Official Report: Minutes of Evidence

The Chairperson (Mr Frew): The departmental officials providing oral evidence today are Richard Logan, finance director; Michelle McLoughlin, head of financial strategy; and Ashleigh Regan, head of future years budgets. You are welcome to the meeting, and I invite you to make an opening statement.

Mr Richard Logan (Department of Justice): Good afternoon, and thank you for the opportunity to update the Committee on the proposed draft Budget 2026-27 to 2029-2030 and the financial implications for the Department of Justice. We have already shared with the Committee a detailed written briefing on specific aspects of the proposed Budget outcome for the Department. I thought that it would be helpful, in my opening remarks, to provide some context to the overall Executive Budget, the funding that it has available to allocate to all Departments and how that impacts on the funding for DOJ.

The multi-year Budget covers resource departmental expenditure limit (DEL) budgets for three years and capital DEL budgets for four years. It represents one of the most significant decisions that the Executive will make during this mandate. The Finance Minister highlighted that the proposed draft Budget was prepared against the backdrop of an exceptionally constrained financial position facing the Executive and that it was not possible to provide any Department with the funding that it requested. The figures on the slides that I have shared with the Committee are based on information in the annexes that accompanied the Finance Minister's oral statement to the Assembly on 12 January. The figures are subject to change until such time as a final Budget is agreed by the Executive. The proposed draft Budget does not currently outline how any overspends by Departments in 2025-26 will be treated in the multi-year period. There is a risk that the proposed allocations for DOJ will be reduced in the final Budget, if the Executive decide to allocate overspends by individual Departments against the budgets of all Departments.

Slides 2 and 3 outline the resource DEL funding available to the Executive. The starting point each year is the Treasury control total, which is £16·348 billion for 2026-27, rising to £17·334 billion in 2028-29. Adjustments are then made for Treasury-earmarked items, including additional security funding for the PSNI and regional rate income. The departmental baselines are effectively the position at the start of the 2025-26 financial year rather than the closing position. That means that the baselines do not include any funding received in-year for employers' National Insurance contributions (NICs) or the Programme for Government (PFG), nor any non-recurring funding received through the monitoring rounds.

Slide 3 shows the deductions made for previous Executive commitments such as welfare mitigations, childcare and victims' payments. The draft Budget proposes additional earmarked allocations by the Executive, including £119 in 2026-27 million for the PSNI data breach and £133 million over the three yeas for PSNI workforce recovery costs. The draft Budget includes proposals to set aside £95 million resource funding for transformation in addition to the £235 million earmarked funding from Treasury as part of the restoration package. A strategic reserve is proposed for exceptional costs: £200 million in 2027-28 and £400 million in 2028-29. DOJ has a vested interest in the additional transformation funding and in the strategic reserve, given that it has tranche 2 transformation bids still
under consideration as well as legal claims for holiday pay and McCloud.

The last row on slide 3 shows that, from an overall starting point of between £16 billion and £17 billion, there is funding of only £114·7 million, £430·9 million and £714·2 million available for general allocation by the Executive. Slide 4 shows proposed allocations to Departments, including £10 million, £43·3 million and £59·4 million for Justice. DOJ allocations equate to between 8% and 10% of the additional funding available to the Executive. The Finance Minister has indicated that the Chancellor's autumn Budget statement provided additional funding across the Budget period. However, due to the requirements of the Northern Ireland Act 1998, such funding cannot currently be included in the published draft Budget position. Indicative allocations have therefore been proposed in the meantime, and those will result in DOJ receiving a further £10 million in 2026-27 and £6·5 million in 2027-28.

Slide 5 shows that, on average, of the allocations to individual Departments from the Executive's total £17 billion Budget, Health receives 50%, Education 19% and Justice 9%. Those three Departments alone account for nearly 80% of the Executive's overall expenditure. For the Committee's information, the figure for Justice for 2026-27 is higher, at 9·3%, due to the one-off £119 million allocation for the PSNI data breach.

