Written Ministerial Statement

Published at 5.00 pm on 20 January 2022.

 

Mr Murphy (The Minister of Finance): This statement notifies the Assembly of the outcome of the Executive’s January Monitoring exercise.

Executive Agreements ahead of January Monitoring

As set out in my written statement of 13 January, the Executive has agreed a number of urgent allocations in advance of the January Monitoring round.

These include £55 million to the Department for Communities for an Energy Payment Support Scheme and allocations of £2.0 million and £1.8 million to the Department for Infrastructure in relation to energy cost impacts on DfI Roads street lighting and NIW respectively.

The Executive also agreed the allocation of £40.0 million to the Department of Finance for the Omicron Hospitality Payment so that this support could be provided urgently to the sector.

The resources available included in this paper include those which were used to fund these allocations. The allocations themselves, while not included in either the Bids or Allocations tables, have been reflected in the January Monitoring outcome.

2021-22 January Monitoring

Available Funding

Following conclusion of the October Monitoring exercise there have been a number of changes which have resulted in additional funding being available for allocation.

Barnett Consequentials

Treasury has now confirmed the actual Barnett consequential resulting from the announcement of additional spending for NHS England. This has resulted in an additional £0.8m Resource DEL and a reduction of £3.7 million Capital DEL from the estimate included in October Monitoring.

As set out in my statement of 13 January, the Executive will receive a Barnett consequential of £13.8 million Resource DEL as a result of the from the British Government announcement of support for households over the winter.

A further £44.5 million Capital DEL has arisen as a result of the net effect of additional Cross Rail Barnett and adjustment in relation to a previous Spending Round allocation.

Treasury has also provided the Executive with a £150 million advance on Barnett consequentials anticipated to arise from additional spending on Omicron in England. While there is the potential requirement for this to be repaid should actual allocation to Whitehall departments not result in this level of Barnett, the latest indications for the Treasury are that this is unlikely to be the case.

Central Items

Changes to a number of central items, including adjustment for Budget Exchange Scheme to Final Outturn position, regional rates forecasts, Delivering Social Change, EU match funding, cash management charge, Air Passenger Duty, ROI A5 contribution adjustment and Financial Transaction Capital adjustments have resulted an additional £14.8 million Resource DEL, a reduction of £3.3 million Capital DEL and an additional £3.2 million Financial Transaction Capital DEL for allocation.

Treasury has confirmed that it will provide a one-off additional funding allocation of £24.9 million for the costs arising from legislative changes to the Personal Injury Discount Rate (PIDR). This has allowed DoJ and DoH to surrender funding previously held for this purpose.

City Deals

£2.2 million of the £5.8 million held centrally City Deals funding for 2021-22 will be provided to DfE as requested. The remaining £3.7 million Capital DEL is not required for this purpose and therefore has been made available for allocation.

The remaining £0.07 million of the funding held centrally to cover Construction and Procurement Delivery (CPD) costs relating to City Deals has also been surrendered as it is not required this year.

Reduced Requirements

Reduced requirements declared by departments come to £140.5 million Resource DEL, £3.1 Ring-fenced Resource DEL, £57.0 million Capital DEL and £2.8m Financial Transaction Capital.  Full details are included at Annex A.

The Department for the Economy has declared Resource DEL reduced requirements of £2.4 million in relation to the Protocol, £5.4 million for RHI and £0.2 million for New Deal. FSA have declared a reduced requirement of £0.3 million Resource DEL in relation to the Protocol.  These reduced requirements are for funding ring-fenced by Treasury for these specific purpose as such are not available for reallocation and must be surrendered to Treasury. They are not detailed at Annex A.

Reclassification

The Department of Agriculture, Environment and Rural Affairs requested to reclassify £0.9 million from Resource DEL to Capital DEL for Marine Fisheries Fund National Capital Grants.  This provides an additional £0.9m Resource DEL for reallocation with a corresponding pressure on the Capital DEL budget. Detail is provided at Annex B.

Resources Available

The result of these changes is that £245.9 million Resource DEL, £3.2 million Ring-fenced Resource DEL, £100.5 million Capital DEL and £72.7 million Financial Transactions Capital DEL were available for allocation. 

