Official Report: Minutes of Evidence

The Chairperson (Mrs Erskine): We welcome to the Committee Susan Anderson, director of finance in the Department for Infrastructure; Declan McGeown, deputy secretary for water and departmental delivery; Colin Woods, deputy secretary for transport, roads and asset management; and Judith Andrews, acting deputy secretary for climate, planning and public transport. You are welcome to the Committee. As you know, the Committee was keen to look at budgets. Budgets are in everything that the Department for Communities does, and we are capital-heavy in infrastructure and in what we — I say "we" collectively — do for Northern Ireland through infrastructure.

The papers arrived a bit late, particularly the June monitoring round papers, and that did not allow us proper time. We got them late yesterday. I feel as though I did not have the proper time to scrutinise them in the way that I would like, given how much the budgets impact on the business and service delivery of what happens for my constituents and across Northern Ireland. If you do not mind, can you give a reason for the late receipt of the papers? The memorandum was publicly available — we have seen it — but it was given to the Committee late. In light of that, particularly for June monitoring, why were the papers late? As a Committee, we want to ensure that we have effective scrutiny.

Mr Declan McGeown (Department for Infrastructure): Perhaps I will begin with an apology. We are really sorry about that. It is a challenging process. While our budget is slightly better this year, it still presents us with challenges, and you will hear that through the morning. It is challenging, therefore, to make the budget stretch across the various budgetary areas. For that reason, it probably came much too late for you to give it proper consideration. We accept that, and we apologise. Hopefully, over the next 90 minutes or so, we will be able to elaborate on any points on which you need clarification. Our apologies for that.

The Chairperson (Mrs Erskine): As a Committee, we feel that a lot of time was given. We work within the time constraints of tabling items for business and the interactions between Committees and Departments, so we feel that we have entered into that for our part. I just want to reflect that.

As I said to the Committee, we want to focus on the Main Estimates first, and then we will come to June monitoring. If you do not mind, it would be great if you could take us through the Main Estimates, please.

Ms Susan Anderson (Department for Infrastructure): Thank you, Chair. I have a couple of slides to walk through. As you said, you have the memorandum alongside those slides. The Main Estimates reflect the Department's 2025-26 final budget outcome. I will state up front that those do not reflect the Minister's final opening budget decisions, as they were still subject to the equality consultation that we were working through, which closed on 5 June. However, the equality scenario forms the basis on which the Main Estimates were prepared. As the Committee will know, the Estimates provide the legislative basis for the Department's spending limits on the basis of what was set on the final budget position.

If we look at our actual spending totals for this year, which are set out in the Main Estimates, we will see the resource departmental expenditure limit (DEL) figure. You will probably not be so familiar with that figure, because it is made up of the figure in the equality consultation updated for the final budget plus the ring-fenced element, which is our depreciation and impairment accounting adjustments. That is just under £130 million. That is why the figure sits at £767·5 million. As I said, it is made up of the final budget allocation plus our ring-fenced elements for depreciation and impairment. The capital figure is a bit more straightforward: it is £917 million, which you would expect to see.

In the Estimates, we also have some further figures for our annually managed expenditure (AME) lines. Those are areas that we cannot control particularly well, and they are volatile. Depreciation and impairments score in our resource AME and capital AME. That is for our non-trunk road network, for which we cannot easily quantify or estimate year-on-year how much the movement will be, so that is why they score in AME.

We will move on to the final couple of lines on the table, which are non-budget lines. Our resource and capital lines show the subsidy that we pay to NI Water in cash terms, netting off with the dividend that we receive back from NI Water, along with the loan interest that we receive back from NI Water. Effectively, that is the cash movements between us and NI Water, which is £366 million.

Those figures are reflected in the Main Estimates.

If you look at some of the pie charts in the slides, which show what is set out in our Estimates memorandum, you will see that some of the figures read across nicely to what you will be familiar with in the equality screens, including, for example, the Translink figures. However, as I mentioned, that also includes our depreciation and impairment figures. That is why, for example, on the transport and roads asset management (TRAM) lines, they will look a bit higher, because we also have depreciation and impairment. The same goes for NI Water, as there is £149 million plus another £100-odd million for depreciation there. That just shows how we have split the budget in the Main Estimates across the spending lines, as you will see on the slide.

Again, it is a pretty similar story in the capital position. It aligns nicely with the equality scenario. However, you will have picked up in the equality scenario that we over-planned at the outset. Because we cannot use that over-planning in our Main Estimates figure, we have effectively netted that off the various lines across the pie chart. Those show the allocations per the equality screening and the need to net off the over-planning amount that we factored in.

That is a quick run through the Main Estimates memorandum. We are happy to take questions on the detail of it.

The Chairperson (Mrs Erskine): Thank you. We could start on the equality impact assessment (EQIA), which closed just last week. When does the Department anticipate that it will conclude its consideration of the issues raised in that consultation, and when will the Minister determine the final allocations resulting from that impact assessment?