As the Committee is already aware, however, the Department of Justice has faced years of underinvestment, and it is concerning that DOJ's share of the block grant has fallen continually from just under 11% in 2011-12 to just 8·7% over the upcoming three years. Slide 6 outlines the funding position since 2011. The final Budget allocations for 2025-26 show that, whilst the total block grant increased by 66% in the 14 years previous, DOJ has experienced growth of just over 25% in its Budget allocation. Compare that with other Departments: during that period, Health and Education's Budget allocations have grown by just over 98% and just under 72% respectively. Increased Budget allocations in the last three years have gone some way towards redressing the balance in favour of Justice. However, the multi-year Budget shows more limited growth for all Departments, including DOJ.

Slide 7 outlines the capital funding that is available to the Executive. As with resource, the starting point each year is the Treasury control total, which is £2·339 billion for 2026-27. That falls slightly each year to £2·296 billion in 2029-2030. Adjustments are made to reflect the Irish Government's funding for the A5 and Treasury-earmarked items. Deductions are then made to reflect previous Executive commitments, including the mother and children's hospital and the Strule campus. The draft Budget also proposes a number of additional Executive-earmarked allocations that relate mainly to funding for sporting facilities. However, there are no specific allocations for DOJ in either the previous or the proposed Executive-earmarked capital allocations. Similar to the proposal for resource spending, the draft Budget includes proposals to set aside £42·7 million in capital funding for transformation, in addition to the £235 million from Treasury.

The last row on slide 7 shows that, from a £2·3 billion starting point, there is funding of £1·845 billion in 2026-27, falling to £1·668 billion by 2029-2030, available for general allocation by the Executive. Slide 8 shows the proposed allocations to all Departments, including an average of £120 million for Justice in each of the four years. This time, though, Justice is only the sixth-largest Department in terms of allocations, with its allocation equating to between 6% and 7% of the additional capital funding. However, DOJ is the only Department with a capital budget that increases from year 1 to year 4.

What does all that mean for Justice? Slides 9 and 10 show the build-up of DOJ's resource DEL budget. The starting point is our baseline budget for 2025-26 of £1·354 billion. We then add the £37·8 million in additional security funding for the PSNI and the £4 million for the protocol and Windsor framework. The transformation tranche 1 funding relates to our previously successful bids for speeding up justice and electronic monitoring, which the Committee are already aware of. The current £16 million funding for the Executive programme on paramilitarism and organised crime (EPPOC) consists of £8 million from the Treasury and £8 million in match funding from the Executive. However, the EPPOC funding comes to an end on 31 March 2027. Whilst the same overall pot of £16 million is available for years 2 and 3, that is for the post-EPPOC successor of violence and harm reduction, which is subject to business case approval by the Treasury with the involvement of the Executive and the Northern Ireland Office. That funding is therefore not currently allocated to DOJ in 2027-28 or 2028-29.

Over the next three years, the Department will receive earmarked funding from the Executive for the PSNI data breach, workforce recovery and judicial salaries in the Courts and Tribunals Service. Any additional or new money will come from the general allocations and indicative June monitoring allocations of £20 million in 2026-27, £49·8 million in 2027-28 and £59·4 million in 2028-29. However, the 2025-26 DOJ budget included £5 million for Programme for Government priorities, £4·7 million for employers' NICs and £4·6 million for police awards. Crucially, none of those funding streams has been rolled forward in our baseline for future years.

Slide 11 provides a summary of the stabilisation pressures for day-to-day running costs that DOJ faces. The figures reflect the estimated costs reported by business areas in summer 2025 for the future years budget exercise and departmental five-year plan. The costs reflect the best estimate, at the time, of future demand for our services and potential pay award and inflationary uplifts. After taking into account the related allocations, the remaining pressures are estimated to be £101 million in 2026-27, £141 million in 2027-28 and £215 million in 2028-29. Approximately 50% of the pressures each year relate to the estimated cost of pay awards. To put the scale of the figures into perspective, the £215 million pressure in 2028-29 relates to the combined total expenditure for the Prison Service, the Probation Board, the Youth Justice Agency and Forensic Science NI. The impact of such shortfalls in funding would be catastrophic for the justice system in Northern Ireland, and, considering the magnitude of the pressures that remain, it is difficult to see how the Department would manage to live within its resource budgets over the next three years.