Protocol

Back in June, £35.3 million Resource DEL and £0.3 million DEL had been allocated to departments with respect to the Protocol.

DAERA has now received a further 4.0 million Resource DEL and £6.0 million Capital DEL, with DOJ receiving £2.1 million Resource DEL. 

Taking into account further in-year reduced requirements and re-profiling of expenditure, £39.0 million Resource DEL and £6.3 million Capital DEL funding has been provided for the costs that will be incurred implementing the Protocol.

January Monitoring Bids

Departments submitted bids of £146.7 million Resource DEL, £31.9 million Ring-fenced Resource DEL and £4.6 million Capital DEL. There were no bids submitted for FT Capital. Details of all bids are included at Annex C.

Allocations

Resource DEL

Given the significant level of funding available, we have been able to meet all Resource DEL bids submitted by departments. The allocations are detailed at Annex D and include the following. 

TheDepartment for Agriculture, Environment and Rural Affairs received £4.0 million for compensation for those impacted by the Avian Influenza outbreak as required under section 8 of The Disease of Animals (Northern Ireland) Order 1981.

The Department for Communities received £18.2 million, comprising £10.0 million for Rates Support Grants for councils, £7.0 million to provide support for councils for continuing lost income as a result of COVID-19 and £1.2 million to address a De-rating Grant pressure for councils.

A further £0.8 million is provided to the Department of Finance for the COVID-19 Small Business Top Up Grant Scheme, this pressure has been informed by latest assessments.

The Department for Infrastructure has received a total of £68.1 million. This includes some £24 million to subsidise bus routes, £19.8 million for the impact of Covid on Translink’s income, £0.1 million for other lost income as a result of Covid-19, £2 million for the Driver Vehicle Agency, £2.7 million for penalty change notice debt write and a further £15.5 million to address the ongoing impact of increased energy costs. Also included in the funding provided to DfI is £4.0 million for financial support for the bus and coach industry in light of the ongoing impact of Covid.

£12.3 million has been allocated to the Department of Justice, of which £3.5 million is for Legal Aid costs and £8.7 million is for a range of PSNI pressures.

The Department of Education received £43.3 million including £22.5 million for a range of COVID-19 pressures, £18.4 million to support Special Educational Needs (SEN) and £2.4 million for the Voluntary Exit Scheme.

In addition to these allocations DE has also requested flexibility across the funding provided to DE for COVID-19 related pressures, which is ring-fenced for specific purposes. With the exception of the amounts allocated for Holiday Hunger, DE has been provided with the flexibility to move funding between other COVID-19 allocations to enable the Department to respond to any emerging pressures between now and year-end.

Ring-fenced Resource DEL

Treasury provides the Executive with a separate budget allocation for Ring-fenced Resource DEL which can only be used to fund non cash costs relating to depreciation and impairments. While this funding cannot be used for other purposes the Executive is permitted to use its non ring-fenced Resource DEL budget to cover pressures in this area.

Departments have bid for £31.9 million of funding for Ring-fenced Resource DEL pressures. With only £3.2 million available for allocation this left a pressure of £28.7 million to be addressed.

To avoid departments having to reduce spending on services to fund these pressures and mitigate against a potential year-end overspend, the Executive has agreed to fund these pressures from its unallocated non ring-fenced Resource DEL budget.

A separate ring-fenced Resource DEL allocation is also provided for Student Loan Impairments.  The Department for the Economy bid for the £443.8 million which remained unallocated following October Monitoring. This allocation has been agreed subject to final confirmation from Treasury of the total funding available.

Changes to this area are shown in Annex E.

Capital DEL

As set out above there was £100.5 million of Capital DEL available for allocation in this round. Departments submitted bids of £4.6 million Capital DEL and it has been agreed that all these bids should be met. Details are provide in as listed in Annex D.

With some £96 million remaining unallocated, RRI Borrowing has also be reduced from the planned £140.0 million to £80.0 million, reflecting the amount that has already been borrowed for 2021-22.  This will reduce principal and interest payments in future years.

As a result, £35.9 million of capital DEL remains unallocated.

