Official Report (Hansard)

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DCAL Briefing on December Monitoring

2 December 2010

Members present for all or part of the proceedings:

Mr Barry McElduff (Chairperson)
Mr Declan O’Loan (Deputy Chairperson)
Lord Browne
Mr Thomas Burns
Mr Billy Leonard
Mr Kieran McCarthy
Mr Raymond McCartney
Mr David McClarty
Mr Ken Robinson

Witnesses:

The Chairperson (Mr McElduff):

I welcome the team from the Department: Deborah, Arthur and Colin. This evidence session, on the December monitoring round, will be recorded by Hansard. Deborah, who is the director of finance and corporate services, will introduce the team and make an opening statement.

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

With me are Arthur Scott, director of culture, and Colin Watson, who is in charge of sports and who is here on behalf of Mick Cory, director of sports, fisheries, libraries and museums.

I thank the Committee for inviting the Department of Culture Arts and Leisure (DCAL) to present its proposals for the December monitoring round. The Department of Finance and Personnel undertakes four formal in-year monitoring rounds, usually in June, September, December and February. Monitoring rounds are the process by which Departments can bid for additional resources to meet unexpected pressures, surrender any reduced requirements and/or transfer de minimis budgets between service areas, or submit a linked-bid reduced requirement to transfer a larger amount.

I refer the Committee to the outcome of the September monitoring round, which was announced in the Assembly on 28 September. The Executive accepted all DCAL’s proposals, which included: a capital reduced requirement of £4∙1 million for the 50-metre pool; capital reduced requirements of £8∙2 million for the multi-sports stadium; a capital bid of £3∙2 million to meet the shortfall in the Public Records Office of Northern Ireland (PRONI) disposal receipts; and a number of internal reallocations and technical transfers.

I turn to the December monitoring round, beginning with the bids on resource.

The Department has reviewed its resource requirement and proposes to make no bids for additional budget. Its planned spend for the financial year is £110·646 million, as described in annex D to the Committee’s budget tracking table. On capital, we are placing a bid of £259,000 for general capital in museums.

The Department is surrendering a total of £1·024 million of resources, £1·187 million of depreciation and £952,000 of capital. Those reduced requirements are being declared against several different areas. First, we have an easement of £407,000 on fisheries, and we had been holding funding in that area pending the outcome of any additional EU clawback that may be required and the salmon buy-out provision. That is not needed in 2010-11, but it could roll forward into next year.

We are surrendering £500,000 of the budget for the Ulster-Scots Academy. There has been some spend on that, but significant work is ongoing to refresh the business case, some funding of projects and the relocation on the Ulster-Scots language society and the Ulster-Scots Academy implementation group collections to Redwood House. It is envisaged that there will be greater spend in the last few months of the year, but the full allocation will not be spent and the surrender is, therefore, being made in the December monitoring round.

We are also surrendering £117,000 of sports resource. Some pressures were identified by the Sports Council against its depreciation, and, to manage those, it had held back on spend in other areas. However, due to easements in depreciation in other areas of the Department’s spend we were able to meet that, and we are surrendering that small amount of excess in the Sports Council resource.

There is also a depreciation easement in National Museums Northern Ireland of £1·187 million. That is based on a confirmation by National Museums Northern Ireland that its depreciation requirements are smaller than anticipated. There is also a difference in the budgeting treatment from 2010 onwards in capital, and budget cover is no longer required. The Department is content that the remaining small pressures can be managed by reallocating other capital or resource budget.

DCAL is seeking approval to fund some of its de minimis bids by means of internal reallocations. That involves reprioritising resources to meet pressures in high-priority areas with proactive management. The most significant of those is a pro-reduction and pro-allocation of £924,000 in respect of a pressure facing National Museums Northern Ireland, due to the release of its voluntary early retirement provisions. That is a technicality in which a provision was previously created and there was budget cover. However, from 2010-11 onwards when the provision is released, budget cover must also be in place, and we can manage that pressure by using easements elsewhere in the Department.

There are also technical transfers being actioned between DCAL and other Departments. The net impact of those will be an increase in our administration budget of approximately £17,000 and an increase in the resource budget of approximately £420,000. Agreement with the Departments concerned has been reached.

We have surrenders on the capital side. The revised capital budget after the September monitoring round is £49·219 million. It is proposed at this point in the year to declare a reduced requirement of £952,000, which comprises £500,000 for the multi-sports stadium; £193,000 for the safe sports grounds initiative, in which area there has been some slippage on the Crusaders’ Football Club ground; and £259,000 for the sports strategy implementation. Against those surrenders, we will be placing a bid for £259,000 to fund additional general capital in museums.

