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Budget (Northern Ireland) Order 2007

Volume 689: debated on Wednesday 21 February 2007

Before the Minister moves that the first order be considered, I remind noble Lords that, in the case of each order, the Motion before the Committee will be that the Committee do report that it has considered the order in question. This Committee is charged only to consider orders, not to approve or not approve them. The Motion to approve will be moved in the Chamber in the usual way.

rose to move, That the Grand Committee do report to the House that it has considered the Budget (Northern Ireland) Order 2007.

The noble Baroness said: We are considering the draft Budget order today as a result of the continuing suspension of the Northern Ireland Assembly. We are hopeful that locally elected representatives will soon be taking decisions on public expenditure in Northern Ireland with the restoration of devolution. However, while direct rule continues, we are determined to govern in an open and fair way to improve the delivery of public services for the people of Northern Ireland.

The draft order has two purposes. The first is to authorise revised amounts of resources and cash for 2006-07. The total revised amount of resources for 2006-07 is £16.83 billion and the total revised amount of cash from the Northern Ireland Consolidated Fund is £11.194 billion. The second purpose of the draft order 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 the main estimates for 2007-08 can be prepared and considered. To do this, the draft order seeks Parliament’s authorisation for the use of resources amounting to £6.217 billion, and for the issue of cash from the Northern Ireland Consolidated Fund amounting to £5.05 billion.

In general, the resource and cash amounts required on account for the next financial year have been calculated as 45 per cent of the total voted provision for this year. The vote on account is not intended to seek final approval of the allocations for 2007-08. Instead, it seeks sufficient resources and cash to allow services to continue until the detailed work on the main estimates for next year has been completed in the early summer. I will not attempt to summarise the high level of financial detail contained in the Budget order and supporting documents. I will try to answer any specific points of detail raised during the discussion.

The Government’s key objective in the use of expenditure continues to be the delivery of quality public services. Reallocating resources from lower to higher priority areas, focusing on the reform of our public services and raising more money locally to pay for better local services, will achieve this. As in other regions of the UK, work is under way in Northern Ireland to determine the spending priorities for the Comprehensive Spending Review. The Secretary of State has identified three key cross-cutting priority strategies as part of the Comprehensive Spending Review: a 10-year strategy for children and young people; an anti-poverty and social inclusion strategy which replaces New Targeting Social Need, the previous strategy; and the sustainable development strategy emphasising the importance of investing in our environment and in renewable energy sources, as an important step in supporting the creation of a society which is genuinely sustainable.

There has been an increase in real-terms investment expenditure of 43 per cent, or more than £300 million, on the amount spent just four years ago. The planned level of investment will continue to grow, with the investment strategy for Northern Ireland setting out a sustained capital investment programme for 2005-15.

On 1 April this year, we will see the implementation of the water reform programme which will deliver significant benefits both to the public and the Northern Ireland economy. Through the new Northern Ireland water company, the Government will be putting in place the framework within which sustained investment will take place to improve the quality of our drinking water, better protect the environment and radically enhance the delivery of water and sewerage services to customers.

Considerable investment is required to improve the water and sewerage infrastructure. The Northern Ireland Asset Management Plan 2 indicated that investment in the region of £3 billion, at 2001 prices, may be needed during the 20-year period from 2003. The introduction of domestic charges and the widening of non-domestic charges will establish a secure, reliable source of funding which will deliver the scale of investment that is required to improve the water and sewerage infrastructure and the service to the customer.

The water reform programme will also benefit other public services in Northern Ireland as resources previously required to fund water and sewerage services will be available to allocate to other areas. Ultimately, when charges are fully introduced, we expect this figure to be around £300 million per year—a substantial sum which will provide much needed extra funding for our hospitals, schools and transport systems.

We want to see society and the economy transformed by using public spending wisely to invest in the services that make a real difference to peoples lives—in health and education; in the lives of children and young people; in promoting long-term economic growth through investment in skills and training; and in protecting the environment through the development of new sources of renewable and clean energy.

Investment must be accompanied by radical reform of how public services are planned and delivered so that front-line services are more efficient and responsive to the needs of the citizens who use them. It is in this context, therefore, that the process of implementing in full the announcements made following the review of public administration has already begun.

This Budget aims to meet the needs and expectations of this and future generations in Northern Ireland through a combination of investment and reform. I commend the draft order to the Committee.

Moved, That the Grand Committee do report to the House that it has considered the Budget (Northern Ireland) Order 2007.—(Baroness Amos.)

I thank the Lord President for presenting the Budget as she has. I take the opportunity to welcome her back to the seat that she enjoyed for some time in the past and congratulate her on the speed with which she flew in from Iraq.

Traditionally, we use this debate as a general discussion on the Northern Ireland economy. It is the only real economic debate that we have, bearing in mind that at this end of the Palace we usually do not deal with budgetary matters. However, there are a number of issues that I am sure noble Lords will want to raise. I should like to raise some general points.

