Official Report: Minutes of Evidence

The Deputy Chairperson (Ms Ennis): From the Department of Justice, I welcome Deborah Brown, director of the justice delivery directorate; Andrea Quail, head of financial planning strategy; and Louise Blair, head of financial planning support. You are all very welcome. Thank you so much for joining us. The session will be reported by Hansard, and the transcript will be published on the Committee's web page.

Deborah, are you going to kick us off? Do you want to give us an outline of the October monitoring round position and the 2022-25 Budget process?

Ms Deborah Brown (Department of Justice): Good afternoon. Thank you for the opportunity to provide an update on the DOJ budget. We aim to give you an update on where we are with the October monitoring round and the returns that have been submitted to date as part of the information-gathering exercise for the 2022-25 Budget.

The main area for discussion today is the October monitoring round, which is the second monitoring round of the year. As you are aware, this year continues to be very difficult in terms of our budget pressures and the uncertainty that has been created by COVID-19. When finalising the 2021-22 budget, the Department had significant resource pressures; at that stage, those were estimated at £55 million, excluding the COVID-19 pressures. The pressures reduced to approximately £27·7 million as a result of a reduction in the PSNI pressures of £14·3 million and an in-year allocation of £9·8 million to the PSNI. The pressures were further reduced to £23·9 million in the June monitoring round. In the June monitoring round, the Department bid to DOF for £23·9 million for those pressures, plus £16 million for Compensation Services pressures resulting from a change in the personal injury discount rate — a total bid of £39·9 million. Allocations for the June monitoring round totalled £11·5 million, leaving pressures exiting the June monitoring round of £28·4 million.

As part of the October monitoring round, the pressures have been reviewed and further reduced to £25·4 million. While there has been some movement of pressures, increasing and decreasing across our business areas, the main change is a reduction of £3 million in the pressure being faced by Compensation Services in respect of the personal injury discount rate. The Compensation Services pressure was estimated alongside a range of pressures estimated at that point, and we bid to DOF for £16 million. That has now been updated and reduced by £3 million. The Executive provided £5 million as part of the June monitoring allocation. Therefore, this is a pressure of £8 million. DOF has advised that negotiations on those costs are ongoing with Her Majesty's Treasury (HMT). Should funding be received from HMT, it will be held centrally for reallocation. However, uncertainty remains in relation to the timing and quantum of those settlements. We will continue to keep them under review throughout the year.

On PSNI pressures within the £25·4 million, a bid will be submitted to DOF in the October monitoring round for £3·4 million in relation to EU exit pressures, as the funding required from HMT for the Northern Ireland protocol will not be met at this stage. There are bids of £1·1 million for COVID-19 pressure and £134,000 for the McCloud pressure.

Taking all this into account, the Department will submit bids to DOF of £25·4 million, which are set out in annex 1 of your paper. The bids include the £8 million for the Compensation Services payments. Should all those pressures be met, the Department would leave the October monitoring round with £1·7 million of unallocated funding, £334,000 earmarked for Gillen, and remaining pressures of £1·275 million. Those pressures, along with any unmet bids, would be reviewed following the October monitoring round and considered again at January monitoring.

We have some ring-fenced easements, which must be surrendered. Those total £914,000: £430,000 for the Office of the Police Ombudsman for Northern Ireland (OPANI) for historical investigations; £295,000 for Together: Building a United Community (T:BUC); and £189,000 of COVID funding.

Moving to capital, the 2021-22 budget was allocated in full as part of the opening Budget exercise. We left the June monitoring round with an easement of £846,000. Further easements have been identified as part of the October monitoring round, bringing the total to £2·276 million, which will now be surrendered to DOF.

As part of the October monitoring round, we will update our ring-fenced resource departmental expenditure limit (DEL), which is a technical budget to cover depreciation and impairment costs. We have received bids of £4·3 million for ring-fenced resource DEL, for which the Department currently holds £1 million. We will allocate that and bid for the remaining £3·3 million. That would leave the Department with no remaining unallocated ring-fenced resource DEL. We reduced our annually managed expenditure (AME) budget, and will agree movements and bids of £33·7 million as part of this round.

