Official Report (Hansard)

Session: 2008/2009

Date: Thursday, 04 September 2008

Departmental Briefing on the September Monitoring Round

4 September 2008

Members present for all or part of the proceedings:

Mr David McNarry (Deputy Chairperson)
Mr Francie Brolly
The Lord Browne
Mr Kieran McCarthy
Mr Nelson McCausland
Mr Pat Ramsey
Mr Jim Shannon

Witnesses:

Ms Deborah Brown ) Department of Culture, Arts and Leisure
Mr Jack Palmer )
Ms Linda Wilson )

The Deputy Chairperson (Mr McNarry):

With us today from the Department of Culture, Arts and Leisure (DCAL) are Deborah Brown, the director of finance, Linda Wilson, the director of culture, and Jack Palmer, the head of sport. The witnesses will brief the Committee on the Department’s proposed return for the September monitoring round.

I ask the witnesses to be succinct with the presentation. Following the presentation, I will invite Committee members to ask any questions that they may have. Who will make the presentation to the Committee?

Ms Deborah Brown (Department of Culture, Arts and Leisure):

I will. As the Deputy Chairperson said, I am the newly appointed director of finance for the Department, and I thank the Committee for inviting me to present the outcome of the June monitoring round and the proposals for the September monitoring round.

I will begin by outlining a brief background to the monitoring process. I am aware that monitoring rounds have been presented to the Committee on previous occasions, but I am happy to take any questions on the process itself.

This is the second of four monitoring rounds undertaken by the Department of Finance and Personnel (DFP) during the financial year. The monitoring rounds afford Departments an opportunity to bid for additional resources where there are specific, unexpected pressures; to surrender any reduced requirements; to propose de minimis bids for budgets between service areas; or to make a linked bid between reduced requirements.

DFP commissioned the September monitoring round on 15 August, with a deadline of 11 September. That will be discussed at the Executive Committee meeting at the beginning of October.

Public expenditure for Departments is split into six categories, which are set out in the paper that has been presented to the Committee. Movement between the categories must be approved by DFP and would be regarded as a reclassification. However, it is difficult to move between those classifications, and movement from capital to resource is not allowed.

Departments are also given the opportunity during this monitoring round to make proposals to limit their expenditure on a specified service in favour of a higher priority in the Department. There is flexibility for Departments to move between their service areas. However, in DCAL, between the areas of sport and art, there is a limitation that requires DFP approval. There is scope within the monitoring round process for the Department to move money around below the de minimis level — £500,000 or 10% of the unit of business — which does not require DFP or Executive approval.

DCAL is responsible for 10 service areas, including the arts, museums, libraries, sports, and cultural policy. The Department is also responsible for inland waterways and fisheries, the North/South Language Body, Waterways Ireland, the Public Record Office of Northern Ireland (PRONI), and the events unit. End-year flexibility is no longer available.

The outcome of the June monitoring round, which was confirmed at the most recent Executive meeting, was that the Department’s reduced requirements were accepted. Those reduced requirements were £1 million for the Ulster-Scots Academy implementation group and £8·7 million on capital. All the proposed capital investment internal reallocations below the de minimis level were also approved.

No resource bids were met, and that is the issue that is arising from the Northern Ireland Civil Service equal pay pressure, whereby it was decided that any decisions on resource bids would not be taken as part of the June monitoring round.

The bids that were made as part of the June monitoring round were £3 million for libraries’ redundancy; £700,000 for book stocks; £2 million associated with the resource costs for delivering capital projects; and £700,000 for the North/South Language Body, arising from changes in the exchange rate.

There was a £3·4 million allocation from the Integrated Development Fund in the June monitoring round, which comprised £500,000 for the ‘If Walls Could Talk’ project, the Spectrum Centre and the Gaeltacht Quarter. The Department was allocated £2·9 million in capital grant — £500,000 for An Gaeláras and £2·4 million that was allocated under the north-west cultural challenge fund in error. As a consequence, as part of the September monitoring round, the Department proposes to return most of that to DFP.

If Committee members are content with the outcome of the June monitoring round, I will move on to the proposals for the September monitoring round.

The Deputy Chairperson:

If you will indulge me, because it is topical and it will come up at some point, the Northern Ireland Events Company is in the news again.

Ms Brown:

Yes, it is.

The Deputy Chairperson:

There is a serious allegation that the Department paid the same amount of money twice to a company that was going down the tube. This Committee has made its views on the issue well known. Our Chairman was on the radio this morning calling for a statement. Are you in a position to comment on that matter, bearing in mind that, somewhere along the line, the Department would, I assume, have requested the money through the monitoring rounds?

We now do not know the whereabouts of that money, who is to blame, or who will ensure that it does not happen again. Is it unfair to ask you to comment on the matter? I understand fully if you are unwilling to comment, but we will be going after someone about it.

Ms Brown:

I must emphasise that the document in question, which was leaked to the BBC, is confidential, and the BBC has been asked to return it. It contains sensitive information that could prejudice future investigations. As a consequence, neither the Department nor I are in a position to comment on the matter.

The Deputy Chairperson:

I will put the matter to members of the Committee. I understand what you are saying about the document, but it is not confidential if it has been leaked. Is it so confidential that this Committee cannot ask for it?

Ms Brown:

It is my understanding that, at this stage, it is of such a sensitive nature that we could not circulate it. The document is not widely available, even in our own Department. Only certain individuals in the Department have access to the document. However, I will refer your question to the Department.

