End of Session Report 1 September 2012 - 31 August 2013

Session: 2012/2013

Date: 19 November 2013

ISBN: Only available online

Committee Remit, Powers and Membership

Powers

The Committee for Finance and Personnel is a Statutory Departmental Committee established in accordance with paragraphs 8 and 9 of the Belfast Agreement, Section 29 of the Northern Ireland Act 1998 and under Assembly Standing Order 48. The Committee has a scrutiny, policy development and consultation role with respect to the Department of Finance and Personnel (DFP) and has a role in the initiation of legislation.

The Committee has the power to;

  • consider and advise on Departmental budgets and annual plans in the context of the overall budget allocation;
  • approve relevant secondary legislation and take the Committee Stage of primary legislation;
  • call for persons and papers;
  • initiate inquiries and make reports; and
  • consider and advise on matters brought to the Committee by the Minister of Finance and Personnel.

Membership

The Committee has eleven members, including a Chairperson and Deputy Chairperson, with a quorum of five members. The membership of the Committee during the current mandate has been as follows:

Mr Daithí McKay (Chairperson) (1)

Mr Dominic Bradley (Deputy Chairperson)

Mrs Judith Cochrane

Mr Leslie Cree MBE

Ms Megan Fearon (2)

Mr Paul Girvan

Mr John McCallister (3,4)

Mr David McIlveen (5)

Mr Mitchel McLaughlin

Mr Adrian McQuillan

Mr Peter Weir (6)

1 Mr Daithí McKay replaced Mr Conor Murphy MP with effect from 2 July 2012

2 Ms Megan Fearon was appointed to the Committee with effect from 10 September 2012

3 Mr Roy Beggs replaced Mr Ross Hussey with effect from 23 April 2012

4 Mr John McCallister replaced Mr Roy Beggs with effect from 15 October 2012

5 Mr David McIlveen replaced Mr David Hilditch with effect from 1 October 2012

6 Mr Peter Weir replaced Mr William Humphrey with effect from 1 October 2012

Primary Legislation

Civil Service (Special Advisers) Bill

1. The Committee undertook detailed scrutiny of the Civil Service (Special Advisers) Bill, a Private Members’ Bill which was introduced to the Assembly by Mr Jim Allister QC MLA (the Bill sponsor) on 2 July 2012 and referred for Committee Stage on 25 September 2013.

2. As part of its consideration of the Bill, the Committee issued a call for evidence and received written submissions and held oral hearings with a representative range of stakeholders and academic witnesses. Two oral evidence sessions were held with the Bill sponsor and the Committee also received legal advice from Assembly Legal Services.

3. A number of key themes and issues were identified in the evidence including, for example: consideration of the needs of victims; blanket disqualification versus individual assessment; compatibility with other human rights requirements; commitments under the Good Friday/Belfast Agreement and St Andrews Agreement; and transparency on arrangements for special advisers. In addition, the Office of the Legislative Counsel provided comments relating to drafting and technical issues.

4. While there was no consensus in the evidence in respect of most of the themes and issues identified, the substantial body of evidence gathered by the Committee helped provide Assembly Members with an insight into the different perspectives on this sensitive and controversial topic and thereby informed the subsequent plenary debates as the Bill made its passage through the Assembly.

Public Service Pensions Bill

5. Following its introduction to the Assembly in June 2013 the Public Service Pension Bill progressed to Committee Stage on 26 June 2013. The Bill will introduce major changes to public service pensions in Northern Ireland, including the policy for a new career average re-valued earnings (CARE) scheme model, with pension age linked to state pension age. The reforms will extend across the public service schemes for the civil servants, devolved judiciary, local government workers, teachers, health service workers, fire and rescue service workers, and, members of the police service.

6. Given the significance of this Bill and the associated time constraints, the Committee started gathering evidence from stakeholders, including Trade Union representatives and DFP officials, in the months preceding the introduction of the Bill to the Assembly. Clarification was sought from the Department on a range of issues including, in particular, the anticipated savings from the reforms and the financial impact of choosing not to proceed with following GB in making the changes. The Department estimated an annual cost of £260 million, however the Committee identified that this figure was calculated on the basis of a detailed assessment of the Health Service pension scheme only. DFP consequently agreed to commission further work by the Government Actuary’s Department to establish a more accurate estimate of costs/savings.

