NICVA briefing on Programme for Government and Budget

On Thursday 25 October 2007, at a specially convened sitting of the Northern Ireland Assembly, the First and Deputy First Ministers and the Minister for Finance and Personnel launched three draft documents – the Programme for Government 2008-2011, the Budget for the same period and the Investment Strategy for Northern Ireland 2008-2018.

These are the first statements from the new devolved Executive about what kind of Northern Ireland they want to see, what they intend to do and how they intend to pay for it.

What is the consultation about?

The consultation is asking for views on the proposed priorities for Northern Ireland in the coming three years, the budgets that accompany them and the latest version of the ten year Investment Strategy. The consultation period closes on 4 January 2008. Final documents will then be published early in 2008.

This consultation is important because it sets down what is going to be done by government departments, both individually and on a cross-cutting basis, for the immediate future and what funding they will have to do it. It sets the tone for governing Northern Ireland and prioritises what are the most important outcomes.

Themes and priorities

The Executive’s over-arching aim is: “to build a peaceful, fair and prosperous society in Northern Ireland, with respect for the rule of law and where everyone can enjoy a better quality of life now and in years to come.”

The draft Programme for Government (PfG) sets out a series of principles by which the Executive intends to abide. They are:

• providing good leadership and working energetically in the interests of everyone
• working in partnership as an Executive, and across the public, private and voluntary sectors
• raising standards across Government
• delivering fair outcomes and social improvements

The document then sets out two cross-cutting key themes:

1. A better future: fairness, inclusion and equality of opportunity will be watchwords for all of our policies and programmes; and
2. Sustainability: building a sustainable future will be a key requirement for our economic, social and environmental policies and programmes.

There are then five priority areas, each of which has a series of key goals attached. The priority areas are:

1. Growing a dynamic, innovative economy
2. Promote tolerance, inclusion and health and well-being
3. Protect and enhance our environment and natural resources
4. Invest to build our infrastructure
5. Deliver modern, high quality and efficient public services

The document makes clear that the first priority is the top one.

Attached to the Programme for Government (PfG) document is a set of 23 Public Service Agreements (PSAs) which include targets and actions for departments, usually a mix of departments within each one. These are the targets designed to deliver the five priority areas above.

Imvestment Strategy for Northern Ireland 2008 - 2018

The draft Investment Strategy is the third of a suite of documents including Programme for Government and draft Budget. The Strategy covers infrastructure investment in six areas or pillars identified as:

1. Networks
2. Skills
3. Health
4. Social
5. Environment
6. Productive

Incorporated in the Budget over the next three years is £5.6 billion worth of new infrastructure with a projected spend of £18 billion over the next ten years. The document notes:

And goes on to say:

Cross-cutting Objectives

There are three cross-cutting objectives on the Investment Strategy:

1. economic – investment in infrastructure to accelerate economic growth and improve competitiveness of business;
2. societal – investment in infrastructure to promote equality of opportunity and the desirability of good relations, promote regional balance in future development, and tackle areas of social disadvantage; and
3. environmental – investment in infrastructure to protect and enhance our environment, particularly addressing areas affected by EU directives.

The document notes that the three cross-cutting objectives can be mutually reinforcing and further notes that the Strategy will seek opportunities to promote social inclusion and equality of opportunity in its procurement processes. The Strategy reiterates the infrastructure context in Northern Ireland in that we have come through a sustained period of under-investment in water and sewerage, transport, schools and health facilities.

Headline announcements

Much has been made of the decision to freeze the central government element of rates for the next three years, in addition to delaying the introduction of water charges. There has also been a decision not to proceed at this stage with charging full industrial rates to businesses in Northern Ireland which have paid a reduced amount.

The Executive has also announced its intention to create 6,500 jobs, overhaul planning and build up to 10,000 new social housing units. Free transport is also being extended to everyone over 60 during 2008.

The existing UK commitment, which was already stated as a target for Northern Ireland in Lifetime Opportunities, to halve child poverty by 2010 and end it by 2020 is restated. Whether the budget is actually there to support some of these promises is currently a matter of debate.

Issues for voluntary and community organisations

There is much in the Programme for Government that the sector will welcome. This includes poverty reduction targets, a commitment to sustainable development, a focus on affordable housing, a commitment to working in partnership with the sector and to the establishment of a Charity Commission by the end of 2008. £500 million is to be spent on regeneration by 2012 and there is to be a new single phone number for selected government services, making it easier for people to find the help they need.

