Official Report: Minutes of Evidence

The Chairperson (Mr Gildernew): I welcome the following officials from the Department for Communities to the meeting: John Greer, deputy secretary, corporate services group; Kathy Sands, director of finance; and Olga Beagon, director of finance. John, will you make a brief opening statement? We will then move to questions.

Mr John Greer (Department for Communities): Thank you, Chair and members. To clarify, Olga is replacing Cherrie Arnold and will be helping me to answer questions on benefit delivery and our work for DWP. Kathy will be ably assisting me with the rest of the questions on the other areas of our business.

Chair, as you noted, the purpose of the briefing is to update you on our current financial year's position and then to talk about the draft Budget that was released around Christmastime. On this year's budget, following Executive agreement on the December monitoring round, the latest budget position for the Department is £930·2 million of non-ring-fenced resource, £272·9 million of capital and £31·4 million of financial transactions capital (FTC).

Before I progress any further, I must apologise to the Committee. You did receive a written briefing a week or more ago. A revision of that was sent and received by you, as I understand it, this morning. That revision was in respect of a small error, where the figures were, essentially, in the wrong place at table 8.1 of the briefing. I apologise for that and the fact that we did not catch it earlier. The briefing that you have now is the correct one.

I will go back to the DOF December monitoring round that was returned by the Department on 20 November. We bid for £67·7 million, and the Executive agreed allocations of £42·4 million.

DFC received £29·8 million for new-build social housing, £8·6 million for the cladding safety scheme and £4 million for disabled adaptations. Members will be interested to know that the additional £29·8 million brings us to approximately 1,750 units of social development homes in our social housing development programme (SHDP).

A further technical exercise was commissioned on 17 December 2025 that asked for any technical adjustments from the Department — that happens regularly — and to submit any reduced resource requirements. That was particularly pertinent, given the much publicised overspend that the Executive are facing. The technical exercise confirmed additional allocations for DFC. On a positive note, there was £6·5 million of capital for disabled adaptations. We also received £2·4 million of non-cash funding for depreciation and impairments.

Coming back to this year's budget, we are compiling responses to the equality impact assessment (EQIA), and a final decisions report is due. That will be presented to the Committee in due course.

On the 2026-2030 Budget, you will be aware that, on 23 December 2025, the Finance Minister circulated an Executive paper proposing draft allocations and seeking agreement to launch a public consultation prior to the 2026-27 Budget being agreed. DOF published the draft Budget on 6 January for an eight-week consultation. That is still open and is due to close on 3 March. As members will know, the draft allocations are still subject to ministerial and Executive approval.

The Finance Minister noted that the block position was challenging and that not all bids could be met. That was further compounded by the fact that the Executive are likely to be overspent their budget by circa £450 million. As a result, negotiations took place between the Department of Finance and the Treasury. That resulted in an agreement of a Treasury reserve claim of some £400 million, with a number of conditions and a repayment schedule across the three years.

The bit that we do not know at the minute is how those repayments to Treasury will be allocated across the nine Departments in the next financial year and the further two financial years in the three-year repayment schedule. We are waiting to hear from the Executive about agreement on that via the Department of Finance, as that will impact on our allocations for the next financial year and all the financial years in the spending review period.

In the draft allocation, the Department's earmarked resource commitments are set to be fully funded, with the exception of benefit delivery. I want to spend a moment stressing that. We were very happy to receive £16·9 million to enable us to recruit 400 staff to deliver benefits. Members will have heard several times that we are chronically under-resourced in our benefit delivery. The real impact of that on citizens is that, currently, we only have enough staff to provide about 20% of the into-work support that we are meant to deliver, according to the policy to help people to get back into work.

The allocation of £16·9 million was very welcome. Unfortunately, during the financial year, we could not use all that £16·9 million, since, as I am sure you will appreciate, it takes time to recruit people. We have been working very hard at that. We returned to the centre £9 million of the £16·9 million that we knew we could not spend.

Unfortunately, the legacy of getting the £16·9 million is that we went on a campaign to recruit the full 400 people, and we fully expect that we will have those 400 people in post. Unfortunately, it is proposed in the future years' budget exercise that we will receive only £8 million a year over the next three years of the compared with the bids of £23·9 million, £33·5 million and £34·8 million. That adds to a pressure in the Department, because those are funded posts and we have people in place. That will be a real pressure.

On non-ring-fenced resource funding, we have received an opening baseline of £754 million for 2026-27, with a proposed indicative allocation of £10 million. Essentially, it is £764 million. That represents only a 2% increase to our baseline.

It is important to stress that the real problem that the Department finds itself in is that we have significant inflationary pressures. We all know that there are inflationary pressures across the piece, and citizens are feeling that. For the Department, those inflationary pressures are all of our general administrative expenditure (GAE) costs but not least our salary costs as well.

Essentially, those allocations, as they currently sit, provide a real challenge for us to continue to deliver our demand services while meeting pay and inflationary pressures. As a team, we are working very hard to look at the various scenarios for how we deal with that and are talking to our Minister about what that might mean, respecting the fact that we do not have an agreed Budget as yet. The first principle in that, as has always been the case with the Department, is that, as much as possible, we want to guarantee that we will continue to provide critical services to citizens and critical funding to the organisations that provide those services, and try to subsume that pressure as much as we can internally.

It is important to say at this stage that it is very hard for us to do that. Of the £764 million, a large proportion is made up of staff costs, pre-committed costs and statutory obligations. There is very little discretionary spend that we can shave, but we will talk about that in more detail. As I said, the Department is working with the Minister to see how we can limit the impact that it has on citizens. We estimate that, as we sit here today, those inescapable pressures are, in the best-case scenario, somewhere around £40 million, and, in the worst-case scenario, in excess of £60 million, so the situation is stark.

On the capital side, our earmarked allocations are set to be met in full, except for the cladding safety scheme. You will remember that the cladding safety scheme was put in place in response to the Grenfell disaster. Our proposed general capital allocation sees an increase of £40 million on the 2025-26 opening general allocation of £120 million but falls significantly short of need. Proposed reductions in the 2028-29 and 2029-2030 capital position are concerning, given the level of need that DFC is projecting in the future.

