Official Report (Hansard)

Session: 2008/2009

Date: 24 March 2009

Members present for all or part of the proceedings:

Mr Jimmy Spratt (Chairperson)
Mr Raymond McCartney (Deputy Chairperson)
Mr Simon Hamilton
Mr Danny Kennedy
Mr Alan McFarland
Mr John O’Dowd
Mr Ian Paisley Jnr

Witnesses:

Mr Adrian Donaldson )
Mr Barry Gilligan ) Policing Board
Mr Sam Hagen )
Sir Desmond Rea )

The Chairperson (Mr Spratt):

In case there is any doubt, and in relation to certain comments that have been made elsewhere, I want to make it clear that the Committee is presently undertaking very important and absolutely necessary work around the financial implications of devolving a range of policing and justice matters. I also want to dispel any suggestion, speculation or rumour that might exist about “talking up” the figures.

The fact is that the Committee has the authority of the Assembly to undertake this work, and has asked for written submissions from over 20 organisations providing a range of policing and justice services. The purpose of the oral evidence sessions with some of these organisations is to explore further and to probe the extent and reality of the pressures on the policing and justice budget.

The Committee has not yet reached any conclusions about the evidence that it has heard so far. That is a matter to be considered — and which will be considered — later. I expect that it will form a significant part of the Committee’s report to the Assembly in due course.

Mr Paisley Jnr:

I think that a message should go out loud and clear from the Committee in line with your comments. If the Northern Ireland Office thinks that it can facilitate the devolution of policing and justice a lot quicker than this Committee — well, we have seen the mess that it has made of that over the years.

The Committee is working strenuously in a hard, robust and diligent way to examine the figures that are brought to us, not figures that we invent. If Departments that are answerable to the NIO complain properly to us, we have a duty as public representatives to take that on board.

If there is to be devolution of justice and policing, we will take on the responsibilities, but only if the money is there to match those responsibilities. The NIO will not be getting off cheap on this one. The Secretary of State can answer those issues when he comes before the Committee.

The Chairperson:

Those who have been making those comments will well know who I am referring to.

Mr Paisley Jnr:

I think he is called Shaun, is he not?

Mr Kennedy:

No clues, please.

Mr Paisley Jnr:

That is your starter for 10.

The Chairperson:

I will not go any further on that matter. I will leave you to make up your own mind.

We move now to the Policing Board oral evidence session. I welcome Professor Sir Desmond Rea, chairman of the Northern Ireland Policing Board; Barry Gilligan, the vice-chairperson; Adrian Donaldson, the chief executive; and Sam Hagen, director of corporate services. You are very welcome.

I ask members to declare any interests. I am a member of the Northern Ireland Policing Board.

Mr Paisley Jnr:

I am a member of the Northern Ireland Policing Board.

The Chairperson:

There are no other declarations of interest; if anyone else arrives I will ensure that they declare their interests.

We expect the session to last for up to one hour, and I understand that you will begin by making a short opening statement. We know that there are two sides to your evidence this morning, so perhaps you will keep the two matters separate — the budget for the Northern Ireland Policing Board, and, secondly, the policing budget and the board’s relationship to that.

Sir Desmond Rea (Policing Board):

Thank you for your words of welcome. As I look around the room, I am mindful of the importance of treating people well, because there comes a day when one gets one’s comeuppance.

Mr Paisley Jnr:

Why are you looking at me? [Laughter.]

Mr Kennedy:

He is looking directly at the Chairperson.

Sir Desmond Rea:

Yes. As you rightly said, I am joined by Barry Gilligan, the board’s vice-chairman, Adrian Donaldson, who recently joined us as chief executive, and Sam Hagan, the board’s director of corporate services. Lorraine Calvert, who deals with our public relations, is sitting behind us. On behalf of the board, I thank the Committee for its invitation to attend. The Committee will have received a copy of the board’s submission, which was considered and agreed by the board at its meeting on 5 February.

The board welcomes the opportunity to attend today. Our aims are, first, to provide the Committee with information about the board’s finances, secondly, to expand on the information provided in the board’s written submission, and, thirdly, to address the board’s role in relation to PSNI finances. Following my opening remarks, I, along with my vice-chairman, the chief executive and the director of corporate services, will be happy to answer members’ questions and to provide any information that might assist with the Committee’s work. If we cannot answer any questions, we will do the necessary work to come back with an answer.

The board is an executive non-departmental public body, and I note that that status is recommended to remain following the devolution of policing and justice powers to the Assembly. The role of the board is to secure the maintenance of an effective, efficient, impartial and representative policing service and to hold the Chief Constable to account for the exercise of his functions and those of the police and police staff. The board carries out its role in an open and transparent way.