The Deputy Chairperson:

Thank you. We will, though, follow a process. Are members of a mind to ask for a copy of the sensitive and confidential document? The Committee was unaware of it until it was reported by the BBC.

Mr P Ramsey:

The Committee, being the watchdog of the Department, has every right to request the document, given the mere fact that someone in the Department released its details to the media. It was not released by anyone on this Committee. Someone at a senior level in the Department had that paper and felt that it was appropriate to give it to someone at the BBC. I am sure that the Department will believe that if the document is in general circulation, the Committee has every right to have a copy as well as any other documents that are relevant to our discussions on the Events Company.

Ms Brown:

The document is not widely available, and it is unclear as to how it was leaked. It remains unclear whether it was leaked by someone in the Department, and that is subject to an internal investigation.

The Deputy Chairman:

OK, Deborah, we will not press you on that. You have been very frank with us.

Do Committee members agree to request that the document be sent to us immediately?

Members indicated assent.

Mr McCausland:

If there is an issue about the sensitivity of the document because of the potential impact on legal proceedings, an alternative approach could be to get a briefing about it in closed session. That would enable us to ask questions and get some information, and we could then make a decision.

The Deputy Chairperson:

I accept your point — we could add that suggestion to our request. However, given that the Department is apparently being overprotective about a document that has been leaked into the public domain, as well as the fact that we have not seen the full document, the difficulty is that any briefing may consist of what the Department wants to tell us, which would not necessarily be the full story.

Mr McCausland:

I suggest that we ask the Department to meet us next week in closed session so that we can get certain information and have a chance to ask questions. We could then decide whether we want to ask for the full document.

The Deputy Chairperson:

I accept that, Nelson, and I think that we can do that. Our only difficulty will be that we will be blind on what we are asking questions about because we will not have seen the document.

Mr McCausland:

I understand that. I did not hear the news this morning; obviously, there has been some mention of the document. However, I believe that Committee members are astute enough to figure out whether we are being bluffed.

The Deputy Chairperson:

Time will tell.

Mr Brolly:

I want to ask a question about one or two of the 10 service areas for which the Department is responsible.

The Deputy Chairperson:

I want to clear up the issue about the Events Company. Is your question relevant to that?

Mr Brolly:

It is to the extent that the events unit was one of the service areas that was mentioned. Is that the same as the Events Company?

The Deputy Chairperson:

Are you referring to correspondence?

Mr Brolly:

No, it is mentioned in paragraph 2.6 of the paper that was provided.

Ms Brown:

The events unit performs the function that was previously carried out by the Northern Ireland Events Company; a function which, for the interim, has been taken back under the control of the Department.

Mr Brolly:

What exactly is covered by cultural policy?

Ms Linda Wilson (Department of Culture, Arts and Leisure):

That is the service area under which money for projects such as the Ulster-Scots Academy would be allocated, as well as money for sign language, cultural diversity, and a small central budget. Therefore, it covers a raft of expenditures.

The Deputy Chairperson:

That answers Mr Brolly’s question.

I apologise for your lateness, Jim.

Mr Shannon:

I told you yesterday that I was going to be late.

The Deputy Chairperson:

That is why I apologised. You are welcome to the meeting. Do you have a point to make?

Mr Shannon:

I have not heard the news this morning, so I am unaware of the story. The fact that it is on the news means that it is newsworthy. However, as a Committee, I am sure that we would not want to compound any embarrassment or bring added attention to the story without being aware of what is happening.

The Committee is aware of the sensitivity of the issue and we are not in the business of trying to catch anyone out. However, Committee members must be aware of the content of the document and of the implications of that, and, perhaps, the best way to ensure that that happens is for us to be briefed in Committee. As has been said, we are astute enough and have enough wise men and wise ladies to be able to decide what direction we should take.

The Deputy Chairperson:

This morning’s news item was a follow-up to comments that were made by the Chairman in an interview, which I understand he made on the back of two successive editions of the BBC’s ‘Newsline’ programme. In the programmes, the reporter Julian O’Neill exposed, shall we say, certain things that happened in the Northern Ireland Events Company. The programme also showed interviews with two people who made serious allegations. One of the allegations was that, despite knowing the situation, the Department paid a sum of money, then paid the same sum of money again. When it was revealed that the Department had paid the second sum of money, the Department told the recipients to hang on to it until the next spending review. That is absolutely outrageous, chaotic and intolerable.

Nelson McCausland has proposed that we meet in closed session. Do you want to invite the Minister or departmental officials?

Mr McCausland:

It would be better to meet departmental officials.

The Deputy Chairperson:

We will meet the relevant senior officials in order that they might explain the situation about the leaked confidential paper. Do members agree that I should to enquire whether it is appropriate, and possible, for us to see the leaked document in order to prepare for that meeting?

Members indicated assent.

Mr McCarthy:

You said that money was handed back to DFP in the June monitoring round. How much was given back?

Ms Brown:

We surrendered £1 million in relation to the Ulster-Scots Academy implementation group, and we returned £8·7 million of capital, the majority of which related to the multi-sports stadium and the delayed PRONI costs.

Mr McCarthy:

That concerns me, because that money has been lost to DCAL. We all know that many organisations are crying out for funding, yet we are in a situation in which bodies have not been able to spend their allocations. The Committee is concerned about that. Is there any way that such a situation might be avoided in the next spending round?

Ms Brown:

The June monitoring round has already been discussed with the Committee. There are a number of capital re-profiling movements in annex D of our submission, and the Department has sought to maximise the budget by reallocating projected underspends in order to accelerate other projects. However, as members will appreciate, the investment strategy is for 10 years, but the budget programme is for three years.

