Official Report: Minutes of Evidence

The Chairperson (Mr Givan): I welcome to the meeting Peter May, the permanent secretary in the Department of Justice; Deborah Brown, its director of justice delivery; and Louise Blair, from its financial services division's financial planning strategy and support team. You are all very welcome. I advise you that the meeting will be recorded by Hansard and that the transcript will be published on the Committee's web page in due course.

Peter, I will hand over to you to provide an update on the Department's budget and related financial issues, after which, I am sure, Committee members will have some questions.

Mr Peter May (Department of Justice): Thank you very much, Chair, and thank you for the opportunity to brief the Committee on the Department's finances. In particular, I want to address concerns that you and other members raised about information that was shared with you and some that you feel that you did not receive. At the start, I want to say that we very much value the role of the Committee. We have no intent to hide anything or to make the task of scrutiny more difficult. It has been a uniquely challenging period for finance, as with everything else. It is normal for us to be very clear and specific about the cost pressures that face the Department, and for you to expect nothing less, but I ask that you recognise that we cannot offer the same level of certainty as usual this year.

As the Minister of Justice has said, all departmental budgets are now very much in a state of flux, and it will take some time for the dust to settle. In her oral briefing on 30 April, she acknowledged that we would not bid for additional resource if we were unable to spend the money that has already been allocated. She also said that we do not expect much to be surrendered, as we already had a tight settlement prior to the crisis emerging.

In the context of concerns that have been raised by the Committee, it is worth noting that, since its return in February, we have engaged with the Committee regularly on finance and have made ourselves available whenever asked. We have responded to written questions both promptly and to the best of our ability, taking into account often challenging deadlines. To be clear and to reassure the Committee in particular on the areas of concern that have been expressed, I can say that the Department is not known for setting out burning platforms, and it will continue to consume its own pressures before asking for funding centrally, which we appreciate comes with an impact on other public services.

Let me go into a little more detail on a couple of areas. First, what we have called "Other significant pressures" in the briefing paper are pressures that are essentially areas of risk. They are not, at this point, financial pressures in the current year. On that basis, we did not put figures against them, as we knew that they were subject to change. Indeed, in 2019-2020, we had the same set of issues, and, ultimately, no costs crystallised in-year. It is fair to say that we have highlighted those issues to the Department of Finance as areas that are uncertain. If they were to crystallise, we would need assistance with them. If we were not to do that, we would not be engaging with the Department of Finance in the right manner and in a way that would allow it to manage the block Budget. We believe that the Department of Finance is content with the approach that we have taken.

If you were to press me on figures today, I would say that the range of risks for those other significant pressures for this financial year is currently in the region of £8 million, as we noted in our written submission to you. If you had pressed for an anticipated quantum in February, the estimate would have been substantially greater. It would have been over £100 million, at around £102 million. The key point to make, however, is that the number is somewhere between zero and the cost quoted.

I should perhaps say something about why there is uncertainty. There are two main reasons. In part, there is uncertainty because of the nature of the issues. Some are subject to legal proceedings, such as holiday pay. Some are subject to the passage of legislation, such as dealing with the past. Some relate to significant cost estimates, such as the potential impact of a change to the statutory discount rate. We do not yet know to what the rate will change. The other reason is that, in some cases, we do not know whether and when the pressure will manifest itself. In other words, we do not know at what point we will face the challenge. I hope that our written briefing has provided you with further details on the issues. We will be happy to respond to any questions that you have.

If I may, I will turn to the costs in the 'New Decade, New Approach' document. Those costs were discussed at the oral session on 6 February, and further detail was provided in correspondence on 18 February. The main areas that relate to the Department of Justice are as follows: the increase to 7,500 PSNI officers, which was noted to have an annual cost of around £40 million for 600 additional officers, once all officers are recruited and fully embedded in service delivery; the Historical Investigations Unit (HIU), where costs are dependent on legislation; and the tacking paramilitarism programme, with its estimated annual cost of £10 million, although we noted that £18 million was capable of being drawn down this year from the initial £50 million agreed.

It was noted that work on committal reform and the Gillen serious sexual offences review implementation was at a very early stage and that significant costs were not anticipated in this year. In addition, the costs of implementing findings from Criminal Justice Inspection Northern Ireland reports should be prioritised within the respective organisations' operational business or form part of the Gillen costings. We have therefore not included separate costings in those areas.

I can provide the following updates for 2020-21. We anticipate drawing down £11·6 million of the money available for tackling paramilitarism, of which £6·5 million is for DOJ-related projects. We are also allocating £1·2 million to Gillen implementation. Although at block level there was insufficient funding for the costs of New Decade, New Approach, we have sought to prioritise Gillen from the departmental budget, as it is one of the Minister's priorities.

We are also engaging with the PSNI on the development of its strategic outline business cases for an increase in the number of police officers, for IT and for estates. Additional funding was not provided in the Budget to finance additional officers, although you will recall that last year there was an increase of 300 officers as a result of additional Brexit funding, bringing PSNI officer numbers up to 6,900. We do not anticipate significant other costs from New Decade, New Approach in 2020-21.

I will turn now to the impact of COVID-19. This has been an challenging time for everyone, and, across the public sector, we have seen an unprecedented need to respond. That has created financial pressures across the Executive, and some of the costs have fallen to Justice.

Following an early indication of COVID-19 costs, DOF asked for bids by 1 April, but it asked for those bids for additional funding needed for COVID-19 only some 24 hours before that date. As you noted in your correspondence, the Department placed a bid for £38·8 million at that time, based, in most cases, on three months of potential interventions. The bid was turned around quickly to meet the urgent DOF request, but that did not allow time for the usual level of scrutiny that officials seek to provide to ensure that the Department is not overstating requirements. Although we reported pressures, we could not know at the time the impact that COVID-19 would have on any easements that might come forward from our normal spend.

As I noted earlier, the Department has a consistent record of seeking to manage its own issues. Ahead of this meeting, we provided you with an update of the costs. That shows that we have done what we always seek to do, which is to try to manage our own finances before we ask for more.

In the 10 April submission, which provided the standardised template for the forthcoming Budget for 2020-21, we highlighted the fact that we had provided COVID-19 costs to DOF and had received £1·9 million for the Northern Ireland Prison Service and £4 million for the PSNI.

