Northern Ireland Assembly Commission briefing to assist the Audit Committee’s scrutiny of the Assembly Commission’s Budget 2022-25

Legal and Constitutional Background

1. Section 40(4) of the Northern Ireland Act 1998 (“the 1998 Act”) provides the legal basis for the work of the Assembly Commission. Section 40(4) of the 1998 Act states that “The Commission shall provide the Assembly, or ensure that the Assembly is provided, with the property, staff and services required for the Assembly’s purposes.”

2. Section 47 of the 1998 Act states that the Assembly shall pay to Members of the Legislative Assembly (‘Members’) such salaries, and may pay such allowances, as may from time to time be determined. The Assembly Commission administers the payment of these salaries and allowances.

3. The Assembly Commission’s budget therefore includes the disbursement of Members’ salaries, allowances and expenses, the necessary costs for the provision of Plenary and committee facilities in Parliament Buildings and elsewhere and the salary costs for the staffing resources used to provide all the services required by the Assembly.

4. Given the constitutional role of the Assembly as the legislature for Northern Ireland, the Assembly Commission does not develop Programme for Government targets. However, the Assembly Commission develops a Corporate Strategy and an accompanying Corporate Plan and Annual Plans to help to meet the statutory functions set out above under section 40(4) of the 1998 Act. The Assembly Commission monitors progress against those plans and reports on that progress through its Annual Report and Accounts. When developing its plans, the Assembly Commission is acutely aware of the need for prudent financial management.

 

Assembly Commission Funding

5. Although not a part of the Executive, the Assembly Commission is voted resources by the Assembly through the same Main Estimates and Supplementary Estimates processes that are used for all other entities funded from the Northern Ireland Block Grant.

6. The scrutiny of the Assembly Commission’s budget by the Audit Committee and by the Assembly in Plenary recognises the constitutional independence of the Assembly from the Executive. The Assembly Commission’s budget is incorporated into the budget that is presented by the Finance Minister to the Assembly but it is not devised using the same methodology as the budget for an Executive Department. However, the Assembly Commission is aware of wider macro-economic factors when developing its budget for each year.

Budget 2022-25

7. The Chancellor of the Exchequer announced the outcome of the UK-wide Spending Review on 27 October 2021. That Spending Review set the funding envelope for Resource DEL for a three-year period (2022-25). As with most other entities funded from the NI Block Grant, the Assembly Commission has prepared a three-year budget (2022-23 to 2024-25) for both Resource DEL and Capital DEL.

8. The Assembly Commission has developed a five-year Corporate Strategy for the period 2018-23 and an accompanying Corporate Plan. The impact of the prevailing public health environment is still apparent and a number of projects (typically Capital projects) continue to be adversely impacted by the COVID-19 pandemic. However, a full programme of activities and capital investment is planned over the budget 2022-25 period.

9. The budget for the three-year period from 2022-23 to 2024-25 and, in particular, for 2022-23 reflect the costs that are likely to be incurred at the start of the new Assembly mandate. For example, resettlement costs are only incurred following the dissolution of the Assembly and a subsequent Assembly election. Similarly, redundancy payments for former Members’ support staff typically increase in the financial year of an Assembly election. The Capital costs also reflect the concertinaing of a number of projects that were deferred during the 3-year period when the Assembly was not conducting normal business and delays caused by COVID-19, along with the normal replacement of equipment on a cyclical basis.

10. The budget 2022-25 is based on an assumption of a “near to normal” operating environment, with public engagement and committee stakeholder visits and events taking place.

11. Table 1 at Annex A sets out the Assembly Commission’s budget plans for 2022-23 to 2024-25 for Resource DEL expenditure. The most recent forecast for expenditure for 2021-22 is also included. Tables 2 to 4 at Annex B set out the Assembly Commission’s plans for Capital DEL for each year of the budget period. In summary, the Assembly Commission’s proposed budget for Resource DEL is £50.757m for 2022-23, £51.189m for 2023-24 and £52.350m for 2024-25. The total for Capital DEL is £3.897m for 2022-23, £3.160m for 2023-24 and £1.005m for 2024-25

12. As set out in previous briefings to the Audit Committee, the income that the Assembly Commission expects to receive and the expenditure that it expects to incur to enable it to deliver the statutory functions that are placed on the Assembly Commission by the 1998 Act, fall into six broad categories namely;

1. Income;
2. Expenditure on payments to and on behalf of Members;
3. Expenditure on salaries for Assembly Secretariat staff and on the administration costs associated with supporting the Assembly;
4. Costs payable to political parties under the Financial Assistance for Political Parties Act (Northern Ireland) 2000;
5. Depreciation and Impairment costs; and
6. Capital costs.