Although many organisations have capital-investment programmes, many capital projects cannot be accelerated — they require planning permission, business cases, etc. Consequently, although the Department sought to maximise as much underspend as possible, unfortunately, it was not able to utilise the full sum. We are aware that that resulted in us having to return some funding to the Department of Finance and Personnel.

Mr P Ramsey:

I am not sure whether Jack Palmer will be giving us a report — I have some sport-related queries. Following on from Francie Brolly’s comments about the events unit that has just been created in the Department, there was a recent appeal for applications. Can you give us an update on expenditure and tell us how that process is progressing? Furthermore, will money that is available in the Department for such events be fully spent this year?

Ms Brown:

I can confirm that a programme is in place for this year’s events budget. Although I do not have the details with me, we can provide them if members want. We intend to spend all of that allocation this year.

In the September monitoring round, members will notice an events unit bid, which highlights the fact that more funding is required in the events unit’s budget.

Mr Shannon:

Like Kieran McCarthy, I am concerned with the return of £8·7 million of capital. In your reply, Deborah, you said that the Department had attempted to accelerate other projects. How much of that £8·7 million was the Department able to use to accelerate other projects? Those of us who, in some small way, have business ideas, would have thought that there would have been reserve schemes that might have benefited from capital spend. In the past, there has been money for football grounds. We are keen that other projects will proceed. How much of the budget was accelerated or advanced?

Ms Brown:

Annex D of the briefing paper shows lots of figures with minus signs and plus signs. The minus signs show where slippages on some projects have been identified. The plus signs show where the Department has reallocated the money. For example, £10 million could not be spent on the sports stadium, but, in aggregate, the Department gave back only £8·7 million. The big underspends and slippages were against the multi-sports stadium, the elite sports facilities for the 2012 Olympic Games and the soccer strategy. In using up that slippage, money was reallocated to, for example, the Lyric Theatre and the Cultra Manor.

Mr Shannon:

How much money was reallocated to those projects?

Ms Brown:

The briefing paper shows that £2 million was reallocated to the Lyric Theatre and that £1 million was reallocated to Cultra Manor. There is no direct read-across to specifically identify what was given up and moved to another project. The Department identified where the slippage was and considered where the opportunity existed to accelerate some of the projects that were contained in the investment strategy for Northern Ireland. I can provide the Committee with the specific details of the projects, if it feels that that would be beneficial.

Mr Shannon:

That would be helpful.

The Deputy Chairperson:

I would be grateful for that.

Mr P Ramsey:

I want to follow-up on a point, which I do not want to be missed.

The Deputy Chairperson:

We are still rounding up the discussion on the June monitoring round.

Mr P Ramsey:

It is important to make this point so that it is not missed. Concerns have been raised that safety in sports grounds will be compromised. The Committee heard that point from Sport Northern Ireland. Given that some money is available because of slippage and that safety is compromised across all sports, is there an intention to develop some sort of selective programme to ease that problem?

Money from capital investment is going to other projects that are not sport related. One would imagine that that money should be retained to give some comfort to the many sporting bodies that need modernisation programmes. Given that Sport Northern Ireland told us directly over the summer that its utmost concern is for the safety of supporters, what will the Department do about that?

Ms Brown:

I will give a brief answer, but I am sure that Jack Palmer can provide more detail. The Department is aware of that problem, and it is setting up an oversight body to consider that specific issue and how to introduce the legislation. There are plans to refurbish grounds, but the problem is that a lot of the grounds were not ready to progress with those projects at the time of the June monitoring round. The investment strategy is in its infancy, and we want to get to a point at which we always have projects ready to lift off the shelves when we have slippage against other projects.

Slippage on a capital programme is inevitable, and that contingency must be in place to ensure that the use of the budget is maximised. The Department is working its way towards that, but, because the strategy is in its infancy, all the other ducks are not lined up, such as planning permission, business cases and approvals. The Department needs to get itself to that point, but that will take time.

Mr Jack Palmer (Department of Culture, Arts and Leisure):

I reassure the Committee that the Department takes the question of safety very seriously. We are working with Sport NI on the implementation of the legislation. In parallel with that, as Deborah mentioned, we are undertaking the work of getting the projects up to a state of readiness, which will allow us to apply more flexibility with the capital that is available.

The Deputy Chairperson:

The view of the Committee is that we have expressed a concern and that we want to be continually updated on what the Department is doing.

Mr Palmer:

The Department shares that concern, and we want to make rapid progress on that issue.

Mr Shannon:

Deborah, you used terminology about ducks being lined up. The duck-shooting season started last Monday, so there have been a few dead ducks since then.

The Deputy Chairperson:

You have shot them all already. There are none left down here anyway.

I see that there is a photographer present from Jim Shannon’s fan club. He does a special album.

Mr Shannon:

He is from the local paper, the ‘Newtownards Chronicle’.

The Deputy Chairperson:

He is one of the best, our Jonathan. I realise that members want this meeting to flow, so they should co-operate with me by keeping their questions short. Are members content that in order to facilitate the photographer, the Committee adjourns to have a photograph taken after the next question?

Members indicated assent.

The Deputy Chairperson:

Is there a projected underspend for the end of the year?

Ms Brown:

Not at this stage. We are trying to manage the budget. By giving up money in this monitoring round and submitting some of our bids, we are on target to spend the budgeted figure.

The Deputy Chairperson:

I am disappointed to hear that. I thought that you would have a working underspend projection for every month. Can you report back to the Committee — and I do not want that to be at the end of the year — when you have some projections on what underspend there will be by January 2009?