Slide 12 shows the scale of stabilisation pressures facing the Department. The Department was able to manage £44 million of pressures in 2025-26. That was achieved in part due to additional Executive funding of £7 million for workforce recovery and £4·6 million for police pay awards. The remaining £32 million was managed due to demand being lower than expected; reduced costs, once additional information became available in-year; and efficiencies that were achieved mainly through vacancy management and control.

Slide 13 highlights the fact that nearly 75% of the total DOJ stabilisation pressures are for the PSNI and prisons, which is no surprise. However, significant pressures are also being reported by the Courts and Tribunals Service and the Legal Services Agency. The Department continues to face exceptional pressures relating to legal claims for holiday pay and McCloud, as shown on slide 14. Those costs are truly inescapable and will not be affordable from within the DOJ budget under any circumstances without additional funding from the Executive. The emerging pressures of £100 million per annum for PSNI legacy civil cases will also be unaffordable from within the Department's current budget allocation. The timing of when those exceptional costs will be incurred is not entirely within the Department's control, and there is therefore a risk that the costs for the various legal claims will crystallise in 2026-27.

As noted earlier, the Finance Minister proposes that the Executive create a strategic reserve to help them respond effectively to any issues that may emerge over the Budget period. The proposal includes setting aside £200 million in 2027-28 and £400 million in 2028-29 for that purpose. Crucially, however, there is no funding set aside in 2026-27 other than the £119 million already agreed by the Executive for the PSNI data breach.

Slide 15, the final slide, summarises the capital position over the next four years. As the allocation is insufficient to meet all inescapable bids, the Department will give priority to contractually committed expenditure. That means that no funding will be available for high-priority and desirable bids. Given the urgent requirement to give business areas clarity on their 2026-27 draft Budget position, capital budgets will be set for one year only, i.e. 2026-27 in the first instance. All business areas will receive an allocation to meet their contractual commitments in full, with the balance of funding being allocated to meet a share of the remaining inescapable pressures.

I trust that I have provided you with a candid but helpful overview of our financial position. The remaining pressures will be extremely challenging if not impossible to manage. It is highly probable that the Department will overspend its resource budget in each of the next three years. Extremely difficult decisions on prioritisation and service provision will be required to minimise the remaining pressures. That will inevitably involve consideration of the level of services that can be delivered and in respect of staff numbers, pay awards and potential deferral of major capital plans. I thank you for the opportunity to provide the briefing. We very much value the role and views of the Committee. We are happy to take any questions.

The Chairperson (Mr Frew): Thank you very much, Richard, for your presentation and slides, which are helpful. You paint a bleak enough picture of the future. Will you outline to the Committee the benefits of a multi-year Budget?

Mr Logan: It will give us certainty and clarity about where we are going, but it also crystallises the shortfall over the next three years. Rather than our sitting with a perception or an expectation that more funding is coming — that might happen, to some degree — we know now that this is what we face. It will give us greater clarity for our planning and when pay awards come up. Generally, over the past number of years of one-year Budgets, pay awards have gone through on the basis of them being affordable in-year, and we work out the tail in future years. That is more difficult in some years than others. Civil Service pay awards used to run from August to July, so you had two years that were split, which was difficult to manage. The start dates for Civil Service pay awards are moving to 1 April. The same is happening for the Prison Service, but pay awards for the police go from 1 September to 31 August. They are always crossing over. The multi-year Budget will give us a certainty, at least, as to what is available, but it reinforces the position that there is limited funding available.

The Chairperson (Mr Frew): As MLAs, we are always told that pay pressures are what do the damage to the reserves. You paint a very good picture on slide 11, which shows "Non-contractual pay award costs" as £44 million in 2026-27, £78 million in 2027-28 and £114 million in 2028-29. You then have "Other inflationary and operational pressures" of £57·4 million, £63 million and £100·4 million. Will you outline to the Committee exactly what those other "operational pressures" are? How meaningful or embedded are they?

