Official Report: Minutes of Evidence

The Chairperson (Mrs Erskine): From the Department, we welcome Declan McGeown, deputy secretary with responsibility for the water and departmental delivery group; Susan Anderson, director of finance; and Damian Curran, head of the NI Water shareholder unit. From PricewaterhouseCoopers (PwC), we welcome Clare Kennedy and Andrew Wilson.

As per usual, folks, I am seeking your agreement that the evidence be recorded by Hansard. Are we agreed?

The Chairperson (Mrs Erskine): Thank you.

Sorry, I mentioned Andrew Wilson there, but I do not think that he is with us.

Ms Clare Kennedy (PricewaterhouseCoopers): He is unwell.

The Chairperson (Mrs Erskine): OK. Please pass on our best wishes to Andrew.

Ms Kennedy: I will, of course.

The Chairperson (Mrs Erskine): Thank you.

Thank you very much for joining the Committee today. I highlighted this to the Minister, but we have not received the report, so that curtails our scrutiny. We look forward to seeing it, but obviously it is disappointing that we do not have the written report today. If you do not mind, I invite you to make an opening statement of five minutes — it will be five minutes — and then I will come to members' questions. Thank you.

Mr Declan McGeown (Department for Infrastructure): I assure you that it will be less than five minutes, but I will cover it anyway.

Good morning — I see that it is still just about morning — Chair and members. Thank you for the invitation to brief the Committee this morning on the outcome of the investigation into a potential unauthorised resource budget overspend by Northern Ireland Water, and thank you for the introductions. I am joined this morning by my colleague Susan Anderson, who is our finance director — you have met her before — and Damian Curran, who is the head of our shareholder unit and oversees Northern Ireland Water. As you said, we are also joined by Clare Kennedy from PwC. As members will be aware, PwC was appointed with a specific role to undertake an independent review of how Northern Ireland Water managed its resource budget in the 2024-25 financial year. I put on record our thanks to Clare and her team for carrying out that detailed investigation and for producing the report for us.

As you know, the Minister made her statement to the Assembly yesterday and confirmed that the report is being prepared for publication and will be published in the next few days. In her statement, the Minister reiterated her intention that any learning from this investigation will be useful for all parties and will help prevent such an occurrence in future years. As explained in the report, any direction by the board of Northern Ireland Water to overspend without the prior agreement of the Department is technically a breach of 'Managing Public Money NI'. Had the Minister not taken her decision on 27 March, which was just four days before the end of the financial year, to allocate an additional £3 million to Northern Ireland Water, Northern Ireland Water would have overspent. At that very late stage in the year, the Minister's decision to redirect funding to Northern Ireland Water to address its overspend was to the detriment of other essential public services that the Department delivers, such as vital road maintenance that would have benefited all the people throughout Northern Ireland.

The Minister set out yesterday the three key learnings coming out of the report, namely that Northern Ireland Water needs to plan against the budget that it has been allocated rather than against a greater amount that it does not have; Northern Ireland Water needs to manage its pay better; and Northern Ireland Water needs to manage fluctuations through better financial profiling and supplier management throughout the year. On that third point, you will have heard yesterday that, if Northern Ireland Water had been able to negotiate even an illustrative 5% saving in goods and services procured through suppliers, it would have, coincidentally, almost equalled the amount of overspend through a saving of £1·2 million. Finally, the Minister advised yesterday that the report points to further work that will be carried out and that she will take time to consider that in the weeks ahead.

I hope that you have found that helpful, and we are happy to take any questions. Thank you.

The Chairperson (Mrs Erskine): Thank you very much, Declan. It is much appreciated.

I put on record our thanks to PwC for the work that it did, particularly given the timescale, because there was quite a confined timescale in which to do the work. I do not want to diminish the work, but we have taken substantial evidence in relation to NI Water, and I feel like we know what the issues are. It is just about dealing with those in the aftermath. The key themes are not really a surprise to anybody. We do not have the report, but was there anything that raised an eyebrow for you and came as a surprise when you were going through the investigation?