Ms Brown:

Yes. We want to be in a position to do that because the December monitoring round informs the Estimates that are used in calculating the accounts that we are measured against. Therefore, by the time of the December monitoring round, the Department will want to ensure that it has all the necessary bids and surrenders submitted to see it through to the end of the year. We will be content to provide that information by January.

The Deputy Chairperson:

OK, I am grateful for that.

Committee suspended.

On resuming —

The Deputy Chairperson:

Deborah, if you would like to continue.

Ms Brown:

In commissioning the September monitoring round, DFP advised that the financial position facing the Northern Ireland Executive remains constrained with the capacity to meet the in-year pressures in this monitoring round dependent on the identification of sufficient reduced requirements.

Following the June monitoring round, DFP advises that the overcommitment position is £85 million. As part of that monitoring round, the Executive agreed to the approach proposed by the Minister of Finance and Personnel, whereby the consideration of the spending pressures raised by the Department would be deferred until the NICS equal pay issue had been resolved. In that context, the Minister and his officials have been engaged in discussions with their Treasury counterparts over the summer period, and central personnel group has initiated negotiations with the trade union representatives. However, there has been no conclusion to those discussions; therefore, it remains critical that reduced requirements are identified and surrendered as early as possible within the financial year.

It is worth noting that the Department of Health, Social Services and Public Safety (DHSSPS) still has some additional financial flexibility and the scope to retain its reduced requirements to offset its emerging pressures. After it has addressed the overcommitment issue, DHSSPS has a guarantee of the first call on up to £20 million.

In the June monitoring round, there was £105∙9 million of capital available for allocation. However, there is a £146 million shortfall in receipts across NICS, which is due mainly to the downturn in the property market and to the delay in sales across some Departments.

The Deputy Chairperson:

Could you repeat that figure?

Ms Brown:

There is a shortfall of £146 million.

I will run through the detail of the bids that the Department is proposing to submit to DFP. The first bid relates to the libraries’ redundancy costs of £3 million — a bid that was submitted as part of the June monitoring round and was unsuccessful. The bid relates to the new library authority, which will be set up from April 2009. That arrangement requires a reduction in the current staffing numbers at senior- and middle-management levels. Ultimately, that will reduce the long-term administration cost, provide a reformed and effective service, and will contribute to the Department’s efficiency savings. However, we were unable to secure any money for the bid in the June monitoring round and, as a consequence, we are resubmitting the bid as part of the September monitoring round.

The second proposal relates to the North/South Language Body, Waterways Ireland and the language exchange-rate deficit, which was identified as a part of the June monitoring round. Initially, when the budgets were pulled together, the exchange rate sat at around 67p to the euro. It is currently sitting at around 79p to the euro. As a consequence, huge pressure has been created against those budgets — the estimate is currently £750,000.

The Deputy Chairperson:

Do members want the bids explained individually as the official is going through them, or is the preference to refer back to them? Are there any questions about the bid for money to cover redundancy costs in libraries, or about the bid for money to cover the increase in exchange-rate costs?

Mr P Ramsey:

Why was the Department so far out in its initial financial appraisal? It now has to bid for a further £3 million.

Ms Brown:

The Department is not bidding for a further £3 million — it is bidding for the same £3 million that it bid for in the June monitoring round. The business case is being collated, and it is a cost that the Department will have to cover.

The Deputy Chairperson:

Is the Department drawing that down?

Ms Brown:

Yes, we have to bid for it. There is no cover for it in the budget.

Mr McCausland:

Did the Department not submit a business case when it made the previous bid?

Ms Brown:

No, the business case was, and is, being developed. DFP approval is required for the business case and the budget cover, which are separate issues. DFP approval of the business case does not mean that cover for the budget will be provided.

The Deputy Chairperson:

Committee members may recall that when we discussed the issue, there was scepticism about whether the financial proposals would be met. That view was supported by a number of witnesses who gave evidence to the Committee. Does the Committee agree that we should revisit what we said, not to say “we told you so”, but to flag it up to the Department, because it is an issue to which we will undoubtedly return?

Members indicated assent.

The Deputy Chairperson:

Are there any comments about the bid for money to cover the increase in exchange-rate costs?

Mr McCausland:

I want to comment on the bid for increased funding for the re-imaging communities programme.

The Deputy Chairperson:

We have not got to that yet.

Ms Brown:

The Department is proposing to bid for £740,000 for Rally Ireland. Following the success of the cross-border event last year, the governing body for world motor sport, the Fédération Internationale de l'Automobile, awarded Rally Ireland the licence for the launch of the World Rally Championship.

The first event will be a high-profile launch of the World Rally Championship at Stormont on 24 January 2009. The launch of the Ireland stage of the rally will be at Enniskillen on 29 January. The change in the location of the launch of the World Rally Championship from Monte Carlo to Northern Ireland came as a welcome surprise. However, no budget provision was made, because we were not expecting to host the event in the current financial year.

The business case has been prepared, and the cost will be approximately £2·9 million, of which £1·2 million will be provided by Fáilte Ireland. From the business case, the Department is content that it should provide up to £950,000 and that the remainder of the cost will be raised through sponsorship, ticket sales, and so on. However, there is not enough in the events unit’s budget to cover £950,000 — there is enough to cover a small portion of that, but the Department will be left with a deficit of £740,000. Therefore, the Department proposes to submit a bid for that amount to DFP. The business case is already with DFP. However, as I have said, approval of the business case does not mean that funding will be approved — that is for the Minister of Finance and Personnel to decide.

