Official Report: Minutes of Evidence

The Chairperson (Mr Butler): I welcome the following officials to brief the Committee: Mr Roger Downey, finance director; Mr Declan McCarney, deputy finance director; and Ms Nuala Hennessy, head of in-year finance planning branch. After the briefing, we will ask some questions. I am sure that members have been reading the pack. If you want to go ahead and give your presentation, we will be very grateful. Thank you.

Mr Roger Downey (Department of Agriculture, Environment and Rural Affairs): Good morning, everyone. Thank you for the opportunity to brief the Committee today on the December monitoring round. This exercise has replaced the October and January monitoring rounds that usually take place during the year. This is the last monitoring round in 2025-26 and will be used to set the final budgets for this financial year that the Department will report against in the provisional out-turn exercise after the year end. DAERA's return was submitted to DOF last Thursday.

The Department has no resource departmental expenditure limit (DEL) or capital DEL bids in this exercise. However, we have one non-cash ring-fenced resource DEL bid for depreciation of half a million pounds. On resource DEL reduced requirements, there is a non-earmarked one of £4·9 million, arising from the delay in filling vacancies. There is also an Executive earmarked one of £3·1 million for PEACE PLUS, which is managed by the Special EU Programmes Body (SEUPB). In addition, there is a Treasury earmarked one of £2·9 million, because the timing of staff appointments has been slower than anticipated. On capital DEL reduced requirements, there is one of £0·8 million, arising from slippage in a lease at the Larne facility to 2026-27. On technical issues, there are a number of de minimis transfers that net to £0·4 million resource DEL and £0·2 million capital DEL out of DAERA to other Departments.

On annually managed expenditure (AME), £108 million non-cash resource AME budget cover has been sought for a potential technical accounting adjustment, in line with international accounting standard 37 on provisions and contingent liabilities, in relation to Mobuoy. That approach is consistent with the one taken last year. Some £0·6 million non-cash resource AME budget cover has also been sought for a potential technical accounting adjustment, in line with international accounting standard 37, in relation to the Agri-Food and Biosciences Institute data breach. The accounting treatment of those issues will be considered at the year end. At this stage, there is no commitment to disburse those or any other amounts. More details are set out in the written briefing that was provided to the Committee earlier this week. We are happy to take any questions.

The Chairperson (Mr Butler): Thank you so much. I appreciate that. My first question is about the non-earmarked £4·9 million resource DEL. Is all of that down to the fact that the staff cost budgets are not being met, due to the delay in filling vacancies across the Department? If that is the case, are any areas of the Department at significant risk due to those posts not being filled? Is there then a knock-on effect on the Department's service delivery?

Mr Downey: Although a significant number of staff have moved into DAERA so far this year, and more will join before the end of March, full-year costs will not be incurred in this year. Many other staff who were projected to be in post this year will not now be in until next year. That is why those savings have arisen. When this year's business plan was being developed, we took into account how likely it was, given staff resourcing and the vacancy position, that work would or would not be taken forward. That was all factored into the business plan that was agreed earlier this year. An assessment was made of the likelihood of staff getting in. At that stage, we had money to ensure that, if more came in, we could fund and employ them. With the passage of time, that has not turned out to be the case. We also have leavers. You will be aware of the age profile in the Department. A large number of staff left during the year, and that creates underspends on staff costs and budgets as well.

The Chairperson (Mr Butler): Did you use the word "savings" with regard to that underspend, Roger? I am not sure that I heard that right.

Mr Downey: I may have used it. I suppose that those terms are interchangeable. If you have an underspend, it is like a saving, so it is not an extra cost.

The Chairperson (Mr Butler): An unintended consequence, I suppose, of not being able to fill posts.

Mr Downey: Yes. We are not being proactive in not filling posts to generate savings.

The Chairperson (Mr Butler): Yes, that is good news, but there is a difficulty in filling posts, and that is an ongoing difficulty.

Mr Downey: Yes, it is.

