Northern Ireland Assembly, 16 September 2002

85 contributions from 29 members. The official report.

Assembly Business: Withdrawal of Statement by Mr Roche

John (Speaker, Belfast East)

Mr Roche has requested, and has been granted, an opportunity to withdraw a remark that he made during the anti-sectarianism debate on Tuesday 10 September 2002.

Patrick Roche (NIUP, Lagan Valley)

In the debate on 10 September I referred to a named Member as a "convicted murderer". I now know that that statement was incorrect, and I withdraw the statement.

John (Speaker, Belfast East)

I think that the statement referred to Mr Gerry Kelly. I ask Mr Kelly whether he wishes to accept the withdrawal.

Gerry Kelly (Sinn Féin, Belfast North)

I welcome the fact that the remark has been withdrawn. It is not the first time that Unionists have abused privilege. In the scheme of things, and considering the speed at which some Unionists are moving forward regarding dialogue, perhaps this is a small step forward.

John (Speaker, Belfast East)

A good precedent has been established by other Members that, when a Member discovers that something that was said was incorrect, it is withdrawn on the Floor of the House. That is a good and proper way to behave.

State Pension Credit Bill: First Stage

Nigel Dodds (DUP, Belfast North)

I beg leave to lay before the Assembly a Bill [NIA 4/02] to make provision for and in connection with a new social security benefit called state pension credit; and to amend section 43(1) of the Pension Schemes (Northern Ireland) Act 1993.

Bill passed First Stage and ordered to be printed.

John (Speaker, Belfast East)

The Bill will be put on the list of pending business until a date for its Second Stage has been determined.

Limited Liability Partnerships Bill: Consideration Stage

John (Speaker, Belfast East)

That concludes the Consideration Stage of the Limited Liability Partnerships Bill. The Bill stands referred to the Speaker.

Open-Ended Investment Companies Bill: Consideration Stage

John (Speaker, Belfast East)

That concludes the Consideration Stage of the Open-Ended Investment Companies Bill. The Bill stands referred to the Speaker.

Children (Leaving Care) Bill: Consideration Stage

John (Speaker, Belfast East)

Members will have a copy of the Marshalled List, which details the order for consideration. There are two groups of amendments for debate. The first group contains only one amendment, which is amendment No 1. The second group comprises the Committee’s opposition to clause 6 and amendment No 2 and amendment No 3, which are consequential to the opposition to clause 6. The amendments, therefore, will be called only if the Assembly agrees that clause 6 should not stand part of the Bill. The Questions on stand part will be taken at the appropriate points in the Bill. If that is clear, and there is no objection, we shall proceed. I propose to call clauses en bloc, to which there has been no signified objection.

Clauses 1 to 4 ordered to stand part of the Bill.

Clause 5 (Representations)

Question proposed,

Joe Hendron (Social Democratic and Labour Party, Belfast West)

I beg to move amendment No 1: In page 8, line 38, leave out "(if any)".

The Committee for Health, Social Services and Public Safety scrutinised the Children (Leaving Care) Bill during every Stage of the Bill. The Committee’s report details the scrutiny of the Bill. We took evidence from a wide range of key groups that work with young people leaving care. Clause 5 deals with representations made under the Children (Northern Ireland) Order 1995. It establishes arrangements for dealing with complaints about services provided under the Order. Each health and social services trust will be required to have procedures in place to hear complaints from young people who qualify for support arrangements under the Bill about the way in which the trust carries out its functions under Part IV of the Children (Northern Ireland) Order 1995. The Committee welcomed that requirement. It is a positive and much needed step that will give young people a stronger voice in their affairs.

Members recommended one minor amendment, which was that the phrase "(if any)" should be removed from clause 5. That amendment would give the Department authority to make Regulations under article 34 of the Children (Northern Ireland) Order 1995. It was agreed that the phrase was unnecessary.

Bairbre de Brún (Sinn Féin, Belfast West)

Éilíonn alt 5 go mbunódh iontaobhais sláinte agus seirbhísí sóisialta nósanna imeachta oiriúnacha le hionadaíocht agus gearáin a mheas maidir le hurscaoileadh a bhfeidhmeanna faoi alt 2 agus alt 4 den Bhille.

Beidh mionsonraí na nósanna imeachta ionadaíochta agus gearán leagtha amach i rialacháin arna ndéarnamh ag mo Roinn. Níl aon deacracht agam dá bhrí sin glacadh leis an leasú seo.

Clause 5 requires health and social services trusts to establish suitable procedures to consider representations and complaints about the discharge of their functions under clauses 2 and 4 of the Bill. The detail of those procedures will be set out in the Regulations made by my Department. Therefore, I accept the amendment.

Joe Hendron (Social Democratic and Labour Party, Belfast West)

I am happy with the Minister’s comments.

Ian Paisley (DUP, North Antrim)

On a point of order, Mr Speaker. I wish to speak on the amendment.

John (Speaker, Belfast East)

I received no indication that the Member wished to speak on the matter. We have listened to the Minister’s response, and the Chairperson has wound up the debate.

Ian Paisley (DUP, North Antrim)

That is all right.

John (Speaker, Belfast East)

However, if the Member wishes to speak in the second debate, I shall make a note of his name.

Ian Paisley (DUP, North Antrim)

I shall indicate my wish to speak at the appropriate time.

Amendment No 1 agreed to.

Question put and agreed to.

Clause 5, as amended, ordered to stand part of the Bill.

Clause 6 (Exclusion from benefits)

John (Speaker, Belfast East)

Amendments 2 and 3 are consequential on clause 6 not standing part of the Bill. Several Members have indicated that they wish to speak on their opposition to clause 6, and on the amendments. Therefore, we shall debate those matters together.

Question proposed,

The following amendments stood on the Marshalled List:

No 2: In clause 9, page 10, line 14, leave out subsection (3). — [The Chairperson of the Committee for Health, Social Services and Public Safety (Dr Hendron).]

No 3: In clause 9, page 10, line 16, leave out "or subsection (3)". — [The Chairperson of the Committee for Health, Social Services and Public Safety (Dr Hendron).]

Joe Hendron (Social Democratic and Labour Party, Belfast West)

Clause 6 will remove entitlement to jobseeker’s allowance, income support and housing benefit from care leavers who have not yet reached the age of 18. The intention is that the resources currently deployed by providing such benefits for that group be transferred from the Department for Social Development to the Department of Health, Social Services and Public Safety.

The transferred resources would be used by health trusts to provide support for 16- to 17-year-old care leavers. Around 220 young people are likely to be affected. The clause will place a duty on health trusts to act in place of the parent to safeguard and promote the welfare of young people by providing financial assistance, as well as by giving advice and support. The cost, although difficult to gauge, may be around £1 million to £2 million a year.

(Madam Deputy Speaker [Ms Morrice] in the Chair)

The Committee took evidence from leading voluntary bodies, and from health and social service trusts, both of which have direct daily involvement with young people aged 16 and 17 who have to leave care. Many witnesses registered serious concern about the policy and the likely impact of clause 6 on the young people who will be affected by having their right to jobseeker’s allowance, income support and housing benefit removed.

Barnardo’s stated that

"Access to benefits is a fundamental right for 16 and 17 year olds."

To remove that right will stigmatise those young people. It will make them different from their peers by denying them the same access to benefits.

The Housing Rights Service was also concerned that the blanket removal of the right of young people to claim benefits could impact negatively on those who have become estranged from social services and depend on financial support.

Organisations such as the Children’s Law Centre and the trade union NIPSA echoed those sentiments. They also stated that the proposed financial arrangements would change the ethos of the relationship between the young people and the trusts’ social workers.

Some trusts registered their concern about the impact of clause 6 on the relationship established between the young person and his or her social worker.

They said that young people would become dependent on their social worker or personal adviser for financial help, as well as for advice and support. Witnesses said that that might impose extra stress and pressure on that relationship.

The Family Bar Association asked whether financial penalties would be imposed should the young person not co-operate with the needs assessment. It suggested that the level of control being passed to trusts under the new financial arrangements might raise human rights issues. In fact, several bodies raised that point.

Witnesses queried the consistency of the delivery of financial packages across different trusts, each of which would have a degree of freedom in developing specific support arrangements. Many organisations referred to their unhappy experiences of finding that sufficient funding had not been made available to fully support new statutory responsibilities under the Children (Northern Ireland) Order 1995. An important point is that the Order has been around for a few years, and there have been problems in financing its provisions.

Moreover, there was concern that, in moving from a needs-based social security system to a cash-limited social services system, budget considerations rather than individual need could become the basis for decision-making. Trusts would be made responsible for an area of work in which the expertise lies with the Social Security Agency. They would need to create a new administrative framework to manage the extra duties.

We do not doubt that the objective behind clause 6 is well meant. However, the young people involved have already lost the security and sense of belonging that being raised in a stable home environment brings to their peers. They already feel different and stigmatised, and clause 6 increases that feeling. To remove the clause from the Bill will leave 16- to 17-year-old children who leave care in the same position as regards their entitlement to social security benefits such as jobseeker’s allowance, income support, and housing benefit as any other 16- to 17-year-old young person who leaves the family home. Except for some changes to avoid duplication of financial responsibility between the Department for Social Development and the Department of Health, Social Services and Public Safety, the other provisions for young people leaving care will remain.

There is much good in the Children (Leaving Care) Bill, and I commend the Minister and her officials for introducing this important legislation. Witnesses who submitted evidence to the Committee eloquently argued for or against clause 6. However, having carefully considered the arguments, the Committee decided on balance, last June, to recommend opposition to clause 6. The decision was strengthened by the absence of a cast-iron guarantee from the Department of Health, Social Services and Public Safety that all resources transferred from the Department for Social Development would be defrayed exclusively for the support of care leavers — and that is a key point.

Members were acutely aware of the legacy of historical underinvestment in family and childcare services, especially during the Committee’s inquiry into residential and secure accommodation.

Since June, the Committee has continued to think long and hard about clause 6. Some Members have voiced worries that opposition to clause 6 may have an unwanted adverse impact on the financial position of the Department of Health, Social Services and Public Safety, as well as on the Northern Ireland block grant, if parity with England, Scotland and Wales were affected.

Clause 6 is important, and the Committee has taken great pride in making the best decision, which is in the best interests of those young people who are affected by the Bill. On 11 September 2002, the Committee agreed by a majority vote to continue to oppose clause 6: the Committee is divided. The ongoing consideration and divergence of views on the Bill reflects the hard work that all Committee members have continued to put in to determine the best course of action on the clause and the Bill.

A key word in this matter is "mandatory". I understand the arguments for retaining clause 6, and we have had discussions with senior officials from the Department. We have put this point strongly to officials, and have asked them whether they can give a guarantee. I understand that money has been ring-fenced under the English legislation. Bearing in mind the difficulties that were encountered in financing parts of the Children (Northern Ireland) Order 1995, and the stigma effect, which is also important, the Committee asked several times whether the Department could guarantee that funding that is to be transferred from the Department for Social Development to boards and trusts would benefit young people. The Committee did not get that guarantee. The word "mandatory" would have been key, had it been used. I wait with interest to hear what the Minister says.

Iris Robinson (DUP, Strangford)

I shall try not to be repetitive. I welcome the Bill’s aims and objectives. However, it has caused the Health Committee many headaches. At its meeting on 11 September 2002, the Committee was divided on how it should proceed. Had other Committee members attended that meeting, the decision might have been different. The vote was four to three in favour of removing clause 6.

Before the recess, the Committee was inclined to oppose the inclusion of clause 6 in the Bill. It was concerned that clause 6 would remove the right of care leavers to social security benefits. It was suggested that a single financial package might simplify care leavers’ management of their affairs. The Committee was concerned that no guarantee was forthcoming from the Department that resources transferred from the Department for Social Development would be used exclusively for those leaving care.

However, my views and those of my Colleagues have changed since then. I am now absolutely convinced that clause 6 should be retained, mainly due to its financial implications. Without clause 6, funding that is required for care leavers might have to come from the devolved health budget. There are already an extraordinary number of worthy issues that make compelling demands for their portion of precious health funding. Therefore, we are in no position to be extravagant.

Traditionally, there has been parity between the social security systems in Great Britain and Northern Ireland. Since power was devolved in 1999, social security legislation in Northern Ireland has proceeded in step with Westminster. I fear that clause 6 will divorce the Province from Great Britain on social security, and will bring parity to an end. I hope that Colleagues — especially in the Ulster Unionist Party — will see the significance of retaining parity with the rest of the United Kingdom.

Without parity, there would be no transfer of social security funding. That would result in money having to come from the Northern Ireland Executive’s Budget. Who would suffer then? If the Health Department had to make up the shortfall, that would involve money that would otherwise have been spent on reducing waiting lists, purchasing medical equipment or boosting staffing levels. I am unsure as to how much money would be involved, but, presumably, it would pay for several heart operations or would provide extra acute beds for the Province.

Furthermore, the system in England and Wales has been working effectively. Why, when its health budget is so limited, would the Assembly choose to pay for something that would otherwise be funded through the Treasury?

Obviously, there are other advantages in retaining clause 6. For example, continuity of responsibility for those young people is desirable. To drop clause 6 would be to risk those vulnerable individuals losing contact with their trusts. There is a responsibility on trusts to ensure that care leavers receive their support swiftly and in its entirety. The money must pass down smoothly to young people. That must be a priority. Those individuals are in need; money for them must not be delayed or swallowed up by other projects. The Health Committee was united on that issue. I support the retention of clause 6 in the Bill.

Sue Ramsey (Sinn Féin, Belfast West)

Go raibh maith agat, a LeasCheann Comhairle. As other Members have said, the Committee considered the Bill in great depth, gathering both written and oral evidence. One of the main issues that jumped out at us was clause 6. A sizeable amount of evidence came from children’s organisations, including organisations that work directly with children in care and children on the verge of leaving care.