7. The Committee also sought to establish the scope to vary from parity with GB in the Bill and related subordinate legislation without incurring financial reductions in the block grant. In response, DFP set out the areas where such scope exists, in particular in the design of the individual schemes, which will be provided in the subsequent subordinate legislation.

8. Prior to the summer recess the Committee issued a call for evidence and the submissions will be evaluated early in the next session, together with further oral evidence from the relevant stakeholder groups. The significant pre-introductory scrutiny of the policy proposals, however, should assist in advancing the Committee Stage of the Bill.

Superannuation Bill

9. The purpose of the Superannuation Bill was to remove the requirement for DFP to secure the consent of trade unions to detrimental changes to the Civil Service Compensation Scheme, in particular the benefits that apply in circumstances of compulsory or voluntary redundancy. In place of this reform, new duties would be placed on DFP to consult with the unions with a view to reaching agreement and to lay a report before the Assembly on the consultation.

10. During Committee Stage, which commenced in March 2012, several important issues were identified from evidence received, including the scope and requirements for meaningful engagement between management and the unions, the case for strengthening the consultation provisions and for providing a measure of Assembly control over future compensation scheme changes.

11. At the start of this session, members considered potential amendments to the Bill and received advice from Assembly Legal Services. The Committee tabled an amendment to insert a new Clause into the Bill which would subject any scheme reducing the amount of a compensation benefit to the negative resolution procedure, thereby providing for a measure of Assembly control. This was accepted by the Assembly on 22 October 2012.

12. The Committee pressed the Department and received a number of assurances over certain issues that arose in the course of evidence gathering. The Minister also assured the Committee that any future compensation scheme changes will not commence until at least 21 days after being laid in the Assembly.

13. In relation to the principle of maintaining parity with GB, the Committee received clarification from the Department that engagement between Northern Ireland Civil Service (NICS) management and the trade unions offers opportunity for compromise and agreement on potential nuances to the timing and substance of compensation scheme changes in NI, while maintaining overall parity with GB. The Minister also accepted the Committee’s view that the Pensions Forum provides a mechanism for such engagement. The Pensions Forum was also identified as the appropriate vehicle for implementing the Committee recommendation that, in future, the Department undertakes local consultation with NICS trade unions at the formative stage of policy development and in tandem with, rather than subsequent to, the timetable followed by the respective Whitehall Department.

14. The Committee scrutiny therefore achieved a number of improvements, in particular that the engagement undertaken in relation to future subordinate legislation will be conducted in the context of the safeguards contained within the provisions of the Bill and the assurances which the Department provided to the Committee and wider Assembly. The Bill received Royal Ascent on 9 January 2013.

Budget Bills

15. The Committee considered two Budget Bills during this session. In January 2013 members considered the Budget Bill 2013, including the Spring Supplementary Estimates for 2012-13 and the Vote on Account for 2013-14. The Committee held two evidence sessions with DFP officials on the Bill and additionally scrutinised each of the monitoring rounds throughout the financial year. Having considered the evidence, the Committee agreed to grant accelerated passage to the Bill on the basis that there had been appropriate consultation with it on the provisions of the Bill as required under Standing Order 42(2).

16. In May 2013 the Committee considered the Budget (No. 2) Bill 2013, which included the Main Estimates for 2013-14. To inform its deliberations, the Committee took evidence from DFP officials and, having considered the evidence, the Committee agreed that the Bill could proceed by accelerated passage.

Financial Provisions Bill

17. The purpose of the Financial Provisions Bill is to adjust statutory limits and to address other minor and non-controversial financial issues within the Departments of Agriculture, Justice, and Social Development. There is also provision to maintain consistency within legislation effecting the Comptroller and Auditor and General.

18. The Committee is taking the lead on this Bill through Committee Stage and has commissioned responses from other relevant committees. Several pertinent issues were identified by members and highlighted to the relevant committees for their attention. In addition, arising from the Delegated Powers Memorandum, the Examiner of Statutory Rules highlighted a potential issue in relation to regulations within the Bill, which DFP has agreed to rectify by way on an amendment.