The Chairperson (Mr Butler): I am trying to unpick whether there are any areas of business that are particularly vulnerable or at risk. There was a news article about the west, regarding 17 vacancies in the Crown Buildings in Thomas Street, Dungannon. There are 20 vacancies in Dungannon. Are there any geographical difficulties or areas of business that are particularly suffering and becoming vulnerable?

Mr Downey: I do not have details about specific areas or offices. There are quite a high number of vacancies registered with Northern Ireland Civil Service (NICS) HR. Lots of competitions have been under way, and we have been able to draw off those during the year. Other competitions are in train. It all depends on the vacancies and grades in a particular office at a particular time and on when staff become available from those competitions. It is difficult to get all those to marry up.

The Chairperson (Mr Butler): Do you have a top-level figure for the number of vacancies? Obviously, we have a value of £4·9 million.

Mr Downey: I think that 838 is the latest figure registered with NICS HR.

The Chairperson (Mr Butler): Are those full-time equivalents?

Mr Downey: Yes.

The Chairperson (Mr Butler): I cannot imagine that that does not have an impact on output, and on the pressure on existing staff, too. That might be a concern.

Mr Downey: Yes. We do not expect all those staff to come in at the same time. They are registered. It depends on when the competitions become available and staff come into post. We would not have enough money to fund 838 staff from 1 April every year, but you take into account churn as well with people leaving to go to other Departments, retiring or moving out of the Civil Service.

The Chairperson (Mr Butler): Do we employ through agency contracts?

Mr Downey: Yes.

The Chairperson (Mr Butler): How much does that cost? Is that not picked up in the £4·9 million? Is it already included?

Mr Downey: It is included. We look at the staff cost budget in its entirety, so it includes all the staffing costs of full-time civil servants and agency staff.

The Chairperson (Mr Butler): Do you have a figure for that?

Mr Downey: I do not have that broken down

The Chairperson (Mr Butler): Can you get us a figure for that?

Mr Downey: Yes.

The Chairperson (Mr Butler): I would appreciate that. My final one — forgive me, because it is HM Treasury money — is about Windsor framework staffing. There is a line in your submission:

That confuses me a little bit, because I suspect that there are significant staff shortages there too.

Mr Downey: Yes. We projected to get £2·9 million of staff in this year when we were bidding to the Treasury for that money. We have got a lot of staff in to cover those posts, and £8 million more has been incurred this year to cover that, but not the full £10·9 million more. That is why there is a £2·9 million gap, and that goes back to the Treasury.

The Chairperson (Mr Butler): OK. Thank you.

Mr Blair: Thank you, Roger and colleagues, for the detail provided here. I am still on that £4·9 million. That is described as having been the situation in the autumn, which is half of the financial year. If that is the half-year cost, does that therefore represent an almost £10 million underspend on staff resources, or is that the cost projected until the end of the year?

Mr Downey: That is the cost projected to the end of the year. This is the last monitoring round of the year, so this will confirm our final budget for the year. When we do this exercise, we go right out across the whole Department. We ask all business areas to give an assessment of staff in post, because we get reports on that each month, and also their projections of staff who will come in from various competitions between now and the end of the year, and where we know there are going to be leavers, retirements, moves out or whatever.

Mr Blair: That is much closer to a full-year position than a half-year position.

Mr Downey: Yes.

Mr Blair: That clarifies that, thank you. The Chair asked a question about the impact on business areas. I get that it is probably up to those business areas to identify to this Committee where there may be risks to service delivery, and I do not expect you to have that information to hand. I am keen to know, however, so that we get a picture of how service delivery might be impacted on? Is that £4·9 million significantly higher than at this point in previous financial years? Do you know that?

Mr Downey: It is a moving figure. We have different staff costs in different years. We got some extra money for the increase in employers' National Insurance costs as well. We have also had a significant amount of recruitment this year. There are different budgets, for example, for the Executive staff costs and the Treasury staff costs. It is difficult to pin that down.

Mr Blair: Do you know whether there is a headline figure around that? I am hoping that there is not, by the way. Is that double what it was last year and the year before, or is it a figure that has been reported previously — that £4 million or £5 million of staff underspend?

