Official Report: Minutes of Evidence

The Chairperson (Mr O'Toole): I welcome to the meeting Patrick Neeson, who is a frequent attendee at the Committee and is head of the Supply division; and Janis Marynowski, who is a principal in the Supply division of the public spending group. Welcome, Janis. I think that this is your first time in front of the Committee. Unless you are very lucky, it will not be your last. Patrick, as always, please make some brief opening remarks.

Mr Patrick Neeson (Department of Finance): Thank you. I will keep this reasonably brief to allow time for questions.

As the Committee will be aware, the Budget Bill is based on the 2025-26 Main Estimates. Hopefully, the Committee has copies of those. Those Estimates reflect the opening budget positions for Departments as agreed by the Executive on 3 April and endorsed by the Assembly on 19 May. I will briefly set out what the Estimates contain, as that may be helpful.

Part I outlines the key information that will be voted on by the Assembly and subsequently given legal authority in the Budget Act. That includes voted resource and capital limits for both departmental expenditure limit (DEL) and annually managed expenditure (AME), any voted spending outside the Budget, the net cash requirement, and expenditure and income ambits for each voted limit.

Part II is known as the subhead detail. That includes a more detailed breakdown by spending area in each Department of the resource and capital requirements that underpin the voted limits in part I. It also includes comparative figures from the previous year. Part II also contains what is called the resource to cash reconciliation. That aligns the adjustments needed to reconcile the net resource and capital requirements to the net cash position. It includes the removal of non-cash items such as depreciation; movements in provisions; the removal of arm's-length bodies' resource and capital budgets; grant-in-aid; and accounts for movement in working capital.

Part III is broken down into notes. Note A is what we call a "SoCNE": a consolidated statement of comprehensive net expenditure. It details incoming expenditure in departmental accounts and reconciles those figures to the resource budget and to the Estimates' net resource position. Note B provides a breakdown of voted income — resource and capital — that is split between the various categories. Note C offers analysis of what we refer to as "CFERs": Consolidated Fund extra receipts. There are some additional notes that provide supplementary information on the data that is in parts I and II.

That is a quick breakdown of what is in the Estimates.

The Budget (No. 2) Bill, as you know, provides the legal authority for Departments to incur spend and use resources as set out in the Estimates. It also enables the Assembly to hold Departments accountable for managing their resources within the limits. One key matter for the Committee's consideration is whether to grant accelerated passage for the Bill. As members know, it is essential to ensure that the Bill reflects the Executive's most up-to-date spending plans and that Departments have access to the cash required to deliver services. We know that we routinely ask the Committee to support that process. We, as officials, and the Minister are appreciative of your ongoing support in that regard.

Until the Budget (No. 2) Bill receives Royal Assent, Departments are constrained by the spending limits in the Vote on Account as provided for in the Budget Act 2025, which was passed earlier this year. As members know, that provides cover for cash and resources based on 45% of last year's position, which, we expect, will be sufficient to meet Departments' needs until we get Royal Assent in, we hope, mid-to-late July.

The Supply resolution debates are scheduled for 3 June, during which the Assembly will be asked to approve the Main Estimates.

I will quickly talk about sole authority. Members know that 'Managing Public Money' allows for certain spends to proceed under the sole authority of the Budget Act. As you know, we monitored and kept an eye on that. I am pleased to say that the amount of money involved in relying on sole authority has fallen from about £24·5 million in the spring Supplementary Estimates (SSEs) to around £13·4 million now. We hope to shortly bring forward a financial provisions Bill, which will take care of a lot of the remaining spend under sole authority.

Finally, as members know, the position set out in the Main Estimates will evolve throughout the year as a result of in-year decisions, monitoring rounds and so on. That will be reflected in the spring Supplementary Estimates and the associated Budget Bill when we do all this again in February.

The Chairperson (Mr O'Toole): OK.

Mr Neeson: One final thing to note is the timing of the Final Stage debate. We told members that it would be on 17 June, but it has been brought forward to 16 June.

The Chairperson (Mr O'Toole): Thank you. One of the things that has been pertinent to the Main Estimates that were laid at Westminster is the clarity on the quantum of support to meet the additional cost of employers' National Insurance contributions (NICs). For the purposes of the record, are you able to explain exactly how much will accrue to the Executive to support them and the wider public sector in meeting the additional National Insurance costs?

Mr Neeson: As you know, the Executive agreed at their meeting on the Budget that additional spending will be provided to Departments in June to help them manage the pressures as a result of the increase in National Insurance costs. Any additional in-year funding will be reflected in the spring Supplementary Estimates later in the year.

The Chairperson (Mr O'Toole): I am trying to say that you now know, definitively, how much the additional money will be, because it is included in the Main Estimates. I presume — you said — that it will be allocated in June monitoring and there will be specific allocations to Departments to cover the cost of employers' NICs.

Mr Neeson: It is not in the Main Estimates.

The Chairperson (Mr O'Toole): It is in the Westminster Main Estimates.

Mr Neeson: It is not in Northern Ireland's Main Estimates.

The Chairperson (Mr O'Toole): It is not written into those Main Estimates.

Mr Neeson: No. This reflects the Budget position at the start of the financial year.

The Chairperson (Mr O'Toole): Yes, but it will be in the Westminster Main Estimates, which have come out. Have they come out?

The Committee Clerk: They have, Chair, yes.

Mr Neeson: Any additional spend or budget that is allocated to Departments in-year is reflected in the spring Supplementary Estimates.

The Chairperson (Mr O'Toole): Yes, that is fair enough. However, I am trying to establish a point for the record. Officials have consistently told us that we will not know exactly how much we are getting for employers' NICs until we get the Westminster Main Estimates, so I am asking that now. If you are unable to tell me, it would be helpful if the Department or the departmental Assembly liaison officer could write to the Committee.