Ms Kennedy: Not a surprise as such. I agree with that. Coming in, it was clear that the multitude of stakeholders that are involved with Northern Ireland Water are very cognisant of the budgetary constraints that the company faces. You are right that there are limited levers for NI Water to pull. In our report, we recommended that more work be done to look at some small areas. Again, those were relatively limited in value compared to the total budget. It was not a surprise, but we recognise the difficult position that it is in.

Declan called out the issue of pay. NI Water accrued the pay award in 2023-24, and the payment was made in 2024-25. The option was there to not make the pay award, which was referenced. It was an option, but we are not saying that that was an easy option at all. We have heard from the board that it faced the threat of industrial action. Again, these were not easy decisions that the company had to make.

The Chairperson (Mrs Erskine): Declan, in your opening statement, you talked about the potential breach of 'Managing Public Money', which is really serious, and, for anybody, consequences should follow from that. Have you put forward options to the Minister on potential consequences as a result of the report?

Mr McGeown: The spirit of the report is very much about drawing out the learning to prevent it happening again. We now have that learning, albeit we do not have the final report. If I were Northern Ireland Water, I would look at this year — we are one sixth of the way into this year already — and see how we manage overestimations, how we manage pay and how we negotiate with contractors so that we do not arrive at this position at the end of the next financial year.

In short, it was more about taking the learning and making sure that we avoid it happening again, rather than looking to sanction anyone at this stage. It was an unfortunate occurrence. It is the first time that it has happened. From that perspective, how do we make sure that it does not happen again? Northern Ireland Water can speak for itself, but I imagine that it will look at those aspects and say, "Are we overestimating? Can we pay the pay award at a different speed or rate? Can we look to negotiate with our contractors?" That is what I would do.

The Chairperson (Mrs Erskine): As for breaching 'Managing Public Money' and the themes that are contained in the report, for clarity, it is the pay issue in terms of monetary value where there is the main concern? Am I correct?

Mr McGeown: Yes.

The Chairperson (Mrs Erskine): Damian, this question is maybe directed at you, because you are head of NI Water's shareholder unit. I imagine that you have had ongoing, regular discussions with NI Water. Does it accept this? Is it the case that it is breathing a sigh of relief and that it will get off scot-free, if it goes, "Yes, Minister. We'll take this on board?" How do we ensure that it is not a recurring theme? From what I have heard so far, the themes could be replicated across so many other public bodies. This is not unique to NI Water, so why is it the target of a forensic accountant here?

Mr Damian Curran (Department for Infrastructure): I echo what Declan and Clare have just advised: there are learnings to come out of the report. It has been a difficult journey in terms of what, NI Water said, it needed to spend as against what the budget allocation was. That will be a key learning in terms of budget allocation. There will always be hard choices to make on what the budget allocation is allocated for and whether that is sufficient, but I imagine that that is across all public services. Monitoring spend and aligning that to the budget allocation are equally important. Effectively, that is what the report tries to elaborate on in terms of the decisions and the decision-making of NI Water's board in ensuring that its expenditure was aligned to the approved budget from the Minister.

Going forward, that will be a key focus for the Department's governance and oversight of Northern Ireland Water's use of public expenditure. Equally, NI Water's report to the Department about its public expenditure will have to be carefully scrutinised. That is in addition to the oversight that we already apply to Northern Ireland Water, which is already intensive.

Mr McGeown: Chair, can I come in?

The Chairperson (Mrs Erskine): Yes.

Mr McGeown: Apologies for cutting in earlier. It was not about targeting. The Department has responsibility for a number of arm's-length bodies (ALBs), and there are a number of ALBs and bodies relating to the Department and the wider Civil Service. This body overspent, and we had to address that issue. I have worked in the Civil Service for 30 years with a number of arm's-length bodies, and I have never experienced that. That is why it was done. It is not a case of targeting, but it is the only ALB that decided to overspend.

The Chairperson (Mrs Erskine): Thank you. I appreciate that.

Mr Stewart: Thank you for coming along today. We will — not reserve judgement — come back to the discussion once we see the full report, and we will probably have even more questions. In the preliminary announcement in the statement yesterday, the Minister referred to fluctuations in contractual arrangements and suppliers, and if just 5% had been saved, the overspend would have been covered. How realistic was the 5%? Where did that figure come from? What cost of the analysis and investigation could have been saved had that been done to its fullest, if that makes sense?

