Official Report: Minutes of Evidence

The Chairperson (Ms Bunting): Ladies, I am sorry to have kept you waiting. We have been behind from the start. We were dealing with some Bill stuff, and we then had a briefing on trauma-informed practice that was really interesting. Thank you very much for your patience with us.

With us we have Deborah Brown, director of justice delivery directorate; Louise Blair, head of financial planning and support; and Andrea Quail, head of financial planning, strategy and support. Ladies, you are all very welcome. Thank you very much for coming. We have read your briefing. I will hand over to you to talk us through any other points that you want to make or anything in the papers that you want to highlight, and I will then open the meeting up to questions.

Ms Deborah Brown (Department of Justice): Thank you very much. Good afternoon, and thank you for the opportunity to give you an update on the Department's budget. Thankfully, we have some happier news this afternoon. As you say, I am joined by Louise and Andrea, and we are going to provide an update on the 2024-25 January monitoring, along with the outcome of the 2024-25 October monitoring. We will also provide an update on the 2025-26 budget and the current status of the Department's transformation proposals. As has been highlighted in previous briefings, 2024-25 was the most challenging budget to date for the Department, and one that would require very careful financial management and difficult decisions to reduce the risk of an overspend. The issues and concerns have been documented widely in the media and debated by the Assembly, particularly the financial pressures facing the Police Service. With the outcome of October monitoring agreed by the Executive, and further proactive actions being taken across the Department's business areas and identified during January monitoring, the Department faces resulting stabilisation pressures of £2 million.

As the Finance Minister highlighted in a statement to the Assembly on 11 November, the October monitoring outcome reflects the autumn Budget set by the Chancellor on 30 October, providing the Executive with their final spending enveloped for 2024-25. Whilst budgets will be finalised through the spring Supplementary Estimates, the Department of Finance has indicated that the prospect of any additional funding for Departments is unlikely. Therefore, all Departments must take the action necessary to live within the October monitoring budget allocations. The Department will therefore have to take further actions to manage the remaining pressure of £2 million. There remain significant pressures across the Northern Ireland block, and the Finance Minister has requested that any savings that can be made by Departments be identified as early as possible and notified to DOF, so that any funding available can then be prioritised. The Department does not have any easements at this moment.

The October monitoring outcome provided the Department with a total allocation of £39·3 million, an additional £36·1 million towards stabilisation pressures, £2·8 million of earmarked funding for the PSNI for the cost of policing the summer disorder, and £400,000 from the Northern Ireland Consolidated Fund towards judicial salaries. Due to the delay in receiving the outcome of October monitoring, the Department was able to consider the January monitoring position when making further budget allocations across DOJ business areas. A total of £7·4 million was available for internal reallocation, due mainly to increased easements as a result of proactive action taken to reduce spend by holding vacancies as they arose across the Department; lower costs for the Northern Ireland Prison Service as prison numbers did not increase as expected; and legacy history funding not required by the Office of the Police Ombudsman. Every effort has been made, and continues to be made, by the Department's business areas to reduce the level of pressures, but that has not been achieved without adversely impacting the justice system, including the Police Service.

The Department will continue to manage the remaining stabilisation pressures of £2 million in order to live within the budget for 2024-25. That will require continued strong financial discipline and management by all DOJ business areas for the remainder of the year. In addition, the Department continues to report exceptional pressures of £227 million in respect of legal claims for holiday pay, the McCloud injury to feelings and the PSNI data breach. The costs of settling those legal claims are not affordable within the Department's existing budget under any circumstance.

The Department's available budget was adjusted in October monitoring due to technical transfers of £1·6 million, with a further £1·4 million of technical transfers included in the January monitoring round. The technical transfers relate to transactions such as contributions to the Department of Health costs of custody nurses, the Rowan sexual assault referral centre, and funding for domestic and sexual abuse programmes. Only a small change of £30,000 was made to the Department's capital departmental expenditure limit (DEL) budget in October monitoring in relation to the resource-to-capital DEL reclassification for the Northern Ireland safety partnership, with a further reclassification request being made in January monitoring for £40,000. In addition, for January monitoring, the Department has submitted reduced requirements of £6 million for capital DEL, which has arisen across a number of DOJ business areas for reasons such as delays in procurement and changes to leases.