Although, in hindsight, the table should have been shared with the Committee, it is also fair to say that it would have come with a range of caveats to explain, as we did in our correspondence to you on 24 April, that it was too early to understand the impact of the COVID-19 crisis on the normal activities of the Department, and therefore what pressures might not be manageable for it. The priority at the time was, quite rightly, to focus on the urgent response needed across the justice system to the crisis. In other words, the priority was not to delay purchasing personal protective equipment (PPE) or changing work patterns, because budget cover was not assured.

At this point, having had the benefit of time to take stock of where we are at, given the interventions that are now likely to be needed for a longer period, I can say that our gross costs have increased from £38·8 million to £56 million, of which £52 million is in resource. There is now further clarity, however, on areas in which things have slowed down, and that clarity has highlighted funding to offset the pressures. The main areas in which we have seen a slowing of business have been in the payment of legal aid and in the payment of compensation claims. If we take into account projected easements and the £12·4 million of funding now allocated to the Department by the Executive, that leaves the Department with a net pressure of around £19 million to manage, and we are engaging with our Minister on what steps we might consider taking. The papers before you identify a small easement from the June monitoring round, of around £1·8 million, that we will look to offset against the £19 million. It will be for Ministers in the Executive to consider in the first instance how to address those issues across the block.

You also raised concerns about a £0·9 million pressure relating to the Legal Services Agency (LSA) interim payment scheme. That was always a maximum figure. Again, it reflects a risk rather than certain costs, and I can say more about that during questions, if that is helpful.

The reduction in activity in courts, which I noted earlier, means that there will be less legal aid spend, meaning that that pressure will no longer need to be met centrally but will be managed from within our existing budget. Paul Andrews confirmed that at the Committee on 23 April. In addition, it is also fair to note that the take-up rate of the interim scheme has been much lower than we expected when we introduced it, and the risk has been reduced accordingly.

Your pack includes a summary of the June monitoring round position. That was completed before the impact of COVID-19 had been fully felt but highlighted £1·9 million of resource easements and £1 million of capital easements. Those will be used to offset the COVID-19 pressures. The Department of Finance has indicated that EU-exit pressures will be dealt with separately. I know that the Committee has written to us asking for the very detailed templates that we submit to the Department of Finance. The exercise closes tomorrow, and the forms will take some time to finalise, but we plan to share the detailed forms with you when they are completed. As ever, when you receive them, if you have queries, we will be happy to respond to them.

I will close by thanking you for the opportunity to brief the Committee today on the Department's finances and by reiterating my assurance to the Committee that we value its role and will engage with it in a full and frank way. As ever, I am happy to take any questions that you may have.

The Chairperson (Mr Givan): Peter, thank you for that. We will get into the specific financial aspects. To address your opening remarks, which you touched on at different points throughout your contribution, I welcome the commitment that you have made that you have no desire to hide anything from the Committee. That should go without having to be said, and it is unfortunate that it has had to be said. It never should have been the case.

You mentioned later in your contribution the templates that were provided to the Department of Finance, and I think that I am quoting you saying that it was "fair to say" that the information should have been shared with the Committee when it was not. I want to get your view on why we got information, some of it about the £38·8 million, not from your Department, for which you are the accounting officer, but from the Committee for Finance. The Minister is not responsible for how taxpayers' money is spent: you are. Why did we have to get that information from the Committee for Finance via the Department of Finance, despite our having asked for it from your Department?

Mr May: It was an oversight. You have to remember the context, and I have tried to explain the context. We were responding to multiple urgent requests about finance. There was a huge number of other things going on at the time, as you may remember. All parts of government were desperately running to stand still. We set out to use the money that we received from the Department of Finance. There was no attempt to hide anything. Not sharing the information at the time was just a simple oversight.

The Chairperson (Mr Givan): An oversight that no other Department seemed to make.

Mr May: I cannot speak for other Departments, and I am not seeking to. I am recognising that we should have shared that template, but I will go back and set this in its context. Those were very early emerging pressures. They were not a considered position. Over time, we have been able to mature our view, but there remain very significant uncertainties about our budget this year, and that is unique in my experience in public service. I have given you the assurance, Chair, that there was no deliberate attempt to hide anything from the Committee. That is absolutely the case. There was an oversight, but I also think that, in overall terms, an awful lot of other things were going on, and a fair-minded person would recognise that.

The Chairperson (Mr Givan): You have acknowledged that it was an oversight. Did you advise the Minister to write her letter?

Mr May: I am sorry?

The Chairperson (Mr Givan): Did you advise the Minister to write the letter that she penned to the Committee?

Mr May: It is never practice for officials to talk about the advice that they offer to Ministers, and I am not proposing to go down that path today.

The Chairperson (Mr Givan): You did advise the Minister or you did not?

Mr May: As I said, it is not practice for officials to disclose the advice that they give to Ministers.

The Chairperson (Mr Givan): The letter clearly does not indicate that there was anything wrong with the Department's approach. In fact, it is categorical. Now you are saying that there were errors and failures by the Department in what was provided to the Committee. It contradicts what the Minister put in her letter.

Mr May: I have set out the position in terms of a simple oversight. I think that too much can be made of something like that.

The Chairperson (Mr Givan): I know that my permanent secretary would never have advised me to write the kind of letter that was written.

Mr May: That is a matter that I cannot possibly comment on.

The Chairperson (Mr Givan): To draw a line under that issue, in respect of the letter that was sent to the Minister two weeks ago, are we to take your response as the response from the Minister?

Mr May: Sorry, I am not sure I understand the point you are driving at, Chair.

The Chairperson (Mr Givan): The Minister has not responded; the Committee responded to the Minister.

Mr May: I understand that the Minister did write to you to set out the position and offer officials to come today to clarify the issues. I think she then went on to say, that, insofar as there remained further issues to be explored, she would be happy to engage with the Committee, if that was necessary. I do not have a copy of the letter in front of me. Perhaps the Clerk can clarify whether a letter was received.

The Chairperson (Mr Givan): OK. I will get the letter and I will come back to you.

From the information that we have, there is a net pressure of £19 million for the remainder of the financial year. Is that the correct figure that I have picked out from your contribution?

Mr May: Yes. As I said, we identified £1·8 million of easements from June monitoring, which we can net off against those COVID pressures, so the current situation is about £17 million. I want to stress that there are a lot of moving parts, so it is an estimate at this stage.