The Deputy Chairperson:

The World Rally Championship is a significant event for Northern Ireland, and it is one that we all support. Now that the events unit is beginning to appear on bits of paper, do Committee members agree that we should be reminded about its remit, criteria and the budget, because, at present, we are unsighted?

Members indicated assent.

Ms Brown:

The bid for money to ease pressures on education and library boards is for furniture repairs and maintenance work so that work can begin on digitising the cultural assets. There was an unforeseen settlement item for cleaners’ job evaluation costs and an increase in fuel costs. We propose to submit that bid to DFP.

Mr McCausland:

What cultural assets will be digitised?

Ms L Wilson:

We are trying to make valuable books and other items available.

The Deputy Chairperson:

When dealing with other people’s money, it is easy to gloss over unforeseen additional running costs. Who did not foresee them and why were they unforeseen? Such terms, and the term “calculation error”, continue to crop up. Is something wrong in the manner in which those accounts are prepared that results in most eventualities being unforeseen? Does the Department not allow for, and anticipate, contingencies? What is the Committee supposed to do with the word “unforeseen”? Are we meant to overlook it?

Ms Brown:

Our budgets are set considerably in advance. Inevitably, other issues will crop up. The Department always scrutinises closely information that is provided by arm’s-length bodies to ensure that the cost is inescapable and that the body cannot manage on its allocated budget. I accept that the Committee should not approve of the word “unforeseen” when it is used as an excuse for failure to provide a more robust budgeting process. The Department rigorously examines the budgets, the profiles and the proposals, and it scrutinises them closely.

The Deputy Chairperson:

You said that so eloquently that I am inclined to believe you. However, perhaps you will return to the Department and ask that someone examine its use of the word “contingency”. It may be better if the Department were to build contingencies into budgets.

Mr P Ramsey:

I am sorry to return to the subject of Rally Ireland. According the review of public administration, the function of organising events for Northern Ireland was to be transferred to the Northern Ireland Tourist Board. Owing to the difficulties that the Northern Ireland Events Company encountered, its role has been transferred to DCAL. Is that a temporary measure?

Ms Brown:

Yes.

Mr P Ramsey:

I agree with the Deputy Chairperson that there is huge potential for marketing the Rally Ireland event. Given its magnitude, surely it is a matter for the Department of Enterprise, Trade and Investment (DETI) rather than DCAL?

Ms Brown:

The budget and responsibility for that is currently with DCAL. Transfer of that function from April of next year is under consideration.

Mr Palmer:

The original intention was that the function would transfer on 1 April 2008. However, when the difficulties encountered by the Northern Ireland Events Company became apparent, the transfer was deferred until 1 April 2009. Transfer by that date is still our intention.

Mr P Ramsey:

Therefore, will that form part of the briefing that the Committee will receive at a later stage, as requested by the Deputy Chairperson?

Mr Palmer:

The Deputy Chairperson said that he expected a briefing on the events unit, its budget and its remit.

Mr P Ramsey:

Governance is a hugely important part of that.

Mr Palmer:

It will be part of that.

The Deputy Chairperson:

Perhaps the transfer could be deferred until 2 April. I am always wary of planning events for 1 April.

Mr Palmer:

It is the beginning of the financial year. [Laughter].

Ms Brown:

The re-imaging communities programme was launched as part of the renewing communities action plan, which was a ring-fenced, specific, time-limited budget allocation. It was launched in July 2006. The programme was intended to deliver 60 to 80 community-based projects within three years and had a budget of £3 million. The number of projects undertaken exceeds the target by 25%. Some 99 such projects have been funded. They help to restore pride to local neighbourhoods and to move Northern Ireland towards normality.

There has been great demand for the programme. The Arts Council had to suspend applications in June 2008, as the response to the pilot scheme was so overwhelming. The Office of the First Minister and deputy First Minister (OFMDFM) has advised that it is prepared to contribute £50,000 towards it.

On assessing the demand, at least £500,000 is required. As a consequence, we propose to submit the bid.

Mr McCausland:

When that bid is submitted, will that be the end of the re-imaging communities programme? Will that submission be simply to cover the bids that have already been made?

Ms Brown:

That is correct. We will not be reopening the process. I have outlined the bids. If the Committee is happy to support those, we will move on to the reduced requirements. DCAL proposes to declare reduced requirements to DFP that total £2·9 million of capital investment. That includes £1 million in relation to PRONI, which is due to legal delays in the development and the lease agreement. In addition, we had to return money as part of the June monitoring round. That means that that project is slipping into future years.

Of the £2·4 million that was allocated to us in error regarding the north-west challenge fund, we propose to return approximately £1·9 million. We have identified some projects that were in the investment strategy for Northern Ireland that could be undertaken at this stage to use up some of that funding.

Mr P Ramsey:

Is it unusual for an error of that magnitude to occur?

Ms Brown:

It is very unusual.

Mr P Ramsey:

How did it happen?

Ms Brown:

That is a DFP issue. I am unaware of how it happened.

The Deputy Chairperson:

I will try to move us on. I will not stamp on anybody, because it is important matter, but time is moving on. Do members have any issues about the Ulster-Scots Academy implementation group?

Mr Shannon:

Are you referring to annex B of the submission?

The Deputy Chairperson:

I am referring to the issue of reduced requirement of the Ulster-Scots Academy implementation group, which is £1 million.