In addition to holding the Chief Constable to account, which we do at monthly meetings, in public session and in private session, the board has a number of statutory responsibilities which require specific resources. Those responsibilities include, as you all know, support for district policing partnerships (DPPs), community engagement — encouraging the public to co-operate with the police in order to prevent crime, including community safety partnerships (CSPs).

I am mindful of the fact that a consultative document on our relationship with DPPs and CSPs has been issued to all interested parties. It has not, as yet, gone out to the public. I have read the report, and, personally, I welcome it. The board has yet to consider the report, but I believe that we will find it to be a positive document, because many of the arguments put forward by the board concerning those bodies and their functions have been incorporated into it.

The board also monitors the PSNI’s compliance with the Human Rights Act 1998 and assesses the level of public satisfaction with the performance of the police and DPPs. In addition, there are a number of areas of the board’s remit which the Committee may not be aware of. For example, the whole area of selected medical practitioners accounts for approximately £315,000 of the board’s budget. Members may wish to ask questions about that, and we will be delighted to answer them.

Chairman, you and members of the Committee will have received the board’s response to your questions about the board’s finances. You will note that the total estimated budget for the year 2008-09 is approximately £8,660,000, and that the board has set its business plan in line with the funding available. Members may find it helpful if I provide a summary of some of the detail that underpins those figures.

Salary costs account for approximately 30% of the board’s programme budget, which covers both staff and the nine independent members of the board. The board has 10 MLAs and nine independent members. Approximately 33% of the board’s non-staff budget is used to pay for typical running costs — rent, rates, postage, stationery and courier services — and, secondly, expenditure to carry out its work plan. Some of the key elements include: research and surveys; human rights advice; the selected medical practioner side of the work, which I have already referred to; advertising; and community engagement.

The board also funds 75% of the costs of the 26 DPPs, one in each district council area. The overall cost to the board this year is £3·15 million — approximately 36% of the board’s total budget. The remaining 25% of the DPP funding is raised and provided by councils. Most DPPs attract funding of between £100,000 and £120,000, with Belfast attracting estimated funding of £383,000 in 2009-2010. DPPs are important because policing with the community was at the heart of the Patten recommendations. DPPs are an essential element in delivering policing with the community. They relate to the local district commander; they relate to the needs of the local area; they prioritise those needs and input them to the policing plan; they monitor the performance of the district commander against the plan; and they engage with the community in the prevention of crime. The relationship with CSPs is in that latter area.

As regards the board’s capital budget, the board is not a capital-intensive organisation. The majority of the fixed assets are furniture and fittings and computer equipment; accommodation is leased. As assets are depreciated on a straight-line basis over five years for IT assets and five to 12 years for furniture and fittings, there is a planned capital expenditure in 2010-11 to refresh the board’s computer facilities.

The board has a history of staying within its budget. In 2007-08 it delivered within 3% of its allocated budget, and we are confident that we will deliver within this year’s budget. The board develops and delivers its business plans in line with its allocated budget. As the role of the board is to remain unchanged following devolution, I as chairman do not anticipate any significant additional requirements in future years. Neither do I anticipate any significant easements that could be delivered by adjustments to existing plans and priorities.

This statement does not take into account the consultative document that has come out this week in respect of DPPs and CSPs, to which I have already referred. The only area outside the normal business areas that has the potential to become a significant pressure: the discussions in relation to the equal pay claim for junior civil servants could have a significant impact on the board’s budget. As I said earlier, we will be happy to take questions on any aspect of the submission.

I turn now to the finances of the PSNI. Chairman, you and the Committee members will be aware from our submission of the board’s statutory obligation to provide the Chief Constable with funding for police purposes. The Chief Constable will provide the Committee with a detailed input later today. However, I wish to reinforce the board’s concern about the availability of sufficient resources for front line policing. Much of the financial pressure experienced by the PSNI recently is a direct result of issues over which the Chief Constable has no control; it is not an issue of due diligence.

The Chief Constable will cover the detail of the figures, but the pressures relate mainly to what can be termed legacy issues, such as the maintenance of the Historical Enquiries Team; claims for hearing loss, the estimates for which continue to rise significantly; support for public inquiries, and the associated legal fees; and pension costs. All those pressures place a significant burden on the PSNI and make it difficult for the Chief Constable to continue to deliver an effective, efficient and modern policing service.

Indeed, those significant pressures have meant that the PSNI has not been able to take forward projects that are important for the delivery of policing with the community. In reaching a balanced budget for next year, the Chief Constable has had to defer and set aside plans to modernise the facilities for receiving and dealing with calls for assistance — call handling, in other words; to continue to significantly reduce overtime; to introduce police community support officers (PCSOs) — an issue which the board sees as particularly important; and to develop or modernise the police estate.