19. As scrutiny progressed and after Second Stage of the Bill, the Committee was informed of the Minister’s intention to bring forward two amendments at Consideration Stage, both of which relate to rating legislation. The Committee has undertaken to scrutinise these provisions accordingly. Following receipt of any further responses to the call for evidence, which concludes on 27 September 2013, the Committee will complete its Committee Stage scrutiny.

Legislative Consent Motions

Marriage (Same Sex Couples) Bill

20. The LCM on the Marriage (Same Sex Couples) Bill was brought forward by the Minister of Finance and Personnel to obtain Assembly agreement that provisions of the Marriage (Same Sex Couples) Bill, which relate to the treatment of same sex marriages in Northern Ireland and gender recognition, should be considered by the UK Parliament. In particular, the Bill would provide for English/Welsh same sex marriages to be treated as civil partnerships in Northern Ireland, in the same way as overseas same sex marriages are treated.

21. Mindful of the majority view in the Assembly against same sex marriage, as expressed in recent debates, the Committee adopted a pragmatic approach and recommended that the Minister is supported on the LCM. However the Committee raised a number of key concerns and sought clarification on a range of issues.

22. It was noted that the approach taken by the LCM would leave Northern Ireland out of kilter with an increasing number of modern democracies around the world. Moreover, given the concern of some stakeholders regarding the potential for the policy to lead to an unequal regime of human rights protection in Northern Ireland compared to Britain, the Committee was mindful of the potential for subsequent legal challenge on human rights or equality grounds. In querying the extent to which the equality implications of the LCM had been robustly examined, the Committee obtained a view from the Equality Commission on the Department’s equality screening. The Commission raised a number of issues and indicated that it would advise the Department directly in relation to the screening form and its equality scheme commitments.

23. Included in the Committee’s recommendations was a call for clear guidance on the legal status and position of both adoptive parents in same-sex marriages and their children, should they move from Britain to here. Clarification was obtained from DFP regarding the provisions and implications for pensions of some same-sex spouses moving to Northern Ireland and assurance was received that the consent of DFP would be required before the Secretary of State makes Orders in respect of Northern Ireland. The Committee also sought that it be consulted before any such proposals went to the Executive.

24. Finally, given the complexity and sensitivity of the issues involved, the Committee pointed out how this LCM highlighted a major flaw in the LCM process in terms of the Committee having insufficient time for thorough evidence gathering as a result of not being given an early enough indication of the Minister’s intention to bring such a motion. A report was prepared to inform all Assembly members in advance of the debate in plenary on 24-25 June 2013, following which the LCM was agreed.

Subordinate Legislation

25. During the session the Committee scrutinised 23 statutory rules. Nine statutory rules were subject to affirmative resolution and the Committee recommended that they be affirmed by the Assembly. Fourteen statutory rules were subject to the negative resolution procedure and, following scrutiny, the Committee agreed that it had no objections to the rules.

26. As part of its routine scrutiny of subordinate legislation, the Committee obtained clarification and assurances on issues identified by members. For example, with regard to the General Register Office (Fees) Order (NI) 2012, an explanation was obtained from DFP on how the increase in fees had been calculated in terms of cost recovery. Similarly, in relation to the proposal for subordinate legislation on the Compulsory Acquisition (Interest) (Amendment) Order (NI) 2013, the Committee obtained clarification on the anticipated costs, together with the rationale for the proposed amendment.

27. The Committee also noted three proposals for subordinate legislation which were not subject to Assembly procedure.

Inquiries

Inquiry into Flexible Working

28. The Committee had previously decided to initiate an Inquiry into Flexible Working in Northern Ireland. During this session it agreed the Terms of Reference, received evidence and considered research which indicated that flexible working practices – including arrangements for how, when and where public servants undertake their work – have the potential to offer considerable benefits for employees, employees and wider society. The evidence to date has focused on how best flexible working practices could be implemented to realise maximum benefits for the public sector. The Committee has also identified an apparent absence of an overarching strategy on flexible working within NICS; and DFP officials have welcomed the Inquiry, indicating that the findings could help to “crystallise thinking” on this issue within NICS.