I will take members through some of the internal moves in the capital table. The first column shows the revised budget after the September monitoring round. The second column details where we are moving money around to meet pressures. The third column states the one bid that we have made, which is £259,000 against museums’ general capital, and the fourth column shows that we have reduced requirements of £952,000, which I have gone through. The fifth column shows our proposed position after the December monitoring round, assuming that all those moves, surrenders and bids are met. We move from an allocation of £49·2 million to an allocation of £48·5 million.

I will take you through some of the moves in the second column to give a short explanation of some of the easements. You will see a reduction of £251,000 against the Lyric Theatre; that is because there has been a reduction in the costs of that project. Overall costs are now estimated to be about £17·5 million. We have had some small easements on libraries, where there have been reductions in some costs. We have also had a reduction in the amount of receipts that we were able to generate from libraries, and we are having to meet some of those pressures.

On sport, we have easements of about £1·5 million. You will notice that we have £779,000 of an easement against the elite facilities programme. The outline business cases have not yet been approved by the Department. We also have some other small easements on the soccer strategy with Windsor, where we had a lower tender. We had some slippage on the mountain bike project, which we hope to fund next year. I mentioned the slippage on Crusaders’ football ground, which is listed in the table under safe sports grounds, and we also have a small easement on St Colman’s. Several pressures are identified in sport. There is a pressure on Tollymore of £170,000 for fixtures and fittings, and, under sport strategy implementation, there is a pressure on Awards for Sport of £108,000.

On museums, we have a small bid of £48,000 to purchase some high quality equipment for the observatory in areas such as meteorological equipment, the observatory grounds equipment and computer and related technical equipment. Some pressures and some easements have been identified with National Museums. Pressures are identified against its capital maintenance, its general capital and its security systems, and some small easements are identified on its minor capital. Overall, museums gets an additional allocation of £820,000, the majority of which is met through internal allocations, and we have made a small bid of £259,000.

In inland fisheries, we are reallocating money to meet a need for weed cutter, costing £220,000. A small easement is reported against PRONI for its new accommodation.

Therefore, a significant number of small pressures and easements are being managed internally by the Department. We have a reduced requirement of £952,000 and a small bid of £259,000, which, as I said, moves our capital position from £49·2 million to £48·5 million.

I forgot to highlight just one bid. Members will notice an amount of £650,000 for a live screen for Derry City of Culture 2013. That will maximise the legacy effect of the 2012 Olympic and Paralympic Games and the Derry City of Culture celebrations. That is just a quick run-through of the issues and the proposals from the Department on the December monitoring round.

The Chairperson:

I am seriously concerned about the fact that the Department is handing back capital money, and I suspect that other Committee members are, too. We constantly hear from arts and sports groups about their plans. A very popular programme called Places for Sport helps clubs that are in a state of readiness and which have achieved planning permission. Therefore, initiatives tailored for Places for Sport can open and close very quickly. Could a window for the Places for Sport programme have opened and closed quickly to ensure that money was not handed back but made available for local sports clubs that were ready to go?

Mr Colin Watson (Department of Culture, Arts and Leisure):

I should point out that we are about to launch a £2·5 million expenditure to award small grants to a large number of clubs. Small programmes such as that can start running fairly quickly. However, only so much can be done. Sport Northern Ireland does a fantastic in job delivering funding. However, it deals with hundreds upon hundreds of applications, and it must try to meet the needs of some 200-plus clubs by allocating them money. However, it can only deal with so many applications. Sport NI has to through a whole process, including due diligence, with the clubs. There is, therefore, a fairly hefty workload, and there is only so much it can do in short periods. However, it has managed to distribute, in a very short period, £2·5 million to a couple of hundred clubs that need money.

The Chairperson:

Can the Department tell governing bodies to nominate a project and then allocate £952,000 to them to enable a quick turnaround in order to meet needs?

Mr Watson:

What you are suggesting is that we move away from the standard way of running programmes, which is done on a competitive basis. If did that, we would have to justify to all the clubs that are not nominated even by their governing bodies why they cannot compete for funding. It may be that not all clubs agree with the selections of their governing bodies. Programmes must be run competitively to ensure that the process is fair and equitable for all.

The Chairperson:

I am simply reflecting a determination, which I have heard Ciarán express before, to get money out to the sporting infrastructure.

Mr O’Loan:

It would be helpful if all Departments provided tables showing the accumulative surrenders from the different monitoring rounds throughout the year.

Mrs D Brown:

The information in annex D gives a full picture from the start of the financial year.

