Official Report: Minutes of Evidence

The Chairperson (Mr O'Toole): We are joined via Zoom by Sir Robert Chote and Maureen O'Reilly and in person by Jonathan McAdams. Welcome, Sir Robert, Maureen and Jonathan. If you are willing, Sir Robert, we would welcome an opening statement.

Sir Robert Chote (Northern Ireland Fiscal Council): Good afternoon, Chair and members. It is a great pleasure to be with you. Apologies that I am not there in person. I am happy to take whatever questions you have, but maybe I should start by picking up on some of the themes from the previous couple of evidence sessions that are relevant to us.

I will speak first about the Programme for Government (PFG). As you will appreciate, pretty much as soon as the Fiscal Council was created and we started talking to a variety of stakeholders across Northern Ireland, the importance of having an agreed Programme for Government and a clear link between it and the Budget was emphasised to us time and again so that money visibly follows strategy. We have the draft PFG now. Judging from the evidence that you have received, it will soon be accompanied by a sustainability plan. Another component of the jigsaw that we have yet to see is the investment strategy for Northern Ireland (ISNI), which is particularly relevant on the capital spending side. With those components together, when we get to a draft Budget, presumably at some point later in the year, we will have as great a clarity as possible about how everything — the most relevant element is probably the nine priorities in the draft PFG — feeds through to where it shows up in particular spending decisions. That would increase the credibility of the PFG and the Budget.

There are a number of concrete numbers scattered throughout the PFG, but there is clearly not a comprehensive picture. Some of those numbers are particular sums of money, but it is not clear over what time period they refer to. Tidying all of that up and drawing a clear link, when the draft Budget comes before you, would be desirable.

I will turn now to current Budget activity. As you know, the UK Government's Budget, the first one from the new Government, is due on 30 October. The presumption is that it will set revised spending numbers for this year, 2024-25, and numbers for 2025-26, which will then form the basis of the Executive's draft Budget. It remains to be seen whether additional spending will be announced at a UK level that will result in Barnett consequential increases in block grants.

It is our understanding, from the tenor of the interim fiscal framework, that, if there are increases in UK Government spending on resource and capital for this year and next year, you would expect to enjoy the 24% uplift that you discussed earlier.

The Minister of Finance has talked about the scale of in-year Budget pressures. It sounds as though it is a gross figure of between £700 million and £800 million — £770 million or thereabouts — and she has referred to a net pressure of £270 million or thereabouts. I presume that those figures are based on an assumption, which may be more or less well founded, that you will see an increase in UK Government spending that will deliver Barnett consequentials of around £500 million to make those two numbers consistent.

As you will be aware, when the Chancellor of the Exchequer came into post, she got the Treasury to publish an audit of public spending, which suggested that there were in-year pressures of £22 billion, some of which, arguably, were inherited from the previous Government and some of which reflected potential pay decisions for this year. Presumably, if UK Government spending plans for this year are increased to reflect some portion of that £22 billion, some portion of that increase will lead to Barnett consequentials, and, presumably, there is a judgement that that money would cover some but not all of the in-year spending pressures that the Executive are confronting at the moment.

As you discussed, the assumption is that there will be a further UK spending review in the spring of next year that will reaffirm or tweak the spending settlement for 2025-26. It will probably go out two more years for resource and potentially a bit further than that for capital. As you said, the discussion on whether to revisit the 124% and what the precise methodology will be is relevant to the second spending review, the assumption being that the October announcement will include the 24% uplift for this year and next year from any decisions that arise out of it.

You have had an interesting discussion on the 124%, for which we take a good deal of the blame. As witnesses pointed out, we explained that the precise percentage depends on a series of judgements about which reasonable people could disagree or have different views. We said that people could make judgements that would leave you with a higher or lower percentage than that. As Tony Simpson mentioned, the interim fiscal framework states that, if there were "multiple independent and credible" pieces of evidence suggesting that the percentage is higher, the Treasury would be willing to consider a review of your relative need. From what we have heard, it sounds as though the Department is indeed searching for bits of evidence that might point in that direction. That does not exclude the possibility that the Treasury might be pursuing independent evidence that could point in the opposite direction. It is therefore not simply a one-way bet.