Budget and Financial Scrutiny

In-year Expenditure

29. The Committee scrutinised the DFP monitoring round positions prior to the Department making its submissions to the centre in June, October and January. In addition, the Committee received evidence from DFP officials on the outcome of each monitoring round at both Departmental and strategic level.

30. The Committee also took evidence on the 2012-13 provisional outturn at both strategic and Departmental levels and welcomed the fact that no resource was surrendered to the UK Treasury, in part due to Departments bringing forward reduced requirements early in the financial year for reallocation. As a result of this routine financial scrutiny, the Department provided clarification and assurances on a range of public expenditure issues affecting DFP and the other Departments. The Committee also commissioned work by Assembly Research to support all statutory committees in undertaking scrutiny of in-year expenditure.

Review of Efficiency Delivery

31. On referral from the Public Accounts Committee (PAC), members undertook follow-up scrutiny of the Northern Ireland Audit Office (NIAO) report on the ‘Review of Efficiency Delivery Programme’. The Review by the Audit Office had arose from a recommendation in the previous report by the Finance and Personnel Committee on its preliminary inquiry into public sector efficiencies in 2010. The Review report found that, for around two thirds of the projects examined, NIAO could offer no assurance that genuine efficiency savings have been achieved. It concluded, inter alia, that this reflects a lack of understanding by departments of what represents an efficiency saving, and a lack of sufficient financial and performance information.

32. As part of its consideration of the review, the Committee received evidence from NIAO, DFP, DHSSPS, DRD, and DEL as well as from DE via the Education Committee. A number of key themes and issues were identified in the evidence and these will form the basis for the Committee’s report in the next session. The cross-cutting nature of the Committee’s work on this topic required collaboration with other committees and highlights the potential for a ‘joined up’ approach to financial scrutiny aimed at having a positive impact on the management of public expenditure by all departments.

Policy Scrutiny

Some of the other key policy issues examined included:

Prompt Payment by Public Bodies and Main Contractors

33. The Committee continued to scrutinise this issue, mindful of its importance in terms of the local economy. Arising from research and evidence gathered, members expressed concerns that the performance of NDPBs and ALBs in meeting targets set for prompt payment of invoices is not accounted for within the figures for core government departments presented by Account NI; spending by these bodies accounted for significant amounts of the overall spending in certain departments. In response to this concern, the Minister gave an assurance that the potential to widen the scope of Account NI to include NDPBs would be considered as part of the review of Account NI prior to tendering for a new contract.

34. The Committee also raised issues in respect of prompt payment to subcontractors during this session. Members voiced concerns that contractors could employ subcontractors additional to those identified at tender stage and not adhere to prompt payment principles. The Committee also asked for clarification about the mechanisms used by the public sector contracting authorities to ensure that subcontractors are paid on time. In addition, members pressed DFP officials on whether subcontractors were paid on the same basis as main contractors. Departmental officials sought to assure the Committee that the relevant Procurement Guidance Notes addressed such issues and that adequate controls were in place to ensure prompt payment principles were being adhered to by main contactors, Departments and local councils. Follow up scrutiny of this issue, however, will be conducted by the Committee early in the new session.

Rating issues

Rate Rebate Replacement

35. In its Spending Review 2010, the UK Government announced that support for Council Tax (Council Tax Benefit) would be localised from April 2013 and expenditure reduced by 10% from the same date. This has now taken effect and the changes implemented in Council Tax Benefit in GB also took effect in relation to the Northern Ireland equivalent, the rate rebate element of Housing Benefit. Effectively the policies and the associated cuts in funding have now been devolved.

36. Mindful that this aspect of welfare reform could affect a significant section of the local community, the Committee took initial evidence from DFP and other stakeholders in the spring of 2013 in order to establish the policy options open to the Executive and to provide its initial views in this regard.

Rates Liability for the Landlord Sector

37. During the session DFP went out to public consultation on proposed reforms in this area. Rating and landlord/owner liability in Northern Ireland is governed by primary legislation. While the occupier will usually be liable to rates in the domestic sector (for occupied rates) this is subject to certain exceptions, which deal with landlord/owner liability (liability can also occur as a result of vacant rating). A key exception is where landlords/owners of certain rental properties will become liable to rates instead of the occupier. The rating legislation creates mandatory liability for landlords/owners as well as providing for voluntary liability by agreement between a landlord/owner and the Department.

