Official Report: Minutes of Evidence

The Chairperson (Dr Aiken): I welcome Joanne McBurney and Jeff McGuinness. The session is being reported by Hansard.

Mr Jeff McGuinness (Department of Finance): Thank you for the opportunity to update the Committee on this legislation and its context in the wider review of financial process. In December 2016, one of the last acts of the then Executive was to agree the commencement of a review of financial process to simplify financial reporting in order to better align Budgets, Estimates and resource accounts. There are a number of different systems, which have an impact on the control and presentation of government expenditure. Those include budgetary controls and Supply Estimates, which are presented to the Assembly for approval, and resource accounts, which are prepared by Departments at the end of each financial year.

Those systems and the way in which they have historically been maintained mean that there is significant misalignment between the different bases on which financial information is presented to the Assembly and the public. As the Committee is very much aware, that makes it difficult to understand the links and interrelationships between them. Although the Bill is short, it deals with the full aspects of the misalignment that exists by amending the Government Resources and Accounts Act (Northern Ireland) 2001 to allow the Department of Finance to issue directions on the way that Departments prepare Supply Estimates. It provides for departmental Estimates and accounts to include the spending of non-departmental public bodies (NDPBs) and other central government bodies for which the Department has responsibility, thereby aligning with the budgetary treatment.

The Bill also provides for consultation with the Treasury in order to prevent the designation of a body that is funded solely from a Consolidated Fund other than the Consolidated Fund of Northern Ireland. That is in line with current practice for each Westminster Estimates process, where the Treasury consults the Executive and other devolved Administrations on each of their designation orders.

The Bill is short, with four clauses. Clause 1 contains the key changes that are required to the Government Resources and Accounts Act (Northern Ireland) 2001 in order to better align the Estimates and accounts to Budgets. I am happy to go through the clauses should the Committee wish to explore that level of detail at this stage.

The Chairperson (Dr Aiken): OK. Thanks, Jeff. We have quite a few questions. We are setting up an independent fiscal council, and part of its remit will be to monitor government expenditure closely. Has there been any dialogue with the independent fiscal council yet about the reporting processes and information flows that we want to see so that we can have effective management?

Mr McGuinness: We have been looking at a memorandum of understanding with the fiscal council. We are in the process of finalising the way in which that information is processed and passed to the fiscal council. I do not know whether Joanne has anything else to say about that.

Ms Joanne McBurney (Department of Finance): No, Chair. It is early days. We have been engaging with the fiscal council, but those processes are still to be tied down. It will be open and transparent, and we will provide the information that the fiscal council requests.

The Chairperson (Dr Aiken): My next question is about arm's-length bodies. What bodies will be included in the process?

Mr McGuinness: The intention is that most arm's-length bodies within the departmental boundary will be included in the process. Some will be excluded. Northern Ireland Water, for example, will be excluded because it will remain as what is called a "misalignment". The intention is that the majority of all arm's-length bodies within the departmental boundaries will be included.

The Chairperson (Dr Aiken): Will that include all the NDPBs?

Mr McGuinness: Yes.

The Chairperson (Dr Aiken): One of our problems, as Committees, is granularity. We cannot delve in significant detail on some issues. Will the voluntary grammar school sector and things like that be included or excluded from the process, or do they sit outside?

Mr McGuinness: At the last Committee session on the review of financial process, concern was expressed about transparency. Members were concerned that, should revised Estimates follow the level of detail in previous Budgets, the process would reduce transparency. We are very aware of that concern. While it is not specifically related to the workings of the Bill, we want to provide reassurance that the new Estimates structure will provide at least the level of transparency and granularity that currently exists at the Estimates format. We will work with Departments on their budget and Estimates structures for the 2022-23 financial year. The level of detail that is currently afforded to the Committee in the Estimates process will, at a minimum, be retained.

The Chairperson (Dr Aiken): OK. Can you explain what is currently voted for in respect of the Budget Bill? What percentage of expenditure is currently not covered by the Budget Bill? Is it around 25% or more, or does the non-voted expenditure include NDPB spending plus capital? Does the Assembly currently vote on capital?