First, let us hope that this is the last time that we are asked to debate the Northern Ireland Budget. I have said that several times before, but I sincerely hope that we have arrived at the end of the road. Nevertheless, let us take a brief look at the general state of the Northern Ireland economy. People are saying that the economy is in a strong state, and it is. But I should like to be reassured that the Government, while they are in control, are aware of and taking action on a number of areas that could give cause for concern.

We currently have low unemployment—the last quarter of last year was the lowest I have seen—but it is starting to edge up again. House prices have risen at a faster rate than anywhere else in the United Kingdom in the past three months. It is already causing a significant problem for first-time buyers, a problem which has also been felt elsewhere in the United Kingdom. People are saying that a generation gap is about to appear, with a whole generation of first-time buyers unable to get on to the housing ladder. It is very important that those who are currently responsible for running the country look at the issue, make a plan, and deal with it. I declare an interest as a member of the National House-Building Council and chairman of the Northern Ireland committee.

In previous years we have talked in this debate about public servants’ huge dependence on the economy and the public sector input to the economy. Those numbers are still way above anything that could be considered safe, solid and sensible. Although the Government have talked about that a lot, as far as I can see they have done very little to change the balance. It really does need to be addressed. People have talked about changing tax regimes and so on. The Chancellor will have his say and will make up his mind. However, I have lived with the corporation tax difference between Dublin and Belfast since the 1970s, when I started running businesses there and was looking for inward investment, and I can see the practical difficulties involved in that. We need to address that problem to ensure that the Northern Ireland economy is more self-sufficient and less dependent on government funding of one sort or another.

We are also in an era, which is the same on this side of the water, where bank rates are rising—they have risen quite quickly recently—inflation is undoubtedly rising and significant indirect taxation has taken place. That is coming through now and—in my simple opinion; I am not an economist—is forcing the inflation rate upwards. With the addition of the on-costs of the water rates and rates, another indirect tax, I can see that the whole economy will be under enormous pressure. I should like to hear the Government’s ideas on how to manage that. Our economy has benefited considerably from the rich economy of the south and a lot of cash is still flowing northwards. In the 30 to 40 years in which I have been involved in business in Northern Ireland, the economy has always fluctuated one way or another. At the moment, Northern Ireland is benefiting from the strength of the economy in the Republic. But I would like to feel that actions are being taken to move our economy upwards and for it to be strengthened.

In opening, the noble Baroness mentioned the review of local administration. I have complained before from this Dispatch Box about the lack of movement and the huge waste in the administration of Northern Ireland. It is a classic example of serious over-government, over-regulation and over-bureaucracy. It needs to change. I know that the plans are there and that we are talking about reducing the number of local authorities from 26 to seven and streamlining the hospital trusts and the education and library boards. But when will it happen? How quickly will it happen? When and what benefits will feed into the Northern Ireland Budget system?

Further, the key cash eaters of our Budget, as they should be, are education, health and to some extent the environment. We know that the number of pupils in full-time education is dropping significantly year on year. I believe that 80,000 places are unfilled in the education system. I thank officials for helping me with that figure yesterday, and see one of them nodding now. That calls for quick rationalisation. We do not need the same number of teachers for 80,000 fewer pupils. Where is the rationalisation? When will it come? Health is also an eater of cash. My view of the health service in Northern Ireland—as an only occasional user, thank goodness—is that it is still nothing like as good as it was 25 years ago. It, too, is over-administered and over-governed.

I turn to another bête noire of mine: the amount of money that is very often wasted on spin—on selling spin. I have in front of me the House of Commons Hansard from 19 December 2006, which contains a Written Answer to a Question asked by my honourable friend David Lidington. It shows the expenditure on press, public relations, publicity, communications work and advertising. The advertising figure for Enterprise, Trade and Investment for 2005-06 was £172,254; and the estimate for 2006-07 was £1,071,710. For Environment, the figure for 2005-06 was £1,554,283; and the estimate for the current year was £2,845,744. That is almost a doubling. For Health, Social Services and Public Safety, the numbers are not so big,—from £272,284 to £626,500—but the percentage increase is enormous. The Regional Development figure in 2005-06 was £46,910; and the estimate for this year is around £1,070,000.

I would be grateful if we could have an explanation for those figures. It is one of the areas that I have been complaining about. The waste of money on consultations, dressed up glossy documents and the money spent on consultants is all part of the heavy, over-bureaucratic administration that we have been complaining about for some time. With those few words to start with, I leave it to my colleagues to continue.

I thank the Minister for her statement and congratulate her on the way in which she is able to jump so quickly into discussing Northern Ireland from her previous involvement in the Chamber. I have been looking back at what I have said on this on previous occasions. We always start by saying how unsatisfactory this is, and of course it is. I said previously that we could spend on these matters every day for six weeks and still not scratch the surface of some of it. However, could this really be the last time that we have to meet like this? I am working on the basis that it might be; you never know.

As far as the Budget book is concerned, the die is cast. There are five weeks to go before the year-end, and I do not think we can say too much. I am delighted that the noble Lord, Lord Glentoran, has taken a page or two out of my book and has ferreted about. I took the view that I would not do that this time, unless it referred back to something that I had spoken about earlier, so there will be no new ferreting by me, although I am sure that would have been possible. Of course, the die is cast, and 2007-08 is based on 45 per cent of 2006-07, and we need—we hope for—a Northern Ireland Budget in Northern Ireland in June to look at the further 55 per cent and at the disposition of those resources.