You are absolutely right that the biggest question mark is over the way in which you integrate policing and justice into a needs assessment. Gerry Holtham did not have to worry about that on the Welsh front. Clearly, there are unique security and political issues in Northern Ireland that make it hard to come up with external, uncontroversial, ungameable indicators that will just tell you how much more Northern Ireland needs to spend than Governments do elsewhere. Tony talked about trying to find experts in that area who could give an interesting view. It is always important to remember that, with the fiscal framework, whether it is 124%, 122% or 126%, the big win is that the number will not inexorably go down to 100%. That is what the top-up delivers for you. Yes, you will get a bit more if it is 126% and a bit less if it is 122%, but it is a big win, regardless of the matters at the margin.

One has to be slightly wary of putting all one's eggs in the policing and justice basket. If you were trying to squeeze every penny that you could out of the Treasury, you would try to demonstrate as far as possible that Northern Ireland is unsafe and difficult to police in order to justify as large a percentage as possible. That is not without other issues.

Finally, I will briefly mention the devolution of further tax powers. That was a matter for the Fiscal Commission for Northern Ireland to advise on rather than us. Concrete plans around the devolution of tax powers is the key component of what would be in a final fiscal framework relative to the interim one. From looking at the Welsh and Scottish examples, I will say that, if you were to go in the direction of saying, for the sake of argument, that there should be devolution of some part or all parts of income tax, that raises a couple of other issues, one of which is whether it changes your view of which borrowing powers the Executive ought to have. Should they be allowed to run a reserve as distinct from having access purely to Budget exchange with the Treasury? What sort of arrangements need to be put in place to forecast the revenues that could arise one way or the other?

I will not wade into the deep waters of air passenger duty (APD), on which there is clearly much interest around the table, other than to note that the block grant adjustment on that is perhaps a small but symbolic demonstration of the fact that any devolution of tax-raising powers comes with risk as well as opportunity. There is an opportunity to change your mind about how much money you would like to raise. There is an opportunity to change the level of progressiveness or fairness that it delivers. There is an opportunity to try to do things that will influence people's behaviour. You also, however, subject yourself to the risk that the underlying tax base does not perform as it was performing when devolution took place. It is hard to imagine that all income would disappear in the way that all long-haul flights might do, but the lesson from Scotland and Wales is that Scotland had to raise taxes in order to agree simply to stand still because of relatively poor performance of the tax base, with the opposite being the case in Wales. As Tony Simpson said in the previous session, there are risks as well as opportunities attached to that sort of decision.

After that rather scattergun selection, I am happy to take questions.

The Chairperson (Mr O'Toole): Thank you very much. There is nothing wrong with a scattergun selection. That makes up most of what we do here. Thank you very much, Robert, Maureen and Jonathan. I will ask a few questions. As always, members, if you wish to come in, please indicate to the Committee Clerk or to me.

I will go back to the first thing that you touched on, Sir Robert. Maureen and Jonathan are also more than welcome to contribute. In the draft Programme for Government, as you said, there is not a particularly clear read-across from the aspirations, priorities or thematic areas — whatever terms you wish to use — to the Budget. It is a draft Programme for Government, but, when there is a final Programme for Government, do you think it would be helpful to see a more direct read-across from the thematic priorities to the Budget?

Sir Robert Chote: It depends a bit on the sequencing. You want a Budget and a PFG, whether or not they be the final PFG and the draft Budget. Certainly, when you have the final PFG and the final Budget, you will want to see as clear a demonstration as possible of the Budget having been designed to deliver the PFG priorities. There is an element of asking, "Which comes first: the cart or the horse?". The fact that you have a draft PFG before a draft Budget is perhaps not a surprise. It is no surprise that you can negotiate agreement on prose before you can negotiate agreement on arithmetic. The fact that you have the draft PFG, which is at a relatively high level, in place first is perhaps not a surprise.

As I said, once you have the ISNI and the sustainability plan, you can take all the elements of the jigsaw together and ask, "How does this map on to a Budget and a set of departmental allocations?". The clearer that link can be made, the more credible the Budget and the Programme for Government will be.