I wish to draw members’ attention to the relative inflexibility in the PSNI finances due to the maintenance of the establishment of 7,500 officers. The associated costs account for around 80% of the total PSNI budget, and, therefore, only the remaining 20% can be played around with. The commitment to retain 7,500 officers means that any financial pressures must be met from 20% of the budget, which is approximately £200 million. Significant pressures such as hearing-loss claims must be dealt with from within that £200 million and not the overall £1 billion budget. That puts the current difficulties in clear perspective. As discussions on the financial settlement in the next comprehensive spending review begin, there will be a focus on the financial sustainability of retaining an establishment of 7,500, which was the number of officers recommended by Patten.

The current security threat is placing further operational and financial pressures on the PSNI. The murders of the two soldiers in Antrim and of Constable Carroll in Craigavon are stark reminders of our dark and difficult past. The Chief Constable and his officers are pursuing the investigations into those murders and have had to make a separate bid for additional money to pay for those; of course, the board fully supports that bid. On the back of the three murders, I spoke to the Northern Ireland Office and drew its attention to the pressures that the police are under. Should the current threat level remain, it will have a significant impact on the PSNI’s finances and its ability to provide the style of community policing that the service and the board would wish to provide.

Due to the hard work of many communities and public representatives, there has been great success in delivering more peaceful marching seasons in the last few years. The board hopes that the current security threat will not lead to increased tensions at that time of year, because such tensions all too often spill over into public disorder that requires a police response. The costs of such a response would have to be met from the Chief Constable’s ever-decreasing pot and, therefore, detract from normal policing. I urge you all to use whatever influence you have to continue to deliver more peaceful summers. In the past two or three years, local representatives of the different political parties have used their best efforts, and they have secured more peaceful marching seasons. The board and I hope that that continues.

The Chairperson:

In your submission, you stated that as a result of legislative changes and staffing issues, the Northern Ireland Policing Board adjusted its current work plan to stay within its budgetary allocations. Will there be a knock-on effect for future budgets as a result of those actions? Can those adjustments be monitored and managed, on an ongoing basis, to relieve the pressure on budgets?

What additional pressures, if any, will arise in relation to the budgeted police grant for 2009-2010? You identified some of them, but I do not think that you provided figures. It would be helpful if the Committee had some idea of the figures that you and your colleagues will be considering.

I remind you that the proceedings are being reported by Hansard staff.

Mr Sam Hagen (Policing Board):

The Northern Ireland Office sets our budget, and we draw up our business plan to live within that budget. Our submission states that our business plan reflects the budget that we have been given. You asked whether that will have a knock-on effect in the future; we are given a CSR settlement over three years, and we plan our corporate plan every three years and our business plans on a yearly basis. We do not foresee significant problems living within our budget and fulfilling our business plan.

Sir Desmond Rea:

In respect of the policing budget, a funding gap was identified. First, we had pressures in the last four months of the current financial year. Considerable efforts were made by the police, and by the board working with the police, to seek to resolve those pressures. We managed to do that by pushing some of this year’s obligations into next year. However, that means that there will still be problems coming down the track.

A funding gap of £101 million was identified in 2009-2010, and £75 million in 2010-11. In discussions between the board, the police and the Northern Ireland Office, it was agreed that we should set aside the pressures emerging from hearing-loss claims and equal-pay claims. As a consequence, the residual funding gap identified in 2009-2010 was £43·7 million, and, in 2010-11, it was £29·4 million.

In order to reach a balanced budget for 2009-2010, the PSNI proposed that internal bids for funding should be rejected; PCSOs should not be proceeded with, as I outlined to you; a 5% cut should be imposed across transport, telecoms, supplies, etc; staff overtime should be reduced by 8% — incidentally, the projected figure for the following year is 20%; and police recruitment in 2010-11 should be stopped. If those cuts are implemented, there will be a remaining pressure in 2009-2010 of £13·8 million and a surplus in 2010-11 of £13·8 million. NIO approval would have to be sought to transfer budget provision from 2010-11 back into 2009-2010.

Those are the figures with which you are playing. I am sure that you will want to ask the Chief Constable further questions about those. Given our role regarding the maintenance of the Police Service of Northern Ireland, we, as a board, have been working closely with the Chief Constable and his team — particularly David Best, who is responsible for finance. When we have approached the NIO, we have done so jointly. I have no doubt that you, as a Committee, are concerned about that. The resources and improvement committee monitors expenditure against budget on a continual basis. Board members regularly meet David Best and the Chief Constable in order to question them about expenditure against budget.

Mr Barry Gilligan (Policing Board):

Overtime is an area of pressure in the budget. Members and former members will be aware that a lot of work has been done with the PSNI over the lifetime of this board to reduce the average daily overtime hours, which were certainly out of kilter when compared to other police services.

