Official Report: Minutes of Evidence

The Chairperson (Ms Dillon): I realise that we now have a paper, but it has come to us only now. We are still in the very early stages of the new term, but it would be much preferable for Committee members to have papers prior to meetings.

I welcome Louise Warde Hunter, who is deputy secretary, and her team, Graeme Wilkinson, and Roger Downey.

Ms Louise Warde Hunter (Department of Agriculture, Environment and Rural Affairs): Thank you very much, Chair. We apologise for the late submission. You have a very short slide pack in front of you. I propose that, as we talk you through this and as we end each section, if is agreeable to you and to members, we pause and take some questions at the end of each sensible chunk, so that we can lift things as they arise since they are set out into different areas of capital and resource. Would that be helpful?

The Chairperson (Ms Dillon): I am happy with that if members are agreeable.

Ms Warde Hunter: OK. Thank you again, Chair and members, for the opportunity to brief you today on a number of items relating to the Department's finances. As this is the first time that I have presented to you, I want to provide an overview of the Department's opening 2016-17 Budget. So, starting at the block level and the funding available for the Executive's Budget 2016-17, which was determined by the outcome of the spending review 2015, as usual, the settlement for the Executive was determined by the application of the Barnett formula to the outcomes in Whitehall Departments, and the impact of the resource reductions applied by the Chancellor was mitigated in our spending review outcome by the fact that the health and education sectors in England were both relatively protected. So, from 2016-17, this represents a resource nominal increase of £84 million to £9·745 billion, or a real-terms reduction of 0·8%. On capital, it represents a £52 million nominal increase or a real-terms increase of 3·7% for conventional capital DEL.

As you will see from the first slide, we have a total resource allocation of £215·9 million and £48·8 million of capital. The table splits the funding out by group, with food and farming being the largest, and includes the Agri-Food and Biosciences Institute (AFBI), the College of Agriculture, Food and Rural Enterprise (CAFRE), and the administration of EU funding. So, that is why that one is so large.

I will just say a word or two on EU funding. It is important to highlight that the £215·9 million is net of the EU funds administered by DAERA. As members will be very aware, a significant element of the Department's work has been in the administration of EU funds. That is administered under two separate pillars. Pillar 1 covers the basic payment scheme, greening and young farmer payments and equates to approximately £230 million per annum or €2·3 billion over the lifetime of the current programme. Pillar 2 is the rural development programme, which has an allocation of £623 million up to 2023.

Table 2 sets out the main constituent parts of the DAERA budget. It might be helpful if I walk you through that and give an overview of some of the elements. As you will see, the most significant part of our costs are staff costs, which are £116·2 million. As members will be aware, we have just completed a voluntary exit scheme (VES). You heard Noel talk about that last week. We touched on it when we came before you then. That saw us reduce our staffing levels by 385 full-time equivalents, which, in turn, will produce for us annual savings of about £14 million. We are assessing the implications of the VES and have developed a change programme to reshape how we do business in the future. Clearly, losing that number of staff in such a short time will have implications for the new Department and how we conduct business in the future. This change will take time and investment. As I said, we touched on that the last time we were before you.

The next three items on the table relate to general administrative expenditure (GAE), current and other expenditure. They cover the main running costs of the Department, which is spread across 70 locations. That funding includes rates, utilities, maintenance costs, farm costs, enterprise shared services costs, such as HR Connect, planting costs, and travel and subsistence.

AFBI falls under non-departmental public bodies (NDPB) funding. AFBI is our largest NDPB. As you know, it provides a range of research and diagnostic services for the Department. As you will see from the table, we provide annual resource funding of almost £30 million to AFBI. It is important to reference that there has been a change in budgetary treatment for research expenditure. As a result of changes to Treasury classifications, we now record research and development expenditure as capital. As you may be aware, capital funding is not subject to resource reductions. That change is, perhaps, a positive development for the future funding of AFBI.

Like the Department, AFBI has a considerable fixed element to its cost base, in that the majority of its expenditure goes on staff salaries and wages. AFBI has also taken the opportunity to reduce its staffing levels through the voluntary exit scheme. The resulting savings will go a long way towards providing a more secure financial footing for the organisation.

Rural development programmes (RDPs) match funding is included on the table in programmes. A moment ago, I made a reference to the RDP. You will see that we have match funding allocation of £20·8 million for the range of schemes. The main elements of that funding relate to our agrienvironment schemes, such as the Northern Ireland countryside management scheme (NICMS) and areas of natural constraint (ANC).