Are legal costs envisaged, perhaps because of the suggestion that rents have not been paid for premises, and so on? The premises are in Newtownards. Do you have any idea what any legal costs will be? Could it get messy?

Ms L Wilson:

If legal costs or further costs arise, we expect to be able handle those within the budget. At this stage, we do not know whether there will be additional costs. Our solicitors are dealing with another party’s solicitors, and we do not have any information about what the position is or about what the legal costs might be.

The Deputy Chairperson:

Would it be appropriate to keep us up to date on that? Does the landlord have outstanding rents?

Ms L Wilson:

That matter is in the hands of his solicitor and our solicitor. There is no question that the Department will not pay rent that is properly due. That is not the issue at all.

The Deputy Chairperson:

Why is it under legal proceedings?

Ms L Wilson:

It is under legal proceedings because the Department wishes to terminate a lease early. There are issues about the early termination of the lease and in starting to consider what might have to be wound up and dissolved because of that. Questions have arisen about what is owed, and that is what our solicitors are examining.

The Deputy Chairperson:

It is a constituency matter for some of us. I have received correspondence from the landlord, and it has been very uncomplimentary. I ask the questions because I am not in a position to take a decision. I cannot take sides because I do not have the information, but the dispute remains unsettled. Will you keep us informed of further developments?

Ms L Wilson:

Yes.

The Deputy Chairperson:

It is quite unsavoury that a Department may face justifiable claims from a landlord about a contract that it wants to remove itself from.

Ms L Wilson:

The Department will do what is right and fair, but we need to be satisfied about the position. Some issues are in the hands of our solicitors.

Mr Shannon:

I have a couple of questions about annex B of the submission.

Ms Brown:

Annex B sets out areas where the Department has some easements that are below de minimus level, and it is simply a matter of shifting those easements to deal with other priorities. Would you like me to go through annex B?

Mr Shannon:

No. I realise that we need to keep proceedings moving along and I do not wish to delay matters. Does the figure for Sport Northern Ireland represent the actual money for spending, rather than the cost for the oversight body?

Ms Brown:

No, that figure represents the resource bids associated with resourcing rather than the oversight body cost.

Mr Shannon:

If the oversight body were not in place, would the safety at sports grounds scheme not be implemented? What is the role of the oversight body?

Ms Brown:

It implements the legislation regarding certificates for safety at sports grounds.

Mr Shannon:

I am unclear about the wording in annex B relating to the painthall. Could we not accommodate large-scale US film production if that facility were unavailable?

Ms Brown:

We have no similar facilities at the moment, but there are many in the pipeline.

Ms L Wilson:

The painthall is a studio facility that Northern Ireland Screen has been renting. It plans to rent out the painthall to film production companies. The painthall has been empty for a while for a variety of reasons, including the screenwriters’ strike in America. No rent is being generated, but the organisation is in negotiations with filmmakers, and it is optimistic that it will bring in a film. Therefore, we must decide whether we assist Northern Ireland Screen with the rent or tell it to let the painthall go with the consequential loss of the facility.

Mr Shannon:

Does that mean that we are providing assistance?

Ms L Wilson:

It means that the Department has made the difficult decision to find £100,000 to assist it, which is at the risk of our own programmes. Therefore, we will look to the screen commission.

Mr Shannon:

Therefore, you have not lost it.

Lord Browne:

A figure of £13,000 is quoted under sports consultancy costs for the Irish Football Association (IFA)/Linfield contract. What was the original budget? I understood that it was originally a matter between the IFA and Linfield. Will we be involved?

Mr Palmer:

The Department engaged consultants to offer some advice and to give us some valuations of the consequences of terminating the contract.

Mr P Ramsey:

Was the advice good?

Mr Palmer:

Time will tell.

The Deputy Chairperson:

Are you satisfied, Wallace?

Lord Browne:

When I put a question to the Minister about the matter, I understood that it was a matter solely pertaining to the IFA and Linfield.

Mr Palmer:

The contract is solely a matter between the IFA and Linfield, but there are issues about the implications of the contract. I do not want to get into the stadium debate; that is not a matter for today.

Mr McCausland:

On the issue of the painthall, what period does the sum of £100,000 cover?

Ms L Wilson:

It covers three months’ rental.

Mr McCausland:

Therefore, £400,000 a year is spent on rent?

Ms L Wilson:

Some of the rent has already been paid from other sources. It amounts to about £200 a quarter.

Ms Brown:

That is incorrect; the rent is £100,000 for six months and £200,000 per annum.

Ms Brown:

If everyone is satisfied with annex B of the submission, I will move on to annex C, which addresses technical issues.

The Deputy Chairperson:

One moment, please. We have not yet completed annex B, which relates to reduced requirements.

Ms Brown:

I am sorry, I will return to annex A. There is £1.5 million of resource, £1 million of which is from the Ulster-Scots Academy implementation group and £500,000 of which is from the creative industries seed fund. The development of the terms of reference for the creative industries seed fund has been delayed, which, subsequently, has delayed bids on projects for that fund. Consequently, that resource must be surrendered.

The Deputy Chairperson:

Will you repeat that?

Ms Brown:

The creative industries seed fund will be surrendered as reduced requirement.

I am still talking about annex A, which addresses reduced requirements. We mistakenly jumped to annex B before we finished annex A.

The Deputy Chairperson:

The members would take advantage of you very quickly, as I am a lenient Chairman.

Mr McCausland:

How many years does the creative industries seed fund run for?

Ms Brown:

The budget period runs for three years.

Mr McCausland:

What percentage of the £500,000 accounts for one year’s budget?