Social development housing and the provision of social homes are a Programme for Government commitment that we are responsible for delivering. Last year, the Minister decided to provide more than 70% of his opening capital general allocation to the social development housing programme to build the 1,750 social homes that I referenced earlier.

The total draft non-ring-fenced allocation, including receipts, is insufficient to meet inescapable bids, with a shortfall of £45·5 million, rising to £69·6 million in 2028-29. That provides no funding for high-priority projects. I will take you through that. With regard to our requirement for inescapables, in SHDP alone, we have a pre-committed tail of £104 million. We received reinvestment and reform initiative (RRI) funding for the social housing development programme of £107 million. Broadly speaking, there is £3 million left from that. We have received £160 million in a general allocation to cover our inescapable priorities and any new build starts. That is why we have a significant shortfall in our capital programme. That is not doing anything new. There are no new projects in culture, regeneration, heritage or anything else. In fact, there is probably a decline in those areas.

On a more positive note, the Department's bids for financial transactions capital funding have been met in full, except for that in 2027-28, where there is a £2·9 million gap. We hope that that £2·9 million gap can be managed.

Overall, the capital position throughout the four-year period is insufficient to cover our inescapable requirements. That will require more tough decisions. We recognise that that picture is playing out across all Departments and the Executive.

Thank you, Chair. We are happy to take questions.

The Chairperson (Mr Gildernew): Thank you, John. You have outlined a very challenging budget for the Department, John, particularly on the capital side. That challenging picture is reflected across all Departments. We understand that the Department has a wide-ranging remit and a number of key projects that must be delivered, not least, as you mentioned, social housing, Casement Park and the anti-poverty strategy. There are many areas of priority. Given that it will not be possible to fund everything, how will the Department prioritise its budget to ensure that Executive commitments are delivered?

Mr Greer: Executive commitments and statutory obligations are top of the list of what we aim to deliver. That is why I mentioned that the first thing to do is to subsume as much of the pressure as we can internally while guaranteeing Executive commitments — earmarked and so on. That will be extremely challenging. We are working through scenarios. We hope to meet the Minister on Thursday to take him through a set of high-level scenarios, covering everything from what he might be able to do on the social housing development programme to what he will be able to do with his inescapables in capital. That will paint a picture that shows that he will have to prioritise social housing development at the cost of almost everything else.

On the revenue side, the position is much more stark. The Department has gone through a number of years in which it has had a significantly constrained position. That is reflected in the amount of additional investment that we have been able to provide outside the Department and the amount of investment that we have been able to make in the Department. That lack of investment is the reason why the Department has continued to carry so many vacancies. That, in turn, is the reason why the Department cannot deliver policy parity in the welfare space: it does not have enough job coaches to engage in back-to-work activities. The Department is already significantly challenged, and we have faced significant cuts. On the revenue side, we are struggling to see how we will subsume those pressures. Our early analysis suggests that we will do everything that we can. Ultimately, however, we will be presenting some scenarios to the Minister that will involve cuts. That is something that the Minister will need to consider and prioritise.

The Chairperson (Mr Gildernew): Thanks, John. I want to focus on the challenging picture on social housing. The Committee wants to see more investment by the Department in social housing. The Minister of Finance has stated that, under his Budget, the Department is set to receive a capital departmental expenditure limit (DEL) allocation of £570 million over the next four years, on top of earmarked allocations of £770 million, including £441 million for housing. Is that correct?

Ms Kathy Sands (Department for Communities): You are referring to the RRI funding. Yes, there is ring-fenced RRI funding of £423 million, and two separate allocations that are earmarked for housing. However, as John said, the carried-forward commitments under that programme are over £400 million. Therefore, if we look at it on a broad basis of RRI versus the carried-forward commitment, we see that there is only about £34 million left to deliver social housing.

The Chairperson (Mr Gildernew): If social housing is the number-one priority, do you accept that it is incumbent upon the Minister to ensure that the majority of that general allocation goes towards it?

Ms Sands: I refer you to the current year. The Minister did exactly that in the year that we are in. Over 75% of the general allocation went to social housing. The difficulty is that out of that £160 million, there is a raft of other inescapable pressures across the Department in urban regeneration, culture, arts and leisure. The difficulty is that there is a shortfall, which is laid out in briefing: table 5 lays out the need, and table 6 lays out the shortfall. The Minister, if he includes the social housing need, has £355 million of inescapable bids and has £267 million of an allocation, which is £160 million from the general allocation and £107 million from the dedicated RRI funding. If he takes into account his departmental receipts, he still has a shortfall of £45 million. Therefore, even if the Minister were to dedicate all his funding to social housing, he would still have a shortfall of £45 million on his inescapable projects.

The Chairperson (Mr Gildernew): How much of the general allocation does the Department plan to direct towards social housing?

Ms Sands: I think that John referenced that. We are not in a position to give an answer to that. Conversations are ongoing. We are working it through and looking at the scenarios that we need to play in. You can consider some of the decisions that the Minister took this year. No funding was given to disabled adaptations at the outset of the year. Those things will all need to be considered as we work our way through the Department's allocation in this Budget.

The Chairperson (Mr Gildernew): When can the Committee expect to get the outworking of those discussions so that we have a clearer picture?

Mr Greer: Chair, first, this is a draft Budget; we do not have an agreed allocation. On the proper order of things, we are going ahead, working on the assumption that the draft Budget allocations, if and when they are agreed by the Executive, will not alter materially. The first order of things will be that the Executive will agree a budget allocation for the Department, and we will then seek ministerial approval for how we will dice and splice the draft allocation to his priorities. We will then bring that back and enter into an equality impact assessment of them.

The Chairperson (Mr Gildernew): What is your anticipated timeline? I recognise that those are the steps.

Mr Greer: I cannot say, because I have no understanding of the timeline for Executive agreement.