The Chairperson (Mr Givan): There are a range of areas that members may want to pick up on. However, in the engagement with the Minister, something is going to have to give as to how you are going to manage that net pressure. We would like to know what areas are being considered that will no longer be taken forward.

Mr May: The exercise that we are completing with the Department of Finance involves setting out what the pressures are for all Departments so that an Executive-wide view can be taken as to the nature of those pressures. We need to continue to bear down on our costs in all areas. We have some further PPE pressures, and there is a central fund for PPE held by the Executive. We hope that that might be something that is possible and might find favour. It is an estimate at the moment of around £5 million. We will explore with the Minister, and the Minister with the Executive, what possibilities there are beyond that.

The Chairperson (Mr Givan): OK. I am going to bring in other members to get around some of these issues. Linda?

Ms Dillon: Chair, to be fair, you have asked the question around how we are going to find the money for the pressures. I had noticed that the £5 million leaves, obviously, a gap of £12 million. Am I to understand that, when all this information has been given to the Department of Finance, it will look right across the board at all the Departments, and the Executive can then look at where the Department of Finance can help you? At the minute, you do not know what you will have to find within your Department; is that right?

Mr May: That is fair. The other thing to draw out is that this may not be cuts in all cases; it may well be that there are further savings that emerge. People have to make assumptions, particularly about demand-led spends. Let us take legal aid as a classic example. There is a large amount of money each year for legal aid. We made a projection and have already found an easement, but it is really hard to be sure how quickly court business will return to previous levels. With the benefit of another month or two, we will have a better sense, and we will continue to look at that. Those are the sorts of areas where there is some scope.

You will recall from previous briefings that 68% of our budget is spent on staff resourcing. Those funds are continuing, and we are continuing, for example, to pay for some services that we may not be receiving directly. We are, for example, continuing to meet the terms of payments to the third sector for contracts that we have. Some of them might be, for example, provided in a prison context. However, because prisons are not allowing people from outside to visit, they are not able to deliver those services. If we ceased paying them, there would be a risk that those providers would not be there when we need them in the future. In line with the approach taken across government, we have sought to continue to make those payments. I am just trying to give you some sense of what does and does not move in our budget.

Ms Dillon: I have two small queries about that response. First, you highlighted the issue of legal aid in your paper, so you are aware of that. Obviously, more people are on benefits — we know that already — and, realistically, many more will probably be on them in future, given the potential redundancies, so the legal aid bill could go up again very quickly, and we could have an additional pressure rather than an easement. The Chair had the conversation with you about the fact that we need the information. We need to get that kind of information as quickly as possible after you become aware of it, so that we know when to question how this will be managed, rather than waiting until we have to get it. That is to help us all. That is to help the Committee and the Department, because, going forward, we want to help with all this stuff.

Is the third-sector stuff around training and education for prisoners or prison officers? What are we talking about? I just want an example; I am not asking you to detail everything.

Mr May: A wide range of third-sector organisations operate in our Prison Service. Most of them are in prisoner-facing roles, working to provide support to prisoners, be that in preparation for their release or whatever. We can provide some further information, if that is useful to you.

On your first point, we are very happy to share information with you, and also to share the assumptions that we have made that justify that information. I think that what I am asking is that the Committee gives us some leeway to recognise that some of the assumptions that we make may not turn out to be right, because the nature of the world that we are in is such that things are not as predictable as they would normally be.

Ms Dillon: Lastly in relation to the third sector, obviously people are not going into the prisons. That has worked very effectively in keeping prisoners and staff, for the most part, safe and COVID-free, and we are glad to see that. Going forward, if they cannot come into the prison but are being paid to do so, we need to ensure that there is some work going on and that they are doing what they can, rather than just saying, "It's not happening. We can't do it". We have to look at the ways in which some of those services can continue to be delivered. It is important that we push to ensure that as much of that work can be done, be it virtually or in whatever way it can be managed. I know that, for some of it, that will just not be possible. I accept that, but it is important that a close eye be kept on that. When we are so busy looking at the big picture, it is very easy to forget about the small stuff that is really important.

Mr May: That is absolutely right. We need to march in tune with the Executive's pathway to recovery and what they indicate is permitted at any given point. Within that context, we absolutely look to maximise what can be done. While it does not directly involve the third sector, you will know, for example, that the introduction of virtual visits is one of the ways in which the Prison Service has looked to adapt its normal working practices in order to recognise that. You are absolutely right that we should look to get the best value that we possibly can from all the money that we are spending.

Mr Beattie: Peter, thank you for your presentation. When you provide something like this, it always allows people to get into the weeds of the budget. I do not want to get too much into the weeds, but there are certain things that I would like to know. I am always interested in the bill for legal aid and legal services. I have raised this with you before, because I am concerned about that fraud and error piece that is always there. Can you give us a broad-brush sense of the overspend in the non-ring-fenced departmental expenditure limit (DEL) for legal aid services at £600,000 and a sense of the underspend of the non-ring-fenced DEL?

Ms Deborah Brown (Department of Justice): I will pick that one up, if that is OK. Towards the end of the financial year, we became aware that we had some easements in the system. Obviously, what we do is look around to see whether anyone can spend some more money, and legal aid was one of those areas. Whilst it is shown as an overspend of £600,000, it is not actually an overspend. It can be managed within the Department's budget. It was done with the knowledge that it could be spent. As part of the accounts, we look for virement, and we know that we will get the virement because it is below the de min rule of £1 million. It was a conscious decision to get more legal aid out, and obviously that reduces the amount of legal aid that you pay out in the current financial year, so that was a good piece of financial management.

The other element is the one that is in our annually managed expenditure (AME). That is where something moved from DEL, which is the budget that you manage, into AME, so that is how that underspend happened. It is shown as an overspend, but it is actually an underspend. Therefore, it was an overspend in DEL, but actually it was not, because it was managed within the budget. It was deliberately done to mop up some of the easements that we had. The other one was a technical issue when something was moved from being treated as DEL into AME, so I hope that that provides you with a bit of clarity.

Mr Beattie: It does, actually, and what you are talking about is internal financial management.

Ms Brown: Absolutely.

Mr Beattie: That is saying, "Look, you had this budget, but we have got this bit extra. We are going to give it to you", so it will look like —. That makes perfect sense, so thank you for that.

