Budget (Northern Ireland) Order 2004

HL Deb 04 March 2004 vol 658 cc317-34GC

The Lord President of the Council (Baroness Amos)

I beg to move that the Grand Committee do report to the House that it has considered the draft Budget (Northern Ireland) Order 2004.

It remains a matter of regret that this legislation is not being considered by the Northern Ireland Assembly, and I hope that the ongoing review process will lead to an early restoration date. However, given the prevailing circumstances, it is our responsibility to ensure that good government is maintained until the Assembly is restored.

The draft order before us today has two purposes. The first is to authorise the total revised amount of resources for 2003–04 of 12.956 billion and the issue of a total revised amount of cash from the Northern Ireland Consolidated Fund for 2003–04 of £9.579 billion. That represents a decrease in resources of £275 million and an increase in cash of £383.5 million over the position authorised by Parliament in the main estimates for the current financial year.

The second purpose is to authorise a vote on account to allow funds to continue to flow to public services for the early months of the next financial year until main estimates can be presented and considered. For that, the draft order seeks Parliament's authorisation for the use of resources amounting to £5.157 billion and for the issue of cash from the Consolidated Fund of the sum of £4.362 billion.

In general, the resource and cash amounts required on account for 2004–05 have been calculated as 45 per cent of the 2003–04 total voted provision. As its name suggests, the vote on account is not intended to seek final approval of the allocations for 2004–05. It simply seeks sufficient resources and cash to allow services to proceed until the detailed work on the main estimates has been completed in the early summer. By approving the vote on account, noble Lords will therefore not pre-empt decisions on any final allocation for 2004–05. Details of the sums sought are given in the spring supplementary estimates and the vote on account, copies of which have been placed in the Libraries of both Houses.

I shall not attempt to identify the numerous changes contained in the supplementary estimates, as the introduction to each departmental estimate in the supplementary estimates booklet sets out in detail the main changes for which approval is sought. I shall, of course, do my best to respond to any points of detail.

With regard to the 2004–05 financial year, it is normal practice to bring forward a vote on account at this point, prior to the year in which the resources and cash will be used. There will be an opportunity for a further full debate on the detail of the main estimates in early summer. I commend the order to the Committee.

Moved, That the Grand Committee do report to the House that it has considered the draft Budget (Northern Ireland) Order 2004.—(Baroness Amos.)

Lord Glentoran

I thank the noble Baroness the Lord President of the Council for introducing the order. I suspect that she and I, and maybe other Members of the Committee, are in a similar position, in that we have not spent half a lifetime in public accounts and national budgets.

I agree that it is sad that the Assembly is not able to debate the order. We can—as I hope we will in the next hour—look at the total figures but, because we are not close enough, we cannot get involved in the break-out of the funds. We have the block grant to Northern Ireland. It is now in the form of a comprehensive budget where the funds are split between the different departments for different projects, different reasons and different accounts. We are not as close to that as the Members at Stormont would be in order to argue and debate whether that proportionality is right or wrong. If I am proved wrong later by noble Lords, I shall withdraw that statement, but that is how I feel about it.

It is also worth saying that the economy in Northern Ireland, despite everything, is thriving. It is in as good a state as it has been probably for many years. Unemployment is down, property prices are rising, and business generally is strong. For example, the GDP has grown considerably more in Northern Ireland in the past year than it has on the mainland. Wearing a different hat, I was able to do a short presentation in the City on how well the Northern Ireland economy had done in comparison to England and Wales, which is a very good thing.

There are one or two areas that I should like to ask about in order to get them on the record. As the noble Baroness the Lord President of the Council said, page 6 of the supplementary estimates states that the total has been reduced year on year in gross terms. But the noble Baroness also made the point that that would result in a cash increase. It would be good to have that on the record.

Before I go any further, I should like to thank the noble Baroness the Lord President of the Council for allowing me to be briefed by officials last night. That was very helpful, although they now know how ignorant I am about these matters.

On page 3, there is a paragraph headed "Department of Education—Teachers' Superannuation". I understand that there is something about pensions in there. It would be worth having an explanation of that on the record. There is a minus figure against it. I assume that that can easily be explained and that there is not a serious problem with teachers' pensions funding.

I am ashamed to say that I really have little more that I can ask or challenge. As I said, I am not an expert in such matters. I was involved in the exercise last year. It is good to know that, however the exercise was done last year, it seemed to work quite well. Because I live there, I know that there are some major capital projects planned in the Province, which I hope will proceed. From what I know as a local, money seems to be targeted in the right direction: that is part of what we are here for.

Lord Shutt of Greetland

I, too, thank the noble Baroness the Lord President of the Council for introducing the orders and for allowing me to take part in the official briefing yesterday evening.

There is a sense in which I feel that this is akin to the 25 years or so that I spent in local government. I was looking at what ultimately became £230 million; we are now dealing with a figure that is 60 times that. At that time, there was virtually nothing else in my life for six weeks. A great deal of time before that was spent poring over, understanding, cracking a budget and so forth. We are trying to scratch the surface and barely laying a feather duster.

