Official Report: Minutes of Evidence
Committee for Infrastructure, meeting on Wednesday, 13 January 2021
Members present for all or part of the proceedings:Miss Michelle McIlveen (Chairperson)
Mr David Hilditch (Deputy Chairperson)
Ms Martina Anderson
Mr Roy Beggs
Mr Cathal Boylan
Mr Keith Buchanan
Mrs Dolores Kelly
Ms Liz Kimmins
Mr Andrew Muir
Witnesses:Ms Susan Anderson, Department for Infrastructure
Mr Terry Deehan, Department for Infrastructure
Ms Linda MacHugh, Department for Infrastructure
January 2021 Monitoring Round: Department for Infrastructure
The Chairperson (Miss McIlveen): I welcome to the Committee Linda MacHugh, who is the acting deputy secretary for the resources, governance and EU group, and Susan Anderson, who is the director of finance. We were hoping to have Terry Deehan, head of financial planning and management, via StarLeaf. I see that something is popping up here.
Ms Linda MacHugh (Department for Infrastructure): I know that he has had connection problems. There he is.
Mr Terry Deehan (Department for Infrastructure): Thank you.
Ms MacHugh: Thank you, Chair, for the opportunity to brief the Committee. I welcome the chance to update members on the Department's in-year budget position and the draft budget submission for next year. I begin by apologising for having to reschedule our planned attendance at your last December meeting. As you know, the return date for January monitoring was 4 January. It was necessary to reserve decisions until as close as possible to that date to include the potential impact of weather conditions on resurfacing and repair work on the ground and the likely extent of winter gritting or snow treatment that might be required. Each of those determines whether bids or reduced requirements are needed in the monitoring round. In addition, the fast-moving developments in the COVID outbreak and further restrictions meant that significant changes to budget returns were required right up until the last minute.
As you said, I am joined by Susan Anderson. I think that this is her first appearance at the Committee. She is our new finance director. Terry is joining us on Zoom.
In our last briefing to the Committee, which was on October 7, I set out the Department's submission on October monitoring. Following a very disappointing June monitoring outcome, where the Department was unsuccessful in all it bids, in October, we submitted bids for £4·6 million in resource and £9·1 million in capital. Resource bids covered roads maintenance, including winter maintenance and a forecast pay accrual to provide for the liability for the cost of staff leaving as staff leave not taken in 2021, which must be accounted for. In capital, we bid for £9·1 million to cover the Belfast transport hub, structural maintenance, street lighting and the development of the new regional planning system. Only our capital bids were partially successful. We got £1·6 million for the transport hub, and £2 million was allocated to partially address the £6·5 million bid for structural maintenance and street lighting.
Turning to January monitoring, we identified two capital reduced requirements: £1 million in reduced capacity to deliver work on the ground whilst maintaining safe working conditions due to the COVID outbreak and the spending profile of the planning portal project, which has been revised, resulting in a small reduced requirement of £0·6 million. In addition, some capital easements were identified that were ring-fenced and, therefore, had to be submitted to the Department of Finance. One was £1·5 million for the A5 scheme. It has been assessed that no construction will proceed in this financial year. As that funding was ring-fenced, it must be returned to the Department of Finance. There was also £1·5 million of technical reduced requirements. Those were mainly additional receipts, which, again, must be passed on to the Department of Finance.
No resource easements were identified. However, one resource bid has been submitted. In October monitoring, a bid of £1·6 million was submitted for increased holiday carry-forward, as I outlined. At that time, that was calculated on the basis of each member of departmental staff carrying forward the full allowance of nine days plus five days accrued for February and March 2021. Following a further review, that has been revised to £1·9 million to account for staff who are on long-term sick absence and maternity absence and will carry forward more than nine days. An additional £0·7 million has been added for Driver and Vehicle Agency (DVA) staff. That brings the total bid to £2·6 million.
We have also taken the opportunity to make the Department of Finance aware of additional COVID pressures that have arisen in the interim. Further pressures of £1·9 million from lost parking income in Roads and a small amount of PPE costs in DVA have been registered. More importantly, we have highlighted to the Department of Finance that DVA utilised £10 million of its reserves to supplement lost income due to the COVID crisis and that, unless that is reinstated, future capital investment may be hampered. We have bid to replace the £10 million that has been spent out of reserves, and we await the outcome of January monitoring.
While the Executive have not yet taken decisions on a draft 2021-22 Budget, our understanding based on the Northern Ireland settlement announced by the Chancellor is that the Budget position will be very challenging in the next financial year. As part of the information-gathering exercise, updated resource bids of £103 million, including for EU pressures and COVID, were submitted, as detailed in the written briefing that we provided to the Committee. Those bids are essential to ensure the continuation of many basic public services, including the adequate provision of water and waste water services and public transport.
Some £562 million for capital, compared with a total capital allocation of £558 million in 2020-21, is required simply to meet DFI's existing commitments without any further allocations outside those priorities. Those commitments relate to flagship projects, New Decade, New Approach (NDNA) commitments and other inescapable projects and to areas of business that are contractually pre-committed. Details of the capital bids by category have been provided in the written briefing. Depending on the outcome for DFI, it is anticipated that a balance will need to be struck between maintaining existing infrastructure in water and sewerage, public transport, the roads network and flood alleviation on the one hand and investing in new development, particularly in pursuit of the draft Programme for Government outcomes.
In closing, it is important to reiterate that the Minister is keen to get the Committee's views on and support for shaping and delivering improvements to people's everyday life. She welcomes your constructive challenge and input. I hope that the discussion today will help the Committee to understand better the challenges that the Minister faces and the difficult financial decisions that will likely have to be taken in the coming months and that will potentially be compounded by whatever further impact the COVID pandemic has on public expenditure in the next financial year.
At that point, I will finish. Susan, Terry and I are happy to take any questions that you may have.
The Chairperson (Miss McIlveen): Thank you for presenting to us. The manner in which this is presented is quite challenging, considering the timing with the situation that we are in, particularly with COVID. It is about trying to separate some of those processes. We have January monitoring, which sits in its own right; we have the Budget, which is a normal and cyclical process; and we have COVID. It is about trying to work out the process for COVID bidding as well, which, I assume, is ongoing as opposed to being caught in those cycles. Is that correct?