Mr McGuinness: No. The Assembly does not currently vote on capital. That is one change that will happen with the review of financial process. While the Assembly votes on the cash that is provided to non-departmental public bodies, it does not vote on how those resources are spent in the NDPBs — for example, what is spent on pay, rent, rates or whatever. That level of transparency will be flushed out with the application of the Bill.

The Chairperson (Dr Aiken): To clarify: are we voting on income and expenditure separately, or will this be altered so that, in future, we will vote on the net controls in the Estimates?

Mr McGuinness: You will be voting on the net position, but there will be a record of the income. That level of detail will still be available to the Committee.

The Chairperson (Dr Aiken): OK. Finally, you have been doing some dry runs. How has that worked, and has everybody participated?

Mr McGuinness: Everybody has participated to some degree, Chair. That is the best way to put it. [Laughter.]

The Chairperson (Dr Aiken): No, no. We are the politicians.

Mr McGuinness: We have had some good engagement on dry runs. They have brought out issues on which we have been working and which Departments will look to address in a further dry run process that we are planning in the coming months. We are learning lessons from that so that we can make sure that, when we introduce this in real time, the process is as smooth as possible.

The Chairperson (Dr Aiken): A proportion of Departments has participated. How many have fully participated, with arm's length bodies, to the degree that we can successfully roll this out?

Mr McGuinness: I am confident, Chair, that the Departments will successfully roll this out. I do not know the percentage offhand or the degree of those with arm's-length bodies. Certainly, for those Departments that have been engaging in the process, we were able to identify the issues. All Departments have done that to some degree or other.

The Chairperson (Dr Aiken): OK. Thanks very much indeed for that.

Mr Allister: I want to ask a few questions, if I might, about the guidance manual. Paragraph 2.1 is very clear, under the heading "Tautness and Realism", that:

Why, then, is it that, in our Main Estimates, considerable headroom is built in for spend that has not yet been agreed by the Executive? If the guidance manual requires tautness, why at this stage are we building in headroom, which is the very antithesis of tautness?

Ms McBurney: I will answer that one, Chair, as the Estimates are not really Jeff's area. You are absolutely right, and we would prefer to avoid headroom, but, unfortunately, we also have to be pragmatic. There are circumstances in which we know that Departments will need access to money. At the end of the last financial year, for example, although allocations had not been made, we knew that funding would need to be spent before the end of it. It was important to allow that capacity. Similarly, in the Main Estimates, there is significantly less headroom than there would have been in the last financial year, but some is built in. For example, although funding has not yet been provided for victims' pensions, we know that it will be, and TEO is obviously keen to make sure that it has the authority to do that. We are very transparent on the headroom that we build in and notify the Committee of it. In an ideal world, we would prefer not to have headroom, but, as I said, the circumstances mean that, if Departments are to be able to spend the money that they need to spend, we need to build it in. We will absolutely be transparent about that.

Mr Allister: There is not much point in publishing guidance that requires tautness and saying:

If the Estimates just ignore that, what is the point of the guidance?

Ms McBurney: The intention of the guidance is to make sure that Departments are aware of the requirement that the Estimates that they put forward to DOF reflect the position agreed by the Executive. You are right: we allow Departments to identify very specific and exceptional circumstances in which they wish to move beyond that. That is then separately notified. As I said, in an ideal world, you would not need headroom, but circumstances always emerge that mean that it is a solution that is required to ensure that spending can happen on those things on which it needs to happen. The guidance is there to ensure that Departments are aware that the default position must be the Budget agreed by the Assembly and that anything else is exceptional and is something that we would prefer not to do.

Mr Allister: Does it not allow slackness and lazy accounting?

Ms McBurney: No, that is certainly not the intention, because Departments have to make a very good case before we allow them to include headroom, and we notify that to the Committee to allow it to question us on why it has been included.

Mr Allister: You have, however, already built in headroom in these Estimates.

Ms McBurney: As you will have noticed, I do not have the list in front of me — it is in my other pack of papers — but that headroom is only for very specific circumstances. It is certainly not the norm and we would like to avoid that, but, as I said, sometimes we have to be pragmatic and realise that the timing of the Estimates and the time taken to print them and get them through the Assembly mean that not including headroom would have an impact on Departments' ability to deliver the things that they need to deliver.