We have allocated £18·5 million to TB compensation and private veterinary practitioners (PVPs). It is important to note that we receive annual funding from Europe to offset that cost. It can fluctuate a bit, but we have been averaging at about £5 million per annum, although we expect that to reduce. I know that you have just had Robert and colleagues in to present to you.

We have allocated £5 million to common agricultural policy (CAP) disallowance in the current financial year. There is a fair degree of uncertainty around the exact risk to the fund. We have been investing in the land parcel identification scheme (LPIS) over the last number of years and, with the number of farmers applying online increasing, we have had an increasing level of confidence in our internal controls. At its peak, disallowance was at 5·1%, but in the last financial year that had fallen to 3·44%, which was clearly positive. It is not an issue that is unique to this Department. All countries and member states across Europe are experiencing disallowances to a greater or lesser extent and we are making progress in reducing the risk. However, we remain resolved on reducing it to an even lower level. We have set ourselves the objective of getting the risk to 3% in the 2016 scheme year and to 2% in 2017. The new role that I have taken up as part of my wider responsibilities in the Department is head of paying agency

As you can imagine, Chair and members, that will be exercising me substantially.

The total tackling rural poverty and social isolation (TRPSI) allocation in 2016-17 is £4 million, and that is consistent with the 2015-16 figure. You can see from your table that £1·8 million of resource has been allocated to that. The main elements of that funding are due to be spent on three broad areas: community development, such as the rural support network, which is just under £1 million, that is £0·9 million; the assisted rural travel scheme, which is £0·3 million; and maximising access in rural areas (MARA), which is £0·2 million. The other £2·2 million of the TRPSI program is in capital, and I will come back to that separately.

I turn to the carrier bag programme. The main element of that is the £2·6 million allocation to the environment fund, which has been made available to eligible organisations to do two things: protect and improve our habitats and the quality of our air and water; and promote health and well-being, resource efficiency, sustainable economic development and access to the natural environment. There are a number of other, smaller schemes: the repatriation of illegal waste to the Republic of Ireland, that is £0·2 million; and clean-up support to local councils in relation to fly-tipping, which comes in at £0·3 million.

At the very bottom of the page, members can see a note on income. The final resource element is the £48·4 million income, under which the main items are bracketed. I will highlight five items for Committee members: Forest Service receipts from the sale of timber, which is £9·4 million; Northern Ireland Environment Agency (NIEA) income, which is £7·9 million and that is related to regulatory aspects; income from the Food Standards Agency, which is £6·1 million, on whose behalf we do work, for example, we appoint the meat inspectors; EU vet fund receipts are £5·1 million; and, finally, there is the carrier bag levy income, which is £4·6 million.

I invite members to turn the page to resource savings. Over the last number of years, the public sector has been experiencing significant pressure on its finances; indeed, in the current year we have been asked to deliver savings of £11·9 million, or 5·7%. The table in your pack sets out the breakdown of where the £11·9 million of resource savings were found. In order to be equitable across DAERA, it was agreed that this cut should be allocated on a pro rata basis across the three former Departments that have now come together to form DAERA. The vast majority of those savings have been delivered through the voluntary exit scheme and also through the reclassification of some of the AFBI budget from resource to capital funding, which is what I mentioned before through the new Treasury enabling mechanism. There are undoubtedly challenges in delivering our services with fewer staff; however, we are committed to changing our operating model and to delivering differently in the future. Managing this financial picture with the magnitude of that reduction is certainly a challenge. However, we have a positive track record in financial management, and we will be maintaining that in DAERA as we go forward.

Those three slides, Chair, represent the first piece, which is on resource. I would like to pause in case there are any questions that you would like to raise before we move on to capital.

The Chairperson (Ms Dillon): I have a quick question. Are the amounts allocated to the right headings? I ask because some of those amounts do not tally. For example, you talked about TRPSI and you mentioned £4 million, and it seemed that that might have been under the carrier bag programme, so it —

Ms Warde Hunter: I am sorry; you just want to know —

Mr Graeme Wilkinson (Department of Agriculture, Environment and Rural Affairs): The overall programme is £4 million, so £1·8 million is resource and the balance is capital.