I want to go on to the tackling of paramilitarism, and you are going to try to draw down the £6·5 million around that. When we did not have an Executive and an Assembly, strangely enough, we used to get quarterly briefings on where we were with the tackling paramilitary programmes, and we do not seem to be getting that. Where are we now on that?

Mr May: We are doing some work that is looking at the next three years. As you know, the programme ends in March 2021. The New Decade, New Approach agreement indicated support for a further programme, so work is going on which we hope to take to the Executive in the next couple of months. Inevitably, in the past, there was an all-party briefing, and that reflected the fact that there was no Executive. Now that there is an Executive, they are the normal first port of call to take, because it is not purely a Department of Justice enterprise. It has to be something with all the Departments working together. So, we plan to take the proposition around phase 2, which is being worked on by the team and is engaging officials in all Departments, to the Executive, and we will be happy to provide a briefing to the Committee thereafter.

Mr Beattie: I think that would be really useful, Peter and Chair. It would be really good to know where we are on that.

Two very quick ones, if I can, please. On COVID-19, it was £1·9 million to create the resting facility. I do not think that anybody is going to argue about the reason why we created the resting facility, and it was right and proper to do that, which is good. What is the predicted cost of that facility in the next two to three years, if we maintain it, or what do we intend to do with it? Has there been any prediction on what the costs are going to be in the years to come?

Mr May: There are not, at the moment, projected costs going forward. We obviously have to make a decision about what the future for the resting place is, and that is something that we are beginning to turn our minds to. It was a huge effort to get it set up. Thankfully, it has not been needed yet, and we hope that it will continue not to be needed, but we will be considering the options there. Again, we will be happy to explain to the Committee where we have got to in due course.

Mr Beattie: Is that likely to happen soon, Peter? Is that decision going to be made soon, or what is the timeline for that decision?

Mr May: It is likely to be made by September. I think that our arrangement for the lease of the land from the Ministry of Defence runs out in September, so we will need to clarify our position by then.

Mr Beattie: The last one is just on New Decade, New Approach. We talked about the increase in the number of PSNI officers, but no moneys were allocated for the increase in PSNI numbers up to 7,500. Are any internal moneys going to be put aside to allow the Police Service to move with that, or are we stuck because there is no money for it to happen?

Mr May: The PSNI receives a budget, and the Chief Constable is the sub-accounting officer for that budget. Obviously, he gets to make some decisions as to how he spends that money. What we are doing is working on the longer term: the business case for the increase in officers; the proposals around IT, which is another key part of the transformation; and the third area, to do with estates. That will provide the long-term vision as to where the PSNI wants to go. It will then be endorsed by the Department and, ultimately, by the Department of Finance. I recognise that the Policing Board has a critical role to play in all that, and certainly no one would suggest that the Department gets in the way of the board's important scrutiny function.

The answer to your question is that, at this stage, we have not provided extra money for the purposes of additional police officers.

Given the pressures that we are facing, it does not look likely that we will be able to provide additional money. The Chief Constable will consider, within his own budget, how he manages things. One issue needs to be taken into account: if you employ officers, the cost in year 1 is less than in subsequent years, and you need to be confident that you will have the money in future years to make that commitment in year 1.

Mr Beattie: Peter, are you confident that we will be able to increase numbers, as outlined in New Decade, New Approach, or do you think that it is too big an ask and that the resource is not there? You do not have to answer that question, but I am trying to get your thought process.

Mr May: It is very hard to have confidence in a future budget that we have not seen, given what has happened to public finances in all nations in recent weeks and months. I cannot give you an answer at the moment. In my view, because of the sheer scale of it, getting to 7,500 by the end of this mandate is unlikely. Even if the PSNI had the money, there are limiting factors to how many officers it could recruit. We should be realistic about the speed of progress, even if there is an aspiration to increase the size of the PSNI.

Mr Beattie: OK. Thank you, Peter.

Miss Woods: This is the first time that I have ever dealt with budgeting. I am a relatively new member. It is the first time that I have had to look at a June monitoring round. I have two pages of questions, but I will not go over them all today.

Doug touched on a number of things. I will start with the Kinnegar base. The Minister stated to the Committee that she is minded to keep that facility, and I wrote to her about it. I am sure that you are aware that the base is up for sale in 2022. I have been directed to the Ministry of Defence and an MP who is involved in procurement. Given that there have been discussions about the possible retention of the Kinnegar base, does that have any effect on the potential sale? Have there been any conversations with the Ministry of Defence about that?

Mr May: We have not reached the point of opening any formal conversations at a senior level with the Ministry of Defence about those issues. As I said, we are still looking at the available options. We could choose to go forward in a range of ways.

Miss Woods: As an ex-councillor on Ards and North Down Borough Council, I am minded that, when I was there, a motion was passed about the council potentially acquiring the site. A number of players would be involved in that. If that has been discussed, I would welcome some information. The council would definitely need to be involved, given the existing relationship.

Is the £1·9 million for the resting place already committed, or are more costs coming down the line? Following on from Doug's point, is that for the lease or is it for security, extra staffing costs and that kind of thing?

Mr May: I will turn to my colleague to my right for the detailed figures, but there are costs in resource and in capital.

Ms Brown: Yes, there are costs in resource and in capital. The resource costs associated with it were £1·6 million. Some of that was to give money to councils to compensate them for the things that they would have to do. The briefing paper highlights that about £750,000 of that will be given back. The £1·6 million was for those specific purposes.

There is about £4 million of capital. In the COVID briefing paper, the capital table shows that easements are coming out of other areas such as courts as a result of COVID. That leaves us with a residual capital pressure of about £1·6 million. Given the size of our capital budget and the current situation, we do not think that there is a need to bid for that yet. We are looking in detail at what is happening with the other capital projects across the board. We do not anticipate giving back any capital in June monitoring at this stage, because we are still investigating the impact of COVID on the delivery of many of those large capital projects. We have been engaging with our partners who have such projects, and we are advised that they can bring forward smaller projects in other areas. Their capital profile is back-ended, so they had not anticipated as few costs in the first few months of the year.

Miss Woods: OK. Thank you. Has the EU scoping exercise on Brexit costs started? I know that that was discussed at the Committee a number of months ago. Are there terms of reference? When will that be reported on? Is there a date by which the Department has to report to, say, the Minister and the Executive on that? Has that been decided?