Moving to the Budget 2022-25 process, budgets beyond 2021-22 have not yet been set. The Department of Finance formally commissioned the Budget 2022-25 process, the information-gathering exercise for resource DEL, on 6 August. You have been provided with a copy of our return. That exercise continues. The capital exercise was commissioned by the Department of Finance on 9 September, and those returns are due this week.

The Chancellor formally commenced a multi-year spending review on 7 September, with the outcome to be announced on 27 October. The Executive's funding envelope is set by the spending review. Our ability to set a multi-year Budget is constrained by the period that is covered by that spending review. Treasury has announced that the period to be covered by that spending review will be three years for both resource DEL and capital DEL. DOF intends to plan the Executive's Budget on that basis.

I hope that that has provided a useful overview of DOJ's financial position. We will continue to keep this under review, because it is a very challenging budget. Thank you for the opportunity to brief you. We very much value the role and views of the Committee and are happy to take questions. Thank you.

The Deputy Chairperson (Ms Ennis): Thanks very much, Deborah. That was very useful. I have a couple of questions, and then I will open it up to other members.

A total of £914,000 has been returned, specifically £430,000 for the Police Ombudsman, £295,000 for T:BUC and £189,000 for the Courts and Tribunals Service's COVID funding. Could you give us a wee bit more detail on that? Why was it not used? What was the reason?

Ms Brown: The Courts and Tribunals Service had some increased pressures and some easements within the COVID funding, but we have to return it to DOF because that was the purpose for which it was intended. There have been some issues with the T:BUC fund, where there was a little bit of slippage. That will be returned to the centre and will, hopefully, be used for other T:BUC programmes. We have some easements coming out of OPONI. We had an easement at the June monitoring round of £1·1 million, and we now have this further easement of £430,000. We had late notification of the Budget allocation to OPONI, which delayed its ability to proceed with the recruitment of staff. Therefore, at this stage, that is a slippage. It should not create any additional pressures, but it does push the requirement for the funding into future years.

The Deputy Chairperson (Ms Ennis): OK. Thank you for that, Deborah. There is a bid of £3·4 million for the PSNI to address Brexit pressures and implementation of the protocol. Can you give us some understanding or more detail around what those specific pressures are? There is mention in your paper of criminal activity and so on, but is there any evidence that there is or will be increased criminal activity to justify that £3·4 million?

Ms Brown: Part of that is recurrent costs, which are to do with the recruitment of 308 officers back in 2018-19. We have to make sure that we continue to fund those staff. There are also things around the command, control and coordination (C3) portal units and the CCTV systems that are needed across the designated ports. The PSNI wishes to retain the additional EU exit posts to ensure that the benefits of those can be realised. There is still uncertainty associated with the outworking of the protocol, including the longer-term arrangements to replace the temporary and the timing of grace period solutions that were agreed under it. Depending on how those issues are resolved, further impacts might be felt downstream. It will continue to be kept under review, but these are existing costs where the PSNI has put in staff, etc to manage the protocol.

The Deputy Chairperson (Ms Ennis): Thank you for that, Deborah.

Mr Weir: Thank you, Deborah and the team, for the information that you have given so far.

I want to touch on three issues on the monitoring round. The Chair referred to the Police Ombudsman's money. On a number of occasions, there has been an underspend there and money has had to be returned. First, is the Department confident that the baselines for the Police Ombudsman's office are correct?

Secondly, while additional money is welcome, the issue is whether there is additional pressure or rising demand for referrals. There is a bid for £300,000 for modern slavery victims, and it is important that they are supported. However, I would like to get a sense of where that is directed, and whether that shows increasing problems with trafficking.

Thirdly, there appears to be an increase in easements on the capital side. Can you give a bit more detail as to where those capital easements have come from and how they have arisen?

I will come to my further questions after that.

Ms Brown: On our current underspends, the issue is that we continue to monitor the impact of COVID in these uncertain times. At the moment, the underspends are quite small. We are facing significant pressures, which is why we are bidding for such a substantial amount.

The requirements for the modern slavery services have increased. They have a baseline of about £350,000. We have a statutory obligation to provide support to victims. In 2020-21, there was a need for approximately £300,000 more than the budget, and we were able to make savings elsewhere to try to manage that. We will keep this under review. We place a significant focus on that to make sure that we are able to provide funding.

