Official Report: Minutes of Evidence

The Chairperson (Mrs Erskine): We finished the previous session talking about Northern Ireland Water issues. That seemed like a good time to move on to discuss the draft Budget for 2025-26, to which those issues relate. If you would like to give your presentation on that, we will then take questions.

Ms Susan Anderson (Department for Infrastructure): OK, Chair. I will do a bit of a recap — we outlined this when we briefed the Committee previously — on the resource allocation in the draft Budget, which is £633 million. Compared with our opening position for this year, that represents a 13% increase. Our opening budget was £559·5 million this year. The allocation is 8% less than what we think we need to deliver everything that has been identified, and a degree of prioritisation will be required, but you can see the increases from the current year's opening budget and, indeed, the October monitoring position.

Our capital allocation in the draft Budget is £932 million, of which £390·7 million is ring-fenced. The ring-fenced elements cover £190 million for the A5; just under £6 million for the A6; £40 million for the transport hub; £43 million for the city and growth deals; £105 million for the reinvestment and reform initiative (RRI), ring-fenced for NI Water, which Mark touched on in the previous session; and £6 million for the EU Enterprise rolling stock. It is the first time in my experience that a draft Budget has ring-fenced RRI funding, which is normally part of the overall capital that is available to the Executive. This is the first time that I have seen a proposal to ring-fence RRI for something specific. That will be held centrally, so it is not up to NI Water to repay it. Repayment and payment of interest are normally done centrally by DOF, rather than falling to the Department that has the RRI borrowing.

I stress again that no decisions have been taken by the Minister. This is very much a draft Budget, and we are working through what it looks like for us.

I previously briefed the Committee on our original requirements, which were identified as £716 million. We have done more of a deep dive on certain areas, and the requirements have reduced to £688·3 million. I will draw out two key reasons why there is a net overall decrease. You will be aware of the increase in employers' National Insurance contributions. Across the Department, the increase is estimated at about £12 million. That is offset by a reduction in requirements for climate action plan targets. It is not that we are not doing the work on those but that, as I said, we have done more of a deep dive: we were concerned that they were being double counted in our previous figures because they were already embedded in some requirements. That explains the net decrease overall.

I will move on to capital requirements. I have outlined some of the areas that are ring-fenced. Declan mentioned the requirement for NI Water, as set out in the midterm review, and there are elements for Translink and transport and roads asset management (TRAM). The biggest requirements within TRAM include £189 million for the A5 and £139 million for structural maintenance requirements. The "Other departmental" requirement of £6 million is small, but it covers things such as digital, the graduated driving licence and the Strangford ferry.

We touched on where we are and next steps. We are still working through the equality process and rural proofing. We hope to have those agreed and finalised shortly. As I said, decisions have not been taken but will be made when the final Budget is known and depending on the equality process.

That was just a short presentation on next year's draft Budget. I am happy to take questions.

The Chairperson (Mrs Erskine): OK. There are so many questions that it is about figuring out where to go first. How will the Department prioritise its allocation to ensure that resource and capital are targeted to maximise programmes through the financial year? There is an awful lot there, there is a backlog, and, on a lot of things, we are trying to run before we walk. How are we prioritising?

Ms Anderson: That will be a decision for the Minister to take. As regards the advice and information that we will provide to the Minister, we will set out the inescapable commitments, particularly on the capital side: what is already committed and has to be paid. Then, we will work it down to the high-priority and desirable schemes. We will present that information to the Minister to help inform decisions.

The Chairperson (Mrs Erskine): I appreciate that, and I know that that is the case, but I am trying to find out what you have put forward to the Minister. We have a new Minister in place. What are the priorities that you have put forward within the inescapable commitments etc?

Ms Anderson: We will present all the information to the Minister in the coming days. We will provide a finance briefing on the outlook and the requirements. We will align that with the business plan process and the Programme for Government (PFG).

The Chairperson (Mrs Erskine): You must have some idea, before you present to the Minister, of what exactly that will look like for roads, public transport and NI Water. What programmes will be at the top of the high-priority, low-priority and inescapable lists?

Mr Declan McGeown (Department for Infrastructure): As Susan rightly outlined, the process is that each deputy secretary — in this case, me, Colin and Judith — work with their teams to map out the needs and put them in the form that you have seen in Susan's slides. We then have discussions with the Minister. The Minister goes away and thinks about how best to cut the cloth. That is how it is done. It would not be for officials to say, "Fund this over that"; it is for us to say, "These are the things that need to be funded, and this is what they cost". Ultimately, a Minister will make that decision. We advise on what we think needs to be done, but we realise that we cannot afford everything.

Mr David Porter (Department for Infrastructure): I am happy to talk about how we do that in transport and road asset management. You are interested in some details, and I can give you an example. For TRAM, the inescapables will be the likes of the A5, and that starts the count of what we are likely to get. We then look at areas in which we have routine spend: for example, our structural maintenance, which is the pot of money for resurfacing roads. We know what we would like to spend on that. We use our judgement to say which of the schemes are critical to take forward because of the deterioration of the road network, the availability of contractors and the fairness of spend across divisions. We take all sorts of factors into account to determine the pool. We also have our bridge maintenance and the maintenance of structures. It is unfortunate that we have the terms structural maintenance and the maintenance of structures. In our world, structures are bridges. There are bridge maintenance funds. We know the bridges that we are concerned about and the maintenance that needs to be taken forward in the interests of public safety. We will allocate an element to that and, similarly, to our street-light network and the local transport and safety measures (LTSM).

