Official Report: Minutes of Evidence

Committee for Justice , meeting on Wednesday, 26 November 2014

Members present for all or part of the proceedings:

Mr Paul Givan (Chairperson)
Mr Raymond McCartney (Deputy Chairperson)
Mr Stewart Dickson
Mr S Douglas
Mr Paul Frew
Mr Seán Lynch
Mr Patsy McGlone
Mr A Maginness
Mr Edwin Poots


Mr Glyn Capper, Department of Justice
Mr Billy Irvine, Department of Justice

Draft Budget 2015-16: Department of Justice

The Chairperson (Mr Givan): I welcome Glynn Capper, deputy director of finance, financial services division, and Billy Irvine, the acting head of financial planning and budgeting, both from the Department of Justice (DOJ). This session will be recorded by Hansard and published in due course. Apologies for keeping you a little longer than initially intended. At this stage, I hand over to you to take us through your 2015-16 budget.

Mr Glyn Capper (Department of Justice): Thank you, Chair. The Committee will be well aware of the difficult financial position facing all Departments this year and looking ahead to 2015-16. The briefing you received for today sets out the 2015-16 draft budget position for the Department of Justice. To assist the Committee in considering the Department's position, I would like to focus on three areas: first, an overview of the draft budget for the Department; secondly, what the implications are for DOJ spending areas; and, finally, the next steps in the process.

Looking first at an overview for the Department, the table on page 2 of your briefing provides a summary of our resource position. The starting point for the Department's budget is a 15·1% cut against our 2014-15 opening baseline. That is a cut equivalent to £165 million. The Executive will then provide an allocation of £70 million, equivalent to 6·4%, so the net impact is therefore a cut of 8·7%. Separately, HM Treasury is providing £29·5 million of security funding for the PSNI. That is not baseline-related and is specific funding for a specific purpose. If that was incorporated into the workings, the net reduction would be 6%.

However, it is important to note that the starting point for all DOJ spending areas will be the 15·1% reduction. The £70 million allocation from the Executive cannot be used to reduce each spending area's cut to 8·7%. That would only be the case if the Department had no pressures and the £70 million was allocated to each spending area on a pro rata basis. As part of the process over the next few weeks, the Department will allocate that funding based on ministerial priorities. In some areas it will be used to offset the impact of baseline cuts, so some areas will have cuts lower than 15·1%. However, some areas might actually have higher cuts so that funding can be reallocated to front-line priorities. In other areas, the £70 million will be allocated to offset specific demand-led pressures.

Looking at the implications for DOJ spending areas, when the Minister briefed the Committee on 1 October, he noted that there was little doubt that very difficult funding and prioritisation decisions will be required that will have a major impact on the wider justice system and the services that we provide. A high-level summary of the impacts is set out in your briefing. The Committee will be familiar with many of those, as the impacts in most cases will be deeper cuts and the continuation of the measures necessary to live within this year's budget.

Your briefing paper also provides an overview of how the Department's budget is allocated. The graph at paragraph 8 clearly illustrates that the PSNI budget is by far the largest. The next largest budgets are those of the Prison Service, the Legal Services Commission and the Courts and Tribunals Service. The graph also illustrates the complexity of the DOJ budget. With four executive agencies and nine executive non-departmental public bodies (NDPBs), the DOJ has more bodies than most Departments, so there is a range of competing priorities to be taken into account when allocating funding.

The distribution of the budget is also important. The core Department, including Compensation Services, which was formerly the Compensation Agency, accounts for only 7% of the total budget, with 93% of funding allocated to agencies and NDPBs.

The Minister's priorities are set out in your paper and include: protecting front-line policing as far as possible; ensuring that the PSNI has adequate additional security funding; and protecting other front-line areas across the Department as far as possible, with the aim of protecting outcomes for the public. The Minister is currently considering information to inform the draft budget allocations. I will say something about the next step shortly.

It is likely that the core Department will be asked to make savings of 20% or, more likely, a slightly higher figure. That highlights the steps being taken to release funding to the front line. Other spending areas have been asked to plan for cuts in the range of 10% to 15%. They have provided information to the Department outlining the impact of those cuts, and that will be used to inform draft allocation decisions.