The Committee Clerk: Chair, the Minister has stated —.

The Chairperson (Mr O'Toole): Yes, I know that we have had it in various forms, but, for the record, I want to know whether the Westminster Main Estimates contain any surprises, whether on the upside or the downside. Perhaps we can ask that question separately.

The Committee Clerk: We have had that confirmed.

The Chairperson (Mr O'Toole): We have had that confirmed. OK. We will double-check that separately.

June monitoring, basically, will follow immediately. Do we have a date for that yet? Has it gone to the Executive?

Mr Neeson: Returns are due back from Departments on 5 June. I imagine that they will be brought to the Executive shortly after that. We could not have waited until that happened, because of the danger associated with not getting Royal Assent and so on before July, whereby Departments might run out of their Vote on Account money. That is why —.

The Chairperson (Mr O'Toole): The Estimates are written to incorporate June monitoring.

Mr Neeson: No.

The Chairperson (Mr O'Toole): No?

Mr Neeson: No. That will be reflected —.

The Chairperson (Mr O'Toole): They will have to come via the supplementary —.

Mr Neeson: The SSEs will reflect any in-year budget, included June monitoring.

The Chairperson (Mr O'Toole): I will bring in colleagues.

Ms Forsythe: Thank you, both, for coming to give evidence to the Committee and for sending the details. I appreciated getting a hard copy of the Estimates, although I have, of course, left that upstairs in my office. Paul has his.

Patrick, are you satisfied that, if the stages of the Bill go through according to the timetable, the amounts that were approved in the Vote on Account will be enough to take the Departments to that point?

Mr Neeson: We are. We are content. We have done some analysis of how long the spend that was approved in the terms of the Vote on Account is likely to last. We believe that, if the Bill goes through according to the timetable that has been set out and Royal Assent is granted by the end of July, Departments should be OK.

Ms Forsythe: Thank you. From the returns that have come from the Departments, can you see any particular pressures coming through in the 2025-26 Estimates that you wish to bring to the Committee's attention?

Mr Neeson: No, none. As I said, the Main Estimates essentially reflect what the Executive agreed in the Budget. They set out how Departments intend to allocate that across their spending areas.

Ms Forsythe: OK. Thank you.

Mr Frew: I acknowledge the work that the Department has done to get sole authority — about which we have always been fascinated over the years — down. You have reduced it by a further 53%. Comparing that with last year's position, it seems that it is the Department for Communities's welfare mitigations that have been lifted out of sole authority. I take it that that is put into the Budget itself.

Mr Neeson: Yes, the Department for Communities brought forward legislation for those welfare mitigations, meaning that it did not rely on the sole authority of the Budget Act.

Mr Frew: Remind me what piece of legislation that was, if you can remember. I cannot remember.

Mr Neeson: I will need to come back to you on the specific legislation; I do not have that to hand.

Mr Frew: We pushed some through in the past couple of months.

Mr Neeson: From memory, legislation was brought forward in relation to that, yes. I can come back to you with the specifics.

Mr Frew: Sure. Did you say that the Department of Finance is bringing forward a Bill? The financial —.

Mr Neeson: The financial provisions Bill. That is to deal with a number of those remaining amounts, particularly in relation to TEO. Most of the spend that is covered by sole authority now is in TEO. A small amount of it relates to the Fiscal Council. There is a Bill coming forward on that. Almost all —.

Ms Janis Marynowski (Department of Finance): Sorry, the legislation was the Welfare Supplementary Payment (Universal Credit) Regulations (Northern Ireland) 2025. Those regulations were made in March.

Mr Frew: OK. That legislation dealt with that aspect. That was a massive block of the sole authority spend.

Mr Neeson: It was.

Mr Frew: I suspect that those two other Bills — the Fiscal Council Bill and the financial provisions Bill — will not be in place or in play for this time next year. Therefore, you envisage more sole authority being granted next year.

Mr Neeson: Potentially. We hope to introduce the financial provisions Bill this side of the summer recess, so it will depend on how long it takes beyond that. With a fair wind, it may be in place by this stage next year.

Mr Frew: OK. Thank you. That is it.

Mr Brett: My question is about the financial provisions Bill. Is its drafting complete?

Mr Neeson: Drafting is complete. We hope to get Executive approval this week —

Mr Brett: Tomorrow.

Mr Neeson: — and then to introduce it shortly thereafter. Yes, tomorrow. Fingers crossed.

Mr Brett: Then the Minister will introduce the First Reading before the summer recess.

Mr Neeson: That is the plan. We hope that it will be some time in June.

Mr Brett: Very good.

Mr Neeson: There is a small item that needs Secretary of State consent. It should not be an issue. As soon as that happens, we will seek to introduce the Bill.

Mr Brett: That deals with victims' payments and funding received from Westminster for refugee funding that —.

Mr Neeson: Yes, it deals with a wide range of provisions across about six or seven Departments. On the sole authority point, there are a good number of areas in TEO that rely on the sole authority of the Budget Act at the minute that will be dealt with by that financial provisions Bill.

Mr Brett: What will that leave in the black box?

Mr Neeson: The other Bill is the Fiscal Council Bill. There is a small amount of spend there that relies on the sole authority of the Budget Act, and there is legislation coming forward on a similar timetable for that. That should deal with that as well.

Mr Brett: OK. That will be it all dealt with then.

Mr Neeson: That should be it all dealt with. Fingers crossed.

Mr Brett: OK. Perfect. Thank you.

The Chairperson (Mr O'Toole): No other members have indicated that they wish to ask a question, so, at this stage, we will release you, Patrick and Janis. Thank you very much for joining us.