So what is it? The document before us is a substantial tidy-up of 2003–04, the year that ends in four weeks' time. Then it makes a start on agreeing what one might call a payment on account for 45 per cent of the resources required, which sees things going until the end of August.

What we are asked to do today is an enormous task. What we are doing, along with a couple of hours in the other place, really is just a feather duster. I echo the regrets that the Northern Ireland Assembly is not able to be in business to do this important work. What is the Northern Ireland Assembly for? It is there for two things: peace process enhancement, and the proper democratic stewardship of such important and substantial resources. It is not able to carry out either function. In a way, I suppose that the Northern Ireland Grand Committee ought to meet daily, for a full day, for about six weeks. Therefore, our proceedings really are a feather duster.

The general principle of the document is, "Steady as she goes; there should be no radical changes during direct rule. It is a temporary position. Don't disturb too much, and let's hope that, ultimately, democratically elected people in Northern Ireland can deal with such matters. Let's just keep the thing going. If you have to alter something because of a bit of inflation or because something obviously has to be done, so be it, but don't alter too much". I have some reservation about how long that line can be kept, but I understand it.

I would like to speak on three areas: one of regret, one of principle and one of detail. Without causing too much embarrassment, the first matter about which I want to talk is in the budget for the Department for Employment and Learning. Provision is reduced in subhead ⅔ by £7.8 million, given the reduced requirement for the Springvale campus. It must be a very sad day indeed for my noble friend Lord Smith of Clifton, who endeavoured in his stewardship of the University of Ulster to make his own substantial contribution to the peace process. It is a shame that those in charge of higher education in Northern Ireland have such limited vision that we have to delete nearly £8 million for what was intended to be a substantial enhancement of education and a substantial involvement in the peace process.

My second point is that there is a substantial budget—£50 million or so—for the Office of the First Minister and Deputy First Minister. It is intended that that continue on that sort of basis. That £50 million raises some important matters. In a way, it is split in two. A lot of it is grants to voluntary organisations, and it is also for initiatives by the First Minister and the Deputy First Minister. If they are not there to take initiatives, who will take them? Will they be civil servant initiatives? Will they be taken by Ministers here? What democratic accountability is there in respect of them? I am sure that many of them will be first-rate and sound, but they will be done with public money. How does that fit in with the principle of "Steady as she goes"?

The third matter on which I wanted to speak was something about which I thought I knew a little. It is a detail on one area of expenditure—that for the railway system in Northern Ireland. This book of accounts contains the large investment, or at least alterations to the investment—I am not quite clear on exactly how that fits in. I am sure that most Members of the Committee will be aware that the rolling stock of the railways in Northern Ireland is all life-expired, with the exception of the Enterprise stock used for the Dublin service.

Paragraph 1(vi) on page 193 of the Northern Ireland Spring Supplementary Estimates 2003–2004 states that there is an extra £5.728 million allocated for rolling stock—that is something about re-phasing. I am not clear whether that figure relates to the rolling stock that it was thought would be bought next year, and that a payment on account can be made at this point, or whether it is a late payment because the arrangements of the purchase were such that it was made in an earlier year. Does the budget provision to purchase new rolling stock provide for the entire network or only part of it? If it does not provide for it all, should the shortfall be an early candidate for virement in terms of the entirety of the Northern Ireland budget in 2004–05? If that is to be the case, and rolling stock is to be ordered to add to the order already placed, the timing of that will be significant.

Mr Roy Beggs raised the matter of Northern Ireland Railways in another place and referred to the "non-core railway". Who has defined the non-core railway? Seemingly, the reference relates to the routes from Coleraine to Londonderry and from Whitehead to Larne. Which Westminster politician or Northern Ireland politician has come up with the phrase "non-core", or has it come from somewhere else? The Whitehead to Lame route is a strange sort of "non-core", when it is part of the Cork to Lame TENS network, with enhancement funds provided by the European Union. The Coleraine to Londonderry route is a strange "non-core", when that part of the railway takes people from Belfast to the second city of Northern Ireland.

It was interesting that a Question was put by that questioner of questioners, the noble Lord, Lord Laird, on what plans Her Majesty's Government have to promote the railway line between Coleraine and Londonderry as a tourist attraction. The Answer, which is credited to the noble Baroness, Lady Amos, but is so unimpressive that I suspect that someone else dreamt it up, stated: The Government provide substantial resources to Northern Ireland Railways to enable them to maintain railway services including services on the Coleraine-Londonderry line. They would welcome any increase in the low levels of patronage, but do not promote it or assist in promoting it as a tourist attraction".—[Official Report, 24/2/04; col. WA 42.] That is pretty unimpressive. There is a substantial budget in the spring estimates for Northern Ireland Railways. There is another very substantial budget of at least £20 million for tourism. How is influence brought to bear so that Northern Ireland Railways and/or the Northern Ireland Tourist Board do the promotion? How can that be brought to bear? This is one of the few occasions when we can say that pressure needs to be brought to bear on that very point.