Clause 6 gave the Committee — and me — the greatest concerns. Like the Chairperson, I thank the officials, both from the Committee and from the Department of Health, Social Services and Public Safety, for their work in trying to find common ground on clause 6. It is unfortunate that no agreement could be reached, but I place my thanks on record. The Committee has seen more of its officials during the consideration of this Bill than of any other.

Clause 6 will remove the entitlement to jobseeker’s allowance, income support and housing benefit from care leavers who have not yet reached the age of 18. In an ideal society, young people should not be leaving care to go straight on to benefits. That is an issue that must be examined. That is what is happening to a percentage of young people, some of whom leave care with few or no educational qualifications.

The Committee took evidence from leading voluntary and community representatives, and also from trusts, which have a daily direct involvement with young people. Barnardo’s said that access to benefits was a fundamental right for 16- and 17-year-olds. To remove that right will stigmatise those young people. It makes them different to their peers by denying them the same access to benefits. Trusts also had their own concerns. I was struck by the concern that clause 6 would harm the relationship between social workers and young people by changing the nature of that relationship.

I understand and accept that people are entitled to change their minds, but, based on the evidence at the time, the Committee accepted that it would vote against accepting clause 6. [Interruption].

If I am allowed to continue, I shall explain that.

The Committee published a report, which I read carefully at the weekend. However, I am conscious that Committees can receive evidence after reports have been signed off. I am aware that some Committee members, based on the arguments that they have received, have pulled back. I accept that. It shows that, as a Committee, sometimes we may agree as a whole, and sometimes we may not. However, the majority of the Committee agreed and voted that the Committee would still support the removal of clause 6 from the Bill.

I am not for one minute going to speak for the Ulster Unionist Committee members. I am sure that they will tell us how they are going to vote. However, last Wednesday, the majority of the Committee agreed to vote against the inclusion of clause 6 in the Bill. That decision was based not on the benefits issue, but on the stigmatisation that young people will face should their right to benefit be removed, and on other issues that were highlighted to the Committee by leading children’s organisations. Therefore, I support the opposition to clause 6.

Monica McWilliams (NIWC, Belfast South)

One reason why I support the removal of clause 6 from the Bill is a commendation of the Department for Social Development and a criticism of the Department of Health, Social Services and Public Safety. That might interest some Members who had thought not to support the removal of the clause.

In this country social security payments are still paid swiftly and fully. There would be no guarantee that that would continue to be the case if those changes were implemented.

Last week, the Minister for Social Development introduced some good new legislation that extended disability benefits in Northern Ireland, especially disability living allowances for people aged over 65. The Minister regularly introduces new legislation regarding benefits that focuses on inclusion rather than exclusion. This Bill is rare in that its subtext is the exclusion from entitlement to benefits of one of the most vulnerable groups in society. I am concerned that if the amendment is not agreed to, Members will tell the House about the many young people in their constituencies who receive benefits and who do not know where their social worker is or to which health trust they belong. That is the message coming from young people in care. We must support the amendment and delete clause 6, not only to avoid stacking up enormous social problems for young people and help-providers but to avoid funding difficulties.

Iris Robinson argued that the money must come out of the block grant; that is correct. However, one way or another, it will come out of the block grant. It will come out of either the social security budget or the Department of Health, Social Services and Public Safety’s budget. I would be happier about it coming out of the budget of the Minister for Social Development, from which it may be paid more quickly, than it coming out of the budget of the Minister of Health, Social Services and Public Safety.

The guarantee of preserved rights for the elderly must be borne in mind. Those benefits will now be paid from the budget of the Department of Health, Social Services and Public Safety rather than from the social security budget. However, will those benefits continue to be paid in two years’ time, when the transitional period has ended? The answer is perhaps not. There may not be enough money in the budget for those payments to be made to that group of residents in old people’s homes. That example applies to this situation too.

The Minister did not seek accelerated passage for the Bill. One would have thought that she would have done so given the benefits issue. The legislation has already been enacted in England, and evidence collected by the Committee for Health, Social Services and Public Safety suggests that it is not working well. It has not had the intended effect — quite the opposite. However, we have continued to pay the benefits out of the social security budget. Thus, parity has already gone, yet no crisis has arisen. Evidence to the Committee suggests that the best approach is to continue to pay those benefits from the social security budget. It is an example of Northern Ireland benefiting from moving in a different direction to England. And why not? After all, that is one of the benefits of being a devolved region. What is best for one region is not necessarily what is practised elsewhere.

A shift in payments from one budget to another would create a further layer of bureaucracy and considerable administration costs for the trusts. We are trying to do away with further bureaucracy. People’s rights should be assessed according to need, rather than on a discretionary basis by an office set up to administer the new form of benefit. Those workers would have to be paid accordingly. Thus, there would be high administrative costs for providing a small number of people with a service that is already provided for adequately under the social security system.

We have made some good changes to social security legislation, especially with regard to lone parents aged between 16 and 18. Changes are also being introduced to legislation that affects carers, which will take on board how their daily circumstances are affected by the fact that the elderly are living longer — an issue that had not been considered previously.

Why is exactly the same not done for these young people? My understanding is that they would receive their basic entitlement and could still rely on social services and their personal advisers for extra funds if necessary. In respect of value for money, efficiency or a needs-based analysis for the most vulnerable group in Northern Ireland, the arguments do not stack up. All the other parts of the legislation attempt to protect those young people, and if we cannot provide for a roof over their heads, for food on the table and for their quality of life, the whole Bill might as well go out the window.

Annie Courtney (Social Democratic and Labour Party, Foyle)

I support the opposition to clause 6 of the Bill. For those who may not be familiar with the Bill, clause 6 deals with changes to social security legislation and the transfer of responsibility for children leaving care to health and social services trusts.

Evidence was taken from various statutory and voluntary bodies, all of which were concerned that the removal of entitlement to income-based social security benefits, and the transfer of financial support to health and social services trusts, would have a direct impact on care leavers. That concern included a lack of commitment from the Department of Health, Social Services and Public Safety that all resources due to be transferred from the Department for Social Development would be kept exclusively for the support of care leavers.

Clause 6, of course, will mean changes to the social services legislation, which is the responsibility of the Department for Social Development. On balance, however, the majority view was that the removal of clause 6 would be more beneficial to young people leaving care.

It was further noted that in England similar legislation was accompanied by a substantial addition to the budget, which was ring-fenced. That was achieved by giving additional resources from the special social services grant under the Quality Protects initiative. However, apart from £1·2 million from the social inclusion fund for 2001-02 and 2003-04 for pilot schemes, there is no specific commitment to the overall package of additional resources to assist in underpinning the implementation of the Bill.

Northern Ireland is the only part of the United Kingdom with devolved responsibility for social security, child support and pensions. For a considerable time, parity has applied to the relationship between the social security systems in Great Britain and Northern Ireland, and, since devolution, legislation has been enacted in parallel with Westminster. However, I understand that there is no legal definition of "parity" in the Northern Ireland Act 1998. Parity concerns equivalence and equality of treatment. For that reason I have consistently supported the removal of clause 6 from the Bill. Although I welcome the fact that officials put their views to the Committee, I support the opposition to the clause.

Sammy Wilson (DUP, Belfast East)

Until it is decided exactly how we deal with parity legislation, the Assembly will continually have to address this issue. We pretend that we have the luxury of departing, if we so desire, from legislative parity with the rest of the United Kingdom, especially in respect of social security legislation. Even the devolved Parliament in Scotland, with much wider powers than our own, did not take it upon itself to do that. Scotland realised that to break parity at any stage — especially while being a net recipient in respect of welfare expenditure — is a very dangerous position to adopt. The Social Development Committee has examined parity legislation, and we have been faced with the issues time and time again. People may like to flex their muscles and suggest being different, but, financially, we cannot afford to be different.

The Treasury would love it if we were to break parity, albeit in a small way. Given that we are the net recipients of over £3,000 million for social security, the consequences of breaching that parity are obvious. When considering clause 6, we must decide whether we can consider seriously doing that.

The Assembly spends about £1 million of the Budget on those who leave care. That expenditure is demand-led; it could be less than £1 million next year, or it could be more. As it is demand-led, the money does not, despite what Ms McWilliams thinks, come from the block grant. It is not part of the allocation that was devolved to Northern Ireland, so if Members decide that it is only £1 million and that, for reasons such as stigma, responsibility should stay with the Department for Social Development, they will find that that is the thin end of the wedge.

Monica McWilliams (NIWC, Belfast South)

In response to Mr Wilson’s points, the Scottish Parliament has done an enormous amount of innovative work on the effects of student finance and free nursing care – both of which affect its block grant – on its social security budget. Of course funding for those who leave care does not affect our block grant — I was responding to Mrs Robinson’s comment that it may do so in the future — so whether the funding comes from the social security budget or from the Department of Health, Social Services and Public Safety, there must be a variation.

Sammy Wilson (DUP, Belfast East)

The point about free nursing care and student finance in Scotland is spurious, because those matters were not reserved, and Scotland had the freedom to change its policy on them. Northern Ireland has that freedom also. However, the measures in place for social security payments are different. If we start to breach parity, albeit in small ways, that will open the door for the Treasury to treat Northern Ireland differently, and Members will find that increasingly the burden will fall on the Assembly’s Budget.

A second aspect of the debate surprises me; perhaps it will be clarified later. It is my understanding that, although members of the SDLP and Sinn Féin have said that they support the amendment to clause 6, that is not the position that the Ministers from those parties have adopted. The Minister of Finance and Personnel does not want yet another drain on the Budget, which he says he works hard to balance every year, and for which he must find additional finance through measures such as rate increases. Do Members want to place yet another burden on him? It would be interesting if he were to come to the Chamber before the end of the debate and say whether his party Colleagues who support the amendment are rebels or are in line with his thinking.

The same applies to the Sinn Féin Minister of Health, Social Services and Public Safety who, I understand, was happy to allow her Department to absorb the expenditure. Perhaps the fact that her Colleagues who disagree with her did not hobble in this morning shows that she is not too worried about their decision to support the amendment, but it would be useful to hear her view.

Indications are that the Minister of Finance and Personnel does not want any greater demand on his resources, and the Minister of Health, Social Services and Public Safety did not disagree with the inclusion of clause 6, unless she has since been persuaded otherwise by her Colleagues.

12.45pm

For all of those reasons, the House ought to support the Bill as it stands and to reject the amendment, because it has been ill thought out and is perhaps a knee-jerk reaction to extensive lobbying. Even if Members are heavily lobbied, it is important for the Assembly to weigh up these matters before deciding to unnecessarily increase a financial burden.

John (UUP, Strangford)

Madam Deputy Speaker —

Jane Morrice (NIWC, North Down)

Is the Member raising a point of order?

John (UUP, Strangford)

No.

Jane Morrice (NIWC, North Down)

I was about to call the Minister of Health, Social Services and Public Safety, but the Member has permission to speak.

John (UUP, Strangford)

I have listened intently to the debate. Whether a devolved Administration should opt out of parity parameters is highly controversial; when it comes to the social fund and social services, I advise that we should not opt out. First, it greatly upsets the negotiations between the Department of Finance and Personnel and the United Kingdom Exchequer. Secondly, those of us who have been in politics for some time will recall that one of the great breaches in parity was the decision of a previous Northern Ireland Administration to change family allowance levels in Northern Ireland, making them different to those in Great Britain. That created a tremendous controversy. That was not worth trying, and I suggest that this is not worth trying either.

Bairbre de Brún (Sinn Féin, Belfast West)

Go raibh maith agat, a LeasCheann Comhairle. Ar an chéad dul síos, aithním na hábhair imní a léiríodh faoin alt seo. Mar is eol do Chomhaltaí, cuireann alt 6 deireadh leis an teideal do liúntas ioncam-bhunaithe do dhaoine atá ag tóraíocht oibre, do thacaíocht ioncaim agus do shochar tithíochta i gcás na ndaoine óga sin a bheidh ag fáil tacaíochta ó na hiontaobhais faoi na socruithe nua sa Bhille um Fhágáil Cúraim go mbeidh siad 18 mbliana.

Cé go n-aithním na ábhair imní seo, creidim gur chóir alt 6 a choinneáil. Is é aidhm an Bhille go ndéanfaí riachtanais daoine óga atá ag fágáil cúraim a mheas agus freastal a dhéanamh orthu go hiomlánaíoch. Tá contúirt nach beag ann gur cur chuige neamhiomlán a bheadh mar thoradh ar dheireadh a chur le halt 6. Ní cosúil gur chun leasa daoine óga atá ag fágáil cúraim é a riachtanais tacaíochta airgeadais agus tithíochta a mheas ar leithligh óna riachtanais ar nithe eile mar oideachas agus oiliúint.

Is mian linn socruithe tacaíochta níos loighciúla a chur ar bun a dhéanfaidh freastal ar riachtanais phraiticiúla — lena n-áirítear airgead tirim — daoine óga chomh maith le cabhair eile. Chiallódh na socruithe nua, don chéad uair riamh, go bhfaigheadh daoine óga pacáiste iomlánaithe de thacaíocht mhothaitheach, phraiticiúil agus airgeadais, lena n-áirítear plean conaire pearsanta agus measúnú riachtanas lena chinntiú go bhfaigheann siad an chabhair chuí ar a mbealach chun an neamhspleáchais. Bhainfí den bheartas seo mura mbeadh tacaíocht airgeadais mar chuid den phacáiste cúraim.

Tuigim gur léirigh cuid Comhaltaí imní i rith Chéim an Choiste den Bhille an gcosnófaí na hacmhainní a d’aistreofaí ón Roinn Forbartha Sóisialta chuig mo Roinnse. Le deireadh a chur le haon amhras faoi sin, glacfaidh mé céimeanna lena chinntiú go gcosnófar na hacmhainní a aistreofar ón bhuiséad slándála sóisialta ionas gur féidir dul i mbannaí nach mbeidh daoine óga 16 bliana agus 17 mbliana atá ag fágáil cúraim faoi mhíbhuntáiste airgeadais ag na socruithe nua. Tá moladh agam acmhainní aistrithe a chosaint agus tá súil agam go n-áiteoidh seo ar Chomhaltaí gan cur i gcoinne alt 6.