The Chairperson (Ms Dillon): It would be beneficial to us if we could get that breakdown in written format. The detail that you have given us in the summary would be good to have in written format.

Ms Warde Hunter: Absolutely, Chair. I am happy to forward that to you.

Mr McGlone: Thank you for your presentation. Does AFBI engage in any sort of collaborative research work — well, I know that it does — with Queen's and the likes around Horizon 2020? Is there derivable income associated with that?

Ms Warde Hunter: Yes. AFBI has a new chief executive coming in, and I would have thought that collaboration is an area that they will want to take forward. It has a dedicated member of staff called Elaine, who is trying to make sure that it can bring together collaborative ideas in order to draw down funding. That will undoubtedly form part of its strategic direction.

Mr McGlone: I suppose that I am bouncing you on this, but do you have any figures or facts as to what that might look like at the moment?

Ms Warde Hunter: I am not sighted on that, Mr McGlone.

Mr Roger Downey (Department of Agriculture, Environment and Rural Affairs): We do not have the detail at that level. Overall, I think that AFBI income is about £18 million a year.

Mr McGlone: In the previous Committee that I sat on, it was a big issue to promote R&D to take us to a higher level, especially with the agrifood sector. It would be appropriate if we could get that in written form.

Ms Warde Hunter: We can come back to you through the Committee Clerk on that.

Mr Poots: How did the £1·2 million for repatriation of waste come about?

Ms Warde Hunter: How did it come about?

Mr Poots: It is not our waste; it is the Republic of Ireland's waste. It is their responsibility, not ours. How did we come to be paying for repatriating waste that should not be here?

Ms Warde Hunter: I will come back to you on that point as to what we are legally and statutorily obliged to do.

Mr Poots: My recollection is that the Republic of Ireland was paying for the removal and repatriation of the waste. I am not sure what has happened in the last five years, but we should not be spending £1·2 million on somebody else's waste that should never have been here in the first place.

Mr Downey: Just to clarify, it is only £0·2 million.

Mr Poots: I thought that it was £1·2 million.

Mr Downey: No, it is only £0·2 million.

Mr Poots: We should not be spending anything, to be honest. We should be awarded costs from the Republic of Ireland for our staff's time and for their breaking of European rules and their irresponsible handling of waste.

The Chairperson (Ms Dillon): If we can get a response in relation to that, it would be good.

Ms Warde Hunter: Yes, I am happy to bring that back.

Mr McMullan: Thanks for your presentation. The income from the forestry ground etc is £48·4million. I notice that we did not have any figures for leases of ground that we own, such as forestry ground and the leasing out of telecommunications. We have ground leased to NI Water that I do not think has been included in that cost.

Mr Wilkinson: Louise gave a figure of £9 million for Forest Service income. That is its top-level number. Those are smaller amounts of money, but they will be included in that figure.

Mr McMullan: Can we get a breakdown of the £9 million as to what exactly is in there earning money?

Mr Wilkinson: Yes, we can give you a breakdown.

Mr Ford: Thanks for the presentation. I accept that it is complex, but it is a bit confusing that some of the totals are not the same in the paper that we had previously circulated, although it appears that it is the issue of non-ring-fenced DEL that has made the difference in the depreciation.

It is not terribly helpful when we are given figures that do not quite tally, accepting all the complications of that. You referred to forest income in what I take to be a DEL resource figure, yet in the more detailed paper that was presented — I think on your page 23 — there is a reference to Forest Service timber as annually managed expenditure (AME). How on earth is that AME, when it is normal income from normal operations?

Mr Wilkinson: I do not have your paper so —

Mr Ford: It is the one that you presented to the Executive, as far as I understand.

Mr Wilkinson: I suspect it is to do with the valuation of the timber, so that is a change in the value. Whenever they do the valuation every year as part of the accounts, as opposed to the income, it is treated as AME, but the income that we get from the timber is treated as DEL. They are two different things.

Mr Downey: Just on that, you are looking at page 23 of the Main Estimates. Forest Service income is in row A-5 under the heading "Accruing Resources". The figure 9,448 is for the Forest Service income that —

Mr Ford: Is the AME an assumed capital adjustment?

Mr Wilkinson: That is the valuation piece of it.

Mr Downey: It is the valuation, as Graeme was saying, of the biological assets, the trees. It varies in line with timber prices each year and because it can be quite volatile it is put into AME as it is annually managed expenditure. All volatile expenditure goes in there as opposed to going into DEL which has tighter controls on it.