Finally, on ring-fenced resource DEL, the Department continues to face pressures of £11·2 million, which we bid for in stage 2 of January monitoring, and bids will also require Executive approval. The main element of that pressure relates to the PSNI, due to substantial capital investment in prior years resulting in higher depreciation charges; and to the Northern Ireland Courts and Tribunals Service, due to the revaluation of the estate at the end of 2023-24.

I will turn to the 2025-26 position. On 30 October, the Chancellor announced the outcome of the first year of a multi-year spending review. The Executive will be able to set only a one-year Budget for the incoming 2025-26 financial year. The Department reported resource DEL stabilisation pressures of £207 million, and capital pressures of £146 million will be returned to DOF for 2025-26. An additional resource DEL pressure of £15 million has subsequently been identified due to the increased costs of the employers' National Insurance contributions arising from the changes announced by the Chancellor.

The stabilisation pressures are against a planning budget of £1·218 billion for the next three years, that being the budget position for 2024-25 that was announced on 29 May 2024. The pressure of £207 million included a £38 million pressure for additional security funding for the PSNI, which was then confirmed in the Chancellor's statement and has been earmarked for 2025-26, thereby reducing the departmental pressure to £169 million. Funding for the tackling paramilitarism programme has also been confirmed by DOF and match funded by Treasury, providing £16 million in total. That is cross-departmental funding.

The exceptional pressures of £227 million relating to the legal cases for the PSNI data breach, holiday pay and McCloud injury to feelings may not crystallise in 2024. Therefore, those continue to be highlighted to DOF as unaffordable by DOJ under any circumstance in future years in the absence of specific Executive funding or a reserve claim from HM Treasury. Equality screening on the planning budget for 2025-26 has been completed. All business areas have been screened out, and a full equality impact assessment is not necessary. The Finance Minister intends to bring her Budget recommendations to the Executive for agreement in December, and, if agreed, public consultation will begin on the draft Budget proposals.

On the transformation bids, as previously advised, three of the Department's transformation proposals are still under consideration by the interim public-sector transformation board: speeding up and transforming the criminal justice system; the modernisation of electronic monitoring and tagging; and reducing reoffending prison population transformation initiatives. Following stage 2, the speeding up justice bid was reduced from the £40 million that was previously reported to you to £20 million. The timescale for approval of transformation bids and the release of the funding is still unknown. However, I understand that a paper setting out the transformation board's recommendations is with the Finance Minister for consideration, the aim being to bring those to the Executive in due course. We will keep the Committee updated.

In conclusion, I trust that we have provided a candid but helpful overview of where we are with our financial position. We continue to operate in a difficult financial environment, and the Department's position remains extremely challenging in the sense of living within the budget made available to us. Thank you for the opportunity to brief you. We very much value your role and views, and we are very happy to take any questions.

The Chairperson (Ms Bunting): Thank you very much, Deborah. We appreciate your briefing. Usually, we try to gather questions together in themes, but we wanted to hear what you had to say first, so we have not been able to do that. I cannot give you a heads-up as to what is coming your way, unfortunately. I will open the floor to members.

Suffice to say, we are aware of the very difficult financial position in which the Department finds itself. A number of us have advocated on the Floor of the House for the Department and its budget. That will doubtless continue, but I suppose that, in making those statements and advocating for the Department, we must also be able to stand behind the decisions that the Department takes and the prioritisation in its budget. Does anybody have any questions?

Miss Hargey: Thanks very much for the briefing. Deborah, it is a better picture and outlook than when you were last here. Hopefully, that can continue in the engagement that the Minister is having with the Finance Minister and the Executive. You mentioned the data breach and the McCloud judgement: those are huge costs. Are they likely to crystallise in 2025, or will that be over a period of years? You touched on the reserve claim. Is there an update on where those discussions are at with Treasury?

Ms Brown: As the year progresses, the risk that those legal claims will slip into next year increases. The issue around the reserve claim is still an open discussion on which DOF is engaging with Treasury. We have always been very clear that we cannot meet that ourselves. At this stage, there is that uncertainty as to which year it will fall into.