Railway enhancement has taken place in the British Isles, with lines and stations reopening and considerable enhancement of tourism on lines such as Settle to Carlisle, south Devon, Fortwilliam to Mallaig, and so on. Coleraine to Londonderry is in such a class. Enhancement has also taken place in the Republic of Ireland, with stations and lines re-opening. Why is Northern Ireland the poor relation? Reference has been made to two important lines as "non-core", and there is the already mothballed line between Lisburn and Antrim.

That is a bit of detail so far as this is concerned. We could scratch at that kind of detail throughout the book were there anything like the opportunity to do so. While the devolved Assembly is not in business, there ought to be a way in which we can scratch and scratch away at an issue in an endeavour to influence it. However, we cannot do that in a couple of hours here and a couple of hours in the other place.

3.30 p.m.

Lord Laird

I join Members of the Committee who have already spoken in tribute to the noble Baroness the Lord President of the Council for her introduction to the debate, and to the civil servants who have obviously done considerable work in putting together the document. I am sorry that I did not attend the briefing last night. I do not know whether I was invited. It was probably entirely my fault, but I knew nothing about it by whatever mechanism. It might not have affected me.

I was very impressed with the remarks of the noble Lord, Lord Shutt of Greetland. He made a major contribution today, not only in regard to the railways but by referring to the fact that scratching at details is not satisfactory for a document of such size, worth and impact. We can only poke in and poke out as we see fit. That is an extremely important point at this time when there is no devolved government. I would obviously like there to be an Assembly at which such matters could be better scrutinised.

As the noble Lord said, there have been many years of under-investment right across the board in Northern Ireland. The example that he used was that of railways, which is a good example. The standards of safety that apply throughout the rest of the United Kingdom do not apply in Northern Ireland. With the railway system, we are sitting on a possible disaster. If there is ever an incident involving the safety of our rolling stock—I hope that there is not—it would be a major scandal that the safety regulations that affect the rest of the United Kingdom do not affect Northern Ireland because of under-investment. There will be very serious questions asked if that comes about.

To a lay person such as myself, an awful lot of money seems to be spent on administration. I am sure that I do not understand the problems. Let us take a simple example that we all know of and about which a lot of people in Northern Ireland talk. We have four health boards, which employ 800 people and spend £27.5 million a year on administration. The best research that I can do shows that in any other part of the United Kingdom an area the size of Northern Ireland would be administered by 50 people spending £5.5 million. We are heavily over-administered; money is wasted on administration.

I am sure that there are many parts of this document that I do not understand. Let us look at the section on the Department of Agriculture and Rural Development at page 15. Nearly £31 million is spent on administration for veterinary services and yet the net resources are just £880,000 million. If I read the figures right—perhaps someone will explain it to me—nearly £31 million is spent on administering an £880,000 million budget. I assume that there is a logical explanation for that—because it is Alice in Wonderland if there is not.

I could go through the document and talk about the Department for Employment and Learning and the labour market, details of which are on page 88. The total budget was £16 million, of which £14 million was spent on administration. Page 128 deals with business development services and shows £11 million spent on administration when the total resources are £11 million; there is £200,000 left to administer. I must have read the figures incorrectly; that cannot be.

Like many other people, I am glad of the pension protection fund initiative but perhaps the Minister will explain why it does not apply to Northern Ireland.

As regards local management of schools, I do not know whether any man or woman alive understands the formula for the funding of schools. Recently, I sought information about the funding of primary schools in Belfast, and discovered that Stranmillis Primary School in south Belfast is heavily underfunded and rapidly sliding into the red. I am not a financial wizard, but no one can explain to me the system of funding for a school such as Stranmillis Primary School. I just take that as an example. It has the lowest per capita figure of any primary school in Northern Ireland.

There must be targeting social need in Northern Ireland. As the noble Lord, Lord Glentoran, said, the economy is such that unemployment is at its lowest, certainly in my lifetime. I welcome that. But there are still areas of great deprivation. We need to target social need heavily. Is there recognition that in targeting social need and supporting organisations that put culture, health and support into local areas, we are saving Her Majesty's Government funding in other areas—they are not in this document and not under consideration today; they include such aspects as police overtime and compensation.

I declare an interest as co-chairman of a cross-border body. I cannot prove these figures, but if we gave £10,000 in grants for TSN areas, that would probably save about £100,000 in police overtime and perhaps £1 million in compensation. Eight years ago, it took £6 million to put the city of Londonderry together again after the marching season. We put a small amount of money into that, backed up by other good governmental organisations. It no longer costs £5 million in compensation; and there are no longer police overtime costs. It costs £250,000, and the city of Londonderry is full. It is a throbbing and exciting festival, and there is not a stone thrown in anger. Sometimes I wonder whether the Government get their sums right and understand what is more important—trying to stop trouble before it starts by socially acceptable means or waiting until people have to be hosed off the streets, damaging the image of Northern Ireland, and having to pay compensation?