The Chairperson (Mr O'Toole): One of the points that has been made, and one of the arguments that may be made as a plea in mitigation, is that there is not yet a multi-year UK spending review to guarantee Executive spending. We now know that we will not be getting a comprehensive spending review (CSR) this October or even next, but do you think that it would nevertheless be possible or advisable for the Executive to do some kind of indicative Budget or, if not an indicative Budget, some kind of indicative spending profile, or would that be ill-advised?

Sir Robert Chote: You have to have a multi-year perspective to some degree, particularly across capital spending. The challenge is that the Executive have had a succession of one-year Budgets, either because of what has been going on at Stormont or because of the time profile of the UK spending reviews. On 30 October, we will get some addressing of the in-year issues for 2024-25 and a spending settlement for 2025-26. Then, in the spring, you have three years, from 2025-26 to 2027-28, in which the expectation is that you will have a spending review every two years, with the third year of the previous spending review always overlapping with the first year of the following one. That will give you a bit more long-term certainty.

The other point to bear in mind is that the amount of money that the Executive have had to spend in 2024-25 is very different from the number that was pencilled in for the ill-fated draft Budget that extended to that point. Yes, a multi-year UK spending review, along with a multi-year block grant settlement, clearly provides a better basis for medium-term planning, but history tells us that that will be rejigged and revised as inflation shocks or other things come along in the meantime, so it by no means gives you a completely certain trajectory, even over those two to three years.

The Chairperson (Mr O'Toole): Understandably, given the devolved spending context and the spending restraint because of austerity over the past decade and a half, there is a degree of unanimity among parties here in wanting to see the maximum possible funding provided. The impression that I get from some of what the Fiscal Council has told us in the past is that the discussion about 124% versus 122% or 126% can become a little bit academic and that that is not the most important thing, which is either the overall amount that the UK Government are spending or the guarantee that that amount will not go down. I am interested in you unpacking what you said about the 124% a little bit. Correct me if this is wrong, but it sounded as though you were perhaps indicating that there is a little bit too much focus on 124% versus 126% or 122%.

Sir Robert Chote: That is probably right. The amount of financial difference that that would make over the relatively short term to the total pot that the Executive have to spend from is relatively modest. As I said, the big gain in having a needs-based framework, albeit in the slightly odd context of applying the 124% to Barnett consequentials that are being added to the block grant rather that applying the 124% to the block grant as a whole, is that, all other things being equal, it at least ameliorates the so-called Barnett squeeze, whereby, over time, you will see the premium that Northern Ireland funding has over English spending decline inexorably. That is therefore a good thing to have. If you go for a higher number, you will, on that basis, get a bit more money. As I said, the only point that I will make is that, although the UK Government were willing to go to 124%, that is not to say that there were not arguments for asking whether that is too high, because of the way in which you are pulling together the different components of need. I would be slightly wary of the idea that, if you open that up to independent analysis, it is inevitable that the answer will be higher rather than lower. It does not surprise me that there is unanimity from where you are sitting that it should be higher, but that is not necessarily how the Treasury would view it.

The Chairperson (Mr O'Toole): The council would qualify as being independent and credible, but has it been asked by the Executive or the Treasury to provide any updated analysis as part the fiscal framework discussions?

Sir Robert Chote: You will have seen that the various scenarios that we published on, for example, which dates to apply to the comparison for policing and justice are reflective of things that different parties have asked us about. We have not been asked to do anything more formal in revisiting the issue, and we made the point that, if you were to rerun the whole exercise, we do not have the capacity and technical expertise to do that. You could certainly do that if you wanted to, however. When we published the estimate, we made it clear that you can end up with different numbers, depending on precisely which judgement you take. The challenge is that you could employ an awful lot of people with PhDs to come up with various sets of arguments for why it should be one number or another, but, at the end of the day, it will be a political decision of the Executive and the UK Government. You can be led by the science, but the science will not necessarily be the only factor that determines the answer.

The Chairperson (Mr O'Toole): OK. I will cover a couple of quick points before I bring in members. I understand that we will get more detail on the sustainability plan tomorrow, but we are getting the sense — I could be wrong, and I do not want to prejudge — that it is not going to be unbelievably detailed on future choices.