As I mentioned earlier, some areas will be protected and will have a lower savings figure. The PSNI will have a savings target that is lower than the rest of the key spending areas. In fact, that is likely to be as close as possible to the 8·7% overall DOJ budget reduction and, therefore, lower than the scenarios of 10% and 15% that the PSNI was asked to prepare plans for. That reflects the priority to protect front-line policing as far as possible.

The Prison Service, being another critical front-line service, will also be protected as far as possible. That takes into account the fact that the service's budget reduced by 15% over the four years of the current budget period, delivering significant savings through the staff exit scheme. I expect that the Office of the Police Ombudsman will also be protected from cuts as far as possible, as will some smaller front-line organisations like the Police Rehabilitation and Retraining Trust.

In many areas, the levels of savings required will mean fewer staff, but it is too early to be able to put a figure on that. When each spending area works through the implications of its draft budget figure and prepares detailed savings delivery plans there will be more certainty around staffing impacts. The Department will share those plans with the Committee when they are available. Work on developing an exit scheme is being led by corporate HR in the Department of Finance and Personnel (DFP), and the DOJ will provide information to DFP over the coming weeks.

I am conscious that the Committee will have an interest in the legal aid position next year. Legal aid, as you know, is demand-led, and historically the available budget has not been sufficient to meet that demand. That will continue to be the case next year. It is worth noting that the legal aid baseline of £75 million will also be subject to the 15·1% cuts, equivalent to a cut of around £11 million, which reduces the baseline funding to £64 million. That will simply increase the pressure. On that basis, the Justice Minister, as part of the 2015-16 draft budget process, will consider a range of urgent measures with a view to closing the gap and living within the funding available as far as possible. That work will be taken forward by the Department's public legal services division, which will no doubt brief the Committee as the work develops.

Delivering the savings required across all areas will be very challenging. The Committee has asked for a breakdown of the Department's contractually committed spend to assist it in assessing the impact of cuts. I have provided a separate summary of how our spend is broken down by each spending area. That excludes the Police Service, given that its budget is disproportionate to the other areas, as that sometimes skews the information. So, I have tried to analyse our spend not just by contractually committed costs, because that does not necessarily provide the most useful analysis, given the nature of the Department's work. The analysis looks at the main blocks of costs and shows that there are six categories that account for over 90% of spend. Those are: staffing costs; legal aid payments; accommodation costs; contracted-out costs; compensation payments; and prisoner-related costs. Those are a combination of contractually committed costs, statutory commitments and, as noted above, the largest element is staffing related. While not all fixed, there are clearly difficulties making savings quickly in all of those areas. Hopefully that highlights the challenges faced by the Department.

It is also worth touching on capital. As your briefing points out, the DOJ capital baseline will fall significantly next year. We have a range of capital requirements, mainly in the police and Prison Service. Without additional funding, there will need to be significant prioritisation.

Having looked at the overall draft budget for the Department and the impact for spending areas, I would like to quickly set out the next steps. As I mentioned, the Minister is considering draft allocations for DOJ bodies. Each body will be informed of its draft budget allocation at the beginning of next week and will be asked to complete a savings delivery plan during the consultation period between now and Christmas. That will provide more detail about the actual impact of cuts based on a specific savings figure, and I will ensure that this information is provided to the Committee. The Department will consider the savings delivery plans and consult on its allocations, and, after 29 December, it will share the outcome of that with the Department of Finance and Personnel to inform decisions on final Budget allocations.

In concluding, I apologise for a lengthy set of opening remarks, but, given the issues involved, I hope that this provides you with useful information.

The Chairperson (Mr Givan): Thank you very much, Glyn. Are these draft Budget proposals from the Department in keeping with the priorities identified in the Programme for Government or does there need to be any recalibration?

Mr Capper: The Minister's priorities as set out, including, for example, protecting front-line services to the public, are in line with the Programme for Government. The consultation process will provide an opportunity to test that. If, as a result of that, any recalibration is required, there will be an opportunity to do so.