Ms Anderson: Yes, the equality consultation closed on 5 June. We had a number of responses to it covering a range of areas, as you would expect, including water; housing; active travel; community transport; public transport; road maintenance; and road safety. Those areas were brought to our attention as part of the equality screening. We are working our way through them and will prepare a final report for the Minister's consideration. Once she has considered that, we will invite her to take up final budget decisions. That should happen in the next couple of weeks.

The Chairperson (Mrs Erskine): So you imagine that that will be in two weeks or so: is that the aim?

Ms Anderson: That is our plan for working it through, yes.

The Chairperson (Mrs Erskine): Will the Committee's views be sought on any final proposed allocations or any decisions that the Minister will make?

Ms Anderson: We will certainly share the final report with the Committee. That is normal practice. We will share that with you once it is finalised.

The Chairperson (Mrs Erskine): Do you know how many have fed into that equality impact assessment? The likes of community transport and people like that, including section 75 groups, will, of course, feed into it, particularly on the public transport elements.

Ms Anderson: Yes. We had 27 responses in total. Some of those were blank, but that is the number of responses, including everything that I mentioned, which was that range of areas or general trends that were covered.

The Chairperson (Mrs Erskine): There is a lot of pressure on the Department. We do not underestimate that. There is a lot in your submission on Translink, road maintenance and water. You have a lot going on about climate, planning and how we do business. What pressures have been identified or anticipated under business areas as a result of what you may have at this moment in time?

Ms Anderson: We are maybe moving into the June monitoring pressures. We have identified those and subsequently bid for them as part of June monitoring. Are you happy to talk about those now?

The Chairperson (Mrs Erskine): Maybe we will leave it until that session. If the main pressures that have been identified are for the June monitoring and that is the reason for the pressures, we will maybe keep that until then, if you are happy enough.

I want to chat about the depreciation, because I raised it in the Chamber and want to get some clarity. The Committee has written to get some clarity on that in relation to roads and road maintenance. As we know and as the Committee is aware, road maintenance equals road safety. There was a £4·2 million underspend: why is that? Does that roll over, or does it go back into the Department of Finance's central pot? For clarity for the Committee, how does that work?

Mr Colin Woods (Department for Infrastructure): That is purely a technical, rather than a substantive, matter.

The Chairperson (Mrs Erskine): OK.

Ms Anderson: As Colin says, that is absolutely an accounting matter. It is ring-fenced for depreciation and impairment; we cannot use it for any other expenditure. It is not cash-related, so there is no cash impact. It is purely the accounting adjustment to reflect how the assets have depreciated over the year. As I mentioned, it is really difficult to estimate that accurately at the start of the year, which is why we then had that underspend as part of the provisional out-turn. It is absolutely not funding that we could have used to maintain the roads in any way; it is a ring-fenced, non-cash accounting adjustment to reflect how the assets have deteriorated over the year.

Mr Stewart: Thanks, folks, for coming along. I appreciate your time today. Will you give us a high-level breakdown of what the ring-fenced £261 million in the capital forecast and spend is heading towards at this stage?

Mr Woods: A lot of that is expenditure for major roads projects, so it is for the A5 and the city deal projects. The A5 is the largest single component of it, but we are also taking forward other city deal projects, such as the Lagan pedestrian bridge, the Newry southern relief road, the Cookstown bypass, the Enniskillen bypass and so on. That is all ring-fenced money, because those projects are either Executive flagship schemes or part of the city deals. For example, the A5 number has gone down a bit, because, as we still await a judgement on the legal challenge, we are not able to progress that project as fast as we would like. That money is ring-fenced, so it has to go back to DOF for redistribution. It is not something that we can choose to reallocate, which is why, helpfully, it is presented in a different part of the pie chart that we showed.

Mr Stewart: That makes sense, Colin. I appreciate that. Is it anticipated that the city deal projects will progress fully and that that expenditure will be spent in the 2025-26 year?

Mr Woods: The projects are all proceeding. Exactly when you need the cash will depend on when you get through a procurement and initiate an instruction. The Executive have made the commitment to fund the deals, so they will be funded at whatever point that need arises; it just changes what we do in this particular year.

Mr Stewart: I will move on to resource and capital for transport and roads maintenance. I do not need to tell you just how poor a condition our roads are in, given the inflationary pressures and the fact that the state of the roads depreciates each year. How confident are you that that is enough money to stand still and keep our road network to the standard that it needs to be at? We know that there is a precarious position, shall we say, with maintenance.

Mr Woods: I will answer that question in two parts, because the resource and the capital parts are probably different answers. We have an increased resource budget available this year for essential maintenance, which is the routine maintenance that you do, such as defect repair, grass cutting, verge management and all that stuff. We have been operating a limited service since 2014. We are now in a position where, although we cannot restore normal service, we are looking to expand upwards from the limited service standard. We are bringing proposals to the Minister for consideration about what exactly that will look like. For example, we had to reduce our gully cleaning frequency. We are looking to see whether we can increase that again in areas of known risk from the minimum of one a year to something that is more risk-based and tailored. Some of the extra money will go to that.

We have also been developing a new road maintenance strategy, and we hope to fund some activity from that on a network-wide basis. From a resource perspective, things are better than they were last year, although we are probably still short of the figure of actual need. My estimate is that we are £10 million short of the network's true need for standing still, if I may use that kind of language.