Ms MacHugh: Throughout this financial year, there have been monitoring rounds and separate COVID bidding exercises. We used January monitoring to update our COVID bids to reflect the latest position, because that was another opportunity to make sure that any pressures that had been identified were logged. Susan might want to say something more.
Ms Susan Anderson (Department for Infrastructure): That is exactly right. COVID is an evolving pressure situation. We will continue to assess our pressures. If there is any additional funding from the Treasury, for example, the Finance Minister will, I assume, issue another exercise. We will continue to look at these on an ongoing basis.
Ms MacHugh: Sorry, I was just going to say that you are right, Chair. It is challenging, because as COVID restrictions move and change, that clearly has knock-on impacts on income, particularly for DVA, Translink and car parking, where fewer people are moving around and using car parks. That is something that we have to keep under constant review.
The Chairperson (Miss McIlveen): The reason I ask is that, for January monitoring, you are talking about DVA lost income and trying to reinstate reserves, lost income from parking charges and PPE, yet, when we look at the budget portion of the paper, we see that you are talking about COVID pressures, which are £50 million for Translink and £5·2 million for Northern Ireland Water and so on. It is really about this: at what point do you highlight those challenges, when you know today that they exist?
Ms MacHugh: Yes. I suppose, for next year's budget, we had to separate out the COVID pressures because we are being asked to work from a baseline from the start of this financial year, and, clearly, that did not have any COVID issue in it. It is really important that we separate out what would be a normal, expected uplift and what is an additional pressure because of things like loss of income due to COVID or additional operating costs because of COVID. That is why, in the budgeting process, those have been separated out. I will just make it clear: we are not bidding for a massive amount of money just because we want to do a massive amount more; it is because there is a lot more pressure on budgets, if that makes sense.
The Chairperson (Miss McIlveen): I appreciate that, but I am also mindful that the Finance Minister is sitting on a sizeable sum of COVID relief money, so it is about when that needs to be spent and how. If it needs to be spent quickly by the end of this financial year, is there capacity in the Department to be creative in order to spend it and to spend it appropriately and in a targeted way?
Ms MacHugh: We are looking at every option, but, clearly, we have to do that within the confines of 'Managing Public Money'. We are mindful that there seems to be money available this year, and we are looking at ways in which we could spend, but we cannot accept money that we cannot spend because that will then result in an underspend. That is where it is frustrating, because, for example, on the capital programme, we know that next year there is a big capital pressure, but we cannot spend more money than we have already bid for because there is a capacity issue. Particularly at this time of the year, it is difficult to start new capital programmes and spend out within the financial year. We have maximised as we much as we can bid for and usefully spend, but, as I said, we continue to work with DOF. I know that DOF is working with Treasury to see what flexibilities there might be, but, clearly, that is for DOF to take forward.
The Chairperson (Miss McIlveen): I suppose the worst situation would be if we had money that could be available and could be used for the benefit of those in Northern Ireland but has been kept aside. I appreciate rainy-day scenarios and that things could have been worse, but additional money has been allocated to Northern Ireland that has not been used. We have heard and will continue to hear the plight of so many businesses and, particularly in this Committee, of taxi drivers and operators who genuinely struggle as a consequence of COVID, yet there is money there that has not been spent in order to assist them and make them ready for when COVID starts to pass. On a daily basis now, we hear of businesses that are closing because they can no longer be sustainable, yet there is money in government that could be used to assist them.
That has been an ongoing challenge for us as a Committee with regard to those businesses because they fall within our remit. I see that there was a bid for £19 million for the taxi and haulage sector. All that money has not been spent either. The challenge that I put to you and your officials is this: is there a way that you can be more creative in order to assist those people? I appreciate that £1,500 has been given to those who have been eligible in order to meet certain costs. However, that time has now passed, they are still in a difficult situation and you have all the information that pertains to those individuals, so it would be easy to create another scheme to help them.
Ms MacHugh: Yes. I know that my colleague Julie Thompson is appearing after me, and she will be able to report on the current position on taxis and the support that the Minister is giving to that sector. However, as I said, I absolutely understand everything that you say . We just have to make sure that we spend public money in a way that is accountable, justifiable and within the confines of 'Managing Public Money'. One of the areas where we have been — "creative" may not be the right word — justifying getting more money is on the DVA side. I said that we are bidding for £10 million, because the only way that DVA could operate this year was to start to eat into its reserves. Those reserves had been earmarked for the capital programme that the DVA is planning for replacing MOT test centres. It operates a trading fund, so it is allowed to keep reserves. We justifiably argue that it had to use those reserves just to keep its business going. We now need, if there is an opportunity, to bid to replace those reserves so that the capital programme that it is planning in the coming years will not be impacted. We are looking at opportunities like that to bid for additional moneys while there is money available.
The Chairperson (Miss McIlveen): Turning to the monitoring round again, in October you bid for £5·5 million for the structural maintenance that you were allocated. For January, you have not made a bid for structural maintenance, yet you have given back £1 million in reduced capacity to deliver work on the ground. Are those linked?
Ms MacHugh: Again, that is probably to do with timing. Had we been successful in October monitoring, there would have been the time and opportunity to gear up to deliver that structural maintenance. At this point in time, it is too late to bid for a huge amount more for structural maintenance. It is, again, down to the amount of work that we can deliver on the ground in the current COVID climate.
Ms S Anderson: If I could add to that, we have identified a couple of small underspends in other areas that we have allocated specifically to structural maintenance where we can in order to deliver within the capacity that we have. Again, we have been able to do that within the existing resources without needing to bid to the centre.
The Chairperson (Miss McIlveen): Finally, is the £0·7 million that has been added for DVA staff holidays — obviously, that was highlighted in advance at a previous meeting with regard to holidays and so on — for the nine days carry-over plus five? Is it being allocated in the same way as it has been for the rest of the Department?
Ms S Anderson: Yes, it is calculated on the same basis.
Mr Boylan: I support the Chair's comments about support for the hauliers and the taxi industry and trying to get that money out. We are having a briefing afterwards about that.