The Chairperson (Mr Givan): Some may say that the figure of £75 million for legal aid has not been achieved in years, and so, every year, additional resources have to be found to meet the pressures. I imagine that representatives of the legal profession, if they were here, would say that £75 million is not an appropriate baseline to start with in order to then take 11% from it to get £64 million. How would you respond to the suggestion that £75 million is not the baseline that should be used?

Mr Capper: There are a number of points to that, Chair. The figure of £75 million has been the historic legal aid baseline since devolution. As you said, when we apply the 15% cut to it, that takes £11 million off the baseline to take it down to £64 million. From there, we need to consider what additional funding can be provided on top of that to meet the demand as far as possible. There is also an observation that, if the £11 million does not come off that baseline, that is £11 million to come off somewhere else in the Department.

The totality of the £165 million, the15% cut, has to come off the total budget, so what the Department will aim to do in setting a budget for the Legal Services Commission is take into account that baseline cut, take into account what other funding from other savings in the Department can be used to supplement that figure and then look to see what proportion of the additional allocation from the Executive can be used to add to the Budget. As I said in my opening comments, a combination of those will be used to try to fund the legal aid forecast next year as far as is possible, but there will no doubt be a gap that will need to be managed.

The Chairperson (Mr Givan): What options are available to the Department and its agencies to avail themselves of the voluntary redundancy scheme that is being talked about? Have you identified how many people could potentially go as part of that scheme?

Mr Capper: I am reluctant to put a specific figure on that just yet. Over the coming couple of weeks, when we inform people of their draft Budget allocation and their percentage saving, we will then ask each area to pull together a detailed savings delivery plan. That will draw out what staffing implications there are for people to meet their savings target. We will collate that and provide the information to corporate HR and DFP.

There are a couple of considerations for the Department, but, as the analysis shows, the vast majority of our budget is staff-related, and it is important to note that the majority of that budget is with arm's-length bodies, so we will work to see how the terms of the scheme apply to those bodies.

The Chairperson (Mr Givan): OK. As people leave those posts, I assume that there will have to be an exercise in restructuring organisations, because I assume that it will not be the case that one individual leaves the job and that post remains open until such a point that there may never be funding to replace them, so that, inevitably, may lead to significant restructuring having to take place.

Mr Capper: I think that that is probably a valid comment that would apply, not just to DOJ, but probably across all Departments. It is still relatively early days for what the scheme might look like, and DFP colleagues will no doubt be much better placed to comment on that than I would, but you are quite right in that, whenever people inevitably leave under the scheme, there will be an exercise to look at what posts those people leave and what other staff might be released in other areas who could move across or how, as you say, the work or structure in particular areas needs to be reconstituted. Yes, there will no doubt be a period of rebalancing as those moves take place.

Mr Frew: You mentioned front-line services. Where in the budget line does the community safety unit fall in the Department of Justice?

Mr Capper: The community safety unit budget comes under the core Department.

Mr Frew: The core Department of Justice? Is there a line for that?

Mr Capper: Are you referring to the one-page sheet or the graph?

Mr Frew: What page is that? I have a bar chart in front of me.

Mr Capper: Yes, it you look about halfway up that chart, you will see a safe communities directorate line, and the community safety unit sits in that budget.

Mr Frew: If I am right, that is £19·4 million.

Mr Capper: That was the opening baseline for that directorate at the beginning of 2014-15.

Mr Frew: OK. Within the community safety unit, the Department of Justice funds several services, one of them being the Railway Street Drug, Arrest Referral and Harm Reduction Service in Ballymena. In short, the locals call it the addiction service. An announcement was made on 10 November that that budget was to be cut by £360,000. That was withdrawn by the Department of Justice, and it has meant that the other third of the funding, which came from Health, was also withdrawn because it could not manage it.

When you talk about front-line services, here is a service that deals with people who have had serious problems with addiction, with self-harm, social problems and mental issues, and not only are they referred from arrests, it keeps them out of prison and gets them on the straight and narrow as best it can. It also provides them with welfare, medication and therapy, yet this service will no longer be available. I think that it is due to shut in February. How many other services are in that same position and have been removed or reduced? I am sure that Railway Street is not the only one that has been affected on the front line with regards to the in-year savings and the draft Budget going forward.

