, neither is acceptable. I am sure that none of us would wish that on ourselves or any of our family members.

Chair, we need to call back Access NI and particularly the police to look at this. Seriously, it is not on. A person has been persecuted because he does not have a criminal record, and it is not on. I do not know what you have to say about this or whether Access NI and the police have been in touch with the Department about recurring problems like this. If they have not been in touch, they are not doing their job, because they should be bringing this to the fore.

Mr Capper: I am unable to comment on that specific issue. I do not know whether that is an isolated incident.

Mr McGlone: Mr Capper, this has been a recurring theme at the Committee. Members right across the board have had such matters raised with them in their constituency. If you have not been apprised of it, I would venture to say that someone is not doing their job.

Mr Capper: I need to take that back to colleagues in the Department who have a more specific focus on that area.

Mr McGlone: Please do.

Mr Lynch: You spoke about two scenarios in the future: a 5% cut and a 10% cut. Is that across the board? What impact would each have on front-line services?

Ms Rocks: The purpose of scenario planning is to understand exactly that: the impact of the two scenarios on each of the Department's organisations. In setting the 2015-16 budget, we did something similar. That allowed us to identify areas where, for example, the impact on front-line and public safety aspects would create too many difficulties, so we protected some areas. At this stage, it is scenario planning only.

Mr Lynch: What about front-line and safety aspects? What examples do you have?

Ms Rocks: The Courts and Tribunals Service might say, for example, that there will be a reduction in sitting days or an increase in waiting times. Obviously, we would prefer to target back office administration savings, as we did in 2015-16.

Mr Lynch: We were briefed last week on the Community Safety College in Desertcreat, which hangs in the balance. There is a £78 million underspend: where does that sit? Did it go back, or is it in the Department?

Ms Rocks: The business case is being finalised, and we hope to have that at the end of November. That will set out what the funding requirement will be. That will then inform the capital planning. I think that there is a slide showing capital forecasts. That does not, as yet, include the forecast for Desertcreat because we are still working up the business case. However, it will form part of our discussion with DFP about capital spend as part of the next Executive Budget.

Ms McGahan: Under Together: Building a United Community (T:BUC), £0·7 million will be allocated between DOJ, Belfast City Council and the Housing Executive. This strategy covers the North of Ireland, so what is the rationale for all of the money going to Belfast City Council and the Housing Executive and being focused on Belfast?

Mr Capper: At the last session, as part of June monitoring, we presented our bids that went to DFP. As you rightly say, the Department's bid was for £700,000. That was one of the things allocated as part of June monitoring. As to the specifics of why certain money goes to certain areas and so on —

Ms McGahan: It is all going to Belfast: that is the point.

Mr Capper: I do not think we are the most appropriate people to ask about where the money goes. We come at this from a [Inaudible.]

point of view. However, I can go back to colleagues in the Department who deal with T:BUC and get you a better answer than I can give.

Ms McGahan: OK. Will you get clarification on what is meant by:

What exactly does "staff resources" mean? Does it mean travelling expenses? I want that kind of detail, if you do not mind. Can this be changed to have a broader focus than just Belfast City Council? This is a big issue.

Mr Capper: I will take those questions back to colleagues and come back to the Committee in writing.

The Chairperson (Mr Ross): I think that, after last week, we wrote to the Department on that issue. Officials might wish to speak to somebody else, but they are aware of it and will, hopefully, get a response to us.

Mr McCartney: Thank you for the presentation. This is a theme that I have developed and asked a few questions about, and it relates to some of the specific questions that members have asked: who assesses the impact when budget lines are being decided? Recently, I spoke about the size of the PSNI budget and the fact that the PSNI has to make reductions. I am interested in the examination of that. In one round of spending, the PSNI has to cut back on certain services, and then it comes forward with a bid for £1·5 million for cybercrime. Is there someone asking why that is a priority over some of the services that they have had to cut? Is that a Policing Board role or does the Department have a role to play as well?

Mr Capper: There is a tripartite arrangement. One of the roles of the Policing Board is to review and scrutinise those sorts of bids. The bids also come into the Department and are reviewed. I think that I am right in saying that, in June monitoring, the police's only bid was for cybercrime. I am not sure where that ranks in the police's overall priorities — no doubt it is a high priority — but it was a specific bid because there was a similar pot of money available for police forces in England and Wales. That is why that it was a bid as part of June monitoring.

Mr McCartney: We can develop that, not just in this budget but in all budgets. Through T:BUC, a certain amount of money is going to a particular place, as Bronwyn mentioned. Without prejudice to the answer, is someone in the Department saying, "You need to be careful. Other areas have made bids. Why are we making A a priority over B?"? Is that part of the process or is it outside your control?

Ms Rocks: There is a separate pot of funding from OFMDFM for things like T:BUC, so they are not competing for the same funding. When the police are taking cuts and looking at where they spend their money, that is part of what the Department allocates to them. However, in the case of Together: Building a United Community, for example, they bid to a separate pot of money.

Mr McCartney: I am talking about the assessment. Say, for instance, that the Police Service has provided money in local areas for gates. If someone came in tomorrow and said, "We're putting aside £100,000 to continue with that scheme", has the Department a role in saying, "Make sure that the money is spread properly", or do the police set the priority? That is my point.

Mr Capper: The process is that police internally set their priorities. Then, as part of our normal monitoring rounds and, indeed, our bigger annual spending review/budget processes, all the priorities from all of our bodies come through the central Department and we assess them. I will give you an example and touch on what Lisa said about the next spending review. We are asking all of our bodies to assess the impacts under a series of headings. One of the impacts we are asking for is that of substantial cuts across the whole justice system. As a Department and a board, we will sit down and look at that. As part of the process for setting the budget for next year, that is the sort of information that we hope to bring to the Committee to allow it to have its place in those decisions as well.

Ms Rocks: Part of that is picking up the equality issues and looking at whether any potential cuts would have any equality impact.

Mr McCartney: That is excellent. The reason why I say that is that, if you lose one worker from a large area, the impact is not as great as losing one worker from a small village, where there is an obvious impact. Who is ultimately responsible for the decision? I assume that people making the decision measure that impact as well, but I wonder whether there is a second eye, someone to say, "Hold on — that looks a bit unbalanced. We are the ones who decide the budget. We will allocate money to you, but you have to ensure that it is not centred in one location; it must go to two or three distinct locations".

The Chairperson (Mr Ross): No one else has indicated that they have a question. Over lunchtime, I noticed a press release from the Department about the asset recovery community scheme. There is money for community projects across the Province, which is all very welcome. How much of the 2015-16 budget is being spent in the community and voluntary sector compared with the previous year? I know that you have had quite a bit of interest from Members across the Province in the community fund.

Mr Capper: To be honest, that differs by area. One of the complex things about the DOJ is the number of bodies that it has. I mentioned earlier that we had five agencies, and there are 11 across the NICS. Each of our bodies took a decision about cuts independently, and then we looked at it across the Department. Some areas, for example, protected the voluntary and community sector more than others. I know that the Probation Board and the Youth Justice Agency have tried to protect their grant funding as far as possible. The answer to your question is that I think that we spend in the region of £13 million to £14 million in total across the voluntary and community sector. That includes police and community safety partnerships and so on.

The Chairperson (Mr Ross): OK. Members are happy enough that they have no further questions. Thank you very much.