One thing that we have realised as we have been doing scrutiny concerns the £113 million of revenue raising that the Treasury effectively mandated in discussions with the Executive parties prior to restoration. I cannot do the percentages in my head, but we are about £80 million on the way to £113 million, so an inflationary increase in rates next year, combined with a few other bits and pieces, would probably straightforwardly get us to £113 million. Do you think that people slightly overdid it when it came to how ambitious the revenue raising was that the Executive were asked to do earlier this year? It does not feel as though they are being asked for a huge amount of additional revenue raising. That is not to trivialise the rates increase, but no new, substantial powers are being taken.

Sir Robert Chote: I should preface this by saying that I do not know the scope of the sustainability plan or how widely it will range over, for example, aspects of the Budget management process and what we have talked about for in-year monitoring rounds and so on. presume that a lot of focus will be on the revenue question. As you said, a decision on the overall rates increase could get you quite a way to that figure. There have been periods of inflation when that decision has not been taken. It is still an increase relative to holding it completely flat.

The broad picture is that that will get you a good deal of the way to £113 million. If that has gone to the Executive, I presume that the UKG or the Treasury are happy with the progress, whether it is £113 million to the last penny or not. That decision is less difficult to take than it would be if you were in a situation where it had all to be done through concrete changes on reliefs etc.

The Chairperson (Mr O'Toole): Indeed. We will wait to see: maybe we will get those. My final question is on the Fiscal Council Bill, which will legislatively underpin your organisation. We have heard that that Bill may be introduced by the end of the year, but it also may not. How do you feel about that?

Sir Robert Chote: At one level, given that I was initially appointed for six months to cover the period until the Assembly had a chance to legislate, that is drawing me slightly closer to the president-for-life model than I had originally anticipated. Clearly, getting to a position where the Fiscal Council has a legislative underpinning is desirable. It is very much in line with the OECD's best practice requirements for institutions of that sort, so it would be a welcome and good thing. That said, I would rather that it was done well than done quickly. We have had useful discussions and had some input on what should be thought about when the legislation is being drafted.

On a day-to-day basis, we do not suffer from what fiscal councils normally complain about most: a surreptitious squeeze on their budgets or a failure to access the information they need to do their jobs properly. Therefore, I have not needed a legal underpinning: we have had cooperative engagement with the Executive, and indeed the UK Government when they held the purse. There is no big day-to-day problem that is preventing us from doing what we need to do, so we are not desperately waiting for the legal underpinning of the organisation. That said, a robust legal underpinning is the right thing to do for the long-term well design.

The Chairperson (Mr O'Toole): Part of it is about future-proofing. You may have a good relationship with the current Minister and the Department, which is good to hear, but that might not be the case in a year or five years. We may come back to that. I will bring in others now.

Dr Aiken: It is good to hear from you, Sir Robert and team; thank you very much. I have two quite short questions. You may be surprised that I am asking short questions, but I will get stuck into the first one. One of the questions I have raised frequently with Caoimhe, our Finance Minister, is about the degree of certainty that we have on the £500 million from the Treasury. We have been given assurances all the way through. At a recent event in Oxford, I listened to the Secretary of State say that a lot of the future development in Northern Ireland would be based on the city deals programme. A week later, that programme was paused and then half of it was brought back. What degree of certainty is there on the £500 million of Barnett consequentials? Should we look at contingencies?

Sir Robert Chote: I will pick that question up before I forget it. The £500 million is, essentially, the likely or hoped for in-year contribution that will help deal with some of the growth overspend pressure this year.

Dr Aiken: I know, Sir Robert, but the terms "likely" and "hoped for" are worrying because we have set our Budget parameters on that basis. We have passed a Budget Bill in the Assembly that is based on moneys on which we have no guaranteed assurance. Should we look at putting in place a contingency plan in case we do not get as much as £500 million? That takes me to my second question. I am very well aware that Whitehall Departments, stand fast the Department of Health and the Ministry of Defence, have been told to look at 10% efficiencies for next year until the CSR has been done. I cannot imagine that the NIO will not be part of that overall 10% pressure that is coming from Rachel Reeves. What have you picked up?