Mr May: On Brexit, we received £10 million last year, the vast majority of which went towards the 300 extra police officers that we discussed earlier. We know that there is definitely a need for an additional £5 million this year, and that is very much to meet the cost related to the point that I tried to make to Doug earlier: you start employing people at each stage during the 12 months of the year, but, the next year, you have to pay them for the whole 12 months. That is why it is an extra £5 million.

We do not yet have any additional certainty or clarity on whether there will be additional costs as a result of the protocol and the transition. Work is ongoing. The UK Government recently issued a paper on those issues, and we are working through what that might mean. It is probably fair to say that, at the moment, we have not identified any additional costs that flow from that, but we are keeping it under close review as we understand how those policies will be operationalised.

Miss Woods: OK. I want to tease that out further. Is there an expectation that a report will be drawn up by a certain point during the remainder of this year. The transition period is due to end on 31 December. Is there a plan from the Department to submit a report on expected costs by a certain stage, or is it a case of identifying them as and when?

Mr May: We will not issue a report, but we have already clarified the need for the £5 million as a carry-forward from last year. We will keep under review any additional costs that might flow from that, but we have not yet identified any. There will not be a formal report on that.

Miss Woods: OK. No problem.

Yesterday, the Minister suggested that she would be willing for the Department of Justice to administer the victims' payment scheme. Has a costing estimate exercise been done on that possible proposal?

Mr May: I can clarify that the Minister has been very clear that she does not believe that the Department of Justice is the best Department to run the scheme but that it would do so if asked by the First Minister and the deputy First Minister. It is her view — I am not misquoting her — that the Department for Communities is the more natural home for that scheme because it is used to making pensions payments.

We are all very interested in the likely cost. I will turn again to Deborah in a moment, but I do not believe that we have sufficient clarity yet. A range of decisions needs to be taken about the nature of the scheme and so on. It may be that, even when the scheme is being set up, it will be difficult to have any clarity on what the total cost will be because of the nature of its judicial-based decision-making. I suspect that we may have a range rather than total and individual costs. Is there anything that you would like to add to that, Deborah?

Ms Brown: I will just add that TEO has been doing a lot of work on that and that our compensation service has been assisting it with some modelling etc. As Peter said, there is great uncertainty about the costings. Some three-year costs have been in the media, but that is all subject to further scrutiny and what is in the legislation etc.

Miss Woods: Thank you. I appreciate that the question of where it will land is very difficult.

My last question is on the money for tackling paramilitarism. I second the call for a more regular update on that. I appreciate that it may go to the Executive, but, as an MLA from a non-Executive party who is keenly interested in that part of the Justice Department, I would appreciate an update on where we are with that. Can you confirm that £6 million of a possible £18 million to £19 million will be drawn down this year?

Mr May: I think that £11 million or maybe £11·5 million is being drawn down overall.

Ms Brown: It is £11·6 million.

Mr May: Some £6·5 million of that will be spent by the Department of Justice.

Miss Woods: OK.

Mr May: Most of that will be spent by the PSNI's paramilitary crime task force or the small team that coordinates the work that the Department hosts. Those are the two main costs that flow from that £6·5 million.

Miss Woods: OK. That is fine. I was going to ask for a breakdown of that.

Mr May: In due course, we will be able to give you more information. As you are new to the area, if you would find it useful and if it is permitted, we can have a separate conversation with you about budgeting. I do not see any difficulty with that.

Miss Woods: Thank you very much.

The Chairperson (Mr Givan): A couple of other members — Linda and Doug — wanted to pick up on the issues that Rachel raised, and then I will pick up on it as well.

Ms Dillon: I have a very quick question on the stuff that Rachel raised about victims' pensions. Has the Minister indicated that she is prepared to take that on without an assurance on financial assistance?

Mr May: No. Not only was she saying that, in her view, that responsibility belongs with another Department but she was very clear that there would need to be an absolute guarantee that the Department would be funded for any costs of paying the pension and administering the scheme.

Mr Beattie: Just a quick one. Peter, you talked about the £6·5 million to tackle paramilitarism. A lot of that is going to the PSNI for the paramilitary crime task force —.

Mr May: It is not going just to the PSNI; I should say that the National Crime Agency and HMRC are also —.

Mr Beattie: That is the question that I was going to ask. Some of it is going to the National Crime Agency as well.

Mr May: Sorry, I used a short-hand description. Apologies.

Mr Beattie: I know you did; I was just confirming that. Thank you.

The Chairperson (Mr Givan): The Minister's current position, which you outlined, is that she has a willingness to take on the victims' pension subject to certain conditions. Has that always been the case?

Mr May: No. It is something that she wrote to the First Minister and deputy First Minister about in recent weeks.

The Chairperson (Mr Givan): Is that the first time that she has written to them about it?

Mr May: I do not know. I would need to go and review whether there has been any previous correspondence.

The Chairperson (Mr Givan): How long has the dialogue been going on between the Minister of Justice and TEO on the issue?

Mr May: It predates the Minister of Justice taking office. The scheme's shape and form and who might administer it were being discussed prior to the return of the Assembly and Executive.

Ms Brown: We have been engaging with TEO since October because it has been looking at the compensation service system to see if that is something that can be used, and it is also using some of the modelling that the service uses, so we have been engaged with it since that point.

The Chairperson (Mr Givan): So, the current position that the Minister outlined to TEO, which you articulated, is that she is willing to take it on subject to it all being financed.

Mr May: It would not be her preference.

The Chairperson (Mr Givan): It would not be her preference. Was there previous correspondence that did not have that kind of caveat, or have other positions been outlined that are contrary to the current one?

Mr May: As I said, I cannot recall; I would need to go back and review previous correspondence. Our starting point was that we did not think that the Department of Justice was the most appropriate place for this. There have been quite protracted conversations, but I cannot recall the extent to which there has been any ministerial correspondence on it.

The Chairperson (Mr Givan): It would be useful for the Committee to get sight of the correspondence and exchanges between the Department of Justice and TEO on this issue, because it has gone on for months. That is incredibly unseemly given the issue that we are talking about. It is important that we begin to get the backstory on how the issue is being managed in the Departments here. If information on that can be provided through the correspondence between your Department and TEO, it would be useful, and members may be interested to see some of it.

Mr May: OK. That is fine.

Mr Dunne: Thank you very much for your presentation this morning. The advance on legal services was done here some weeks ago.