Members need to be aware of the very direct correlation between overtime and the policing of the community. On a visit to Lisburn, I was informed that £5,000 had been made available to deal with the specific problems of underage drinking and youths causing annoyance. That was very effective. When I asked where the £5,000 went, I was informed that it went directly to pay for overtime. Our chairman mentioned the possibility of a difficult marching season. If that was to happen, or there was dissident activity, it would impact on overtime that would ordinarily have gone into the policing of the community.

The Chairperson:

Is the board aware of any figures in relation to overtime due to the pressures of the past few weeks?

Mr Gilligan:

I am not currently aware of the specific figures. However, from my conversation with the Chief Constable, there is no doubt that practically all of the overtime that is available is going towards addressing the present security threat.

The Chairperson:

Just so that it is clear for the record, Sir Desmond, in relation to what you said regarding equal pay and the hearing-loss claims, does that amount to more than £100 million over the next two years? Figures of £90-odd million have been bandied about in relation to the hearing-loss claims. Are we saying that the combined figure for equal pay and hearing loss is in the region of £100 million over a two-year period?

Sir Desmond Rea:

There has been considerable conjecture in respect of the hearing-loss claims. However, as a result of the discussions with the Northern Ireland Office, it has been agreed that given that those are legacy issues — particularly the hearing-loss claims — the only sensible way in which we could proceed was to take it out of the consideration. The NIO agreed. In other words, it said that it would discuss those two areas with the Treasury. It certainly accepted the rationale for the way in which we jointly approached that issue.

The Chairperson:

Is it fair to say that that is an increasing sum, particularly on the issue of hearing loss? Is that figure rising on a monthly basis?

Sir Desmond Rea:

That is what I understand.

Mr Hagen:

It is about provision accounting. The figures that are being used relate to providing for future bills. Cash will not actually be going out the door, but it has to be accounted for when it is known about. Our understanding is that hearing-loss claims are increasing. The money is provided for on the basis of the number of claims that are received. The number of claims being received each month is increasing.

Mr Kennedy:

Good morning, Sir Desmond. You are welcome, and so are all of your colleagues. Thank you for your presentation and for your personal commitment to policing as you prepare to step down as chairman over the coming months.

The Committee has no difficulty in finding common cause with the Policing Board in ensuring that adequate resources are provided for policing in Northern Ireland. The Committee must, however, also be sure that every possible efficiency saving is made without reducing the service or impacting adversely on it. You were strong in your defence of DPPs and CSPs. There is a general view that they are sometimes seen as expensive talking shops that produce little or nothing, and their cost-effectiveness is questioned.

Do you plan to streamline those partnerships as part of the review that was indicated? Will there be savings, or are you content that they will continue to operate as at present? There is also a strong suggestion that there is some duplication between DPPs and CSPs that could be addressed.

Sir Desmond Rea:

The chairman of the community engagement committee is Alex Maskey and his vice chairman is Barry Gilligan, who is also vice chairman of the Policing Board. Barry will answer those questions.

Mr Gilligan:

The board’s view is that DPPs have contributed significantly to increased confidence in policing. That view is shared by many visitors who study the whole new policing arrangements here.

I will not bore the Committee with statistics, but the board’s surveys indicate a very strong level of confidence in policing. We are not complacent about it, but the Chief Constable has pointed out time and time again that Northern Ireland is one of the safest areas in these islands in which to live. The board attributes that in many instances to the very close working relationship that the local community has with the PSNI.

There are undoubtedly some areas where that does not work as effectively as in others; however, the board has a mechanism that enables it to compare the efficiency of DPPs. I believe that the board’s investment of £3·15 million in DPPs represents very good value for money, but we are not complacent about that.

In respect of savings, I would like to see investment in DPPs going up as a result of the document that Desmond talked about at the outset — it describes the closer working relationship between DPPs and CSPs. I would see that very much as the DPPs taking on a bigger role; however, there should be a net saving to the public purse. If you add together the amount of money that we currently spend and the amount currently spent on CSPs, there should be a net saving, albeit that the board believes it should have a bigger budget to deal with that.

Sir Desmond Rea:

A further point that emerged in the consultative document issued by the Northern Ireland Office is that the reconstitution and reduction in number of local councils in 2011 affords a possible opportunity to reduce the number of DPPs. However, in reducing the number, DPPs become more distant from rather than closer to the community. Nevertheless, that is a possibility. In other words, coterminosity will become an issue. I have no doubt that the board will discuss that and make its wishes known to the Chief Constable at the appropriate time.

Mr Kennedy:

On the issues of police resources and of the police reserve, the current security climate and the situation on the ground have caused concern, particularly in light of the potential closure of quite a number of local police stations and, almost automatically, a reduction in the number of police reservists. Where is the Policing Board on that issue? Is it looking at it? What projections do you have in relation to police resources on the ground, that is, actual police officers — as opposed to members of DPPs or community activists — who can respond to criminality and all its associated problems?