Sir Robert Chote: As I said, the overall picture is that the new Government have come in and said that they have been left with, including pay pressures, a big set of in-year pressures on the UK Budget. Obviously, I do not know what set of tax-and-spending decisions is going to come out. If I believe what I read in the newspapers, it is not impossible that you will see some set of increases in taxes and/or, maybe, changes in borrowing that will allow some of those pressures to be met by increasing spending in-year and, effectively, have that feed through to 2025-26.

There are elements where there is a lack of certainty. Exactly what proportion of the £22 billion — or, indeed, any other amount that the Government decide they are willing to increase the spending plans by this year and, essentially, push into next year — is "Barnettable"? By that I mean the proportion that generates Barnett consequentials rather than not doing so, depending on whether it is spending on things that the UK Government do in England and the Executive do in Northern Ireland. A reasonable assumption is that, if there is an increase in spending, it is unlikely to be dramatically more or less "Barnettable" than the average, particularly if quite a bit of it is going into public-sector pay. On that basis, it seems to be a reasonably safe bet that some Barnett consequentials will emerge out of the October 30 statement. I do not know exactly what conversations have been had about the degree of certainty that the Department of Finance should be able to think about, but it does not look to be a mad ballpark figure. We do not have that long to wait to find out what it is.

Dr Aiken: Thank you very much indeed.

Mr Brett: Thank you all for coming along today. I want to build on Steve's point. Say we will get £500 million, that still leaves in-year pressures of £270 million. You will be aware of the grave consequences that there will be should the Executive overspend this year. In contrast, previous overspends were written off by Treasury. Has the council any view on the Executive's ability to close the gap between the possible £500 million and the £770 million?

Sir Robert Chote: We have not looked at that closely. It is smaller than some of the potential overspends in the past couple of years. Obviously, we are starting from a position where decisions have had to be taken on the overspend, so you might think that it is less of a threatening number to have to try to deal with than has been the case over the previous couple of years. Given that quite a lot of the pressure in gross terms is probably in Health and around pay, that confronts some familiar challenges that have been addressed before. Clearly, a decision on what is done on pay, given the proportionate importance of that in the Executive's overall spending, will be one of the levers that you can pull that will have a relatively large impact. There may be other things to do around that. It is not a trivial sum of money, but we have confronted larger ones.

Mr Brett: Fair enough. I was surprised to hear you say, in your response to the Chair, that the Department has not asked the council to advise on the independent evidence base that it is producing to give over to Treasury. What does the council's future work plan look like? What is the main focus of your work at the minute?

Sir Robert Chote: We did a good deal of work on that area. We presented it very carefully by pointing out that there are different scenarios and judgements that you can reach that will come up with different answers on that in response to various stakeholders' or parties' interests, particularly, for example, looking at the impact of judgements on agriculture and of decisions on policing and justice. We have shown how sensitively what we have come up with would do that, so we do not have any particular intention to go back and do much further work in that area unless asked to do so. As I said, we do not have the resources to do a completely drains-up, bottom-to-top repeat of the Holtham exercise. Somebody could ask for that to be done. I would not guarantee that that would be a one-way bet and that asking somebody else to start with a blank sheet of paper would end up with a higher number or a lower one.

Mr Brett: Some decisions taken by the UK Government on spending commitments in Northern Ireland — on city deals, growth deals, town future funds and Levelling Up Fund projects — have led to them being paused or delayed. The Treasury continues to purport that it inherited a £22 billion black hole. There is some disagreement over that figure. Do you have a view on whether that is a true and accurate figure?

Sir Robert Chote: That is not something on which I have reached an overall judgement. There are areas where the Government have made the argument that those pressures are, as it were, ones that they inherited and had little choice over. For example, on the issue of inward migrants living in hotel accommodation etc, they said that that was an inheritance and a pressure that there was no reasonable way to roll back. However, the £22 billion includes a decision to increase public-sector pay in a way that the previous Government would not necessarily have done. Indeed, the current Government could have made different decisions. The £22 billion is a mixture of numbers. It is way above my pay grade to say whether it is entirely appropriate to come up with a number of that sort. However, the number is out there and the Government think that it is likely that there will be a need to spend more money this year than the previous Government anticipated spending at the last fiscal event. That implies the possibility of an increase, which implies the possibility of Barnett consequentials.