I will return to some of the issues that I have referred to previously. Three years ago, I raised the issue of the budget of the First Minister and Deputy First Minister, which at that time was £50 million. That includes money for taking initiatives. When the Assembly was up and running, initiatives were taken by both the First Minister and the Deputy First Minister.

Also under that heading are some of the things that I thought were copper-bottomed by the Belfast agreement. One is the civic forum, which was basically shut down apart from a bit of ticking-over money. What will the system be for getting that up and running again? It was part and parcel of the Belfast agreement, and it should be up and running again. There should be such involvement. Indeed, it is now even more important, bearing in mind the prospective disposition of the Assembly. I understand that the noble Lord, Lord Rooker, did not want to involve himself yesterday in electioneering; nor do I, but we are forced to see it there. How do we get that up and running when the Budget is based on 2006-07? It should be up and running, provided that the Assembly is back for the subsequent year.

I recall referring to the budget for Northern Ireland Railways. On one occasion, when the Minister was answering, I referred to tourism and asked whether there were any resources in the vast tourism budget for promoting the line from Belfast to Londonderry, particularly the western parts, which are incredibly scenic. I do not know what happened. Did anything happen? Something must have happened. The noble Lord, Lord Laird, of Artigarvan, is not here today because of illness, so we may not be treated to words about the sins of Irish waterways. As noble Lords know, he is assiduous about asking questions. One of his questions highlighted that fact that, in the past five years, there has been a 50 per cent increase in passenger journeys on that railway line. What is the position now that Northern Ireland Railways has new rolling stock and has shown that it can achieve a 50 per cent increase in the number of passengers and that the customers will come? Where is the money? Has anything been done in this period to enhance the rolling stock? Enhancement was only partial when the new rolling stock was brought in. Where are we with replacing the other rolling stock? Indeed, it is often said, particularly in the Republic, that the frequency of the railway service between Belfast and Dublin should be doubled. That can happen only if the rolling stock is there, so is there any news on whether any work has been done on that?

I have referred to Ulster Savings two or three times. Ulster Savings will no longer be seen in this Budget book, but there was a savings scheme in Northern Ireland, which has now closed. Efforts have been made to trace all the people who had deposits in it, but those efforts have stopped. Even after ferreting about and looking for people, £8 million of assets are still unclaimed. There are no longer any staff in the organisation; it has been closed. I made the point that Northern Ireland money that is dormant in Northern Ireland should be used for that community. I also said that a splendid destination for it would be the Community Foundation for Northern Ireland. I made several points about this to the noble Lord, Lord Rooker. On 4 July 2005, he said, in effect, that I would have to wait for Mr Brown. I am not certain about that. I know that work is being done on unclaimed assets throughout the UK, but is this devolved money or is it Treasury money? It was in this Budget book previously, which leads me to think that it is devolved money.

For example, the moneys for the police are not in this book; we understand that. However, Ulster Savings was in this book. That needs looking at urgently. I do not want to lose it. Without speculating too much about the election, I think that we know where things stand. It is one thing the noble Lord, Lord Trimble, and the UUP being in business with the SDLP; it is rather different as regards the DUP and Sinn Fein. This is clearly uncharted ground. I am fearful of a “We’re going to look after our own” mentality arising. It strikes me that if the small resources of the Community Foundation for Northern Ireland were enhanced, they could be allocated to cross-community activities and minority groups.

I referred earlier to education and here I shall consult the Budget book. These Benches consider that it is right to look at integrated education. I cannot fathom what is meant by the wording on page 54, which states:

“All Voluntary and Grant Maintained Integrated Schools: to reduce provision in subhead A11/3 by £19,812,000. This is mainly due to a reduction of £34,438,000 reflecting a reprofiling of infrastructure expenditure to future years”.

“Reprofiling” is a popular word. “Reconfiguration” is also used. I do not really know what they mean, but I do not think that they mean enhancement. They either mean a delay or a cut. In setting out the Budget are the Government doing all that they can as regards integrated education? It does not sound like enhancement to me. My noble friend Lord Smith asks where the Bain report is going in the whole area of education and what savings it proposes through amalgamating schools.

I believe that one of my questions has been partially answered in that the domestic rates and water charges will result in a neutral effect for 2007/08. I believe that the long-term effect will be some £300 million. Will that figure arise in 2008-09 or will it be introduced gradually? Where do we see these savings? When will this major change have a positive effect on the Budget?

Looking ahead positively, I refer to policing. Policing is not mentioned in this document because it is not devolved. However, if it were to be devolved, on what basis would it be devolved financially? Will Northern Ireland be treated like Scotland in that the Barnett formula will apply, bearing in mind the incredibly enhanced moneys for Northern Ireland? Will Northern Ireland pick up what it is due on the basis of the Barnett formula in the same way as Scotland, or will it do so on another basis? These are very substantial resources—£16 billion. I trust that the Assembly will use that money wisely and look at the totality of the diversity that makes up Northern Ireland. That is its task.