Mr Weir: Is that through increased identification of victims? It may be a double-edged sword. If we are catching more perpetrators and, therefore, supporting more victims, that is obviously a good thing. On the flip side of the coin, the need for that additional spend may show that the problem is not dissipating but increasing. It would be useful to get a bit more detail on that, even in writing.

Ms Brown: Absolutely. I will take that away and try to get more detail for you.

Mr Weir: What about the capital side?

Ms Brown: The largest easement that we had in our capital budget was about £500,000, which is to do with the state pathology case management system. The introduction of that system has a budget of about £1 million. Unfortunately, the timeline for that has slipped into next year. We estimate that we only need £500,000 this year. We will keep that under review.

The other easements are much smaller amounts. We have a bit of slippage in our remote evidence centre; there was a change to the timing of that programme. We have delays in some of our ICT projects in the prisons. We have small slippage in a few projects in Forensic Science. There were some fit-out costs for offices that were, then, actually not needed. Those are the reasons for the small number of easements that we have in our capital budget.

Mr Weir: OK. I want to ask two questions on the budget. First, have you any indication or estimate of what the total liabilities across the Department's agencies will be under the McCloud judgement?

Secondly, the PSNI has outlined three transformation business cases: for police numbers, for digital services and for estates. The aim of any transformation is to produce certain long-term savings, but it is almost inevitable that transformation will have an upfront cost before it starts to achieve those savings. Unless I have this wrong, there is an allocation for the increase in police numbers, but there does not appear to be bids for additional transformation costs on either the digital or the estate sides of things. Will you give an explanation of that?

Ms Brown: The digital and estates projects are both capital projects, so those are being considered as part of the capital exercise. You are absolutely right: significant costs are involved. The business cases are currently under development, and we are working closely with the PSNI on those. An associated business case around the police numbers is also being constructed.

I did not quite catch the liability that you mentioned.

Mr Weir: The liability under the McCloud judgement.

Ms Brown: That is across the board. At the moment, the figures are very high-level estimates. It will depend on the number of people who come forward. We have made DOF aware of our position on that, but we do not have numbers to quote at this stage.

Mr Weir: Thank you.

Mr Newton: I thank the officers for coming to the Committee today. The Department has identified a number of areas that should be considered as exempt from reductions. Why are tackling paramilitarism and T:BUC exempt from reductions? I am not saying that I do not support that. I have been pushing to have the T:BUC lines altered to bring in areas of need and because, obviously, the paramilitary situation has not improved. Will the Department talk about that area?

Ms Brown: Both T:BUC and tackling paramilitarism are cross-departmental initiatives that are led by TEO. We have only a small element of that funding. On tackling paramilitarism, there is an allocation from the Executive and an allocation from the UK Government. As far as I am aware, work has been done that supports having that amount of funding and, indeed, highlights that there is a requirement for additional funding. We know that spending in that area will save money in the longer term. From our point of view, it is really important that programmes such as tackling paramilitarism and T:BUC are ring-fenced so that we realise the benefits of them as soon as possible.

Mr Newton: Although those are multi-funding programmes, is it possible for them to be moved into the Department's baseline?

Ms Brown: No. They are cross-cutting, so they are always held by the responsible Department. The programme and the projects that are delivering on the objectives are looked at and it is decided who needs what in what year etc. There is also the benefit that, when we return funding, it can be redistributed across the other Departments. It works in a more streamlined way.

Mr Newton: I know that I am not the only elected representative to look for some T:BUC money to be spent in their constituency. Given that we are tackling all the issues around deprivation and so on, how did we arrive at a situation in which we returned, in T:BUC terms, such a significant amount of money?

Ms Brown: We are dependent on other partners for our delivery on these programmes and as regards how they are prioritised. The T:BUC budget is managed centrally and an element of slippage is allowed for. When you are planning, you will have a number of projects that, if they all delivered, might exceed your budget, but you know that you have an element of slippage. You are always relying on the fact that there will be a bit of slippage in your planning. That is not unexpected given that all those programmes are managed centrally.

Mr Newton: It is not a wee bit of slippage; it is a significant amount. I cannot find it; will you confirm the amount for me?

The Deputy Chairperson (Ms Ennis): It is £295,000.

Mr Newton: So, £300, 000. It is not an insignificant amount of money for community work, considering that it is within fairly tight geographical areas.