Mr Logan: They cover a range of demand-related costs, such as compensation services, legal services and legal aid payments. Small increases are planned in those areas over the future years, if there are demand increases. For all the running costs of organisations, such as IT provision, leases, infrastructure and security, inflation is running at 3% to 4%. Broadly, in our original costings, the assumptions for pay were a 3% non-contractual uplift, plus a 1% uplift because you go up the scale — so, between 3% and 4%. In some areas, they were slightly more. The increases were similar to, if not higher than, inflation. For guidance, in some areas, there were 5% increases in IT costs.

Of the Department of Justice's total bill, roughly 70% is pay and 30% is non-pay. That is the 5% increase in the non-pay bit — that is where we get those increases. That will cover payments for injury on duty, any legal claims that are being settled and day-to-day things. It is basically everything that is not pay. We included some small, marginal, new services to be delivered. In our five-year plan, we highlighted about £20 million to £30 million for new services, if the funding was available. It is not that we are putting in £200 million or £300 million of new developments; most of our pressures relate to dealing with existing pressures.

I will touch on the point about pay. Across all the organisations in DOJ, our pay bill sits at £1 billion each year. If there is a 3% pay award over the next years, that will rise to £1·3 billion. That means that every 1% of a pay award across DOJ costs £10 million. If there is a 3% pay award, £30 million has to be found. That will increase to where a 1% pay award will cost £13 million. That will be so significant when it comes to managing our budgets over the next number of years.

The Chairperson (Mr Frew): Given everything that you have said, do you believe that all spending areas in the Department of Justice will be able to fully meet their statutory functions?

Mr Logan: The Finance Minister put out his proposed Budget on 6 January. We issued draft indicative Budget allocations to our business areas on 6 February. They are starting to look at and go through those. We plan to issue a planning note tomorrow asking business areas to revise their pressures and outline the actions that they would have to take to live within budget. When those returns come in, we will know the true impact. We did a similar exercise last summer with the planning budgets, and business areas came back and said that it would be difficult. The Probation Board, for example, said that it might not meet all its services. A lot of areas talked about scaling back, saying that they might not be able afford to focus on rehabilitation because their statutory duties would take precedence. We need to give the business areas an opportunity to comment. As part of that process, we ran a session for the senior teams in all our agencies and non-departmental public bodies (NDPBs) on 26 January. We felt that it was important to do that. At that session, we talked in more detail about the slides that I have presented to the Committee, and that set the context so that people knew what was coming. Everybody had a fair idea about what was coming, but that put it down in pounds for the first time. It is now for the business areas to assess what it all means. The police and all the other business areas are currently looking through that.

The Chairperson (Mr Frew): Will that exercise take in, "Here's what we're left with. Here's the shortfall"? Will it be a strategic re-prioritisation of what the Department and its arm's-length bodies do? Will it lead to reform?

Mr Logan: No options are off the table because of the severity of the financial position. We need to see the impact. History shows us that the costs come down because people have been cautious when they put in forecasts. It is not that they deliberately overstate their pressures, but there will be savings if inflation is lower than what was expected when the costings were done — and inflation has fallen to 3% this week. In the past number of years, the Justice Department has balanced it out. Generally, things do not stop, but bits in one area are shaved off or slowed down. If it leads to reform and that can be done, that is an option that all areas will consider

The Chairperson (Mr Frew): Before I bring Emma in, I inform members that we have just received the ombudsman's budget return, which will be forwarded to members via email. That should come in soon, if it is not in already.

Ms Sheerin: Thanks to you all for the presentation and oral briefing. Our pack contains concerns about the capital allocation. Will you detail how that will be prioritised? When we met the Lady Chief Justice, she referred to the need for an increased court capacity, because that would help with the delays in victims' receiving justice. What scope do you have to allocate funding to increase court capacity? What chance will there be to increase or improve the current estate?