Miss Hargey: For further clarity, if it were to fall into 2025, would it all be paid then, or would it be over a period of years?

Ms Brown: We understand that, in trying to go for a lump claim of all of them together, it does not really matter when it gets paid. Once that claim gets settled, it hits the budget and then gets paid out.

Miss Hargey: OK. It is an immediate thing.

Ms Andrea Quail (Department of Justice): Yes, immediate.

Ms Brown: So, I do not think that we need to worry too much, but there could be exceptional cases within that, which would mean that we would not be able to forecast what those costs might be. All of that is still quite uncertain, unfortunately.

Miss Hargey: I assume that all the additional or ring-fenced money for the police for the summer events was spent on the additional policing resources that were needed.

Ms Brown: That was the £2·75 million that they needed. That was all spent.

Miss Hargey: OK. You touched on the issue of vacancies that could not be filled. Could you give us an understanding of the impact of that on service delivery? Is that felt in particular areas where you want to push ahead but are restricted by the lack of staff availability to do the work?

Ms Brown: At this stage, we are juggling all of that to try to minimise the impact across the board. Our staff-in-post numbers have dropped by 50 since the start of the financial year. As I say, that was a deliberate attempt to try to manage the very significant pressures that we were facing. As we get a 2025-26 settlement, that will be built into the strategic planning, the prioritisation of what we need to do and what the Minister wants to be done over that financial year and into future financial years. That will then dictate where staff resource needs to be focused and, perhaps, where we need to slow down, pause or stop some areas of work.

Miss Hargey: My last point is about employer contributions, which is a big issue as well. The Treasury says that there will be a contribution of sorts for the Civil Service or Departments. However, obviously, there are also arm's-length bodies (ALBs). Can you give us a sense of how that will impact on the departmental remit of those bodies? What preparatory work is being done to understand the scale of the challenge for arm's-length bodies? Is there a rough figure of what that could be?

Ms Brown: We think that, on top of the £169 million for next year, there is another £15 million for the employer contributions, but we are still working our way through that with the arm's-length bodies. That £15 million covers the police at the minute: that is our estimation, but we are still working our way through it, so I cannot say that that is a definitive figure.

Miss Hargey: Will that not be updated?

Ms Brown: Absolutely. Our concern is that we do not get all of that cost met. We hope to get some of it met, but not all of it. That will just increase the £169 million pressure even further.

Miss Hargey: OK. Thank you.

Ms Egan: Thank you, all, for coming in today. I have recently joined the Committee so have not previously heard from you. I was wondering whether you had figures that you could pass along to the Committee on how the Justice Department's budget has been squeezed since the devolution of Justice. That has been discussed and alluded to on the Floor of the Chamber, but it is not included in the figures that we have in front of us.

Ms Brown: We have an analysis of that, and I am very happy to send that to you, if that is OK.

Ms Egan: Thank you. I will just follow up on that. Obviously, you are working very hard to ensure that there is no overspend in the Department. Could you lay out for me the consequences if we overspend, please?

Ms Brown: If we were to overspend, there would be an Excess Vote, and that would result in our being up in front of the Public Accounts Committee (PAC). Worse than that, it would mean that the block grant had been overspent, and we would be at risk of having to pay back the £559 million that we would have forgone. It would have a very significant impact for not just DOJ but all Departments. All Departments are having to bear down on their spend to ensure that we do not overspend in this financial year.

Ms Egan: Thank you. Obviously, that is really important, so we appreciate the work that you are doing to ensure that that does not happen.

The Chairperson (Ms Bunting): Does anyone else have anything? I have a couple of things, if that is all right. On protocol funding, your paper states that there are:

Can you give us some indication of what that is for and what it is about?

Ms Brown: Those are the costs that are associated with the Northern Ireland protocol. The police have looked at what that means for them, but, even though those bids were not met in full, we knew that there was a significant risk that they would not be met in full. Therefore, they were included in the pressures that we were reporting. So, when we have allocated the £36 million to the PSNI this year, that means that it can cover all of those costs. Those are the costs that are, the police say, associated with that element.

The Chairperson (Ms Bunting): Is it for a security risk? Is it to settle disorder? Do you know what it relates to?