Sir Desmond Rea:

I will deal with the part of the question that refers to the closure of police stations. As you are politicians and you deal with people’s concerns, you will no doubt be aware that there were proposals for the closure of 16 police stations. However, the board did not feel that sufficient account had been taken of the alternatives that were being proposed for policing communities in those areas, alongside those proposals. Coincidentally, the board also felt that the documentation did not take sufficient account of the dissident threat and the policing of that threat — and that was before the recent killings. The board asked the Chief Constable, and we sent the document back and said that we would not consider it until he came forward with reasoned proposals in both those areas.

We have yet to receive a reply to that, but that is not a criticism. The PSNI will come back to us at the appropriate point in time. They may well come back with proposals in respect of six or seven stations and leave a second tranche to a later date. In other words, we asked the hard questions, and we told them that we would not consider the document, and the meeting has been postponed.

Bearing in mind the constituency that you represent, I think that your question about police officers relates to the full-time reserve, and you wrote to me about that issue. I have written to the Chief Constable about it, but I have not received a reply from him. I wanted his risk assessment to be part of that reply. However, I will take the matter to the board and reply to you on the back of that.

Mr Paisley Jnr:

I welcome the delegation from the Policing Board, as Danny has rightly done. I want to go back to the issue about there being no requirement for significant funding beyond what you are getting as a board. Let us look at board funding first of all. In the answer to Danny’s question about DPP versus CSP funding, there appears to be an anomaly in respect of competition, as organisations are doing some of the same work, or some of their work is overlapping. Can I take from what you have said that there is potential for a budget pressure if that anomaly is not dealt with immediately? Has the board come to any conclusions about how that might be addressed, so that we can streamline the funding and then do, as Mr Gilligan has suggested, that is, direct more targeted resources to it?

Sir Desmond Rea:

First, I do not wish to do any injustice to the report. It will, no doubt, come to the Committee, and the Committee will make its own judgement on it. What is basically being said in the document is that the Minister believes that there is a reasoned case for bringing together DPPs as and when the review of public administration takes place. There are financial issues in there, and that is one of the things that he says need to be looked at. In the meantime, he is saying that he has been out there — and I attended a DPP meeting with him, along with the CSP, in Craigavon, where the two senior administrators share an office — and that there is evidence of good practice. In the meantime, he would like to see movement — he is correct in saying that — and he would like to see people voluntarily moving to come together, and implicit in that is that there could be savings.

Mr Paisley Jnr:

That sounds like some carrot, but there will have to be stick as well. Is there stick in the document — or baton?

Sir Desmond Rea:

I cannot remember definitively whether that is the case. Therefore, I had better not answer.

Mr Gilligan:

I will put the matter into context. I put the Policing Board and DPP costs at £3·15 million, 35% of which is spent on DPP managers and other staff. Common sense says that, at the very least, we could achieve a common secretariat, which would enable an immediate saving.

Mr Paisley Jnr:

I am trying to suggest that a budget pressure might arise if the matter is not addressed.

Mr Gilligan:

There might be.

Mr Paisley Jnr:

The other issue is that you are tasked by the Policing Board to deliver an efficient and effective Police Service by, essentially, securing a budget that is fit for purpose. In the past year, how difficult has it been to deliver a balanced budget?

Mr Gilligan:

I want to reiterate the chairman’s words from the start of the meeting. Our budget is generous but not very flexible. It amounts to approximately £1 billion, 80% of which is allocated to wages and salaries and 20% to other costs. With a given of 7,500 officers, if we are told to find a 3% efficiency saving on our entire budget, we cannot touch 80% of it. Therefore, on a balance of £200 million, a 3% efficiency saving becomes a 15% saving. We have been there; we have done that through the Gershon review. We did it several years ago, but we can only go so far. At a police finance meeting, someone asked me, as a businessman, what to do during difficult times. First of all, we should turn to the reserves. The PSNI has no reserves, and it has not been allowed to carry over reserves for the past couple of years. Therefore, the well is pretty dry.

Mr Paisley Jnr:

You said that 80% of the budget cannot be touched. However, there is an indication that you, perhaps, might have to consider reducing the number of recruits or the number of officers from 7,500. Given the current climate and the current pressures caused by the dissident threat to police officers, what sort of message, in your view, would that send to the community?

Sir Desmond Rea:

My recollection is that there is no intention to reduce the number of recruits in 2009-2010.

Mr Paisley Jnr:

Yes; but what message would that send?

Sir Desmond Rea:

I am not sure that reducing the number of recruits sends a good message. That is my personal view, because the board has not discussed the matter. It is important to retain that number until there is significant reason for change. As Barry said, the total budget, including capital, amounts to approximately £1·2 billion.

