§ The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Ian Pearson)In light of the consultation exercise on the draft Programme for Government and the Draft Budget launched by the Northern Ireland Executive in September 2002, we are today setting out policies, priorities and spending plans for the Northern Ireland Departments for 2003–04 and beyond.
When devolution was suspended we made clear our determination to do two things. We pledged that we would work tirelessly to rebuild trust across political parties and to bring about an early return of devolved government. We also explained that for as long as direct rule continued we would govern in an open, active and fair way.
The Northern Ireland Office ministerial team is determined to build on the progress that was being made by the Executive and continue the good work they had started to improve public services in Northern Ireland.
In setting priorities and plans for 2003–04 and beyond, we have considered carefully the challenges, policy issues and priorities identified in the draft Programme for Government. Many of these remain very relevant and we have decided to continue with these priorities as the basis for action over the coming year. These priorities are:
We have also retained, at the centrepiece of our policies the emphasis on the Reinvestment and Reform Initiative (RRI) which was agreed between the Prime Minister, the Chancellor of the Exchequer and the then First Minister and Deputy First Minister in May 2002. This was the focus of the draft Programme for Government and draft Budget agreed by the Northern Ireland Executive in September. The plans we have agreed recognise that investment in Northern Ireland's infrastructure is hugely important to both economic and social development. Roads and public transport, hospital and school buildings and the water and 19WS sewerage system all need significant new investment if they are to be capable of sustaining the quality of life that everyone wants to see, to correct the pattern of under-investment which we also found in other parts of the UK when we came to office in 1997.
- Growing as a Community
- Working for a Healthier People
- Investing in Education and Skills
- Securing a Competitive Economy
- Developing Relations—on a North/South, East/West and International basis
As a key part of the RRI, we are moving towards the appropriate use of Public Private Partnerships. In doing this we believe that there are areas where such mechanisms are the best way to draw the expertise and resources of the private sector into the delivery of public services, bringing new skills and ideas into this important work.
In order to achieve the best balance of investment, using traditional public expenditure, borrowing and PPPs, we are pressing forward with the development of the Strategic Investment Board (SIB), subject to parliamentary approval of the necessary legislation—which has recently been issued in draft for consultation. The proposal is that the SIB should be an expert body to advise in future both the Executive as a whole and Departments and agencies individually on both the best means of financing and organising major projects and on their successful implementation.
To take forward the process of re-investment, we have taken some initial steps to access the borrowing power which was agreed as part of the Reinvestment and Reform Initiative. This is triggered by actions which increase the relative levels of revenue raised in Northern Ireland: such self-financed borrowing can be used for investment over and above the Departmental Expenditure Limit for the Northern Ireland Departments. In the short term we are making a start on this by introducing rating of vacant properties and by phasing out industrial derating. In the longer term we have indicated our intention to replace the existing domestic regional rate with a new scheme based on the capital value of properties. All these changes arise from the Executive's Review of Rating Policy.
These measures will provide the vital additional resources necessary to support our policy priorities and plans. In due course proposals will also be developed to ensure that the water industry becomes self-financing.
By bringing together mainstream capital expenditure, borrowing and the use of PPPs in this way, we have been able to announce today a Strategic Investment Programme that will enable around £2 billion of new investment in schools and colleges, hospitals, road transport and water services to start in the next three years. I am placing a table in the Library today which sets out an indication of the plans that we are now developing. We will be looking to the new Strategic Investment Board to advise on priorities and value for money and to work with all Departments to take the programme forward so that it makes the best possible use of all available resources, and addresses the top priorities for investment as effectively as possible.
Aside from these major increases in capital investment, we have been able to confirm all the proposals in the Executive's draft Budget, and make some improvements, on a relatively modest scale (about 1 per cent. of the resource DEL in each year). We have been able to make greater provision for some mainstream services at a better level than in the draft 20WS Budget, as well as augmenting the capacity to build up the investment programme. In total we have been able to allocate an additional £76 million in 2003–04, £106 million in 2004–05 and £76 million in 2005–06 beyond what the Executive had planned in the draft Budget.
We have used this to meet some essential new issues which have emerged since the draft Budget was agreed, and to provide for the development of services in some priority areas.
We have allocated some additional provision to enable DHSSPS to develop services in the acute, community care, children, mental health and disability sectors. We have provided for increased support for university research. Elsewhere in the education sector, further provision has been made to improve pupil performance in schools, to provide additional youth workers and to support a cross-border initiative to provide better support for children with special educational needs.
Other allocations will promote arts and sport; deliver new targeted initiatives recommend by the Employability Task Force and enhance concessionary fare schemes for the disabled. For social development we are increasing provision to reduce fuel poverty, promote neighbourhood renewal and to develop better community relations.
In agreeing the spending plans we have sought to strike a balance between allocating resources so that public services may be properly planned and delivered, while leaving flexibility and scope for revised decision making by the devolved institutions when they return.
The spending plans fully reflect our determination to see a radical change in the approach to investment in public services, with new funding linked to strategic reform, and with an emphasis on using private sector finance and expertise where that can help deliver better services.
I have placed copies of the "Building on Progress" document, the accompanying Budget for 2003–04 to 2005–06 and details of the Strategic Investment Programme in the Library.