Mr Swann: Is that is the value being put on uncut trees?

Mr Wilkinson: No, it is for the standing trees.

Mr Swann: Standing trees. Do you value everything that is still growing? How is that done? Do you go round and count them?

Mr Wilkinson: No. A model is used to calculate the value based on timber prices. It is a fairly complex process. It is done purely for accounting purposes to make sure that we are recording them in the accounts.

Mr Swann: OK. Louise, going back to the income of £48·4 million; there is £9·4 million from forestry, £7·9 million from the NIEA, £6·1 million from the FSA, £5·1 million from the EU veterinary fund and £4·6 million from bags. My total is £33·1 million. Where is the other £15 million?

Ms Warde Hunter: I said that those are the main items —

Mr Swann: Where is the other £15 million?

Ms Warde Hunter: I invite Roger to give you a flavour of what sits beneath the remainder.

Mr Downey: There are College of Agriculture, Food and Rural Enterprise (CAFRE) receipts, from student tuition income, of £2·3 million. We also get a rental income from AFBI because we own the estate that it rents from the Department, and that is £6·3 million. There is £2·5 million salvaged from animals that are slaughtered and there are other veterinary receipts of £1·1 million. The balance comprises other income from a whole range of smaller things that add up.

Mr Swann: What?

Mr Downey: Sorry? We get income; we are down to hundreds of thousands of pounds. That is why only the bigger ones are in —

Mr Swann: Louise, I know that you told us that these are the main incomes. However, there is £6·3 million rental income from AFBI that you did not mention and that would have been your fourth highest income. Is there any reason for that?

Mr Wilkinson: I suppose, Robin, it is a case of "in and out". So, it is income to the Department but it is a cost — it is circular —

Mr Swann: It is still being listed, so are the carrier bags, which are going out at £4·2 million but coming in at £4·6 million. I do not think it is a valid reason. There is £2·5 million from the salvage of animals. Where is that income? Explain that to me.

Mr Wilkinson: Basically, that is for TB reactors. We have a contract with a company that lifts the reactors and gives us money in return for the animals. This is where that comes in.

Mr Swann: So, that is money for TB. Is that money then put back into TB?

Mr Wilkinson: It is in the veterinary service line, yes.

Mr Swann: Is it ring-fenced?

Mr Wilkinson: It is included in the veterinary service budget, so it is included as part of the programme. Whenever they talk about a figure of £30 million that figure is net of that receipt.

Mr Swann: OK.

Mr McKee: I see that there is £0·2 million for fisheries. Have there been any funds for the decommissioning of fishing boats? Apparently, five or six years ago, fishermen were squealing to get this money. There was money available, but it was never allocated for those fishermen to get out of fishing.

Ms Warde Hunter: Yes, I recall that scheme. Graeme, is there a point you would like to make?

Mr Wilkinson: I recall that. We had difficulties with the business case and proving value for money for that scheme. There has not been any money allocated for a decommissioning scheme in the current financial year because of the issues that we would have around trying to prove value for money.

Mr McKee: What is the future? Are you going to continue to look at it?

Mr Wilkinson: I am not sure what the policy position is, but I know that Europe and the Commission are not keen on decommissioning schemes. I am not aware of any that there has been across Europe. I do not think there is a need for us to look at that at this stage.

Mr Anderson: Louise, when talking about running costs and general administration expenditure, did you mention 70 locations?

Ms Warde Hunter: Yes, 70 locations, which include our —

Mr Anderson: Currently, there are 70 locations. Will there be more or less in the future? The running costs for a number of locations could depend on how many of them go, year on year.

Ms Warde Hunter: Absolutely. That is part of the change agenda that we are looking at for our estate. I know that Graeme would like to come in and talk on that. You are quite right: the number of locations has to be examined to see whether it is sustainable or desirable.

Mr Anderson: What do you mean by "examined"? When will that be? Where are we with that?

Ms Warde Hunter: Part of our broad change programme is about making sure that we are fit for purpose, not just in how we are shaped, organisationally, but where we are located.