Mr Allister: Can I ask you a couple of other —?

The Chairperson (Dr Aiken): Jim, I just have a quick question about headroom. Joanne, our Committee has been told for weeks that moneys are expected from the Treasury, the NIO or whatever source from which the Secretary of State will sign it off. We are moving into the second quarter, Departments are within their headroom, particularly with issues like victims' pensions, and we still have no confirmation that that money will be signed off on. What degree of confidence can we have that that headroom will not end up having to be clawed back? We will very soon be in June, and I have some real concerns. We have been told time and again that it will be signed off, you are accounting for it in the headroom in the Estimates, but we still have not had any confirmation. All that we have had is the statement, "We think that it may happen". What degree of confidence can we have that it will happen?

Ms McBurney: We have no reason to believe that the money for the victims' pensions, New Decade, New Approach (NDNA) and the confidence-and-supply agreement will not be confirmed. We would also like the money for those to be confirmed sooner rather than later.

Headroom is built in to the Estimates to allow Departments to spend the money, should that money be provided. They cannot spend that money until it is in their budgets. Those controls are there, and we would not expect Departments to spend the money simply because the headroom has been built in. They would need

in their budgets.

We hope that either the NIO or the Treasury will confirm the New Decade, New Approach and confidence-and-supply funding quite soon. Obviously, the funding for the victims' pensions is different because the Executive have committed to providing that funding. Therefore, while we are still in discussions with the Treasury and the NIO on that, we will provide that money. That is not in any doubt.

The Chairperson (Dr Aiken): OK. Thanks. Jim, sorry for that

Mr Allister: A couple of other points caught my eye in the guidance manual that I was puzzled about. Paragraph 2.10 of the guidance manual suggests that non-voted spend could be reduced. How could that be? Surely non-voted spend is for things such as judicial salaries and all of that. In what circumstances would non-voted spend be reduced?

Ms McBurney: I am looking to see whether Jeff can answer that. He might have more of the specifics. I can talk about the generalities.

Mr McGuinness: I am not aware of the specific situations. In the Bill and the review of financial process, we are trying to ensure that the maximum amount of allocations and resources are brought through the Assembly and the Committee.

At the minute, things that are non-voted are, for instance, notional charges. Departments will make notional charges that are not voted on and do not come within the remit of the Committee or the Assembly. We are trying to make sure that those notional charges are reduced to a minimum so that we can maybe change that to an actual budget line. That will allow that to be voted on by the Assembly so that there is a bit more transparency in the process. That is how we are trying to reduce non-voted spend. It is not about reducing salaries or those things that come under the Consolidated Fund standing services.

Mr Allister: I see. Paragraph 1.11 of the guidance manual — I am coming back to my hobby horse of the sole authority of the Budget Bill — sets out four bullet points under which expenditure on the sole authority of the Budget Bill can be allowed. The first is:

Then the word "or" appears. It states:

The word "or" does not appear in 'Managing Public Money'. Why has it suddenly appeared here? Why are the two guidance documents not compatible?

Ms McBurney: May I jump in? I would need to check 'Managing Public Money' and talk to the Estimates people, but my understanding is that the word "or" is in the current Estimates manual. We would need to look at that. If you are saying that 'Managing Public Money' is different, we would need to look at that reference and check it. My understanding is definitely that what is in the guidance that has been issued reflects what is in the current Estimates manual.

Mr Allister: If you look at paragraph 2.3.3 of 'Managing Public Money', you will find that, unless I have misread it, "or" is not there. I would appreciate it if you could check that.

Ms McBurney: We will certainly look at that.

Mr Allister: I assume that you agree that the guidance that you issue should be compatible with 'Managing Public Money'.

Ms McBurney: Yes, certainly. There is no argument. We will check that.

Mr McHugh: You are very welcome to the meeting this afternoon. I welcome the adoption of any strategy to make the understanding of Estimates more user-friendly. What features in this new presentation will make it more user-friendly?