Detailed Figures

Income

13. It is expected that the Assembly Commission will receive income of £684k in 2022-23, £627k in 2023-24 and £610k in 2024-25. The vast majority of the income for each of these years will arise from the recovery of the cost of Ministerial salaries from Government Departments. This comprises £602k of the overall total for each year. This recovery only includes the additional salary paid to each Minister over and above the salary that they receive as a Member.

14. The Assembly Commission enters into a small number of secondment arrangements for its staff with other public sector employers. The recovery of the salary costs of these seconded staff is treated as income. It is anticipated that £69k will be received for a staff secondment in 2022-23 and £17k for 2023-24.

15. The remaining £13k (which includes income from two weddings) for 2022-23, £8k for 2023-24 and £8k for 2024-25 is made up of miscellaneous income mainly from the Post Office facility in Parliament Buildings and commission from crafters for sales in the Speaker’s Corner gift shop.

Expenditure Associated with Members

16. This category of costs is made up of a series of sub-categories including Members’ Salaries, Members’ Constituency Office Costs (including Members’ support staff costs), Members’ Travel Costs and Members’ Other Costs (such as winding up allowance and resettlement allowance). The total cost that is required for 2022-23 is estimated at £19.129m. For 2023-24, the estimated figure is £18.919m and for 2024-25, the figure is £19.212m.

17. Members’ Salaries. The calculation for Members’ salaries is relatively simple as it covers the salary payable to all 90 Members plus the additional salaries paid to Ministers and to other Assembly officeholders such as the Speaker, Deputy Speakers, Committee Chairs and members of the Assembly Commission.

18. It should be noted that Members are not paid for the period between the date of the poll for the next Assembly election and the date that each Member signs the Roll. It is also the case that after dissolution, former officeholders such as Statutory Committee Chairpersons do not receive the element of their salary that was payable due to holding the position of Chairperson. However, for various other officeholders such as Ministers, the Speaker and Assembly Commission Members, the full salary remains in payment until a replacement office holder is nominated or appointed. The impact of the 2020 Assembly elections will therefore result in a slight decrease in the cost of Members’ salaries for 2022-23 to £6.733m.

19. The budget forecast for 2022-23 of £6.733m includes a salary uplift of £500 per Member with effect from 1 April 2022 as specified in the Determination issued by the Independent Financial Review Panel (IFRP) in March 2016. That Determination prescribed that Members’ salaries would increase each year if the CPI measure of inflation for September in the previous year was 1% or greater. As CPI inflation was 3.1% for September 2021, the £500 increase in Members’ salaries is provided for from 1 April 2022.

20. A similar £500 uplift has been assumed for 1 April 2023 and 1 April 2024 as most commentators indicate that the rate of CPI inflation is likely to be above 1% for the medium term. The figure for Members’ salaries for 2023-24 is £6.994m and £7.053m for 2024-25.

21. The Audit Committee is asked to note that this budget proposal does not attempt to predict how a future IFRP or Remuneration Board might deal with Members’ salaries. However, the salary for an MLA is now more than £13k less than the salary payable to an MSP in Scotland and more that £16k less than the salary payable to an MS in Wales.

22. The 2022-25 budget figures do not attempt to forecast what might happen with Members’ salaries over the budget period and no additional budget provision has therefore been included, but there appears to be a reasonable likelihood that Members’ salaries will increase over this period. If a future Remuneration Board increases the salary payable to Members, this will be notified to the Department of Finance to secure the necessary funding at the appropriate time.

23. Members’ Constituency Office Costs. The forecast for this part of the budget for makes provision for the amounts that are available to Members in respect of the costs of running a constituency office. It covers the salaries paid to Members’ support staff, the rent and rates for constituency offices and all the associated running costs.