I will go to road maintenance, because in any year if you are driving around between this time of year and March, normally, you see that every road and pothole is being worked on frantically and money is being spent before the end of the financial year. You bid for £2 million in the October monitoring round for essential road maintenance. Where is that all? I will read out a few roads to you — you might not have heard of them, but you will remember them — because, day and daily, in Newry and Armagh, particularly the rural part of it, there are a number of roads that several councillors have made requests to have potholes, deterioration and everything else fixed. Here we see that there is money that is being handed back and roads that are not being done, so it sort of defeats the purpose of bidding for money if we cannot spend it. In that context, can you specify exactly what the £2 million for essential road maintenance was used for from the October round?
Ms MacHugh: I would need to refer to my colleagues in Roads for a complete breakdown of where that money is being spent. We do not have that level of detail here, but we can come back to you on it.
Mr Boylan: I could mention roads in Tivnacree, Tullysaran, Darkley, Derrynoose, Drumnahavil or Knockbane. I could name 100 roads, as could every other member. One thing that we see is money being handed back. Over the winter period, the roads deteriorate that wee bit more after the snow and the frost, and I am concerned about that. Can you specify why £1 million was handed back?
Ms MacHugh: Again, where capital is concerned, we have scoped with our colleagues in Roads exactly how much work they can take on between now and the end of the financial year. They are not being shy about that, but we have to accept that some things have slowed down because of new working practices relating to COVID. As Susan said, it may look like we are not bidding, but that is because we have been able to find other moneys within the confines of the departmental budget to put towards roads maintenance so that anything that can be done will be done. What we cannot do is bid for work that we know that we cannot deliver.
Mr Boylan: I will praise some of the people who work in DFI; we have a good working relationship with the local guys and girls on the ground, and they assist us. However, with the £1 million and reduced capacity, are we saying that we cannot get contractors to do the work? Is that the issue? Is it because of COVID that we cannot do the work? Some of the work is essential, such as fixing a pothole or part of a road, and the opportunity should be taken now to do it. Do you know what I mean?
Mr Boylan: I was asking whether reduced capacity and being unable to undertake that work is the reason why the £1 million is being handed back.
Ms MacHugh: Yes, it is because we — I mean either we in the Department, our contractors or whoever is delivering the work— have not got the capacity. That is because of the need to maintain safe working conditions due to COVID, which slows down the work.
Mr Boylan: I appreciate that. Is that message getting on the ground to councillors? Is it being explained to councillors, when they report something, that, "Listen, we can't do it because of these reasons"?
Ms MacHugh: I know that my colleagues in Roads are in regular contact with councils. They go round each council at least twice a year formally and have many informal contacts. I cannot speak for them, but I assume that if questions are asked about why work is not being done and that is the reason, they articulate that.
Mr Boylan: I appreciate that, but you can understand why I am asking that.
Mr Boylan: We are asking for stuff to be done, and we need to be able to give an explanation for why money is being handed back. I appreciate your answers on that.
I want to move on to the reserves, because £10 million was utilised due to lost income from testing and everything else. What is the state of the reserves? Can you say?
Ms MacHugh: There is £10 million less than there was. I do not have —.
Ms S Anderson: We do not have the exact figure, unless Terry does.
Mr Boylan: Following on from that and the impact that it will have, the 12-month temporary exemption certificates (TEC) are now up. Some of the six-month ones may get another six months, but the 12-month ones are definitely up. Have you worked out whether that will generate some income?
Ms MacHugh: I know that DVA is building its capacity because it is very aware that those extensions cannot be extended. Its challenge is to be back to full operation by March. If you want more granular detail on that, Julie will have it because that is her area of responsibility, but I know that DVA is taking that challenge seriously and working towards it. That will all be factored in. It will probably more likely hit next year's budget, where there will be less of a downturn. That said, driving tests are suspended because of COVID restrictions. Therefore, there is still some loss of income on the DVA side. It is not just MOTs.
Mr Boylan: I appreciate that. I understand the difficulties that we are all going through.
I have not so much a question but a final point to raise. Linda, with regard to essential road maintenance, whatever you can do to get money down to the ground —.
Ms MacHugh: Yes. I know that, at this time of the year, particularly with freeze/thaw, potholes just get worse. They certainly never get better.
Mr Boylan: Absolutely. Where we can work with officials and the people on the ground, we must try to get as much as we can down to them. Thank you.
The Chairperson (Miss McIlveen): Just for information, DVA will be at the Committee next week, so we will be able to explore the issues on budget and the various problems that it is experiencing.
Mr Hilditch: You are very welcome this morning. Obviously, there have been poor outcomes from the monitoring rounds in the current financial year. There was nothing in June and a limited figure in October. Part of that, I think, was actually even for the transport hub, which was probably ring-fenced money coming back in at that time. Maybe that took the bad look off it, but it has not been good. Is there any reason why the Department has not been performing on the monitoring rounds? Is something being ignored potentially? Is there any issue that you know of?
Ms MacHugh: Clearly, there has been great pressure on the Northern Ireland block Budget, largely because of COVID and, to some extent, additional pressures that were caused by the preparations for EU exit. We are not taking it personally. We bid as hard and vehemently as we can. However, at the end of the day, it is an Executive decision about where priorities go.
Mr Hilditch: I know that the Minister was keen for the public to see delivery on the ground to bring confidence back into some communities where it has been lacking due to poor street lighting and various things. One scheme that we discussed previously was the 20-mph limit around schools: has money been secured for that?
Ms MacHugh: Yes. We are in the process of implementing that outside, I think, 100 schools. That is going forward.
Ms MacHugh: I understand that there is a bit of an issue with steel at the moment because of EU exit, which may delay things, but we hope that it will be resolved and that we can get going on that because, clearly, it is a ministerial priority.
Mr Hilditch: There are a couple of other bits and pieces. Is the £2 million for staff recruitment a normal figure, or is it high?
Ms MacHugh: I wonder whether that relates to —.
Mr Deehan: Perhaps I could come in there.
Mr Deehan: On staff recruitment, that is unusual for DFI. It is simply to reflect that, since the voluntary exit scheme (VES), the number of staff has reduced significantly and
requirement for essential staff to take forward initiatives in the Programme for Government etc. It is very unusual to bid for staff recruitment. I have never seen it in the past 15 years. It is unusual, yes.
Mr Hilditch: These things go round in circles, do they not? You have to replenish the stocks.
You bid for £1·9 million for lost revenue from parking. There were already payments of £3·7 million or something like that.