Financial Transaction Capital

£72.7 million of FT Capital was available for allocation in this round. No FT Capital bids were submitted by departments in January Monitoring. To avoid this funding being lost, we have agreed with Treasury that it can be used to fund repayment of FT Capital to Treasury in advance of previously agreed repayment schedules. This effectively frees up funding in future years. It is proposed that £71.1 million is used for this purpose. This is in addition to the £19.9 million already held centrally for planned repayments.

As a result, £1.6 million remains unallocated which is the amount of permitted carry forward under the Budget Exchange Scheme.

Flexibility

Departments have the flexibility to reallocate budgets across spending areas subject to restrictions to protect ring-fenced funding and where an allocation has been made by the Executive for a particular purpose.

The tables accompanying this statement outline all changes to departmental Spending Areas since the published October Monitoring 2021-22 outcome, including those changes which do not require Executive approval.

January Monitoring Outcome

At the conclusion of the January Monitoring £70.5 million Resource DEL, £35.9 Capital DEL and £1.6 million of Financial Transactions Capital remains unallocated.

The Executive has limited ability to carry forward underspends into 2022-23 through the Budget Exchange Scheme (BES). The current estimated level of carry-over we have available is £105.6 million for Resource DEL, £3.5 million for Ring Fenced Resource DEL, £27.5 million for Capital DEL and £1.6 million for FT Capital.

We are therefore currently within our Budget Exchange Scheme limits for carry-forward of Resource DEL and Financial Transactions Capital to 2022-23.

There is merit in maximising the amount which is carried forward to help address pressures in 2022-23. However, there is a risk that any unallocated funding when combined with department underspends at year end could lead to a breach of Budget Exchange Limits.

Therefore, I have asked Ministerial colleagues to ensure under spends are minimised in their departments.

I will also keep the position under close review throughout the remainder of the financial year.

I am aware of other potential proposals that could utilise this funding and will bring these back to the Executive should the information received from departments indicate that action is needed to ensure we do not hand back funding to Treasury.

However, the level of unallocated Capital DEL already exceeds the estimated amount we will be permitted to carry forward. I am extremely disappointed that we are in this position which is a direct result of the significant level of reduced requirements identified by departments at a very late stage in the financial year. If these has been notified earlier the funding could have been utilised in other areas.

I have asked Executive colleagues to consider opportunities to use this funding.

Along with the other Devolved Finance Ministers. I have also pressed the Chief Secretary to Treasury to allow increased levels of carry forward in light of the ongoing Covid situation.

It is hugely concerning that Treasury has indicated that it will not permit funding to be carried into next year even if additional funding is confirmed at such a late stage that it prevents it being used most effectively.

However, in the absence of agreement to increased carry forward, all Ministers have a responsibility to do everything they can, within the public expenditure rules, to avoid funding being returned to the Treasury

 

INDEX OF TABLES

2021-22 January Monitoring:

Annex A Reduced Requirements

Annex B Reclassifications

Annex C Departmental Bids

Annex D Allocations

Annex E Ring-fenced Resource Expenditure

Annex F Administration Costs

Annex G Spending Area tables

 