Finally, I thank the officials, with whom I had a short meeting yesterday, for the help that they gave on the points that I raised.

This is a rather curious thing to be called a Budget. Normally, when you think of budgeting, you think about what your income will be, where you are going to get it from, the total of that income, and then you think about expenditure. At least one hopes that you think about it in that order. If you think about it in a different order, it can be embarrassing. But this document, called a Budget, is merely parcelling out expenditure; so it is not a Budget in the real sense. That may be because the financing of Northern Ireland operates in a different way. There are, however, a couple of sources of income that would be under the control of the devolved Administration, if there were one: the regional rate, water charges and others. But in this document we have no clear statement on how the sum is made up, where it comes from and what choices have to be made in determining the total spend. It is merely dividing up the cake. The size of the cake is a given in this exercise. So the use of the term Budget is perhaps a little misleading.

There is a point in making these observations. An election is going on. I do not want to fight it here any more than anyone else does, but I do note that some of those fighting the election are making a lot of noise about the need for additional resources to be given to the devolved Administration. Some months ago the Chancellor was persuaded to make a statement, although I am not sure it involved additional resources. But these parties are now calling for even more money. The Minister is undoubtedly aware of that. I would appreciate her observation on this. It is not as if—I hesitate to say this—public expenditure in Northern Ireland is currently ungenerous. But the begging bowl is being rattled and it would be interesting to see the reaction to that.

As the Budget order involves expenditure across departments, it has been traditional for those of us from Northern Ireland who take part in these debates to use them as an opportunity to raise specific issues. I shall do so but I shall be restrained; rather than gathering up all my hobby-horses, I shall pick up only two. The first—if I need to justify raising it—comes under the heading of the Department of the Environment with regard to conservation planning services, and so on, in the hope that something can be done to increase the effectiveness and efficiency of the Planning Service. I think that this comes down to additional expenditure. The Planning Service has had to deal with a tremendous increase in the number of planning applications, which is partly a reflection of the increased prosperity and is therefore welcome. But the service is having great difficulty coping with the work.

Part of the reason for the agency’s difficulty is the difficulty in retaining expert staff, because the rewards of private practice are so much greater than the rewards in the public service. Steps have been taken over the past few years to make additional resources available to the service, but I hope that more can be done. The delays occurring in the Planning Service have a significant negative effect on development and consequently on the local economy. Perhaps I may give an example from my former constituency in the Banbridge area. A development there—Bridgewater Park, a combined industrial and commercial site—is finally coming on stream although the proposal was raised well over a decade ago. The planning delays in bringing it to fruition have been inordinate.

We are running into difficulties from the Planning Service in a related proposal affecting the small town of Gilford. This very imaginative proposal could be considerably positive not only for Gilford itself but for the region. It involves converting a former mill into a hotel and developing a new golf course nearby which will link the two together. It will greatly enhance the region’s tourism potential. This very positive development, involving multimillion pound investment, is now imperilled by the Planning Service. The problem is coming not simply from planning but from environmental and conservation considerations, which are fine in themselves but which should be taken and balanced against the positive economic benefits that there would be for the region. The matter is still very much in progress, but it should be mentioned, because it would be more than a shame if this development was frustrated because of the way in which it is being handled through the Planning Service.

I appreciate very much the comments that were made about the noble Lord, Lord Laird. It was said that because of the noble Lord’s absence, we would not have any mention of Waterways Ireland; I am now going to fill the gap on this matter. I will mention Waterways Ireland, but not in terms that my good friend would use. During the negotiation of the Belfast agreement, I was very much determined that waterways would be among the list of potential cross-border co-operation. I very much wanted that on the list for one reason and one reason only; namely I hoped that this would be a way in which we could advance the restoration of the Ulster Canal, which is a cross-border canal. It was not a cross-border canal when it was constructed; the border came into existence subsequently. If it were to be restored, it would be a cross-border canal. It is a project that ought to be advanced. From a tourism and leisure point of view, we are limited in the possibilities for tourism in Northern Ireland. We are always going to be engaged in various forms of niche tourism, but the use of waterways for leisure purposes is such a niche; and with the lakes, the loughs and the rivers that exist, there is huge potential. Indeed, there was a feasibility study into the restoration of the Ulster Canal, and that feasibility study must now be well over 10 years old, or pretty close to it.

They have been restoring canals in the Republic of Ireland, and they have been enhancing the use of waterways for leisure purposes. It is a highly desirable objective. Not only does it increase tourism, but it is significant from the point of view of rural regeneration. The Irish Government are well aware of the value of this exercise, but unfortunately in the Northern Ireland departments there is scepticism about the value, and there has been and continues to be resistance in the Northern Ireland departments to this operation. The matter is topical again because in the recent plan for capital expenditure announced by the Irish Government, they once again put in their share of the money for the restoration of the Ulster Canal. Quite some time ago, they effectively said to their Northern Ireland opposite numbers, “There is our money on the table; where is yours? If it is put down, we can get started on this”. I hope very much that something will happen on that.