Mr Wilkinson: I have a couple of things to say on that, Sydney. As you will recognise, we have a larger Department now. That is why the number of locations has increased so significantly. We intend to review our estate strategy, given that we are a new Department, to identify potentials for synergies and to look at where there are vacant spaces in our various locations. We will take into consideration that our staff numbers have reduced very significantly. Primarily, we will be looking at the need for office accommodation, the optimum number of locations and where we should be located. We are doing that piece of work in the current financial year. We will want to have a draft of our estate strategy by the end of this financial year. Looking at our overall estate is a significant piece of work, as you might imagine.

Mr Anderson: Are some of these locations leased, or are they —

Mr Wilkinson: There is a mixture of leased and owned accommodation. A large part of the 70 locations will be run and managed by DFP. It is a mixed bag. The intention across the NICS is to remove ourselves from leased accommodation, as that will save us resource funding.

Mr Anderson: Will that be a buyout of the lease or what will it be?

Mr Wilkinson: It will depend on each individual circumstance; we will be looking at each on its merits. We would have to do a value-for-money assessment on whether it would be more valuable to buy out the lease or to let it run its course and utilise it. There is a significant piece of work to try to come up with a revised estate strategy for over 70 locations.

Mr Anderson: I appreciate that.

The Chairperson (Ms Dillon): On the back of what Sydney has just said, is there any suggestion that DAERA Direct offices are going to be reduced in number? Will any of those be closing?

Mr Wilkinson: The DAERA offices are obviously part of the 70 locations. We will have to look at the optimum configuration across all our sites, as I said to Sydney. No decision has been made. We need to look at the analysis to see what the optimum number will be.

The Chairperson (Ms Dillon): Given that the Department is concerned with rural affairs, I would like to think that you would not be thinking that it is easier to move everything to the city.

Mr Wilkinson: No.

The Chairperson (Ms Dillon): I accept that it can be difficult to take things out of the city as regards staffing, but this is a rural Department, and it should be looking after rural areas.

Ms Warde Hunter: Are you happy for me to continue now?

The Chairperson (Ms Dillon): Yes.

Ms Warde Hunter: I would like to move into the capital budgets, if I may. As with previous budget exercises, this budget was allocated from a zero base. The £48·8 million allocation will allow the Department to continue to take forward the majority of DAERA's existing schemes and programmes.

Table 3 shows that there are three main types of capital expenditure in DAERA. There is capital allocation, which will allow the Department to take forward priority investment programmes, and that is £21·1million, IT systems are £11·3 million, and recurring capital is £16·4 million, totalling the £48·8 million.

The largest budget, at £10·4 million, is for headquarters relocation, of which £9·4 million relates to the move to Ballykelly. Planning permission was granted for the relocation in February, and construction contracts were awarded in March. The process is in its design phase until the end of September. The residual £1 million capital budget in 2016-17 relates to the Rivers Agency relocation to Loughry, which is projected to be completed this October.

The TRPSI allocation of £2·2 million — the balancing figure from the earlier mention of TRPSI — includes an additional £1·2 million this year to offset the £1·2 million reduction in the resource element of the programme. The main items of this funding are due to be spent on the Rathlin harbour refurbishment, rural broadband, the rural sports facilities scheme, and a village renewal pilot scheme. In terms of amounts, Rathlin is £0·5 million, rural broadband is £0·3 million, the rural sports facilities scheme is £0·3 million, and the village renewal pilot scheme is £0·3 million.

The next item is the £5 million allocation to the rural development programme, and the largest element of that is the £2·5 million allocation to priority 6 LEADER measures, including the rural business investment scheme and rural tourism. A further £2 million is for the farm business improvement scheme (FBIS), which is to support sustainable growth in the farming sector and is being rolled out in a phased way. The early focus is on knowledge transfer, making advice and support available to farmers to help them to identify their needs and make the right decisions about developing their business. It is intended to help farmers to develop business plans that will be needed to access any future support for capital investment, preparing the way for the proposed farm business improvement capital scheme that is planned for later on in the year. There is also £500,000 allocated for the new forestry grant schemes. These opened on 15 November last year. The Forest Service has issued letters of offer for the planting of 180 hectares of new woodland prior to the end of spring 2016.