24. It also includes Establishment Expenses that, unlike most elements of the financial support that is available to Members, are payable over the course of a mandate. In effect, this means that new and returning Members after the May 2022 election will have access to the full £4,000 that is available over the course of the 2022 Assembly mandate.

25. It is estimated that the level of expenditure in 2022-23 will be greater than in 2023-24 and 2024-25, as Members will generally incur more costs through Establishment Expenses in the first year of a new mandate. Similarly, the cost of any redundancy payments that arise following the May 2022 Assembly election will fall in 2022-23 but should not recur to the same extent in subsequent years.

26. The Assembly Commission has agreed that an amending Determination in respect of Members’ allowances will not be published until legislation to alter the functions and remit of the IFRP is introduced in the Assembly in the next mandate, however budget provision has been made for possible changes that are likely to come about in the next mandate.

27. These include:

• An uplift of £1.5k in the level of constituency office rent that can be recovered per annum per Member;
• An increase of 3% on the cost of office rates;
• An uplift of 3% per annum on the limit on Constituency Office Operating Expenses to reflect the likely movement in office running costs; and
• Additional staffing costs provision for a Member who has a baby or adopts a child. Budget cover of £68k for 2022-23, £69k for 2023-24 and £70k for 2024-25 for this is included, based on 3 Members availing of this facility each year.

28. Under the Determination, the maximum payable in respect of Members’ Staffing Costs is increased or decreased by the same percentage increase or decrease applied to salaries paid to staff employed by the Assembly Commission in the preceding year. The 2021 pay award for Assembly Commission staff has still to be determined but, for planning purposes, an uplift of 1% is assumed for 2022-23, with 2% for 2023-24 and 2024-25.

29. Taking all of the above, the forecast for Members’ Constituency Costs for 2022-23 is £11.499m, for 2023-24 it is £11.524m and it is £11.746m for 2024- 25

30. Members’ Travel Costs. The amounts to be paid to Members in respect of their Assembly and constituency travel allowances retain the limits that were set by the March 2016 Determination issued by the IFRP. These amounts have not been reviewed since 2016 so this budget assumes that a future Determination published by the Assembly Commission after the start of the next Assembly mandate will increase travel allowances by 3% in 2022-23 and in subsequent years. The total for this sub-category of expenditure for each year for 2022-23 is forecast to be £304k, with £313k for 2023-24 and £323k for 2024-25.

31. Members’ Other Costs. This sub-category of costs includes provision for items such as winding up expenditure, ill-health retirement allowance and resettlement allowance. The financial year immediately following a March dissolution of the Assembly sees a raised level of expenditure on both resettlement costs and winding up costs. The total for this sub-category is £593k for 2022-23 reflecting the fact that the Assembly election will take place in May 2022 but falling to £88k for 2023-24 and £90k for 2024-25.

32. The figure for resettlement allowance payments is based on an estimate of 20 Members not returning after the next Assembly election with 10 Members choosing not to stand again and 10 not being re-elected. Budget cover for disability allowance payments and the cost of 2 Members resigning and winding up their Assembly business in 2023-24 and 2024-25 are included.

Expenditure on Assembly Secretariat salaries and administration costs

33. Assembly Secretariat Staff Salaries. For 2022-23, the cost of Assembly Secretariat staff salaries is forecast to be £21.736m. While there will be a reduction in staffing numbers and staffing costs as the legislative pressures at the end of the current Assembly mandate ease, the figure for 2022-23 includes staffing to support the development of Private Members’ Bills at the levels seen in 2021-22. Staffing to support the implementation of simultaneous interpretation of Assembly business in Irish and Ulster Scots agreed by the Assembly on 15 June 2021 and the provision of staffing support for an Ad Hoc Committee is also included. Additional support has also been provided for the scrutiny of secondary legislation.

34. The figures for 2023-24 and 2024-25 do not propose significant changes to staffing numbers. There will always be changes up and down in staffing numbers, as new posts are needed for a period while other posts are no longer needed. On average, the number of staff included in the Staff Salaries budget remains relatively constant at approximately 370 Full Time Equivalents during the period 2022-23 to 2024-25.

35. No assumptions have been made about changes to employers’ on-costs such as pension contributions or National Insurance Contributions save for the already announced increase of 1.25% in National Insurance Contributions with effect from April 2022.