Ms Brown: It then goes back to the centre and will be used for other projects in T:BUC.

Mr Newton: That is fair enough. At least it may be of value to others, but it was allocated for these projects, and we have failed to spend it in that area. OK. That is fine.

I have a question on revenue raising, particularly around court fees. How do our court fees compare with those in England, Scotland and Wales or, indeed, the Republic?

Ms Brown: I do not have that detail with me. I apologise. I can get that for you.

Mr Newton: So, we do not know whether our court fees are higher or lower.

Ms Brown: Colleagues in the Department will know, but we in finance do not have that information with us today. We can get that for you.

Mr Newton: We have identified court fees as a potential means of revenue raising.

Ms Brown: Yes, we are exploring it. We will be taking into account and exploring what those fees would be by looking at what is happening in other jurisdictions, but the challenges here will be the time delay in us being able to put this in place because we will need secondary legislation. By the time that we are able to realise savings, we could be a couple of years down the line. I can get you some information on how they currently compare with England and Wales and Ireland.

Mr Newton: I think that that would be useful, Chair, if the Committee was minded to receive that. I note that we have been able to recover an increase from 73% in 2016 to 77% in March 2020. Are we considering perhaps building in an inflationary cost as opposed to maybe just increasing the cost? Maybe that is the same thing a different way.

Ms Brown: I can get that information clarified for you.

Mr Newton: OK. I had a final question, but I have lost my place, Chair. Can the officials clarify the next stages of the draft process? Can I come back if I find my place, Chair?

The Deputy Chairperson (Ms Ennis): We will not put you under pressure. That is OK, Robin. We will come back to you at the end. We will go to Jemma, Rachel and Sinéad and then come back to you, Robin.

Mr Newton: Thank you, Chair.

Ms Dolan: Thank you, Deborah, Andrea and Louise, for your presentation. I will go back to the key priority areas in the budget that the Department wants to be exempt from cuts, which Robin was talking about. What criteria are used by the Department to determine which areas should be exempt from reductions?

Ms Brown: When we look at the areas for reduction, we are looking at those areas in which we have limited control over the costs where they are deemed to be a key priority. You will see that we have included EU exit. If we did not get that funding going forward, that would have a significant impact. Legacy remains a key priority for the Department. You will be aware of the New Decade, New Approach (NDNA) commitments on PSNI officers. Those are the sorts of criteria that were used in establishing those. You will see that legal aid is included. Legal aid is demand-led, and, indeed, the legal aid baseline budget is insufficient to meet the demand that we have experienced over the past number of years. We have always had to bid in year. On Compensation Services, again, you were made aware of the challenges that we have now with the increases around the statutory discount rate. Again, that is a demand-led service, and that is why we are saying that there should not be any cuts to that either. We have already discussed the cross-cutting ones around tackling paramilitarism and T:BUC.

Ms Dolan: Thanks. That makes sense.

On the bids that the Department is submitting to meet a range of resource pressures, what plans will be put in place to manage those pressures if a bid is unsuccessful?

Ms Brown: We await the outcome of the October monitoring round, which, we hope, will be towards the end of October. We will then look at what we have managed to secure, look at the remaining pressures and see where it will be possible to slow down or stop expenditure, as the case may be. As you can see from the bids, however, there are some things relating to pay and price, for example, that are truly inescapable, so there will be limits to what we will be able to do. We plan to come back in early November, when we will know the outcome of the October monitoring round, to decide what our next steps will be.

Ms Dolan: OK. Thank you.

Miss Woods: Thank you very much for your presentation and for the pack that was given to us for today's meeting.

A number of questions have already been asked on T:BUC, but I want to go back to it. Apologies if this has already been asked, but I am finding my sound and the internet quite difficult here in Bangor. Is the £295,000 slippage that is being returned for T:BUC the result of particular projects not going ahead because of the COVID pandemic?

Ms Brown: No, it is not because of COVID. There was a small easement. A two-phase project is being taken forward with DFC and IFI funding. DFC is covering some of the costs in 2021-22, but the costs that relate to us for the removal and replacement of the Ballygomartin interface will not be incurred until next year.

Miss Woods: OK. Thank you. Was the £295,000 for that one project, then? Will we see that next year?