Mr Hilditch: Are people not operating reduced car parking fees or stuff like that?
Ms MacHugh: The problem is that fewer drivers want to park their cars in on-street parking in town and city centres, which is where the revenue comes from. Basically, again, it is a direct result of restrictions that fewer people are travelling into towns and cities.
Mr Hilditch: But the charges are back on again. They were dropped during the first period of COVID.
Ms MacHugh: As I understand it, they are still there. It is not that we are not charging —.
Ms MacHugh: It is just less use.
Mr Hilditch: It is a reduction. OK.
We spoke about the £19 million of COVID assistance for taxi drivers etc: what remains of that £19 million?
Ms MacHugh: It would be better to ask Julie that because I know that they are still working through the payments. I think that £15 million has been paid out, but Julie will be able to give a more up-to-date figure when she joins the meeting after we leave.
Mr Hilditch: No problem.
Is the £25 million from NDNA solely for the low-emission buses?
Ms MacHugh: Yes. That is for Translink and its low-emission buses. I do not think that it includes anything else.
Ms S Anderson: We can double-check and come back to you. Terry, do you have anything on that?
Mr Deehan: The NDNA is for low-emission buses. It is £25 million for this year and £25 million for next year.
The Chairperson (Miss McIlveen): According to our papers for the next session, £14 million was bid for taxis and £5·3 million has been allocated so far. It looks as if there may be an underspend.
Ms MacHugh: We have been working with our colleagues, and they are looking at how much they can actually spend. We have not surrendered, so clearly there is room to go on the support for taxis.
The Chairperson (Miss McIlveen): According to correspondence from the Minister in our papers today, there is £25 million. Although £19 million has been allocated for taxis and coach operators, there is still £6 million being left centrally with the Minister of Finance. There are still questions about that and how it can be spent by the end of the year.
Ms MacHugh: That will depend on where the Minister wants to go with support for taxis and buses.
The Chairperson (Miss McIlveen): We are under time pressure for all these things, so there really is not a lot of time for thinking. It is about action at this stage.
Mr Muir: Thank you for the information about the monitoring round. We are in a very difficult situation at the moment, and I understand the pressures. I declare that I was previously an employee of Translink. As a result of the bids made, will this bring the reserves for the different bodies under the remit of the Department up to the level prior to the pandemic?
Ms MacHugh: It will for Driver and Vehicle Agency but not for Translink; not with these bids.
Mr Muir: Why has a higher amount not been bid for? I am conscious of the concerns over the last number of years about reserves and Translink's ability to continue.
Ms MacHugh: That is under active consideration. At the moment, we are looking at the losses that Translink had made, and that is what the bids to date have been based on. It goes back to whether we can be creative at this time. Ultimately, it will be an Executive decision, but it is something that we are looking at.
Mr Muir: I agree with the Chair that there is a real risk of those moneys being surrendered to Westminster and Her Majesty’s Treasury if they are not spent by the end of this financial year. It is about ensuring that we get the maximum benefit.
Structural maintenance has been discussed. However, I struggle to understand why we have not been able to bid for money and get more activity occurring on the ground. It is not for lack of projects that need to be undertaken. I have a list the length of my arm of people in my constituency who want works undertaken. I am trying to understand the blockage in undertaking this work.
Ms MacHugh: I absolutely understand the frustration, but, as I said, we have to make sure that if we bid for money we can spend it. The assessment of our colleagues in the Roads Service is that what is being bid for is what can physically be delivered between now and the end of March. We can ask for more detail about where the blockages are, but I assume that it is both in the capacity of contractors to undertake work and the capacity of the Department to deliver it.
Mr Muir: It would be appreciated if you could get that information so that we can go back to our constituents. They tell me that there are so many issues to be addressed and ask why work on them cannot be undertaken. It is hard to justify surrendering money to Treasury.
The Department ran a grants scheme for road safety. Sixty-one applications were submitted, but 47 of them were rejected. There is a strong demand from communities to undertake road safety work, yet those applications were rejected and there was a cap on the scheme of £100,000. Why has additional funding not also been bid for those road safety grants? Committee members would agree that work by community groups is at the core of road safety, and it helps us to raise awareness of road safety.
Ms MacHugh: We can ask the part of the Department responsible for the scheme why there was such a high rate of rejection — it could be for all sorts of reasons — and why it is not bidding for more money. I suspect that it is because there is only so much capacity in the Department to deliver projects between now and the end of the financial year.
Mr Muir: I would appreciate it if you could find out a bit more about that because, as I said, many people were rejected, and it would have been good to have been able to fund them.
Ms Kimmins: Thanks Chair, and thanks Linda and Susan for this morning. It is disappointing that £1 million is being returned. I know that we are in very challenging times, but the Minister repeatedly told us that if the Finance Minister were to give her more money, she could do X, Y and Z. With the information that we are getting this morning, that argument falls flat on its face. Cathal talked about the number of roads still in dire need of repair and maintenance, yet we are handing back a million pounds. I want to put that on the record because it is something that we hear repeatedly, despite the Department having one of its biggest budgets in years.
I want to ask about winter gritting. We have a prediction of the demand for gritting in the coming weeks. Whenever there is a hard frost, heavy snow or ice, there always seems to be a scramble to get to the areas most in need of gritting. I was contacted by a lady from Katesbridge who told me that, although they were facing temperatures of -7°C, there was not even a grit pile left on her road. It has been dealt with, but we need better planning when filling grit boxes when we know that bad weather is coming. Do not get me wrong: the guys on the ground are very good, and once contacted, they respond. However, sometimes it is nearly too late because the weather has passed. I would like to know what sort of preparation and planning we are doing in terms of demand
Ms MacHugh: On your first point, I know that it is frustrating to see money going back. However, it is a very different proposition being given a budget at the beginning of April and being able to plan ahead and being able to plan a full programme of capital works, compared with what you can do in January. In fact, it could be the end January before we get the outcome of this. Therefore you have two months to spend money.
Nobody could have predicted at the beginning of the year just how much our capital programme would have been impacted by COVID-19. We had serious concerns in the spring that the construction sector would be very slow in getting back. In some respects we have done better than we thought we might at one point in the year when all our plans were turned upside down. This is a frustration not just for colleagues in the Department but in our big arm's-length bodies. Northern Ireland Water and Translink always make the point that they are given a budget at the beginning of the year and, quite often, that is not as much as they need. Come January, money is available, but, by that point, there is not enough time to spend.