Ms Brown:

The budget is £1 million.

Mr McCausland:

Is it a cross-border fund?

Ms Brown:

Yes, the Southern Government contributes money.

Mr McCausland:

What creative industries benefit from the fund?

Ms L Wilson:

Surprisingly, creative industries are an important sector of the economy. However, a huge amount of work has yet to be done in that area, which covers a raft of industries. The creative aspect applies to arts and crafts. There are also service industries, such as marketing, tourism and architecture. Software is also classed as being part of the creative industry.

Mc McCausland:

Will you explain how crafts apply to marketing and tourism?

Ms L Wilson:

The people who produce craft work, such as weavers and designers, supply items to sell to tourists. The creative industry also covers architecture, marketing, software, digital media and screen content.

Mr McCausland:

Could the Arts Council supply details of the areas covered by the creative industry?

Ms L Wilson:

We can provide you with that information through the Department. We have been working on an action plan, which provides a lot of background about the industry and its priorities.

Mr McCausland:

I asked because much of the craft available to tourists here is absolute tat.

Mr Shannon:

That is unfair.

Mr McCausland:

Not all of it is tat, but a lot of it is. There are also a lot of good items. However, if you were to go into an average tourist-type shop, you would find a lot of tat.

The Deputy Chairperson:

That is made in China.

Mr Shannon:

Locally produced crafts are of a very high quality.

Mr McCausland:

Of course, but I am fed up seeing souvenir cows with shamrocks or whatever stuck on the side of them.

Mr Shannon:

Those are made in Taiwan.

Mr McCausland:

You are probably right. Shops stock that type of souvenir when they should stock more locally produced items. That way the money will go back into the hands of people in Northern Ireland rather than been siphoned off —

The Deputy Chairperson:

I am sure that that is not what the creative industries seed fund is for.

Mr McCausland:

Is it not about encouraging the growth of those craft industries so that there is good quality local produce for people to buy?

Ms L Wilson:

That is part of it. Part of the reason for the delay in getting the funding going has been getting some sort of overview and rationale for what is to be covered and what we should be concentrating on. We will be considering a small and easily accessible grants programme to try to achieve that local emphasis. Equally, we are well placed to contribute to areas such as software and digital media.

Mr McCausland:

When will those criteria be established?

Ms L Wilson:

I hope that they will be ready in the autumn, around October. We are working on them.

The Deputy Chairperson:

I have allowed a good deal of discussion on this matter. Members will recall that in our budget, in our submission and in our debate, we majored on the importance of the creative industries. I am shocked to find that the reason for the resource being surrendered, as noted in annex A, is that there is a delay in setting up terms of reference, and that therefore, the full £1 million funding is not required this year.

What on earth is going on? We get berated by people from organisations such as the Arts Council when they ask for more money. Everyone is asking for money to do this, that and the other, and here we have the surrender of a fund, the importance of which was agreed by the Assembly. You said yourself, Linda, that it was vital. People must get their acts together. There is no point in us using our good offices to help people to push for funding that we agree with and take decisions on, only to find that £500,000 or £1 million is sent back because the terms of reference were not right. I thought that we were overloaded with pen-pushers and people writing documents, yet we cannot get terms of reference right. We will keep an eye on this issue.

Mr McCausland:

Are those terms of reference being worked on by the Arts Council, DCAL, or both together?

Ms L Wilson:

It is more than just the terms of reference. It is the strategy and the detail of the seed fund. It is being worked on by DCAL, the Arts Council and a range of key players from the creative industries sector, which have been brought together in a working group, and which includes the skills sector councils, Northern Ireland Screen and the Northern Ireland Music Industry Commission (NIMIC). We are trying to do it in partnership.

The Deputy Chairperson:

There are some big boxes in the annexes of your submission, which contain lots of information, but you have added two or three other reasons that are not written down. It would help the Committee — if we are going to try to understand things — to have the reasons as they are. You have added strategies and other matters. All that we have is terms of reference. Perhaps in future we could be mindful of that.

I am conscious of the fact that we are to be kicked out of here at 1.00 pm. What is next, Deborah?

Ms Brown:

We have already discussed the internal reallocations that are outlined in annex B. If everyone is happy, the only other issues are technical ones.

The Deputy Chairperson:

Just before you go, are we moving away from reduced requirements?

Ms Brown:

Yes.

The Deputy Chairperson:

Just before we do, can you give me an indication as to when the funding that was set aside for the Maze stadium will appear as a reduced requirement?

Ms Brown:

We already gave back £10 million in the June monitoring round. That has been surrendered.

The Deputy Chairperson:

Is there an amount allocated in the budget?

Ms Brown:

Yes. The £10 million allocation for the current financial year has all been surrendered, because, obviously, it will not be spent. There is a budget —

The Deputy Chairperson:

Therefore, are you saying that no money will be spent in the current financial year, which is between now and 31 March next year?

Ms Brown:

That is correct. As you know, it is a three-year budget cycle, so a budget stock take will take place around October, which will examine the proposed budget for 2009-10 and 2010-2011. That is the point at which the Department will consider what has happened in the current financial year and the implications of that for those two future years, and submit a proposal to DFP. However, in the current climate, it is not a bidding process; it is simply a stock take. That will give the Department the opportunity to revisit that budget, decide whether that money is needed, and, if it is not needed, determine what else it might be better spent on. Proposals will then be put to the Minister and the Committee. However, obviously, we are not yet at that stage.