The Rethink Waste recycling infrastructure has an allocation of £3 million. This is for district councils to increase recycling by improving or extending their waste collection and their reuse and recycling infrastructure and services. The drivers for funding come from the EU waste framework directive's target to recycle at least 50% of waste from households by 2020, and the EU landfill directive's target to divert biodegradable municipal waste from landfill at 35% of 1995 levels by 2020. Those are significant targets driving that initiative. In 2014, Northern Ireland had a waste-from-household recycling rate of 43·6% but the increase in that rate has since levelled off, so that is an important issue. The funding is to incentivise councils to introduce source-segregated kerbside food waste collections to comply with food waste regulations that will require councils to provide kerbside food waste collections from 1 April 2017.

Turning next to fisheries, the allocation there relates to the European Maritime and Fisheries Fund (EMFF). A total of €4·6 million national capital funding is required over the programme to match the €13·7 million European funding available. The £0·2 million there is currently the projected national spend in 2016-17.

Moving on, the final item of our programme's capital is for the Foyle, Carlingford and Irish Lights Commission (FCILC) and the Livestock and Meat Commission (LMC). That totals £0·3 million and mainly includes habitat reinstatement works, vehicle procurement and IT equipment for the FCILC and IT equipment for LMC.

The Chairperson (Ms Dillon): I want to let members ask questions now, because the next presentation was due to begin at 12.00 noon. I do not want it to be left that members do not have an opportunity to ask questions.

Ms Warde Hunter: Certainly, Chair. If you want me to pause at this point, I can cover the other things —

The Chairperson (Ms Dillon): If members need an explanation of any of the further stuff —

Ms Warde Hunter: OK. Do you want me to move very swiftly to a conclusion then? The slide at the back, on the Main Estimates, speaks for itself really. There will be accelerated passage. I am happy to —

Mr McMullan: It says that £0·3 million is being allocated for broadband. Where exactly is that money being spent, because it is not getting around the countryside. If you want to find out about it, you will lose half a day of your life trying to do so, and even then you will not find out. That £0·3 million is a small figure, and it is not getting into the rural areas across the spectrum. Rural areas are not getting broadband, and they are getting no information on it.

Ms Warde Hunter: I will take that away and come back to the Committee on it.

Mr McKee: On the FBIS, what projects will be included in the capital scheme that you mentioned?

Ms Warde Hunter: The capital scheme covers a wide range of areas. The first phase was all about trying to get farmers tooled up in equipment and in knowledge transfer. After that, there will be a tiered approach. Do you want to say a word or two about that, Graeme? There will be a tiered approach to the size of grant that people will be able to apply for to benefit their business. It is about maximising a broad spread by being able to go up to a certain level of capital and then to a larger amount.

Mr Wilkinson: There are two schemes under the FBIS. The first is a smaller capital scheme for up to £30,000. The larger grant scheme, tier 2, is more transformational and involves a much larger investment of between £30,000 and £250,000. That is the broad structure of the capital grant scheme.

Mr McKee: Will the larger grant cover not only machinery but infrastructure — sheds, tanks or whatever?

Mr Wilkinson: Yes, under tier 2, you will be looking at a much larger scheme that includes infrastructure like, as you say, larger sheds, tanks etc.

Mr McKee: When do you expect that to be rolled out?

Mr Wilkinson: At this stage, we are working through the business case. We are engaging with DFP and are seeking final approval for the FBIS. Once that has been approved, we can start launching it.

Mr McGlone: Following on from Mr McMullan's comments about broadband, it would be helpful if we could get the criteria for that. Many of us represent rural areas where accessibility to broadband still remains an issue, albeit there was significant investment previously by DETI. So, the criteria for that would be very helpful. Secondly, will you explain to me what CAP reform ICT is? I presume it is to do with the new rules and regulations on that.

Ms Warde Hunter: I will pass that one to Roger.

Mr Downey: As we get so much funding from Europe each year, we need to ensure that we are compliant with all the regulations. Money needs to be invested in the systems to make sure that we are compliant and then minimise disallowance. The more you spend up front as an investment, the less the disallowance will be when the EU comes in and looks at what we spent the money on.

Mr McGlone: I am not inviting a response to this. My conclusion could be that that investment could all be redundant on 24 June.

Mr Poots: Hear, hear.

Mr McGlone: I am not inviting comment.

Ms Warde Hunter: And we are not commenting.

Mr Ford: In rough terms, there is £20 million — over 40% of the budget — in the relocation and the two big IT schemes. Should there be any slippage in the major schemes, do you have anything else up the sleeve, such as what you might call "recurring capital", to ensure that we do not lose that money?

Ms Warde Hunter: I do not doubt that we have a large suite of —

Mr Ford: Shovel-ready projects?