The other issue, of course, is that we roll from one year's budget to the next, and when you are trying to plan large capital programmes, that is very difficult. Many other things delay a capital programme, including objections and planning, among other things. Look at the A5. The delay there has been because of the inspector's report. That is why we are unable to spend that money in this financial year. Many external factors determine whether the Minister can fully spend her budget. However, I do not think that that takes away from her point that, had she been given more budget at the beginning of the year, we could clearly do an awful lot more with it. It is just that, by the end of the year, spending money is very difficult when it comes to capital, particularly.
Ms Kimmins: On that point, you could say that we could all do an awful lot more with more money. Do you know what I mean? However, we have to be realistic in what we can deliver. That is the point that I am making. In April, we might not have been able to foresee exactly where we are now but, even locally, some of the Minister's colleagues repeatedly asked the Minister of Finance to give Infrastructure more money. There is a difference between getting more money and being able to spend it.
I do not want to labour the point, but when members of the public hear that £1 million is going back to the centre while nothing is done about huge potholes in the road, they want to know why. I just want to clear that up. That is fair enough; I take your point as well.
Mr Deehan: Could I come in at that point, Chair? I want to talk about the underspend and the amount of money that is handed back. That is capital, so it cannot be used in the current year, given the stage of the year we are at. As the Chair said, COVID-19 has overtaken in-year monitoring this year. Much more significant amounts of money have been given to the Department than are in in-year monitoring. The Department has received some £208 million in COVID-19 funds. It has spent all that to date. It anticipates spending it all and handing back nothing at all. The year has been dominated by COVID-19.
The Department has a very good reputation for spending all its money. Normally, at this time of year, the Department would provide a safety valve for other Departments that have unspent capital, and we use it on the ground. However, because of COVID-19, we cannot spend on structure and maintenance because conditions, working safely, etc, do not allow it. We are handing back a very small amount of capital, but we are still spending £80 million to £90 million on structural maintenance, with significant amounts — £200 million-odd — on COVID-19 expenses.
A huge amount of money is being utilised. "Creative" is a difficult word for accountants; it is a bit of an oxymoron for them. However, the Department is spending significant amounts of money and has not, until now, given anything back at all, because of the stage of the year and because it is capital money and it cannot be spent between now and the end of the year.
The Chairperson (Miss McIlveen): Thank you. I will pick up on a point that you have made. I totally accept what you say, but a lot of the COVID-19 money is really plugging the hole that was created by inactivity, be it for Translink, and supplementing an income. The Committee is challenging the Department today to be more creative and to go beyond what it normally does, rather than just plugging holes. After all, COVID-19 is not going away any time soon. You should try to see how you can create an offering that is different from what you have been doing.
Ms MacHugh: As I have said already, we are looking at being creative. However, we have to do that within the vires of the Department while making sure that we follow the rules under 'Managing Public Money'. Whether or not there is a surplus, it is still public money, and we need to be conscious of that.
The Chairperson (Miss McIlveen): Do not go away from the Committee thinking that I am asking you to do anything that you do not have the vires to do. However, I am asking you to think creatively and to use the powers that you have. I am not defending any Department or Minister when I say that there are those who have a huge number of schemes waiting to go and are being delivered, and yet the Department is looking after one scheme. There is an opportunity for the Department for Infrastructure to look at doing something different.
Ms MacHugh: Bear in mind that that was one scheme that we did not have the powers to do, and we needed to seek the powers to do it. However, we have them now.
The Chairperson (Miss McIlveen): You have those powers now. You could have had them earlier had you requested them, no doubt. It is about looking at how you do things. That is what I want you to take from this meeting. I put that challenge to you for the next time, I suppose.
Ms MacHugh: OK. Thank you.
The Chairperson (Miss McIlveen): This will not go away; we have to recognise that. It is not just about plugging holes. The Minister said that she wants to do things differently, and we are asking you, and her, to do that.
Ms Kimmins: I still have a couple of other questions, Chair, is that OK?
Ms Kimmins: No. I have one question about street lighting and an update on column replacements. You might not have the information to hand, Linda —
Ms MacHugh: No we do not.
Ms Kimmins: — to see how many columns are over the 40-year-old mark because I know that work has been ongoing on that. It is important work.
My final point, and the Chair also mentioned it, is to get the power to provide support and to think creatively. One of the key issues that we have repeatedly raised in the Committee is the haulage sector. Whilst we have come up with schemes for taxi operators and drivers, and the bus and coach sector, there has been nothing forthcoming for the haulage sector. We warned about this, and issues have been doubly compounded due to Brexit. I know that we are to speak about that later, but there is scope there that the Minister and the Department could have looked at and tried to be creative and work on. Every Department has had to do that because of the times that we are living in. I just wanted to make that point.
Ms MacHugh: OK, thank you.
Mr K Buchanan: Thank you, Linda, Susan and Terry in the distance there.
Linda, I will pick up on David's point when he referred to the schools that you are doing. If I am correct, the budget to do those 100 schools is £2 million.
Mr K Buchanan: Do you see all of that being spent? That is roughly £20,000 per school. Do you see more schools being done because there was talk about more being rolled out in the future? Do you see the £2 million being spent, and do you see another allocation for more schools?
Ms MacHugh: Nothing has been surrendered. That is the first phase. It will be for the Minister and my colleagues in Roads to determine whether it will need to be rolled out further.
Mr K Buchanan: On that, if that is on the basis of £20,000 per school, that is probably not the most efficient approach. I am big into speed indicator devices (SIDs), as they are a far cheaper and more effective way of indicating speeds at schools. I appreciate that you have to put in into law that it is a 20-mph zone, but it is a very expensive way of reducing speed. Ultimately, I do not see it working. Some of your colleagues in the Roads Service will tell you that, because it does not indicate the speed that you are doing; it just tells you that it is a 20-mph zone. Therefore, it is not the same catchment. It is up to you to feed that through to say that there is a better, simpler, cheaper and, ultimately, more effective way of getting more schools done.
At what point did the Department realise that £1 million had to be returned? When did you discover that you have £1 million excess that had to go back?