I want to put that into a slightly broader context. If you are going to get the full benefit of the leisure and tourist potential from the restoration of waterways, your waterway needs to link up with major urban areas. That is the case in England and Wales, because the waterways were designed to carry goods and raw materials to areas that were then industrial areas but are now urban areas. The reason for the need to have the link-up to the urban areas is that from the point of view of the initial viability, it is people from those urban areas who might be persuaded to buy a boat and then to use it moving from the urban areas out into the countryside. Restoring the Ulster Canal, which would link Lough Neagh with Lough Erne through Monaghan, is good in itself, but if we really want to get the full benefit from it we need to restore the Lagan navigation as well, to have a network that stretches from Belfast through Lough Neagh to Lough Erne. It is no accident, from the point of view of restoration of the Irish canal network, that the Irish have started from Dublin with both the Royal Canal and the Grand Canal and are working out across from Dublin towards the Shannon waterway system.

So if we want it to be successful at the Northern Ireland end, we need to put in the Lagan navigation as well. It could be done for a fraction of the cost of the Ulster Canal restoration if the environmental heritage department could be persuaded not to list the derelict blocks, or to remove the listing. The listing is such that it will enormously increase the cost of restoration. From an environmental heritage point of view, the listing will achieve no significant benefit if the effect is to keep the locks derelict.

On my next observation, my view differs from that in the feasibility study into restoration of the Ulster Canal a decade or so ago. I think that it is desirable not to gold-plate the operation. When the Erne-Shannon link was put in, it was gold-plated. It has automatic locks—you swipe the card through and the locks work. It might sound like a good idea, but it is a bad idea. Do the locks the traditional way so that the boater had to get out, get his windlass, wind up the paddles and then open the locks. It is good physical exercise: I lost half a stone doing it last summer, and I am looking forward to losing a bit more this coming summer. In case noble Lords feel that I should declare an interest, I shall not, because my boat is on the English waterway system and will not come to the Irish waterway system. There is no point in having narrowboats on the Irish waterway system because they cannot cope with open water. But that is another matter. Working the locks is part of the attraction of using waterways and turns it into a valuable family activity by giving everyone something to do.

From my experience over the years I know how much families enjoy the locks. Making it easy to use them might be all right for those who are just going round in their gin palaces and are not up to doing a little bit of work; but if we are to attract those whom we would want to attract, we should not gold-plate the system. I thank the Committee for its indulgence of me as I gathered up those hobby-horses for their canter. I look forward to the observations of the noble Baroness.

I want to raise, as briefly as I can, one or two general issues. I do not know why my Liberal Democrat friends are so sceptical about that.

First, where are we going with the reform of local government, and what in practical terms will happen? We have a great plan for what I call a super-substratum of local government. We are going to reduce the number of councils from 26—and I think that there is much sense in that—to seven, but to seven super-sub-councils. If we are to have devolved local government, then, in a community with about 1.7 million people, it is nonsense to talk about having seven super-councils for which, according to the Budget, there will not be any extra money for new building or new premises. I think that they will be an exceedingly expensive luxury. In tandem with devolved government, we should have a form of local government that delivers local services at the local level. We must get rid of the idea of seven super-councils and look at reducing the 26 to 14 or 15, so that a relationship can be established between the devolved arrangement at Stormont and what is necessary locally. I hope that there is still enough latitude and imagination in whatever is going to happen to enable us to achieve that.

There has been a massive disposal of local assets in recent years. I am interested on two fronts. Military assets have been disposed of, and I am told that that comes back to the Ministry of Defence or to the Exchequer. If so, so be it. However, in the late 1990s, we were told that if we achieved peace in Northern Ireland, the assets from that achievement would be reinvested in Northern Ireland. If multimillions of pounds from the disposal of capital assets are coming back to the Exchequer and not being invested in Northern Ireland, I think I would like to know the justification.

The disposal of police capital assets is another issue. I have asked questions about where the money from the sale of parts of the police estate—police stations and the like—is being invested but have not received a clear answer. I should like to think that it is being invested exclusively in Northern Ireland and can be put towards the new police college, where there is a dispute regarding the figure of £90 million or thereabouts and a requirement of £135 million. Are we to have a cutback in this fine police college which we were promised would be a college of international standing because the Government are not going to find that £45 million? That is a huge amount but it could be looked at in terms of the income achieved by the sale of police estate. I know that I am straying outside the scope of the debate and apologise. I do not pretend that I am unaware of that. But the issue goes side by side with what we are discussing. We cannot divorce from this debate the effect of this issue on daily affairs in Northern Ireland.

I conclude on an issue that very much falls within the context of the Northern Ireland Budget. I have asked a number of Questions—some of which have inconveniently not yet be answered—about money invested in dealing with the major problem of autism. I declare an interest as vice-president of Autism Northern Ireland and I have a personal interest in this issue.