Mr Logan: The Department's overall estate is probably valued at over £1 billion: half of that sits with the police, and the next two biggest elements are the courts and the Prison Service. Our allocation averages out at around £120 million over the four years, and our bids averaged out at £270 million, so there is a shortfall of £150 million. At this point, in year 1, we can only afford to do what we are contractually committed to do. Our main contractual commitment is the new forensics lab. Of the £120 million for next year, £36 million is allocated to that lab.

We have gone out again to the business areas to see what their priorities are for the next number of years. There is a list of seven or eight big areas: the Prison Service; Magilligan; Hydebank; modernisation of the police college estate; modernisation of the Royal Courts of Justice; Bishop Street courthouse; Causeway digital development; and the IT transformation and modernisation project for the courts. We will not be able to do all those things with a £120 million allocation. We might be able to do one or two of those projects and phase them in over a number of years, but the £120 million allocation will not allow us to do all of them. Some of those projects will cost in the region of £40 million or £50 million. I know from speaking to the Courts and Tribunals Service that it can phase in its projects over a number of years, so they will not cost £60 million in one year. The new forensics lab is different from nearly all the others in that it is a project lasting a short period of two years. The other projects can be phased in. If a project, such as a courts project, can be phased in and is affordable, it can be looked at, but we are not at that stage yet. We do not want to rush in and make a knee-jerk decision at this point, because there are so many other pressing priorities on the capital side.

Ms Sheerin: OK. Thank you.

Ms Egan: Thank you all for coming in today. A sum of £119 million was secured for the PSNI data breach. Am I right in thinking that that is for a universal offer to officers?

Mr Logan: That is the cost in the business case for the data breach, so that covers all potential costs associated with the data breach, including the universal offer. It is not solely for the universal offer.

Ms Egan: There is a universal offer, but officers can also get their own legal advice and representation and push for more. If some officers are successful in that, it could lead to a host of others pushing for more compensation. Has that been taken into consideration? Are there contingencies if the cost comes to more than £119 million?

Mr Logan: The business case had a number of assumptions and scenarios built in, whereby a percentage was assumed of who would take up the universal offer. There are other percentages and tiers of more expensive payments. That has been factored in. If people do not accept the offer, however, and it goes to court and there is a court ruling, yes, it could cost more than £119 million. I think that, in any correspondence the Minister has told the Executive, "We really do welcome that £119 million, but we note that there is still uncertainty and a risk that more will be needed." The matter may or may not be settled in 2026-27 depending on how quickly claims can be processed and agreed. Therefore, there is risk on two fronts: one, that is it not all settled in 2026-27, and, two, that it might cost more than £119 million.

Ms Egan: The Committee has received correspondence from the Office of the Police Ombudsman outlining its concerns about the current budgetary situation, stating that, even if its budget remains unchanged, it faces a cut in real terms and referencing a bleak financial picture with regard to its ability to meet its statutory obligations. How is the Department engaging with the Police Ombudsman's office on that?

Mr Logan: Part of our initial consultation on the budget was to meet all areas to let them know and set that out. Business areas, through their sponsor teams, provide feedback. In our approach to setting our budget, we knew that we would have a shortfall. No matter how we split the budget, it was going to be £101 million short. The approach that the Department took was to try to smooth out the shortfalls. That is why, in the allocations that we shared with the Committee, some business areas do not get any allocations over the next couple of years. That is because the pressures that they have reported as a percentage are lower than in other areas. If we gave more money to those areas, which were sitting with pressures of maybe 5% or 6%, they could be down to 2% or 3%, but we had other areas facing 15% or 16% of pressures. We smoothed it out as far as possible so that, in year 1, nobody has more than 12% of their pressures remaining. In year 2, it is 13%, and by year 3, it is 18%.

The Finance Minister said that every Department will not be able to get what it asked for, and that is mirrored in our Department, in that not all areas will be able to get what they want, but we have tried to smooth it out. If there are in-year easements, we will — as we have done every year — put money out to business areas that have particular pressures or difficulty in meeting them. However, we need a contribution from everybody to do that. The Department is not sitting with any money left to allocate. We do not have a strategic reserve. That is not something that we are allowed to have, nor can we even set money aside. All the budget that we were given has been fully allocated.