Mr May: Yes.

Mr Dunne: I understand that the budget for it was exceeded. My understanding was that it was to come in within the limit of existing funding. Is it the case that it has exceeded what was planned?

Mr May: The short answer to that is no. We started an interim payment scheme, which is a way of paying people for work that they have already done. As part of —.

Mr Dunne: Also for work that was planned to be done?

Mr May: No. We are not paying in advance; we are paying an interim payment. In other words, a payment before the case is completed for work that has already been completed and that can be evidenced. All the payments that we are making are for work that has been done. The £0·9 million came about because we identified the risk that a solicitor or barrister might cease to trade before a case was completed, at which point a new solicitor or barrister would need to be brought onto the case and redo some of that work. We made a best estimate that, at one point in time, that might cost a total of £0·9 million.

That was, in my view, always a relatively generous estimate of what was likely.

In practice, the take-up of the scheme has been much lower than we expected. We have not being paying out in anything like the volume that we expected. That might be partly because solicitors who have furloughed their staff are not able to do any work and are therefore unable to make claims. I do not know. I am guessing, but that is one of the possible explanations. Given that we are paying out so much less, the risk is much less than £0·9 million now. In any case, because the legal aid payments overall have reduced, we would be able to find any small additional costs. Does that make sense?

Mr Dunne: Yes. Are you saying that it came in within budget or below budget?

Mr May: It will come in within budget.

Mr Dunne: It will.

Ms Brown: If you look at the table, you will see that, on the legal aid side, we are giving up easements of £15 million as a consequence of COVID. We have some small pressures, and we are reporting the costs of COVID. At the moment, there is about £500,000 for IT costs and other things that LSA has had to do. Within that, there is an element to do with the risk that we might have to pay for business again because some solicitors etc have folded. The estimate is sitting at around £330,000. I suggest that that figure will probably be lower. We are reassessing this as we become more familiar with it.

I will give you a flavour of the uptake of the interim payment scheme. We got only 1,642 requests, from 99 legal service suppliers. Therefore, we have paid out only about £492,000 at this stage, which is way lower than the £16 million that we had estimated over that three- to six-month period. In that short time, there has been limited uptake.

Mr Dunne: There is, or could be, still quite a long time to go.

Mr May: Yes. The number could yet grow, but our expectation has been that, if firms or barristers, as sole traders, were in financial distress, they would have made the requests early and quickly. It is possible that we will see an increase, but it is not certain.

Mr Dunne: Under the COVID-19 heading, you have £12·4 million for resource DEL as part of the June monitoring round. A total of £4·9 million is for PPE across the justice sector. Is that for the new financial year?

Ms Brown: That is for this financial year.

Mr May: That is in addition to what we have already received from the Executive for PPE.

Mr Dunne: So, that £4·9 million for PPE is just for the justice sector.

Ms Brown: Yes.

Mr May: That covers the police and prisons in particular. They are the main users.

Ms Brown: The police got £4 million of that. Prisons got about, I think, £500,000, and Forensic Science Northern Ireland got about, I think, £100,000, from my recollection.

Mr Dunne: There is £4 million for the PSNI to maintain critical services. Can you clarify whether that is for PPE as well?

Ms Brown: No, it is not.

Mr Dunne: What is that?

Ms Brown: That is for the consequences of COVID on its operations and to maintain its critical services over this period.

Mr Dunne: That money is not part of the costings dated back to the start of this in, say, February. I would say that the PSNI was probably planning for this in February.

Mr May: In February, we would not have been able to put any run of figures against COVID pressures. It featured in the first set of numbers in early April — the £38·8 million that we talked about — but, inevitably, as I said before, the numbers are being continually refined as we understand better what the real impact is.

Mr Dunne: We have a breakdown of £1·9 million for the Prison Service to maintain front-line services. Is that PPE again?

Mr May: No. The Department of Finance agreed to a proposal, which is the same as has happened in prisons in England and Wales, that prison officers would have additional allowances in recognition of the difficult environment that they are working in at the moment and the risk of being in contact with those with COVID-19.

Mr Dunne: Do prison officers get that at the moment?

Mr May: Yes.

Mr Dunne: When did that start being paid?

Mr May: I need to check the precise date. I think that it was in April. We have already secured some funding from the Executive from April to June. The additional resource that we put in will, because of the continued uncertainty, go beyond that.

Mr Dunne: I just want clarity on this because it is a very topical issue. Are prison officers getting an additional allowance for working during the COVID crisis?

Mr May: In different respects, yes. Some relates to overtime payments; some is for those who work in isolation units where they are in full PPE.

Mr Dunne: OK. So, the £4 million for the PSNI is not for PPE. Do we know the cost of PPE across the sector since the start of this crisis?

Ms Brown: I have it with me.

Mr May: It would probably be better if we made sure that we have all the figures and wrote to you. We have already secured some funding for PPE.

Ms Brown: Our estimate of PPE requirements across the Department and its arm's-length bodies, including the police, is about £10 million, of which we have received £4·9 million to date. That leaves, potentially, another £5 million for PPE requirements for the full financial year. However, we will have to keep reassessing that as the situation unfolds.

Mr Dunne: Is that for the current financial year?

Ms Brown: Yes.

Mr May: Yes.

Mr Dunne: Can you clarify the cost to date?

Ms Brown: I cannot tell you the cost to date. All I can tell you is that the cost projected for the year is around £10 million, of which we have received £4·9 million. The police have already spent £2·5 million on PPE, but they have to cover the coming months and further into the future. We have £5 million that is still not covered. We will need to assess the need for that as we go through this crisis. We will have to keep revisiting it. If we need to, we will bid for it.

Mr Dunne: OK, grand.

Mr Frew: Throughout this session, my connection has cut out on me for small periods. I apologise if I ask about something that has already been extensively covered.

Peter, let me thank you for your candour and for the information that you and your team have brought to the Committee. It is very good and contrasts greatly with the June monitoring information that the Department of Finance gave to the Finance Committee yesterday, which was zero.

Let me get the nasty stuff out of the way first. We do not mind the Minister being robust. However, a robust relationship works both ways. We can, and will be, very robust. If that is the movement forward, so be it. We will accept that and move on in that vein. The relationship that I have had with you and your team has been a very good one. Even throughout the lean periods over the last number of years, I have always respected you and valued your contact with me and all the other parties. You have treated us very fairly and kept us informed.