Is é an aidhm atá ann nach bhfaigheadh aon duine óg pacáiste dá chóiríocht agus dá chothabháil — cé acu a dhíoltar sin leis go díreach nó a eagraíonn seirbhísí sóisialta é ar a shon — a bheadh níos lú ná mar a gheobhadh sé dá mbeadh sé i dteideal tacaíochta ioncaim nó liúntas do dhaoine atá ag tóraíocht oibre agus leas tithíochta a éileamh.

Clause 6 will remove entitlement to income-based jobseekers’s allowance, income support and housing benefit from young people who would be supported by trusts under the new arrangements made in the Children (Leaving Care) Bill until age 18. I recognise Members’ concerns regarding clause 6, but I believe that the clause should be retained.

The intention behind the Bill is that the needs of young care leavers should be assessed and met in a holistic fashion. There is a real danger that removing clause 6 would lead to a fragmented approach. To have young care leavers’ housing and financial support needs assessed separately from education and training needs would not be in their best interests. More coherent support arrangements need to be put in place to meet young people’s practical requirements, including cash as well as other assistance.

The new arrangements would mean that, for the first time, young people would receive an integrated package of emotional, practical and financial support, including a personal pathway plan and needs assessment to ensure that they have appropriate help on their road to independence. If financial support were not part of the package of care the policy would be undermined.

During the Bill’s Committee Stage, members expressed concern about whether the resources to be transferred from the Department for Social Development to my Department would be protected. To allay fears on that front, I will take steps to ensure that the resources transferred from the social security budget will be protected to guarantee that 16- and 17-year-old care leavers will not be financially disadvantaged by the new arrangements. The intention is that no young person should receive a package for their accommodation and maintenance, whether paid directly to them or handled on their behalf by social services, that amounts to less than they would have received had they been entitled to claim income support or jobseeker’s allowance and housing benefit. [Interruption].

Jane Morrice (NIWC, North Down)

Order. There is a general hubbub, which should cease so that the Minister can be heard.

Bairbre de Brún (Sinn Féin, Belfast West)

The Bill’s intention is to strengthen the bond between social services and the young person. I have listened to Members’ points about changing the ethos of that relationship. The Department and I consider that the Bill’s provisions will aid the development of that relationship, which will be the equivalent to that of a good parent.

No guarantee is being provided for the transferred resources in the equivalent legislation in England and Wales. The arrangements are purely administrative; and we wish to follow that model.

Joe Hendron (Social Democratic and Labour Party, Belfast West)

The Minister mentioned a guarantee as regards the transfer of social security funding. I have written to her several times about funding for children in care being ring-fenced, and the Committee for Health, Social Services and Public Safety and Members will be concerned that that will be the case. Will the money coming from social security be ring-fenced? We will come to the issue of parity later, but I would appreciate an answer to my question.

Nigel Dodds (DUP, Belfast North)

There is no guarantee of ring-fenced funding.

Jane Morrice (NIWC, North Down)

Order, the Member will address his comments through the Chair.

Bairbre de Brún (Sinn Féin, Belfast West)

The process will be carried out through administrative arrangements in keeping with the procedures elsewhere. With regard to the costs of administration, the legislation is concerned with assessing and meeting need. That is more likely to be achieved effectively by a co-ordinated approach than by a fragmented one that would involve a range of agencies.

In the event that the Assembly does not agree that clause 6 stand part of the Bill, I will seek to table amendments at Further Consideration Stage to amend trusts’ duties with regard to relevant children.

Clause 2 of the Bill inserts a new article 34C into the Children (Northern Ireland) Order 1995. The article sets out the duties of trusts towards relevant children. Paragraph 8 imposes a duty on trusts to safeguard and promote the welfare of those children. Trusts must provide relevant children with maintenance, suitable accommodation and such other support as may be prescribed in Regulations. If clause 6 is dropped, the provisions of article 34C(8) will duplicate the responsibility of the Department for Social Development for maintaining and accommodating young people.

In other words, primary responsibility for the maintenance and accommodation of such children will remain with the Department for Social Development. To ensure that there is no duplication of responsibility, I will have to consider removing the specific duties of trusts that are set out in article 34C(8) to maintain and accommodate relevant children.

Joe Hendron (Social Democratic and Labour Party, Belfast West)

I thank the Committee Clerk, the Committee and departmental officials for their hard work. I listened carefully to everyone, including the Minister, and I respect what they said. I listened particularly carefully to Sammy Wilson and John Taylor on parity with Britain. Anyone who has read the recent needs and effectiveness document will know that, compared with England, there is a massive deficit in Northern Ireland’s Health Service. I do not have the figure to hand, but I think that it is around 30%. Over the past few years, millions of pounds should have been invested in the Health Service in Northern Ireland, but it did not happen. We are a long way behind England in that respect, and people who wish to promote parity should realise that.

The legislation in England ring-fences funding from the social security budget for young people leaving care. Earlier I saw Peter Robinson shake his head and say that money could not be ring-fenced. It seems to be done in England, and I would like that to be explained.

It is important to note that, under the Children (Northern Ireland) Order 1995, the finance for young people in or leaving care has often been found wanting. Young people leaving care are the main concern of every member of the Committee, including those who wish to keep clause 6. Sammy Wilson did not even mention young people; his whole speech was about the issue of parity. I have no problem with the principle of parity, provided that it is genuine parity.

I thank Iris Robinson, Sue Ramsey, Monica McWilliams, Annie Courtney, Sammy Wilson, John Taylor and the Minister for their comments. If the Committee had been sure that the funding from social security benefits would go entirely to young people, that would have been a different kettle of fish. Everyone in the Committee took the time to speak to officials and ask about that matter again and again. Those Members who argue that we should have parity with England should face the truth on this issue. If funding can be ring-fenced in England, why can it not be done in Northern Ireland? I appreciate the difficulty that the Minister of Health faces, and her integrity is beyond question.

A Member made the point that removing clause 6 would make young people more dependent on the benefits system. However, allowing young people leaving care to have access to the social security system is not about making them dependent on it.

Trusts must ensure that those children have every opportunity for further education and access to jobs. In other words, they must ensure that those children are treated equally to their peers who come from a stable family background.

To delete clause 6 would limit flexibility on how resources are deployed. However, if trusts are to act as good parents, the resources available to help young people leaving care should be used as necessary and should be based on their assessment of need and the pathway plans. The threat of limiting flexibility should not be used as an argument to retain clause 6. To remove the clause will prevent a holistic approach being taken and would fragment the service assessment. Assessment of need should be based on a young person’s overall needs. How those needs are met will inevitably be through a variety of agencies, including the social security and further education systems.

Furthermore, to continue to make the social security system responsible for young people leaving care would send out the wrong message about our expectations of them. We do not wish to stigmatise young care leavers; we want to give them the same entitlement to benefit as any other 16- or 17-year-old.

Finally, I listened carefully to the arguments about parity. Nobody would have trouble with parity were it to be genuine parity. All those who helped draft the needs and effectiveness evaluation know that there is not parity between the Health Service here and that in England .

Sammy Wilson (DUP, Belfast East)

Will the Member give way?

Joe Hendron (Social Democratic and Labour Party, Belfast West)

I am sorry. Were I not summing up, I would. If I did, I would have to give way to others, and I cannot do that.

We do not have parity with England, and everyone, especially Lord Kilclooney, should take that on board. Our main concern is young people who are leaving care. This is the Bill’s Consideration Stage, and the Minister can table further amendments at Further Consideration Stage if she so wishes. I have made the arguments for removing clause 6, and other Members and I still want clause 6 removed for the reasons that we have given.

Question put,

The Assembly divided:

Ayes

Ian Adamson, Pauline Armitage, Billy Armstrong, Roy Beggs, Billy Bell, Paul Berry, Esmond Birnie, Gregory Campbell, Mervyn Carrick, Joan Carson, Wilson Clyde, Fred Cobain, Ivan Davis, Bairbre de Brún, Nigel Dodds, Pat Doherty, Tom Hamilton, William Hay, David Hilditch, Derek Hussey, Roger Hutchinson, Gardiner Kane, Danny Kennedy, Lord Kilclooney, Robert McCartney, William McCrea, Alan McFarland, Michael McGimpsey, Gerry McHugh, Pat McNamee, Maurice Morrow, Conor Murphy, Mick Murphy, Dara O’Hagan, Ian Paisley Jnr, Ian R K Paisley, Edwin Poots, Iris Robinson, Mark Robinson, Peter Robinson, George Savage, Jim Shannon, David Trimble, Denis Watson, Peter Weir, Jim Wells, Sammy Wilson.

Noes

Alex Attwood, P J Bradley, Joe Byrne, Seamus Close, Annie Courtney, Michael Coyle, John Fee, David Ford, Tommy Gallagher, Carmel Hanna, Joe Hendron, Billy Hutchinson, John Kelly, Patricia Lewsley, Alban Maginness, Donovan McClelland, Alasdair McDonnell, Barry McElduff, Eugene McMenamin, Monica McWilliams, Francie Molloy, Eamonn ONeill, Sue Ramsey, Brid Rodgers.

Question accordingly agreed to.

Clause 6 ordered to stand part of the Bill.

Jane Morrice (NIWC, North Down)

No amendments have been tabled to clauses 7 and 8. As the Assembly has already agreed that clause 6 should stand part of the Bill, I shall not be calling amendment No 2 and amendment No 3 to clause 9, as they were consequential to the removal of clause 6. Therefore, I propose, by leave of the Assembly, to group the three remaining clauses.

Clauses 7 to 9 ordered to stand part of the Bill.

Long title agreed to.

Jane Morrice (NIWC, North Down)

That concludes the Consideration Stage of the Children (Leaving Care) Bill. The Bill stands referred to the Speaker.

Social Security Bill: Consideration Stage

Jane Morrice (NIWC, North Down)

That concludes the Consideration Stage of the Social Security Bill. The Bill stands referred to the Speaker.

(Mr Deputy Speaker [Mr McClelland] in the Chair)

State Pension Credit Bill: Accelerated Passage

Nigel Dodds (DUP, Belfast North)

I beg to move

That, in accordance with Standing Order 40(4), the Assembly grants accelerated passage to the State Pension Credit Bill.

This Bill is an important piece of legislation. It will make provision for Northern Ireland to correspond to the social security provisions that are contained in the State Pension Credit Act 2002. As Members will be aware from the previous debate, there is a long-standing principle of parity between Great Britain and Northern Ireland in the fields of social security, pensions and child support.

People in Northern Ireland pay income tax and make National Insurance contributions at the same rate as those elsewhere in the United Kingdom. Therefore, I take the view that they are entitled to expect changes in the legislation elsewhere in the country to apply in Northern Ireland with minimal delay. The State Pension Credit Act received Royal Assent on 25 June 2002. The Department for Work and Pensions made Regulations on 11 July 2002 to allow for the early implementation of the proposals from October 2002. From October 2003, pension credit will replace the minimum income guarantee for those aged 60 and over.

For many pensioners who need it, pension credit will not only provide more money. There will also be a fairer system and the decent treatment that senior citizens deserve will be provided. Pension credit will differ from current pension provision in several ways. First, it will guarantee that no one over the age of 60 need live on less than £100 a week, or £154 a week in the case of couples. Secondly, people who qualify will receive a cash reward from the age of 65 for modest savings. Single people can benefit by up to £13·80 a week and couples by £18·60 a week. Thirdly, the rule that excludes pensioners with savings of £12,000 or more will be abolished.

Fourthly, from the age of 60, people will no longer have to report any savings that they have under £6,000. That means that 85% of pensioners who are entitled to the pension credit will not have to report savings. Fifthly, the way in which help is delivered to those aged 60 and over will be modernised, and the rules simplified. There will be a significant reduction in the information that pensioners must provide at the outset and over time as changes happen. That will enable pensioners to get what they are entitled to with much less intrusion and hassle.

From age 65, most pensioners will not have to report changes in income for fixed periods of five years. That will effectively abolish the old weekly means test. Approximately half of all people aged 60 and over in Northern Ireland, some 120,000 persons, will potentially gain as a result of the introduction of pension credit. On average, they stand to gain around £400 a year.

The aim of pension credit is to provide a way to help the least well off and to taper that help for pensioners further up the income distribution. The extent of the changes is such that it is necessary to put in place the required subordinate legislation this autumn to allow time for staff to be trained, and for systems and processes to be designed and implemented.

It will be necessary to begin to reassess the 75,000 minimum income guarantee cases before conversion to pension credit. In some cases, that will involve verification of matters such as age and savings. Moreover, the advance take-on of new claims will start in April 2003, when it is expected that there will be many thousands of cases to be assessed. If pension credit is not in place, pensioners here will face the possibility of not having access to the new pension credit and the more generous income and capital rules at the same time as their counterparts in Great Britain.

Therefore, for the reasons that I have given, I ask that the Bill proceed under the accelerated passage procedures set out in Standing Order 40(4), so that we can bring Northern Ireland law on those matters into line with those in the rest of the United Kingdom with a minimum of delay. To grant accelerated passage means that there will not be a formal Committee Stage, so I have discussed the provisions of the Bill with the Committee for Social Development. Members will, of course, be able to make their views known at the Consideration and Further Consideration Stages.

Fred Cobain (UUP, Belfast North)

I explained to the House last week that the Committee for Social Development received written notification in August of the Minister’s intention to seek accelerated passage for the Social Security Bill. In that correspondence, the Minister said that he also intended to seek accelerated passage for the State Pension Credit Bill. As I said to the House last week, the Minister agreed to attend a specially convened meeting of the Committee to explain the reasons for his request.

At that meeting, the Minister explained that the State Pension Credit Bill is considered to be a parity measure in that it replicates the State Pension Credit Act 2002 enacted at Westminster. The Minister stressed that the introduction of the legislation would offer more generous income and capital rules than those that apply in Northern Ireland at present.