Mr Stewart: Would that £10 million take us towards a normal maintenance service?

Mr Woods: Yes, it would. We have a director of engineering memo that gives our staff instructions on how to deliver at the standard that we can afford. We would then look to change that. We will look to make changes to those standards during the year anyway, as I said, but, in order to fully restore normal service, it would take a bit more, which we do not yet have, but we are making positive steps towards that.

On the capital side, I am afraid that the answer is not as positive. You will see from the slide that the non-ring-fenced capital available to the TRAM group is about £118 million or £120 million. That is £20 million to £25 million less than last year because we have had to support the delivery of the ring-fenced schemes. The budget that the Department gets is not entirely on top of its normal requirement. We still have to try to make the best balance available. The indicative allocation for structural maintenance in particular is much lower than the need requirement. The need is about £194 million a year, and we are looking at an indicative opening allocation of £68 million.

We have never got £194 million —

Mr Stewart: I appreciate that.

Mr Woods: — so we are not going from that down to £68 million. Last year, the out-turn was around £101 million or £102 million. That is still a significant drop from last year and is, in any case, significantly below what it would take for the condition of the network to stand still. We are now picking up on 10 years of limited service. It costs more to keep a house or a car when it is older and in bad shape to begin with, and the same is true of the road network. From a capital perspective, we are at approximately a third of the level of need, but we recognise that the money has to fund all the other things that the Executive want to do, so here we are, and we are trying to manage it as best as we can.

Mr Stewart: This question may stray into an operational matter, but, on maintenance, we heard about the potential capacity issues in the private sector when providing contracts. Are you confident that there has been engagement with the private sector to make sure that the workforce and private contractors have the capacity to do the work that needs to be done?

Mr Woods: The capacity of a marketplace turns like an oil tanker, not a speedboat, but yes, we think that we have reasonable plans to make good use of that this year. Hopefully, the great day will come when we have multi-year budgets and can plan for three years, improving our ability to do that. From an essential maintenance perspective, however, we have done that.

We have the opposite problem with contractor availability when it comes to the structural maintenance programme. At £68 million, there will not be enough work to sustain the same supplier base. Logic will tell you that, if you are down £30 million on the year, not as much work will come from the Department. We know that that would be an issue for our contractors, so we are talking closely to them and trying to keep them sighted on where we are in the decision-making process. We and the Minister recognise that there would be a regrettable impact if that is the figure that we end up having to go with.

Mr Stewart: I appreciate that. I have a couple more questions, Chair, but they may stray into our session on June monitoring. I am not sure. Should I ask and find out?

The Chairperson (Mrs Erskine): Yes, ask them and find out. [Laughter.]

I had to ask mine to find out.

Mr Stewart: They are mainly on the capital Estimates, particularly for Northern Ireland Water and Translink. We are aware of the pressures that they have. I am interested to hear the feedback that you have had from them on where, they think, the main pressures are and how close those figures go towards alleviating their biggest concerns.

Mr McGeown: We probably will stray into June monitoring with that,

but I can tee that up with a teaser.

Northern Ireland Water has sent an operating plan to us that sets out its resource and capital needs. For resource, it says that it needs £172 million, and, for capital, it needs £405 million. We will get to this point in the discussion on that, but the figures that we suggest allocating, which are subject to ministerial approval, fall slightly short of those and will present a challenge. That is why you will see bids to try to address that. It will present a challenge to Northern Ireland Water, particularly on the capital side, given the range of schemes that have to be delivered. We are looking to see how we can work with NI Water to address that and to look at alternative ways of providing the service. You have heard about the natural approaches, so we are looking at things like that.

Ms Judith Andrews (Department for Infrastructure): I can pick up on the question on Translink.

Mr Stewart: Yes, please.

Ms Andrews: It is a challenging capital budget for Translink, which would consider itself to be about £30 million short. That said, the focus is on the capital project commitments. You asked about ring-fenced budget for the remainder of the works on Grand Central station: there is a commitment of £40 million for the public realm works around Weavers Cross. Translink is focused on replenishing its fleets of buses and class 4000 trains. There are commitments for things such as signalling, the Northern Ireland railway operating centre (NIROC) project and electronic ticketing, which is coming to a close. That improves customer services and reduces costs.

Health and safety is a big priority for Translink. About £37 million is devoted to that in addition to the committed spend, and that is about the infrastructure, such as bridge linings, cleaning culverts, signalling and things like that. Those are really important for safety. We are working closely with Translink on prioritising what it can spend within the budget envelope that it has been allocated.

Mr Stewart: That is good to know. From speaking to Translink and people in the organisation, we are aware that its fleet is ageing and that we spend more and more on maintenance each year to keep vehicles on the road and trains on the tracks. Significant pressures will come to bear from buying the new fleet, and I am concerned that the money is maybe not there at this stage.

Ms Andrews: This year, Translink plans to buy 100 new battery buses, so there is a degree of replenishment. It is maybe not happening at the speed that Translink would like, but we are doing what we can. Obviously, as a result of the environmental piece on climate change, there has been a shift to battery buses and hydrogen buses. The class 4000 trains are being replenished to a degree. However, as you say, it is an ageing fleet of vehicles and carriages.