I take your point about oversights. In the fog of this crisis, there will be oversights and mistakes. That is natural. We have to get an understanding of it, learn from mistakes and make sure that they do not happen in the future. That is all good, proactive planning for the next time. I have no problems with that. I will not be critical of a Department that makes mistakes that can be accounted for and explained.

In the past, has there been a difference between the information that you supplied to the Committee and the information that you supplied to the Department of Finance through the budgetary systems?

The Chairperson (Mr Givan): Hopefully, you picked that up, Peter.

Mr May: Yes. I suspect that we provide the Committee with a summary of the material that goes to the Department of Finance.

Ms Brown: Absolutely. My experience of other Committees is that they receive a summary of what we have done and the key material elements. An awful lot of very detailed internal small moves happen through technical adjustments and money being moved to other Departments for certain things, and they all appear in those detailed templates. We did not give those to the Committee in the past. In my experience, I did not give that information to other Committees, because it is very detailed. We make sure that we give you the key issues around the key pressures, where the easements are and how we might reallocate to manage that or, as the case may be, to bid.

I do not know whether that helps.

Mr Frew: Yes. The reason is that it would be too technical or that there would be too much information. Do not get me wrong: I am not being critical; you could flood a Committee with information to the point that members might miss critical points, a tactic that some Departments might have deployed in the past. What I am getting at is this: in your submission to DOF, many of the early estimates in the table are to be confirmed — TBCs. Is that the raw material that was sent to the Department of Finance? I know that those are early estimates. Has the Department of Finance also received that chart showing those TBCs?

Ms Brown: Yes.

Mr May: I am confident that that is correct, Paul. We would not have provided figures to the Department of Finance and not to you.

Mr Frew: OK. That was my concern.

I can see how, at early estimates stage, you have to put on a chart something about which you are not sure. I understand that. That matures as we go along the budget process. You have been asked to do something different and separate from June monitoring. I cannot understand why June monitoring, or any monitoring round, is not a prioritisation plan anyway. You are being told to produce a reprioritisation plan alongside June monitoring. What difference in activity has that meant for the Department?

Mr May: To be fair, we had already identified the need to do an exercise like that and had started one before the instruction came from the Department of Finance. We knew that, this year, there were such high levels of uncertainty around our budget spend that we needed to be doing more than we normally do. We could not assume that the budget that had been allocated was the right budget, either plus or minus. It takes each budget holder to take a proper look at their anticipated spend. I am being open with the Committee in saying that we are still working on the basis of assumptions, some of which might turn out not to have been correct. However, that is the basis on which we looked at the work.

Mr Frew: OK. In that reprioritisation plan, as opposed to the June monitoring round, you have been given further parameters in which to work. Is that correct?

Mr May: The Department of Finance has asked Departments to identify the pressures that they face and what options will be available to best meet those pressures.

Ms Brown: Additional flexibility is being provided in this June monitoring round, which means that we can move money around very freely, whereas, in a normal monitoring round, there are restrictions, such as the de minimis rule of £1 million etc. We have presented to you the pressures and easements. We will have to match some of those easements and say where they will go to meet some of those pressures. I have to say that that is a very big challenge when we do not really know which of those pressures will materialise. We could risk matching an easement against a pressure that does not materialise, which would mean having money stuck in the wrong place and not being able to move it back. We would like to think that, come the October monitoring round, we might get the same flexibility again.

It should be recognised that this is a very complex and difficult thing to do at this stage, given the level of uncertainty about some of those pressures, the assumptions that we have made about those pressures and what may happen in the future. We are dealing with a complete unknown here. There is no precedent. There is no baseline to look at. It is very difficult, and, if we put budget in the wrong place, that could present problems in the future.

Mr Frew: You have pre-empted my next question. I think that, from here on in, there will need to be reprioritisation plans, if that is what they are to be called, at each monitoring stage. Maybe that additional flexibility is what is needed throughout the monitoring round system to allow Departments to have greater agility and flexibility. Do you agree with that?

Mr May: For this year, there is a case for it because of the levels of uncertainty. In other years, when times are more normal, it may well make more sense for the Executive to be able to look across all Departments as to where any easements should go.

Mr Frew: Paragraph 9 states that funding of £1·1 million has been recommended to take forward the Gillen review implementation. Will that £1·1 million be a bid from the centre or will it be moved around within the Department?

Mr May: This year, no funding was provided for New Decade, New Approach requirements, of which Gillen is one. We have reallocated and reapportioned money within the Department to meet that need because it is a key priority for the Minister.

Mr Frew: Where in the Department does that money come from?

Ms Brown: In our opening allocations, we had identified a need for Gillen and set aside £2·4 million. Now that more work has been done on scoping that, the requirement is just £1·2 million, so the remainder finds its way into the easement of £1·8 million that we are reporting as part of the June monitoring round.

Mr Frew: OK, I see that.

My final point is on the concerns that we had about the £38·8 million. The Chair and I voiced those concerns in the Chamber, and they have been ably picked up by the Chair of the Finance Committee. I understand the £1·9 million for the pressure and the risk, but I think that, in future, it would be good to see all the figures that have risk apportioned to them — whether it is a real or a forecasted risk. Then, the next time that you came to the Committee, a month later, for example, if you had been able to amend a figure, so be it, but that change would come with an explanation, if we felt that we needed one. That way, moving forward, we would have as much detail as we could take in, and, if we had any concerns as a Committee, we could raise them in a sensible manner with you and get a valid explanation.

This annoys me, and it has annoyed me since I came back: I am already sick to death of information not flowing to Committees, not just to the Justice Committee but to the Finance Committee, which I am also on. The Assembly has been back for only a couple of months, and I see no change whatsoever from the old ways. That cannot and must not persist — it just cannot.

You talked about other pressures for the £38·8 million. Surely, it would have been better to itemise that, to separate out the risks and to distinguish between real pressure and forecasted pressure before giving the information to the Committee. You have given that paper to the Department of Finance. You could then evolve it and evolve it and come back to us when it became much clearer.

Mr May: There are two sets of numbers here. The £38·8 million relates specifically to COVID pressures. I accept that there is a level of uncertainty, but the pressures were all ones that we thought would exist. The other set, which we did not provide information on, is other significant pressures. That was because there were really high levels of risk. I explained that, at one point a couple of months ago, it might have been over £100 million. We are now at £8 million. That is a big set of moving numbers.