Mr Capper: Over the course of the year, the Committee will have been aware of the financial position that the Department faces. We have had to make savings in the region of £60 million or so, and that will be a greater figure next year. Throughout that process, the Department has been clear that, while it will seek to protect the front line as far as possible, and you can see from this year's savings that the core Department made savings of over 16% in some cases compared with much lower figures for their front line, there will inevitably be some impact on front-line services. We have already seen that this year; for example, in the Police Service, the Probation Board and others. There have been undoubtedly some front-line impacts in-year, including the one that you have pointed out.

Mr Frew: Is it not a false economy? The service costs £365,000 a year and keeps people out of prison. What does it cost for one person to be imprisoned for a year?

Mr Capper: Off the top of my head, I know that the cost per prisoner place, if that is a figure that the Prison Service still uses, varies by prison. I will come back to the Committee in writing on that. I know that, at one point, it was significantly high, and we would maybe be talking about £60,000 or something like that. Please do not quote me on that, I will confirm it.

Mr Frew: I will not put you on that hook, but I believe that it is around £60,000 a year for one person. My maths has always been bad, but £360,000 a year would pay for about six people. If it can keep six people a year from prison — I know that it is doing a lot more than that — there is actually a cost saving to the Department. So, is it not a false economy and madness to cut those types of front-line services and put more people in our prisons? That will ultimately cost the Department more in the long run and within a year.

Mr Capper: If Prison Service colleagues were here, I think that they would say that you cannot directly read across and say that six people at £60,000 cost £360,000, because there are some fixed costs for prison officers and so on built into that.

Mr Frew: You can see my argument.

Mr Capper: I take your point. I do not know the specifics of that particular case, but I think that I am right in saying that it was a pilot project.

Mr Frew: It has been going for 14 years. It is a project, but it has been going for 14 years.

Mr Capper: Those are the sorts of things that we are having to consider in-year. As we look into next year and the bigger budget cuts, whilst, we will, as far as possible, seek to protect the front line and take into the account the invest-to-save type of things that you have talked about, there will no doubt have to be some front-line consequences.

Mr Frew: In the monitoring round, you gave £13·2 million to the legal aid pot, which seems to have a complete hole in the bottom of it. Even the £0·2 million could have gone some way to retaining that service. How can the Department justify giving £13·2 million to legal aid in-year when services like that will close in February?

Mr Capper: We touched on the £13·2 million allocation to legal aid at last week's Committee meeting. I go back to the point that was made then that, to a large degree, those are statutory commitments and demand-led costs. The bill comes in and, at some point or other in the legal aid system, it has to be funded.

Mr Frew: You established last week that you could have paid slightly less or slightly more and could have part-paid it.

Mr Capper: If we did that, it would simply increase the pressure next year when there needs to be even bigger cuts. We also need to look at the long-term commitment that was in place for that scheme, and I assume that that was the example in that case.

Mr Frew: Did you bid for the money to protect services like that in the in-year monitoring rounds? It was £360,000.

Mr Capper: Throughout the year, the Department sought to generate savings internally as much as possible to move funding from the back office to the front line. The funding was allocated in the October monitoring round specifically for police and legal aid pressures. The savings you have talked about were the extra steps the Department had to take to put funding to the front line as far as possible.

Mr Frew: Even though losing that service will put even more pressure on legal aid and the police.

Mr Capper: We had relatively short timescales to make very significant savings this year. The bulk of the type of costs you are talking about in the Prison Service and so on are staff-related, and it difficult to make savings in those areas quickly. The Department had difficult choices to make about prioritisation. As I said, the sense of the savings that we have had to make this year is only an indication of the types of things that will have to come out of the justice system in 2015-16, once the impact of the cuts we are looking at are worked through.

Mr Frew: I know that we are living in difficult and austere times, but we need the Civil Service to step up and think of new ways, other ways and better ways to fund those services. It will ultimately come back to cost you.

Have you looked at any other ways and means of funding it? Have you looked at the £35 million that is unallocated at the centre at this time, which you have not bid for? Have you looked at the change fund? What about asset recovery money?