Although I am told it is a fine scheme, I cannot understand why the Middletown initiative is going ahead with ring-fenced funding when we cannot achieve ring-fenced funding for the assessment of children who badly need it for their future; that is, children who are suspected of having autism. I do not see any money dedicated specifically to that. I have had great difficulty trying to find out from the Northern Ireland Office where money for these specific assessments will come from and why 560 children are currently waiting—sometimes for almost three years—to be assessed. And yet we can have ring-fenced funding for a redundant nunnery in Middletown which is to be used as a centre of excellence, although nobody quite knows what it can do. It is isolated from teacher training colleges, universities and the main centres of population. It is a mad notion which was introduced by the Minister in the last Assembly, Martin McGuinness. I think it was done for dubious reasons and I leave it at that. But it is not a proper or good disposal of scarce moneys which should be better husbanded. Those specific points are important for the people of Northern Ireland when they look at how scarce money is being expended.

I had not intended to contribute to this debate but shall do so after hearing about the vast sums being spent in Northern Ireland, in particular on education, for historic reasons that we all understand. The number of people in Hampshire and Dorset together is equal to the number in Northern Ireland. It would be invidious to compare the combined cost of education in Hampshire and Dorset with the money going into Northern Ireland. It is probably too late now to do so because it has all gone through. But have the Government thought about local government as an important element in the provision of education? Have they thought about having just one unitary authority and 26 what I shall call community councils, rather than parish councils or whatever one wants to call them? The cost of that might be significantly less than the present reorganisation proposals. I simply ask the question. The Minister may not be able to answer it, but it struck me forcefully as we were talking about the amount going to education and the reorganisation of local government and the costs therein.

My Lords, I do not want to prolong matters, but I shall repeat the observation that I made yesterday in the Chamber. This is a major item of Northern Ireland business, but in Grand Committee we do not have the benefit of the views of members of the Democratic Unionist Party. They have absented themselves once again from an important piece of Northern Ireland business. I say this more in sorrow than in anger. We should encourage our colleagues to give us their views on this range of expenditure. It would have been most helpful to have had them.

My Lords, I begin by thanking noble Lords for welcoming me back to Grand Committee and to Northern Ireland business. I confess that when it became clear that I would have to do some Northern Ireland business, I said to my noble friend Lord Rooker, “As long as I don’t have to do the Northern Ireland Budget”. But here I am. Clearly, it was intended that I should be here.

I should say to noble Lords—particularly to the noble Lord, Lord Shutt, who raised a number of the issues he mentioned when I replied to this Committee many years ago—that it was quite a delight to hear the same issues coming up again. Like the noble Lord, Lord Glentoran, I hope that this is the last time we debate the Northern Ireland Budget. We all hope that the process of devolution will proceed. I also join noble Lords in noting the absence of the noble Lord, Lord Laird. He always brings what I can only describe as a colourful dimension to our proceedings. I certainly miss him.

If I may, I should like to run through the various points that have been raised, starting with the general points on the economy raised by the noble Lord, Lord Glentoran. He is correct to say that Northern Ireland’s unemployment is at a record low and well below the UK average. Employment is also increasing rapidly, particularly in the services sector. In terms of skills development, that remains an area of concern to some. I note the noble Lord’s comments on the local housing market. As he will know from discussions today about the housing market particularly in London, it is not a unique problem. However, a significant housing affordability review is under way. The affordability review is considering the barriers affecting those seeking affordable housing in the owner-occupied and the social and private rented sectors. An interim report has just been produced for consultation. Following the consultation period, final recommendations will be presented to the Government in the spring.

The noble Lord, Lord Trimble, raised wider Budget issues regarding the various requests for additional funding in Northern Ireland. It would be a much braver person than I who responded in detail on that matter. This is a time when the budgets of all government departments and wider public sector bodies are facing pressure as a result of wider economic conditions. I am absolutely certain that that will be one of the things that the Chancellor bears in mind. The current package presented by the Chancellor offers a stable and robust base on which an incoming Executive can develop priorities and associated spending plans. That remains our view.

On the point made by the noble Lord, Lord Glentoran, on the scale of public sector employment in Northern Ireland, the noble Lord is of course right that the key issue is to increase private sector employment. It is important to point out that the level of public sector employment in Northern Ireland is high when it is expressed as a percentage of the total number of those employed. If, however, you look at it as a percentage of the total population, it is actually exactly the same as elsewhere in the United Kingdom, because you need certain levels of nurses, teachers and others.

The noble Lords, Lord Glentoran and Lord Maginnis, who is briefly not in his place, mentioned the review of public administration, which covers local government, education and the major health and social services bodies, including the remaining Executive agencies and public bodies. Under the current timetable, by 1 April this year, five new health and social services trusts will replace 18 existing trusts. By 1 April next year, a new health and social services authority will replace four existing health and social services boards. A new patient and client care council will replace the existing four health and social services councils, and a new education and skills authority will replace the five education and library boards. A new library authority will also be operational. By 1 April 2009, seven new councils will replace the existing 26 councils. The noble Lord, Lord Maginnis, suggested that the number should be 15 or 16. I talked earlier about a braver person than I am, and I must use the same words again: a braver person than I am would reopen the debate on local government configuration, which has already been decided.