Mr Stewart: We will maybe touch on that more in a bit. Thank you so much.

Mr Dunne: Thank you, folks, for your presentation. I will pick up on a couple of points. You mentioned that there have been 10 years of limited service, and I know that we have talked about that a number of times in the Committee. We welcome what is, hopefully, positive music on that. What is the time frame for a new road maintenance strategy? The Minister has hinted at that a few times, even in answer to me at Question Time. As you say, that limited service over 10 years has had a significant impact on our roads across the country, and a lot of investment will be required to bring them up to a safer standard. I am keen to tease out more information on that.

Mr Woods: That is very much tied up in the budget question. What we can afford to change this year comes in part from what we can afford to spend. The purpose of the strategy is to look at the approach that we have taken over the past 10 years and to recognise that, while it was absolutely the right approach logically, it has left us with some unintended consequences. Going past one defect to fix another and not fixing the first one until it gets worse is not good value for money. When you are trying to manage a network of the scale that we have, with 26,000 kilometres of road and 6,000 kilometres of footpath, it is sometimes difficult to be precise and to take the best value-for-money approach, but we recognise the need to move in that direction from where we are at the minute after 10 years of limited service.

We want to intervene to really improve usability and the quality of the asset, which is the structure and the roads. That may mean that you intervene only at a number of sites, but, when you do, you do it really well. There is a balance to be struck between doing that and ensuring that safety is appropriately protected. The structural maintenance budget, for example, is a component of that. Often, the best thing to do is to replace and not patch a footpath, but the amount of capital budget that you have tells you how realistic a goal that is. One of the reasons why the Minister has not brought forward the strategy at this point is that it is tied up in the amount of money that is available for structural maintenance in the 2025-26 budget.

Mr Dunne: Will it be a priority, then?

Mr Woods: Yes. We want to try to move to that approach, and that is what the Minister has asked us to think about. I have likened it to swinging the pendulum away from a purely reactive, defect-led approach to one that includes greater focus on overall and underlying quality. You can do that for a while, but, depending on the number of defects that you have, you may have to swing it back again. We are trying to find the room to manoeuvre and improve.

Mr Dunne: That is reflected in the increase in claims for vehicle damage and personal injury over those 10 years.

Mr Woods: That is a factor, absolutely. The amount of money that it would take to remove the risk of most if not all claims is astronomical, so it is not a straight trade-off between one or the other. However, it is one of the indicators that we use to tell us whether our approach is optimal or whether we need to think about how we should do it differently. That is the space that we have been in over the last while.

Mr Dunne: I have one other quick point. This may stray into business that we will deal with later, but do you foresee the Estimates having any impact, negative or positive, on the Living with Water in Belfast plan?

Mr McGeown: That remains to be seen. As you know, we had to look at and review the Living with Water programme because of the huge rise — 50% — in costs. Following that review, we got to the point where NI Water will take forward the schemes as business as usual. Northern Ireland Water has already developed outline business cases for the areas that need to be developed. It will be for Northern Ireland Water, within the envelope of funding that we allocate to it, to decide whether those feature as higher priorities or whether other priorities should take centre stage. It will be for NI Water to decide how it allocates its funding to Belfast and other parts of the region.

Mr Dunne: OK. Thank you.

Mr Durkan: Thanks to the team for coming along. There is a quite a lot in the budget, albeit we would love to see more. We are looking at how the pie is cut, and we would all like to see a bigger pie.

It may be stylistic, but is there a reason that the same colour code is not applied to net resource DEL and net capital DEL in the two pie charts? In some respects, it might be easier if it were. For example, Translink is in red in the resource pie chart, yet ring-fenced money, excluding Northern Ireland Water, is in red in the capital pie chart. It would be easier for everyone — not just us but probably you — if the key were consistent.

Deborah asked about the depreciation and got a bit of clarity about the £4 million differential. How is the Estimate done each year? Is there a fixed formula or equation for doing so? Is it lower because the book value of the capital for the roads asset was lower than anticipated? What is the reason for that? I appreciate that it is a technical accounting mechanism, not money coming out of somewhere else, but how is it computed?

Ms Anderson: There is a complicated formula behind it all. That is worked through after the year end. We then get the actual value of the network, which lets us determine how much the road has depreciated in-year. The specific roads in question here are roads in our trunk road network, which are motorways and other main roads. Different types of valuations are therefore applied to different types of roads. We have to apply a number of assumptions when we estimate at the start of the year, because we do not have the indices etc that we need to estimate accurately. When we do that, we also look at historical trends. It is difficult to forecast accurately, but we do it as best we can with the information that we have available to us when we forecast. That is at the Main Estimates stage. We then have an opportunity to update the forecast again at the spring Supplementary Estimates stage, but, again, we do not know the depreciation until after the year end, when we have the valuations through.

Mr Durkan: Thank you. The active travel team will be in with the Committee later this morning, or it may be this afternoon. There is a legal obligation to spend 10% of the transport budget on active travel. Would there be any merit in giving it its own heading? Does that 10% come out of the TRAM and Translink budgets?