Mr Capper: As part of the 2015-16 process we are in the middle of, we are about to move to the stage of looking at the impacts and details of savings, and the Department will absolutely explore those. At the start of the week, I issued a note to the Department and its bodies to seek bids for the change fund. That may be something that officials in the relevant areas will look to. Asset recovery is another option. So, yes, over the coming weeks all those avenues will be explored as we seek to prioritise our funding in the best way possible in the context of very significant cuts.

Mr Frew: How much is the asset recovery money worth at the present time?

Mr Capper: I think that it is £2 million or £3 million a year. It obviously fluctuates depending on what assets are seized and recovered, but there is a steady-ish state of £2 million to £3 million a year.

Mr Frew: How much will you be bidding for from the change fund?

Mr Capper: Based on the draft Budget, the change fund pot that will sit in the centre in 2015-16 is £30 million. We have currently put out requests for bids, and they are due back next week. We will collate those, and I am happy to let the Committee know what sort of things we are bidding for. That will go into the central bidding process.

Mr Frew: Have you looked to Europe for funding for a unique service that is shared between you and Health? Two thirds of the funding comes from Justice and one third from Health. Have you looked to Europe for funding under a partnership fund of some sort?

Mr Capper: I am not sure about the European element and would need to speak to the relevant officials in that area. I will certainly enquire.

Mr Frew: My last question goes back to my first. The Railway Street service is only one service, will other services throughout the Province also be cut?

Mr Capper: I will not be able to answer that question until we see the detail in the savings delivery plans that each area will prepare. To go back to the general point, there will undoubtedly be front-line impacts that we would otherwise prefer not to have. There will no doubt be cuts, and we will see the details of those in the savings delivery plans when they are produced.

Mr Frew: Thank you, Chair, could we write to the Department and ask for the detail about drug-arrest referral and harm reduction services throughout the Province, and how many of those services have been cut or removed altogether?

The Chairperson (Mr Givan): I am happy to do that if the Committee is content.

Mr Frew: Thank you.

Mr Douglas: Thank you for your presentation. Yesterday in the Chamber, we had a debate on Maghaberry prison and some of the pressures that prison staff are under inside and outside the prison. Your presentation states that the cuts on the Prison Service will:

"have an immediate impact on the operational prison regime, including prisoners spending longer in cells".

Surely that is a recipe for disaster in light of all the evidence that we get from the prisons, prison staff and their families. Secondly, surely there must be some sort of human rights infringement with prisoners spending more time in their cell. I am not quite sure about that. Have you investigated those two aspects?

Mr Capper: Hopefully, I can give you some reassurance. The information set out in the presentation is a high-level assessment of the impact of the 10% to 15% cuts that each spending area was asked to plan for. In my opening comments, I said that we would look to protect some areas as far as possible from the cuts and the Prison Service will be one of those, so I do not expect the Prison Service cuts to be in the more extreme range.

That takes into account, as I said, the fact that the Prison Service has already had a significant budget reduction over the past four years. When we put out our detailed cuts by spending area, the Department will protect the Prison Service as far as possible.

Mr Douglas: My second question relates to the Probation Board. Obviously, we are all concerned about front-line services. The paper says that cuts will impact on the delivery of front-line services:

"including the number of probation officers, the ability to monitor offenders when caseload is increasing".

Are we talking about monitoring and managing sex offenders and violent offenders? That is what I am reading here.

Mr Capper: The operational outworkings will be for the Probation Board. To go back to my previous comments; the size of the cuts we are facing means that there will be cuts across all areas unfortunately. We will seek to protect areas as much as possible. However, areas such as the Probation Board will have to face a significant degree of cuts. That will be the likely outworkings. As for the types of offenders you talked about, I have no doubt that the Probation Board will do all it can to ensure that the risk is managed and will, for example, look to make savings in the back office and other less risky areas as much as possible.

Mr Douglas: Can we look at that again? It is OK to say that it will do all that it can, but it can only do all it can with the amount of money it has. The Probation Board budget is quite tiny, compared to the police and Prison Service budgets. I suggest that we write to say that we are extremely concerned about the cuts in the Probation Board, where those could impact on the monitoring and management of sex offenders and violent offenders.

The Chairperson (Mr Givan): At the end of the session we will seek views from members on the types of issues that we, as a Committee, should feed into the consultation process. There is no doubt that this issue will be one of them, and members may have a view on some of the other pressures. If we can hold off for now on the type of things that we want to raise, we will do that at the end.