38. Given the importance of the proposed reforms to tenants and landlords, the Committee undertook a series of briefings from the Department and representative stakeholder groups. The Committee noted a number of issues and anomalies in this policy area, including examples of instances where tenants and landlords alike have borne the responsibility of unpaid rates as a result of non-payment.

39. The Committee will receive update briefing from DFP officials early in the new session, which will set out the findings of the consultation exercise and enable the Committee to reach an informed position on the way ahead on this matter.

NICS Equal Pay settlement

40. In the previous session and following an extensive evidence gathering exercise, the Committee had concluded that the case had been well made for the Executive to address the grievances of NICS retirees, NIO secondees and PSNI secondees and support staff arising from the 2009 NICS equal pay settlement. As such, the Committee called for the equal pay settlement to be extended to cover these cases, mindful that a settlement of these grievances would also reduce the risk of further litigation and avoid additional legal costs for the Executive.

41. Subsequent developments in this policy area included the legal action initiated by NIPSA on behalf of some 500 members in the autumn of 2012 on foot of the legal judgement in the Birmingham City Council v Abdulla case. Consequently, in May 2013, the Committee took evidence from DFP officials to examine the potential impact locally of this legal judgement and the current position being adopted by the Department. The Committee will continue to monitor developments in respect of the residual grievances arising from the NICS equal pay settlement.

Corporation Tax

42. The Committee is supportive of the continuing commitment of the Executive to press for the devolution of corporation tax powers. Having monitored the progress of the Ministerial Working Group via briefings from the DFP Minister and officials, the Committee is disappointed that the UK Government’s decision on the devolution of corporation tax will not now be taken until after the Scottish referendum on independence on 18 September 2014. However, the Minister has advised the Committee that the Executive will continue to press for a positive decision and has given a commitment that, in the interim, work will be taken forward to: develop the technical design principles for a devolved regime; resolve the outstanding issues on the net cost of the measure; and reach agreement on necessary adjustments to the block grant, including measures to manage expected volatility in receipts.

Air Passenger Duty

43. During this session the Committee continued to actively gather evidence and examine the important issue of Air Passenger Duty (APD). This included briefings from Departmental officials, the Minister and PriceWaterhouse Coopers.

44. The Committee agreed that the Air Passenger Duty (Setting the Rate) Bill should proceed by accelerated passage, having been satisfied with the explanation and assurances provided by the Minister in this regard.

45. In response to a recommendation within the Committee’s report on Air Passenger Duty (published in the previous session) the Minister committed to undertake research to explore options to improve Northern Ireland’s connectivity, which would include the APD and non-APD related actions which may be taken. The Committee undertook to monitor progress and examine the outcome of this two-stage Air Connectivity Study being undertaken by DFP and the Department of Enterprise, Trade and Investment.

Scrutiny of European Issues

46. Members have continued to scrutinise the work of both DFP and the Special European Union Programmes Body (SEUPB) in relation to European Funding programmes. During oral hearings and follow up communication, the Committee pressed both DFP and SEUPB on the timescales for processing INTERREG project funding applications and on the options for improvements in this area in respect of future programmes. Members also examined the various evaluations that have been carried out on previous funding programmes, in light of the development of future PEACE IV and INTERREG V Programmes and the need to ensure that lessons are learned and applied going forward.

47. In terms of wider scrutiny of EU issues, the Committee made submissions to the Committee for the Office of the First Minister and deputy First Minister as part of a co-ordinated return on the European Commission Work Programme Pilot Project and the Draft European Priorities for 2012-13.

Banking Issues

48. On 11 October 2012, the Committee held a concurrent meeting with the Enterprise, Trade and Investment Committee to examine the Ulster Bank Systems failure. In addition, in response to recent branch closures the Committee held a special meeting with representatives of the Ulster Bank on 10 July 2013, at which members of the Enterprise, Trade and Investment Committee also were given the opportunity to question witnesses.