Ms Egan: It is concerning, and it seems as if the whole Department is underfunded.

Mr McGlone: How many PSNI data breach compensation claim cases have been taken independently? Do you know, offhand?

Mr Logan: I do not know. Maybe 10 or 20 test cases are going through the courts, but that is not necessarily reflective of the number of individuals.

Mr McGlone: That is what I mean. The test cases have sort of set the benchmark for the offer that was put out. You do not know therefore how many other cases could be pending where individual officers are taking cases in their own right.

Mr Logan: No.

Mr McGlone: What are the implications for post-mortem examinations and the like as a result of a reduction in the number of staff? You mentioned that some staff are employed on a temporary basis — temporary consultants — in the pathology departments. Those of us who have dealt with sad instances of sudden death will know that those staff, many of whom are under pressure but deal with it very sensitively, realise the importance to families of the release of their loved ones' remains as soon as possible.

I have two questions. Do you see any cutbacks slowing up that process? Obviously, you want to make sure that people get their loved ones' remains returned as soon as is practically possible. The second question is about the temporary consultants: are they employed on the same basis as, for example, temporary doctors? Are they employed on a locum basis? If they are employed on a locum basis, is the pay significantly higher than for a permanently employed member of staff?

Mr Logan: I cannot comment on timings for post-mortems. The state pathology service would need to give a definitive view on that. I imagine that it will do everything possible to not impact anybody adversely, but I am not in a position to comment on that.

On the point about temporary staff, again, we need to hear that from the State Pathologist's Department. It could be just a temporary one- or two-year contract, or it could be to fill a void. Some of that might be retention/recruitment allowance, so I do not —.

Mr McGlone: In this respect, it might be many's a thing. You do not have the figures today, but could you come back to us with more accurate figures on that, please?

Mr Logan: Certainly, yes.

Mr McGlone: Thank you.

Mr Kingston: Thank you for the presentation and the slides, which provide clear information. From what you said, no Department received the funding that it needs, so it is hardly surprising that the Executive, as a whole, did not approve the multi-year Budget.

I want to check the wording. When you talk about "stabilisation pressure", is that effectively a shortfall or an overspend? How do you address a stabilisation pressure?

Mr Logan: It is essentially the day-to-day running costs of the Department of Justice. We tried to distinguish between the exceptional pressures — legal claims that are completely outside our capacity to fund — and day-to-day stabilisation to maintain the justice system.

Mr Kingston: How has the £44 million stabilisation pressure in this financial year been covered? Obviously, the £400 million from the reserve claim went to Health and Education. What has happened to that £44 million this year?

Mr Logan: The Department expects to live within its budget in 2025-26. Unless something changes in the next six weeks, we are not expecting an overspend this year, and we will not need a reserve claim. The £44 million was managed through the likes of the £7 million that we got for the PSNI workforce recovery and the £4·6 million that we got for the police pay awards. All areas made savings: the police, prisons and courts. We thought that initial demand for legal aid was going to be higher this year, but that did not come through at the same level, so that was a reduced cost.

The £44 million was managed by the Department in-year. In a budget of £1·4 billion, £44 million is about 3%. If we are managing at that level, we would expect that, through the normal course of business, through reduced costs and through vacancy management and delays in recruitment — posts have not been filled as quickly as we wanted — as things stand, we will not need to access the reserve claim.

Mr Kingston: OK. That is good to hear. I am not questioning that there has been pain in meeting that, but it leads me on to this thought, as always: in a four-party coalition, it is difficult for individual Ministers to take the lead, but they all must be under pressure to live within their budgets. Is there a collective desire to find those savings? Obviously, no individual Minister wants to have to make cuts and take public criticism for that. Do you feel that there is a collective responsibility to drive forward finding efficiencies and savings across Departments?