I also agree with the noble Lord, Lord Smith. I had a very peripheral involvement in the noble Lord's imaginative scheme for Springvale. I, too, am disappointed that that has not taken place. I was one of those who, in another place—in Stormont—represented West Belfast. I was convinced that that would have been a great help to many people in both major communities in West Belfast.

As I said earlier, I am the co-chairman of a cross-border body. The cross-border bodies are mentioned in the estimates, as there is bound to be an effect on the budget. I have never been able to work out how the budget for the cross-border bodies is reached; it is a source of amazement to me. Obviously, I shall not receive any credit for being able to deal with figures because I cannot understand the process at all. I have with me the North/South Language Body financial memorandum; what actually happens bears no relation to it.

Last year the budget was set at the behest of the Dublin Government. The Government backed down only because it was scuppered by the teeth of a court and shown that the British Government had been fettered by the Irish Government's announcing the budget in advance. I do not want to have to do that again this year: but, again, Dublin has set the budget in November for the language implementation body.

It also refers to a document of 19 November 2002 which takes the place of the North/South Ministerial Council's decision-making process. The document raises some concerns. It states: We will consult with the appropriate bodies". As the chairman of a cross-border body, I can say that, six months after submitting our business plan, we have never been consulted.

Our budget is set by the Irish. What the Irish know about the culture of the Ulster Scots is beyond me, yet they can set our budget. Will the Minister say what mechanism is used for setting cross-border bodies budgets? With whom are there to be consultations? As I understand it, proportionality changes from year to year depending on the arrangements. How is proportionality worked out? Someone once described proportionality to me as the difference between what is put into the relationship by the British Government and what the Irish Government puts in. It has changed for some bodies but it has not changed for the language implementation body. I want to know why that is and what information formed the basis for the decision that proportionality will remain the same as it was in year one.

I also want clarification of what exactly is the new policy. As I understand it, under the current arrangements, cross-border bodies are supposed to work only on care and maintenance, yet Waterways Ireland is to get an extra 40 per cent. On the other hand, we, a new body, which started from ground level on the basis of funding four Ulster Scots groups in 2000 but funding 24.6 last year, receive only an inflationary allowance given to us generously by the Irish Government.

Why are we treated differently from other bodies? Why is there care and maintenance? What is the meaning of care and maintenance? It is stated that there are no new policies. In my opinion, a new policy is when you stop a policy. We have a policy of grant-aiding groups; we have a policy of trying to take people away from paramilitarism in Belfast and targeting social need. Those are policies that we now have to stop because Dublin did not allow the British Government to give us the money. In my opinion, stopping a policy is the same as having no new policy. We have to stop our policies.

As to care and maintenance, has it held up the activities of either the trade body or the tourism body? Is care and maintenance stopping Tourism Ireland from bringing tourists into the island of Ireland? We should all be treated on an equal basis.

I feel that I have asked enough questions at this point but I reserve the right to come back.

3.45 p.m.

Lord Dubs

I am delighted with this procedure; it is much better than doing everything on the Floor of the House.

I fully concede that, if there were no devolution in the future, we could refine the process. But I hope that devolution will happen before we go much further and that what we are doing today will be seen as a historic procedure.

I agree with the noble Lords, Lord Shutt and Lord Laird, that there are ways in which we could scrutinise the headings in more detail. Having been involved on the ministerial side in some of these matters, I partly feel tempted to ask questions relating to my former department. I shall not do that—I do not believe it is appropriate—but I certainly understand that behind the figures are policies. This is an opportunity to scrutinise the detailed policies, but that would be a very difficult task because perhaps 100 or 150 key policy areas are covered by these figures.

I want to ask two questions, one of which I have given notice of, and the other so straightforward that it will not be difficult. The latter is simply this: what assumptions have been made in the figures as regards costs of the Assembly and, indeed, for the First Minister and Deputy First Minister in the case of there being devolution, and in the case of there not being devolution? In other words, do the figures allow for the Assembly and the Office of the First Minister and Deputy First Minister to be brought up to speed very quickly when the happy day arrives, which I hope will not be too long ahead?

The question of which I gave notice is simply about integrated education. I should declare an interest: I am chairman of the All-Party Group on Integrated Education in Northern Ireland. It is a very important issue. I know that the policy of the Government—it was the policy of the Assembly—is that there should be growth in integrated education as demand for it rises. What assumptions have been made about integrated education in the figures? I could not detect the words "integrated education" in the descriptions of the figures themselves, but could we be told a little about how the Department of Education sees the development of integrated education? What resources will be made available for it?