Mr O’Loan:

That is useful. I will look at the information to see whether it is in a comprehensible form. This is a very large round, with a big surrender and a substantial bid. Surely some of the items surrendered could have been declared earlier. There is an imperative to do that. The capital programmes, in particular, are a long time in development, and the Department would have known in which direction those were going well in advance. Why did the Department not declare more items for surrender earlier?

Mrs D Brown:

A capital programme board meets bi-monthly to examine our capital programme in order to ensure that we are maximising the capital budget available. In that particular instance, it is actually quite a small surrender. If we surrender £952,000 and bid for £259,000, the fact that we are bidding for £259,000 is a technicality because we have moved above the de minimis level on the museums. We have to bid for and surrender capital; that needs to be looked at as a net effect. The only amount that we really have to surrender is £500,000 for the multi-sports stadium. Obviously, there has not been much progress on it at this stage. Most of the surrender is for the multi-sports stadium.

Mr O’Loan:

It must have been obvious in September that that would not go ahead this year.

Mrs D Brown:

We wanted to ensure that there was capital if we were able to get it off the ground. The other small surrender relates to Crusaders’ Football Club. That is a slippage issue. It could not have been managed.

Mr O’Loan:

I know that you are pushed for time, Chairman. Finally, you described the bid for National Museums capital as high priority. How difficult would it be for National Museums if it did not get that money?

Mrs D Brown:

I believe that it is for capital maintenance, general capital and security systems, so National Museums would not be able to spend the money on those capital maintenance projects. It has a knock-on impact. I hope that because the block starts the December monitoring round with nil over-commitment on capital, the Executive will be able to accommodate those moves.

Mr Leonard:

I would like more detail on the outline business case for the multi-sports stadium and the implications for the next three months. It is indicative of a greater problem. Crusaders’ Football Club was mentioned in our discussion with the IFA this morning. Why was there slippage?

Mr Watson:

It occurred because there was potential contamination; therefore environmental health officers had to make a contamination report, which held up the planning application. The planners needed the report from environmental health before they could proceed. I am not sure, but I believe that it might have been asbestos-related.

Mr Leonard:

It was a serious issue.

Mr Watson:

Absolutely. The planning application could not be submitted until the report was finalised. As far as I am aware, the planning application has gone through; therefore, the contamination report has been completed.

With regard to the major facilities programme, we are looking at the outline business cases. You will appreciate that they require substantial capital funding. As yet, we do not know what our capital allocations will be in the next CSR period. Therefore, affordability will be an issue in moving forward on all those projects. Until such times as we get clarity on that —

Mr Leonard:

Therefore, there is nothing new or additional to that particular reduced requirement report for the future?

Mr Watson:

No.

The Chairperson:

Ken had a question, although he may feel that it was reflected in Billy’s question.

Mr K Robinson:

Was the contamination that you mentioned on the existing site or a potential new site?

Mr Watson:

The project was on the existing site.

Mr McCartney:

You mentioned the major facilities programme. Why is it still referred to as a multi-sports stadium in the document?

Mrs D Brown:

When the database was set up four years ago that is what it was envisaged to be.

Mr McCarthy:

With regard to Libraries Northern Ireland, the purport of the document is that there is a possible threat. Two new libraries were to be built. Do you know anything about a threat that they will not go ahead? If that is the case, why is money being handed back?

Mrs D Brown:

None of the money is being handed back at this stage, as I understand. We are taking forward several library projects in the Shankill, Falls and Whiterock areas.

Mr McCarthy:

I am referring to two newbuilds.

Mrs D Brown:

I do not have the detail with me. I am not aware of a threat.

Mr McCarthy:

They may not go ahead?

Mrs D Brown:

I suppose that in light of the uncertainty about the Budget for the next four years, we will have to address certain issues. Until we have certainty, we just do not know.

Mr O’Loan:

There is too much information in annexe D, so can the officials provide a short summary paper on the cumulative surrenders this year?

Mrs D Brown:

Yes.

The Chairperson:

I thank Deborah, Arthur and Colin for attending. Members, are there any actions that we want to carry out on foot of the December monitoring round?

Mr McCarthy:

We have had several presentations today, and when the question of next year’s Budget crops up people are uncertain. Can we write to the Executive to tell them to agree a Budget so that people can have information?

The Chairperson:

I am told that we have to write to the Minister of Culture, Arts and Leisure, not the Executive.

Mr McCarthy:

There is a real concern.

The Committee Clerk:

We scrutinise the Department, not the Executive, so we can write only to the Minister and ask him to urge the Executive to do something.

Mr McCarthy:

Can I make that proposal?

The Chairperson:

That is agreed.