Mr Woods: Yes. The transport budget includes a broad range of things. You are right: it is primarily from public transport and TRAM activity. There might be value in having it as a category, but active travel is diffused throughout a lot of budget lines. It includes anything that we do that supports cycling, walking and wheeling. It includes structural maintenance. An example of that is when money is used to replace footpaths. It includes a portion of our street lighting costs, which are primarily for the benefit of pedestrians. It would be quite an exercise to do. It might be a useful thing to do from an analysis point of view — I am sure that the active travel team will be happy to discuss how to help make the active travel budget more visible — but it probably would not be useful for us when it comes to budget management. Making it clearer for interested parties is something that we could think about doing, however.

Mr Durkan: It makes up 10% of about 50% of the overall resource picture, which is not insignificant by any means.

You said that Translink is £30 million short of the capital funding that it needs: I do not doubt that. We have heard about Translink's capital shortfall, but how will it meet its resource shortfall? I know that there will be in-year monitoring bids, but it will be competing with road maintenance, Northern Ireland Water and everything from every other Department, so has Translink any option other than to increase fares?

Ms Andrews: The decision to increase fares rests with the Minister. From looking at the resource side, Translink has looked at its income for this year, and, overall, it expects to increase income by about £16 million. That is largely as a result of its fares but more through a shift in passenger numbers. In 2024-25, it had about 81 million passenger journeys, and it has set itself an ambitious target for 2025-26 to increase that number by just over 8%. Translink is seeing an upward trend in uptake, particularly post-COVID. Passenger journeys are back to being beyond pre-COVID levels. For example, Translink has the Enterprise in train, and there has been a doubling of passenger numbers. There are also big events this year such as the Open and different festivals.

The other thing to say is that, this year, we do not have any blockades. Last year, we did, around Grand Central station, and that would have had some impact on passenger numbers. Translink's revenue growth is largely linked to passenger journeys and getting people on to public transport. There is also the environmental benefit from doing that.

Mr Durkan: Finally, Stephen and others mentioned road maintenance. I welcome the work on the strategy, but what it entails is something that I have been calling for for a long time. It does not necessarily mean just getting more money: we also have to look at how money is spent. Has anything been identified that could be done more efficiently and effectively? Stephen talked about claims: are claims reflected in the contingent liability? Is the figure for claims going up every year as well?

Mr Woods: The amount of money that we are having to allocate to road compensation claims is going up, yes. From memory, it is typically somewhere around £9 million or £10 million at the minute, and that figure is up. There are lots of reasons that it is up, one of which is to do with the deterioration of the average condition of the network. There have also been changes made to the law on how personal injury compensation is calculated and so on, and that has had a significant impact. In fact, those changes have probably had more of an impact on the volume of claims and claim amounts than the condition of the road network. It is a complicated basket, but, yes, a road that is in better condition will typically have fewer safety defects, meaning that it will have fewer safety incidents and therefore fewer claims. The scale, however, makes it hard to be precise about what cause and effect one is seeing.

Mr Durkan: Is that captured in the contingent liability in the Estimates or under the roads budget? What else does the contingent liability cover? Does it cover claims for the vesting of land?

Ms Anderson: It is a mixture of both. We will have a budget for claims that, we think, are likely to be settled. As Colin said, the figure is around £9 million, and that is factored into the budget. We will, however, also have some contingent liability for the claims that have not yet been settled and for which there is a degree of uncertainty over whether we will be paying out. That is why it is classified as a contingent liability. The majority of it is public and employers' liability, and there is then a small amount for contractor claims. There are two elements involved, and it depends on how sure we are about whether we will have to pay out something.

Mr Durkan: OK. Thank you.

Mr K Buchanan: Thanks for coming along today and for the information that you have provided. I will follow on from Mark's point about active travel. The question is possibly for Colin. Is spend on active travel broadly out of the capital budget?

Mr Woods: Yes, it is both, but most of the spend is capital.

Mr K Buchanan: Looking at the capital figure of £118 million for TRAM — the magic number is 10% — what do you expect to spend on active travel this year?

Mr Woods: From memory, there is about £20 million in the indicative allocation in the active travel budget lines.

Mr K Buchanan: Out of that figure?

Mr Woods: Out of that figure, yes. There would then be additional money from within structural maintenance and a few other budget lines. Some of the major projects that are ring-fenced also include active travel spend. For example, the Lagan pedestrian and cycle bridge to link the gasworks and Ormeau park in Belfast will count towards the active travel spend target. The spend on active travel is therefore made up of a number of things, but, for dedicated active travel lines that will fund the Belfast cycling network, greenways and other dedicated activity, there is about £20 million out of that £118 million.

Mr K Buchanan: What is that in percentage terms? I appreciate that I am being specific.

Mr Woods: I do not have the detail, but the team that is coming in after us will.

Mr K Buchanan: Fair enough.

Mr Woods: From memory, we currently spend around 5% or 6% of the transport budget on active travel, and the law obliges us to grow that to 10%.