Mr Douglas: Thank you, Chair.

Mr McGlone: The cuts are having a profound effect as they have been pushed through the Assembly. There are a number of things. One of the main costs you outlined is labour costs. A voluntary redundancy scheme has been floated. Has there been any idea given as to where the money for the voluntary redundancy scheme will come from?

Mr Capper: My understanding is that there will be a central pot. Part of the draft Budget that the Finance Minister presented has been set aside for that purpose. It will not be a case of each Department —

Mr McGlone: Where is the central pot coming from?

Mr Capper: As part of preparing the draft Budget, the Finance Minister and the Department of Finance and Personnel would have earmarked funding for that when they looked at the totality of funding available to all Departments.

Mr McGlone: I know the process, but where is the actual money coming from?

Mr Capper: Do you mean whether it coming from cuts from other Departments?

Mr McGlone: It could be from other Departments or from the reinvestment and reform initiative (RRI), which somebody mentioned. Have you any idea at all where it is coming from?

Mr Capper: My understanding is that it will be through RRI and capital funding, but I will come back to the Committee with the details of that. An amount of £100 million or so has been set aside for that.

Mr McGlone: What about capital funding remaining?

Mr Capper: I will defer to DFP officials, who will be able to provide a better answer, but my understanding is that some capital funding has been set aside for use in the exit scheme.

Mr McGlone: That brings me to my next question. Could that capital funding include the likes of the community safety college?

Mr Capper: The community safety college funding is from a different pot. The allocations in the Department's draft budget include £53 million for the college for next year. I will make a couple of comments on that. First, it is assumed that that funding will come from the end-year flexibility pot that sits with the Treasury. The £53 million is not the most recent forecast of the requirement next year; it will be a lower figure, taking into account the ongoing work in reviewing the college. The £53 million from the Department that you have seen in relation to the college is a separate funding pot to the normal capital baseline that we have just talked about.

Mr McGlone: That is the £53 million, but you know that it was projected to be much higher than that. So, for the anticipated cost of the project that we are working with now — we are talking about the steering group and that — none of those capital moneys are going to be touched to go to the voluntary redundancy package, or any other package for that matter.

Mr Capper: I will make a point or two on that. The funding set aside for the exit scheme relates to the 2015-16 Budget. The much higher college forecast spend — I think it was £168 million at the last business case — does not just fall next year. So, £53 million was the assessment of what would be needed next year at a point in time from Treasury's end-year flexibility pot. The more significant balance of the funding will fall in future years and in a future Budget period. That will be assessed in terms of the Executive's overall capital priorities in those future years.

Mr McGlone: That means that, at this moment, none of the capital is projected to be touched for the voluntary redundancy scheme.

Mr Capper: I am not sure whether I could say that definitively.

Mr McGlone: It is all right if you want to come back and clarify it. That is grand.

Mr Capper: The question about the Executive's capital priorities in future Budget periods will be for the Executive, DFP and the Finance Minister to work through. However, the funding set aside for the college next year is a specific end-year flexibility amount. Funding in future years would be for the Executive to prioritise.

Mr McGlone: You have touched on the fact that the allocation of the £53·3 million is:

"dependent on agreeing the drawdown of unspent funds from HM Treasury in 2015-16."

The way that that is worded raises uncertainty, or lack of clarity, in my mind about the availability of those unspent funds. Are you certain that those unspent funds, the £53·3 million, are still to be depended on?

Mr Capper: The comment in the paper refers to the fact that over the 2011-15 Budget period, the four-year period that we are in, other processes are wrapped up in the arrangements that are part of the security funding deal by which Treasury provides additional security funding for police. There was an agreement that underspend in relation to the college would roll forward over that four-year period. It was assumed at the time that the funding would have been used by now. That reflects the fact that the deal, as currently set out, ends in March 2015. It will be for DFP officials, not the Department of Justice, to engage with HM Treasury to secure that funding.