The Minister gave three main reasons in support of his case. He explained that, although the provisions in the Bill will not take effect until October 2003, it is necessary to introduce extensive subordinate legislation to give effect to the new law. The Minister also pointed to the need to make significant alterations to operating systems, especially the computer system, and to undertake substantial staff training programmes to ensure the smooth implementation of the new law. The Minister stressed that it was important to get the legislation onto the statute book promptly so that pensioners here can enjoy the benefits of the new pension credit arrangements at the same time as pensioners in Great Britain.

As Chairperson of the Committee for Social Development, I assure the House that the Committee listened carefully to what the Minister had to say and welcomed his assurances that the Bill’s provisions will be beneficial. It seems that the practical arrangements for the introduction of the new legislation are complex, and although I do not understand why accelerated passage is necessary to accommodate changes to the computer systems and to facilitate staff training, I acknowledge that the Department has a sizeable task ahead of it.

If the House agrees to grant the Bill accelerated passage, I hope that the Minister and the Department will use the time granted in an efficient way. It would be disappointing to hear at a later date that there were difficulties with putting in place the new arrangements and that the introduction of the new legislation had to be deferred. That will be especially true when Members come to consider the third main plank of the Minister’s argument.

As with the Social Security Bill, the Committee accepts the Minister’s contention that it is important to ensure that people in Northern Ireland benefit from the changes at the same time as they are introduced in Great Britain. It is hoped that, by October 2003, the law will be introduced, that transitions to the new arrangements will be seamless and that pensioners will not suffer any inconvenience.

At its meeting on 29 August, the Committee agreed not to register any objections in the debate to the Minister’s request that the Bill be granted accelerated passage.

Monica McWilliams (NIWC, Belfast South)

The Minister may have noticed in the media recently that attention has been drawn to the married woman’s contribution to pensions, which was known as the "small stamp". However, that contribution has recently been wiped out, and many of the women who thought that they had been contributing towards their pension have been told that it is now irrelevant. Is there anything in the State Pension Credit Bill that will be of comfort to those women? There has been speculation that married women have lost out on their pensions.

Nigel Dodds (DUP, Belfast North)

I thank the Chairperson of the Committee for Social Development for his remarks, and I am delighted with the Committee’s approach to the issue. I was glad to be able to go to the Committee and explain the reasons for accelerated passage and to assure the Committee that I shall endeavour as far as possible to keep its members informed — personally and through officials — of parity issues as they arise at Westminster.

The State Pension Credit Bill does not address the issue that Ms McWilliams raised. I am happy to discuss it with her, but it is not relevant to the Bill’s provisions.

Mr Deputy Speaker, I thank you and the Assembly for your co-operation. I look forward to having the provisions implemented as quickly as possible and to meeting the deadline of October 2003 for the implementation of state pension credit in Northern Ireland in line with the provisions in the rest of the United Kingdom.

Donovan McClelland (Social Democratic and Labour Party, South Antrim)

I remind Members that the motion requires cross-community support.

Question put and agreed to.

Resolved (with cross-community support):

That, in accordance with Standing Order 40(4), the Assembly grants accelerated passage to the State Pension Credit Bill.

Donovan McClelland (Social Democratic and Labour Party, South Antrim)

The Bill will receive its Second Stage tomorrow, Tuesday 17 September 2002.

Review of Opportunities for Public-Private Partnerships in Northern Ireland

David Trimble (UUP, Upper Bann)

I beg to move

That this Assembly notes the Report of the Review of Opportunities for Public Private Partnerships in Northern Ireland and the Executive’s consultation process on ‘Financing our Future’.

The consultation exercise was launched on 21 May and is due to conclude this Friday. It has been based on the report of the working group that was set up to review the opportunities for public-private partnerships (PPPs) in Northern Ireland. The group’s remit was to consider all funding opportunities to assist in addressing the major investment deficit in our public services.

We must take a strategic approach towards investment in order to maximise the return from the resources at our disposal as regards quality and level of service provision. The Executive’s reinvestment and reform initiative offers an opportunity to accelerate investment in infrastructure and reform service provision.

Through it we can make a difference to the quality of our core infrastructure. A long-term strategic approach must replace the piecemeal ad hoc approach of previous years.

A key element of the initiative is the creation of a strategic investment body, and we will introduce legislation soon to establish it. The body should combine the best expertise from the public and private sectors. Given the current investment deficit and the ad hoc way in which the issues had previously been addressed, it is vital that strategic infrastructure investment be viewed in the long term. The strategic investment body will advise on the best use of the financing sources available to us from the public or private sector. It must have the necessary expertise and resources to serve the Executive’s programme of strategic capital investment. We want to ensure that projects are taken forward by the most appropriate method. We want to achieve high-quality public services to maximise the return on our limited resources and encourage investment additional to that funded by the public purse.

The initiative also provides for the possibility of borrowing, and that would need to be paid for from local revenue sources. The option to borrow should provide a means by which we could accelerate capital investment. There are clearly important links with the review of rating, on which public consultation concludes today.

We announced the reinvestment and reform initiative on 2 May and the initial allocations infrastructure projects on 2 July. The initial allocations will secure significant progress on projects including the regional cancer centre; the widening of the M1; improved investment in water, sewerage and road infrastructure and the replacement of 20% of mobile classrooms. The consultation exercise has been based on the Executive paper ‘Financing our Future’.

The reinvestment and reform initiative changes the context within which policy on PPPs will be formulated. No single solution, be it borrowing, PPPs, or the more traditional public expenditure, can be hoped to meet our need alone. Different funding and procurement approaches should provide solutions in different circumstances. Dependence on routine public expenditure alone to fund infrastructure would make it much less likely that we could secure the range or quality of public services required.

Public-private partnerships are one option for helping us to deliver the reinvestment and reform initiative. We must also ensure that all our assets are put to best use. The initial Executive response to the PPP working group report noted that the group’s findings were broadly consistent with the view set out in the July 2001 report of the Committee for Finance and Personnel. Both reports stressed the need for an investment strategy, a central investment board and value for money. The Executive will consider those points in greater detail, and they could be brought to bear through the proposed strategic investment board.

The working group report includes a helpful analysis of the scale and nature of the investment deficit, its causes and how best to address them. The group estimated that £6 billion would be required over the next decade to cover our investment deficit. The working group developed a definition of public-private partnerships to suit our circumstances. It states:

"A Public Private Partnership is generally a medium to long-term relationship between the public and private sectors (including the voluntary and community sector), involving the sharing of risks and rewards and the utilisation of multi sector skills, expertise and finance to deliver desired policy outcomes that are in the public interest."

That definition of public-private partnerships reflects its wide-ranging nature and its ability to encompass some potential PPP forms. It is important to emphasise that all types of PPP should be considered. There is scope for new thinking and untried models to be developed.

Public-private partnerships have been developed in some public sectors in Northern Ireland, particularly in health and education. Some 25 projects have been developed across several sectors to the value of nearly £190 million. A further 25 projects have been put out to tender and planning with an estimated capital value of £500 million. Earlier this year, I visited the new Balmoral High School, which is one of the projects that have been completed.

The headmaster told me that, although initially he had had considerable problems with this form of finance, he had had a greater input into the design of the school than he would have had under the normal public expenditure model.

One consequence of PPP development is that managerial problems have been shifted from teachers to the private body. It is commonly said that, in the past, head teachers spent 25% of their time on teaching and 75% on administration. The PPP approach has reversed those percentages; head teachers now spend only 25% of their time on management, without suffering any significant loss of managerial control. Those are just some examples of the benefits of PPP.

Whatever model is adopted, we are limited by the amount of funding that is available. The working group emphasised the crucial distinction between financing and funding of public services. Funding is defined as the source of public revenue to pay for the service, whereas financing is the means used to raise the capital needed for investment. The new borrowing power and PPPs represent alternative options for the financing and delivery of public services — not their funding. Whatever model is chosen to service our investment deficit, it must be paid for. None of the available methods is free; they all require a source of public funding.

In developing a policy framework, we must ensure that our available funds are efficiently and strategically invested to obtain best value for money. Increased investment must be balanced with optimum returns in order to ensure that we achieve the required quality of public services. As the working group’s report emphasised, the level of available funding would have to increase significantly in order to provide the required level of public services and reduce the investment deficit.

Given the limitations of available infrastructure funding, we must look hard at all possible sources of ongoing funding for essential infrastructure, but we must also utilise the funds at our disposal to best effect.

The working group concluded that several benefits could be realised from PPP, but there are also several areas of concern. It is important that we recognise and address such concerns when developing our policy. Public-private partnerships are not a panacea for our financing and funding problems, but they can potentially improve efficiency, provide value for money in service delivery and secure lifetime asset maintenance. They also offer one way of achieving earlier service delivery.

Ultimately, we must recognise that PPPs should be chosen as a means of providing public services only where they offer better value for money than conventional procurement methods. The strategic investment board should have an important role to play in advising Departments of the most appropriate means by which to develop individual investment projects.

The Executive recognise the centrality and complexity of the issues of equality and public-sector employees. Those issues were addressed in the working group’s review and in the subsequent consultation exercise. The Executive share those concerns and will address them when formulating policy in that area.

The consultation process lasted 18 weeks, which is longer than usual. We wanted to ensure that interested bodies and individuals were offered as much opportunity as possible to voice their opinions and concerns on the issue, and thus inform the policy process. We endeavoured to have a consultation process that was as proactive as possible. It encompassed debate in the Assembly and discussion with Committees, together with three public meetings that were attended by Ministers. The public meetings were well attended, and a wide range of views was expressed. The Department of Health and the Northern Ireland Council for Voluntary Action (NICVA), among others, held seminars to discuss the report on PPPs. That supplemented the Executive-led discussions.

The Executive encouraged all organisations and individuals who have an interest in the matter to respond. The review and the consultation involved a social partnership approach. Our policy-making process must be inclusive. Both the review and the consultation exercise included representation from the public, private, voluntary and trade union sectors, and their contribution will be invaluable in assisting the Executive to formulate their policy in that area. We are keen that Members’ views should be brought to bear in formulating our policy framework. We realise the importance of the issue for the future provision of public services, and we are all aware of the current deficiencies in public service provisions. All of the options available, as expressed during the consultation and today’s debate, will be considered when addressing the inadequacies. We welcome the opportunity for an informed debate on how best we can proceed to address the key issues — considering the options for public-private partnerships and how we might most effectively avail of them.

The views expressed today, and the responses to our consultation, will contribute to our work on a policy framework for public-private partnerships in the coming weeks.

Francie Molloy (Sinn Féin, Mid Ulster)

I thank the Speaker’s Office, staff and Members for their expressions of sympathy following my recent bereavement.

The Committee for Finance and Personnel welcomes today’s debate on public-private partnerships (PPPs), and I thank the working group for the report that has led to this debate. The First Minister outlined in detail his response to the report and commented on the role that the Committee has played.

The Committee tabled a motion on 3 July 2001 on its report and the recommendations from its inquiry into the use of public-private partnerships. I recognise that the scope of the original debate has moved on, and since the Chancellor of the Exchequer’s announcement on the reinvestment and reform initiative in May 2002, it is now focused on public-private partnerships. Taking that into account, the Committee and I see this debate as an opportunity for the Assembly to consider the full range of procurement and financial options available to the Executive on the wider issues associated with whatever method is selected.

I wish to begin by pointing out some of the figures given to the Committee on the infrastructure and public service deficits. All Departments require funding of £4 billion to £7 billion for capital projects in the next ten years, depending on the range of proposals and whether they are accepted. The bulk of the deficit is in three Departments — Education, Regional Development and Health, Social Services and Public Safety. Those Departments have programmes to deliver the priority areas in the Programme for Government. Some £6·5 billion of the infrastructure and public service deficit lies there, and those Departments have a shortfall of £5 billion in their capital budgets over the next ten years as regards the projects identified as requiring capital investment.

Assuming that departmental capital budgets remain the same, the Department of Education will have £1 billion conventional public finance available to meet its assessed need of £2·1 billion over the next ten years. The Department of Health, Social Services and Public Safety will have £0·6 billion available to meet its assessed need of £2 billion over the next ten years, and the Department for Regional Development will have £1·8 billion available to meet its assessed need of £4·4 billion over the next ten years.

In May, the Chancellor of the Exchequer made a borrowing facility available in the reinvestment and reform initiative, and £125 million was made available for the financial years 2002-03 and 2003-04. It is worth taking into account that that is approximately one third of the underspend over the past year. The Executive used those resources, some of their own in the Executive programme fund for infrastructure, and underspend resources carried forward through end-year flexibility. In total, £270 million was allocated for capital projects in the next two years. Those allocations will advance other projects in the pecking order for consideration for funding.

The Committee is grateful to the Minister of Finance and Personnel for the early copy of the draft strategic investment and regeneration of sites Bill. The Committee notes that the Bill will be introduced by the Office of the First Minister and the Deputy First Minister and that the Committee of the Centre will undertake the Committee Stage. The Committee will want to consider the relationship between the strategic investment body, the procurement board and the Department of Finance and Personnel. The Committee will also want to be assured that the significant costs of those initiatives will represent good investment and value for money.

It is easy to advocate that we accelerate the capital investment programme. All Members would like that to happen. However, as the Minister said, infrastructure and better public services must be paid for. Many questions about that investment remain unanswered, and the Assembly faces many problems. Which projects will be selected? How will they be prioritised? How will they be financed? How will the financial options be funded? How will funding affect future resource position manoeuvrability? Is the project flow realistic and achievable by the construction industry? That matter was dealt with in the Committee’s report. Will projects be properly managed, guided and monitored to ensure the efficient use of resources?

The Committee’s report made several recommendations. It considered those issues during its inquiry into the use of public-private partnerships. It investigated a range of financial models, such as bonds and not-for-profit organisations. It also heard evidence from the advocates and opponents of public-private partnerships. The Committee concluded that the preferred financial option is public finance. However, it still sees a role for public-private partnerships in the right circumstances. It concluded that core needs had to be taken into account and that all contracts had to be properly investigated and fully secure.