Lord Glentoran

I would like to come back with two general points. One is to do with the administration of Northern Ireland as a whole. I know that a review is taking place, but it is a good time to put some markers down. As the noble Baroness will know, I asked the Government a number of Questions a month or so ago about costs of administration. To summarise a little, 37.5 per cent of all those employed in Northern Ireland. not including the security forces, are employed by the Government in government administration. That is a pretty serious figure. It is a long way above anywhere else, certainly in the European Union. It is a very nonproductive group.

I think that we have 26 local authorities. I have the number of quangos, but I did not bring it into Committee. We have regulators and ombudsmen everywhere, and they all have their own offices costing £1 million or thereabouts each. Everything is duplicated and not linked. The noble Lord, Lord Laird, mentioned the situation with hospital boards. We have education and library boards all over the place, with everything duplicated and duplicated.

I sincerely hope that the Government will attack that serious waste of resources. The money could be spent considerably better than on that over-regulation. It is a government fad, as we know, throughout the United Kingdom. Since they have been in power, regulation has multiplied and multiplied, and it has happened in Northern Ireland. One has only to look at the number of inspectorates, commissions and quangos set up. The list goes on and on, and every one needs to be paid for.

My second point, perhaps with a less aggressive tone, is on the Office of the First Minister and Deputy First Minister and the salaries of the Assembly Members, as was mentioned by the noble Lord. Lord Dubs. If I have the figure right, it is about £100 million. So far as we can see, that money is not being earned. Nearly £50 million is sitting in the budget of the First Minister and Deputy First Minister, with another £47 million listed on the back page for Members' services and salaries. That does not make sense. With due respect to those in the Room, we need a Northern Ireland Civil Service, but do we need 10 departments' worth of officials while we do not have an Assembly?

I could go on. Someone needs to look very quickly at the administration costs of the Province. Frankly, it is mad if it is not going to change. Some of us believe that it could be 10 years before it changes, the way things are going. The noble Lord, Lord Dubs, and I often disagree on the matter; sadly, I have been right rather more than he has at this stage. I sincerely hope that I am proved wrong, as he knows. I believe that in financial planning we should plan for reality and not for blue skies. I end on that point.

Lord Smith of Clifton

My Lords, on a point of general principle touched upon by the noble Lords, Lord Shutt, Lord Dubs and Lord Laird, if—and one certainly hopes it is not the case—we are here again next year because there is no re-activated Assembly, can some provision be made for a greater amount of time for us to consider the budget? Basically, we are rubber-stamping what civil servants have cooked up. They have cooked-up quite brilliantly—I congratulate them on that—but the political input is zilch, and that is not good for democracy.

Lord Dubs

My Lords, I remember that in my days as a local councilor—on Westminster City Council, no less—we went through such issues page by page. That would be fairly difficult in the case of parliamentary scrutiny of government in Northern Ireland but, short of going through the order page by page, I find it difficult to see how the noble Lord's wishes can be met. Perhaps we should all think about the issue outside the Committee and then put our views to my noble friend, outlining what procedures might meet our needs—without becoming local councillors.

Lord Glentoran

My Lords, I wish to make one further point. Although the Springvale project was very much the project of the noble Lord. Lord Smith, I was also involved. I believe that the Government are making a huge mistake in withdrawing it. I have walked every inch of the site and I have been involved with the Millennium Commission. We have put an outreach facility there which is operating and working wonderfully well. If only it had the university around it as was envisaged, dreamt about and planned by the noble Lord, Lord Smith, and his colleagues at the time. I believe the figure given then was £70 million or £71 million; I do not know what it is today as it is withdrawn.

It will be a serious retrograde step. The area around Springvale is one that needs education to bring people together. It is on the peace line—everyone in the room knows that, but those who read Hansard may not—and would have been a perfect vehicle to help improve education at all levels. I think that I am right in saying that there is a comparatively high level of adult illiteracy in that part of Belfast compared with other parts of the city—the noble Lord, Lord Smith, is nodding in assent. People are frightened to admit it; they are embarrassed by their children and it causes domestic problems which many of us know about. It is wrong to take away that facility for the sake of £71 million which, if the Assembly is not going to sit, could come out of the salaries of its Members.

Lord Smith of Clifton

I thank all noble Lords who have commented on the demise of Springvale. It was a very great personal disappointment to me.

In answer to the point made by the noble Lord, Lord Dubs, we have had perhaps two or three days to look at this order. It would have been nice to have been given 10 days because we could have gone into it in greater depth. I agree that, with budgets, you more or less have to take them or leave them; you cannot really change them. But it would be a courtesy to the people of Northern Ireland if we were able to give the order a reasonable amount of attention rather than the rather peremptory treatment it is receiving today.

4 p.m.

Baroness Amos

I thank noble Lords for the points they have made. Perhaps I may start by addressing the general concerns that have been expressed.