Mr Paisley Jnr:

I agree that cutting recruitment would not be good. What do you think about reducing the total number of police officers? If the Policing Board agreed to or recommended a reduction in numbers, would that send a message to the effect that the community has been depleted of a service?

Sir Desmond Rea:

Patten asked what should be the size of a police service in Northern Ireland if the population of 1·5 million or 1·6 million was transferred to a similar geographical area in England. We must not forget that, at that stage, the RUC had a total of 13,000 officers. That figure comprised 9,000 full-time officers, and the remainder were full-time Reserve and part-time Reserve. Patten decided that 4,300 officers would be required, against the reality of 9,000. However, he acknowledged that Northern Ireland is not a normal society because of the continuing terrorist threat from both identities and the civil unrest in the summer period.

If one were to take the typical norms today — in other words, for example, the number of police for every 1,000 people in the population in England and Wales — the figure of 4,300 would be more in the region of 6,100, as I understand it. In a sense it is obvious: if the dissidents went away, if the loyalists decommissioned, if civil unrest in the summer period came to an end, and assuming that criminality in both identities is contained by effective and efficient policing, there are prizes to be won. Ultimately, following the devolution of policing and justice, the Assembly will be responsible for that budget, which will be competing with education and health.

Mr Paisley Jnr:

I understand the public-relations message; it is a very powerful message and one that I do not want to diminish. However, as the longest serving chairman of any major policing authority in these islands, you have a fair grasp of what is going on, and what the political appetite is, what the political stomach is. In your view, is there the political appetite, is there the community appetite and is there the ability to deliver policing in Northern Ireland, as it currently stands, with a reduced number— I think you mentioned a figure of 6,100 — of police? Is that possible?

Sir Desmond Rea:

It is not possible as long as the threats continue.

Mr Paisley Jnr:

I stress again: we police the situation as is.

Sir Desmond Rea:

You are correct. However, I am pointing out that there are prizes to be won.

Mr Paisley Jnr:

I accept that, and I think that that is a positive point to have on the agenda.

The Patten Report suggested that there should be a police academy or college. I understand that money has been set aside for the bricks and mortar to build that. Are there any medium- to long-term pressures on delivering that ideal, that goal? Can that be delivered under the present police budget?

Mr Gilligan:

I think that the capital can be delivered because the capital has been set aside for it. There is no doubt that training costs will go up when the new college opens in 2012. Those increased costs, which are probably around £5 million a year, will have to be found from the existing police budget.

Mr Paisley Jnr:

Where do you imagine that that money will be found if the budget does not increase?

Mr Gilligan:

To be fair to the PSNI, I have looked at its budget over the past few years, and I have looked at the work that has been done in securing efficiencies, and I sometimes ask myself: could the same not be done in every Government Department in Northern Ireland? Over the years, the PSNI has managed to achieve a balanced budget. I am sure that the money will be found, not least because, in my view, training is hugely important. The cost of not training could be significantly higher than the money that we are talking about. Specifically where that money will be found, Mr Paisley, I do not know. However, I am confident, given the importance of a new training facility, that it will be found.

Mr Paisley Jnr:

I set that against your earlier answer that there are 80% of costs that we cannot touch. The money has to be found from the remaining 20%. It does not readily come to mind as to where you would find the additional money, within that 20%, unless there is an increase in the budget. You are a business man. Do you not agree?

Mr Gilligan:

There will certainly be significant pressure on the budget.

The Chairperson:

Perhaps you could quickly just clarify a point that Mr Kennedy made. Is the policy of the closure and disposal of police stations driven by financial pressures as much as by operational requirements?

Mr Gilligan:

No, it is not driven by financial pressures.

Mr McCartney:

Thank you very much for your presentation. What role does the board play in scrutinising the validation process of the budget for the PSNI?

Mr Hagen:

The Policing Board has a number of committees, one of which is the resources and improvement committee. The director of finance and support services for the PSNI presents figures to the committee each month on Police Service spend. He also presents the policing budget to the committee. The budget, as prepared by the Chief Constable, is presented in draft form. After the budget has been considered and scrutinised by the committee, it is then presented to the parent Department in final form. Therefore, the Policing Board’s role is between the draft form and final form of the budget. That is the process that we use.

Mr McCartney:

If any part of the budget is overstated or understated, does the Policing Board have a role in bringing that to the attention of the PSNI?

Mr Hagen:

The committee goes through the budget in detail, comparing the figures with those of previous years and examining the assumptions that have been made. Therefore, the committee goes through the budget in quite an amount of detail.

Mr McCartney:

This morning, Sir Desmond outlined the pressures that legacy issues — the Historical Enquiries Team, hearing-loss cases and public inquiries — place on the budget. If those pressures were removed and realised, or satisfied, in another way, what relief would that bring to the budget? What is your appraisal of those pressures on the budget?