The Chairperson (Mr Gildernew): OK. I will now bring in members, starting with our Deputy Chair, Cathy Mason. Lean ar aghaidh, le do thoil.

Mrs Mason: Thanks, guys, for the presentation. I want to pick up on a couple of things were mentioned regarding inescapable pressures. You referenced some of the decisions that the Minister took this year. We have heard over the past year quite a few announcements from the Minister about funding allocations going towards various capital projects. In my view, it has not always been clear how those projects align with Executive priorities, so I hope that you can help us to understand that a bit better.

I can probably think of about 10 off the top of my head, but one that I want to pick up on is the £70 million allocation to the Queen's Parade project in Bangor. I am sure that you will agree that that is a significant sum of money, especially in the current fiscal climate. Can you give us an idea of where that project sat in the list of priorities, and is it an inescapable pressure?

Mr Greer: The £70 million for the Queen's Parade project in Bangor was part of the Belfast region city deal and was agreed by the Executive. The money is held centrally for that project and has previously been agreed by the Executive.

Mrs Mason: OK. So, nothing came from the Department to finance that. That was fully financed by the city deal money.

Mr Greer: That will be fully financed by the city deal moneys that were agreed a few years back.

Mrs Mason: OK. Another one that I want to pick up on is the allocation to the Ulster Museum. Again, that is a significant funding allocation for a single project. Can you give us an idea of where that sits in the list of priorities? Is that a bigger priority than housing? I want to get an idea of how many houses could have been built with that money.

Mr Greer: I cannot speak to how many units of social housing could be built with that because the numbers depend on the development and the housing association grant rate and so on. The Department has a statutory obligation with regard to heritage and museums, and one of the challenges that the Department faces, and probably will face in extremis, is that a number of our heritage sites and heritage attractions are falling into disrepair. In fact, a number of them have had to be closed due to health and safety concerns. The proposal is to reinvest in the Ulster Folk Museum, which has not seen investment over many years. The Minister decided to fund that proposal under his statutory responsibilities to provide investment on that site.

Mrs Mason: I appreciate that, but is it an inescapable pressure?

Mr Greer: Not yet.

Mrs Mason: It is getting £40 million from government, I think.

Mr Greer: Sorry, it is not an inescapable pressure yet, as an integrated consultant team (ICT) has not been appointed at this juncture.

Mrs Mason: Do we know where it sits in the list of priorities? If housing is the top priority, where does that proposal come on the Minister's list?

Mr Greer: I cannot speak to the specifics of any ministerial list. The fact that the Minister has funded the proposal and committed to funding it in future years is a strong indication that it is a high-priority item for him.

Mrs Mason: OK. There is £1·1 million or something for the musical instruments fund. Is it considered the same?

Ms Sands: It is deemed to be a high-priority project, not an inescapable pressure.

Mrs Mason: OK. I am just trying to understand. We are saying that we are looking for more money for social housing because of the severe pressures that exist there, but other projects are being prioritised over social housing.

Ms Sands: May I clarify something about the inescapable pressures and high priorities? The only element of the social housing development programme that is inescapable is the element that is contractually committed to and carried forward. As a Department, however, we have deemed it to be inescapable. When we submitted our bid and highlighted it to DOF officials, we told them that we were making the full amount for social housing as an inescapable need, given its stature as an Executive priority under the housing supply strategy.

Mrs Mason: I appreciate your answers. Where the priorities lie is stark. Thank you.

Mrs Cameron: Thank you for your presentation. There are clearly huge pressures in the Department, as there are across all Departments. We all fully recognise that. My question comes the back of some that have been asked. The Committee has shown its support for earmarked funding for the SHDP. Can you give us your assessment of whether that should be agreed at Executive level by all the parties? What will that mean in reality? Should it be agreed that funding is earmarked for social housing, what will happen as a consequence?

Ms Sands: As finance director, I will give you my assessment of the advice that I have given to the Minister about that correspondence. The reality is that we have a raft of inescapable commitments, and the concern is that it will have an impact on our general allocation if we ring-fence funding for the social housing development programme. There is £235 million of need. If that is reduced, we will have an easement on that spend.

Mrs Cameron: Thank you. More progress has been made on programme of revitalisation of the Northern Ireland Housing Executive (NIHE). Can you detail that progress and advise on what the next steps are? Are there any indications of timelines for revitalisation? Are there future consequences from not securing those powers in the short to medium term? What mitigations is the Department undertaking?

Mr Greer: The revitalisation programme is among the highest priorities for the Minister and the Department, and there is daily engagement between our officials, Housing Executive officials and the Department of Finance, which acts as a conduit to Treasury. We continue to work with DOF to accelerate the agreement of Housing Executive revitalisation as part of the fiscal framework negotiations and continue to say that, if the fiscal framework negotiations risk slowing down an agreement over Housing Executive revitalisation and the accounting treatment of loan borrowing, they should be decoupled.

To answer the second part of your question, which was on the implication of any delay, we use the term — it is not a very good term — "the meter is running". Housing Executive stock continues to age and decline, and, because of inflationary pressures, the cost of making that stock fit for purpose continues to increase.

As a result, the Housing Executive's ability to deal with those pressures is reduced, because it is continually accessing its reserve in order to meet them. There will come a point at which the two things diverge. Without a solution in place, the Housing Executive will not have the capacity in its reserve to meet its pressures. We do not know when that will happen, because there are a lot of moving pieces, but that is how the pressures manifest. We will eventually reach a point at which the number of available homes will reduce, because some will no longer be fit for habitation.

Ms Sands: I will add to that, John. The need for alternative finance is pressing, so our Minister has submitted a proposal for RRI funding. That proposal is with DOF colleagues, who will assess the need. We mentioned inescapable bids. The Department's inescapable bids include need for the revitalisation programme to the value of £70 million, which will rise to £80 million as we go through the Budget scheme.

Mrs Cameron: Thank you. I will ask another brief question. Can you give an update on the extension to Northern Ireland of powers under Public Authorities (Fraud, Error and Recovery) Act 2025? Has any progress been made on that at Westminster? Where is the Department with that and any proposed legislation?