ANNEX A

January Monitoring Reduced Requirements (£ millions)
Dept	Description	Non Ring Fenced  Resource	Ring Fenced Resource	Capital	FT     Capital
DAERA	AFBI - Replacement Vessel Corystes			-2.2
	Livestock Genomics - Green Growth			-3.0
	Rural Development Programme			-2.4
	VETS Depreciation		-0.4
	Waste Management Grants			-3.0
TOTAL  DAERA			-0.4	-10.6
DfC	COVID-19 Labour Market Interventions	-14.0
	Housing Benefit Rates	-1.4
	Project Delay and Reductions to Demolition Costs		-0.6
	Project slippage - Regional Stadia Programme - Casement Park Redevelopment			-0.8
	Recruitment Delays	-0.5
	Retained FTC Loan Receipts Not Required				-1.8
	Welfare Migitation	-3.0
	Welfare Reform	-2.5
	Welfare Reform projects Reduced Contract Costs	-0.3
TOTAL  DfC		-21.6	-0.6	-0.8	-1.8
DfE	COVID-19 - CFER - Assistance to Business	-0.2
	COVID-19 - Covid Restrictions Business Support Scheme	-0.1
	COVID-19 - Economic Recovery Action Plan	-2.2
	COVID-19 - Economic Recovery Action Plan - Innovation	-17.4
	COVID-19 - Economic Recovery Action Plan - Skilled & Agile	-7.7
	COVID-19 - Economic Recovery Action Plan - Trade & Investment	-2.5
	COVID-19 - Further Education College - Safe Learning	-0.5
	COVID-19 - Teaching Grant QUB/UU	-0.0
	COVID-19 Futher Education CFER	-1.1
	COVID-19 Higher Education CFER	-1.5
	Careers Frontline Resource	-0.2
	Central Administration			-0.0
	Central Administration - Consultancy	-0.1
	Central Administration - Direct Capital			-0.0
	Central Administration - Law Centre	-0.0
	Central Administration - Salaries	-0.2
	Delays in Events	-1.5
	Departmental Working Capital			-6.3
	EU Exit	-0.2
	Education Authority Funding from Further Education	-2.1
	Energy Salaries	-0.2
	European Social Fund - Foreign Exchange Gain	-0.7
	European Social Fund - Match Funding	-0.3
	Further & Higher Education - Maintenance Grants	-0.2
	Further & Higher Education - Student Support	-0.1
	Further & Higher Education - Supplementary Allowances	-0.1
	Further Education College - Income	-2.1
	Further Education College - Other Operating Expenses	-0.8
	Further Education College - Staff Costs	-2.5
	Harland & Wolff Provision	-1.5
	Health and Safety Executive NI Programme	-0.1
	Health and Safety Executive NI Salaries	-0.1
	Higher Education Commission - Income	-0.4
	Insolvency Service Salaries	-0.4
	Invest NI	-1.0
	Invest NI CFER	-1.1
	Invest NI Capital Receipts			-8.2
	Invest NI FTC Loan Repayment				-1.0
	PMS Capital Receipts			-2.0
	PSO - City of Derry Airport	-0.0
	Small Business Research Initiative			-0.0
	Small Business Research Initiative (SBRI)			-0.2
	Tourism NI	-0.6
	Training for Success	-0.8
	Youth Training Salaries	-0.0
TOTAL  DfE		-50.3		-16.7	-1.0
DE	COVID-19 - EA Behaviour Support	-0.3
	COVID-19 - Education Authority Behaviour Support			-0.1
	COVID-19 - Engage II Programme	-0.4
	COVID-19 - Joint Education/Health Vulnerable Children & Young People	-0.0