Mr K Buchanan: I am not anti-footpath, but I see footpaths being built to nowhere, and we do not have money to fix the roads. If you are spending 5% or 6%, how do we strike a balance? You and I have had that conversation before. I will not get into the footpaths-to-nowhere debate, but we are building footpaths to nowhere, yet our roads are in poor condition. You said yourself that the condition of the network is the worst that it has been, so how will we square that circle?

Mr Woods: To some extent, as civil servants, we will simply do what the law instructs us to do. The law requires us to spend 10% of the transport budget on active travel, and we are not debating that in our heads. We are trying to figure out how to give good effect to that obligation, and, when we do so, we want to get the best value for money that we can. That is one of our other obligations. I am confident about the programmes of work that our active travel team is bringing forward.

We have set a strategy over the past two years to grow our capacity in order to spend that money well, because we cannot just turn on a tap and be sure that it will all be worth it. Otherwise, we would end up just throwing money away on things that we do not want, and we do not want to use the money in that way. The quality of our proposed schemes is high. I am comfortable that the money will be well spent in order to get towards that 10% target.

We should not be seeing footpaths to nowhere. At times, there are reasons behind why we are trying to link one part of a network to another part. If we do not have the money to do the whole thing, it is still valuable to start to create those links. The active travel delivery plan, however, takes a much more strategic look at how we do that and how we choose which schemes to invest in.

Mr K Buchanan: OK. The pie charts show the capital DEL and the resource DEL for NI Water. How much has NI Water's capital DEL gone up since last year? Has it seen any broad increase?

Mr McGeown: That will depend on — Susan, do you want to answer that?

Ms Anderson: Again, it is similar to last year's out-turn. The figure includes the general allocation and the reinvestment and reform initiative (RRI) borrowing.

Mr K Buchanan: It is similar. There has not been a dramatic change.

Colin, you talked about doing less gully cleaning: are you happy with the amount of gully cleaning? I am conscious that the evidence session is about finance, so I do not want to drill down too deeply, but, if gully cleaning is not done, pipes will get blocked. Gully cleaning is sucking out the pot. It is not sucking out the pipe, so doing it less is not as effective.

Mr Woods: Yes, I agree with that.

Mr K Buchanan: How do you square that circle? I find that a lot of localised flooding comes from gullies not being emptied. Is anybody policing gully emptying? Is anyone monitoring the work that is being done? I apologise for raising those points, so I will leave it at that. [Laughter.]

Mr Woods: I will try to answer quickly.

Mr Boylan: He is taking you up the gully, Colin. Take it easy.

Mr Woods: Yes, our staff monitor the delivery of the gully cleansing programme and understand what has and has not been done. It goes back to this question: if we have only so much money, how will we spend it? That is the challenge, not how we make sure that all the gullies are operating at their best. That is not the question that we need to answer. The question is this: we have only so much money to spend on maintenance, so how will we spend it? In that context, once a year is deemed the minimum acceptable standard. Unfortunately, with a limited service, we have found ourselves looking to meet the minimum acceptable standard.

One of the things that we hope to include in the maintenance strategy that I talked about is a road resilience plan that looks at the resilience of the network and at its ability to cope with extreme weather events: flooding and all the rest of it. Over time, I expect to see our activity shift from a blanket approach to a more tailored, risk-based approach that takes into account areas of known risk. I am not saying that we do not do that already, because I know that we do. For example, when there is a weather warning, our staff will go to areas that are known for flooding and give the gullies a blast in order to prepare for the storm. The effectiveness of doing it in that way is limited, but that is where we have got to. While we cannot go from providing a limited service to providing normal service in one jump, we are looking to step up the value chain, if I can describe it like that, by taking a more tailored approach to gully cleaning, among other things.

Mr K Buchanan: Finally, if you are going to step up, tell me about that in percentage terms. If you are at a certain percentage today, and 100% is perfect, what steps are you taking?

Mr Woods: Small steps, given the money that is available. I cannot give you a percentage.

Mr K Buchanan: Are you talking 10% or 20%? Will people see it? People see their street flooded or potholes on the road: they do not see pie charts.

Mr Woods: I expect the impact to be seen. It is about the absence of something, however, and it is harder to spot the absence of flooding than to spot flooding. The former does not catch the eye in the same way. The point is that we will have fewer sites of localised flooding, so I hope that people will definitely see the benefit our work over time.

Mr K Buchanan: Thank you.

Mr McReynolds: I never thought that I would see the day when Keith would take my question on active travel. [Laughter.]

Mr Boylan: Go over to that side of the room, Pete. There is a spare seat over there for you.

Mr McReynolds: I will try to cobble together a question.

The written briefing on active travel states that, over the past three years, roughly £45 million to £50 million has been spent on active travel overall. I say that just to concur with what Mark said. We have a net capital DEL figure for Waterways Ireland of £2·7 million. Roughly £15 million to £20 million is being spent on active travel. I therefore see merit in displaying what we spend on active travel.

Colin, you said that you think that we are getting to the right place when it comes to meeting the 10% target. I think that the percentage is currently at roughly 5% to 6%, as you said. As a Belfast MLA, I notice that a lot of the schemes have not progressed that much since the active travel delivery plan was developed. Are we getting a decent return on our investment to enable us to deliver a greater uptake than the 1% of journeys that currently are made by bicycle? Given the money that we are putting in, are the schemes that are in place being delivered to increase the number of people making use of active travel?