Ms Olga Beagon (Department for Communities): It is intended that those powers will be put in place in Northern Ireland as well, but Executive approval will be required. That has not been agreed yet.

Mrs Cameron: It has not been agreed by the Executive or has not been agreed at Westminster?

Ms Beagon: Both.

Mr Greer: It is positive, however, that it was referenced in the business case that was submitted to the Treasury for the spending review. If it is agreed, we will potentially receive 50% of any savings that manifest from the increase in fraud and error detection.

Mrs Cameron: We have spoken about that a few times in Committee, but will you reiterate what those savings could look like?

Ms Beagon: The business case was submitted to Treasury in advance of the autumn Budget. Treasury agreed to discuss it with the Northern Ireland Executive. We have asked for approximately £9 million of investment a year for the next five years for fraud and error activities. We estimate that that will generate circa £45 million of savings in annually managed expenditure (AME) per annum over the life of the project. We already have terms of reference for a review of our fraud and error activities. The review has already commenced, because information has been requested. It will be worked on in the next number of weeks and months, and we hope to get a decision from Treasury on funding the business case. We have asked for a 50% share of any savings that are generated, but that has not yet been agreed, and it would need to be transferred from an AME saving to resource DEL. All of that is yet to be discussed, but the review is under way. As I said, we have agreed the terms of reference, and the review started this week.

Mrs Cameron: Thank you.

The Chairperson (Mr Gildernew): To pick up on that point so that we are clear, is that 50% of a potential £45 million?

Ms Beagon: Yes.

The Chairperson (Mr Gildernew): It is therefore £22·5 million.

Ms Beagon: Yes.

The Chairperson (Mr Gildernew): You are therefore seeking £9 million in order to go after that £22·5 million. Is that right?

Ms Beagon: Yes.

The Chairperson (Mr Gildernew): As finance officers, do you see there being a risk attached to trying to double the amount coming back from what you are spending, or is that in keeping with what you would normally expect from spend?

Mr Greer: It is based on analogous experiences. You have to understand that DWP, our partner Department in England, has invested significantly in tackling fraud and error. We can see the savings that it has made already. In fact, it is encouraging that, although we have never had the same amount of resource to address fraud and error that DWP has had, we have had a much more effective way of detecting fraud and error. We therefore have a high level of confidence that the estimates are sound and that the risk to getting that return is mitigated, although nothing can ever give 100% assurance.

The Chairperson (Mr Gildernew): No. If we could get 100% certainty, we would all be going for it.

Ms K Armstrong: Thank you very much. If you do not mind, I will ask some quick-fire questions, because I have a lot to ask you. The first concerns the overspend impact and the borrowings that we now have. Has there been any discussion about whether that will be capital and revenue or just revenue?

Mr Greer: It will be just revenue.

Ms K Armstrong: Thank you. We do not know yet how that will be divided up.

You talked about the pressures that you have because of the requirement for staff. Is there any way in which to review the contract with DWP for the work that is being done for it to make sure that full cost recovery is being met?

Mr Greer: There is a way in which to review the contract, but we have the utmost confidence in it. The principle of the contract is that it is 100% fully funded.

Ms K Armstrong: If our staffing costs relate to other areas that are under full cost recovery, that portion will increase. It is therefore about ensuring that we get as much as we can out of DWP for doing its work.

Mr Greer: The relationship with DWP is such that if there were to be an increase in the cost of anything, that would be reflected in what we receive from it.

Ms K Armstrong: Table 1 in your briefing paper contains figures on welfare mitigations. On what are they based? My colleague has been asking a lot about welfare mitigations. Figures are provided in that table, but we still do not know how many people are affected by the removal of the two-child limit and what that will mean for the benefit cap.

Ms Beagon: Are you referring to the welfare mitigation figures of £48·2 million, £48·9 million and £49·5 million in the table?

Ms K Armstrong: Yes.

Ms Beagon: Those figures were submitted to DOF in advance of the announcement at Westminster about the removal of the two-child limit. They are for all welfare mitigation payments, most of which relate to the bedroom tax. In addition, we submitted a further bid of £9·4 million for next year, rising to £9·7 million the following year and then to £10·1 million. That bid is to cover the additional welfare mitigation payments to families who will now meet the benefit cap threshold but who did not meet it before the removal of the two-child limit.

Ms K Armstrong: OK. Thank you very much.

Very quickly — I am flying through my questions, sorry — when it comes to priorities and budgets, I share some of Cathy Mason's concerns. I appreciate that the Budget is in draft form, but do you have any granular detail on the list of high-priority and inescapable matters? We have the headline figures, but would the Committee be able to have a look at the detail? We are here to assist the Minister as much as to scrutinise him.

Ms Sands: Kellie, I refer you to our briefing in November, at which we provided the detail and broke everything down by category. I have here appendix 1.3, which details all the categories of requirements.

Ms K Armstrong: Is there any further detail available on what is in the categories?

Ms Sands: Those bids will be made at a point in time. You are probably better waiting until we get the outworkings of the refinement exercise, because the figures are quite old now. They were done in July or August last year for submission in September or October. We are refining everything, both resource and capital DEL bids. That information will come to the Committee in due course.

Ms K Armstrong: As the Chair said, we are totally behind the Minister to get social housing built. I have no belief, however, that the amounts in the document will be able to be delivered because of implications that are not within your control. What cross-departmental discussion has there been about the ability to deliver on the projected number of homes in the bid? I met representatives from Build Homes NI yesterday, and they said, "Unless water is sorted, this ain't happening, folks". I already have several closed catchments in my area. My concern is that money will be set aside for social housing development that cannot be delivered because of Northern Ireland Water (NIW).

Ms Sands: I am not able to get into the specifics of that, Kellie, but I know that those who work on the social housing development programme work closely with colleagues in other Departments to bring forward the projects that will not have issues with infrastructure or water.