Mr McGuinness: That is a good question. At the moment, if you pick up a Budget document and an Estimates document and do your best to make a comparison between them, it is very difficult to understand where the Budget and the Estimates for each Department align. The process that we intend to implement will ensure that an Estimates document is in the same format as the Budget document. Effectively, what you are voting on is the same as the structure in the Budget document so that the two documents align more accurately, if not entirely.

Mr McHugh: OK, thank you. One of the fairly topical issues in the Committee is the role that will be played by the fiscal council. Have you arrived at any decisions on the part that it will play in that?

Mr McGuinness: I will not put words in the fiscal council's mouth but I suspect that it will welcome anything that aids the transparency of the financial process. We have not liaised specifically on the review of financial process with the council because it is still getting and understanding information on the Budget and the processes as they are at the moment. No doubt, we will discuss in due course with the council how the Estimates and the Budget will change because of the review of financial process.

Mr McHugh: OK. Do you imagine that the fiscal council will have a remit to comment on issues such as the presentation of the Budget documents and so on?

Mr McGuinness: Again, I will not put words in the fiscal council's mouth. It will have a remit for whatever it wants. It is quite possible that the council will wish to and be able to comment on the format of the Budget document and the information that is presented in it.

Mr O'Toole: Thanks for the evidence so far. The explanatory note to the Bill points out that the review of financial process was agreed in 2016. It goes on to say that the Bill deals with one aspect of alignment. Were any other additions to the Bill considered for inclusion?

Mr McGuinness: No, not at this stage. The Bill is focused on changing the Government Resources and Accounts Act (Northern Ireland) 2001 to allow this alignment. No additions are being considered at this stage. I want to make the Committee aware of a possible consequential amendment to the Bill in relation to the legislation for the Public Services Ombudsman. That legislation makes reference to DOF's role in directing accounts under the 2001 Act. We are considering looking at a change to references to the resource accounts and the Estimates so that they will properly align with the changes that we now propose to the 2001 Act. We are seeking advice on that issue but not considering introducing anything else in the Bill.

Mr O'Toole: It is clear that this is only one part of the review of financial process. Will you update us on where the other review actions are?

Mr McGuinness: We are focused on this element at the moment. When this process and this stage of the financial process review have been implemented, we will look at how this element has interacted. We will then look again at the remaining misalignments to see whether we can implement any adjustments, but that is the next stage down the line. We are making sure that we have this key element of the financial process review implemented first. We will then focus on a second stage to remove or reduce any other misalignments and consider any other areas where we may improve transparency.

The Chairperson (Dr Aiken): Matthew, apologies. May I come in on for a second? Jeff, will you clarify that? I have just been talking to the Clerk — you may have noticed that we were whispering away — and this applies to both accounts and Estimates. Will you explain that more, please?

Mr McGuinness: I am not 100% over the accounts element, but, ultimately, that will allow us to issue directions on the accounts to allow their alignment with the new Estimates process. At the moment, the accounts align with the older Estimate process and the existing position. It is to allow us to give directions. For example, if the accounts are being compared with the legislation, Budget or Estimates, this allows a comparison with the new position.

The Chairperson (Dr Aiken): OK. I need to get my head around that. I am not quite clear on it at the moment. Sorry, Matthew, go ahead.

Mr O'Toole: Last week, we considered a relatively straightforward statutory rule. It adds Forest Service and the Commissioner for Survivors of Institutional Childhood Abuse (COSICA) to those bodies whose accounts are to be consolidated in the whole of Government accounts (WGA), which is UK-wide. It is very relevant that we are talking about the account keeping of public bodies. We were quite concerned that Forest Service had not previously been incorporated into the whole of Government accounts. Is that an anomaly or is it symptomatic of a broader issue?

Mr McGuinness: Again, accounts are not specifically my area. I understand that the way in which we interact with the whole of Government accounts on a UK basis is that elements and bodies with a budget of under £5 million are not necessarily folded into them. They do not necessarily have to be. It is a material issue. I suspect that Forest Service is now registered because it has breached that threshold, so we need to consolidate it into the WGA.

Mr O'Toole: OK. We have written to the Department to ask for more information in whether other bodies are in that situation.