Mr Woods: The short answer is yes, but I appreciate that you would expect me to say that. From conception to delivery, an active travel scheme takes about the same time as a small major road scheme. It is a complicated exercise when there is land, legislation and all the rest involved. In the strategy that I described a few minutes ago, we focused on making sure that we could sensibly grow our delivery. We have really invested in our capacity to put out good active travel schemes. I know that the pace of progress over the past 10 years has been disappointing; the Department acknowledges that. We could debate why that has been the case, but, for now, we say that we have successfully, we think, created the pipeline that can sensibly spend that extra funding in a value-for-money way. All of that is aimed at the goal of increasing the number of journeys done by active travel means, so, yes, we expect the strategy to have a positive impact.

Mr Durkan: I have a supplementary question to Keith's question about gullies and the answer that was given. Colin, I think that you said that you monitor what has been done: is it not the case that you monitor where has been visited as opposed to what has been done? We know that, for various reasons, including cars being parked over gratings, even when they come to areas, crews cannot do an area, so they then move on to the next place. That is no fault of theirs. They cannot hang around all day waiting for a car to be moved. On rural roads, one sees — it is evident even to the untrained eye — gullies that have not been cleaned out in years. I hope that the strategy will capture a way to address that.

Mr Woods: Yes. As I said, we recognise the need to have better intelligence about areas of known flood risk and then ensure that we adapt our approach, not just take a blanket approach. You are right: when a crew goes out and cannot clean a gully, we do not ignore that, but it does not mean that we can go back out to it the next day. We are trying to cover 26,000 kilometres of road, so it can take a while for a second visit to occur.

Mr Boylan: Thanks very much for your answers so far.

Declan, I have a question, because I am trying to recollect something. Keith asked a question about NIW. You said that its capital DEL is similar to what it was last year. Is that in line with price control 21 (PC21)? We had a conversation previously about how NI Water had outlined its six-year programme and needed so much in year 1 and year 2 and then the need increased. Is that similar? I am not asking about what NIW needed. Is the figure still in line with PC 21? What NIW has been allocated, it has been allocated. I am not arguing that it should have been allocated more. We said before that year 1, year 2 and year 3 would be funding to a certain level.

Mr McGeown: Stop me if this answer is too long, Cathal. When we had the price control determination, the first three years, as you know, were fully funded; indeed, we exceeded that funding. As we got into year 4, a gap started to emerge between what we could afford and what was doable. You have heard the magic figure of £321 million as an indicative planning allocation for capital, but our Minister is keen that funding be targeted at water, inasmuch as it is possible to do that. Although, this time last year, we had £321 million as an indicative figure for Northern Ireland Water looking into this year, there was a big gap between that and the, I think, £537 million that, the Utility Regulator said, was needed at that point. Northern Ireland Water feels that it can deliver around £405 million this year. The Minister has already increased the figure from £321 million to an indicative allocation of £350 million. She has increased it by 10% already. She is working hard, as you will hear later, to close the gap.

In short, the gap still exists between what we are allocating and what, the Utility Regulator says, is needed, but the gap between what, Northern Ireland Water thinks, it can deliver and what we are giving is much smaller. Does that make sense?

Mr Boylan: Obviously —.

The Chairperson (Mrs Erskine): Cathal, if you do not mind, I want to be completely clear, because you raise a valid point. Is the Department's allocation to Northern Ireland Water in line with PC21? Is the answer yes or no?

Mr McGeown: The short answer is no.

Mr Boylan: That is not the question that I was asking: my question was about the fact that, in the first three years, there was a certain amount of money, and then, as the capacity and the infrastructure grew, more was needed for the next three years. I am not asking whether NIW got the exact same amount of money; those are separate issues. You have answered the question about what the Minister is trying to do. My question had nothing to do with the other issue. We need to be clear, Chair, about the question that I was asking. My recollection of the six-year programme is that, in the first three years, NIW was targeting a certain element, and, in the next three years, the capacity grew.

Mr McGeown: It was always expected that costs would rise.

Mr Boylan: Exactly. They were going to rise. That is the question that I was asking.

The Chairperson (Mrs Erskine): It is important that we get clarity on all the issues.

I want to touch on NI Water. We are waiting with bated breath to see what might come out of the forensic accountant's work. What consideration has been given to that? I do not want to pre-empt what might come from the forensic accountant, but my question is about NI Water's funding. The forensic accountant may come back and say, "NI Water needs x" or, "There may need to be a reduction".

Mr McGeown: Chair, as you know but to clarify for everyone, that is an independent report that PricewaterhouseCoopers (PwC) is doing. It is looking at how decisions are made about the budget allocation once it is given to Northern Ireland Water. I suspect that the final report will be silent on what Northern Ireland Water needs. The report will be more about what decisions it could have made last year, in the financial year that has just ended, that can help inform decisions for this year. The report will therefore be more about the decision-making process than about how much Northern Ireland Water needs or what model it should use. It will be silent on both of those issues.