Mr McGlone: That is grand. Very briefly, Chair, with your forbearance, I want to talk about the change fund. Depending on how you look at the £30 million change fund, it would appear that nearly every Department is looking to it as their saviour, but they will get a quick scattering. We heard at a briefing yesterday that projects have already been submitted by some Departments — I do not know which — and are at the point where they are to be sent back for a bit of tweaking. The point I raised yesterday was that, if some Departments are at an advanced stage in the development of projects, which are being sent back to be tweaked, other Departments that have not already submitted to the change fund may be down the pecking order. How many projects has the Department of Justice worked up to the stage of being submitted, given that other Departments are already ahead of it?

Mr Capper: I cannot comment on the process that other Departments have used. I do not think it is the case that it will be first come, first served for the change fund. DFP issued a note last week about the process. We sent that out immediately to our spending areas to seek bids, and those will come in to us next week. We will then assess and consider those at board and ministerial level and put them to DFP. My understanding is that it will be the Executive that will make a decision on the change fund allocations. I assume that the final submissions from each Department will be pulled together at a point in time by the Executive.

Mr McGlone: When do they have to be in?

Mr Capper: The date is 12 December.

Mr McGlone: So, you do not really have much time.

Going back to my original point; usually applications for funds such as that £30 million must be good, well presented, well put together, professional and meet the criteria. They must also give some bang for the buck. If other Departments have already submitted applications and are being asked to revise, adapt and tweak them, my concern is that your Department has maybe not got off the blocks as quickly as the others. They are in a position to be asked to adjust and amend them, and you could be disadvantaged for one reason. I mean no disrespect to the people who are making the application, but you may be disadvantaged as a result of the quality of the applications submitted. That is my one concern.

Mr Capper: I hope that that concern does not come to fruition. The format in which bids were to be presented came from DFP only last week. I cannot comment on other Departments' processes, but if they have already taken that pro forma, prepared bids and put them in, they have obviously turned that around relatively quickly. We have taken the approach of asking our spending areas, between now and next week, to consider the types of bids they would like to make. We will pull those into the centre to make sure we can prioritise them in the Department, quality-assure the bids and make sure they are robust as possible. Having gone through that process, we will then submit a set of bids to DFP.

I hope that your concerns do not come to fruition, but that is the process the Department intends to use.

Mr McCartney: Thank you very much. I have two broad questions, and I will put them together. At the end of the consultation process, do you expect to hear anything that will make you change your original plan? If there is an uplift, will you listen to the consultation, particularly on the issue of impact? When Paul Frew spoke, he talked about the impact, not just on a single project but on the wider stresses of the system.

Mr Capper: First, the consultation process is absolutely important, and we will see what comes in from that process, after it is launched, on 29 December. There will be an opportunity for a number of stakeholders to provide input to that process. The consultation will obviously be across the general public, and we will also listen to the views of the Committee and so on. Based on the information we get back from that, the Department will decide how it might want to reallocate funding.

Part of the savings delivery plans that we will ask each area to produce will specifically outline the impacts on the front line. That will hopefully set out clearly the types of impact and allow us to make decisions about whether funding is reallocated.

I suppose that the overarching point is that the cuts will have to come from some areas. So, if there is any rebalancing, it will be done in a fixed envelope. It is not a case of saying that we will give more to some areas but leave others untouched. It will be about moving funding around in a fixed pot. Within that, there will be the opportunity to look at the impacts, the results of the consultation, and see what changes we might make to our draft Budget allocations.

Mr Poots: Mr Chairman, you referred to legal aid, and the £75 million target for that has never been met. What plans does the Department have to ensure that it meets that target and does not go beyond it? What steps will it take to ensure that that is the case?

Mr Capper: A number of steps have been taken and others are in the process of being taken at the minute. It is worth noting that the savings that have been made in criminal legal aid will generate about £20 million of savings. It is fair to say that, if that had not been the case, the gap we would be looking at it would have been £20 million or so higher.

Mr Poots: How much has the civil legal aid bill gone up at the same time?

Mr Capper: Last week, we touched on the point that civil legal aid costs have gone up. That goes back to the demand-led nature and so on of legal aid.

Mr Poots: How much?

Mr Capper: I will come back to you with a specific answer. The forecast spend for legal aid this year is just over £100 million. Some of that is the commission's fixed running costs —

Mr Poots: Did the civil legal aid bill go up by a similar amount that the criminal legal aid bill came down?