Mr Logan: As a Civil Service and public sector, if we are going to live within budget, that is a collective responsibility, and, when I meet fellow finance directors, I see that we all know the impacts and that measures have to be introduced. There is a collective responsibility amongst everybody, I suggest.

Mr Kingston: Finally, a couple of weeks ago, the Education Minister published a five-year budget strategy, including areas where structural reforms could reduce costs. I think that Health has also gone public on that. Is Justice working to produce a projected five-year budget indicating where savings could be found?

Mr Logan: We shared previously with the Committee our five-year plan. All areas are looking at that. The police will be looking at that. We had a session with them earlier in the year, and they have been going through all the areas that they can look at for savings. It might not come in a specific, separate published document, but that is being done. Speeding up justice, which Lisa Rocks will be talking about, prison reform and all of the reforms are already happening and have happened to try to minimise costs in the Department. At the moment, there is no plan to publish documents similar to those that Health and Education have published, however that work has been ongoing in previous years anyway.

Mr Kingston: Is that called a "five-year plan" rather than a "budget strategy"?

Mr Logan: It is a departmental five-year plan, setting out our plans and costs and the efficiencies that we can make.

Mr Kingston: There is a financial element to it.

Mr Logan: Absolutely.

Mr Kingston: Are potential areas for savings identified?

Mr Logan: The drivers for our costs are the pay awards. That is the biggest impact for us. Then there is the increasing prison population. That is a demand-led service. The prisons cannot turn the prisoners away at the door, so they have to take them, look after them and rehabilitate them. All of that needs to happen. Reform has been happening, and people have been looking to make efficiencies. We have set out those costs in the departmental five-year plan. It is that balance of making efficiencies where, I think, the remaining pressures for police were £40 million, £50 million or £60 million. To make efficiencies runs contrary to the aspiration to increase officer numbers up to 7,000.

As a Department, since 2020, we have had a 6% reduction overall in staffing numbers. The majority of that — slightly more than that — is made up of police. We have an extra 200 staff in the core Department, but that relates primarily to the Victims' Payments Board and the Troubles pensions teams. That is work that we administer on behalf of TEO. Those costs are fully funded by TEO to us. With efficiencies from the Department, there has been a 6% reduction in the past five years. That has had an impact on services, most notably police. That has been in the public domain. There have been some small, marginal increases of, maybe, 40 staff in prisons, but prison numbers have increased by around 35% over that period.

Justice has already been making a lot of the efficiencies, and our position is that there is not much more that we can do, even on staff numbers. There is no voluntary exit scheme — I am not suggesting that that is an option — across the Civil Service to reduce numbers. That would cost money. In the absence of that, the only way to make cost savings in staffing is through natural attrition so that, when people retire or leave, you do not fill the posts. There is no mechanism to reduce numbers. That might be something that some places do in future, but, at the moment, that is not an option.

Mr Kingston: Can you give me those statistics again? What did prison staff numbers increase by?

Ms Michelle McLoughlin (Department of Justice): They rose by 44 over the past four years.

Mr Kingston: Forty-four people?

Ms McLoughlin: Forty-four individuals, yes.

Mr Kingston: Over the past four years?

Ms McLoughlin: Yes.

Mr Kingston: At any one time, on average?

Mr Logan: It is from 2020 through —

The Chairperson (Mr Frew): It is a baseline.

Mr Logan: — to the end of 2024-25. We will provide that information as part of our year-end accounts. We will have all of the details on the average number of staff so that we have a consistent basis. Police numbers were down by 1,117; prison staff numbers were up by 44; and core department staff numbers by 240, 200 of which were for the Victims' Payments Board and the Troubles permanent disablement payment scheme. There were an additional 17 staff in victim support areas. The total number of staff in Justice — the core Department, agencies and non-departmental public bodies (NDPBs) — is sitting now at just under 13,000.

Mr Kingston: I have one final question. Without wanting to get ahead of ourselves, if the sentencing Bill increases the duration of sentences, it might increase the prisoner population. Have you made any forecasts or projections of the implications for the prisons budget?