I agree completely with the noble Lord, Lord Glentoran, that the Northern Ireland economy is thriving. It is something we should be pleased about. I share the regret of the noble Lord, Lord Shutt, that the Northern Ireland Assembly is not able itself to consider these estimates in detail. That is why we wish to see a restoration of devolution and the work of the Assembly as quickly as possible.

I agree with the noble Lord, Lord Laird, that it is important that we target social need in areas of deprivation. My noble friend Lord Dubs said that the Grand Committee had been a useful process. I agree, although I hope that we will not have to consider the budget in detail in a year's time, as was suggested by the noble Lord, Lord Smith. I am aware that the noble Lord is thinking about what might happen, but we all hope that we shall see a resolution in a far shorter time.

A number of general points were raised. The noble Lord, Lord Glentoran, referred to the fact that we are issuing a revised amount in cash terms because there has been a decrease in other areas. I referred to that in my opening speech, but, to clarify, I shall say it again: the total revised amount of cash from the Northern Ireland Consolidated Fund for 2003–04 of some £9.79 billion represents a decrease in resources of £275 million and an increase in cash of £383.5 million over the position authorised by Parliament in the main estimates for the current financial year. If one looks at the two figures, it is clear that there has not been an overall reduction.

The noble Lords, Lord Laird and Lord Smith, asked about the spending plans for 2003–04. The overall spending plans for 2003–04, on which the estimates are based, reflect the draft budget prepared by the Executive in September 2002, prior to suspension. Although I take the point about local participation in the exercise, some local views are reflected, given that the process took place prior to suspension, and the 2004–05 plans have been discussed with local parties. I take entirely the point about the time available to scrutinise the plans in detail, and I hope that when we come to look at the main estimates later in the year, noble Lords will feel that they have an opportunity to do that.

The noble Lords, Lord Laird and Lord Glentoran, raised a point about administration. In the estimates for administration, there is a quirk in the system that we operate, and the same position applies in Whitehall: the cost of civil servants appears as administration, yet many of those civil servants will be engaged in direct service provision to the public and not in administration. For example, within the agriculture department, the bulk of the work is carried out by vets engaged in scientific activity. So the term "administration" is not used in the way we would normally understand it. A key feature of the overall budget announcement has been a bearing down on administrative costs, with a consequential shift to investment in services. That will be one of the key issues for this year's spending review. I hope that I have assured the noble Lord, Lord Laird, on those points.

The noble Lord, Lord Glentoran, mentioned the review of public administration launched in June 2002. Its aim is to review all aspects of the public sector in Northern Ireland and to develop a system of public administration that meets fully the needs of the people in Northern Ireland. Of course suspension of the Assembly and the Executive has had an impact on the timescale of the review. My right honourable friend the Secretary of State Paul Murphy has said that he is committed to the work of the team, which is continuing to help establish a modern system of public administration that is both efficient and effective. In October last year, a consultation document on the future of public administration in Northern Ireland was issued. The deadline for responses to the consultation was extended to 27 February. Those responses have now been received, and we will look at them.

We are also undertaking a fundamental efficiency review, which reflects the work of Sir Peter Gershon in Whitehall on efficiency.

I think that that addresses the wider points raised. I shall now respond to the specific points. The noble Lord, Lord Glentoran, referred to the reduction in resources identified on page 6, which is linked to the Department of Education's pension issue. The consequence of the application of a new accounting standard for the first time at main estimate stage was recently reviewed on the basis of actuarial advice, hence the reduction. It has no impact on the delivery of public service. I hope that that addresses the noble Lord's concern.

The noble Lords. Lord Shutt and Lord Glentoran, referred to the Springvale project and the particularly important role that the noble Lord, Lord Smith, played in it. Following the University of Ulster's withdrawal from the project in September 2002, the Springvale hoard carried out a review of the project. The review was completed in January this year, and a report has been forwarded to the Department for Employment and Learning. I have been advised that my honourable friend the Minister is considering the report's proposals, and a statement will be made in due course.

The noble Lord, Lord Shutt, raised the issue of the budget of the Office of the First Minister and Deputy First Minister. All the department's work is subject to the oversight and control of my honourable friend Ian Pearson, the relevant Minister.

On transport, the noble Lord, Lord Shutt, talked about the railways. The rescheduling of rolling stock was expenditure originally planned for 2002–03 that has slipped to 2003–04. It does not cover the entire network, and any underspend will be considered for virement into other priority areas. The definition of "non-core" railway networks is based on usage and flows from the regional transportation strategy. The strategy looks at the most frequently used part of the Northern Ireland network, which is commonly known as the "core". In looking at that, the regional transportation strategy has also identified "non-core".

The noble Lord, Lord Laird, asked about the funding of North/South bodies. I must say to him that I would have been very surprised if he had not pressed me on those points. All budgets for North/South bodies are agreed jointly by the Governments north and south. The noble Lord is quite right that, under current arrangements, North/South bodies are required to operate on a care and maintenance basis only, and, in this context, budget proposals should not include any substantive development costs. The noble Lord raised specifically the issue of Waterways Ireland. The 2004 budget contains an allocation for a new headquarters, which is still subject to approval to proceed. The increase is not with respect to new policy issues but with respect to a new headquarters.