Ms Warde Hunter: — thoughts.

Mr Wilkinson: That has been our approach over the last number of years. We have a good track record in financial performance, and part of our approach is to make sure that we have shovel-ready projects should we anticipate or expect any underspend or slippage on the larger schemes, as you have rightly pointed out. Yes, we will monitor those very closely and, if there is slippage, we will seek to start the projects that we have ready.

Mr Poots: How many grants have been awarded under the business improvement scheme so far?

Ms Warde Hunter: Sorry, I did not hear. Did you say, "How many grants"?

Mr Poots: Yes. You said that it is being rolled out.

Ms Warde Hunter: I do not know the answer to that. Does anybody else have that information? I am happy to come back.

Mr Wilkinson: Louise was making a point that a large number of farmers have started to engage in the business development groups. They are getting their thinking together before they roll out the capital grant scheme.

Mr Poots: Have applications been made yet?

Mr Wilkinson: To the business development groups?

Mr Poots: To the schemes.

Mr Wilkinson: Not to the capital scheme. There have not been any applications because we do not have the business case approval in place.

Mr Poots: You said that is being rolled out. It is more like steamrolled out, given the speed that it is going at. There was a fanfare about the £600-odd million, but we now need to start to see the evidence of it on the ground. It is imperative that a bit more focus is put on putting the money on the ground and making things happen. It will be hugely beneficial for the Northern Ireland economy when this happens because farmers will be making significant investment as well. For the construction industry and everybody else, this will be a huge boost.

You said that it would be to the advantage of AFBI, which I am sure will be very unusual for AFBI after five years of disadvantage. Can you explain how you can take money that you are awarding to an organisation that was previously funded through resource and fund it through capital? Obviously, that will not pay staff. It will not pay for people to do research in particular areas. I raised an issue last week about carbon capture and that course of research work. How do you actually do this? Capital is buildings, computers, vehicles and so forth; it is not human beings.

Mr Wilkinson: The European System of Accounts 2010 (ESA10) has meant a change to Treasury guidelines in how we categorise expenditure. As you say, staff salaries will be categorised as capital. It is a change in methodology in how the Treasury is recording expenditure on research and development. Perhaps it sees it as an asset as opposed to an expendable resource. I think that that change in approach is helpful to AFBI, and, as you know, capital is relatively easier to come across and is not subject to in-year cuts as resource is. We see it as a positive development.

The Chairperson (Ms Dillon): One point that we need to raise is that we do not have anything on the June monitoring round today.

Ms Warde Hunter: My apologies to the Committee for that, Chair, but we are not in a position to share any documentation with you on June monitoring now. As soon as the position becomes clearer, we will let you know.

Mr Swann: Chair, can I seek clarity? What do you mean you are not in a position to share it with us now?

Ms Warde Hunter: It is still under consideration in the Department.

Mr Swann: By the Minister or by officials?

Ms Warde Hunter: The officials and the Minister.

Mr McKee: How do you intend to finance the total landings obligation that the fishermen are faced with? As it states in the document, this poses the most significant challenge to the local fishing fleet. I imagine that the Department will provide some sort of financial support because there is no outlet for the total landings. What is the position? Fishermen find themselves in a very awkward position. It is a criminal position. They cannot be seen to be disposing of these on the dockside. Do you have any plans on that?

Ms Warde Hunter: I would have to revert — I am happy to do so — to the policy lead in that group and come back to you with an explanation or statement on their intention. I will have to consult the policy people before I can respond. Apologies.

Mr Robinson: I will be very brief. It is about the development of country parks. Can you elaborate on what that entails? Is that work to the existing country parks?

Ms Warde Hunter: Roger, is anything leaping out at us to assist on that one?

Mr Downey: Yes, it is for larger capital enhancement works where there has been subsidence and closure of some parks in recent years due to heavy rainfall. It is just to bring them back into a condition so that visitors can enjoy them like they used to before the subsidence.

Mr Robinson: Does that include the park in Limavady?

Mr Downey: Is that Roe Valley Country Park?

Mr Robinson: Yes.

Mr Downey: Yes, it was mentioned.

Mr Robinson: As part of that?

Mr Downey: Yes.

Mr Robinson: That will be welcomed.

The Chairperson (Ms Dillon): Thank you, Louise, and your team for the briefing.