Ms Brown: I would have to get you some more detail on the specifics of it.

The Chairperson (Ms Bunting): Yes, I am interested to understand that.

There is information about depreciation charges relating to the PSNI. Please forgive me, but this is to enhance my understanding of these things. How does that work? I thought that, at this point, property prices were on the increase. Explain to me how that works in this calculation.

Ms Brown: That is based on the valuation of the PSNI's assets. Assets have to be valued, and, at this point, the police are forecasting what the value of their assets will be. The valuations will not be done until the new year, so, on that basis, they estimate that the valuations will increase. As a consequence of that, the depreciation charges go up, and that is where that pressure arises. It is ring-fenced resource DEL. In the past, we have been reasonably successful in securing ring-fenced resource DEL. That is what that is.

The Chairperson (Ms Bunting): We have noted that reduced capital of £6·1 million is being returned to you. Is the £40,000 from the Road Safety Partnership in addition to what has previously been reallocated from it? That is the second time that we have seen a figure relating to it, and I am not clear whether it is part of the same thing and is a repetition or whether it is different. Money was transferred previously from it.

Ms Brown: I think that it is for exactly the same thing, but, again, I can take that away.

Ms Quail: It is additional. It got £30,000 in October and then £40,000 in January. It is for the same element of funding, but they are two reclassifications in the monitoring rounds.

The Chairperson (Ms Bunting): That is, essentially, money that it did not use and that is being returned.

Ms Quail: No, it is reclassifying it. It is being used to fund capital. It had the fee income, and it is reclassifying it to spend as capital.

The Chairperson (Ms Bunting): I think that the first one was actually money that it returned, because the Committee for Infrastructure was looking at that too.

Ms Brown: We can have a look to see whether anything was returned.

The Chairperson (Ms Bunting): There is something going on there with its budgets.

I also note that there is £15 million for National Insurance contributions as a result of the Budget. That is fair enough; you have covered the things that I needed.

There are a couple of housekeeping things that I want to understand. In the paper, we are advised that, in the previous monitoring round, you submitted a bid to the Department of Finance and that that came to us the same day. This time, the paper specifies that it would come to us a week later. [Interruption.]

Will members who are online please mute?

Can you give us an indication of why that is and what that week is for?

Ms Brown: I am not sure that I am following. There was a week —.

The Chairperson (Ms Bunting): When the papers came through for the previous monitoring round, they were issued to us on the same day as they were issued to the Department of Finance. This time, as specified in the paper, there will be a week between the papers going to the Department of Finance and their coming to us. I ask just to understand why. I am not objecting to it; it is just about understanding why.

Ms Brown: No. I am not sure. Again, I apologise. I will take that away and look at that process point for you.

The Chairperson (Ms Bunting): That is OK. Stuff came to us a bit after our meeting pack was issued, so we were not able to look at everything together. That was the only reason why I asked.

I will flag another thing with you, because I raised it previously, and it would not be right not to raise it when you are in front of me. I expressed disappointment that, when additional moneys were given to the Department and the Minister issued a press release, that information did not come to the Committee. Information on how the money was to be divided among the departmental sections did not come to us until days later. A number of us learned about it through the media — Cool FM and so on — and somebody sent it to me in a screenshot. It was not ideal. I raised it previously, and it would not be right to have raised it behind your back, as it were, so it is fair that I say it now. We had an expectation that, if the Minister were to issue a press release, we would be copied into it at the time so that we would have some indication of how she would allocate the money. It is not a gripe.

Ms Brown: We will take that on board for the next time and ensure that we line it up better so that you have that in advance.

The Chairperson (Ms Bunting): This is a Committee that is really engaged in what is going on with the Department. We want to see the Department do well. We would have been interested in seeing it earlier, but thank you very much. I will not crib about that.

Mr McNulty: Thanks, Deborah, Louise and Andrea. I am a little concerned about what has been outlined in the briefing on your draft 2025-26 budget. The potential consequences of decisions that could be required go against every bit of evidence that the Committee has heard and everything that we, as reps, hear from our constituents. Just last week, we had an update on the Gillen review implementation and a discussion about access to justice, including a conversation about domestic abuse protection orders and notices. The week before that, the Commissioner Designate for Victims of Crime attended the Committee. Is it now the case that we will not be able to deliver those vital services?