Mr Brett: Diplomatic as ever. Thank you. [Laughter.]

Miss Hargey: Thank you very much for your answers so far. How much engagement are you having with the Department of Finance across all the issues that are being discussed?

Sir Robert Chote: We have a very good relationship with the Departments. They have been straightforward in providing, where at all possible, the information that we have asked for. We have had access to officials to talk to them, and they have taken an interest in what input we might have on the shape of legislation. That is, obviously, partly a matter for the legislation drafters as well.

The biggest frustration on a bit of information that we would have liked but not had is not really a Department of Finance issue. It is the one that was referred to in your earlier discussions with the Chair: it would be very nice to know what the Treasury's methodology is for estimating the current size of the 12X% premium so that you can have a sensible discussion on the impact of the top-up, whether you are starting from below or above and by how much, and how much difference the restoration package makes etc. Of the stuff that we would like from the official machine that we have not yet had, the one that we would choose — and there are, clearly, political as well as technical reasons for why it is difficult to provide — is that methodology. That would mean we could all sit here with a spreadsheet and discuss exactly what the premium has done in the past, and what is a sensible prediction for what it might look like, depending on different assumptions about UK Government spending and how you apply the top-up in future.

We are promised that that methodology has to be sorted out, and it pretty much has to be sorted out in time for the next spending review, which will set UK spending plans beyond 2025-26. Presumably, we will get something on that in the first quarter of next year if not before it.

Miss Hargey: Tony said earlier that the public spending directorate in the Department is already engaging Departments to look at the Budget period 2026-27 and how that feeds into the five-year departmental plans, and at Budget improvement plans. Are you having engagement on that? Or, are there additional areas or frameworks that you would put in place to make sure that it all aligns and that all of the work feeds into the overall fiscal framework that is being developed?

Sir Robert Chote: We do not get deeply engaged in the more strategic level of planning on public spending at that horizon. As I said, the key message that we have, at the moment, is that it is important to us that we have as good an understanding as we can so that we can talk to you about what the in-year pressures are looking like and what the implications are for future years. I presume that the Department of Finance will have written to Departments in August, if not earlier, with questions on the larger strategic judgements about priorities and to say, "We need your clear, coherent plans for 2025-26". It is for the Department of Finance to decide how much further indicative material it is useful to ask Departments to provide on the subsequent two years when we are still a few months away from knowing what the UK Government settlement will be and, therefore, what the block grant settlement will be for 2026-27 and 2027-28.

Miss Hargey: Matthew touched on the Fiscal Council Bill. You said that you were broadly content with it as it aligns with OECD best practice requirements. Are you content with the underwriting and legislative proposals on oversight and continuing engagement with Departments that are in it? Is there enough protection built into the current proposals, or are there other areas that you would like to see added?

Sir Robert Chote: Transparency around Budgets, the arrangements for hiring and firing at the council and statutory access to information to do the job are generally done when these things are being drawn up or revised and you are looking at the shortcomings. That is the sort of thing that you would focus on. In the case of the Fiscal Council here, there is a different challenge with regard to defining its remit and what you would like it to deliver. It has certainly been my experience that every year is different with regard to who is running the Budget, what is going on and how timescales change. The biggest suggestion that I have made is to do something every year that explains how the Budget balances and do something every year that talks about sustainability, which came out of 'New Decade, New Approach' (NDNA). There might be a long list of things there that you would like to see out of the council, but there should also be a recognition that it would be sensible to give us a relatively high degree of flexibility in what to provide, and when to provide it, because the political budget framework timetable is so much more uncertain.

I hope that we have, over the past couple of years, delivered you stuff that was useful at broadly the times at which it was useful. We have tried to do that rather than go back and say, "I'm sorry. We're only supposed to be providing a and b, and we have to provide a and b". We are trying to do that in as flexible and useful a way as possible. Flexible and useful is not always straightforward to translate into legislation, but it would be good if one could do that under these circumstances. We do not know whether, in the future, we will be operating with the Executive setting the Budget, or going back to the Northern Ireland Office etc. Some recognition of the reality of those circumstances has been one of my asks.