36. The Assembly Commission is currently undertaking a grading and pay benchmarking exercise. A pay uplift for 2022-23 of 2.5% has been incorporated to include potential outcomes from that exercise, the pay award for August 2022 and the cost of pay progression. 2% is included for 2023-24 and 2024-25 (to include the cost of pay progression). This leads to a forecast for Staff Salaries of £21.965m for 2023-24 and £22.380m for 2024-25.

37. Administration Costs. The forecast for administration costs for 2022-23 to 2024-25 is £6.445m, £6.328m and £6.392m for each of the three years.

38. Administration costs cover the full range of expenses incurred in enacting legislation and in delivering Parliamentary scrutiny. So, for example, the costs of drafting Private Members’ Bills, facilitating committee activities including meetings in Parliament Buildings and elsewhere and delivering Plenary sittings are all included in this category of expenditure. It also includes the costs of operating Parliament Buildings such as heating, lighting, property maintenance, rates, etc. The costs of business-critical and longer-term contracts for IT support, broadcasting, cleaning, etc. are also included.

39. For each year of the budget period, normal or typical years of operation are assumed that are not adversely impacted by the Assembly not carrying out its normal business nor are they affected by COVID-19. A full programme of engagement and outreach activities including committee visits and associated travel is assumed. It is also recognised that utility costs are likely to increase during the budget period and that an alternative approach to the provision of print facilities in Parliament Buildings is likely to be adopted.

Payments under the Financial Assistance for Political Parties Act (Northern Ireland) 2000 (‘the 2000 Act’)

40. Payments to political parties are currently made under the FAPP Scheme 2016. The Assembly Commission is presently discussing the rate of payments under a future FAPP Scheme and while a draft Scheme has not yet been prepared, an assumption that the level of payments could reach £988k in 2022-23 has been made. It is also assumed that an inflationary uplift of 2% will be made for each year of the Scheme meaning that the total for 2023-24 is £1.008m and £1.028m for 2024-25.

41. The Audit Committee will be aware that the Assembly and Executive Review Committee has just completed its Report on the outcome of the independent Review of the adequacy and effectiveness of the Statement of Entitlements for an Official Opposition at the Northern Ireland Assembly. A Motion on the Report is included in the Provisional Order Paper for 9 November 2021. While the Assembly has yet to offer a view on the Report, the figures for this category of expenditure include an amount of £100k per annum to provide additional payments to a party that enters Opposition following the next Assembly election. For budgeting purposes, it is assumed that 1 party will enter Opposition in 2022-23.

Depreciation and Impairment

42. It is expected that the charge for depreciation and impairment will total £3.143m for 2022-23, £3.596m in 2023-24 and £3.948m in 2024-25.

43. The increase in depreciation charges in 2023-24 and 2024-25 reflects the fact that a significant capital investment programme is envisaged in both 2022-23 and 2023-24 with a resultant impact on depreciation charges.

Capital Investment

44. In the next three financial years, it is anticipated that a number of planned capital projects will be delivered with a total cost of £3.897m in 2022-23, £3.160m in 2023-24 and £1.005m in 2024-25.

45. A number of these projects are carried forward from 2021-22. These include:

1. The replacement of the existing Security Management System;
2. The investment in broadcasting infrastructure; and
3. The installation of a partial Electronic Access Control system.

46. Each of these projects was planned for completion in 2021-22, but progress has been slower than expected due to a range of factors such as problems in securing the services of external specialists in Parliament Buildings. As a result, these projects will now be completed in 2022-23 and the majority of the capital expenditure will be incurred in 2022-23. The surplus capital funds were not retained in 2021-22, but were returned via early monitoring rounds to enable their re-allocation across the NI Block.

47. The list of capital proposals for 2022-23 to 2024-25 is attached in Tables 2 to 4 of Appendix 2 and includes a number of items that require replacement on a cyclical basis.

48. The Assembly Commission has sought to assure itself that the capital projects include in this budget exercise can be delivered in the relevant timeframe. While external factors can have a detrimental impact on the timetable for any project, it is anticipated that these projects will have tight controls over their timetables to minimise the potential for slippage.

 

Conclusion

49. The Assembly Commission’s Resource DEL expenditure for 2022-25 is forecast to be £50.757m in 2022-23, £51.189m in 2023-24 and £52.350m in 2024-25. Capital DEL expenditure of £3.897m, £3.160m and £1.005m has also been identified for the budget period.