Ms MacHugh: It was done from the calculation of January monitoring right up to the beginning of January. As I said in my opening remarks, the budget this year has been a bit of a moveable feast. We had to determine what could be spent and what was left over. Within the Department's budget remit, we had to look at what we could move around to maximise how much we could deliver and not hand back, and Susan explained that there is a bit of internal movement. For example, we used other underspends to make sure that we maximised how much we could spend on structural maintenance. This year, it was right up to 4 January that we were still putting figures to the Minister, and she then had to determine what she was prepared to put forward.
Mr K Buchanan: Mr Boylan listed roads. We could all list roads. I am not disagreeing with your comments, Linda, but, if you said to an engineer in the middle of January, "I've got £1 million; could you get that spent by the end of March?", there is probably not one in Northern Ireland who could not. As we know, resource for potholes is a capital figure, but people in 100 houses in Upperlands are walking on the road for a quarter of a mile to the village because there is no footpath. That money could be spent.
I am not disagreeing with you or Terry. There is not one engineer who, if you said to them, "I have £1 million for you" at the start of January, could not get that spent by March. I do not mean waste it; I mean spent effectively. We should not be handing that money back; we are all crying out to get those areas fixed. I appreciate the difference between resource and capital. It is unfortunate that that is going back. I spent half a day with an engineer in mid Ulster looking at different things, and he always says that there is no money. That does not warrant what you are saying.
Ms MacHugh: I understand the frustration, but all work has to be done through proper procurement methods. There are methodologies for doing all of that. There is a capacity issue; we cannot get around that. We have a finite number of staff in the Department, and we have a finite number of staff in the contractors that we are contracted with to deliver. That combined capacity is driving the work that can be done in any financial year.
Ms M Anderson: Thank you, Linda, for appearing in front of us today. I concur with what you said, Chair. I know that you, Linda, realise how to get access to the Financial Assistance Act 2009. I am sure that your Department gained a lot of hope when your Minister put in for it late on a Friday afternoon and received the green light on a Saturday. You said to us, as Committee members, that your Department does not have the powers. I think that you are dealing with members who understand how quickly you can get those powers. I encourage you not to tell the Committee that you do not have the powers and that that is why you cannot take action. I know that what was said was probably a misunderstanding, but taxi operators have not been sorted out yet, nor have hauliers, but we will deal with that in the next session.
Andrew Muir talked, before you came in, about the Budget. The Finance Minister is before the Finance Committee today, but we, as members, want to be consulted, to scrutinise and to understand the planning. Can you give us any clarity on whether the Budget paper is being blocked from being discussed at the Executive? Has that been the case since before Christmas?
Ms MacHugh: I do not have any information on that. That is an Executive matter. Clearly, the Budget paper was drafted, and we have responded to it; our Minister has commented on it. However, it is up to the First Minister and the deputy First Minister as to what gets put on the agenda for an Executive meeting.
Ms M Anderson: I asked you, Linda, because of your role in the Budget. I am sure that you are concerned about the reports that the Economy Minister wants the Finance Minister to raid budgets like yours to plug a gap that has been created by the loss of EU funding. The irony of people who campaigned for Brexit realising that £100 million will come out of their budget every year might be lost on them, but is your Minister defending her budget against it being cut in that way to replace EU funding?
Ms MacHugh: Our Minister has looked at what, we believe, we need to fulfil the obligations of the Department next year, and that is what she is bidding for.
Ms M Anderson: Is she concerned about the reports — they are quite public — of the Finance Minister being asked to cut other budgets to plug a hole in the budget of the Department for the Economy that has been left by the removal of EU funding? In every tranche, £3·5 billion will be removed from the North, and, unfortunately, £100 million will come out of the Department for the Economy every year.
Are you across that? I am a bit concerned, as there have been attempts to put pressure on the Finance Minister, who is resisting it, because he is defending all the budgets. I wonder whether your Minister is across that.
Ms MacHugh: I cannot really comment on discussions between the Department for the Economy and the Department of Finance.
Ms M Anderson: It is impacting on your budget, as yours is one of the budgets that they are asking to be cut. They are asking that Departments' budgets be cut to plug in a hole in another Department. That is what I am concerned about.
Ms MacHugh: All that I can say is that our Minister has put forward a compelling case for why she needs the budget that she needs. The Chancellor's statement means that we are all conscious that there will be a huge pressure on the Northern Ireland block grant. He said that we are looking at getting the baseline for this year and nothing more. That will be a concern for everybody.
Ms M Anderson: Yes. Linda, I am sure that you appreciate that we, as Committee members, are looking to scrutinise —
Ms M Anderson: — and the reduced time available is going to impact on consultation and planning.
I will move on. For your departmental resource pressure, you cite £3·6 million for issues that relate to Brexit and the implementation of the protocol. Can you elaborate on that?
Ms MacHugh: Yes. Again, that is an estimate of how much of an additional cost there may be, but it is just an estimate at this point. As you will appreciate, we are still working through the impact of the protocol, how it relates to the trade agreement and what that will mean in practice.
Ms M Anderson: Linda, even if it is only an indicative figure, do you have an understanding of what exactly the £3·6 million will be spent on?
Ms MacHugh: Do you have any breakdown of that, Susan?
Ms S Anderson: Yes. Approximately £1·3 million is for staffing costs, which are for the additional staff that will be required to work through the various things that Linda has mentioned. The balance of £2·3 million is for NI Water — again, that is very much an estimate — for additional chemicals that may be needed. I stress that that is an estimate at this stage, and we will continue to refine the figure.
Ms M Anderson: I find that interesting, because, when NI Water and other officials were in front of us, we asked them whether, as a consequence of Brexit, there would be any increased cost implications for chemicals, and we were told that the supply chain would not be affected in that way. I would not mind getting more information on that, Chair. I appreciate the verbals that we have received today, but I would not mind getting a written report. Linda, I ask that you get us much more information about the chemicals. Some of us on the Committee suspected that chemicals would cost more as a result of Brexit, because of from where in the supply chain we got the chemicals and materials. We knew that NI Water could not stockpile them, because those chemicals are dangerous.
Ms MacHugh: It is important to stress that there is a difference between getting chemicals and the cost of those chemicals. Although there is a sufficient buffer for us to get over any short-term delay in the supply of chemicals that might be created as the new systems bed in, we are not yet over the line with the additional costs arising from transportation or from customs and import charges.