Sir Desmond Rea:

That is an interesting question, because we have been arguing with the NIO that legacy issues should be removed from the current policing budget. We believe that that is an argument that, above all, should be taken up by the Assembly and by the First Minister and deputy First Minister in their negotiations with the Northern Ireland Office and the Treasury. We have argued strongly that that should be the case. What was the other part of your question?

Mr McCartney:

Would removing those legacy issues relieve overall pressures?

Sir Desmond Rea:

If those pressures were removed, there would be considerable relief. One of the most substantial sums has not been mentioned. Do not forget pension costs; historically, we had a complement of 9,000 police officers, which is a sizeable number.

Mr McCartney:

Do you consider the pension issue to be a legacy issue as well?

Sir Desmond Rea:

We have argued that it would be better if that issue were tidied from a particular date and time.

Mr McCartney:

The Committee heard evidence, either directly or indirectly, about an approach that was used at corporate level whereby hearing-loss claims formed class actions and were settled. Is there a new approach, or could there be a different approach, whereby such claims are contested more rigorously?

Sir Desmond Rea:

It might be better if you leave that question for the Chief Constable, as he will be able to give you a definitive answer. David Best is with him, and he will give you the authoritative answer in respect of that. I am aware of the fact that there are cons of a class action. Therefore, a different approach has been adopted. However, the Chief Constable and Mr Best are the authoritative sources on that issue.

Mr McCartney:

Do you envisage that there will be improvements in the role that the Policing Board has in the process of securing a proper budget for the PSNI, which to date has been carried out with the NIO? What would be the best scenario for the Policing Board: to continue with that scenario or to have a justice Department that would negotiate the budget? Which process would be the most advantageous for you?

Sir Desmond Rea:

All of us are realists. If the transfer of policing and justice occurred yesterday, we would operate in exactly the same way as we have operated with the NIO, and we would expect our reasoned arguments to be respected by whoever it was.

Mr Gilligan:

Another point that I should add is that, obviously, we do not look at budgets in isolation. We take account of the 43 other police services in the UK and the Garda Síochána by benchmarking how much overtime they have and what sort of office space they use. That has been one of the factors in driving down overtime hours, which were totally out of kilter.

Mr McFarland:

Thank you for your presentation. On a housekeeping point, I struggled for some time to work out how you were being given £8 billion to run the Policing Board. That figure must either be written as £8,666,000 or £8·6 million. At present, however, in your paper it appears twice as £8,666 million. I understand what is meant, but it would be difficult for an outsider coming cold to Committee records. It would, therefore, be useful to have an accurate figure in your paper.

Sir Desmond Rea:

That is a valid criticism.

Mr McFarland:

Both you and the PSNI commission consultants to carry out studies. Is there any scope to co-ordinate the studies, so that you do not each spend what is, I suspect, quite a lot of money over the years on such consultations, studies, and so forth?

The devolution of policing and justice powers will involve some 21 MLAs, including those on an Assembly Committee overseeing the Minister and the Department, which has a link to you. The Policing Board already oversees the PSNI. Given that all those people will be involved and there is only a single pot of money available from the block grant, how long can the funding of £8·6 million be justified and continue?

Mr Gilligan:

In answer to your first point, the question of duplication and value for money is examined by every Policing Board committee: for example, at a recent meeting of the community engagement committee, chaired by Mr Maskey, proposals were put to us that we spend £60,000 on a survey. A particular survey was under discussion, and the committee was unanimous in its view that a number of surveys had already been carried out on a similar theme. The committee, therefore, decided not to proceed and tasked officials with studying the results of those other surveys. We are, therefore, constantly mindful of duplication.

Was your second point about how long will we continue to receive funding of £8 million?

Mr McFarland:

Yes, and it is based on the amount of people who will be involved: a total of 21 MLAs, 11 on this Committee and 10 others, a Minister, and an entire Department. This Committee will oversee the Department and Minister and hold them to account on the Floor of the House, and so forth, and the Policing Board holds the police to account. Given the constrained financial position in the current recession — and that will become worse —how long will the luxury of £8 million for the Policing Board last?

Mr Gilligan:

I do not consider £8 million to be a luxury.

Mr McFarland:

Consider that amount in the great scheme of things.

Mr Gilligan:

During the years of its existence, the board has proven to be extremely effective. From your past experience as a member of the Policing Board, you will know that the level of accountability and the policing structures that are in place are the envy of many. I argue that £8 million is money well spent, and I suggest that there are many other areas at which you might look to make savings of £8 million, rather than at the Policing Board.

Sir Desmond Rea:

Perhaps Sam will tell the Committee what consultancy exercises have been conducted in the past five years.

Mr Hagen:

Our main consultants are advisers on human rights, and that is our main cost.