	COVID-19 - PPE for Special Schools	-0.7
	COVID-19 - Recovery from Lockdown Addictions	-0.3
	COVID-19 - Response Council for Catholic Maintained Schools	-0.0
	COVID-19 - Response Education through Covid - Immediate Response Team	-0.0
	COVID-19 - Response Pathway Fund	-0.0
	COVID-19 - Response Special Schools Testing Pilot	-0.3
	COVID-19 - Restart - Anticipated In Year Growth - 6th Form	-0.6
	COVID-19 - Restart Staffing	-0.2
	COVID-19 - School Holiday Food Grant Payments	-3.0
	COVID-19 - Transport	-0.3
	COVID-19 - Wellbeing Boxes	-0.4
	COVID-19 - Wellbeing Initiative in Schools	-0.0
	School Surplus Drawdown	-34.5
TOTAL  DE		-41.1		-0.1
DoF	COVID-19 - Increased Income	-0.3
	COVID-19 - Unfilled vacancies	-0.0
	Administration Costs	-0.5
	Depreciation		-1.6
	European Regional Development Fund	-0.1
	Increased Income	-0.1
	Project Delays	-3.6		-4.7
	Project Delays & Rate Relief Refund	-0.4
	Recovery of Bad Debts	-0.5
	Recruitment Delays	-0.9
	Recruitment Delays & Increased Income	-5.8
	VAT Costs			-2.0
TOTAL  DoF		-12.1	-1.6	-6.7
DoH	GP Contract			-1.7
	Health Trusts			-7.4
	Pandemic Flu			-3.2
TOTAL  DoH				-12.3
DfI	COVID-19 - Over-accrual Bus and Coach Sector support scheme 20/21	-0.4
	Roads CFER	-0.1
	Tens CFER income			-0.0
TOTAL  DfI		-0.4		-0.0
DOJ	COVID-19 - Justice Delivery - Access to Justice	-0.1
	COVID-19 - Justice Delivery - Safer Communities	-0.1
	COVID-19 - NI Prison Service	-0.6
	COVID-19 - NI Prison Service / Youth Justice Agency	-0.1
	COVID-19 - PSNI			-0.6
	COVID-19 - Probation Board NI	-0.1
	Compensation Services	-1.0
	Justice Delivery - Access to Justice			-0.4
	Justice Delivery - Safer Communities			-1.4
	Legacy	-0.1
	NI Prison Service			-0.3
	NI Prison Service / Youth Justice Agency			-4.3
	PSNI			-1.0
TOTAL  DOJ		-1.9		-8.0
TEO	COVID-19 - Covid Taskforce	-0.2
	COVID-19 - Executive Information Services - Knockview - Reduced Project Costs	-0.0
	Community Relations Council - Project Delays			-0.1
	EU Exit	-0.4
	Maze Long Kesh - Project Delays			-0.0
	Social Investment Fund	-0.1
	Strategic Investment Board - Project not Progressed			-0.0
	Urban Villages			-1.4
	Victims Redress	-8.8
	HIA	-1.0
TOTAL  TEO		-10.6		-1.5
FSA	Administration Costs due to COVID-19	-0.1
	Advisory Committee	-0.0
	EU Exit - Recruitment Delays	-0.1
	General Capital			-0.1
	Implementation Delays to NI Protocol	-0.4
	Income for resumed project	-0.0
	Recruitment Delays	-0.0
	Shellfish Sampling	-0.0
TOTAL  FSA		-0.7		-0.1
NIA	Recruitment Delays	-0.1		-0.0
	Recruitment Delays and Impact of COVID-19	-0.8	-0.3	-0.1
	Returned Income	-0.1
TOTAL  NIA		-1.0	-0.3	-0.2
NIAO	Salaries, Overheads, Depreciation and Income	-0.4	-0.0
NIAUR	NI Renewables Obligation Buy-out Fund	-0.0
NIPSO	Project Delays		-0.0	-0.0
PPS	Administration Costs	-0.4
	Depreciation		-0.1
	IT Equipment			-0.1
TOTAL  PPS		-0.4	-0.1	-0.1
Total Reduced Requirements		-140.5	-3.1	-57.0	-2.8
Total may not add due to roundings