My final question goes back to Maolíosa's question, and it is about simplicity and transparency. We had another Budget debate yesterday. I think that you were sitting in the officials' box, Jeff, patiently suffering through that. Apologies that you had to endure that, but it reinforces the systemic challenge of a shockingly poor level of public and Assembly understanding of our Budget process's hieroglyphics. The Budget process is extremely poorly understood by the Assembly at large, let alone the public. It is fair to say that this is a relatively minute improvement that will enable trained accountants to do a slightly better read-across from one financial document to another, but it will not be a step change in the public understanding of how we do public finances here. That is a slightly political statement, but is it unfair?

Mr McGuinness: Many will agree with that position. This is not a panacea for understanding public expenditure, but it is a step in the right direction to allow better scrutiny and transparency by aligning the Budget and the Estimate process more fully to allow an easier read-across. There will always be difficulty in understanding public expenditure from the public's point of view. It is hard to get into it. We talk about an 18-month learning curve for people who come to work in our area. We appreciate that some people will say that it is very difficult to understand. However, with this legislation, we will try to allow a little more transparency and read-across to create a little more understanding. It is a move in the right direction, but you are correct in saying that it will not make everything really easy to understand immediately.

Mr Frew: Thanks for your evidence so far. The Bill allows the Department to issue guidance, and it aligns bodies that have a connection to a Department. It makes for a consistent read when we look at finances. Is that right?

Mr McGuinness: Yes, that is right.

Mr Frew: Where is the enforcement — if there is need of it, and I do not know that there is — if a body does not produce a standardised resource or Estimates sheet?

Mr McGuinness: The Bill will provide us with the authority to give direction, and Departments must follow that. The Bill, as you will see, does not necessarily apply to the Northern Ireland Audit Office, but the expectation is that it will fall in line as well.

Mr Frew: Yes, I see that it gets its own subsection. Do you have a list of the bodies that will be aligned?

Mr McGuinness: We have a list of the NDPBs in Departments. We also have a list of those that will not be aligned, which are the ones that are currently misaligned, such as Northern Ireland Water.

Mr Frew: What good reason is there to be misaligned?

Mr McGuinness: It is a good question. It will depend partially on the way in which some of their accounts are done. Northern Ireland Water's accounts are done on a different basis from the rest of government. I am not sure of the historical reasons behind that. Possibly, it has something to do with the fact that it was and is a Go-co. There is an issue with how its accounts are structured and with the alignment of its accounts to whatever particular accounts directions it is under.

Ms McBurney: May I jump in there? I can explain the Northern Ireland Water situation. The first thing that Jeff is saying is that it should be the exception that a body is not aligned, rather than the rule. Historically, Northern Ireland Water was created as a government-owned company, which had specific treatments in Budgets, Estimates and accounts because water charging was not introduced as planned at that time. The Office for National Statistics (ONS) said that the level of income that was being brought in by Northern Ireland Water was not sufficient for it to be treated as a government-owned company, which would be treated as a public corporation. Therefore, in Budgets, it is treated as a non-departmental public body. However, it is set up in legislation as a government-owned company and has to prepare its accounts in that way. That mismatch between the way in which it is designated for Budgets by ONS and the way in which it is legally established means that we cannot bring it inside the Estimates and accounts boundary. It does not produce its accounts on that basis, so that is simply not possible.

A few other bodies probably have specific circumstances for not being aligned. Jeff may want to say a little more about that, so I will hand back to him. It should very much be the exception, rather than the rule, that a body is not assigned.

The Chairperson (Dr Aiken): We just gave Northern Ireland Water an additional £30 million.

Mr Frew: We are told that most things are possible with legislation. Why not use the opportunity to align every single body that gets government money?

Ms McBurney: That is wider than the work that we are doing. The Department would need to be involved to make decisions on the way in which those bodies are structured and governed. That should be looked at, but this is not the way to do it. It is already a huge piece of work for Departments to align the bodies that they can align. A few bodies will be misaligned — I do not have the list in front of me — but there should not be many.

Mr Frew: Explain again why the Audit Office is not included. Surely we should be able to audit the Audit Office.