Ms K Armstrong: Those projects may not necessarily be in areas of high need, because Northern Ireland Water's priorities are very different. I get that, but I am very concerned that that may hamper the bid process for the Department for Communities because the money will end up needing to go elsewhere.

The revitalisation of the Northern Ireland Housing Executive has been going on forever. There is a plan B here, so when will we start to talk about it?

Mr Greer: I think that we are, which is why we submitted a —.

Ms K Armstrong: Plan B is to split the Housing Executive into a housing association and a housing authority, which could then borrow almost immediately.

Ms Sands: I will pick up on that. Our negotiations have involved officials from Treasury, the Northern Ireland Office (NIO) and DOF. I can clarify that the issue in and around the consolidated budgeting guidance is not considered to be a showstopper for those conversations. There is a lot of work to be done on providing those officials with the information that they need. The reality is that revitalisation of the Housing Executive is part of the full fiscal framework.

We hope that it will be front-loaded as an issue in the negotiations.

Ms K Armstrong: I am worried that, when there is a plan B, we are waiting for something perfect. A change in legislation is needed, but I am seeing homes fall apart. You know what the issues are.

Ms Sands: As I said in response to Pam's, the RRI proposal is with DOF colleagues.

Ms K Armstrong: No problem. Thank you. My questions were rapid-fire ones, and you did very well.

Mr McHugh: Tá fáilte romhaibh uilig arís.

The Minister announced support for veterans last week. Was that decision agreed by the Executive?

Mr Greer: I am not aware. I will need to look into that and come back to you.

Mr McHugh: Will the scheme be open to all veterans? For example, many residents of my area, who were born and raised in Tyrone, are Irish Army veterans. Is the scheme exclusively for those who served in the British Army?

Mr Greer: I am not across the detail. I am happy to provide the Committee with something in writing. I apologise.

The Chairperson (Mr Gildernew): Before Maolíosa asks his next question, I have one. Are you not the acting permanent secretary at the present time?

Mr Greer: No. Emer Morelli is currently the acting permanent secretary.

The Chairperson (Mr Gildernew): As a senior member of the team, does none of those decisions come your way unless they are in your direct line of sight?

Mr Greer: I apologise. I was off on a week's holiday, so perhaps I missed that one. I am not aware of it. Kathy, do you know anything?

Ms Sands: No.

Mr Greer: We will have to come back to you about that. We apologise.

Mr Allen: What is the scheme?

The Chairperson (Mr Gildernew): The Minister announced a scheme for —.

Mr Allen: Is it the affordable warmth scheme or the Make the Call service?

Mr McHugh: The Minister announced a scheme, and —.

The Chairperson (Mr Gildernew): Two separate schemes.

Mr Allen: He announced the affordable warmth scheme, and the war pension is exempt from the calculation. If I read it right, there are also exemptions under wider disability for the affordable warmth scheme, and those exemptions are available to anyone who meets the eligibility criteria. The Make the Call service is a dedicated service.

The Chairperson (Mr Gildernew): Andy, I will allow Maolíosa to continue his question, and then you can come in with yours.

Mr Allen: I am just clarifying.

The Chairperson (Mr Gildernew): There is probably an overlap with both schemes that were announced last week.

Mr McHugh: To what extent have you any knowledge of that particular scheme? Are you in a position to answer any of my other questions about the scheme.

Mr Greer: I do not know, because I do not know what the questions are. There have been conversations in the Department about how we deal with the implications of the armed forces covenant. We have appointed a senior sponsor for the work, who is Linsey Farrell, the grade 3. She has been working across the Department with housing, Housing Executive and Make the Call colleagues.

Mr McHugh: Is Linsey the nominated strategic lead?

Mr Greer: Yes.

Mr McHugh: What are the financial implications of repurposing staff to service the advice line that was part and parcel of the announcement?

Mr Greer: At this stage, we are unclear on what the volume of calls will be. There is existing infrastructure in place that has the capacity to deal adequately with the calls that we receive. If we need to dedicate more staff, we will make an assessment at the time. For example, we already have a team for the Make the Call service, so it is a matter of routing calls from veterans to touchpoints in the Make the Call cohort. They have a dedicated script about the support that we will provide to veterans.

Mr McHugh: The announcement also mentioned roadshows to keep people informed about the service. All of that costs money. At a time when we particularly talk about budgets, from where is the money being taken out of current budgets at the Minister's disposal?

Mr Greer: The costs for the roadshows still need to be worked up, and the Minister will consider them as part of his budget for next year. The roadshows still have to be planned and paid for.

Mr McHugh: I appreciate that you have limited information on all of that, but may we receive information on the questions that I have asked?

Has an EQIA been done for that project?

Mr Greer: At this stage, an EQIA has not been done for the project. I will need to speak to Linsey about the approach that is being taken, and we will come back to you via correspondence with the detail that you have requested.

Mr McHugh: Andy mentioned the Northern Ireland fuel poverty scheme. It was pitched as taking a "cross-government approach" and contained no mention of separate arrangements for veterans or of war pensions. On what basis is the Minister including an exemption in the affordable warmth scheme. In doing so, he is creating a privilege for former British soldiers?

Mr Greer: Again, I apologise, but I will need to research those matters, speak to the strategic lead and come back to you.

Mr Allen: Chair, if I may, we need to be careful with our language.

The Chairperson (Mr Gildernew): I will allow Maolíosa to choose his language, Andy. I will come to you. I have noted your indication. You need to wrap it up, Maolíosa.

Mr McHugh: I am just amazed at the total lack of information on the whole scheme. I would appreciate it if we could have it forwarded to the Committee.

Mr Greer: I apologise. I will expedite that information.

The Chairperson (Mr Gildernew): Has there been a change of policy on either of the schemes?

Mr Greer: A change of policy for —.

The Chairperson (Mr Gildernew): For those schemes. Is that indicative of a change of policy?

Mr Greer: No. I do not believe that it has impacted on any policy area. It is just additional activity, or, rather, an additional routing and use of existing infrastructure based on the commitments that the armed forces covenant places on the Government and on Departments.