Ms Kennedy: The figure was illustrative.

Mr Stewart: Yes.

Ms Kennedy: The figure was purely an illustrative percentage. Our analysis predominantly focused on the other spend category. The other big categories are power, staff and PPE, and a lot of those factors are outside the control of NI Water. You all know that. Apologies for telling you that again. What is in the area of other costs? Are there potential options in that area? We looked through a number of different nominal ledgers. Northern Ireland Water was extremely helpful and very engaged in the process. I formally thank the staff for their engagement. We got everything we asked for, and in a very timely manner that acknowledged the six-week period of our work.

Our focus was to go through the nominal ledgers for the other spend. We also asked for the largest items of expenditure, which are the items of cost that made the biggest difference. We asked for a number of extracts from NI Water's contracts, and we identified that 18 out of the 21 contracts were call-off agreements. Therefore, by their very nature, there is the potential for optionality and variability depending on the business need. There may be discretion in that area, but it is important to point out that, within the six weeks, we could not conclude on that. We have not finalised our report. Our conclusions and recommendations are still a work in progress.

NI Water does a lot to manage its supplier spend, but there may be an option to look at the SME call-off contracts for potential discretionary spend. There may not be, but there may be.

Mr Stewart: That is useful to know because the Committee knows that NI Water is the biggest consumer of energy in Northern Ireland. Yesterday, I asked the Minister whether NI Water was availing itself of economies of scale. It does a lot, but given how much energy is consumed, can more be done? Does the report go into that level of detail?

Ms Kennedy: We looked at electricity in quite a lot of detail.

Mr Stewart: OK. We will expect that.

Ms Kennedy: The Department knows that NI Water is looking at hedging its electricity contracts to try to reduce its exposure to volatility in the energy market.

Mr Stewart: My other point is about the planning around the hoped-for level of funding as opposed to the actual allocation of funding. It is difficult because NI Water wants to do everything that it wants to do. How did that work? How was the in-year monitoring round allocation of funding factored in? Did you expect NI Water to plan for what it got versus a plan for the hoped-for allocation, and a plan for what it hoped to get in the in-year monitoring round? A lot of the work is capital-intensive, and it takes a lot of preparation. I am sympathetic to the difficulties for NI Water. How did it work? What did you expect from NI Water?

Mr McGeown: Maybe I could just make a general point, John? As a Department, all our business areas, our ALBs, etc, are each allocated an amount that will not be exactly what they need but is the amount that they have to budget against. Northern Ireland Water produced an operating plan on what it needed and sought to work against that figure, not what it was allocated. That is where the gaps started to emerge and where there was divergence. As Clare's report points to, there was a gap of almost £80 million, over a three-year period, between what it felt it needed versus what it actually needed. Sorry —

Mr Stewart: Just on that, Declan — sorry — did NI Water expect the money to come in an in-year monitoring round, or did it just make a plan for what it wanted, whatever might come down the road?

Mr McGeown: It probably hoped that money would become available through a monitoring round, but experience has shown that that is not always possible. I will bring in Susan, in a moment, on the technical aspects of this. No matter what — I say this to all my divisions — you work to the budget that you have been allocated, not the budget that you wish you had.

Ms Susan Anderson (Department for Infrastructure): On the monitoring round point, we cannot guarantee that we will get funding, as you know, from a monitoring round, so we bid for it. A couple of weeks ago, we were here bidding for money for this year's June monitoring round. We put in a lot of high-priority and inescapable bids and so do other Departments. Therefore, we would never recommend planning on the basis of getting moneys through a monitoring round because we know that it is not guaranteed.

Mr Stewart: Clare might know the answer to this from her investigation. Was that a more recent occurrence, or had NI Water, year after year, been basing its plans on what it wanted rather than what it was getting? Is this just the two financial years or —?

Mr McGeown: Three.

Mr Stewart: Had there been no evidence of that before? Did that appear to be a deliberate tactic, or did it take a decision, at some stage, to create a plan based on what it hoped for rather than what it was getting?

Ms Kennedy: My understanding is that, every year, NI Water prepares its operating plan and budget. It goes back to the assumptions that had been put into the price control period. It was not that it just pulled them out of the air.

Mr Stewart: No, I appreciate that.