We will go through the process and produce a figure that is — certainly it has been in recent years — way in excess of what we are likely to get. That is where the judgement comes in to decide the priorities. Earlier, you touched on the regional imbalance. The previous Minister said that he wanted the Department to tackle regional imbalance, and we expect that that approach will remain the same with the new Minister. This is where regional imbalance is taken into account: what projects are we taking forward that align with that approach? That helps to prioritise the long list of projects, while living within the allocated budget.

The Chairperson (Mrs Erskine): OK. Let us take that a step further. You said that this is the first time that you have seen RRI borrowing ring-fenced. Why is that the case? What will the ring-fenced money be used for? Obviously, it is ring-fenced for a need. What does that look like?

Ms Anderson: On the "Why?", the Executive agreed that decision as part of the draft Budget. At this stage, it is ring-fenced for NI Water. It is not specifically for waste water or drinking water; it is just for NI Water.

The Chairperson (Mrs Erskine): Will that be on top of its normal level of funding?

Ms Anderson: The Minister will consider the general allocation and decide how much of that will be used to top up the RRI borrowing ring-fenced amount.

The Chairperson (Mrs Erskine): OK. Am I right in saying that the Department is not expecting the same levels of Barnett consequentials?

Ms Anderson: Again, that would be an Executive decision.

The Chairperson (Mrs Erskine): How does the Department intend to manage the resource and capital spend for the likes of winter service to ensure that roads are safe for motorists? In-year monitoring will be crucial for the likes of road safety, and we have a road safety strategy. How do they match up?

Mr Porter: We tend to manage winter service in one of two ways. We can either put a large figure in at the start, manage that and then give some money back, or, if we know that things are very constrained and we are likely to get money later in the year, we can put in a smaller figure and then bid for more. Both strategies have their pros and cons. In the budget paper that will go to the Minister, we will aim for a figure of in and around £7·5 million, because that is what we spend a typical year. It can go as high as £10 million, so, if we get a particularly harsh winter, we will have to bid for that. We tend not to like going below £7·5 million, because we know that that is what is required for a typical year, and typical things typically happen, and we do not want to be in a position of having to constrain other projects that are on the ground or actually going forward, particularly towards the end of the financial year. A judgement has to be made. One of the options that we will put to the Minister, if we cannot make all the sums add up, is, "Here is an area where there are tactical options".

The Chairperson (Mrs Erskine): Am I right in saying that it would be a concern if you do not get the same Barnett consequentials as you got in 2024-25?

Mr Porter: The Barnett consequentials is an Executive issue. It would not be a concern for the winter service.

The Chairperson (Mrs Erskine): OK. What is the Department's assessment of the resource required arising from the increases in National Insurance contributions? My maths is not great, but, with a quick calculation, it is about £12·3 million. That is a substantial amount of money for the Department. What is the assessment of that?

Ms Anderson: As you say, Chair, it is about £12 million. In the slides, there is a breakdown of how that is spread across our various organisations. We have been engaging with colleagues in DOF on any additional central funding that will come for that. We have provided the information and the figures and are working with DOF on that. We will keep in close contact with our DOF colleagues.

The Chairperson (Mrs Erskine): Obviously, that is a Labour Government policy. Have there been any conversations with Treasury about that, given that the amount of money that needs to be allocated to it puts pressure on the Department?

Ms Anderson: Again, we, as officials, do not speak to Treasury; that is for Department of Finance officials and the Finance Minister. We know that those conversations are happening, but we are not involved in them in any way.

The Chairperson (Mrs Erskine): OK.

Mr K Buchanan: I want to go back to the TRAM budget and the whole active travel thing. In the previous session, you mentioned the 10% requirement. What, broadly, is the active travel figure? I appreciate that Peter McReynolds might want to come in on the other figures, so I will not steal his thunder. What is the active travel figure, broadly? Does a percentage come out of TRAM for that, or is there a separate figure?

Mr Porter: We know that we need to aim for about £70 million or £80 million if we want to do it against that 10% figure and demonstrate that we are compliant with the legislation. It is important to highlight that we are not starting from zero. You get impressions, certainly in the media, that it is awful and we are starting from a standing start. The Department already does an awful lot — it has done for years, from even before I worked in the Department — for the benefit of non-motorised means. We have footways all around the country that we maintain. We could do more maintenance on them, but they exist. We have had a debate about what active travel actually is. The new legislation is trying to change our mindset about how the public travel and how we can be more carbon conscious in our decisions. We cannot play fast and loose with the legislation and just say, "Well, we do lots of maintenance on footways, and I'm sure it'll add up to 10%. So, there you go: we're ready and compliant". That is the bit that the Department has been going through, and somewhere in the range of £70 million to £80 million is likely where we will need to go.

Mr K Buchanan: Will that come out of capital or resource or a bit of both?

Mr Porter: That is not specified in the legislation.