I do not have a problem providing an overall figure, but I ask the Committee to reflect on whether it is sensible for us to provide numbers that relate to, for example, court cases. Normally, you do not publicly divulge in advance what your exposure might be if a court case were to go against you. The reality is, as I said, that the court case is being contested anyway, so the exposure is somewhere between nought and a large number. However, the court, if it were to find against the Department, could decide on all sorts of bases how to reach its decision on an allocation. The Department has no control over that. It is, ultimately, a court process. Therefore, I ask that the Committee reflect on whether that is a sensible way in which to proceed, recognising that we would not provide individual numbers for those sorts of things.

Mr Frew: Yes. I would not expect you to, because it is not in your hands, but surely you are able to provide that explanation on paper.

Mr May: Yes.

Mr Frew: You do not even have to put in a sum, or include a white band —

Mr May: I am happy to do that.

Mr Frew: — but you can tell us. The information has to go to the Department of Finance at some point, and you will have factored in some figure in your financial planning. You could leave the figure out, but tell us the reason that you are leaving it out.

Mr May: OK. That is fine. We do not factor any of those other significant pressures into our budget, the point being that they are usually of such a scale that, if we were to do that, we would stop doing all sorts of other important things, and we might then look very stupid late in the year, when it turned out that the pressure had not crystallised and that we had a big lump of money that we could have spent really sensibly but did not.

Ms Brown: We always make it clear —.

Mr Frew: I get that, but you need to differentiate between the information going to the Department of Finance and that going to the Committee for Justice, which is the scrutiny Committee. That is the issue.

If we can find it somewhere else, that poses the question, "What is this, then? What is this money?". It comes back to you ultimately, Peter. We will therefore need something. I put a lot of store by the new templated version that the Research and Information Service (RaISe) team has pushed out. It gives us consistency right across the piece, and that is probably the reason that we found this. That is a good thing. We might need, however, to have a simpler version between the Department of Justice and the Justice Committee so that we can have explanations, even when it is sensitive information. If the Committee has to meet in closed session or whatever, so be it, but we need something by way of explanation, because if we find money somewhere else, coming from the Department, we will want to know what it is and what it is about.

Mr May: This is about building a way of working between the Department and the Committee, and we need to work through that. The very detailed templates that have been requested risk there being so much detail that it is quite hard to identify the specific issues. We ought to try to aim to get to a place where you have confidence that we will be sharing with you all the issues that are material, including some of the assumptions or risks that go with doing that, rather than providing huge amounts of information, tables and so on, which are very hard to understand and make sense of. Look, that is a process that we will work through in the coming months with you, and we will try to get to that place.

Mr Frew: OK. Thank you, Chair.

The Chairperson (Mr Givan): Thank you, Paul. Sinéad have you anything to ask? I am not sure. Sinéad is not there. OK. That is fine.

There are quite a lot of other questions, Peter, but —.

Ms S Bradley: Hello?

The Chairperson (Mr Givan): Sorry, Sinéad.

Ms S Bradley: Chair, can you hear me?

The Chairperson (Mr Givan): I can hear you, OK, Sinéad. You are struggling.

Ms S Bradley: I have just a few points to raise, so I will try to make them quickly. First, Deborah, you mentioned interim payments. I am curious to know about them. I could not really hear, so apologies. Do the interim payments include exceptionality for large cases involving legal aid, or is that a separate thing? If so, I would like an update on that.

Secondly, you spoke about trying to find easements in the departmental budget to match easements that have been made. It would be helpful to walk that path and to get an idea of where in the budget you are looking to find those easements.

Thirdly, you referred to the third sector, which offers services to the Prison Service etc. I presume that that is done on a contractual basis. What work, if any, has been done to give assurance to those third-sector organisations that the contracts can be honoured and reviewed and are fit for purpose in the new world in which we find ourselves so that they can plan and work with you?

Fourthly, and this is a point rather than a question, you mentioned, Deborah, that some small capital projects may go ahead. I am keen to get an assurance that, in the event of any of them relating to estates or build projects, they will be reviewed and be fit for purpose for this new world and that our spaces will be built with pandemics in mind.

Thank you, Chair.

Mr May: Thank you very much. I will try to respond to those four questions, perhaps in reverse order. We will absolutely be looking very closely at our capital budget this year. There are two factors. First, the pandemic may result in some slippage in how quickly contractors can get back on the ground. Secondly, there may be some additional costs when they are on the ground, because of changes in the way in which they need to work, in order to meet social-distancing rules and so on. We will need to keep that under close review.

You asked a question about contracts with the third sector. We have sought to provide some certainty to the organisations that we engage with and receive services from. Our plan is to continue to receive services from them in future. Of course, there will be detailed conversations with each of them about how that can be done safely, taking account of whatever the guidance is at the time.

You also asked a question about easements. Initially, we have been looking at those areas in which business is likely to be lower as a result of the pandemic. As Deborah explained, legal aid and compensation are the two main areas that we have identified so far, but we are continuing to look at whether there are any other easements elsewhere.

Finally, you asked whether interim payments cover exceptionality cases. There is nothing that would prevent those who are working on those cases from bidding for interim payments, where they meet the criteria. To be clear, where we previously had separate lines for exceptionality for very large cases, that is something that we continue to manage separately from the interim payments scheme. That is the distinction. There is a major case running relating to a customs and excise fraud, in which, I think, there are 36 defendants, and, because of the legal representation, the costs for that case could be very significant. We do not yet know when those costs will need to be paid out, but we are keeping a very close eye on the case, which is not specifically covered in the interim payments scheme.

The Chairperson (Mr Givan): OK, Sinéad?

OK. [Laughter.]

There are other questions that we wanted to cover on some more of the specific detail, Peter, but the Committee will be happy to follow those up in writing. I had looked for the Minister's response in the correspondence section of the report, but it was not there. It was in another part of the report. We will deal with that, but I do not want to do that with you, because, ultimately, the Minister sent the letter, rather than you. Her response is here, and I suspect that you provided advice for the second letter, but I will not ask you to comment on what is in it.

Mr May: My response is the same as it was the first time you asked, Chair.

The Chairperson (Mr Givan): Peter, thank you.

Mr May: Thank you very much.

The Chairperson (Mr Givan): Deborah, you are staying for the next session.