On the issue of the North/South Language Body's budget, and in particular on proportionality, the agreed allocations did not reflect the figures included in the agency's final draft business plans, as they were considered by the sponsor departments to be in excess of care and maintenance. The respective agencies' business plans were approved on the basis of the budgets agreed by the sponsor departments. It was agreed that the funding, although less than that originally sought by the respective agencies, was sufficient to allow each agency to carry out the necessary activities to sustain and build on its 2003 baseline position.

The issue of proportionality is based on an assessment of the perceived benefits to each jurisdiction of the work of the body. The assessment for the agency is that that has not changed. Of course, that will be reviewed each year as part of the budget process.

My noble friend Lord Dubs asked a specific question about the Office of the First Minister and Deputy First Minister and what would happen. For 2004–05, the detailed plans assume that the Assembly will be functioning normally, which of course is our sincere wish. If that is not the case, relevant resources will be redeployed to priority areas.

On the issue of funding for integrated education, the Government respond to parental demand but do not seek to impose any particular type of education. Funding is made available for integrated schools that are robust, do not involve unreasonable public expenditure and meet the specified criteria. The current expenditure on integrated schools will be £53.3 million in 2003–04, with £14 million allocated for capital expenditure. Funding of around £500,000 a year is also provided to the Northern Ireland Council for Integrated Education, to further promote integrated education.

I hope that I have addressed the points raised.

Lord Shutt of Greetland

I appreciate the difficulty of responding to the barrage of questions and so forth. However, I wonder whether the noble Baroness had the opportunity to think a little about a more encouraging and convincing response to the juxtaposition of the railway and tourism issues, to which I referred.

Baroness Amos

It is important to identify the roles that the Government and the tourism authorities have in relation to that issue. I will take the issue away and look at it again. I was very grateful for the fact that the noble Lord felt that I had not had a hand in the reply. Of course, I signed off the reply, which means that I was happy with it, but I will go hack and probe further.

Lord Laird

I want to ask the Minister again on some of the issues about which we talked. She talked about Waterways Ireland, the entries of 40 per cent for its cross-border implementation body and the fact that that relates to a new headquarters. As I understand it, the whole concept of care and maintenance is to see what happens to the political process. It is quite clear in the Belfast agreement and the legislation that there can be no cross-border bodies if there is no Assembly. Why then was Waterways Ireland allocated money for a headquarters that may not come into being? That is not care and maintenance; it goes far beyond that.

The noble Baroness may say, "Well, it has not been signed off by the North/South Ministerial Council", which is a fair point. If so, why were the same standards not applied to us? Why did we not have money set aside, even if it may not have been signed off by the council? The issue has not been resolved but, at the end of the day, the budget that we got was one authorised by the Irish in November.

I am sorry to say that there is no answer to the point that there was no consultation with the agency about the budget. Therefore, no one in the sponsoring departments can say that the budget is adequate to keep us going on the same lines. It is not. It means that we have to cancel policies. However, I can understand that the department does not know that because, after six months, it has not consulted us.

It would seem a sensible point of government procedure from what it is hoped is today's open government that, if someone is carrying out the work and you suddenly decide that they have the expertise to carry it out, you should consult them on the budget. It is no use us tying up our minute staff by having them spend months making business cases if the money is simply allocated to us with no regard taken of those cases.

I want to make a further point about proportionality. I am sorry, but I am totally dissatisfied with the answer. In the case of the North/South Language Body, there has been no request for information from us since we started in 1999 that would inform the Department of Finance and Personnel of where the benefits went on both sides of the border. Therefore there cannot have been a discussion about proportionality because no information has been provided about what percentage of the good that we do is in the North and what percentage is in the South. Why are we the only implementation body not to be given an opportunity to have its proportionality from the two governments changed?

There is something extremely bad about the way that we have been handled. Just to make the issue slightly political: when we consider that this is being done at the hands of the Irish Government, it really makes the case for unionism. When we see our culture, our heritage and our language dismissed as being of no account by people who know nothing about it and will not even come along and ask us, we are in a very serious situation. I will pursue this with a certain amount of energy, and not just today—I have shown on other things that I can do that. I shall pursue this issue because I am not satisfied with the way we are being treated.

We are prepared to sacrifice ourselves and do our jobs by taking part in these cross-border bodies. I do not want to take part in a cross-border body, but if I am prepared to do that for political reasons, then I want to be treated with respect, to be treated as an equal and like everyone else. I do not want the Irish setting our budget, with our department simply rowing in behind it, and cutting into what we do.