A thriving economy should benefit everyone in Northern Ireland if the policies are right to support those who cannot benefit directly, for example those who are economically inactive, cannot work or are not sufficiently skilled to access high-wage jobs. Of the 6,500 new jobs to be created through inward investment over four years, 75% are to attract salaries above the private sector average, which is welcome. In transport, as well as major road building schemes, there are to be 20 new trains from 2010 onwards with £137 million spent on the rail network including on tracks between Coleraine and Derry, Ballymena and Coleraine, and Lisburn and Lurgan. £45 million is to be spent on the bus fleet and there is a rapid transport plan for Belfast.

The focus on health and wellbeing, which is a more proactive way of promoting good health, rather than just providing services for people who are sick, is very welcome. Health is to get an extra £450 million over three years with additional resources going to public health and suicide prevention. There is an important recognition of the links between environment, economy and quality of life. £500 million is available for the Rural Development Programme 2007-13 which includes money to “address rural poverty” and there is a commitment to develop proposals for a Rural White Paper by 2008.

The PSAs promise an Early Years Strategy and there is a target for the elimination of severe child poverty by 2012, the first target of this kind in the UK. There is an additional £18 million in DCAL’s budget by 2011, but a heavy emphasis on the Olympics, which may or may not have direct benefits for people here. A “strong, independent voice” for older people is promised, but there is no commitment to a Commissioner, even though a review process on this is under way.

The draft Investment Strategy 2008-2018 has responded to many of the concerns raised by voluntary and community organisations and NICVA in the past around the Investment Strategy. The Investment Strategy is making a clear attempt to consider together the social and economic issues as well as issues of social inclusion and social cohesion.

The Strategy does recognise that in the procurement process good contracts can allow for both social and economic outcomes and in the programme a work set in train can itself provide opportunities for people who have been long-term unemployed in Northern Ireland. Most of the programme for the next three years is funded from within the resources of the Northern Ireland Executive but it is not quite clear as to how robust the plan might be as it does depend on the sell-off of unused assets.

The Investment Strategy is no doubt the most ambitious programme of strategic investment which has ever been put in place in Northern Ireland. Technically it looks reasonably sound and achievable, despite concerns that Northern Ireland needs to agree its education system before the infrastructure provision can be put in place otherwise a disastrous mismatch could happen.

Concerns

Overall there is less of an increase in this year’s budget, so there is less money around. Northern Ireland has four sources of money – our share of UK public expenditure which comes through the Barnett Formula, money raised through regional rates, borrowing under the Reinvestment and Reform Initiative and EU money. No money comes from the UK allocation for water and sewerage, as these are not funded by the public sector in GB, so the gap left by the expected water charges in this year’s budget is felt across all departments. In real terms the annual increase is only around 1.2%.

The Programme for Government this year is a very slim document. There is no analysis of the challenges facing Northern Ireland, as we have been used to in previous years. There is some analysis in the budget document, however this devotes only two pages to social context, under the headings Demography, Health, Arts and Culture, and Crime, whereas the economic context has 13 pages of analysis. Thus the only social analysis in the whole government plan for the next three years amounts to eight paragraphs.

'A Shared Future'

Despite the mention of tolerance and inclusion in one of the five priorities, A Shared Future is nowhere to be seen in these documents. The analysis in the budget makes no mention of Northern Ireland as a divided society and instead of A Shared Future we are offered “a better future” with no definition of what that would mean other than the ‘watchwords’ of “fairness, inclusion and equality of opportunity”, and no policy or key goals attached to it. Officials have been asked by Peter Robinson to look at the recent Costs of Division study to see if there is scope to free up resources but the Finance Minister thinks that changes in areas where there would be scope for savings have little realistic prospect in the short term. The PfG is also rather vague and bland on equality.

Money

It is not clear in many areas that the money is actually there to pay for the promises made. In housing, for example, 10,000 new housing units are promised over ten years, but the money for this is not within DSD’s budget. Instead, it is to come from the sale of assets, working with private developers (although ’developer contributions’ are unspecfied). There are also fears that the Fuel Poverty Strategy cannot be fully funded.

The PfG tells us that

This will only be true if the right policies are in place, as the experience in Ireland, where the gap between the rich and poor did not close automatically with increased prosperity, has shown. The social and the economic must go hand in hand so that all can benefit from any increase in prosperity. Assumptions of trickle down have long been discredited. There are also doubts about whether the level of inward investment needed to deliver 6,500 new jobs is actually out there in the midst of what looks like a global slowdown.

Employment

In addition, the documents recognise that Northern Ireland’s youthful population will soon translate into a much larger working age population. In order for targets such as increasing the employment rate to 75% by 2020, it is likely that many tens of thousands of jobs will be needed. These are unlikely to come from growth in the public sector and the current plans give no indication that the private sector will be creating anything like this number in the near future.