Ms Brown: Yes. The budget is managed in a way that anticipates slippage in such projects. That money will go back in, and whoever can use it this year will do so. Hopefully, it will be reallocated back out to us in our allocation next year.

Miss Woods: OK. Thank you. Sorry, I just wanted to clarify that.

The departmental letter in our pack states that, as part of the monitoring round, the Department is submitting a bid for £65,000 for legal aid costs in relation to the personal injury discount rate litigation cases on access to justice. What legal costs are those? The table in appendix 1, under Compensation Services and the change in the personal injury discount rate, states that the June bid was £16 million; the funding received was £5 million; the revised pressure in June was £11 million; and the October bid is £8 million. What is that for? What is the difference between the legal costs and Compensation Services?

Ms Brown: We will let Louise cover that one. Thank you.

Ms Louise Blair (Department of Justice): The smaller amount of £65,000 for access to justice is for the legal costs of, I understand, a judicial review (JR) against the Department. The bigger amounts against Compensation Services relate to the increase in the compensation payable to victims under the new personal injury discount rate. The rate at present is under the old scheme, and that will potentially change in January or early in the new year. The pressure in Compensation Services is for victims' payments.

Miss Woods: OK. That is what I wanted to clarify: the June bid was £16 million, which was at the interim rate; £5 million was received, and the figure was then revised down to £11 million. Was it revised down because not as many people were claiming or settling at that time?

Ms Blair: There are a number of uncertainties in timing and quantum around the amounts, which are quite outside the Department's control. We have updated the forecast pressure based on the information that we know at this point, and we will review that closely. We are keeping a very close eye on it in advance of January monitoring.

Miss Woods: Thank you. Sorry, it is just that the Committee is looking at the Bill today, so it is good to get some actual numbers for the budgets.

Finally, template 1, the strategic assessment form, states that there is legal aid pressure, which has been stated as a £17·8 million funding shortfall over the next number of years. It goes on to state that that pressure will be exacerbated by the Domestic Abuse and Civil Proceedings Act (Northern Ireland) 2021, given the amendments made in the Act, which:

However, no further financial pressures have been itemised in that section. If there are going to be further increases in the cost of the legal aid bill in relation to the amendments that were made in the 2021 Act, has there been any financial forecasting on that? Obviously, there is a £17·8 million funding shortfall over those years, but it has not been outlined. Is that going to be outlined?

Ms Brown: At this point, as regards those pressures, the Legal Services Agency (LSA) has taken into account what it knows about those impacts. Those are all factored in at this stage. As I said earlier, the LSA starts a bit behind the ball because it has not had a baseline that has met its demand over the past number of years. Then you have the issues of catch-up with regard to COVID etc, and then we have to meet the demand that is coming through and the additional pressures that were caused by the 2021 Act and others. There are a number of things that are built in behind that figure work.

Miss Woods: Thank you. Finally, I want to ask you about the phrase:

Was that specific advice that was given by the Department of Justice or the Legal Services Agency?

Ms Brown: Are you reading from the template?

Miss Woods: It is at template 1 — the strategic assessment form. At the bottom of the paragraph, it says:

Ms Brown: This is where we are having to work through the issues around the waiver. There are costs associated with removing the financial eligibility issue. Those are increased costs that we had never built into our business case. As you know, we are currently working our way through that. That is what that is referencing.

Miss Woods: Thank you very much.

Ms S Bradley: I thank the officials for being here. A lot has been covered. I want to pick up on Rachel's final point. Is it normal process to state "against the advice of" the Department? I do not know why that is stated. A Bill is a Bill, as far as I am concerned. I would be keen to have some feedback on whether that is common practice. Are there examples of that type of language being used at that stage in terms of measures? I appreciate that it was something that was not factored in. It may be there as a note to officials more than anything else, but it is quite sensitive, in my view.

To be fair, a lot of questions have been answered, so I am not going to labour anything unnecessarily. Nevertheless, I would like to go back to T:BUC, if that is OK. It is about the money that was being returned. We have already established that that was down to just one scheme, which took me a bit by surprise. I am eager to hear more detail about that scheme, why it was delayed and about that amount of money, which is quite sizeable.