Mr K Buchanan: Are you telling me that you are spending roughly £70 million to £80 million?

Mr Porter: That is where we have to get to.

Mr K Buchanan: What are you spending now, roughly?

Mr Porter: Off the top of my head, the figure that active travel had last year was £12 million. You could add an element of maintenance into that, so there is a bigger figure for what is of benefit to non-motorised users.

Mr K Buchanan: Tell me what you have spent that £12 million for active travel on.

Mr Porter: It has pretty much been spent on two things. One is the schemes that DFI takes forward, such as the active travel schemes. For example, there was substandard footway on the Coleraine ring road. We removed that and put in a much wider and much improved facility to encourage active travel. The other element is funding for greenway projects through councils. A pot of money has been made available that councils can bid into for schemes that are part of the wider network. They would not become part of the adopted road network, but they are part of the wider surface transport network.

Mr K Buchanan: Can that £12 million be moved between section offices? Do you split it up? Is it as simple as that? Is it £12 million across NI? If one section office does not spend it, can it be moved to another section office?

Mr Porter: We have it allocated against an active travel budget line, and it is allocated by division.

Mr K Buchanan: If a division does not spend it, what happens?

Mr Porter: Each division will have three or four projects that they are taking forward, so a division will be able to do a wee bit of juggling on the acceleration, unless it comes to a very significant problem: for example, if a division is anticipating that it will get land by agreement for a significant project, and the negotiations break down. We did not need land for the Coleraine ring road, but take that as an example. A very big number was allocated to that in the division. If it had to go to vesting, that would have had such a significant impact on the project that, in order to deal with it, the division would not have been able to accelerate its other projects. In such a case, that money would be redistributed across other active travel schemes. If active travel schemes could not take it, we would try to subsume it within road maintenance. DFI does not give much money back. We would try to find another project for it, where we reasonably could. However, each division does try to balance that.

Mr K Buchanan: I was talking to a few guys in section offices in the east of the Province. I want to make it clear that it was in the east, not the west [Laughter.]

I will use my language for what they said: the active travel office has carpet on the floor; the maintenance office has linoleum. Maintenance offices have money for nothing, but active travel has loads of money, and that is with only £12 million being spent on it. Let us say, for argument's sake, that, this year, we are going to spend £80 million on active travel. What percentage would that be of the entire maintenance budget? Some people are buying new trainers, but the rest of us have to buy moon buggies because the roads are that bad, and that is with only £12 million being spent on active travel. If we go to £70 million, we will just see the condition of the roads get worse.

Mr Porter: The plan is to get to a point where we spend 10% so that we are compliant with the legislation. However, an element of judgement will still be needed. If we are not fully funded for all functions, you have to make a decision and ask, "Right, is the Minister going to prioritise this road maintenance over that active travel project?". It is not just active travel against maintenance. It is all our functions: local transport and safety measures; maintenance of our street lights; keeping the traffic lights working; our investment in the traffic information and control centre (TICC); and so on There is always a tension between all those functions, and it will come down to a Minister's decision; "What I am going to do with the pot that I have available to me?".

We have not been able to accelerate active travel as quickly as some people would have liked, but that is just the reality of the constraints that we face in DFI.

Mr K Buchanan: There is not enough for everything else, yes.

Mr Porter: It is not because there is an unwillingness or a grand plan that we are just not going to do it; it is just the reality of the constraints that we find ourselves working within.

Mr Peter Rice (Department for Infrastructure): On a slight tangent, I will add that, as part of public transport improvements, there will normally be an active travel element. Therefore, it is not just DFI Roads; it is across the whole Department.

Mr Porter: That is a good point.

Mr K Buchanan: Thank you.

Mr McReynolds: Has a definition of active travel been provided? We were talking about this in closed session. When there was no Stormont and no Executive, we got somewhat loose briefings — you will remember, Declan — from Denis McMahon about how things were going in DFI. I remember Colin Woods talking about how the Department was looking at the definition of active travel, but that was about a year and a half ago. Has the Department come up with a definition? Is that publicly available yet?

Mr Porter: The Minister launched an active travel implementation plan in which there is a definition of active travel. That is out for consultation. It not only sets out the policy position but is actually a practical document. When you flick through it, you will see maps of individual towns showing where the next planned projects will be implemented. There are solid lines showing where we plan to commit to bring forward projects, and there are an awful lot more dotted lines showing where the next versions of the plan could be. That is out for public consultation, and the definition is in that document.

Mr McReynolds: OK. I will take a look at that.

There is a £0·3 million reduction in ramping up active travel in year 1. How was that figure reached? Why is that reduction taking place?

Ms Anderson: It is just a re-profiling between years.

Mr McReynolds: OK. Within that £158·6 million revised figure, what is the active travel spend? If we know that we are reducing it by £0·3 million, do we have a total figure for active travel?

Ms Anderson: For active travel overall, it is around £600,000.

Mr McReynolds: OK.

Ms Anderson: Sorry, that is just resource.

Mr McReynolds: That is fine.

What really jumped out at me in the figures is the climate action plan. I think that you mentioned that briefly earlier, Susan. I want to ask about the reduction from £38·8 million to £1·1 million. What did you suppose would go into that £38 million, and what has been removed given the reduction to £1 million?