However, the Committee also decided that public-private partnerships were not the only game in town. One of its recommendations in July 2001 was that a unified, service-wide investment strategy be established for financing and managing the infrastructure deficit. The Committee envisaged that expertise would be brought together to create a centre of excellence, which would ensure that contracts were fully investigated; that one Department would not overlap another; that each Department would not do its own thing; that a partnership would be established to ensure a long-term investment strategy, rather than simply the short-term secondment of civil servants from one branch to another; that the Minister would be given responsibilities for leading and delivering the investment strategy; and that a social partnership would be created to support it. The Committee also envisaged that it might be similar to that which exists in the South of Ireland, where trade unions play an important role in putting together a social partnership.

The working group will have an important role. The strategic investment body will have the role that is described in the report. Its job will be to ensure that public-private partnership contracts are put together properly. The Committee would welcome an explanation from the Minister of the relationship between the strategic investment body and the procurement board.

The Committee for Finance and Personnel will soon provide a substantial response to the Executive’s consultation exercise. As the basis of its response, a detailed analysis has been carried out to compare the recommendations of the Committee’s report that was published in July 2001 with those of the report of the public-private partnership working group, which was published in May 2002. The Committee will meet on 17 September 2002 to agree a formal response to the First Minister and the Deputy First Minister. The public-private partnership working group has built upon the findings of the Committee’s inquiry. Progress has been made in several areas, including the statement of principles and setting the future direction of PPPs.

When he launched the consultation process, ‘Financing Our Future’, in the Assembly on 21 May 2002, the Minister of Finance and Personnel correctly pointed out that the reinvestment and reform initiative, which was announced in May 2002, provides a new context for consultation. The draft Strategic Investment and Regeneration of Sites Bill provides some detail of how the investment body will relate to Departments. That relationship will be key in the Executive’s development of an effective investment strategy. The Committee is interested in hearing from the Minister whether the reinvestment and reform initiative will mean that less use is made of public-private partnerships and whether the low-cost loan from the Treasury will have any implications for the use of relative-cost private finance. The Committee’s report recommended public finance as the best way to secure public administration. If new money is available more cheaply than are PPPs, will it be seriously considered?

The Committee has been disappointed by the slow progress in developing the high-level investment strategy that the strategic investment body took so long to set up. The need for an overarching investment strategy is all the more important given the new borrowing facility and the fact that there are now several games in town. Clarity is required as to the relationships between the Departments, the strategic investment body and the Department of Finance and Personnel, and their respective roles in relation to PPPs.

Although the Committee recommended that a Minister lead the investment strategy, it remains unclear where responsibility lies. It is important that one Minister or Department has an identified lead role so that everyone knows where they stand.

During the inquiry, the Committee found it difficult to determine evidence of value for money. That is not to say that there is no value for money, but it did not come out during the inquiry. There may be good projects that will deliver value for money in the long term — some of the contracts are still in the very early stages — but there may also be evidence to suggest that they will not.

Since the report in July 2001, Departments have retained their capital projects and pressed forward with their own PPP projects, without the significant degree of strategic oversight or planning from the centre, which was one of the inquiry’s recommendations.

I will conclude with the main questions that the Committee for Finance and Personnel wants answered. What further detail is available on the reinvestment and reform initiative? What are its implications for funding from the departmental expenditure limit? When will a strategy embracing all the financial options be delivered? What are the relationships between the Departments, the strategic investment body and the procurement board? What are their respective roles as regards PPPs? Will responsibility for investment be delegated to a specific Minister? Do the Executive have further evidence of the value for money achieved by PPPs? Can some light be thrown on the capital resources currently held by Departments? What short-term capital expenditure plans and PPP plans do individual Departments hold, and how do they fit in to the strategic investment plan? Has any assessment been made of the longer-term funding implications of those projects?

I thank the Ministers for the debate. I urge the Committees to take on board the points that have been made and to consider how financing and funding decisions will impact on future Programmes for Government and Departments in the longer term.

Patricia Lewsley (Social Democratic and Labour Party, Lagan Valley)

Our main goal in this matter should be to attain social justice and sustainable development. Public services cannot be seen as a mere safety net. Rather, it must be accepted that a vibrant economy and a healthy society cannot be built unless we lay essential foundations. Investment of our shared resources will be of benefit to all.

Most Members will agree that the issue is not whether we need to find more money for public services, but how to find it. We must explore the options available to generate greater resources for social and economic development and seek to raise the bulk of the required resources through directing graded taxation. However, spreading society’s financial burden fairly, according to means, is not an easy task. The limitations of political powers in the North mean that we cannot raise enough money in that manner.

Everybody is aware that Northern Ireland faces a huge infrastructure problem and needs to examine these issues. Even the most vocal critics of PPPs accept that we need to make significant improvements in roads, the transport system, hospitals, schools and college estates. Yet when we take our own resources into consideration, we simply do not have enough funds to address those issues in the traditional way. Therefore, it is logical to conclude that we need new approaches and ideas when considering our capital needs. In that context, the ‘Financing Our Future’ review must be welcomed. We must have mechanisms in place that can guarantee public benefit in terms of value for money, transparency and accountability. Such schemes must be compatible with our commitment to social justice and the targeting of social need.

There has been criticism of PPPs, and more will probably be expressed in this debate. It is proper to acknowledge that some of the fears are genuine and should be addressed. For instance, do workers face job insecurity after the establishment of a PPP? If so, we must take that on board and, if necessary, tighten legislation to protect workers. The stability and the future of public-sector employees must remain paramount, and I hope that that will be given priority.

Given that more than 20 PPP projects have been completed in Northern Ireland, it is now time to look closer to home and consider what can be learned from the achievements. Simply to examine the UK experience is not the most appropriate way of establishing which measures are necessary to achieve a successful outcome in Northern Ireland.

We must ensure that the private sector does not have undue influence in determining which projects are suitable for partnership financing. Government policy and strategy must remain in the hands of the public through their representatives, and not become subject to the needs of company shareholders.

The reinvestment and reform initiative seeks to establish a strategic investment body to examine strategic infrastructure and investment in Northern Ireland and to suggest innovative approaches to managing and financing the Executive’s infrastructure programme.

We must develop ways of building innovative partnerships across society that can fund the necessary development. We must examine new and different public-private models as well as other alternatives, from Government bonds to options involving the voluntary sector and not-for-profit organisations. That would preclude concerns about benefits for shareholders, plough profits back into services and promote sustainability for provider organisations, many of which provide valuable services to the public.

New models of financing must genuinely lever in additional finances for public services, rather than merely substituting one mechanism for another without clear long-term benefits for the public. If PPPs are to work, they must not replace public spending but add to its capacity. We must seek to combine the best models of social partnership with the best models of financial partnership to deliver better public services to the whole community.

Peter Weir (DUP, North Down)

Much has been made of the changed environment since the last debate on the matter in July 2001, when the Committee for Finance and Personnel published its report on public-private partnerships. Much has changed — the reinvestment and reform initiative has been introduced, and proposals have been put forward to establish a strategic investment body. We have witnessed a poacher-turned-gamekeeper transformation. The Deputy Chairperson of the Committee at that time, who shared the Committee’s view, has now risen to become one of the people who will help to implement this. There are also the proposals in the ‘Financing our Future’ document.

However, while there have been changes at that level, much has remained the same. We are still faced with a large infrastructural deficit, which is as great as it was in July 2001. It is clear that although a range of options could be used to make good that deficit, PPPs have a large part to play. PPPs are not an end in themselves, but a means to an end to ensure that we get the best services. Some would argue that in our efforts to finance that massive infrastructural deficit, not enough is being done to reduce administration costs in Northern Ireland. Leaving that argument aside, it is important that we get the best value for money in our projects and that the right structures be in place.

In July 2001, the Committee for Finance and Personnel established a range of principles, structures and recommendations, which have remained — more or less — the same. Although it may not be appropriate to pat ourselves on the back, many of the principles established by the Committee are as relevant today as they were a year ago. However, the manner of their implementation has been a mixed bag. Today, we are at the interim stage, and we should therefore indicate what we wish to see emerging from the consultation and what should, ultimately, be carried forward by the strategic investment body. We are still at the recommendation stage.

There has been some movement, such as the public-private partnerships working group that has already been referred to. There has also been movement in setting out the principles of PPP projects; in technical guidance; on the public service comparator; and in the definition of PPPs. However, the Committee feels that progress has been slow in several areas. There were a couple of assumptions running through the Committee’s recommendations. First, it was assumed that it is important that we learn from others. I appreciate that it is not simply a question of taking what has happened in England or the Republic of Ireland and transferring it to Northern Ireland. However, as I indicated at the time, a wise man learns from his mistakes: a wiser man learns from someone else’s mistakes. It is important that we apply the lessons learned from what has taken place elsewhere, and that from the beginning, through the strategic investment body, we take the opportunity to get the structures right. That is vital.

One principal area of concern not properly answered was the recommendation that one Minister be given overall responsibility for driving the initiative. For example, the motion stands in the names of the First Minister, the Deputy First Minister and the Minister of Finance and Personnel. I am sure that both Departments have valid reasons to do that, but it is not clear which Department will have responsibility for spearheading the initiative. It is vital that that point is clarified soon.

It is essential that we get the powers of the strategic investment body right from day one. Moreover, there is the matter of the relationship between the strategic investment body, public-private partnerships and the current procurement body. It is important that our structures and practices are correct. According to the evidence that the Committee received, everyone agrees that a strategic investment policy is necessary, and that a strategy must be in place to implement the policy. However, when the powers of the strategic investment body are determined, and proposals are in place for its practice, we shall be in a better position to judge whether that has been achieved.

Furthermore, in the light of the evidence received, and since Northern Ireland has always been behind the rest of the UK and other places, it will be especially important that an appropriate flow of deals is achieved as regards proposals on strategic investment and public-private partnerships. We must not have a situation in which so many projects come on to the market at the same time that companies are overwhelmed and are unable to deal with them, or that they come through so slowly that it will be uneconomical for local companies to bid for them. In such a situation, the level of expertise required for one project would mean that costs were not suitably apportioned among several projects. We must ensure that the balance is correct.

The strategic investment body will provide the opportunity to pool resources, especially those of the Civil Service, so that areas of expertise can be concentrated. A level of expertise will be developed, for example, in contracts, and we shall be able to learn from the range of projects available. A review of legislative powers will be necessary to ensure that no impediment to contracts is caused, for example, by the need for powers that do not already exist.

I am reluctant to comment further because the Committee for Finance and Personnel will make its full response available soon. Today’s debate is on an interim level, and to ensure that the right conclusion is reached, the Executive must clarify a range of issues.

Such is the scale of investment needed, through public-private partnerships and other means, that if the issue is handled wrongly — and it is to be hoped that it will not be — the people of Northern Ireland will pay for our mistakes for generations to come. It is, therefore, vital that lessons are learned now; that, in the face of opposition, flesh is put on the bones of the strategic investment body; and that the initiative is got right at that stage.

I urge the Ministers responsible to consider the Committee’s report and ensure that its proposals and recommendations are considered, so that the necessary lessons are learnt and they get it right from day one.

Seamus Close (Alliance, Lagan Valley)

The Assembly last debated PPPs in July 2001 in response to a report by the Committee for Finance and Personnel. It is worth emphasising that the Committee made several important, pertinent and salient recommendations on the implementation and progress of PPPs. Today, we are debating a different report that does not take away from those recommendations. It builds on them and is a weightier report. It is not more important, and it does not point in a significantly different direction. It simply deals with the matter in a more colourful way.

It is to be regretted that, in the past fourteen and a half months, progress on PPPs has been slow, and that should be subject to criticism. Even after fourteen and a half months, as the Chairperson of the Committee for Finance and Personnel has said, several significant questions have yet to be answered properly, and out in the big, bad world, the problems continue to increase.

In his introduction, the First Minister said that it is important to hear Members’ views. With due respect to the First Minister, if he is looking for my views, I refer him to Hansard Volume 11, No 10, pages 399 to 401 of 3 July 2001. Those remain my views. I could waste the Assembly’s time by regurgitating them but, because nothing has changed, I shall not. The Executive must accelerate the snail-like pace that they appear to have adopted. Our constituents do not want to see more reports. They want, and need, to see action, and that should not be interpreted as my saying that we should rush into PPPs willy-nilly. We cannot be accused of doing that.

The recommendations give the vital building blocks that must be put in place — they should have been put in place before now. However, when I read the report, I wonder whether even a strategic plan, upon which to build, exists, and therein lies my major criticism.

I hope that we shall get answers to those vital questions as a result of today’s debate; who knows, the Minister might answer them in his summing up. The Chairperson of the Committee for Finance and Personnel concluded his summary by posing fundamental questions that must be addressed urgently. The Committee feels that, if we do not get answers to those questions, the matter must be driven forward, and one Minister must be given control of doing so strategically and positively. If that decision has not yet been made, we must ask where we are going.

I hope to lay to rest the myth, which can arise through debates such as this, that PPPs per se can solve the funding deficit. That is a load of rubbish: PPPs do not solve the funding deficit, and I am delighted to see the Minister of Finance and Personnel nodding in approval. The only way to solve a funding deficit is to increase revenue or reduce expenditure. Public-private partnerships are an alternative way to provide facilities.

Fourteen and a half months ago, several Members said that PPPs were not a panacea and were not the only show in town. In those fourteen and a half months, the reinvestment and reform initiative has clearly demonstrated that we should recognise that fact. Public money is the cheapest, and that must be borne in mind. If we decide to use the strategic investment board or other bodies, they must make clear decisions about the selection and prioritisation of the different deficits that must be funded, such as schools, roads, water, et cetera. We must see that prioritisation carried out, and we need it done yesterday. We certainly need it before another fourteen and a half months elapse.