The Chairperson (Mr Gildernew): OK. We can look at that. One of the things that I saw in the publicity for it, which may not be accurate, but we can drill down, is that it mentioned a policy change. I will check that out. We will move on.

Ms Mulholland: To start, I will talk a bit about welfare mitigations. I am concerned about there being a repeat of the previous cliff edge. What planning is being done for the multi-year Budget when it comes to the 2028 cliff edge for mitigations?

Ms Beagon: For the last year of the three years, which is 2028-29, we have bid for £49·5 million for welfare mitigations. That was before the removal of the two-child limit. That bid has been met in full in the draft Budget. We have submitted a further bid for £10·1 million, which has not been met in full, but we hope that, in the coming years, that amount may be added. There was, I think, only £2 million or so left in the indicative allocation for that year to meet it, but it has been met in full for next year and the following year. Until 2028-29, we therefore have it fully covered. In 2028-29, there is still a shortfall in what we bid for to meet the additional amount required, which is because of the removal of the two-child limit.

Ms Mulholland: Are plans being put in place for anything after 2028-29? Are those conversations happening as part of forward planning? Are there plans to extend the legislation? Have those conversations been had, or is it just a case of thinking, "That is for 2028-29, so we will deal with that when we come to it"?

Ms Beagon: I am not aware of any conversations being held on that yet. The welfare mitigations have been extended for a few years. I am not aware of any activity to look at when that ends. Not yet, anyway.

Ms Mulholland: I am keen for us not to repeat the cycle of considering issues only in the approaching Budget year.

Mr Greer: May I add to that? Excuse me, Olga. There have been some very early conversations about reviews and evaluations that might be considered to inform the most appropriate and intelligent future interventions. Fortunately, with the two-child benefit cap, although no specific allocation was provided in the draft Budget in addition to what was required, there was a narrative in there that the bid is expected to be met when its extent is understood.

Ms Mulholland: Discretionary support, which I have brought up a few times, is, to be clear, one of the few safety nets for people who are experiencing a crisis. The clue is in the name — discretionary support — but I understand that it is not categorised in any way as being inescapable or a high priority, even though, to those who receive it, it absolutely is a high priority.

From the planning for that support in this financial year, what is your assessment of its future?

Mr Greer: You are right: it is not classified as "high priority", "pre-committed" or "inescapable" or so on. It has received an increase in funding. We bid for it in the multi-year exercise. It will be amongst the raft of things that the Minister will be considering but, of course, we recognise the vital role that it plays.

Ms Mulholland: Would the least worst-case scenario be a reduction in awards, a reduction in the number of categories or a pausing of or complete end to the support? Are all options on the table? Have they been discussed in a tiered approach, or what is the thinking around it?

Mr Greer: There was a reference made to it earlier. We hope to sit down with the Minister on Thursday to discuss a number of scenarios. They have not been presented to the Minister as yet. At this stage of the conversation, it would be more along the lines of, "Minister, are you content to maintain discretionary support at its current level or at a lower or higher level?". If the answer is, "a lower level", we will discuss the quantum of that and how we might deal with it in the allocation of awards. There is a review of discretionary support that is almost complete as well.

Ms Mulholland: What is the timeline for when we can expect that?

Mr Greer: That is now in Cherrie Arnold's area. It is in the final stages of evaluation, so it will be close, but I will check with Cherrie and come back to you, Sian.

Ms Mulholland: I have two quick questions. It is obviously very disappointing to see £9 million being returned after getting £16·9 million to recruit staff to deliver benefit support. What were the factors in that £9 million being returned?

Mr Greer: I will speak frankly. For any organisation to recruit 400 people in a year, in this labour market, is extraordinarily challenging. Recruitment is the responsibility of Northern Ireland Civil Service (NICS) HR, which is under the purview of the Department of Finance. Undoubtedly, our recruitment needs to be faster. In line with that, we worked with colleagues in NICS HR to launch a pilot. Whilst the pilot was not perfect, we hope that there will be future pilots. That pilot saw people express an interest in a job and eventually be placed in a job in the north-west in 12 weeks. Prior to that, that process sometimes took longer than 12 months.

We bid for the £16·9 million in the hope that we would be able to recruit 400, recognising some of the challenges that we would face. The critical thing is that, when we bid for posts, we always expect it to be a recurrent bid, because we are recruiting people who are going into jobs who will need to be paid that year, next year and so on. The problem here is that this has not been recognised as a recurrent bid, despite the fact that we are very firmly on our way to recruiting the 400 people. Despite the fact that we returned money in this financial year, in the coming financial year we will need all that money and more, because we will have the people in seats, working.

Ms Mulholland: Is that DWP or DOF?

Mr Greer: It is DOF: DWP is completely separate.

Mr Allen: I want to touch briefly on the veterans issue. I took issue with what was said earlier because the schemes and initiatives that were announced by the Minister come under the purview of the Armed Forces Act 2006, which is about removing disadvantage. It is not about creating privilege, and that is where we need to be careful about our language. Sorry, Chair, I should have declared an interest as a former member of the military. Many veterans from across this Province find it difficult to reach out and interact due to hypervigilance and security concerns. We know why that is. We need to be careful in our language when we raise the schemes: they are about removing disadvantages and challenges experiences by members of the community that I come from.

I will pivot to the Budget briefing. How much do the inflationary increases for the regional stadia programme and the subregional stadia programme for soccer, now the football fund, total across the board?

Ms Sands: It is in the written briefing. If we look at Casement, we see that there is an inflationary increase of £52·4 million across two years — 2028-29 and 2029-2030. For the Northern Ireland Football Fund, there is an increase of £15 million in 2028-29 and of £12·2 million in 2029-2030. Alongside that, there are inflationary amounts for the previous projects at Windsor Park and Ravenhill.

Mr Allen: So there is in excess of £100 million in inflationary uplifts across those schemes. Was that funding that the Minister proactively sought, given his inescapable pressures? Or was it allocated by the Executive? Was there Executive agreement on it? Or was it only the Finance Minister proposing that?