Ms Anderson: It is about a whole range of actions that are picked up as part of the climate action plan. That will be across the Department and Translink, for example. I stress again: it is not that we have removed it. We have done a bit more of a deep dive and drawn out the amounts that are already included in those top figures. It is not that we are not doing them, proposing to not do them or not including them in the requirements; it is just that we are worried about them being double-counted. That is why we have reduced that to £1·1 million, which, I suppose, is what is left that had not already been included in the previous figures.

Mr McReynolds: Does the Department still think that we can reach the climate action targets in the Climate Change Act? Are you still confident about that?

Mr Porter: For surface transport, yes, we are. There is a plan in place for that.

The Chairperson (Mrs Erskine): It is back to me. I have more questions. I am looking at the Department's forecast for its capital requirements, which is £1·43 billion against an allocation in the draft Budget of £932·7 million. Obviously, there is a shortfall. Given that shortfall in the assessed need against the draft allocation, how will the Department balance allocation of its capital to ensure that projects are completed and delivered on time? We know that projects being delivered on time is a problem and that, with that, costs go up. We need to make sure that we are working on that because, ultimately, it will save the Department money.

Ms Anderson: We will go through the same process. We will provide the Minister with information on what is contractually committed. We will look first at the Executive-agreed ring-fenced allocation amounts. Then, on the remaining general allocation, we will provide the Minister with a breakdown of contractual commitments and see what is left.

As we have done in previous years, we will also propose an over-planning amount. Upfront, at the start of the budget process, we will propose an amount to over-plan. That will give us a bit more flexibility. We can plan for things at the start of the year. Then, if we get additional allocations in year, we do not have to look for schemes or try to pick things up; we will have done it as a planned, measured process from the start of the year.

The Chairperson (Mrs Erskine): Naturally, with a shortfall, there will be a knock-on impact on projects. What specific projects will have a reduced allocation? I know that you will say that no decisions have yet been taken by the Minister, but let us be real here. There will be projects that will have a reduced allocation. Which of those are in the draft Programme for Government? I have been asking about the major roads prioritisation project, which has been delayed. It is due to go to publication soon. There will be a reduced allocation there. Can you touch on that?

Mr Porter: I will give you an example from TRAM and Roads to add a bit of context. Susan mentioned earlier that we had a bid of £139 million for structural maintenance. I genuinely do not believe that I will get £139 million; I have not had a successful bid of £139 million in the past five years. That is our opening bid for everything that we would need in an ideal situation. Then, there is the process that Susan outlined about contractual commitments, safety-critical aspects and the reality of making that fit. Looking at the past five years, I suspect that we will get an opening allocation of £80 million or £90 million, and then we will bid throughout the year. If it is the same pattern that we have had over the past five years, we will end up with a figure of £105 million, £110 million or £115 million for structural maintenance. That is the process that we go through.

The shortfall will definitely have an impact on individual projects. The £139 million is not a figure that we have just plucked out of the sky. It has come from engagement with the divisions and their saying what the projects are, by named road, that they could take forward. That makes up the £139 million. The consequence of getting not £139 million but £80 million at the start of the year is that we will have to put a pen through some of those projects. That is the reality: they will have to be put back a few years.

You are absolutely right that it will have a knock-on effect on individual projects, but, again, that is not an unusual situation; that is normal. We always know that we have more projects than will ever get funded. The bit that we need to be careful about is that we do not go below a critical point where we lose control of, in particular, the road network. We need to keep a healthy level of investment in structural maintenance to keep the overall network in reasonable condition. If we were to start to drop below that £80 million, I would start to worry that the network will get away from us. If the network gets away from us, it will be the devil's own job to try to get control of it back.

The Chairperson (Mrs Erskine): OK. I have been asking questions about Northern Ireland Water and consequential written agreements between the Department and the Utility Regulator. Will you outline what the consequential written agreement is and what it means for the budget?

Mr McGeown: The agreement does not specifically say that you must spend this or that. It is almost a working arrangement between the Department, Northern Ireland Water and others. We can set out more detail on that and forward it to you. The main thing for us is that we have the price control that has been agreed by the Utility Regulator, and we then have to deliver against that as best we can. That is our main challenge. It is about trying to deliver on what the Utility Regulator says is needed. The Utility Regulator has set out what he feels the figures are for the last few years of this price control period, and our challenge is to see how we can deliver on that. Our main focus is to try as best we can to do that. All the work that the Utility Regulator does is guided by social and environmental guidance, which sets out the requirements that need to be covered in the lifetime of a price control period: drinking water, waste water treatment etc. That is costed by the Utility Regulator, and, in turn, we try to deliver as much funding as we can for that. That is really where we are in the space of trying to meet the challenge of delivering what Northern Ireland Water needs.

The Chairperson (Mrs Erskine): We have the Utility Regulator's position on what is needed for NI Water. We have what the Department bids for and what money it gets. For complete clarity, can I check this: in the written agreement between the Department and the Utility Regulator, is that the Department calling on the Utility Regulator to agree the Department's position on the money for NI Water? What does that look like?