Ms McBurney: It is not considered appropriate for us to direct the Comptroller and Auditor General, because of his independence. Jeff, do you want to say a bit more on that?

Mr McGuinness: Yes. It was always the original intention of the Government Resources and Accounts Act 2001

but excludes the Audit Office from having to be

by the Department of Finance. It is about the Audit Office's independence and the fact that it should not be directed by us on its accounts and/or Estimates.

Mr Frew: Is that the same for offices such as the ombudsmen and the Utility Regulator?

Mr McGuinness: That and the potential consequential amendment are exactly what we are looking into. We are looking into how those align and whether we need to adjust the legislation relating to them so that we can provide direction on Estimates and accounts to them

Mr Frew: How will this affect a Department such as the Department of Education, where money is dropped down to education boards, which then drop down money to schools?

Mr McGuinness: In theory, it should not have any impact on a Department's day-to-day running. It will allow us only to make sure that whatever we see in budgets is reflected in the Estimates so that we can understand where the funding is and where it is spent and can ensure that the legislation follows appropriately.

Mr Frew: OK. This is my last question, Chair. Jeff, you say that the Bill will create no significant additional expenditure, but I take it that we are talking about a change of operation for these bodies. That change will bring expense, will it not?

Mr McGuinness: We are not talking about a change of operation. All that we are saying, effectively, is that, for the purpose of Estimates and accounts, the bodies will be treated as being inside the departmental boundary. They are not necessarily inside the departmental boundary at the moment. There should not be any additional cost associated with it. It just allows us to direct how we issue guidance on the Estimates process.

Mr Frew: There will be no additional training, you will not sprinkle down any new guidance, and there will not be a new form-filling exercise for the accountants of each body: is that correct?

Mr McGuinness: Not that I am aware of. No more than we normally issue guidance, training and direction on financial activities.

Mr Frew: OK. Thank you.

Mr Catney: The Assembly retains separate controls over the income and expenditure, rather than simply focusing on net controls in the Estimates. How does that work for arm's-length bodies? Should they be included in accounts for Northern Ireland? Where do they sit with the Programme for Government?

Mr McGuinness: Arm's-length bodies' budgets, for the likes of an NDPB, for instance, are currently within the departmental boundary.

Therefore, the budget will reflect what they spend their money on, whether staff, rent, rates or whatever else. At the moment, in the Estimates, the Assembly votes only for a cash grant to an arm's-length body. Therefore, there is already a significant misalignment. This legislation will allow us to direct the Estimates, so that, in the Estimates, Members vote for the same thing that is in the Budget. You will be voting for the areas that they spend that money on, staff, and so on. It allows us to align those.

There is a further piece of work that is probably separate in aligning the Programme for Government with the Budget. We are working with TEO colleagues on that to see how we can best align a new Programme for Government with the Budget process to make sure that there is top-down alignment from the policy intent of the Programme for Government, feeding through into the Budget process and down into the Estimates process, where it is legislated for.

Mr Catney: What are we currently voting on in respect of the Budget Bill? Are we talking about income and expenditure, or are they separate?

Mr McGuinness: You are voting on different elements in the Departments. You are voting on grants that they will pay out and admin that they will use. It will, perhaps, be voted on an income and expenditure basis, whereas the Budget is presented on a net basis. It is aligning those but also providing the information on income so that there is no lack or dilution of transparency when we come to the revised Estimates.

Mr Catney: Will that be the case for the 2022 Budget Bill?

Mr McGuinness: For the 2022-23 financial year, yes.

The Chairperson (Dr Aiken): Jim, do you want to come back in again?

Mr Allister: I will go back to some of the issues that Paul Frew was pursuing. The boundary here is public bodies that have been ONS-classified. Are there are still public bodies, NIW apart, in Northern Ireland, that have not been ONS-classified?

Mr McGuinness: Not that I am aware of. There is always a process of making sure that the classifications for public bodies are correct. There will always be correspondence with them on the most up-to-date classification, but I am not aware of any that are not classified by ONS. Certainly, all the long-standing public bodies are classified by ONS.

Mr Allister: My second question is whether this alignment includes the North/South bodies.