The Assembly Commission
28 October 2021

Annex A

Table 1: Resource DEL Budget 2022-23 to 2024-25

	2021-22  Forecast Outturn  £000	2022-23  Proposed Budget  £000	2023-24  Proposed Budget  £000	2024-25  Proposed Budget  £000
Income	(652)	(684)	(627)	(610)
Members' Salaries	6,821	6,733	6,994	7,053
Members’ Constituency Office Costs	10,416	11,499	11,524	11,746
Members' Travel Costs	300	304	313	323
Members' Other Costs	144	593	88	90
Secretariat Staff Salaries	20,866	21,736	21,965	22,380
Administration Costs	5,875	6,445	6,328	6,392
Party Allowance	800	988	1,008	1,028
Depreciation and Impairment	3,500	3,143	3,596	3,948
Total	48,070	50,757	51,189	52,350

Project Title	Description of works	Estimated Spend £000
Broadcasting contingency	Contingency for replacement of key broadcast infrastructure items and installation costs.	£30
Digital Archive and captioning Annunciator systems	Replacement of servers that support the digital broadcast archive of Assembly Proceedings and the Annunciator service.	£36
Kitchen equipment contingency	Replacement of individual items of kitchen equipment.	£15
Furniture replacement	Replacement of individual items of furniture.	£25
Parliament Buildings Security System (PBSS).	Replace existing Security Management System.	£360
Chamber video replacement	Replacement of cameras and associated infrastructure in Assembly Chamber and production gallery work.	£708
Room 21 and 29 broadcasting refurbishment	Full replacement of all audio and video systems and related infrastructure.	£1,290
Green screen studio build	To build a permanent green screen studio for use as a dedicated signing studio.	£35
Parliament Buildings Wi-Fi Replacement	Replacement of Wi-Fi infrastructure in Parliament Buildings to facilitate video conferencing and other applications.	£125
Corporate System Review Project	New system for HR, Payroll, Finance and Procurement.	£823
Replace internet firewalls	Replacement of internet firewalls providing secure access including scanning for viruses, malware etc.	£40
Replacement of Hansard Digital Audio System.	Procurement of a new digital audio system providing digital sound recordings to facilitate the production of the Official Report.	£150
Refurbishment of emergency lighting	Replacement of phase inverters.	£70
Electronic access control	Installation of new partial electronic access control system.	£160
Portraits of former office holders	Production of portraits in line with the Commission's agreed policy.	£30
		£3,897

Project Title	Description of works	Estimated Spend £000
Broadcasting contingency	Contingency for replacement of key broadcast infrastructure items and installation costs.	£30
StarLeaf system for video conferencing of Assembly business	The initial StarLeaf installation occurred in 2020 so it will need to be reviewed and replaced as it approaches its end of life.	£25
Sync Pulse Generator (SPG) System	The SPG is used to ensure that all cameras across all broadcast rooms in Parliament Buildings operate in phase with each other. The system is stable but, by 2024, it will need to be replaced to ensure ongoing compatibility with new equipment.	£20
Website redevelopment project	A new form of content management system and search services to improve the quality and accessibility of our information and a revised operating model for content publishing.	£100
Kitchen equipment contingency	Replacement of individual items of kitchen equipment.	£15
Furniture replacement	Replacement of individual items of furniture.	£25
Chamber audio	Replacement of all audio equipment and infrastructure in the Chamber along with associated production gallery work.	£681
Room 30 and Senate broadcasting refurbishment.	Full replacement of all audio and video systems and related infrastructure.	£1,271
Corporate System Review Project	New system for HR, Payroll, Finance and Procurement.	£288
Network Communications replacement	The replacement of end-of-life network routers, switches and associated infrastructure in Parliament Buildings.	£250
Evacuation of persons living with a disability	Creation of refuge areas to enable safe emergency evacuation.	£50
New remote access solution	Update to method of securing remote access to facilitate working from home.	£125
Portraits of former office holders	Production of portraits in line with the Commission's agreed policy.	£30
Laptop replacement	Replace end-of-life laptop equipment. Est 350+ devices.	£200
Renewable technologies	Replacement/upgrade of roof-mounted renewable technologies.	£50
		£3,160