Jane Morrice (NIWC, North Down)

When the First Minister and the Deputy First Minister originally announced the establishment of the borrowing facility — the reinvestment and reform initiative that Mr Close mentioned — I said that a large "handle with care" stamp was necessary; that same stamp is necessary for PPPs. That message has been reiterated by all contributions to today’s debate.

The public are still confused by pick-and-mix financial policy. They make all sorts of assumptions: that PPPs are confined to the private-finance initiative, which in fact finances only major capital projects, and that PFI offers something for nothing in the context of public expenditure restraint. However, no matter how projects are financed, in the absence of user charges they remain funded by the public purse. Members have made that point repeatedly today. We risk locking the public sector in Northern Ireland into long-term financial commitments that offer poor value for money for the taxpayer. That is the argument of short-term pain versus long-term gain.

It has been recognised today that the infrastructure in Northern Ireland, specifically for regional development, health, and education, is under tremendous pressure and that dependence on public expenditure alone means that the range and the quality of services provided will be insufficient, both now and in future. PPPs may be one way to bridge the gap.

The assertion that the private sector has skills that make it inherently more efficient than the public sector is not always backed up by evidence. If this were the case, far from there being a preference for traditional procurement, there would be a preference for private sector solutions, with no reference to public sector comparators.

Principles and economics must also be considered. Mr Close stated that public money is always the cheapest money, and we should not forget why that is so. Public money should always have the good of the public at heart, which is why it is the best and cheapest way to progress. Some people think that a public service that is funded for profit by the private sector is incompatible, and that Government should provide schools, hospitals, roads, public transport and sewerage systems. Are PPPs and PFIs a legitimate and cost-effective way to increase the pool of money that is available for those services? The dangerous approach of "buy now, pay later" cannot be overstated or ignored.

PPPs should be chosen as a financing option only when they provide better value than conventional long-term public finance. A holistic approach must be adopted, and an assessment of comparative costs must include the social and environmental impact as well as cost-effectiveness considerations.

We urge the Executive to give priority to the identification of long-term and dependable funding streams to sustain the valuable public services that the voluntary and community sector provides.

Patricia Lewsley and others spoke about the guarantees that are required for a level playing field for employees. Trade unions and Members have expressed fears that a two-tier workforce may emerge. Contractors are employing new workers on poorer terms and conditions than workers who have transferred from the public sector. Ms Lewsley also stated that the legislation must be tightened to take that issue on board.

PPPs have not been highly contentious in the Republic of Ireland, so the Executive should consider the Southern experience and take a broader view.

The partnership approach has been highly successful; for example, between local councils and the not-for-profit companies — the voluntary sector. That approach has been important to our communities, because PPPs are at the cutting edge and work successfully in the voluntary sector. Bryson House provides local councils with valuable expertise and information, and its kerbside recycling schemes are at the cutting edge.

Information on the ‘Financing Our Future’ consultation process and its implementation timetable would be appreciated.

Roy Beggs (UUP, East Antrim)

Northern Ireland has a huge infrastructure deficit, and different estimates have been made about its extent, which appears to be more than £7 billion over the next 10 years.

The Committee for Finance and Personnel indicated that the preferred source of finance is public finance, because it is generally provided at lower interest rates than those available through the private sector. We should address that important issue, because there would be no point in passing funding over to the private sector if that were the only consideration. However, it is not the only consideration. No one has claimed that we could finance our deficit of some £7 billion over the next 10 years from within existing public expenditure. We shall have to think outside the box and, increasingly, consider alternatives.

Public-private partnerships can bring benefits. We have heard about improvements in the design of schools, and about the ease of the management of ongoing maintenance arrangements. There are also benefits to be had from encouraging Departments and organisations to think outside the box. For example, Departments could perhaps be encouraged to share facilities with other Departments, and to increase the use of those facilities. That form of funding could increasingly encourage communal use, and a variety of other uses.

There are many ways to finance those activities. We have the traditional route of public expenditure; we have the private finance initiatives and public-private partnerships; and we now have the reinvestment and reform initiative. We should not be tied to any one route. We must consider each means of finance on its merits, and decide which one will best address the urgent community needs that exist. As Members have said, we must also bear in mind that, ultimately, as when someone takes on a mortgage or hire purchase agreement, it must be paid for. Therefore, we must consider the long-term implications of each option.

I concur with the Committee for Finance and Personnel’s view that PPPs can be a valuable tool and means of investment, and should not be ruled out. I welcome the First Minister’s comments, which reflect the views of the Committee, that value for money has to be demonstrated clearly over the life of a project.

I joined the Committee for Finance and Personnel only this year, and I have already heard favourable comments about public-private partnerships. For example, I heard some during a visit to the Scottish Parliament, and I also heard about positive experiences in the Republic of Ireland. I learnt that, on occasion, even though public finance was available, PPPs were preferred because of other perceived benefits.

Northern Ireland has had limited experience to date of PPPs compared with other UK regions. We need an advisory group that will consider in detail the overarching investment strategy. I expect that to be done by the strategic investment body.

How can we be assured that that body will have the necessary experience and expertise? That will be critical in determining options for funding. I agree with Patricia Lewsley that we should learn lessons from our existing PPPs. There should be a review of our experience to date. Although it is limited, there must be positive lessons to be learnt. I ask the Minister to ensure that any early lessons are built on in future decision-making.

I welcome the reinvestment and reform initiative and the move to establish the strategic investment body. However, further details are needed, and we need to keep the process moving forward. Ultimately, projects must be delivered. For example, the widening of the M1, which is of concern to many commuters, and the new cancer centre will be financed by the initiative. When will more projects be delivered, and when will our constituents begin to see more benefits from these initiatives?

Donovan McClelland (Social Democratic and Labour Party, South Antrim)

Before I call Mr Byrne, I remind the House that we must break at 2.30 pm for Question Time. Mr Byrne will be allowed to resume after 4.00 pm, if necessary.

Joe Byrne (Social Democratic and Labour Party, West Tyrone)

It is generally recognised that public investment needs are a major problem in Northern Ireland. That point has been highlighted since the Assembly came into being. Three Departments in particular — Education, Health, and Regional Development — have major capital investment needs, and we have suffered major handicaps in those areas over many years.

Public resources are insufficient to meet those capital investment needs, and that is regrettable. However, that is the reality that the Assembly faces. Most parties would like to see public capital needs provided for through the public purse, but, unfortunately, that is not possible under the limited devolved Budget. The big question is whether private-finance capital sources can be attracted to finance capital budgets or projects in those areas.

There have been several private finance initiative (PFI) projects, and, more recently, public-private partnerships in Britain and, indeed, Northern Ireland that have resulted in new schools, colleges and offices. That has brought welcome development to different localities and communities. However, it is fair to say that there has been some genuine concern and criticism of how some PFIs have worked, including the accumulated cost of servicing the payback on some projects. Many trade unions are greatly concerned about how workers are often asked to pay a price for such projects.

One of the key principles is value for money, which must be crucial in assessing a PFI or public-private partnership project. The rate of return on a private finance initiative must be sufficient, but not excessive. There has been genuine criticism of some of the excessive returns in some projects, and the rate of return should reflect the prevailing safe loan capital environment — the repayment is assured to the public purse, so that risk is limited and controlled.

(Mr Speaker in the Chair)

The reinvestment and reform initiative outlined by the Office of the First Minister and the Deputy First Minister and the Chancellor of the Exchequer in May is a welcome proposal that can be used to get necessary, upfront capital investment money for infrastructure projects. The strategic investment board has obvious merit in facilitating private finance schemes for public investment projects. The public wants to see new schools and hospitals as soon as possible, and there is a great imperative that private finance schemes should be processed in a more efficient and effective way. There is genuine concern that the entire administration of projects is long-winded, cumbersome and leads to excessive costs.

John (Speaker, Belfast East)

It would be unfair to ask any of the other Members to start a speech for the sake of a few seconds, only to have to interrupt themselves in full flow. The House will take its ease until Question Time, which is in less than one minute.

The debate stood suspended.

John Kelly (Sinn Féin, Mid Ulster)

Go raibh maith agat, a LeasCheann Comhairle. It was heartening to hear the First Minister say earlier that private finance initiatives (PFI) or public-private partnerships (PPP) are not a panacea and to hear other Members say that they are not the only horse or show in town. I was afraid that those of us who opposed PFI might be accused of being Luddites.

The Conservative British Government of John Major launched PFI in 1992, and the original motivation behind it was to reduce public expenditure in Britain at a time in the early 1990s when public borrowing was perceived to be out of control.

The British public sector budget had a surplus of £20 billion in 2001, but that did not inhibit the uncontrolled progression of PFI. One would expect that, with that huge surplus, the critical issue of public expenditure would be well under control. However, it seems that PFI has become a means of replacing public expenditure rather than adding to public services.

There are enormous questions around PFI that have not been studied, answered or resolved. Everyone seems to take the view that "if the money is there, why not use it?" However, they have not considered the serious consequences. The First Minister said that he had met school teachers and others who considered PFI to be praiseworthy, as it allowed them more time to run their schools rather than be concerned about replacing old buildings, about the fabric of the building, or about looking for new buildings.

However, the British Medical Association said that, apart from the evidence on beds and doctor numbers, PFI health provision has led to questioning every service provided. As a result, prolonged and expensive treatments have been withdrawn, and care is concentrated on patients who are broadly healthy rather than on the chronically sick. Expensive treatments such as maternity and accident and emergency treatments are reduced. Those who can afford to buy insurance get private treatment, while those who cannot must wait for services that may never materialise. The number of people who die while on waiting lists for cancer care is a case in point.

In effect, PFI acts to put profit before people. It therefore acts to undermine the very foundations of socialised medicine and social services. That is at the core of my objection to PFI. Trade unions and workers in Scotland have successfully campaigned on the basis of their objections to keep workers out of PFI contracts so that they cannot be transferred to the private sector against their will. In Wales, ancillary workers such as cleaners and meal workers have simply been classified as clinical staff, which enables them to remain in the public sector under existing rules.

Yet officials in the Northern Department of Education are reportedly still telling education and library boards that all PFI projects must include the transfer of employees, who are, once again, primarily cleaners and meal workers. The privatisation of workers is the greatest source of private profit in many PFI projects, and there must be a strong suspicion that those who favour PFI are concerned that their projects will not be attractive enough to the private sector unless workers are transferred or made redundant. The protection of public sector workers may be the most important immediate task of the campaign against PFI.

The unions here said:

"We are still gravely concerned with regard to the insufficient time and resources allocated to exploring alternative sources of funding such as Not For Profit, the USA experience, and Bond Finance."

Those unions are the most vocal against PFI. Seamus Close said that public money is cheaper, but public responsibility is a major factor in how we approach the notion of PFI. We are not against increased spending on public utilities such as schools, hospitals and roads. However, we question whether it is cheaper to do that through public funding or through PFI. I argue that the latter is certainly more expensive. The evidence so far will confirm the notion that privately financed projects are more expensive than those funded publicly.

The strategic investment body is, I believe, the driver behind PFI. Have the voluntary sector and the unions been consulted on the matter? There are issues of accountability and planning. Where PFI has been introduced, the planning of public services has effectively been carried out by private companies without there being adequate accountability. For example, hospital bed numbers are reduced to make plans affordable without any concern for the knock-on effects for other parts of the Health Service.

The British Medical Association has shown that the health trusts running the first 14 hospitals in Britain that were built under PFI will lose a total of 3,700 beds, and that, on average, bed numbers will decline by 31%. A study carried out by a consultancy company that works for the NHS trusts and the Department of Health found that every £200 million spent on privately financed hospitals would result in the loss of 1,000 doctors and nurses. In essence, PFI drains money away from areas that need it more, thus increasing health inequalities.

We must take a serious view of PFI. There must be more consultation, particularly with the unions involved. For example, the Irish National Teachers’ Organisation (INTO) has opposed PFI throughout Ireland. The INTO has not been adequately consulted about the effects of PFI’s introduction on its members. Nor has there been sufficient consultation with trade unions in services such as hospitals and the public sector bodies that we have mentioned.

The main conclusion is that PFI is one of the most important social and economic policy challenges that the Irish people face. Attempts by both the Dublin and British Governments to displace public spending on important social projects with private finance would have a damaging impact on the fabric of our society, both now and in the future.

Private finance holds out the politically attractive prospect of "free money" with which to provide popular projects now. That is an illusion, because the profit motive and the bargaining expertise of business, not to mention the possibility of corruption, mean that society will pay greater costs in the future for the "free money" that politicians seek today.

It will be difficult to explain to the people who seek and deserve new hospitals and schools that PFI is an unnecessary illusion, but the resources that are required to provide for social needs must be made available. The Government have those resources, or can get them through more equitable fiscal policies, such as fair taxation, or through alternative ways to raise money, such as the issue of bonds.

We should not be deluded by PFI or PPP into thinking that this so-called "free money" will solve all our problems. Until we have a proper and comprehensive consultation and a thorough examination of experiences elsewhere, we should exercise caution in coming to any definitive conclusions about the benefits of PFI.

Alban Maginness (Social Democratic and Labour Party, Belfast North)

The debate has been interesting, and there has been a degree of maturity in the Chamber on the subject of PPP, at least until Mr Kelly’s speech. Most Members have refrained from simply opposing a proposition out of financial orthodoxy. We have refrained from applying a sort of financial fundamentalism to public administration and finance. However, listening to Mr Kelly’s speech, I became confused as to whether he was a member of Sinn Féin or a member of some other party.

The reality is that the Sinn Féin Ministers are the most dedicated to PPP and PFI. They are the people who have most relied on PPP. It is a matter between Mr Kelly and his Colleagues in Sinn Féin as to whether those differences can be satisfactorily reconciled. Listening to his speech, I could not believe that they could possibly be reconciled. However, that is a political problem for Sinn Féin.