The decisions arising from the review of public administration in relation to local government are designed to strengthen the role of local government in Northern Ireland and place it at the heart of local democracy. The Local Government Task Force, which is chaired by my honourable friend David Cairns, continues to provide the vehicle for the direct engagement of local government representatives in strengthening local democracy in Northern Ireland. Moreover, members will have direct input throughout the implementation phase. So although the debate on the number of councils is not open to discussion, there will be an opportunity to have input in how the seven councils are implemented.

The noble Lords, Lord Glentoran and Lord Shutt, and the noble Baroness, Lady Harris, mentioned schools. In answer to the noble Baroness, I do not know whether one unitary authority was considered, but I am happy to write to her if I find out any more about it.

On rationalisation, on 23 January the Department of Education published a consultation document, called A Policy for Sustainable Schools. The policy is based on the Bain review recommendation, including its minimum thresholds for urban and rural primary schools, post-primary schools and sixth forms. Its objective is to ensure that all children have access to high-quality education in fit-for-purpose facilities. The closing date for responses to the consultation document is 16 April 2007. The Bain review recommended that schools under the minimum enrolment threshold should be reviewed to ensure that they are providing children with the education they need and will continue to need in the future. The fundamental issue is quality of education. Of course, reviews must be handled carefully and sensitively, and the review will need time to be completed and will require engagement with the relevant education authorities. The Bain review did not identify a level of savings at this stage.

The noble Lord, Lord Shutt, talked about integrated schools. The figures quoted reflect the fact that there has been a re-profiling of integrated schools provision. The money has not been taken away from the integrated sector; it has been re-profiled—a rather difficult word—to specific projects. I shall give some examples of what that re-profiling involves. This year, for example, the Government have allocated £25 million for new capital development in integrated schools. On top of that, additional money will be put into supporting the ongoing running costs of integrated schools, and proposals for new integrated schools are under consideration. For example, the Minister for Education recently decided upon two development proposals for the establishment of new integrated schools.

Almost every time the noble Lord, Lord Glentoran, speaks on these budgetary and resource issues, he raises the issue of consultants. Following the publication of the Northern Ireland Audit Office report on the use of consultants in June 2004, the DFP issued revised guidance on the use of external consultants in February 2005, outlining a number of lessons contained in the report that could be applied across all departments to ensure that value for money was obtained when employing consultants. External consultants are currently being used on a number of key government reforms: the review of public administration and the water reform I have already mentioned, and NICS-wide reforms such as accounting systems, human resources and accommodation. They are also used on a range of major projects, including the new sports stadium at the Maze and on private finance initiatives.

The noble Lord, Lord Shutt, raised the question of the civic forum. The Office of the First and Deputy First Minister has made financial provision in the vote on account for 2007-08 for the civic forum being restored should devolution return. On railways, an issue which the noble Lord has raised in the past, the north-west railway link has sufficient resources to maintain existing services but, given the recent British-Irish Intergovernmental Council oversight report which acknowledged its strategic importance, a review is under way. The north-west clearly has great potential for tourism and that must be exploited. Translink plan to upgrade the track on the railway line between Ballymena and Londonderry. The work is intended to commence late this year, with an expected duration of two years.

On Ulster Savings and the use of money in closed accounts, another issue raised by the noble Lord, Lord Shutt, the outstanding Ulster Savings scheme liability is held within the Consolidated Fund on behalf of investors. It now stands at some £6.6 million. Payments are made on receipt of a valid certificate. The accounts are therefore considered closed as opposed to dormant. The £6.6 million remains liable for repayment. The Treasury plans to bring forward legislation on dormant bank and building society accounts on a UK-wide basis. It will not apply in the case of Ulster Savings, however, because those accounts are viewed as closed rather than dormant. The potential of the legislation on dormant accounts is to fund the community and voluntary sector, including in Northern Ireland. The noble Lord looks as though he wants to come back.

There is an interesting point here. It is one thing for the Government to take a view on dormant bank and building society accounts, but that may go further and cover unclaimed insurance policies and unclaimed shares. An incredible amount is unclaimed, particularly in newly demutualised companies. There is no equity in a situation where those moneys must be used for charitable purposes. Goodness knows what the dormant sums must be in the National Savings Bank. There is a fine line between closed and dormant, and there are no staff left at Ulster Savings. How do people now knock on the door and say “Oh, by the way, I have a passbook here.”? I do not even know how that will work. I assume that it does work, because I thought that the figure was £8 million, whereas the Minister now says that it is £6.6 million. Perhaps some of the money has now gone, though huge efforts were made before the closure. The actuaries can look at how much there will be, because they know how the flow is going. But there will still be a considerable sum. It is right to use that money in Northern Ireland. Is that going to be a decision in the future for the devolved Assembly, or will it be a decision made here by the Chancellor?

I will write to the noble Lord, Lord Shutt, on the process for claiming. On the wider issue of the proposed legislation, my understanding is that the intention is that that legislation should be UK-wide, so it will apply to Northern Ireland. It will not be a devolved matter. I have also had a note which I do not entirely understand, but I will read it anyway. The proceeds of Ulster Savings, like National Savings, are already invested in support for public services.