Ms Sands: That was not bid for as part of DFC's bids. That is money that was allocated as part of the allocation process.

Mr Allen: I note that there is a proposed allocation of £50 million under FTC for the Northern Ireland Football Fund in 2029-2030. Is there any more detail on that? Obviously, we have seen the UK Government give FTC and change the rules around the allocation of FTC for Casement. Has there been any engagement on having a similar approach taken and no strings attached — repayment conditions — to that £50 million in FTC funding?

Mr Greer: That is something that the Minister has raised with the Minister of Finance in a bilateral.

Mr Allen: Is there any more detail on what that FTC would be for, outwith those discussions? If that agreement is not brought forward, might it be for providing loans to clubs to deliver additional upgrades?

Mr Greer: That is one option, and it is still being worked through.

Mr Allen: I appreciate your response to Kellie's question in which she asked for more granular detail. That would be helpful. Obviously, we see all of the high-level stuff, but it is difficult for us to delve into that. I apologise if you have provided it previously, but it would be good for us to have the detail on FTC specifically, so that we can refer to it when we are having the budget briefing, rather than having to dig in and try to find it. Can you give more detail? Is the FTC over the multi-year Budget period primarily for housing?

Ms Sands: I can give you the breakdown. The £72·8 million for the incoming year comprises about £38 million for co-ownership, about £27 million for intermediate rent and £1 million for retrofitting. That is the bulk of it. That will continue across those three years. As you have referenced, the £50 million for the Northern Ireland Football Fund is within the 2029-2030 bid.

Mr Allen: It is all specifically housing related, pretty much.

Ms Sands: It is, pretty much. It is the standard stuff of co-ownership, intermediate rent and the leave for move-on accommodation. That is the major element of it. The other stuff is very small. We can get you a breakdown of that.

Mr Allen: I would appreciate that. It would be good to get that detail as a general rule across all of the resource and capital, so that we can delve into it and see what the priorities are. I may take a different view on the priorities around the musical instrument fund. That is an absolute priority for the Department, as it should be considering the value that the fund delivers within our communities. The arts are often underfunded, so it is an important area for the Minister to fund.

I have one final point. The local growth fund is, obviously, a massive issue. I note that the Minister references that in his letter. Were any bids put in for that, in the context of what will happen if the UK Government do not change their approach on the capital-to-resource split?

Ms Sands: The local growth fund is being managed via DOF and the Ministry of Housing, Communities and Local Government (MHCLG). That is all being worked through.

Mr Allen: I appreciate that, but is anything proactive being done by DFC? The current trajectory indicates that the UK Government are not for budging on their current approach, although they have been told categorically that it is going to have a devastating impact. Are the Executive looking at that, given that DFC has that primary role? Are we looking at it? Has DFC taken any approach around bids?

Ms Sands: The DOF is working with all of the NI Departments, the NIO and the Housing Ministry across the water to inform development of a Northern Ireland investment plan for local growth. Activity is ongoing.

Mr Allen: I appreciate that.

Mr Greer: It is important to say that the Minister and officials recognise the critical impact that that could have on the sector and providers. They are engaging with the sector and providers on a daily basis to understand that and looking at what might be possible within a very constrained budget, if it turns out that the UK Government do not recognise the impact of the switch between capital and revenue. So, Andy, it is something that is very high on the radar of officials and the Minister.

Mr Allen: Can you point me to anything specifically built into the draft Budget that could be utilised should that not change?

Mr Greer: No. At this stage, that is the responsibility of DOF. As the body that manages that funding via MHCLG, it is for that Department to consider that. When we see the outworkings of that, we will work with the Minister to look at the art of the possible to try to fill any gap that may have been left.

Mr Allen: OK. I appreciate that.

Mr Bradley: I will try to be brief. I will touch on what Andy said. The Minister's advice services for the armed forces are to ensure that there is no disadvantage, not special advantage. The Committee needs to see that all members of our community are not disadvantaged in any way or form. I agree with what Andy said.

I will touch on the workforce and the vacancy rate. How dependent is the Department on temporary or agency staff? What savings would be accrued if that were sorted out pretty quickly? I am not talking about a differential; I am talking about staff in general.

Mr Greer: At the minute, across the Department, including DWP-funded posts, we have 7,430 permanent staff and over 3,500 agency staff. That illustrates the point that I made earlier about the Department's very constrained position for a number of years and some of the recruitment challenges that we face. I hope that I have understood your question correctly. If we were able to switch those 3,500 agency staff to permanent posts, I am not clear on what the savings would be. We would need to do a bit of work on that. Obviously, there are additional costs when people move to permanent posts, and that would need to be considered. The Department is of the view, as I am sure you are, that that is not an optimal position to be in. As much as possible, we want to see people being given sustainable career opportunities and permanent posts with the Northern Ireland Civil Service. As I mentioned earlier, we are doing everything that we can to simplify and streamline our recruitment processes to try to reduce our current dependence on agency staff.

Mr Bradley: That would have to be done on a regional basis to ensure that there is equality of opportunity across Northern Ireland, rather than at a specific site.

Mr Greer: Yes. Obviously, our recruitment is led by the Northern Ireland Civil Service (NICS) HR department within the Department of Finance. Where people are placed is largely dictated by where the work is done and the buildings that are there. However, we are always very keen to create regional balance. That is reflected in the recent pilot that we did in the north-west, which was specifically for admin officers to be placed in operational centres in the north-west of the Province.

Mr Bradley: There is a distinction between what is in the north-west and what is not in the north-west, but that is for another day. Which major arm's-length bodies (ALBs) are in the plan? Is there really any way that you can control what the Department spends on arm's-length bodies?

Mr Greer: All of the costs for the arm's-length bodies are costed in our budget. We provide funding to all those bodies. We have a number of ALBs that are of a significant scale. The largest of those is probably the Northern Ireland Housing Executive, then the Arts Council of Northern Ireland, Libraries NI and so on. We work in partnership with all those organisations, but through that partnership, we take a rigorous view of all their funding proposals. Like the Department, ALBs, quite honestly, have faced significant challenges and cuts in recent years. Unfortunately, I expect that to continue, given the draft Budget allocations that we have seen. To answer your question, Maurice, the funding for ALBs is within the control and purview of the Department and the Minister.