Mr McGeown: I would not categorise it like that. I would have to go away and look at the written agreement, but, really, what we are saying is that the Department agrees to provide the necessary funding to Northern Ireland Water, subject to budget availability. That is what we have always said. As we have always said to Northern Ireland Water as well, where we can bid for additional funding, we will do that. That is our agreement. The Utility Regulator will set out what it costs. We will say, as we did in the summer of 2021, that we are happy to work with the figures. Back then, it was £2·1 billion for the price control period, and we said that we would work within that, but that was not us being exact; how could we be, as we do not have future-year budgets? That was us saying, "We will work to deliver that budget requirement. There is no guarantee that we will get it, but we will continue to work for it". That process continues.

We will always give a commitment to try to meet what is costed by the Utility Regulator, but, until and unless we are clear on our budgets and on future-year budgets, we cannot be exact on that. That is the process. We would never be able, at the start of any price control period — for instance, as we go into price control 2028, as it will be next time round — to say definitively, "If it turns out to be £x billion, yes, we will definitely fund that". However, we will give a commitment to make sure that we target funding towards it and work to deliver as much of it as we can.

The Chairperson (Mrs Erskine): In what scenarios would you have a written agreement? I ask because it is related to budget, NI Water and its spend. Why and when would there be a written consequential agreement between the Department and the Utility Regulator on NI Water?

Mr McGeown: The agreement is more about how we work together. There is no document that will pin a body down by saying, "This is how much it costs, and you must, by contract, meet that commitment and sign off on it." I know that you are not saying that. There is nothing on paper like that. It is more about how we, as the various organisations, work together. We are not saying, "If you say that it is x amount" — in this case, in the midterm, it has been up to £2·37 billion — "we will definitely pay for that". What we are saying is that we will work to deliver that as much as we can within the budget environment in which we are operating. There is nothing in writing to state that we absolutely must meet that; the agreement is that we will work with Northern Ireland Water to deliver that financial requirement. That is where we are. We could not give any further commitment on that, because we do not have long-term budgets.

The Chairperson (Mrs Erskine): Yes, but I would say that that is a given. There is no trick question here. I am genuinely interested. I would say that it is a given that the Department, the Utility Regulator and NI Water will work together to try to ensure that there is an appropriate level of funding. I have asked the question and was told that there were four written consequential agreements: in February 2010, December 2012, December 2014 and May 2021. What were the financial or budgetary reasons for those? Why would those written consequential agreements have been made at those times? Would there have been a budget issue that meant that one of those was put in place? Why would you have had to make that agreement, given that, as I would have thought, it is a given that those three bodies will work together to ensure that NI Water has an appropriate level of funding? Does that make sense?

Mr McGeown: It does to me, but, if I answer incorrectly, please ask me more. Each of those consequential written agreements was about how we would work together and what we would do.

At no point did any of them say, "We will absolutely fund x amount". The most recent one was in 2021, which you mentioned. That predates the time at which the costs went up exponentially. When we signed that to say that we would work with them, we would not have known future budgets or about the economic shocks that subsequently came. We would never have been able to say, "We will absolutely fund this"; we would have said that we would continue to work to identify funding to meet the needs. You could never give a cast-iron sign-off. I know that you are not asking that, but we could never have said, "We're 100% going to guarantee funding for this"; we would have said throughout that we would continue to work to source funding to contribute to the needs of Northern Ireland Water as identified by the Utility Regulator through the price control.

The Chairperson (Mrs Erskine): Did any of those four written agreements contain a figure that would have been signed off?

Mr McGeown: I can check. I suspect that they were aligned to the price control, which means that there would have been a figure that the Utility Regulator identified. We did not say in the 2021 agreement that we would definitely pay £2·1 billion; it would have stated that the Utility Regulator identified £2·1 billion as the cost of price control 2021 and that we would ensure that we contribute to that and make sure that we deliver as much as possible. You could not give any further guarantee than that.

Mr Dunne: Thanks, folks. The vacancy rates in the Department are quite alarming at all levels, including the engineering department and so on. Has there been any assessment of that position or of the impact that the draft Budget will have on recruitment? Is there any good or bad news on that front?

Mr McGeown: There are a number of layers to that. David can talk specifically about DFI Roads; a lot of work has been done in that regard. We have seen over the years, and certainly in my four years in the Department, that that is a key pressure point for us, insofar as we have a lot of people who leave. I think that, this year, several hundred people left while we brought in several hundred. It is like a leaking bucket: you bring people in, and other people go. We are also competing against myriad markets out there. We have established a people subcommittee, which is chaired by one of our independent board members, and identified the priority posts that we, as a Department, need to get in. They are, largely, professional technical jobs on the front line. We have tried to make funding available for that and have looked at ways in which we can recruit, which David can pick up on. We have a process in that respect. We are bringing in the expertise that we need, but we are running to keep up. As I said, I think that we brought in several hundred, but we lost probably the same number through our attrition rate. We have an ageing workforce; around 40% of our staff are over 55.

Mr Dunne: I was going to ask whether you had picked that up.

The other issue is that competing with the private sector is a challenge, too, for you on the engineering side.

Mr McGeown: Yes.