49. These public hearings provided clarification and assurances on a number of issues and follow up action was also taken by the Committee. This has included, for example, obtaining an assurance from the Minister of Finance and Personnel to follow up with the Financial Conduct Authority and its investigation into the RBS/Ulster Bank Payments Systems Failure. The Committee also communicated its concerns regarding branch closures to Danske Bank, Bank of Ireland and First Trust Bank, Santander, Nationwide, Barclays and Halifax.

Defamation Bill

50. The Committee undertook initial scrutiny of this topic following correspondence from stakeholders who had raised concern that the Defamation Act 2013 did not extend to Northern Ireland. This Westminster legislation, which received Royal Assent on 25 April 2013, aimed to make substantive reforms to the law of defamation in England and Wales to ensure that a “fair balance is struck between the right to freedom of expression and the protection of reputation”.

51. As part of its scrutiny, the Committee had sought to establish from the Department the background as to why the LCM procedure had not been followed in this instance; however, given the confidential nature of Executive business, it was unable to obtain clarity in this regard. The Committee, nonetheless, held preliminary evidence sessions with stakeholders representing the differing perspectives on whether Northern Ireland should follow the legislative reform introduced in England and Wales. These included: Mr Mike Nesbitt MLA, who plans to introduce a private members’ bill on defamation; Mr Paul Tweed, Media Lawyer; and the Libel Reform Campaign.

52. During these sessions the Committee sought to gain an insight from all parties on the case for the reforms in the Northern Ireland context and on how a balance could be reached between the right to freedom of expression and protection of reputation.

Other Scrutiny Issues

53. The Committee also scrutinised other key policy and performance areas during the 2012-13 session including:

  • Land and Property Services (LPS)
  • Departmental Corporate, Operational and Business Plans, including Programme for Government Delivery Plans and Targets
  • NICS HR Issues
  • Building Regulations
  • Public Procurement
  • Shared Services – Benefits Realisation
  • Dormant Accounts Scheme

Engagement - Informal meetings/events

54. The Committee sponsored the launch of the Northern Ireland Place Names Database Project Event in the Parliament Buildings on 21 January 2013. LPS part funded this project and host the website. This service was praised as providing a useful tool in educating future generations in terms of their local community and offering an on-line resource for overseas genealogists working to establish family links to Northern Ireland.

Likely key priorities for the next session

55. The Committee’s key priorities for the next session include:

  • Inquiry into Flexible Working;
  • Inquiry into the Barnett Formula;
  • Legal Complaints and Regulation Bill
  • Public Procurement – review of departmental performance against Committee Inquiry recommendations;
  • Prompt payment by public bodies and main contractors;
  • Performance of LPS;
  • Banking issues;
  • NICS Human Resources Policy.

Detail of Committee Meetings

56. The Committee met on 39 occasions during 2012/13. Of these 39 meetings, 31 were held in open session and 8 were held in open/closed session. In terms of the latter, most of these related to the consideration of draft committee reports which, following the normal procedural convention, take place in closed session. Privileged legal advice was also taken in closed session.

57. One combined visit and Committee meeting was held at Clare House, Holywood Exchange, Belfast.  

Committee for Finance and Personnel
Expenditure for the period 1 September 2012 – 31 August 2013
 

Budget area

Details

Expenditure

Committee Travel - committee members and staff travel and subsistence in relation to visits and meetings outside Parliament Buildings

Includes the cost of committee visit and meeting to Clare House, Holywood Exchange, Belfast on 13 February 2013 and staff expenses to the Committee meeting held in Derry/Londonderry on 12 June 2013

£148.90

Printing of committee reports

Includes the cost of committee reports on:

  • Civil Service (Special Advisers) Bill
  • Superannuation Bill

£1805.58

Advertising – the cost of public notices relating to committee inquiries, the committee stage of Bills and meetings held outside Parliament Buildings

Includes the cost of public notices in relation to:

  • Civil Service (Special Advisers) Bill
  • Flexible Working Inquiry

£1231.24

General expenses

Cost of refreshments for committee meetings, working lunches, seminars, room hire, witness expenses, and conference fees for members

£2097.86

 TOTAL

£5283.58

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