Mr McGuinness: Yes. The North/South bodies are treated as non-departmental public bodies, and we assume that the alignment will apply to them as well.

Mr Allister: How does that work, given that they work on a calendar financial year rather than April to March?

Mr McGuinness: At the moment, we use their calendar budget as a proxy in our normal Budget process, because the difference between the two is not material in any way. That allows us to use their calendar budget in our financial year. There will be a similar process for the Estimates.

Mr Allister: Will the alignment deal with the tardiness that there has been, historically, in the approval of their budget plans?

Mr McGuinness: We are working separately on making sure that we have guidance in place, as far as possible, to help North/South bodies to get their business plans

Mr Allister: I think that he has dropped out.

We all know that, in some cases, there has been a lag of as much as three or four years before plans are approved. Will the new legislation put an end to that?

Mr McGuinness: The new legislation does not directly impact on that. However, as I say, separately, we are working with the North/South Ministerial Council and Departments to make sure that guidance is in place in time and that we afford every facility to the North/South bodies to get their business plans approved on time and in advance of any calendar year.

Mr Allister: Chair, thanks for letting me back in.

The Chairperson (Dr Aiken): Thanks very much.

Jeff, I have a few questions. Where does Translink sit in this?

Mr McGuinness: I do not know offhand, Chair. I am not sure.

The Chairperson (Dr Aiken): I am concerned that Northern Ireland Water, which takes a substantial amount of the Department for Infrastructure's budget, and which will take even more of it, sits outside the reporting process. The independent fiscal council should look closely at the alignment to make sure that it works. If you took out Northern Ireland Water and, potentially, Translink — I am not sure about that — you take out very large chunks of what we have visibility of. It should report on all government expenditure and all government bodies, regardless of their structure. That is the only way to make sure that we have full visibility of the money coming in and going out. Taking out elements of it is of concern.

Northern Ireland Water should be aligned because, even though it is a Go-co, it does not act like one. We also have issues with the Northern Ireland Housing Executive. Has its status changed? Will we see it moving along the same lines as Northern Ireland Water? Will that be another area on which we will not have full visibility because it will be in a different accounting area? Significant questions still need to be answered.

Mr McGuinness: Certainly, Chair. I want to reassure you that the new process will not dilute the transparency that you have. In the revised Estimates process, which aligns with the Budget, we will make sure that we provide at least the transparency and granularity that you have through the current Estimates process.

We can certainly look at that. We are doing our best to make sure that we include all public bodies where possible. We can provide you with more detail on that in due course.

The Chairperson (Dr Aiken): Yes, but [Inaudible.]

Ms McBurney: May I jump in, Chair?

The Chairperson (Dr Aiken): Sorry. Go ahead, Joanne.

Ms McBurney: The key thing is that the review of financial process will not be a panacea for all ills. We are seeking to create more transparency by aligning the Budget, Estimates and the Vote on Account processes. What we cannot do as part of the process is change how some of the bodies are set up. That would be a wider piece of work than the review. It should be looked at, but it is not part of the review.

Jeff can correct me if I am wrong or come back on it, but, from memory, Translink is designated by the Office for National Statistics as a public corporation. That means that the only transactions that score in the Department's budget are funding that the Department gives to or receives from Translink. Due to Translink's nature, we cannot bring its full expenditure inside the Estimates process, as that would create, rather than remove, a misalignment.

It is not within the gift of the review to change the way that a body has been designated for budget treatment by the ONS. That would require something much wider than we can do.

The Chairperson (Dr Aiken): Yes, but throughout recent Budgets and the COVID pandemic, we have seen substantial transfer to Translink and Northern Ireland Water. It is —.

Ms McBurney: Yes, you are absolutely right. A broader piece of work probably needs to be done. I am just highlighting that it is not part of this review.

The money that went from the Executive to Translink is in Budgets and will be in the current Estimates. There is transparency on the funding that goes from the Executive to Translink. What you do not get in either Budgets or Estimates is the breakdown of what Translink spends that money on.

The Chairperson (Dr Aiken): OK. Thanks very much indeed.

Joanne and Jeff, as usual, thank you very much indeed. We will ask you to drop out for about 40 seconds and then bring you back in again.