Sir Desmond Rea:

I would like to add a point on human rights advisers. At 10.00 am this morning, we launched a thematic inquiry on domestic abuse. I have read that superb piece of work. I commend it to the Committee, and I will ask for a copy to be sent to each and every member. It addresses an essential problem in society and represents money well spent.

I noticed in some of the papers that there has been recent scrutiny of the PSNI’s use of consultants, some of it by the Northern Ireland Audit Committee. The Policing Board is continuing that scrutiny.

Mr Hamilton:

The issue of the closure of police stations was raised. The other side of that is the sale of the property and the realisation of some receipt. What happens to receipts for the sale of police stations or other elements of the police estate? Are they retained by the police, or do they go, in all or part, back to the NIO or the Treasury?

Sir Desmond Rea:

There are issues about that in the current economic climate.

Mr Hagen:

The PSNI has a capital budget which is set for the comprehensive spending review period. It has an amount to spend and an amount that it says that it will receive, from, for example, the sale of police stations. The difference between the two is met by the grant that it receives. If it gets less for the receipts than estimated, then it has to meet the difference. If it gets more than estimated, the surplus is handed back to the Department. However, in that case, the PSNI can bid for that, along with other elements of the Department.

Mr Gilligan:

In respect of the college, the projected disposal of sites currently used for training is directly offset against the capital expenditure on the college, so the PSNI will get the benefit of that.

Mr Hamilton:

If a decision is made to close a station on purely operational grounds, and the PSNI does well out of it, that is almost a disincentive. If it sells a lot and does well, it acquires a surplus to which it does not have 100% access.

Mr Gilligan:

Those days have gone.

Mr Hamilton:

Yes. I understand that. [Laughter.]

Sir Desmond Rea:

Tears in his eyes.

Mr Paisley Jnr:

Let us give a pocketful of sympathy here.

Mr Hamilton:

Say we were back in the good times again, and the PSNI was doing well: the system does not provide much of an incentive. There may be good operational reasons to close a facility or to sell off a piece of land. The police have identified significant pressures in their submission.

Mr Gilligan:

This comes back to the answer that I gave the Chairman: financial issues do not drive the closure of stations.

Mr Hamilton:

I fully appreciate that. However, where there is a capital problem and a gap and a deficit, selling off pieces of land is one way to fund that, if the decision has already been made to get rid of the land already for operational reasons. If the PSNI does not retain all the proceeds, that does not help it to meet other deficits. A mechanism might be looked at to encourage the wise disposal of assets.

Mr Hagen:

There is an argument that, where we estimate the proceeds of the sale of a police station or piece of land correctly, and need a mobile station to fill the gap left by the closure, the cost of that mobile station should be included in the estimate. The gap, then, would not include the spending on another mobile station.

Mr Hamilton:

Certainly, retention of anything over and above the estimate would be useful for the policing budget. That goes without saying, and this might be worth looking at.

The Chairperson:

I am conscious that we are now running out of time. The Chief Constable has arrived, and he has another engagement to attend. I do not wish to detain you too much longer. However, I have a couple of final questions which we have asked everyone who has appeared in front of the Committee. Does the Policing Board currently pay value added tax (VAT) and, if so, can it be reclaimed?

Sir Desmond Rea:

The answer to that is yes and yes.

The Chairperson:

Is it a significant sum?

Mr Hagen:

It is not significant for the board.

The Chairperson:

You do pay VAT, however?

Hagen:

We pay VAT, and then we claim it back. We are allowed to keep what we reclaim.

The Chairperson:

Are you aware of any other issues that could have material or inescapable consequences for your budget in the future? Again, everybody has been asked that question. In other words, is there anything that you are not telling us about at present? It will be a sad day if, after the devolution of policing and justice, you return to us in 18 months’ time and say that there is another £2 million or £3 million that you knew about, but omitted to tell us about. I suggest that should that happen, you will not get a good hearing.

Sir Desmond Rea:

In respect of the board, the answer to your question is no. However, there is major concern within the board that the window of opportunity could be missed in signing up to devolution of policing and justice without securing a settlement that, above all, takes into account legacy issues and enables the PSNI and the board to move forward on a level playing field.

The Chairperson:

OK. Thank you very much indeed for the evidence that you have given us. I know that there are a number of other issues. An hour is not really long enough to cover all of the areas that we wanted to probe into. We hope to send you a number of additional questions this evening. We would ask you to reply to most of those questions, if possible, before the Secretary of State appears in front of us next week.

Sir Desmond Rea:

If we can answer any questions that will facilitate your programme, we will be delighted to do so.

The Chairperson:

Thank you very much, gentlemen, for coming along today. We will talk to you in the not-too-distant future.

Sir Desmond Rea:

Thank you.

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