The Chairperson (Mrs Erskine): OK. Can you give us a brief overview of the planned capital projects on the basis of the allocations in the Main Estimates memorandum? I am also looking at what is not in there.

Mr Woods: I am happy to summarise from a TRAM perspective. The TRAM budget is the one on which the Department bases its decisions on the projects. Arm's-length bodies (ALBs) ultimately make the decisions on the projects, unless the budget is ring-fenced. For TRAM, the major roads projects include the A5, as an Executive flagship project. There is still some cost involved with the A6, because, even though the road is open, that project has not come to a commercial conclusion. We then have the city deal projects such as Belfast Rapid Transit phase 2, the Lagan bridge, the Newry southern relief road and the Enniskillen bypass. We are also starting to spend some money on the north-west city deal, including on the Strabane footbridge and the Derry riverfront project.

We also have a range of routine spend for the structural maintenance, work on active travel, bridge maintenance and so on that we do routinely. That is included in the £118 million figure on the chart.

The Chairperson (Mrs Erskine): Colin, may I just check the effect of that on the major roads prioritisation programme? How tight will the resource for that programme of work be?

Mr Woods: It is funded for 2025-26, so we are fine for this year. Moving lots of things through procurement into construction at the same time creates a bulge in the resource that you need. A number of the city deal projects, for example, have always had shortfalls. Belfast Rapid Transit has the biggest shortfall: the city deal allocated it £35 million, but the cost of the project is closer to £150 million. That shortfall has not yet been identified, but we know that the Minister has decided to supplement it a bit so that we can progress valuable parts of the project. It is not a case of all or nothing being useful; there are things that we can do on that one. When it comes to a major road scheme — a bypass or whatever — you cannot build only part of it: the funding needs to be secured before you take it to the marketplace and ask people to spend time and money on bidding for it. There is still a shortfall at a programme level that the Minister and the Executive will have to consider.

The Chairperson (Mrs Erskine): Is there anything else?

Ms Andrews: Chair, I can take you through the Translink projects, some of which I touched on earlier. The flagship £40 million allocation is for the ongoing work around Grand Central station — Weavers Cross and Saltwater Square — this year. An allocation of £5·9 million has been ring-fenced for improvements in phase 3 of the Coleraine to Derry rail line project to improve speeds and, hopefully, access to the north-west. There is about £21 million for the Enterprise fleet replacement as part of the Enterprise fleet replacement project that will take place over the next number of years.

There are about 75 rail safety projects. As I said, those include signalling renewals; for example, between Fortwilliam and Bleach Green. There are also bus infrastructure and rail infrastructure projects. There are about 43 bus infrastructure projects, including those that deal with real-time information for customers as they wait for the bus. There are also projects that maintain the buses with washing equipment etc. There are about 36 rail infrastructure projects, one of which is the new Lisburn West halt and park-and-ride. That gives a flavour of some of the Translink stuff.

The Chairperson (Mrs Erskine): OK.

Mr McGeown: I will not be able to give you detail on specific Northern Ireland Water projects because, owing to the figure, it will have to recast its programme in line with its operating plan. As you know, however, through the price control, its contractually committed programmes are targeted alongside essential maintenance, nominated output, non-nominated output, business-critical and Living with Water programme work; it will allocate its funding in that framework. The Rivers projects are on the flood forecasting centre, the Portadown and Belfast flood alleviation schemes and flood alleviation more generally.

The Chairperson (Mrs Erskine): OK. If you do not mind, I will touch on my favourite subject: rural roads. I asked the Minister whether a ring-fenced allocation for that — there was previously a rural roads pot — would be reflected in final budget allocations: would that be useful? I am looking at you, Colin. That is my point of view in Fermanagh and South Tyrone and from speaking to my local team. I say a major "Thank you" to your staff on the ground, but it is an issue — even the main roads are not great — and I wonder whether a rural roads pot would help you to deal with some of the problems. The Estimates memorandums mention regional balance: how do you achieve that?

Mr Woods: You are absolutely right: we had a rural roads recovery fund for a number of years. Ultimately, how that structural maintenance budget is distributed will be a decision for the Minister. We will bring her detailed options on that once we know the exact number that we have to work with. It very much depends on what your policy goal is. Typically, we prioritise the roads that have most traffic. That is one way that we prioritise roads. Often, that excludes rural roads. It is about introducing appropriate balance and recognising that the current situation is not good enough. There is more traffic on a lot of the strategic roads and a lot of the roads in and around Belfast, which skews the activity in a way that is not desirable from that regional balance perspective. A rural roads fund with the ability to target money towards the rural road network would ensure a more balanced offering at the end of the year.

The Chairperson (Mrs Erskine): This is more of a comment, but, as I said earlier, road maintenance also equals road safety. We can look at the recent figures that came out. We know that driver error and behaviour are the main factors in the causation of road incidents, but rural roads are high on the list when it comes to incidents, serious injuries and, unfortunately, deaths. Is that also being considered in looking at whether we can ring-fence money to ensure that those roads are safe?

Mr Woods: Those are all reasons to have a rural roads fund. Absolutely, yes.

The Chairperson (Mrs Erskine): Thank you.