I know that it is referred to as a small amount, and it may be small in terms of the overall budget, but it is still a significant amount of money, as is the £189,000 for the Northern Ireland Courts and Tribunals Service's COVID money. That is a slippage, but what percentage is that of the overall budget that was allocated as COVID-19 money? Why was that not able to be spent? I know that it was not able to be spent, and that has been repeated, but I have not heard why. What happened to not allow spending on that?

Ms Brown: We will need to come back to you with further details on T:BUC. I have given you what I have on it at this point, so I will come back on that one.

Our total budget for COVID at the moment is £28·4 million, and we have bids for another £1·1 million in this round. As I said, because it was allocated for the purposes intended, that is why it has to go back. Overall, however, we are not in an underspend position on COVID. I will ask Louise to give you more detail on that.

Ms Blair: Specifically, a lot of the courts' funding for COVID came because they anticipated a shortfall in their income due to a lot of the civil work not being taken forward this year. Their income position is higher than they had anticipated, however, so they have an easement in income of £675,000, which is offset by additional costs that they are incurring for estates, such as additional accommodation, because of continued social distancing and the increased staff and security for some of those, as well as additional IT requirements. The net position between their additional income and additional costs is an easement of £189,000. As they are not making use of that money, we are returning it.

Ms S Bradley: I appreciate that. Thank you very much. That brings clarity to that. I would appreciate it if you would come back on T:BUC, as well as on the language. Is that a fair example of how those documents would be scripted at other times?

The Deputy Chairperson (Ms Ennis): Thank you, Sinéad. Do you want to come back in, Robin?

Mr Newton: I agree with others who have spoken about T:BUC. We deserve an explanation as to why money was held for one project and did not go forward. At what stage was it identified that that would not go forward? Was there enough time to reallocate money? There are some questions for which answers should be provided to the Committee.

I lost my place, but my point was about the Office of the Police Ombudsman. An amount of funding that is not insignificant — nearly £500,000 — is being returned by the Police Ombudsman. That is a baseline, is it not? Am I right that that is a baseline?

Ms Brown: Yes.

Mr Newton: Can you tell me why that £430,000 is being returned? Is a regular amount — or regular amounts — being surrendered by the Office of the Police Ombudsman?

Ms Brown: That was specifically on its case management system. It was a capital project that slipped. That is why that is being given back. It is not a regular amount of funding.

Mr Newton: Is it a one-off for the Police Ombudsman?

Ms Brown: Yes.

Mr Newton: What area did you say that the slippage was in?

Ms Brown: The case management system.

Mr Newton: The case management system.

Ms Brown: Hold on a minute, sorry. The case management system relates to the State Pathologist's Department and the £500,000 that is being surrendered from the capital budget. Are you referring to a different figure?

Mr Newton: I am referring to the £430,000 returned in relation to historical investigations.

Ms Brown: That is because of the Budget for 2021-22 being announced so late at the end of the last financial year, which delayed OPONI being able to move forward to recruit staff. That is why there was slippage on that.

Mr Newton: OK. You said that that is a baseline function for the Department. Could that £430,000 not have been allocated somewhere else to ease some pressures?

Ms Brown: We looked at all our easements. We will use our easements to meet pressures. We finished this round with £1·7 million of pressures and £1·2 of easements. We will wait until we know the outcome of the October monitoring round and those £25 million bids to decide how to utilise that small amount of funding and will look at what decisions we need to take around any other bids that are not met. That will be used.

Mr Newton: OK. Are you telling me that there is not a regular surrender of money by the Office of the Police Ombudsman?

Ms Brown: In this particular case, there were previous easements because of the delays in them getting staff recruited.

Mr Newton: Yes, but are you telling me that there is not a regular surrender of money by the Office of the Police Ombudsman?

Ms Brown: It depends how we define regular. I would need to look back over previous years, and I do not have that information with me today. Sorry.

Mr Newton: OK. Thank you.

The Deputy Chairperson (Ms Ennis): I thank Deborah, Andrea and Louise for their time with us today and for answering our questions. We have other questions that we will send to them for a written response. On the back of the question and answer session, we will add Peter's question on modern slavery and the correlation between the spend and the underspend, the comparison of court fees in other jurisdictions that Robin raised and the specifics of the T:BUC programme that Sinéad raised. We will add those questions to the list that we will send to the Department for a written response. If we are agreed, I will thank the officials for their time today and let them go.

Ms Brown: Thank you very much.