The Deputy Chairperson:

You seem the financial whizz-kid, and you have given the Committee excellent information. When the Assembly agreed to set aside a significant budget for the Maze stadium, was that just a piece of paper or a notion? In other words, are you saying that there is no money for the Maze? That money has been returned. Is the Department unlikely to bid on it between now and 31 March? Where does the £70 million sit?

Ms Brown:

There is currently a budget allocation for 2009-10 and 2010-2011; although, I cannot say how the whole £70 million is made up. However, I am sure that it was not over the whole three-year period.

The Deputy Chairperson:

It was.

Ms Brown:

The £70 million sits in that period — £10 million has been given back and £60 million remains for 2009-10 and 2010-2011. If the stadium kicks off there will be another budget process for the further three-year cycle. At that point, the Department would submit proposals to get the £10 million back in the first year of the three-year cycle.

The Deputy Chairperson:

Therefore, the Department would attempt to recoup the money?

Ms Brown:

Recouping money is not really how the system works; rather, it is akin to another bidding process. The money is not guaranteed, but if the Department started the process, it would be one of its highest priorities.

The Deputy Chairperson:

You are obviously as clear as we are as to where we are heading, which is as clear as mud.

Ms Brown:

Yes.

The Deputy Chairperson:

Thank you for that. I am a lot wiser — seriously.

Ms Brown:

If the Committee is happy with the proposed internal reallocations, which are covered in annex B, I will move on to annex C. Annex C sets out the technical transfers, which is the movement of budgets between Departments. The Ordnance Survey of Northern Ireland moved to DFP, but, unfortunately some of its budget was left behind and it will have to be given back. We also have to pay for some of the Civil Service pension contributions, and we are expected to pay for an administration officer in Rathgael, who will deal with retrieving information for freedom of information requests etc. We hope to get some money for introducing the electronic human resource (eHR) programme, which will be Civil Service wide. Those are really technical adjustments.

Do members have any questions?

The Deputy Chairperson:

The Committee is brilliant on technicalities. [Laughter.] We need to digest all that.

Ms Brown:

We have already discussed annex D — the movement in the capital — when we talked about the surrender of £2·9 million, which is £1 million for PRONI and £1·9 million, which is part of the £2·4 million that was given in error. As I referred to in the June monitoring round, the Department is trying, with other internal reallocations, to maximise the budget where there was slippage in some projects and acceleration in others.

Mr P Ramsey:

As regards elite facilities, which are referred to twice, and the 50 m pool, we commenced the process with £56 million for elite facilities across Northern Ireland, which was announced by the Secretary of State. Are we on target, or what are we expected to spend specifically on elite facilities — including the pool — over the next three years?

Ms Brown:

I do not have that information with me, but I can get it for you. However, Jack may have that information.

Mr Palmer:

The original £56 million has been mentioned, and the budget settlement for the elite facilities programme for the three years was £31 million, £35 million or slightly less. However, I am relying on my memory.

I can tell the Committee where matters stand with elite facilities. A full business case is being prepared for the 50 m pool project, and an offer of up to £15 million has been made. We regard that as phase one of the elite facilities programme. We have now reached phase two of the programme, which involves outlining business cases for those applicants who have progressed to stage two. Submissions to that stage should be returned by 28 November 2008, and by early 2009 the winners from stage two will be known. Those projects can then progress.

Mr P Ramsey:

This matter is hugely important, but we will not have time to cover it fully today. Given how well Britain and our own boxers from Dublin performed in the Olympics, it is unfortunate that the amount of money available for facilities is being reduced all the time — that money is necessary to enable us to create a sporting legacy. The figure was £50 million or £60 million, and it has been reduced to just over £30 million. I am not sure how many centres of excellence for elite facilities we will have. I respectfully request that at some stage we be given an updated report on that issue. We want to ensure that our young people are given the same access to centres of excellence as children across Britain.

The Deputy Chairperson:

Are we agreed on that?

Mr Shannon:

This is a taxing point for us all, particularly given how well team GB did in the Olympics, as Pat rightly mentioned. It would be useful to know where the centres of excellence and elite facilities will be located, and what Northern Ireland’s role will be in the 2012 Olympics. There has been some talk of groups of athletes coming here to train — where will they be based? I understand that cycling and archery have been talked about. Perhaps we should get a bit more detail so that we can determine what the Province’s role will be in the 2012 Olympics.

The Deputy Chairperson:

The Committee Clerk has just reminded me that the Sports Council recently made public the location of the venues.

Mr Shannon:

A very brief press release was issued that simply stated where the venues would be. It was as bland and general as that — just like that bird flying across the sky.

The Deputy Chairperson:

I was coming to that. We must find out what is going on and ask other organisations what they are doing and not doing.

Mr Palmer:

I am conscious of the time —

The Deputy Chairperson:

So am I, and I am grateful to you for that.

Mr Palmer

Briefly, there is a UK-wide list of approved venues that could be considered for training camps and acclimatisation, and so on. A number of venues in Northern Ireland are included on that list. That is one aspect; the other aspect was mentioned by Pat — the development of elite facilities that would complement existing facilities. However, that is a much bigger issue.

The Deputy Chairperson:

The operative word in all of this might be “bluff”. We want to find out whether that is the case. We seem to be being spun along, which is why members are asking questions. Do we agree to Pat’s proposal, as supported by Jim, that we should request further information on this matter?

Members indicated assent.

I thank Deborah, Linda and Jack for their attendance. We have devoted more time to this matter than anticipated, but that is because we are so interested in it. Thank you for making it interesting and for your information. We look forward to seeing you again, and I have no doubt that you will take cognisance of what we have said.

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