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Official Report (Hansard)

Session: 2007/2008

Date: 02 April 2008



Department of Finance and Personnel

2 April 2008

Members present for all or part of the proceedings:
Mr Mitchel McLaughlin (Chairperson) 
Mr Mervyn Storey (Deputy Chairperson) 
Mr Roy Beggs 
Dr Stephen Farry 
Mr Simon Hamilton 
Mr Fra McCann 
Ms Jennifer McCann 
Mr Declan O’Loan 
Ms Dawn Purvis

Mr Richard Pengelly ) Department of Finance and Personnel 
Mr Michael Daly )

The Chairperson (Mr McLoughlin):
I welcome Mr Richard Pengelly, acting budget director, and Mr Michael Daly, head of the central expenditure division of the Department of Finance and Personnel, both of whom are familiar to the Committee. Richard, will you please make your introductory remarks?

Mr Richard Pengelly (Department of Finance and Personnel):
I will make some brief comments, Chairman. The Executive recently concluded that there will not be a Budget process in 2008. There were two crucial reasons for that. The fundamental reason is that there will not be a national spending review in 2008, so the position that was agreed by the Executive at the end of January will cover the three financial years 2008-09, 2009-10 and 2010-11. In 2008-09 there will be no change in the resources available to the Executive, so running a long, convoluted process to realign those resources — given that there was a significant process to reach an outcome in January — seems nugatory. Not going through a budget process makes sense in those terms. It also enables Departments to get their heads down and focus on the delivery of the key targets, goals and commitments that the Executive have signed up to.

Therefore instead of the formal process, the intention is to have a strategic stocktake in the autumn. Essentially, that will involve pausing to take stock of the progress on the Programme for Government and considering any new issues that might have emerged since the Budget was set. In particular, I have in mind the work of the capital realisation task force and whether it has identified significant resources. There is also the outworking of the performance and efficiency delivery unit to consider. Recently, there was a prospect of a bluetongue outbreak. If something unexpected were to happen, it would require a realignment of recourses, so a stocktake will happen in the autumn.

The Committee might be more interested in future developments. The Department plans to use the summer to review how the Executive’s first Budget process worked. Given that that process started during direct rule and was concluded under devolution, it was rather strange. We want to look at that and at the process that was undertaken in 2000-01, during the previous period of devolution. On that basis, we will have discussions with the Minister, and, later this year, we will advise the Executive on what a devolved Budget process should look like in 2009.

We welcome the Committee’s views. As a starting point, we have the Committee’s report on last year’s Budget as input into the consultation process, and there are some valuable issues in it for the Budget process. However, the Committee will probably want to reflect on the process, and we would welcome any views that we can add to the Minister’s and the Executive’s discussions on formulating the way ahead.

The Chairperson:
Do members wish to make any comments?

Under Standing Orders, in order for Budget Bills to be granted accelerated passage, the Committee must be satisfied that appropriate consultations have taken place. How do you envisage the process proceeding and how would there be appropriate consultation if there were to be a Budget Bill for 2009?

Mr Pengelly:
The next Budget Bill will be the Main Estimates for 2008-09. That was covered by the recent Budget process, so the period of public consultation that ran throughout November and December —

The Chairperson:
Therefore you have started to consider the next Budget cycle.

Mr Pengelly:

The Chairperson:
What options can be provided to the Committee for consideration?

Mr Pengelly:
With regard to the longer-term process, we want to look closely at what we did in the previous period of devolution. We started the cycle with a position report, which was an attempt to take stock of where Departments were and what the strategic issues were. We published that and sought Committees’ views early in the process.

Our stance is always that the earlier a view is recorded, the more significance it can have when we are working through the process. We tell people during public consultation that responding on a draft Budget can be difficult, because only marginal changes tend to be made at that stage.

We wanted to consider the position report approach and we wanted to capture views of Committees and of the public as early as possible.

The Chairperson:
You were positive that the Committee should lay down a template that would introduce the Budget process as early as possible in the work programmes. Bearing in mind that we are into a monitoring round function for the next 12 months, that provides an opportunity to take a strategic perspective on how the budgetary process can be laid down in future.

Mr Pengelly:
What we call the “strategic stocktake” for this year will, to all intents and purposes, be a monitoring round. The Committee’s view on a standardised template approach will be reflected in the monitoring process, which will have run in June and October before we get to the strategic stocktake. There are opportunities to build and learn as we go.

The Chairperson:
Will the template standardise the reporting mechanisms?

Mr Pengelly:
Yes. It will capture and collate information from Departments that Committees can examine on a common basis in order to facilitate scrutiny and examination of what the Departments are asking for.

The Chairperson:
Thank you very much. That was relatively painless

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