Ms Kennedy: My understanding is that NI Water goes through a very detailed process. However, obviously, in the past couple of years, it had produced a number that was bigger than what it had been allocated.

Mr Stewart: That is all for now. Thank you very much.

Mr Boylan: This is my favourite subject, Declan. I am delighted that this exercise was carried out, and there needs to be learning from it. I agree with all that you have said, and I listened to how other members' questions have been answered. When you have been around for 17 years and have seen the amount of money that has been invested, you realise that it is a big organisation.

Three points came out of the statement the other day. The first point, in working with the Department, is whether there is a trust issue now, and how do we get over that. The other two issues mentioned the other day were the overspend and how we avoid it in the future. Then, there is the overestimation, which others have mentioned. Those are the three key elements that have come out. How do we move forward? Stephen mentioned a governance issue. Is it a governance issue? How do you think we will address those three issues? Those were the three issues that were highlighted the other day in the statement.

Mr McGeown: I will take those, Cathal. I got your name right this time.

Mr Boylan: Thank you very much. [Laughter.]

Mr McGeown: Apologies.

Mr Boylan: I will turn my nameplate round so that you can see it.

Mr McGeown: You ask whether there is a trust issue, and there is not. We work in good faith with Northern Ireland Water. We have very good relationships, albeit that we have the challenge of trying to stretch the money to fit its needs. Therefore, there is no trust issue: it is about how we work together.

How do we avoid the overspend? As I have said, we are one sixth into the financial year. Currently, Northern Ireland Water has an operating plan pointing towards £172 million, which it has shared with us. We are looking at an indicative allocation that is closer to £149 million, as you will have heard before. So, there is a gap there. I hope — I am sure this is going on as we speak — that Northern Ireland Water will look at the points that were highlighted by the Minister yesterday and, indeed, by me this morning. It will ensure that it looks at the £172 million and consider how it can bring it closer to the £149 million. I imagine that that is happening as we speak.

Then, there is the overestimation point. That is related to the operating plan. I will characterise it like this: a lot of the overestimation, for me, when I see it, is that it has been based on worst-case scenarios. If it were me — I have said this to colleagues in Northern Ireland Water — I would look more at the time sequence over the last couple of years and try to see what the general temperatures, the weather, the rainfall etc, have been. If it points oddly towards higher rainfall, higher winds or something like that — something like storm Éowyn last year — it could bid to the Department for that money. I do not say that it would be successful, but it could bid.

In short, if I were in NI Water now, I would be looking at the operating plan and looking to re-cost it to bring it closer to the £149 million, now that we know what the main issues at play are, but there are certainly no trust issues.

The Chairperson (Mrs Erskine): OK. Happy enough, Cathal?

Mr Boylan: Thanks, Chair, I am.

The Chairperson (Mrs Erskine): OK, very good. Andrew?

Mr McMurray: Thank you for coming in. Conscious of what is in the report and on reading an abridged version of the Minister's statement, I suppose my first question is this: does the statement contradict the assertion that we have seen that NI Water is operating efficiently? I ask because we have had meetings with NI Water, and it has said that it is efficient and all the rest of it. Does the report directly contradict that? Are there suggestions for minor improvements? Can those minor improvements fundamentally change the issue at hand with NI Water?

Mr McGeown: Andrew, I will pick up on the efficiency or inefficiency, whichever way you want to look at it. The efficiency is in comparison with other water companies. A number of years back, the gap was originally 49%. NI Water has worked tirelessly to reduce that gap. It is down and closer to 5%, so it is certainly much more efficient than it was 15-odd years back. So, yes, it is operating more efficiently, but I keep going back to this point: it is about operating within your budget. That is what NI Water has to look at. Sometimes, you can close the gap on efficiency because somebody else becomes less efficient. Therefore, there is probably a mixture of all of that going on, in so far as the wider UK companies are becoming less efficient and NI Water is becoming more efficient, so the gap closes. That is a different point from how it manages its budget. Managing the budget is about having a budget and working to it. However, by being more efficient, it could close that gap further.

Mr McMurray: OK, on the board not managing budget, I am half-quoting from the Minister's statement, if that makes sense:

Ms Kennedy —

Can you explain that? Again, we, in parenthesis, "quote" from PricewaterhouseCoopers. Can you explain that in the statement?