Mr Porter: I will add a bit of detail, particularly on TRAM. As ever, you need to be careful with statistics. At the minute, we are sitting on a vacancy rate of about 27%. That is against an ideal structure. That is not a funded position. That is one figure of where we would like to get to. There is a budget constraint, which gives us a smaller figure. There is also the reality of how quickly we can take forward recruitment competitions and how successful we are at those. We recently ran a senior professional and technical officer (SPTO) external competition for a senior engineer. We received applications largely from internal candidates, most likely because of what Declan said: our attractiveness and how volatile and attractive the employment market is to people at the minute, particularly when it comes to civil engineering. If you want a job in civil engineering, you are not going to be out of work. That is driving wage inflation in the market. Private-sector firms have the ability to react quickly to that. The public sector reacts less quickly because we pay by grade, and we need to be very conscious that the professional and technical people in a particular grade are aligned with the administrative and some of the other skills.

There is slightly more constraint on the public sector. That has always been the case, and we tend to go in peaks and troughs. Sometimes, the public sector is attractive and we see an influx of people, and, at other times, we are less attractive. We are going through a period in which we are less attractive. My hope is that we are coming out of that, because it has been tough for recruitment. As Declan said, we have tried to be innovative in how we bring people in. Over the past year, we have run a skills academy. It was an opportunity for people who did not have a civil engineering qualification to work in the Department. We gave them pre-contract or pre-employment training. The full-time training was for four weeks. The part-time training was over a nine-week period. We gave them certain skills, and they could then become employed in the Department. Many of them are now in the Department, carrying out road inspection functions and inspections of private streets, which is, again, an area where we were under significant constraint. We knew that if we had gone out and asked, "Are there any skilled people who already have that qualification and want to come and work for us?", the likelihood was that there would be little or no interest. The skills academy has, at least, fed those people through to us, but it does not answer all our problems. We get them in on day 1 after they have had basic training. The Department then has to commit, over the next two years, to put them through day release to get a national diploma. However, if we put programmes such as that in place, it will, in time, start to address our problem and make the Department more attractive. The evidence shows that, if we can bring people in on the likes of those apprenticeships, they are more likely to have an emotional attachment to the Department and working in the public sector and are therefore more likely to stay with us over a longer time.

Mr Dunne: That is good. Translink has recently advertised apprenticeships as well, which is good to see.

Is there anything further in the budget for Belfast's living with water programme? There was a bit of uncertainty from the former Minister on that. It is linked to recent media reports on Belfast lough, and so on. Is it too early to comment on its future at this stage?

Mr McGeown: It is not too early. I can walk you through that, Stephen. When it was launched in November 2021, the living with water programme was costed at £1·4 billion. Two years into the programme, the costs went up by 50%, as you know. Now, it sits at around £2·1 billion. I chaired the board at that point and felt that costs were, in my view, starting to get out of control and we therefore needed to do some kind of review. The permanent secretary at the time, in the absence of Ministers, decided that we would do an affordability review, which was carried out and completed in recent months. It determined that there is still a need — absolutely, there is still a need — for the living with water programme in Belfast, but it also determined that it was not affordable within the original 12-year time frame, so it has been decided that it will continue at a rate that is affordable. As members around the table will know, PC21 has baked into it the work that has to be done under the living with water scheme. It is now for Northern Ireland Water to decide which of its programmes it wants to deliver, and that includes living with water. It is about Northern Ireland Water having to prioritise which of those schemes will go forward into the next financial year. In short: living with water is still going. Any decisions to turn off the projects would rest with Northern Ireland Water, not with us. We have said, "Yes, continue", but it will obviously be at a slower rate — understandably so — because of the 50% rise in costs.

Mr Dunne: That is helpful.

Finally, I want to emphasise the need for investment in the TRAM set-up. In the past two weeks, with the recent storm damage, we have seen section offices, particularly, stepping up with clearances. I know that staff shortages were a challenge for them. That emphasises the need. We need to get beyond the limited service. It has had an adverse impact right across the country. A short-term measure such as gully emptying beyond once per year could have a much wider, longer-term impact. I want to emphasise that. Thank you, folks.

Mr Porter: May I respond to that, Chair? Thank you for acknowledging the efforts of the section offices during the storm. I, too, would like to emphasise that lots of staff, not just within the section offices but right across the Department and in our arm's-length bodies, definitely went the extra mile. They proved their value to the public. They stepped up and got our road network, other transport networks and water network operational again quickly. Thank you for acknowledging that. I agree with you about the limited service. It was put in place in 2015 as a reaction to a budget.

Mr Dunne: Yes. We see it every day.

Mr Porter: We are now 10 years in. Again, I pay tribute to the staff because, given the financial constraint that the road network has been under, it is actually not in bad condition. That is wholly due to the ingenuity and efforts of staff to work the budget and target the areas where they know that they will get most benefit to try to minimise clusters and make sure that the main roads are not bad. What is happening is that the underlying condition and lifespan of the asset are deteriorating. That is slightly masked by the fact that staff are dealing with the safety-critical issues. Again, there are lots of good examples of staff going the extra mile and doing their best in very constrained circumstances.

Mr Dunne: I fully agree. I am in regular contact — day and daily — with engineers, who are certainly doing their best with limited means. You need to keep making them a priority going forward.