On the budget more generally, will the Department of Justice have to reduce its workforce? Will the police not be able to proceed with officer and staff recruitment to reach the number of 7,000 required by 2028? Will the Legal Services Agency have to pay bills according to its budget and no more, with the time taken to pay bills set to deteriorate? Is the NI Prison Service likely to see substantial reductions in staffing? Will the NI Courts and Tribunals Service and other organisations also require reductions in their workforce? Is that the reality of the budget as presented?

Ms Brown: No budget is being presented. We have presented the position for 2025-26 against our opening 2024-25 budget. As you have seen, the Department has been successful in the current year and in previous years in securing additional funding. I would like to think that the Justice position is clearly understood and that we will get allocations to ensure that we can deliver legal aid and sustain the police service and start to grow its numbers. We are committed to all those things, but they will be subject to what the budget is. Only when we know what the budget is can we ask, "Where are the priorities? Where should the funding be focused?", and then develop options. That will be subject to consultation. All that will be taken on board, and, until we have done that, we cannot really second-guess what exactly it will mean for the Department. As I said, I hope that there will be a Budget paper in the coming weeks. That would allow the consultation process to start and allow us to start to work out what that provisional Budget might mean for the Department of Justice in respect of all those vital services that you outlined, Justin.

The Chairperson (Ms Bunting): You are outlining the worst but hoping for the best.

Ms Brown: Yes.

The Chairperson (Ms Bunting): Justin, are you finished, or have you more to follow up on?

Mr McNulty: We will have to wait and see. Until we know more, I cannot bang that drum too hard. I understand; that is OK. Thank you for your response.

Miss Hargey: I would like clarity on this point: are you comparing the £169 million pressure on the budget against the baseline rather than the in-year uplifts?

Ms Brown: The exercise by DOF told us to use the opening 2024-25 position as reported in May 2024. It asked us to outline the scenario on that basis

Miss Hargey: OK. So, that could change, depending?

Ms Brown: I hope that it changes.

Miss Hargey: OK. Thank you.

The Chairperson (Ms Bunting): There is no doubt that the consequences that you have outlined are very grave for not just the Department but wider society and, indeed, the Executive's priorities. Also, the Policing Board has heard in the past couple of months from the Chief Constable about his fears that the PSNI would no longer be able to keep the public safe, nor would it be able to keep women and girls safe, which is another Executive priority. Hopefully, the bid works out, because we understand that there are significant issues at play.

Just before you leave, I want to ask you about the Bill. You might not get what you need to provide next year the services that are provided currently, yet there are implications in the Bill, for example, of taking on additional powers and responsibilities. How would the costs of those be met?

Ms Brown: It will have to be a case of looking at all the things that the Department needs to deliver, and an element of prioritisation will then have to happen, absolutely taking into account the consequences of not doing things, not doing them immediately or leaving them to a later stage. Of course, there will be very tough decisions to be made. However, we continue to make a really strong case for DOJ, the need for that additional funding and for it to be provided on a sustained basis because living from one year to the next, as you know, does not improve the justice system, reduce delays or improve the experiences of victims and witnesses.

The Chairperson (Ms Bunting): The PSNI is the only service in the UK that has to operate on an annual budget. It is not allowed to carry reserves or borrow money, which is much the same as the position that the Housing Executive was in. It is the only service in the UK in that position. If that were to change, would it be done at the Assembly or in Parliament? Is there any consideration of that changing to allow the PSNI to be more strategic? Bear in mind that the PSNI accounts for 65% of your budget. If it were allowed to be more strategic in how it operates financially, there might be benefits to be gained for the Department overall. Has that been considered?

Ms Brown: We have not given that any huge consideration, but, of course, we will want to explore that with DOF if we do not get a sustained budget moving forward.

The Chairperson (Ms Bunting): Thank you very much, Deborah. Does anyone have anything else? No? I thank you all for your evidence. We appreciate it. Thank you for taking the time. Apologies once again that we were running late.

Ms Brown: Thank you.

The Chairperson (Ms Bunting): You are probably used to it by now.