Ms M Anderson: Yes, Linda, we differentiated between the cost that was going to be incurred because of Brexit and getting the chemicals. Thankfully, we will not be without the chemicals, but Brexit will add to the cost of them.
Linda, you cited £150,000 of COVID pressures for PPE for DVA staff. What are the current stock levels of PPE for staff across the Department, not just those in the DVA?
Ms MacHugh: I do not have that figure. I know that there have been no procurement issues highlighted with Susan and me. We have regularly been bringing together the core Department and the DVA, Translink and Northern Ireland Water to look at procurement issues, and there has been a lot of focus over the past nine months on the provision of PPE. At the beginning, it was a very challenging process, but, in the past five or six months, I have not had any reports of issues with PPE. Again, we can double-check that.
Ms M Anderson: Yes, check that out so that the Committee is kept informed.
We were told by officials in November that the A5 inspectors' report had been on their desks and that they had given it to the Minister. That was in November, and I am already conscious that the wait for the report has been going on for years. Can we get an indication from the Minister, now that we are in January, of when she is going to respond to the report's findings? Linda, will you ask the Minister, on our behalf, for an indicative time?
Ms M Anderson: OK. Finally, gritting was mentioned. Everyone has mentioned their constituency, so I will mention Kingsfort in Derry. I use that as one example, but there are many others. Ardnarea Crescent is a street in Kingsfort that is populated mainly by older people. I am sure that every member has similar experience of this issue in their constituency. There are grit boxes there, and they are full at times, so that is not the issue that I am raising. The issue is with trying to get the grit spread. Carers are in and out of the area, which is almost 100% populated by older, vulnerable constituents. Linda, I do not know whether you can be a conduit for this or whether we can come back and consider the matter. There is no one-size-fits-all solution. The main roads are gritted, and we know that the gritters will grit only certain other roads. Perhaps, based on need and after a demonstration of evidence, the roads in such areas could be gritted instead of residents having to depend on someone from the area coming out to spread salt on the roads, particularly when the weather is very bad and the temperature has dropped. That is a discussion that is worth having another time so that we do not have a one-size-fits-all solution, particularly when people are trying to access such areas. I do not know whether that is something that I should raise here with Linda or with you, Chair, as an issue for discussion with other officials.
The Chairperson (Miss McIlveen): That may be something that we need to speak about with those in Roads. We could schedule a briefing with them to talk about the winter service and so on. It might be useful to do that.
Mr Beggs: Linda, thank you for your briefing. It must be a busy time —
Ms MacHugh: It certainly is.
Mr Beggs: — what with the monitoring round and COVID expenditure being juggled at the one time, as well as planning for next year's budget.
In the October monitoring round, one of the bids that was unsuccessful was a bid for £1 million for a regional planning system. I do not see that mentioned subsequently. Has it just dropped off the list of bids or are we still implementing a new regional planning system? What has happened with it?
Ms MacHugh: No, it is definitely being implemented. At one point, we wanted to bring forward spend, because, ultimately, doing so was going to save money. We have managed to find that. There has been an easement, again because of the cost projections for the delivery time. Do you have more detail, Susan?
Ms S Anderson: That is right. A revised payment schedule has been agreed with the contractor. It is therefore still proceeding and to the same timescale. The payments will just be made at different times, and they will now fall into the next financial year rather than this financial year.
Mr Beggs: That is the new system that virtually all councils have bought into, so it is important that it is put in place.
Ms MacHugh: Yes, it is for the Department and 10 of the 11 councils as planning authorities.
Mr Beggs: OK. Thank you for that.
On the unusual bid for support for recruitment, can you tell us what has gone wrong? Is that bid purely to fund recruitment, or will it also fund the salaries for some of the posts?
Ms MacHugh: It will be for salaries. It does not include costs for the actual recruitment.
Mr Beggs: OK. How many posts are there? What are the critical posts that have been overlooked and are not currently in place?
Ms MacHugh: I would need to get more detail on that. We do not have it.
Ms MacHugh: Some of it is because, post VES, we were a Department delivering a number of things. Things have been added to that list, including some flagship and NDNA commitments. I assume that it is because we need to re-gear for our current commitments, but we will need to get you a breakdown.
Mr Beggs: Will that be an ongoing resource cost, not just a one-off cost?
Mr Beggs: OK.
You have listed the cost of the protocol and Northern Ireland Water as the two EU pressures. What is the cost of the protocol to the Department? What is the money — the £1·3 million — to be used for? How long is that bid to last?
Ms MacHugh: A lot of it will be used for salaries, because there is a lot more work to be done now on overlaying the impact of the protocol on our legislation and the way in which we operate. A lot of work now needs to be done to make sure that we understand the impact, and we also need to look at how to develop our policies in the future. We touched on that when I was here speaking to you about common frameworks. There will be a new way of looking at policy. It will not be just a case of either taking an EU directive or looking at what GB does, because we are in a unique position, in which, in many respects, we will have to continue to comply with EU laws and standards whilst also looking at what is happening in GB. There will therefore be additional pressures in working through all of that. Some of them may be temporary until we get our heads around the exact impact of the protocol and get on to a much more even keel. Some of it may be temporary, but some of it may be more permanent.
Mr Beggs: Is the £1·3 million bid that is referred to purely for the one-off period of the next financial year?
Ms MacHugh: Yes, although, as I said, some of it might have a tail into future years. It depends on how this coming year goes.
Mr Beggs: OK. I will turn to how we plan future capital expenditure. There has been Executive commitment for areas that are deemed to be the flagship projects, and there are other areas that are deemed to be almost essential: that we must do. NDNA is also mentioned. It was unfunded — we did not receive the funding for it all — so who is deciding that everything in New Decade, New Approach becomes essential and that other essential things are not able to happen? Is that the Minister's call or the Executive's call?
Ms MacHugh: That really is for the Executive to decide. NDNA has a number of different levels of commitment. There is Executive commitment and UK Government commitment, and Irish Government commitment too.
Ms MacHugh: There is money coming for some of it. It is important that we say, "Look, this is an NDNA commitment and therefore should be seen as a priority, because that is an international commitment".
Mr Beggs: Can you help us by providing a list of what NDNA funding has and has not been committed to? I was unaware that there is specific funding for everything that is mentioned in NDNA.