 

ANNEX B

January Monitoring Reclassifications (£ millions)
Department	Description	Non Ring Fenced  Resource	Capital
DAERA	Fisheries Resource to Marine Fisheries Fund National Capital Grant	-0.9	0.9
Total Reclassifications		-0.9	0.9
Total may not add due to roundings

 

January Monitoring Technical Adjustments Depreciation and Impairment (£ millions)
Department	Description	Non Ring Fenced  Resource	Ring Fenced Resource
NIAUR	Depreciation / Impairment to GAE	0.0	-0.0
Total Reclassifications		0.0	-0.0
Totals may not add due to roundings

 

ANNEX C

January Monitoring Departmental Bids (£ million)
Department	Description	Non Ring Fenced  Resource	Ring Fenced Resource	Capital
DAERA	Avian Influenza	4.0
DfC	COVID-19 - Council Funding for Covid Impacts	7.0
	De-Rating Grant	1.2
	Rates Support Grant	10.0
TOTAL DfC		18.2
DfE	FE Colleges - Depreciation		7.8
	Labour Relations Agency - Depreciation		0.1
	Tourism NI - Depreciation		1.0
TOTAL DfE			8.9
DE	COVID-19 - (Fair Start) - Supply of Digital Devices			0.5
	COVID-19 - AccessNI charges	0.0
	COVID-19 - Additional Relief Drivers / Escorts	0.2
	COVID-19 - Contract Cleaning	0.1
	COVID-19 - Human Resource Local Support Emergency Resourcing Team	0.1
	COVID-19 - Personal Protection Equipment (PPE)	0.4
	COVID-19 - Schools Based pressure	20.8
	COVID-19 - Special Schools - Substitute Cover	0.4
	COVID-19 - Teaching and Non-Teaching Staff - Substitute Cover	0.2
	COVID-19 - Transport - Lost Income	0.3
	Departmental Depreciation		0.5
	Special Educational Needs	18.4
	Voluntary Exit Scheme	2.4
TOTAL DE		43.3	0.5	0.5
DoF	COVID-19 - Small business top up grant	0.8
DoH	Depreciation		12.5
DfI	COVID-19 - Lost Income	17.1
	COVID-19 Driver and Vehicle Agency	0.8
	COVID-19 Support for Bus and Coach Industry	4.0
	COVID-19 Translink	2.8
	Bus Route Subsidy	24.0
	Driver and Vehicle Agency	1.2
	Flagship Roads - A6			3.7
	NI Water	12.0
	NI Water Depreciation		2.8
	Penalty Charge Notice debt write off	2.7
	Roads Energy	3.5
TOTAL DfI		68.1	2.8	3.7
DOJ	COVID-19 - PSNI	2.2
	Legal Services Agency NI	3.5
	PSNI	1.0
	PSNI - Depreciation		2.9
	PSNI - Legacy Costs	5.5
TOTAL DOJ		12.3	2.9
TEO	Depreciation / Impairment		4.3
NIAO	Building Project Costs			0.4
Total Bids Submitted		146.7	31.9	4.6
Totals may not add due to roundings

 

ANNEX D

January Monitoring Allocations (£ million)
Department	Description	Non Ring Fenced  Resource	Ring Fenced Resource	Capital
DAERA	Avian Influenza	4.0
DfC	COVID-19 - Council Funding for Covid Impacts	7.0
	De-Rating Grant	1.2
	Rates Support Grant	10.0
TOTAL DfC		18.2
DfE	FE Colleges - Depreciation		7.8
	Labour Relations Agency - Depreciation		0.1
	Tourism NI - Depreciation		1.0
TOTAL DfE			8.9
DE	COVID-19 - (Fair Start) - Supply of Digital Devices			0.5
	COVID-19 - AccessNI charges	0.0
	COVID-19 - Additional Relief Drivers / Escorts	0.2
	COVID-19 - Contract Cleaning	0.1
	COVID-19 - Human Resource Local Support Emergency Resourcing Team	0.1
	COVID-19 - Personal Protection Equipment (PPE)	0.4
	COVID-19 - Schools Based pressure	20.8
	COVID-19 - Special Schools - Substitute Cover	0.4
	COVID-19 - Teaching and Non-Teaching Staff - Substitute Cover	0.2
	COVID-19 - Transport - Lost Income	0.3
	Departmental Depreciation		0.5
	Special Educational Needs	18.4
	Voluntary Exit Scheme	2.4
TOTAL DE		43.3	0.5	0.5
DoF	COVID-19 - Small business top up grant	0.8
DoH	Depreciation		12.5
DfI	COVID-19 - Lost Income	17.1
	COVID-19 Driver and Vehicle Agency	0.8
	COVID-19 Support for Bus and Coach Industry	4.0
	COVID-19 Translink	2.8
	Bus Route Subsidy	24.0
	Driver and Vehicle Agency	1.2
	Flagship Roads - A6			3.7
	NI Water	12.0
	NI Water Depreciation		2.8
	Penalty Charge Notice debt write off	2.7
	Roads Energy	3.5
TOTAL DfI		68.1	2.8	3.7
DOJ	COVID-19 - PSNI	2.2
	Legal Services Agency NI	3.5
	PSNI	1.0
	PSNI - Depreciation		2.9
	PSNI - Legacy Costs	5.5
TOTAL DOJ		12.3	2.9
TEO	Depreciation / Impairment		4.3
NIAO	Building Project Costs			0.4
Total Proposed Allocations		146.7	31.9	4.6
Totals may not add due to roundings

 

ANNEX E

 

ANNEX F