John Kelly (Sinn Féin, Mid Ulster)

I do not know whether Mr Maginness has been listening. I was attempting to say that we must look at PPP and PFI more critically than we have done before. I am, and will continue to be, a member of Sinn Féin — [Interruption].

Donovan McClelland (Social Democratic and Labour Party, South Antrim)

Order.

John Kelly (Sinn Féin, Mid Ulster)

What I have said does not conflict with anything that the Sinn Féin Ministers have done so far. All we are saying is that we should have a critical look at PFI, and not accept it, as the First Minister said this morning, as some kind of panacea.

Alban Maginness (Social Democratic and Labour Party, Belfast North)

I am sure that Mr Martin McGuinness and Ms Bairbre de Brún are relieved that Mr Kelly is now in line with the Sinn Féin approach to PPP and PFI. Alarm bells may not be sounding in Sinn Féin over Mr Kelly’s previous remarks, given that he has entered quite a strict qualification on his previous propositions to the House.

Members can check the record on that.

The SDLP’s position on PPPs is not one of financial orthodoxy or financial fundamentalism. We accept that there is a need for PPPs, but it is qualified, not absolute. Strict conditions should be imposed. It is important that there is value for money. There is no point in having PPPs if they only serve to indulge the private sector and allow it to make excessive profits out of the system of public finance.

It is essential that there be enhanced value for the money used in PPPs. That money must be additional to public finances, rather than a substitute for them. The SDLP also believes that the benefits of efficiency and effectiveness should compensate the public for the outlay. Our goal is to see high quality public services that give value to everyone. If PPPs do not deliver that extra efficiency and effectiveness, they are a waste of time.

The SDLP also wants to see the protection of workers’ rights in PPPs. We want transparency in how the Government decide on PPPs, undertake the selection process, and agree their contractual terms and conditions.

I share the reservations expressed by other Members in the debate, as does my party. I have reservations about the length, complexity and size of contracts. We want PPP contracts to be properly controlled; we cannot give the private sector contracts that allow it to evade proper responsibility.

The SDLP would like to see the Department of Finance and Personnel and the Executive explore the option of voluntary, or not-for-profit, bodies or companies for the public services. The Executive should also be exploring the use of bonds.

All types of enterprise involve some risk and some burden on our citizens, but there is nevertheless a variety of funding solutions for Northern Ireland.

As Chairperson of the Committee for Regional Development, I re-emphasise that there has been an enormous deficit in our road network, public transportation system and water service for the past 30 years. That deficit is grave and challenging, and both Members and Executive Ministers have a duty to address it. That duty includes exploring PPPs and PFIs to find out whether they can assist us in trying to remove that deficit so that we can rebuild public services in Northern Ireland. We need a cocktail of options, not only one source of public funding.

The SDLP also welcomes the creation of a strategic investment body, which will be useful in monitoring what is being done and in targeting what should be done. That body will be crucial in developing future public services.

The reinvestment and reform initiative, which was negotiated by the Deputy First Minister and the British Treasury, has been mentioned. Everyone welcomes that: it gives the Government greater flexibility as regards public finance. It will help us to rebuild public services and our physical infrastructure; however, it will not be the final solution to our problems. It will be of limited use because we need an income stream for it to be used effectively. It is essential that we do not overburden the ratepayer; that would be grossly unfair. Therefore, there is a limit to the reinvestment and reform initiative, and Members should bear that in mind. There are no easy options in relation to public finance. However, the SDLP believes that Members should explore as many aspects of public finance as possible.

We must explore PPPs and PFIs and apply them in the terms that I have outlined. In the Republic, PPPs and PFIs are used to rebuild the roads structure and transportation system. Some 1·2 billion euros, which is 20% of the road building programme, and 80 million euros, which is 13% of public transport, are PPP-based. Therefore, it is not only in Britain that PPPs are being used effectively. Our neighbours in the South also use them effectively, and we should explore that situation further. The Executive and the Minister of Finance and Personnel are right to come to the House to seek Members’ views. We should give a guarded welcome to the report.

Dara O'Hagan (Sinn Féin, Upper Bann)

Go raibh maith agat, a LeasCheann Comhairle. It is a pity that a good debate was marred by cheap shots from Alban Maginness — I suppose that has more to do with the fact that Members are in election campaign mode than anything else. The Ministers are, unfortunately, working within financial constraints, and the British Treasury is pushing us down a particular road.

Sinn Féin is not alone in voicing concerns about the move towards reliance on private finance initiatives and public-private partnerships to finance public capital building programmes and the provision of public services. Sinn Féin, through the Chairperson of the Committee for Finance and Personnel, Mr Molloy, instigated an inquiry into PPPs and alternative ways to finance much-needed investment in public services, such as in hospitals, schools and infrastructure. That inquiry found that the best way to finance public services was through the public purse, using funds generated by general taxation, and, fundamentally, that public services should remain under public control.

Unfortunately, neither the review of opportunities for PPPs nor the Executive’s consultation on ‘Financing Our Future’ have explored the full range of procurement and financial options. For example, the Irish Congress of Trade Unions (ICTU) statement to the review shows that the trade unions share that concern. It says:

"We are still gravely concerned with regard to the insufficient time and resources allocated to exploring alternative sources of funding such as Not For Profit, the USA experience and Bond Finance."

We can look for explanations from around the world, and we can call the initiative PPP, PFI or anything we want, but it is privatisation of our public services to a greater or lesser degree. The Assembly is being pushed into accepting that option. We must remember the key point, which is that the public sector can borrow at a more favourable rate than the private sector. We must look seriously at alternatives. I shall suggest a few, but it is for the Executive to examine them.

Alban Maginness (Social Democratic and Labour Party, Belfast North)

The Member said that PPP was a form of privatisation, but it is an alternative form of public financing. It is really an alternative form of borrowing by the Government. Naturally, it has implications for workers and those involved in service delivery, but we must ask whether we would have the specialist cancer centre without PPP. If that centre is established in Belfast, will you regard it as a privatised cancer service?

Donovan McClelland (Social Democratic and Labour Party, South Antrim)

I remind Members that they must put questions through the Chair.

Dara O'Hagan (Sinn Féin, Upper Bann)

We all recognise the difficulties and the constraints under which we must operate. Every Minister in the Executive is faced with the choice of whether to go down the road of PPP or PFI to provide essential services. My party and others argue that we should examine alternative means. We should not have to choose between PPP and nothing.

The people who carry out the review must look seriously at alternatives. For example, we should examine the possibility of the Assembly’s borrowing from external bodies such as the European Investment Bank.

Of course, that should be subject to sensible economic calculations, such as expected changes in exchange rates. The problem is that British Treasury rules disallow all public bodies here from doing that. In European terms, that is highly unusual, and it is a tight restriction on the autonomy of public bodies, without any economic basis. If special provisions can be made for the North to borrow from the British Treasury, which the 2002 Brown/Blair initiative introduced, they should be extended to allow the Assembly to decide when, where and from whom to borrow.

Public bonds were also mentioned. Why should the Assembly not be able to sell bonds to the public at a guaranteed rate of return over several years? Public bonds have been suggested as a possible way to fund the London Underground, and they are regularly used by US cities to fund major projects. Crucially for our purposes, the British Treasury recently waived its opposition to bonds in order to allow Wales to modernise its water supply through that source of finance. Glas Cymru, a non-profit public company issued £2 billion worth of bonds to buy the utility that supplies water and sewerage services to Wales.

Alban Maginness (Social Democratic and Labour Party, Belfast North)

Will the Member give way?

Dara O'Hagan (Sinn Féin, Upper Bann)

I have already given way; I prefer to speak.

Public bonds are preferable to PFIs because lower rates of interest can be charged and public bodies can borrow at lower rates. Most importantly, capital investment projects such as hospitals and schools remain under full public ownership and management. In the case of Glas Cymru, bond funding was accompanied by an innovative management incentive scheme. The emphasis is on reducing the cost of provision by ploughing savings back into lower user fees, and managers are paid bonuses if they reduce costs to the public. That is the opposite of PFIs, which give incentives to managers to realise profits at the expense of the public and the workforce.

All parties here should campaign to persuade the British Treasury that we should have tax-raising and tax-varying powers to give the Assembly much more freedom to operate financially.

John Kelly (Sinn Féin, Mid Ulster)

Does the Member agree with my earlier statement that, despite a surplus of £20 billion in 2001, the British Exchequer continued to use PFI to replace public expenditure instead of adding to it? Would she also agree, in case I am accused of being a Luddite by Alban Maginness, that professional associations, such as the British Medical Association, oppose PFI? It was described in the British Medical Journal as "perfidious financial idiocy" that could "destroy the NHS". The Chartered Institute of Public Finance Accountants, the National Audit Office and the House of Commons Committee of Public Accounts and the Health Committee have also criticised PFI in Britain.

Dara O'Hagan (Sinn Féin, Upper Bann)

I thank the Member for his intervention, and I agree with his comments.

Alban Maginness (Social Democratic and Labour Party, Belfast North)

I assume that tax-raising powers will involve taxing people’s income or taxation in some other form. Does the Member suggest that taxes here should be increased — that the taxpayer here should pay more than in other places?

Dara O'Hagan (Sinn Féin, Upper Bann)

I am not suggesting any such thing. Tax-raising and tax-varying powers would give the Assembly much more financial freedom to operate.

Unfortunately, PFIs and PPPs are central to the British Government’s plans for transforming the economy. They are inextricably linked to the Budget, the Barnett formula, the reinvestment and reform initiative, the strategic investment body, increases in rates, and the imminent introduction of water charges.

It is part of an effort by the British Treasury to tighten its control of our fiscal policy and to privatise public services. It is an agenda that is not being effectively resisted by an Executive dominated by the orthodox SDLP and UUP.

We do not have economic sovereignty; unfortunately it is subject to shrinking financial resources and unduly restrictive policy planning rules laid down by the British Government, which seriously compromise the capacity of the Northern Executive to meet local needs. The Assembly merely administers British Government policy within already set and extremely tight financial constraints and guidelines.

With regard to this report and ‘Financing Our Future’, I ask the Executive to go back to the drawing board, give us more alternatives, and let us try to be more imaginative in our approach.

Derek Hussey (UUP, West Tyrone)

I realise that the best funding that the Assembly can have is directly from the public sector. However, if I needed somewhere to live, but could not afford to pay for a house, I could rent one, take out a mortgage, or seek some sort of finance. There is a tremendous deficit in the overall infrastructure of Northern Ireland, which must be addressed. The Assembly must consider the current review of the possibility of PPPs and the different ways of using them.

I want to deal with four issues that arose during the debate. First, when the Committee for Finance and Personnel visited England, it saw that the Department of Health had a central unit that assisted health trusts to formulate contracts, including specifications, risk transfers, financial models, legal issues, and so on. It had a centre of excellence and expertise. We need to develop such a centre in Northern Ireland.

Many of our Departments have PPP units replicating costs, particularly for consultancy. Would it not be better to employ consultants to provide financial and legal expertise on a permanent in-house basis as in the Department of Health? The development of a centre of excellence, which could develop the necessary expertise, should be wholly cross-departmental.

Secondly, people have referred to the private sector gaining profit through PPPs. Naturally the private sector will not get involved in this for philanthropic reasons; it will seek to make a return on its investment. The private sector will make a profit regardless of whether we use conventional finance, the reinvestment and reform initiative or PPPs. However, we should not allow the private sector to lead the process or tell us when projects should commence. More especially, the private sector should not tell us which projects we should undertake. We must take the lead in all projects.

Thirdly, I want to deal with asset management. Mr Beggs and I have tabled questions about Northern Ireland’s assets. The public sector has many various assets and, perhaps, we are not making the best use of them. Some might not be suitable for the purpose for which they are being utilised; others may be doing nothing for us. For instance, are our schools big enough, and will they be big enough in the future? What is the true condition of our water and sewerage systems? How much will it cost to bring them up to standard? There is now a cost to capital through resource accounting and budgeting. We need to know whether the concept that public finance is cheaper than private finance still applies, or how much difference there is. For example, what authority do the Executive have to sell off their assets and to use the receipts for future investments?

Members of the Committee for Finance and Personnel mentioned that little or nothing has happened since the publication of its report on PPPs. I tend to agree, but we must acknowledge what has happened. At departmental level, capital expenditure plans have been ongoing, and PPP plans have been developing. The weakness lies in the lack of a strategic approach at central level. That shows the long-term effects of short-term planning on resource manoeuvrability.

Some of the capital budgets allocated to Departments in the 2001-02 Budget have also featured in end-year flexibility. Would resources available in 2001-02 have been better spent at 2001-02 prices rather than being earmarked as rolling-on, end-year finance?

We need to have a strategic investment body up and running with a remit of examining current PPP and capital plans. The Committee made visits to see how other areas dealt with PPPs; we must learn from the mistakes and, indeed, the experience of others. I know of capital projects where the design, build and maintain concept has been a very effective way of ensuring a first-class product. It is a logical idea; the people who designed and built the project will also maintain it, so they will not do a sloppy job that will cost a fortune to maintain.

Some people are concerned that some projects undertaken in Northern Ireland may be too small. However, there is no reason why we cannot consider bundling projects; that is, bringing projects together to create a larger package that is attractive to the private sector.

Billy Armstrong (UUP, Mid Ulster)

I welcome the opportunities for public-private partnerships in Northern Ireland. The motion is particularly timely, as it comes at the end of the ‘Financing Our Future’ consultation and in the aftermath of the Report of the Review of Opportunities for Public Private Partnerships in Northern Ireland.

The consequences of years of underinvestment in public services can be seen today clearly. Although not the solution in themselves, public-private partnerships have great potential to dispel our huge investment deficit, which is projected to increase over the next decade.

A form of public-private partnership is already operating in the agricultural sector. Today’s farmers do not have the same access to machinery or expertise as agricultural contractors do. A type of public-private partnership is formed whereby agricultural contractors employ farmers to do the job that they know best. People are taking the initiative to run a business. As my hon Friend mentioned, the people who erect buildings will maintain them and ensure that they are fit for their intended purpose.