Mr Porter: Absolutely.

Mr McReynolds: I echo what Stephen said. David Williams in east Belfast was a tremendous help to me and came back to me on a Sunday night, so I echo a lot of what Stephen said.

Mr Porter: Thank you.

Mr McReynolds: To touch on your point, David, I had a quick look at the active travel definition on the website. Is what the active travel budget can be spent on specified anywhere? The definition includes a number of means of transport. You mentioned the Coleraine ring road. At the time — I asked questions for written answer on this — some were concerned that the budget for that was just going to be spent on resurfacing roads. Have there been any internal conversations in the Department about what the budget can go on? Maybe that is a more precise way of putting the question.

Mr Porter: There have been, and we are working on a definition. When we start to commit to particular budget allocations, we will then have the evidence to say, "This is why we have interpreted the budget, and this is why we are meeting the 10%". As I said, we do not want to be seen to be playing fast and loose by saying, "You can walk and cycle anywhere. Therefore, all the maintenance budget can be allocated to it". That would clearly be playing fast and loose with the legislation. We will be able to demonstrate, year-on-year as we spend the budget, where we are investing in active travel in order to encourage that modal shift.

The second part of your question was about the Coleraine ring road and not spending the budget on resurfacing. That is a very good example. There were pretty much two engineering options for it: you could either take land and build a cycle lane on one side of the road or shift the road over in order to make that space. From a cost-benefit point of view, it was more cost-effective to shift the road in places, not across its entire length but across its whole length. When you come to say, "Which bit of that project was for active travel, and which bit of it was for resurfacing?", I and the engineers in the Department can give a view. Other people may look at it and say, "I don't quite get that. I don't accept it". We can have that debate on individual schemes. What is really behind the legislation and the 10% for active travel is the need to change the mindset of the Department and the public. It is saying, "We need to choose sustainable means of transport. We need to not rely on private cars as we did in the past. Therefore, we need to build the infrastructure in order to encourage that change in mindset". That is what it is really about, as opposed to an exercise in maths, to two decimal places, to see whether we were compliant with the legislation. It is about changing the way in which we move around.

The Chairperson (Mrs Erskine): On that point, before I bring in Mark, how is that 10% being measured to make sure that —? That figure is there. How is it being measured?

Mr Porter: We produced a document internally, and that is how we got to the range from £70 million to £80 million. Taking account of the spend across the Department, what does 10% look like? A reasonable position is that range. As I said, there is a breakdown of that. Elements of it could be resource, because we maintain certain assets, and there are new capital works, such as the Belfast cycle network and the works on the Coleraine ring road. We can demonstrate that we are spending more money in that space. As the years go on, we will hopefully, budget permitting, get to the point where you will be able to see increased spend in that area. Hopefully, budget allowing, we will get to the point where you will be able to say, "There is the transport budget, and there is the stuff that the Department said was contributing to active travel". You will be able to do the maths and say, "You have achieved the 10% in time". It is not this year; we are not at that point yet, but, at some point in the future, we hope to get to there, budgets permitting.

The Chairperson (Mrs Erskine): OK. Mark, thanks for your patience.

Mr Durkan: It was always likely that we were going to struggle for a number of years to get into the 10% club, but I reiterate the importance of spending as much money as possible on that kind of modal shift, promoting and provoking investment.

I was not going to comment, but this occurred to me when you talked about winter services. Hopefully, there will be that £5 million for emergency response. Is that normal? What sort of crossover is there? When does something stop being related to winter and start to be seen as an emergency? How flexible is it? How much would be used, typically? We have just come out of an emergency. What contingency is there beyond the £5 million should that be exhausted? Hopefully, it will not be needed, but, with the increased frequency of severe weather events, it is probably inevitable that it will be, sadly.

Ms Anderson: We have identified that £5 million for emergency response as part of our requirements. That is based on our experience in recent years, when we have had more of such weather events that have incurred additional expenses. As part of this year's budget, one of the decisions that had to be taken early on was that we were not able to fund a similar amount of £5 million for this year, as in previous years — albeit, we were fortunate in the previous year to get additional funding to assist with the flooding event last October. We got additional funding then, but we are recognising the need because of these events happening more regularly. Therefore, we are continuing to put that in as a requirement for future years' budgets.

Mr Durkan: Is that the only money there is for a rainy day — or a windy one? What other contingency for that is built in within the other budgets? Over the past couple of years, we have seen how global events conspire to drive up costs here, and we have seen the impact that that has had on the Department's ability to get things done. You do not have a crystal ball, but what anticipation is there of such things as that and how the Department will have to reprioritise spend?

Ms Anderson: That is very much it: we have to reprioritise. We are clear and transparent in having that £5 million sitting out separately, because we do not have it built into other lines. Obviously, there will be some element of emergency response on the roads, but they are more the day-to-day emergencies than the weather events or any other economic shocks that we might suffer. We have put it separately to be transparent about the amount that, we think, we may need, based on the trends of this year and last year.