Mr Downey: I do not think that we had a reduced requirement on staff last year.

Mr Blair: OK.

Mr Downey: There is also the wider block position and pressures. We do not want to be holding on to money on an optimistic assessment that staff are going to come in. This is the last chance to declare it, so, if that helps out the pressures across the block, we are content to do that, as opposed to holding on and potentially —.

Mr Blair: What I am trying to get to is whether we know that that figure of £4·9 million is rising year-on-year.

Mr Downey: No, I can say that it is not rising year-on-year, especially because staff costs increase year-on-year due to inflation, pay awards and higher National Insurance contributions. That is the nature of this particular year.

Mr Blair: With recruitment?

Mr Downey: With where we are, yes.

The Chairperson (Mr Butler): Do members have any other questions?

Ms Murphy: This is just a quick one, Roger. It is in relation to the £3·1 million in PEACE PLUS and the reduced requirement that has been reported. Does the Department know what factors SEUPB has identified that brought it to that conclusion: a reduction from the initial projected figure?

Mr Declan McCarney (Department of Agriculture, Environment and Rural Affairs): There are a number of factors in that easement, working with the business areas across the five investment areas. The reasons for that included state aid and UK subsidy queries, adjustments to delivery plans, and keeping projects in budget. There were also some changes in delivery partners which slowed things off. Those were some of the reasons for the easement at this stage of the year.

Ms Murphy: You mentioned new delivery partners. What was the point before that, Declan — the second point?

Mr McCarney: There were adjustments to delivery plans in order to keep projects in budget. Those were some of the reasons given by the business areas across the five investment areas for the slippage.

Ms Murphy: OK. What support has the Department been offering to rural groups to utilise that money and make them aware that that pot of money has been available?

Mr McCarney: There are various business areas in the Department that work closely. The Department is the accountable Department, but SEUPB is the managing authority and is responsible for managing the programmes on the ground along with the delivery partners. This is a common issue across all PEACE PLUS programmes. SEUPB will be working closely with project partners in the new year to adjust work plans in order to ensure that the money is spent out on the various investment measures.

Ms Murphy: Thank you. My final one is about Treasury earmarked funding. There was mention of a £0·8 million slippage in relation to a lease at Larne. What does that relate to, Roger?

Mr Downey: There is work going on at the points of entry. A capital build is being undertaken by DEFRA. There is a lease required for that at the Larne site, but they are not in a position to sign that this year. When we were bidding for that money, it was anticipated that that lease would be signed in this financial year. Due to the nature of construction, that is going to slip into next year, so we do not need that capital, so that has been eased back to Treasury.

Ms Murphy: Thank you.

The Chairperson (Mr Butler): Before I go to Thomas, to go back to the EU PEACE PLUS piece, Declan, if you do not mind: when you refer to an easement, is that a final loss of the ability to spend that money? Does that go back? What happens to it?

Mr McCarney: There are various investment measures where the total overall allocation of millions of pounds will roll forward and push into future years until it is spent.

The Chairperson (Mr Butler): OK. Thank you very much.

Mr T Buchanan: I understand that the Department relies quite a bit on a number of agency staff. What impact does that have on the staffing budget, given that agency staff are normally paid at a higher rate than a person employed by the Department?

Mr Downey: We look at the staff costs budget in its entirety, covering full-time civil servants and agency staff. Where there are difficulties getting staff recruited in on a full-time basis, business areas can go out to get agency staff, because the work still needs to get done. To answer your question, it all comes out of the one pot, and if staff get recruited permanently, there is less need for agency staff going forward. I suppose that that is just reviewed by business areas on a continual basis. We do that formally as part of each monitoring round during the year and at the beginning of the year when we get our budget agreed by the Executive.

Mr T Buchanan: OK.

The Chairperson (Mr Butler): OK, members, any other questions? No? We will let you off, seeing as it is Christmas — well, it is nearly Christmas. Thank you very much for your time today.