Mr Durkan: Thanks to the team for coming in with all that lovely bleak news this morning. A lot of the big items have been touched on. I would like a wee bit of clarity on the implications of the proposed budget envelope for the community and voluntary sector. From the three-year bids, I note that a much smaller amount is bid for, or hoped for, in 2026-27 than in the following two years. In the context of the stuff around the local growth fund — we have discussed the end of the Shared Prosperity Fund — as well as the withdrawal of lottery funding from a number of very good projects, which has left them in limbo — that has nothing to do with the Department — why is a lower amount proposed for next year? Can we even meet that, given what you have been told you will probably get?

Ms Sands: The Department is probably giving the community and voluntary sector somewhere in the region of £33 million out of a budget of around £750 million. The bid that you see in front of you is for a 5% year-on-year additional requirement for that sector, alongside three ALBs — the Northern Ireland Commissioner for Children and Young People, the Commissioner for Older People for Northern Ireland and the Charity Commission for Northern Ireland. That requirement covers a three-year period. For clarification, it is not that it is less of a requirement. Bear in mind that we are building on each year as we submit those bids. While it is £2·9 million in the first year, moving on, it is on top of that each year when we are putting the bids in.

Mr Durkan: Yes. I get that the community and voluntary sector spend is spread over a number of different areas, such as neighbourhood renewal and so on.

Ms Sands: There is a 5% inflationary uplift built in, but I refer you back to the detail of John's opening statement and the level of pressures that the Department is greeted with as we move into the next financial year — a minimum of £40 million, with the potential to flex up to £60 million, depending on how the reserve claim is dealt with.

Mr Durkan: Finally, I will turn to my old favourite, which is the rate support grant. I was heartened when I saw what was being bid for in the three-year Budget, but disappointed, although not shocked, when I saw what we are going to get, or might get should it go through. What will councils be looking at this coming year, given the current position?

Ms Sands: Given the fact that, essentially, we put bids in, including £12·4 million for the rate support grant, but received nothing towards that, the current envelope for the rate support grant in this year is £3·1 million. Again, I refer you back to our opening statement and the conversations that we have had here. The Minister will have to look right across the piece, and the rate support grant will be no different to anything else in the Department. It will have to be considered as part of options for future years.

Mr Durkan: OK, thank you.

The Chairperson (Mr Gildernew): Kellie, I will allow you a very brief one.

Ms K Armstrong: The Treasury has said that it is going to carry out an open-book exercise. Has that started with you?

Mr Greer: It is just kicking off. We recently received the terms of reference and some initial information-gathering templates.

Ms K Armstrong: Thank you.

The Chairperson (Mr Gildernew): I have one final one. Thank you for your presentation. We should look at doing this more often, because today has been very illuminating. As we move forward, how does the Department propose to monitor and report to this Committee on the cumulative service, equality and socio-economic impacts across the multi-year Budget? Hopefully, we are moving into this multi-year Budget period, which will be very welcome. However, how will that be monitored and how will all those changes be communicated to the Committee as we move through that period? In particular, there is a real risk that funding gaps will widen or monitoring rounds will fail to yield additional resources to fill the gaps. How do you plan to do that, John?

Mr Greer: I am happy to take my lead from you, Chair, and the Committee. Officials are always happy to provide briefings to the Committee at any time. It is my understanding that we provide standard quarterly update reports to the Committee. We are happy to take the Committee's advice on the format or protocol for that reporting. Obviously, given the constrained financial position that we were in and are likely to be in in future years, we will monitor our financial out-turns and the impacts of the decisions that the Minister makes more closely than ever before, if that is possible. Given the Executive's financial position, it is important to say that we have been able to produce some easements in previous years, which have largely come from our salary line, given our chronic under-resourcing, but it is unlikely that we or the Executive will have that same facility. I think that you will see a much reduced level of funding, certainly on the revenue side, coming through monitoring rounds. Again, the ability of Departments to respond to those impacts as we learn and understand them will, I suspect, be more difficult in the years ahead.

The Chairperson (Mr Gildernew): Thank you. Really brief, Andy.

Mr Allen: Thank you, Chair. Another thought came to my mind about the approach that the Department has taken to the FTC bid for the Northern Ireland Football Fund in 2029-2030. We have had briefings recently from hockey and cricket sporting bodies about the need in those other sports. Has any thought been given in the Department to broadening that funding out to other sports?

Mr Greer: The Minister is very interested in that and has asked officials to look at it. We are looking at ways to deploy FTC for other sports, including cricket. We are working with those sporting bodies to see what the art of the possible might be in that space. Financial transactions capital is one of the few areas in which small amounts of money seem to be available is, so we want to use that opportunity as much as we can.

Mr Allen: It would be good to be kept updated on that.

The Chairperson (Mr Gildernew): Yes, we are obviously going to be into lots of —.

Ms K Armstrong: Chair?

The Chairperson (Mr Gildernew): Kellie, only because you were very brief in your questions. You saved a minute in your first set, so I will give you another 30 seconds.

Ms K Armstrong: It is a very quick one. You have talked about bids for the community and voluntary sector. There is a social return on investment, because that money gives x amount back to Northern Ireland. Was that information broken down and provided for in the bids to the Department of Finance?

Mr Greer: Typically, Kellie, we provide a supporting narrative to any bids that we make. Where we have data on the return on that investment, we recognise it in the narrative that supports our bids.

Ms K Armstrong: Thank you.

The Chairperson (Mr Gildernew): I thank all of you for attending. Clearly, the situation is dire in many ways. It is very clear that the underfunding remains a huge problem. I know that that discussion is ongoing. It will take a strong cross-Executive approach to address the core problem of the lack of funding for public services. Thank you, John, Olga and Kathy, for attending today.