Mr Durkan: Finally, I echo other members' sentiments about the staff; their efforts and value; the sad reality that there is not enough of them; and the importance of keeping up efforts in that regard to get more people in to support the workers who are there. I have to challenge David — I cannot let it go, Chair. He said that the roads are not in bad condition. They could be in worse condition.

Mr Porter: Maybe that is what —.

Mr Durkan: I was wondering what or where you were comparing them to.

Mr Porter: It depends on what way you want to express that.

The Chairperson (Mrs Erskine): Keith talked about getting a moon buggy. [Laughter.]

Mr K Buchanan: That shows what the roads are like in our area.

Mr Porter: My point is that they could be in a lot worse condition but for the good efforts of the staff and the way in which they know how to target money and the roads recovery fund, their ability to identify clusters of defects and their knowledge of how to manage that in the most sensible way to get the best out of the fund. They could be in a lot worse condition.

The Chairperson (Mrs Erskine): I have already asked questions, but I want to touch on something, lastly. We have had storm Bert, storm Darragh, storm Éowyn, or however you want to pronounce it — there have been many pronunciations — all men, but each ferocious in their power against us. Do you know yet how much storm Bert and storm Darragh cost the Department? I suppose that it is too early to say how much the most recent storm cost.

Ms Anderson: We are still working through the details of those. The reason for a delay is that a lot of it is overtime, so it needs to work through the HR system and then come through the finance system. We do not have any other way of gathering that information. We are still working to try to capture that.

The Chairperson (Mrs Erskine): I want to touch on what Mark rightly brought up. Some £5 million might sound like an awful lot for emergency response, but, without a storm, an emergency response could be road subsidence after a heavy rainfall, which would not even be classified as a storm. You soon start to see that £5 million pot dry up very quickly. Is that something that has to be looked at in future budgets? We have had quite a considerable number of storms, and the damage that has been caused in those storms seems to be quite substantial.

Mr Porter: In all likelihood, that figure will increase with time as the climate changes. As storms become more frequent and more intense, it will have an impact on infrastructure, and we will therefore need to make more provision. It is worth highlighting that, in relative terms, they have a small impact on the overall budget of the Department. That £5 million is not an insignificant amount of money, but it is a small proportion of the large overall budget.

Another thing to keep in mind is that the most recent storm was on a Friday. A lot of our response was during the day, so a lot of that is in salaries and wages, which were already covered elsewhere. It is only the overtime element that is the additional cost. When we went into the evening or the Saturday, we started to incur costs. It is not as simple as saying that an awful lot of people were responding, because a lot of people were responding during working hours and getting paid in any case. In some ways, that is an opportunity cost to the Department. If you were not doing the thing that you had planned to do but were in emergency response, that is an opportunity cost.

The other thing to say about that wind event is that, whilst it had a very practical impact on the road network, the road network itself was not dramatically impacted on in its infrastructure. You can contrast that with some of the flood events, where bridges may be washed away or flood defences overtopped. That is very significant structural damage, and it takes a capital cost to reinstate those assets, whereas the recent wind events have tended to need an operational response. That is where you tend to get, in relative terms, a lower figure needed to recover from that.

Mr Rice: From a public transport perspective, the recent storm did quite a lot of significant damage to the infrastructure, and there will be capital costs as well as resource costs for that particular storm. It depends on what type of storm it is. If it is flooding, it might have a bigger impact on the road asset. If it is wind, the damage is potentially to public transport infrastructure. It is across the board. It is not just roads: public transport and NI Water will all be affected in different ways, depending on the storm.

The Chairperson (Mrs Erskine): You took the words right out of my mouth. I was conscious of the fact that there would have been an impact on rail as well. There will have been capital impacts. In my area, the storm had impacts on some of the rural roads, in that capital piece.

Lastly — hopefully — I will ask about financial transactions capital. We have been asking some questions about electric vehicle (EV) infrastructure, because investment would be needed for private operators. As we have a mandate in place, we have been asking whether financial transactions capital could be a means of drawing down money to ramp up infrastructure in that area. We got a response to say that the Department and Minister would be looking at that. However, I noted that the answer to a question for written answer stated that the Department was not going to be drawing down any financial transactions capital. Is that the case, or what will be happening about that? It is another means of drawing down money.

Ms Anderson: The issue is that we have not, to date, identified any definite areas where we could use financial transactions capital. As you said, it needs to be used in the private sector. EV is one that, I know, the teams are taking forward. We have not concluded on a yes or a no for putting something forward, but it is being actively looked at.

The Chairperson (Mrs Erskine): Are discussions happening with the industry in looking at that piece?

Ms Anderson: It is being looked at internally. It is not my team that is doing it, so I am not sure how much engagement is being done externally. We are looking at that ourselves, first, and then we will determine whether it is an appropriate course of action. You are right about us wanting to benefit all capital transactions funding streams where we can.

The Chairperson (Mrs Erskine): OK.

Thank you very much for your time today. We appreciate it. We may need to follow up on things, and we may need to bring you back at short notice, given that we will be going to the Assembly on this pretty soon. We might bring you back to the Committee if there are further things about the budget that we need to scope out. Thank you for giving of your time today; we really appreciate it. As has been said, thank you to the staff who were on the ground during the most recent storm, because that was a monumental piece of work that had to be done over a very short space of time. Thank you.