Many European countries have seen a rise in the number of private finance mechanisms as opposed to traditional public procurement methods. However, it has been suggested that public-private partnerships are best suited to areas such as regional development to boost roads and general infrastructure, and for hospital development.

One concern about the use of public-private partnerships is the potential for unaccountability — partners could take on a mind of their own. The best way to prevent such unaccountability is for the public sector to maintain its monopoly of policy responsibility and control. However, the Government must co-operate with private bodies and work with those who often have excellent insight into what is needed.

Members are aware of the investment deficit in water and sewerage services. Problems have reached crisis point and can no longer be ignored. There have been many questions in the House on sewerage problems and the environment.

Derek Hussey (UUP, West Tyrone)

Mr Armstrong mentioned a crisis situation, suggesting that such crises are forcing us into forming PPPs. Interestingly, when we visited Dublin to explore this issue, one of the contributions was that PPPs were being approached there from a position of strength, with a strong economy. Rather than being forced into the situation, many of the capital projects that led them through to PPP/PFI were a matter of choice. I am sure that Mr Armstrong will agree that we must find a model that suits the system in Northern Ireland.

Billy Armstrong (UUP, Mid Ulster)

I agree that we have to explore all avenues and find a model that best suits the Northern Ireland economy. The crisis in our public services is highlighted by the Report of the Review of Opportunities for Public Private Partnerships in Northern Ireland. We must fully explore all alternative sources of financing. PPPs are seen as a more expensive option than conventional financing; however, they offer potential benefits. The working group noted that one advantage is that the contract mechanism ensures that the service is maintained to a specified standard during the lifetime of the contract. For example, penalties can be introduced for breach of contract.

No one solution, including PPPs, is likely to meet the many needs of Northern Ireland, which has higher levels of social disadvantage than the rest of the United Kingdom. I hope that this alternative source of finance for public services leads to the discovery of other such sources in Northern Ireland.

Sean Farren (Social Democratic and Labour Party, North Antrim)

I found the debate valuable and interesting. I compliment Members on their contributions, whether they were supportive, critical or sceptical of PPPs.

Concerns were raised about the form of consultation. The ‘Financing our Future’ report was compiled by a representative group, which consisted of members of the trade union movement, the business community and the voluntary and community sectors. A very intense process of discussion and engagement took place, not just within the group, but with others. All aspects of the issue have been thoroughly considered by the working party. In that respect, all interested parties had the opportunity to have input to the report. Members who have read the report will note the reservations expressed by representatives of various sectors about it. Notwithstanding those reservations, however, the report has received broad support.

Since the report was presented to the Assembly in May, public consultation has proceeded. I chaired a public meeting in Belfast in June and found it stimulating and thought-provoking. It was well-attended and the discussion was very lively indeed. Several key issues were highlighted that must be borne in mind. Many were echoed by Members in this debate. In particular, our social partners, including trades unions, expressed concerns about public-private partnerships.

The meeting also provided an opportunity to clear up some of the misunderstandings about PPPs held by the public and other representative organisations. A panel of experts from the public, private and voluntary sectors and trades unions provided assistance. Other public meetings were similarly constructed. The junior Ministers represented the Office of the First Minister and the Deputy First Minister, and assistance was provided by the panel of experts, which was drawn from those who had helped to formulate the report.

The meeting was followed up by a meeting last week to hear the views of a delegation from the Northern Ireland Public Service Alliance, one of the largest trade unions to represent public sector workers. Some were critical of PPPs, and all views will be used to inform the policy-making process on their use.

Furthermore, I recently visited one of our operational school PPP projects to hear at first hand how it operates. It proved to be a valuable visit that allowed me to see the benefits to teachers and pupils of new accommodation with modern and well-maintained facilities. I learned how education is provided in the school and how its ancillary services are delivered.

That visit added to the experience that I gained with the Department for Employment and Learning, which uses PPPs to provide accommodation in the further education sector. Members who are familiar with the project in the North-West Institute of Further and Higher Education in Derry and the Belfast Institute of Further and Higher Education’s recently opened Millfield campus, and who have kept an eye on projects to provide new accommodation in Omagh and Dungannon, will appreciate how such PPPs are being developed with the intense co-operation and involvement of the institutions and their representatives, as well as those who have brought the projects to fruition.

Despite our long experience of providing such facilities by the traditional route, we do not reflect on one striking feature of public-private partnerships: the close involvement of those who provide the facilities, buildings and services and those who use them. It is a partnership that potentially gives both sides greater influence and control over the project’s development, not just until the doors open but also throughout the lifespan of the project. That contrasts with the traditional procurement route, whereby a facility would be handed over and, in a sense, that would be that. If the facilities were not up to scratch, clients might have to chase contractors for a long time to ensure that things were put right. By highlighting the problems with traditional procurement, I am not arguing that PPPs are always the correct choice. However, I ask Members to reflect on those experiences, to familiarise themselves with projects, especially those in their constituencies, and to learn from people’s experiences.

Not everything has gone as well as was expected; however, that is also the case with traditional procurement. I hear frequently about bad experiences across the water from those who are more critical of PPPs. However, 25 projects have been delivered through PPPs in Northern Ireland, and none of the literature published by commentators in Northern Ireland that I have read contains detailed references to the local experience from which we could learn. I am not saying that we should not learn from experiences elsewhere. References were made to the South’s experience. We were ahead of the South. In formulating its PPP policies, the South took advice from us and now it is ahead of us. We must take pride in the good elements of our experience and learn from those projects in which the experience was not so favourable.

PPPs have several key features. First, there is a need to standardise contracts. The approach to PPPs has been ad hoc, which is inevitable during the learning phase. However, in recent months, the Office of Government Commerce issued new standard contract documentation, on which Northern Ireland Departments and the other devolved regions were consulted, with the publication of a revised edition of the standardisation of PFI contracts, which is an update of original Treasury guidance. It is to be used throughout the UK and represents a significant step forward in establishing a standard approach to many of the issues that arise in private finance initiative projects. If we decide to make further use of the PPP route, the guidance will ensure that the process leading up to the signing of contracts is more expeditious.

As part of their consultation, the Executive will consider the adoption of the guidance, which is vital to speeding up the procurement process, spreading good practice and minimising development and bidding costs for Departments and the private sector. We must draw on the experience of projects awarded elsewhere, not just across the water but in other countries with extensive experience. Some people suggest that PFIs have been confined to Britain, Northern Ireland and the South. I invite Members to read the relevant literature that shows the widespread use of variations of PPP in many countries with different cultures and economic and social circumstances.

The phenomenon, therefore, is not peculiar to these islands.

The PPP review clarifies the scale of the deficit in infrastructure investment; almost every Member who contributed to the debate acknowledged that fact. That deficit amounts to £6 billion across all programmes. Innovation and creativity are required to find ways to bridge the gap in order to meet the future infrastructure needs of the region. The way in which we organise ourselves to meet that challenge is critical.

No single solution — be it the use of PPPs, borrowing or more traditional public expenditure — is likely to meet all our needs. In this major consultation on the report of the review of opportunities for PPPs, comments are invited on the full range of possible sources of funding and how those can best meet our needs. Some commentators believe that PPP funding is being promoted as "the only show in town", and to some extent that was reflected in the debate. However, that is far from being the case. If PPP were to fail to deliver best value and high-quality services, or if it were to put workers’ rights at risk, I would not recommend it while I am responsible for the portfolio. PPP should be put into the context of the investment resources and possibilities that are now at our disposal.

The policy framework on the use of PPPs should take account of local needs and circumstances and ensure that continued use is made of the current capital budgets. Would that it could all be done through the current capital budgets. Members address this issue as though the current capital budgets can grow simply at the wave of a magic wand. However, when Members also suggest that we should have some fiscal autonomy such as additional forms of taxation at our disposal, they acknowledge that the only way to get additional money into the public purse is to ask the public to put it there. I trust that that is acknowledged fully when such points are being made.

It is recognised in the review that there are merits in the PPP approach to finding funding options to address some capital investment requirements. Other routes will be used for other aspects of capital requirement.

The Chairperson of the Committee for Finance and Personnel raised several issues, including a request for details about the reinvestment and reform initiative and the subsequent funding implications. The practical arrangements regarding the reinvestment and reform initiative are being developed, and the details of the borrowing must be settled with the Treasury. Borrowing to fund capital projects must be paid for from additional revenues.

When the reinvestment and reform initiative is advocated, it cannot be separated from the way in which that borrowing will be serviced. Mr Hussey illustrated that point well when he stated that when we make use of a borrowing facility to finance our homes, for example, we must be able to satisfy the lender that we have the capacity to service the borrowing. If we were to ask the Treasury to grant us a loan, we would be asking somebody else to help us to service that loan. That "somebody else" is the person on the street, whether he or she is in Belfast or elsewhere, or, as one of my ministerial Colleagues put it recently, is "the man in the Central Bar". I am not sure which bar he frequents, but he was referring to one of those kinds of establishments.

Borrowing to fund capital projects will have to be paid for from additional revenues. It would not be funded from the existing departmental expenditure limit, and the level of borrowing will, of course, need to be considered further by the Executive and the Assembly.

As has been mentioned by several Members, the relationship involving the strategic investment body, the procurement board, the Departments and the Department of Finance and Personnel, must be considered fully as we take forward work with the Assembly on the reinvestment and reform legislation and implement the initiative. It is vital that the various public bodies work constructively together to ensure that the infrastructure needs are met in the most effective and co-ordinated manner.

The idea of having a specific Minister with responsibility for leading on the investments was raised. No decisions have been taken on that matter, but Members should bear in mind that departmental Ministers have the responsibility of establishing priorities. We will be seeking advice from the strategic investment body as to the financing of the various projects. The House would not wish a single Minister or small group of Ministers to have the sole responsibility for driving forward a programme of investment that would take the prerogative of establishing priorities away from departmental Ministers. Therefore, teamwork is required, and that must be exercised in the Executive. Ideas will be brought forward when discussion takes place on the legislation associated with the establishment of the strategic investment body.

Mr Molloy asked about a strategy to embrace all the financing options. Some of the main funding issues, including the future of the rating system and the use of PPPs, are currently under public consultation. The Executive will consider the outcome of those consultations, and the work on the reinvestment and reform initiative, when setting their strategic plans.

The investment board will have a key role in advising on strategic planning of infrastructure investment, and we trust that its membership will provide the kind of experience and skills necessary to give the optimum advice to the Executive. In its membership, I expect the investment board also to reflect the interests of the social partners.

All PPP projects must demonstrate that they meet value for money criteria before being approved. The projects have long lives, and, as several Members mentioned, we must learn from experience and keep the projects under review to check that value for money is being delivered.

On the question, raised by Mr Molloy, of the capital resource held by Departments, the Executive are considering the level of capital spending as part of their work on the Budget.

As to the longer-term funding implications, which were also raised by Mr Molloy, the evidence from projects to date is that they are not an excessive charge, as they amount to less than 0·5% of the overall departmental expenditure limit resource Budget. Concerns were raised as to whether an inordinate level of debt might mount up, with the implication being that that would not be sustainable. That is a matter for the Executive, with the assistance of advice from the strategic investment board, to consider. It would be foolhardy of the Executive to simply extend borrowing beyond the capacity to service it. Indeed, if there were any attempt to do that, the Treasury would flash warning lights at a very early stage.

Mr Molloy and Mr Weir raised issues concerning the capacity of the construction industry, and deal flow, which are important points. One of the benefits of our strategic investment body is that it can engage with the construction industry when significant projects in which it is involved are being discussed to ensure that the deal flow can be managed. We do not want a situation to arise where we are signing up to projects that cannot be delivered. Members would be very critical if we were to do so.

Patricia Lewsley and Jane Morrice expressed concern about the potential of public-private partnerships to create a two-tier workforce. We are alert to that matter, and the working group dealt with it in some depth. It is important that we learn from our experience. No evidence of this phenomenon has emerged from our public-private partnerships. In our experience, no transferred workers have been made compulsorily redundant. The number of public-private partnerships is small, and —

Donovan McClelland (Social Democratic and Labour Party, South Antrim)

Minister, you have only two minutes left to speak.

Sean Farren (Social Democratic and Labour Party, North Antrim)

Many questions were raised, and if I do not touch on those in the time remaining, I assure Members that I will attempt to deal with them in writing.

Since the consultation on PPPs is the responsibility of the Office of the First Minister and the Deputy First Minister and of the Department of Finance and Personnel, I would like to thank Members for their views and comments on this important issue. We have had other opportunities to hear Members’ comments, and I am sure that they will continue to make their views known to us as the consultation progresses. This debate will help the Executive to shape the policy on the use of public-private partnerships, and to deliver value for money and high-quality services. I was pleased to hear the importance of both emphasised strongly in several contributions.

The ‘Financing our Future’ consultation has helped to promote wide discussion on PPPs with social partners, the general public and the private sector on their potential roles in meeting our investment needs. People have genuine concerns about PPPs, as the working group and the consultation exercise have highlighted. We in the Office of the First Minister and the Deputy First Minister and Department of Finance and Personnel share those concerns, particularly those relating to employee and equality issues. We are determined that the policy that we finally adopt on the use of PPPs will address those fears. We want to achieve a policy framework for the use of PPPs that helps to deliver an investment strategy that will provide a much-needed public sector infrastructure that finds broad support among all stakeholders and social partners.

I thank Members for the debate.

Question put and agreed to.

Resolved:

That this Assembly notes the Report of the Review of Opportunities for Public-Private Partnerships in Northern Ireland and the Executive’s consultation process on ‘Financing our Future’.

Change of Committee Membership

Donovan McClelland (Social Democratic and Labour Party, South Antrim)

There are four motions on the Order Paper, in the names of Mr Bradley, Dr McDonnell and Dr Hendron. As these are business motions, no debate should ensue. Therefore, I propose, by leave of the House, to put the Questions on these motions en bloc.