The Chairperson (Mr O'Toole): No other members have indicated that they wish to ask questions. I have one or two more, as I always do, Columbo-style. One of the other strands of work, which has not come up yet in the evidence we have heard today, but which is very much connected to the overall package that was agreed in February and the themes of Budget sustainability, better management of finances and more strategy generally, is the public service transformation board, which is also on an interim basis at the minute. Has the Fiscal Council had much insight into the work of the public service transformation board and the bid process that has gone on thus far?

Sir Robert Chote: I have not. I will ask Jonathan whether he has had any substantive conversations on that point.

Mr Jonathan McAdams (Northern Ireland Fiscal Council): No, just the same sort of level of discussion that was covered in the previous session about the general idea. There have not been conversations about any specific projects or anything like that; they have been more along the lines of what the Committee was briefed on. I do not think that there have been any briefings between the council members and the board.

The Chairperson (Mr O'Toole): That probably chimes a little bit with our slightly incomplete or tentative levels of information. The public service transformation board was a requirement, and just over £200 million of the restoration package was connected to it work of the —.

Dr Aiken: It was £235 million.

The Chairperson (Mr O'Toole): OK, £235 million. Perhaps the Fiscal Council can think about that and advise us on that when more information is available. A bidding process is going on at the minute. The interim board is whittling down bids, although, apparently, it is not making decisions; it is acting as, I think —.

The Committee Clerk: Priorities and options.

The Chairperson (Mr O'Toole): It is acting in a sieve format at the minute. That is one for the council to look at.

In a previous mandate, I asked about the Fiscal Council having economic forecasting powers or responsibilities. Based on the complement that you have at the minute, that would probably require the Department giving you more resource. Would that be a good idea or a bad idea, or do you not want to commit either way?

Sir Robert Chote: Having spent 10 years doing economic and fiscal forecasting at the Office for Budget Responsibility (OBR), I would say that you should not do that unless you have to. The reality is that the Fiscal Council's fundamental focus is on the finances of the Executive and the Northern Ireland public sector more broadly. As you discussed earlier, the vast bulk of the Executive's money comes from the block grant, both the core "Barnettable" bit of it and the non-Barnett additions from packages etc. Those are not determined by the performance of the Northern Ireland economy, important though that is in a whole lot of other spheres of economic and social outcomes. You are not going to learn much more about the prospects for regional rate revenue by running a complete Northern Ireland macro model.

While forecasting is a noble profession, and one that I have happily been part of for a while, my suggestion is that, if you think that that is a good idea, you should put it where it should be put. In the event of a lot more devolution of tax-raising powers, so that much more of the Executive's revenue is determined by economic development, it would be a different story. You would then be left with the sorts of choices that have had to be made in Wales and Scotland, such as whether you have a forecasting function that is fulfilled by your fiscal council, get the OBR to do it for you, which, essentially, is the way it happens in Wales, or some other alternative.

The Chairperson (Mr O'Toole): Would a step short of that be to suggest that the Fiscal Council, in order to build on the excellent contribution that it has made to policy development here, publishes an analysis or a set of tables on a page that looks at what other forecasters in the market in Northern Ireland are doing, or is that straying too far into that world?

Sir Robert Chote: One could do that. As I said, it is something that anybody else could do as well. I am quite a believer that, if you set up these bodies, keep them focused on where they can add value. Having the Fiscal Council focused on the public finance elements, while the nature of the fiscal framework and the degree of devolution is what it is, is probably the sensible thing to do, rather than get us embroiled into a debate on the drivers of Northern Ireland economic performance more broadly. There are many other people who can contribute in that area.

The Chairperson (Mr O'Toole): I cannot promise that I will not try to embroil the organisation further, but I appreciate the clear view that you have given on that.

OK. Unless anyone else wants to come in, thank you very much to Robert, Maureen, and Jonathan. It has been really useful.

Sir Robert Chote: Thanks very much.