Sustainable development

While the PfG, Budget and Investment Strategy all reference Sustainable Development as a key strategic focus, the actual spending patterns are a cause for concern from this perspective and the associated target of a ‘carbon footprint’ reduction is confusing. This is neither the recognised ‘ecological footprint’ measure nor a carbon emissions target, which is what is needed. Spending on public transport is £268.5 million over the next three years while that for roads is £642.9 million. There is still no commitment to the Environmental Protection Agency (EPA) recommended by an independent panel appointed by government and no budget provision seems to have been made, as the department is only now calculating what an EPA would cost.

Positive Steps

Although there is commitment to a Charity Commission, Volunteering Strategy and to implementation of the Advice Services Strategy, the documents make no reference to Positive Steps (whose implementation is still incomplete), to funding for the sector or to outstanding pieces of work such as the Strategy for Support Services.

The loss of the Children’s Fund and indeed of all cross-cutting funds is of concern to voluntary and community organisations. Cross-cutting funds were viewed as a way of incentivising departments to co-operate more closely – also it is not clear if the funds have been mainstreamed or have simply disappeared. Joint PSA targets will not necessarily achieve the same result if departments can deliver their individual elements separately.

Education

The Education budget is rising by 4.3% a year and with pupil numbers falling (there are over 55,000 empty desks according to the Minister), this will fund curriculum reform, but there is still no decision on selection at eleven and no transfer system in place beyond next year – a major gap in this three year programme. Within the budget there is a great deal of emphasis on skills for work, perhaps not enough emphasis on education as being about anything other than the economy (this is also true of the approach to further education and lifelong learning).

In addition to the 100 school building projects announced there are18 PPPs (Public Private Partnerships). Following major criticism of these as a way of building schools, Peter Hain had stopped the use of PPPs in schools. The NI Executive now seems to have re-introduced it.

Health

Despite increases in health funding, the Health Minister has already made it clear that at these levels the gap with English health service funding, taking account of population, will be £650 million by 2011. Commitments on mental health and learning disability include no-one remaining “unnecessarily” in hospital by 2013, but there is concern as to whether the resources are there to make this possible.

Efficiencies

£790 million is to be raised through efficiencies in three years. There is always a fear that this will translate as cuts to budgets for voluntary and community organisations. The work of the new Performance and Efficiency Delivery Unit set up to monitor these savings will be important. There was a lot of talk of asset disposals in Peter Robinson’s speech as he introduced the budget and ‘capital realisations’ feature throughout the documents.

A taskforce is to be set up to identify “under-used assets for disposal” by December this year for incorporation into the final budget. It is not clear what “underused” means in this context. Public assets can only be sold once and after the one-off injection of cash (although this is to be used for infrastructure), public money would have to be used to replace, for example, land for public projects if needed in future. There is no mention of any consultation on this.

Overall

Overall there appear to be few new policies or innovative approaches in the PfG and Budget. Key decisions like post-primary selection and adoption of the anti-poverty strategy remain unmade. As NICVA has noted in comments on almost all Programmes for Government, many of the targets are still process targets, rather than focusing on outcomes. For example, targets include producing action plans, promoting something, “ensure the central role of…” or having agreements in place.

What we would like to know is what the outcome associated with this will be. Also, some broad objectives have very limited actions and targets associated with them, which could not possibly deliver the broader outcome. For example some of the health PSAs and some actions have no targets attached to them, such as the one on improving partnership between government and the voluntary and community sector.

The levels of targets vary somewhat, calling into question how strategic some of them are. They range from increasing sales in angling permits to regenerating the Maze and Crumlin Road sites to meeting the demand for affordable housing. Some targets are carried over without change from last year’s plans, such as existing road death targets.

Voluntary and community organisations have already expressed a view on many of the issues covered in the Programme for Government and Budget. You can see these in NICVA’s Policy Manifesto at www.nicva.org/policy

Consultation events

NICVA, in partnership with local community networks across Northern Ireland, has designed a programme of events aimed at providing information to encourage voluntary and community organisations to make the most of this consultation opportunity. People should feel free to come along to one or both sessions.

Copies of the Priorities and Budget and information on consultation events can be obtained by telephoning 028 9052 0093 or downloaded from www.pfgbudgetni.gov.uk.

NICVA will be submitting a response to the consultation by 21 December 2008. If you would like to contribute to the NICVA response, please contact Frances McCandless on 9087 7777 or email frances.mccandless@nicva.org by 17 December 2007.