Ms Kennedy: It comes down to its being able to monitor its budget and, in particular, its resource, in this case. It is about what NI Water is monitoring it against. Northern Ireland Water is monitoring against its operating plan and budget, but there is the departmental amount, which is obviously lower, so which will you monitor it against? There is a constraint — we are calling it a "constraint" — against monitoring it against the departmental number.

To be fair, we have seen a lot of really detailed financial analysis where, when things got really difficult in November, December, January, it was looking very closely at how the resource departmental expenditure limit (RDEL) gap was coming down, and NI Water was tracking that. It was just its starting point that we are calling out, not the fact that it did not go on to track it and how it was reducing its resource requirement.

Mr McMurray: Going back to one of the wee, in parenthesis, "quotes": is NI Water considering recalibrating cost fluctuations rather than the "passage of time", as PricewaterhouseCoopers put it? Can you explain that?

Ms Kennedy: That quotation, "the passage of time", relates to the assumptions that it has to make because it does not know how much power will cost; it does not know how much rainfall there will be. Therefore, it does impact on its business, hence the "passage of time" bit. That is not a direct quote from our report.

Mr McMurray: Thank you. Just given the fact that there is an abridged version here makes it difficult. I just want to check that what you guys are saying marries up to what the statement is saying. It is hard to get my head around it without the full —.

Mr McGeown: If you indulge me, I can develop that slightly. There is wording in the draft report of "the passage of time".

Ms Kennedy: There is.

Mr McGeown: What we take from that is that NI Water overestimated at the start for eventualities that I outlined earlier that may or may not happen. Those things did not happen, and as time passed, people realise, "Oh, we did not need as much", if you see what I mean, and therefore the figure went down rather than NI Water having actively done anything — almost passively waiting to see if the world was not as bad as it thought it would be. I know that that sounds like an unfair way to portray it, but that is what that means.

The Chairperson (Mrs Erskine): OK, Andrew?

Mr McMurray: I think so.

The Chairperson (Mrs Erskine): To be continued. [Laughter.]

Mr McReynolds: Thank you for coming in today. When has DFI brought in forensic accountants like this before?

Mr McGeown: I have been here for four years, and it has not done so in my time.

Ms Anderson: Not in my time either.

Mr McGeown: I do not know, Peter.

Mr McReynolds: What about other Departments? When have they done it?

Mr McGeown: I cannot speak for other Departments. I do not know. I think that, because it was an overspend and a breach of 'Managing Public Money', we felt that that course of action needed to be taken.

Mr McReynolds: Obviously, we do not have the learnings from the report, but the sense that I am getting today is that the overspend was quite small in comparison to the wider budget. Is that fair to say?

Mr McGeown: You could portray it that way, but if you are sitting, as the Department trying to manage quite a tight budget, which has been well documented and well rehearsed in this room, when we are being told in February that we are going to overspend by £7 million, then we are told, a couple of weeks later, that it is going to be £5 million and then £3 million, and all the while we are trying to juggle so many other issues, then the significance of that becomes much clearer. For me, overspending by £1 is overspending, because you are breaching 'Managing Public Money' guidelines. The fact is that it ended up being £1·4 million, but as recently as 27 March — four days before the end of the financial year — it was £3 million. That movable feast of, "We need this, we need this" makes it very difficult for us, as a Department, to be able to switch on and off and direct funding, particularly at that late stage, and that is the significant issue of it.

Mr McReynolds: So, the overspend was £1·4 million. How much did it cost to bring in forensic accountants?

Mr McGeown: That is commercially sensitive. We would not disclose it. I noticed a comment on Twitter yesterday evening and —

Mr McReynolds: It was not me. [Laughter.]

Mr McGeown: I know it was not you, Peter. [Laughter.]

The Chairperson (Mrs Erskine): It was not me either, or the Deputy Chair. [Laughter.]

Mr Boylan: They are all coming out of the woodwork now. Get that recorded.

Mr McGeown: To be clear, it was nobody in this room, but the comment pointed to how much this cost vis-à-vis the less than 1% overspend, but the overestimation of £80 million over the last three years, vis-à-vis how much it cost without getting into the figures, is probably about 0·1%, which I think is good value for money to make sure it does not happen again.