It would be better if I wrote to the noble Lord on the process. The legislation on dormant bank accounts is intended to be UK-wide. If I can throw any further light on the issue of dormant versus closed accounts, I will do that as well.

The noble Lord, Lord Shutt, talked about water revenues. The revenues generated from water reform will benefit Northern Ireland departments and budgets immediately. As the years progress, the revenues collected will increase, reflecting the phased introduction. That will mean that more resources will become available to allocate to front-line public services.

As the noble Lord, Lord Shutt, made clear, policing is not devolved. As we move closer to a date for the future transfer of criminal justice responsibilities to the devolved Administration, the Government will need to discuss arrangements for the transfer of additional resources from the Northern Ireland Budget to the devolved Administration to cover the costs of those new responsibilities. With respect to the question on the Barnett formula, we will discuss future funding arrangements for criminal justice spending in Northern Ireland with the devolved Administration ahead of any transfer of responsibility. Those arrangements will operate within the framework of the Treasury’s statement of funding policy for the devolved Administrations. I hope that the noble Lord, Lord Shutt, is not going to ask me what that statement involves.

The noble Lord, Lord Trimble, asked about the need to increase the effectiveness of the planning system. In the time that I covered Northern Ireland issues, there was a widespread concern about the planning process and the time taken to process planning applications in Northern Ireland. I absolutely recognise that concern. The reasons for the delays are twofold: first, a sustained high level in the number of planning applications received in the past three years; and, secondly, increasing public interest in planning issues. We have to find a way of managing that more effectively. For the past three years, the Planning Service has been engaged in a comprehensive reform and modernisation programme which is looking at all aspects of the system. Additional resources have been allocated to the public information interface to help to improve processing, but this will take a little time to kick in so that people begin to feel that there is a difference.

I am delighted that the noble Lord, Lord Trimble, talked about canals and waterways. It would not have been a discussion of the Northern Ireland Budget if we did not have some discussion of canals and waterways. Northern Ireland government officials are working closely with Republic of Ireland officials in endeavouring to take forward the project of the proposed reopening of the Ulster Canal, ensuring compliance with accountability and value for money requirements. A number of studies and appraisals have been carried out examining the costs and potential benefits of reopening the Ulster Canal. The Irish Government have declared their support for a sectional approach being adopted, focused initially on restoring navigation on the 12-kilometre south-western reach at an estimated cost of £24 million. This proposal is being actively explored with the Republic of Ireland.

The noble Lord, Lord Maginnis, asked about the disposal of assets. His memory on these issues goes back much further than mine. I recognise the case that he makes for using released resources to fund a new police college. That decision does not rest with me, but I shall, of course, pass on his comment. Previously we have said that proceeds from the disposal of assets that are the responsibility of the devolved Administration will be available for reinvestment in public services in Northern Ireland. However, military assets, which the noble Lord mentioned, are in the separate ownership of the Ministry of Defence and do not automatically fall within that arrangement.

Autism is an issue dear to the heart of the noble Lord, Lord Maginnis. More than 2,000 children in schools in Northern Ireland are identified as having an autism spectrum disorder. All education and library boards provide specialised support to schools with pupils with autism and provision is matched to individual needs. Since the report of the task group on autism was published in 2002, the Department of Education has committed £7.4 million to meet the needs of children with autism. The Department of Education, in conjunction with the Education and Training Inspectorate, is preparing a strategy for autism based on an action plan produced by the five autism groups, a range of work by the inspectorate and research into preschool children with an ASD, the results of which will be published shortly. The Department of Education and the Department of Education and Science in Dublin are jointly developing a centre of excellence for autism in Middletown, County Armagh. It is planned to start introducing services from mid-2007, beginning with training and advisory services. I hope that that meets some of the concerns of the noble Lord, Lord Maginnis.

I am grateful to the noble Baroness. I apologise for having left the Chamber for a short period. I had to get my Coke fix. That is not to do with drugs but with diabetes.

As the Minister knows, I am concerned about the piecemeal way in which the problem of autism is being dealt with. It appears to me that there is no single identifiable individual heading up an initiative on autism. The noble Baroness will be aware that, although the boards have a responsibility in this area, there is no consistency between one board and the next in how the problem is dealt with. While we would all like to see a centre of excellence, this is a pre-emptive move without any real reason behind it. Middletown is isolated from centres of population, teacher training colleges and universities. The location is an utter nonsense. I do not know whether we can draw back from this. I should like an assurance that this matter will be looked at again before we get too far down the line of spending money that could be more usefully employed.

I suggest two things. First, the noble Lord expressed concern about consistency. Part of the purpose of having a centre of excellence with advisory services would be precisely to help to advise the individual authorities in schools on best practice. Secondly, the noble Lord also talked about not going too far down this road. This will clearly become an issue for the Assembly. Once the centre of excellence is up and running by the middle of this year, and has put in place a work programme, the Assembly may want to consider some kind of review of that programme and its impact and effectiveness in the longer term.

I hope that I have answered all the questions that have been asked, and I commend the order to the Committee.

On Question, Motion agreed to.