I now have to go to the community that I represent, who we organised well last year in terms of the marching season. I now have to return to that community and say to them, "Boys, we do not have the money this year to do what we did with you last year and which resulted in a quiet marching season. The reason we do not have the money for you is because Dublin has cut our budget". The community will think that I have gone haywire. That is a very dangerous political situation. It is one that I have flagged up time after time, although no one seems to pay any attention. But Ministers and civil servants will come squealing to me when there is trouble next summer during the marching season. They will throw money at every possible way of reducing the troubles.

We have a solution. We are putting things in place to beat paramilitarism in the outlying areas of Belfast. We have ways of persuading people to understand that they can show respect for their communities not by throwing stones, but by taking part in cultural events. It is all going down the Swanee because our budget is set by Dublin. I am really quite distraught.

4.15 p.m.

Baroness Amos

I am sorry that the noble Lord, Lord Laird, is not convinced by the points I have put. I hope that I made it absolutely clear that all budgets for North/South bodies are agreed jointly by the governments of the North and the South. I cannot put it any more clearly than that.

I turn to the particular question of Waterways Ireland. Again, I thought that I made it absolutely clear, first, that this funding has not been signed off. However, it was important to make budgetary provision for it. In that context, it should be recognised that there are essential functions which need to be delivered regardless of the political situation. That is why it was important to make some form of budgetary provision, despite the fact that the expenditure has not been agreed. Again, as I said, it is not for developing new policies, it is for headquarters building.

Secondly, I turn to the issue of consultation. I shall have to look at it again. I have been assured and it is my firm understanding that significant consultation has been undertaken between the relevant department, the Department of Culture, Arts and Leisure, and the agency. The noble Lord tells me that there has been no consultation. Clearly, there is some misunderstanding on both sides as regards the nature of what has happened. Perhaps I may write to the noble Lord setting out exactly the process that has been gone through in respect of the agency. If he is still unhappy, I shall be glad to hold a meeting.

Proportionality, as I said, is based on an assessment of the perceived benefits to each jurisdiction of the work of the body. The proportionality issue rolls forward unchanged, unless a case is made to amend it. Again, I would be happy to engage with the noble Lord on that matter.

The noble Lord referred to areas that the agency would like to address but cannot do so because of the nature of the budget. The amount reflects the 2003 budget plus an inflation uplift. The department is confident that the 2004 budget will be sufficient to allow the bodies to implement a substantial programme of work. I know that that means in practice that the agency will need to prioritise. However, all public sector bodies need to do that, They must prioritise and make decisions about the areas of activity that they feel to be more important than others. As I said, I shall be happy to hold a meeting with the noble Lord and the relevant Minister to go through the two issues—in particular that of consultation—which have been raised.

Lord Laird

I do not want to prolong the proceedings, but I should like to know from what source information has been given to Her Majesty's Government so that they can set a satisfactory budget for the cross-border language implementation body. How can anyone decide that, when no one has discussed it with us? How can anyone have a concept of what we are trying to do?

I understand that we shall have a discussion about the whole area of consultation, but—take my word for it—there has been no consultation. I want to know dates and times. Who was the consultation carried out with, and what topics were covered? There has been no consultation. Indeed, when I wrote to the Minister about it, that was not refuted. Over a period of six months, there was no consultation.

The body that I represent is a new one, unlike the others, which existed before. We have been recruiting staff and starting from the bottom. It is not a question of simply giving us an inflationary increase each year: we are building up an organisation. We have come from nowhere. The other organisations are made up of bodies that have been amalgamated. Why are the same rules applied to us? There should be different rules for us because we are building from the ground up. Again, it comes down to consultation. We have had no consultation with the department that is supposed to sponsor us. It does not look after us in any way, and that in itself tells a story. We should not be treated like organisations that are simply brought in and require their money to be upped by the rate of inflation.

We want to employ staff. When we open our new offices, something we are required to do under the agreement, it will dramatically put up our overheads. Why are we given only an inflation increase? Moreover, we were told to go out and start up groups. We had four groups in 2000; by 2003, we had 246. That needs more than just adding a wee bit on in line with inflation. I am seriously concerned about the political consequences of what is going to happen.

Baroness Amos

I can only repeat what I said before. There are two different issues that the noble Lord is bringing to the attention of the Committee. The first issue is that this is a new body that wants to expand. Of course, that desire will be at variance with the care and maintenance provisions at the core of the present relationship between the agencies and their departments.

The second issue relates to the general way in which public expenditure disciplines are deployed. The noble Lord will be aware that there is a discipline that each department has to put into force. I am aware of that from the way in which the Chancellor and the Chief Secretary to the Treasury have been firm with UK departments about those public expenditure disciplines. Of course, that again is at variance with the expansion plans that the agency would like to put into force.

Regarding consultation, there has, as I said, been a degree of misunderstanding. My firm understanding is that significant consultation has taken place. I shall write to the noble Lord about that. I can only reiterate that I am happy to have a meeting.

On Question, Motion agreed to.