Mr Logan: As part of the five-year plan and future years exercise, there were two exercises from DOF on broadly the same information and periods. Prisons have built in additional pressures and costs for those increasing numbers. However, there is also a maximum capacity. There is a potential impact on the resource budget and on the capital budget. That is one of the areas where prisons are looking at emergency modular accommodation — 10 blocks with 12 extra staff over a number of years. When it comes to competing pressures, that is one of them. If there is only enough funding to do one major flagship project, will it be provision of extra accommodation at prisons, updating the courts estate or progressing with Kinnegar or other developments in the police? At the moment, we would not have the funding or be anywhere close to it to start any of those projects.

Financial management will be key where business areas cannot start procurement. They cannot start a procurement process that, by default or stealth, leads them into a contract. We have written out to business areas on that. They cannot do that. You asked about the benefit of the multi-year Budget. People cannot just say, "Oh, we will hope and bid for it in future years". If they have no allocation, they will not be able to bid for it. We absolutely will have to consider that. However, if the funding is not there, we will have to see what the consequences are.

Mr Kingston: Have you considered different models in your projections?

Mr Logan: Prisons have. As part of the revised look at their pressures, the pressures that we have reported were based on information that we collated. I think that we wrote out in June.

Ms McLoughlin: Last summer.

Mr Logan: Last summer, we commissioned that work. It was done over the summer. It is consistent and has not changed. Prison numbers are already at the level that they were forecast to be at the start of the next financial year. All the business areas will now have an opportunity to revise their pressures. I would expect that, with people now knowing the financial context that we are dealing with, when it comes to optional things that they might have wanted to do — there are a lot of good ideas — if there is no money in the business cases now, the key aspect and decision for me in signing off on business cases will be affordability as well as value for money. The three-year, multi-year budget gives me the certainty to say, "You have not got the money now, and you have not got an indicative budget allocation for me". So, if a business area comes to me and says that it wants to do something new, I will not rule it out completely, but it needs to come to me and say, "In order to do that, I will stop doing something else", "I will make a saving", or "I will be more efficient somewhere else". It might drive good behaviour. People will want to try to squeeze as much out of their budgets and deliver as many services as they can. However, it will be challenging. It will not be the answer to all the issues in Justice or any of the Departments. That is the position.

The Chairperson (Mr Frew): Brian, we can recirculate that five-year plan.

Mr Bradley: I will try to be brief. I have one wee question about the budget. The pension scheme that was introduced in 2015 was ruled to be age discriminatory by the McCloud ruling in 2018. Have you factored in the payouts for the McCloud ruling in that budget? If so, when do you expect all the payments to be made?

Mr Logan: That falls under the category of exceptional pressures. We have put in an estimate along the lines of holiday pay. We have that table in. The costs are in. At this stage, it might be 2026-27 when those get paid. There has been no agreement on settling those claims yet. It will be similar to the situation that we were in with the data breach, potentially, where we had a business case that was approved on value for money but we could not sign off on affordability because the funding was not there. Now, however, the strategic reserve that the Finance Minister set aside is for exceptional items that emerge, including the McCloud payments and holiday pay. However, no strategic reserve has been set aside in 2026-27. I think that that is partly because £119 million has already been allocated for the police data breach.

Mr Bradley: The data breach was unfortunate, but that still leaves the officers affected by the McCloud ruling in limbo. You are telling me now that it might come to a conclusion in 2026-27, but it might not. Those officers are still in limbo, and there is nothing in the budget to give them the finance they are due.

Mr Logan: Those are the representations that the Justice Minister has been making to the Finance Minister, saying that we welcome the money for the data breach, but we have other financial pressures that the Department cannot afford at the moment.

Mr Bradley: I have to agree that the Justice Department has been massively underfunded for some time, and you are playing catch-up. Reaching 7,000 police officers is not a target but a baseline; you need more than that.

The Chairperson (Mr Frew): Thank you, Maurice.

We have no further questions. Thank you very much, Richard, Michelle and Ashleigh for your attendance.