Ms MacHugh: One example is the low-emission buses, which is an NDNA commitment, and the money for that has been committed.
Ms MacHugh: Part of it is from the Budget, and I believe that money is also coming from the UK Government. Terry, can you confirm that?
Mr Deehan: Yes, I can, Linda. That NDNA funding for low-emission buses was a direct amount allocated over and above our normal departmental allocations.
Mr Beggs: My question specifically is this: has everything listed under NDNA been funded by additional resources, or are we committing some other capital resources, which, in normal times, we would not have prioritised towards NDNA, even though its commitments are unfunded?
Ms MacHugh: I suppose that the answer is —.
Mr Deehan: Low-emission buses are the only thing that has been funded. Other things under NDNA are also ministerial priorities: the A1 junction; the Newry southern relief road; the York Street interchange; and the Narrow Water bridge.
Mr Beggs: My specific question was this: were their ministerial decisions taken to prioritise NDNA expenditure over other issues? Is that a Minister's decision because NDNA is unfunded?
Ms MacHugh: The point that we should be making is that none of this is committed yet. These are all bids. We are in a bidding process.
Mr Beggs: They are explained in your document as being essential and — I will try to get the right wording — "Inescapable".
Ms MacHugh: The inescapable ones include the flagship projects that are Executive commitments, the NDNA commitments from one of three Governments, and anything else that is contractually committed to.
Mr Beggs: If someone else is paying for it, let them pay for it. Are we committing some of our money towards NDNA that was not originally earmarked for it? That is what I am asking.
Ms MacHugh: There are ongoing negotiations between the Executive and the British and Irish Governments on elements of it. I am sorry that I cannot be specific about all the bids and from where they are coming. The one that we are certain about is the one for low-emission buses.
Mr Beggs: I have one final, brief question. For 2021-22, under the heading "Replacement Connecting Europe Facility Funding", there is a bid for £55 million. Can you elaborate on what exactly that is?
Ms MacHugh: Yes. That is a bid to replace EU funds that have been lost because we are now out of the EU.
Mrs D Kelly: I do not think that there is any getting away from the cost of Brexit, be it a direct cost or a financial loss to us. I have a lot of sympathy with Mr Boylan's opening remarks about gritting and potholes. I feel a bit like I am at a council meeting, however, given some of the issues being raised. Mr Buchanan raised a point about the fact that people at a local level are telling us that, if there is a small amount of money left over, they can spend it. Is there therefore a question around the procurement processes? The same argument is, to some extent, being made in education, with it being said that principals should have some level of flexibility in being able to procure small maintenance tasks for school premises and facilities. Are there any lessons to be learned from the Department of Finance, or is there anything that should be shared on procurement methodologies, without falling foul of any overly creative practices that might put at risk some of the renewable heat incentive (RHI) inquiry recommendations that we now all want or should want to abide by?
I noticed a recurring theme with staffing. I have been around long enough to know that the budget, as well as the staff numbers, of the Department for Infrastructure and, previously, the Department for Regional Development were cut to the quick over many years by successive Executives. Someone mentioned the voluntary exit scheme and the fact that several staff have left, and now we are seeing recruitment partly to fix that and to develop the NDNA elements of the programme. I would like to know, by way of comparison with, say, the best time for Roads Service staffing, whether we could get any an indication of the ongoing workforce shortfall, at departmental level or throughout the regions. Will workforce planning then be enabled moving forward in order to deliver a number of the projects that are currently before us?
Ms MacHugh: Yes, you are right. My colleague Andrew Murray will say that he has lost a considerable number of staff over the past four or five years. I am sure that he would be able to provide you with a running total of staff numbers, but they have gone down considerably in the past five years. There is no doubt about that. That then has an impact on the Department's ability to deliver.
Mrs D Kelly: It might be useful to have some sort of insight into the staffing difficulties across the Department. I know that a significant number of experienced personnel took the opportunity to leave under the voluntary exit scheme, and we are feeling the after-effects of that. It might be useful to have that knowledge before us.
I do not want to get into an old argument, but other members have brought it up. It would be fair to say that the Infrastructure Department's vires was agreed at the Executive so that the Minister could bring forward a bid. At the end of the day, the Department of Finance and the Department for the Economy remain the Departments responsible for financial support packages. We have been overseeing the picking up of the slack, where elements in different sectors have faced particular difficulties in and around the cost of overheads and PPE etc. It is not fair to continue to mix up, attempt to confuse and make political gain out of what are very dire circumstances for individuals who are trying to navigate the various support packages.
Mr Boylan: I just want to clear up one point that Mrs Kelly raised there. DFI, not the councils, is responsible for roads. The money comes out of the grants here. Mrs Kelly said that she thought she was at a council meeting. That is the confusion that reigns on the ground. That is why people are confusing the message. The Budget that is given out here affects that. The reason that I brought up some of those issues today is because the message that is coming out of here will be that money was handed back. It does not matter whether it was capital or resource, because anybody listening from the general public does not understand that. All that they want is for the roads to be fixed. I want to remind people that the roads are the responsibility of DFI, not the councils.
Ms MacHugh: You are absolutely right.
Mr Boylan: The Department may engage with councils, and 100% rightly so. The councils may report once or twice a year to give an update, but roads are DFI's responsibility.
The Chairperson (Miss McIlveen): I want to go back to one more point in the January monitoring paper. It concerns the revised spending profile for the planning portal project, which has resulted in a reduced requirement of £0·6 million. Is that a change in its classification? Was there an overestimate of the cost of the project? Can you give us a little bit more information about that? It is perhaps not a highly political point, but I just want clarification.
Ms S Anderson: It is really just a timing difference. The revised payment schedule has been agreed with the contractor. New milestones will be agreed, and those payments will be tied to those new milestones rather than to what we had originally forecasted on. It is purely a timing difference that will be picked up in future financial years.
Ms S Anderson: A small overall saving is built into the new milestones as well, which will be shared between the Department and the councils.
The Chairperson (Miss McIlveen): OK. That is great. Thank you. You will delighted to hear that I do not have any further questions, and no one else has indicated. Thank you all for coming this morning. No doubt, we will see you in the not-too-distant future.
Ms MacHugh: Thank you very much.