Mr McReynolds: I noticed your use of "worst-case scenario" in response to a question from a member. Is planning in terms of a worst-case scenario appropriate for a company like NI Water? We are working on the Reservoirs Bill at the moment, and Jonathan McKee, from the Department showed us the maps. They have to organise themselves based on a worst-case scenario because, if a reservoir goes wrong, the police and Ambulance Service need to be informed. Is it not inappropriate for Northern Ireland Water to operate in that way?

Mr McGeown: Every business area in Government will have to have contingency planning in place, of course, and has to prepare for the worst. If eventualities happen, such as torrential rain over a sustained period, high winds, high heat or whatever, that is where you get into an abnormal occurrence for which a bid would typically made to the Department because of the abnormality of it. To look at the start of the financial year and continue with that figure well into the year, when those things have not happened and the realistic possibility is that they will not — albeit once or twice they do — then, if it were me, I would be recalibrating and revising my figures as we went along to decide how realistic it is. I would look at a time sequence, as I have said before, to see how often this happens. If it does not happen often, I would build in that error at the start and certainly recalibrate as I go along to make sure that I adjust. That is what I would do.

Mr McReynolds: Has Northern Ireland Water responded to that in its approach?

Mr McReynolds: To be fair to Northern Ireland Water, it received a draft of the report, as did we, and it has fed its comments back. They are factual accuracy comments — I must be clear on that. Those comments are being factored in, but it would not have been able to be drawn on whether or not it agreed. It would be able to say that the report is factually accurate in how it has been characterised and portrayed.

Mr McReynolds: OK.

Mr K Buchanan: Thanks for coming in today. I have two questions which are probably for Clare. Can you educate me on the process, the time and the team involved?

Ms Kennedy: Yes. It was a six-week period. There was a team of four of us brought in from PwC. We submitted an extensive document request to Northern Ireland Water, which was very much focused on financial management information and financial reports. We asked for board papers and information on executive committee members. We reviewed a lot of correspondence back and forth between NI Water and the Department, specifically on the matter of the resource budget. We also spent a lot of time with NI Water, and it gave us a lot of time. We met the executive team, the chair and each of the non-executive directors to cover our terms of reference. We met departmental officials on a number of occasions as well, so that multiple voices were fed into the process.

Mr K Buchanan: Second and final question. You did an analysis of the top five suppliers.

Ms Kennedy: Yes.

Mr K Buchanan: A bullet point in the Minister's statement the other day stated:

What is an example of those?

Ms Kennedy: That is what I referred to earlier. It was when we had identified the call-off contracts that were in place, so the 18 out of the 21 contracts that we requested. Again, we were saying that there was potential optionality in there. Obviously, it depends on business need. We did not have the time to test that, so we cannot conclude on that specifically. We are just saying that the nature of those contracts suggests there may be optionality within those contracts.

Mr K Buchanan: OK.

Ms Kennedy: Sorry, specifically within those other costs and SME [Inaudible.]

Mr K Buchanan: We will get you back in August.

Ms Kennedy: Excellent.

Mr K Buchanan: That is not for me to say, is it? If we get the full report.

Mr Boylan: That was the third question.

Mr K Buchanan: Thank you. I appreciate that.

The Chairperson (Mrs Erskine): I want to come back on two points, if that is OK. The first is about the spending. The Department would have oversight of the overspend. Just for clarity, where is the line for stepping in? Obviously, we have the report, but it is doing something about that. That is the key thing that I keep coming back to.

Mr McGeown: Northern Ireland Water has its own chief executive, board and accounting officer. Therefore, it is for them to manage their budget, line by line. It is for us to observe and look at where they are heading towards an overspend, through their own communications with us. We intervene, with that perspective, to say, "You need to look at where to pull back spend or slow down spend" or whatever. It is for them to choose where that should be. The operational independence is for them. As they have their own accounting officer, it would be for them to decide which budget edge they could turn down or turn off completely. That is their choice, but it is for us to say, "You need to live within your budget", and when we become aware of an issue, as we did in the last financial year, it for us to intervene and say, "You must pull your spend in".