Mr Capper: That is probably a fair statement, and it roughly a 50:50 split between civil and criminal spend at the minute. Savings have been made and additional savings are under way. We talked about some of those during last week's Committee session. I have said that a pressure is forecast for the legal aid budget next year. That takes into account the cut and what additional funding we could allocate to the commission. Over the course of the draft Budget process, the Minister will look at a range of urgent measures to try to close that gap as much as possible.

Mr Poots: The Public Prosecution Service was with us last week. I will paraphrase what they said, but I do not think that I am taking any liberties. They said that legal aid was paying for 22% of cases to have dual representation for the defence, but that public prosecutors had dual representation in around only 6% of cases. So, four times as many defence cases receive dual representation that is paid for by legal aid. In essence, that does not deliver equality in justice. Two legal minds are put up against one in four times as many cases, and legal aid was paying for that. Is that an area in which you think that you can make significant savings and in which there will be a real effort to ensure that that is the case?

Mr Capper: I do not claim to be a legal aid expert or an expert in the processes involved in that. What I can say is that I know that my colleague Mark McGuckin, who was with the Committee last week, is looking at that. He has looked at things such as two counsel representation, with a view to reducing its use as far as possible. I would have to ask Mark to provide some information on exactly how much savings that would generate and what the difference is between the prosecution and the defence side. However, that is absolutely one of the measures that are being considered as part of the ongoing reform of legal aid savings measures.

Mr Poots: It strikes me as a fairly obvious one. We are looking at severe cuts in policing and other areas, and that would allow us to get some balance and equality in that area and save money at the same time.

I have another point about prisons. There are around 40 prison officer vacancies that remain unfilled in Maghaberry and there are others in Hydebank and Magilligan. Mr Ford gave us an assurance yesterday that those positions will be filled. You are indicating that there will be cuts in the Prison Service budget. Will you explain how we will match those two things up? How he will fulfil the commitment he made to the Assembly yesterday and how will you will be able to do what you need to do to deal with the reduced balance in funding?

Mr Capper: I think that there are a couple of points to make. First, the Prison Service budget is about £100 million, so a 15% cut would obviously translate to £15 million or so. If that cut did not come out of the Prison Service budget, it would have to come from somewhere else. It goes back to the point that, when we are making those difficult prioritisation decisions, there is one set of funding, and what you save in one area, you have to unfortunately hit in another.

I said earlier that when we issue our indicative budget allocation and savings targets next week, I fully expect that the Prison Service will be one of the areas that the Minister will protect as far as possible. I think that we will see lower savings in the Prison Service than in some other areas. I think that that will be how we square that conundrum.

Mr Poots: I assume that staffing is the biggest cost in the Prison Service.

Mr Capper: Absolutely, with a caveat —

Mr Poots: Do you understand why we have difficulty in understanding how you will employ roughly 100 more staff to meet the vacancies that exist whilst reducing spending?

Mr Capper: Staffing costs are the biggest cost in the Prison Service. The positive aspect is that, through the ongoing exit scheme, the recruitment of new staff costs significantly less than staff would have cost three or four years ago. How the Prison Service will be able to recruit those staff will be through its having a lower savings target than in other areas and ensuring that the Prison Service focuses on making those savings in, for example, its headquarters and back-office functions as far as possible, which it is doing through its reform programme. The intention is for the Prison Service to have a savings figure as low as possible and a focus on taking out costs from the non-front line.

Mr Poots: Will there be significant savings in overtime if you have the requisite number of staff?

Mr Capper: One would imagine that, if the Prison Service has fewer staff than it has a complement for at the minute and is relying on overtime, then, yes, if extra staff are recruited, the need for overtime would be reduced. That, again, would be an operational matter for the director general and prisons could provide more details.

Mr Poots: Is there a possibility that the non-recruitment is being counterproductive towards savings?

Mr Capper: I am not over those operational decisions or any reason for non-recruitment, and I would need to come back to you through the Prison Service.

The Chairperson (Mr Givan): No other members wish to ask any questions. Thank you both for coming to the Committee. It is appreciated.

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