The Chairperson (Mrs Erskine): I suppose it is because of the sad life that I live that I carry reports with me at times, particularly for a Committee meeting such as this. When the Fiscal Council was before the Committee last week, it referred to greater transparency around DFI's indicative and ultimate allocation. We touched on that earlier, and the difficulty of keeping track of it. It is very difficult for the Committee to keep track of it. There are, I suppose, different layers and levels in looking at that. Is that something, Clare, that definitely came through in your discussions with, or investigations into, NI Water that would make it difficult for its planning, and, ultimately, create an overspend or near-overspend situation? I find it interesting that the Fiscal Council noted that, and it ties in with some of this.

Ms Kennedy: Could you repeat the start of that question?

The Chairperson (Mrs Erskine): Yes. It was just the issue of greater transparency and the ability for NI Water to be able to plan based on what it may or may not receive, and whether that was a factor in creating the basis for an overspend. The question may not be for you, but I just want to check whether that came out in your discussions with NI Water.

Ms Anderson: Chair, if I may, I will pick up on the transparency issues. Members will be aware that we briefed the Committee on the 2024-25 budget process, and we had our equality consultation. That set out the initial thinking about how the budget would be split up in the very early days before formal and final decisions were taken. Members will also be aware from those previous briefings that we had requirements of £676 million at the start of the year against a budget of £559 million. Clearly, some very difficult decisions were needed. That is why NI Water was given the budget allocation at that point, as set out in the equality documents that were consulted on. It should therefore be transparent. We are clear about being open about those budget decisions, which are published.

The Chairperson (Mrs Erskine): Clare, is that something that came up in discussions with NI Water? Did it see any difficulty in seeing what it was going to get and then managing that?

Ms Kennedy: It goes to a slightly broader issue than just the budget. The budget is what it is. Yes, there was an ask for more —. I do not know what the right word is: it is about more detail to what sits behind it. It comes down to service delivery, what is being asked of NI Water and what is more affordable. There is consensus within the regulatory process that exists. The price control process — the sort of review that is coming in — is an opportunity for all parties to coalesce around an approach to managing service delivery within affordable DEL, and it would be good if that were availed of. That might be helpful to NI Water, because, in some ways, the numbers are what the numbers are.

The Chairperson (Mrs Erskine): Are you finished?

Ms Kennedy: Yes.

Mr Stewart: This has just come into my head. Was there any investigation into how NI Water would benefit from multi-year Budgets, when it comes to addressing these three key areas? We accept, and I am sure that the DFI officials know, that it will be a lot easier for arm's-length bodies to better manage. It is not easy doing it, year after year.

Ms Kennedy: That was outside the scope of our review. It was very much focused on the 2024-25 resource budget, in particular.

The Chairperson (Mrs Erskine): Cathal, you wanted to come in.

Mr Boylan: This is great; it has opened up the conversation. Clare, to come back to this thing —.

Mr Stewart: Feeling the need to contribute.

Mr Boylan: I have said this to Declan, on a number of occasions. It is grand: the budgets are there, and they are constrained. My issue is that the PC 21 has been reviewed, it is now a three-year programme, and it has been signed off by the Utility Regulator. I am trying to get my head around what its plans are, what its ambitions are and what its targets are. We are still not getting those, other than hearing, "We've not got the money to do this or do that". This piece of work has interrogated some of that and has outlined some of the challenges. I am just making a point, rather than putting you on the spot and asking you a question. We need to get to that point. There have been five or six price controls — a number of them, anyway — over a 17- or 18-year period, and we are still there, in a place of this size. The challenge for the Committee is to try to get down to that. Hopefully, after this piece of work, we will get a better understanding. We all know that, budgets aside, there is a challenge, but it is about trying to know its work programme. It seems that you were provided with all of the papers and everything that was needed to address that issue. It is about us getting a better understanding of how this is operating.

The Chairperson (Mrs Erskine): You will be glad to hear that you have made better time than the Minister. I am sorry for keeping you waiting. We look forward to seeing the report. I imagine that the Committee will have questions, and we might ask you to come back for our scrutiny of the report, when we see it.

Thank you for coming to the meeting; we appreciate your time. Thank you, Clare and your team, for the work that you did. It is much appreciated.