Tag Archives: North South Ministerial Council

The delays in approving WI business plans

I wrote on 26 November 2013, and again on that date, on 22 January 2014 and on 7 April 2014 about the extraordinary delays in having Waterways Ireland’s business plans approved by The Powers That Be. I saw it as poor practice that would make management’s job harder, with plans not being approved until very late in the year or even until after the end of the year to which they applied.

But, thanks to a statement by Jim Allister of Traditional Unionist Voice, I have been alerted to the possibility that the problem might be even greater than that. He points out that the NI Comptroller and Auditor General qualified the Resource Accounts of the Department of Culture, Arts and Leisure [DCAL] for y/e 31 March 2014 because the business plans for Waterways Ireland and the North/South Language Body were not approved in time. Jim Allister’s interpretation is perhaps a little overheated — the C&AG’s “irregular” becomes “illegal” and “unlawful” — so it’s worth looking in detail about what the C&AG actually said.

Sources

It’s very hard to find the DCAL Resource Accounts on the departmental website (which has a dreadful search engine) so here is a link [PDF]. I quote from them under the [UK] Open Government Licence [the link in the accounts omits a backslash].

Summary

In his Certificate of the Comptroller and Auditor General to the Northern Ireland Assembly on page 83 of the accounts, the C&AG, K J Donnelly, says:

Basis for qualified opinion on regularity

The Department is responsible for providing Annual Business Plans to the Department of Finance and Personnel in sufficient time to allow approval by the Minister of Finance and Personnel and the North South Ministerial Council prior to the commencement of the financial year to which the plan relates. As business plan approvals were not in place the Department has incurred irregular spend in 2013-­‐14 in relation to grants amounting to £3,213,000 paid to Waterways Ireland and £5,258,000 paid to the North/South Language Body.

The detailed account

The C&AG writes about this in more detail on pages 120 and 121:

2. Irregular Spend

2.1 The Department, along with the Department for Arts, Heritage and the Gaeltacht jointly sponsors Waterways Ireland and the North/South Language Body; both are North South Implementation Bodies set up under the North/South Co-operation (Implementation Bodies) (Northern Ireland) Order 1999 (the legislation).

2.2 The legislation requires each body to prepare an annual business plan that is subject to the approval of both Finance Ministers and the North South Ministerial Council. The legislation also states that the department may make grants to the body out of money appropriated by the Act of the Assembly and that such grants shall be of amounts and made on such terms and conditions as the department may, with the approval of the Department of Finance and Personnel, determine.

2.3 In order to comply with the legislation, sponsor departments are responsible for providing Business Plans to the Department of Finance and Personnel in sufficient time to allow approval by the Minister of Finance and Personnel and the North South Ministerial Council prior to the commencement of the financial year to which the plan relates.

2.4 Due to delays in the provision of Business Plans for some bodies, the Department of Finance and Personnel sought legal advice on the legitimacy of grants paid to the bodies prior to the approval of the plans. The Department of Finance and Personnel wrote to Accounting Officers on 23 May 2014 pointing out that failure to follow the outlined approval process in relation to grants made to North/South bodies has resulted in irregular spend.

2.5 The Department has advised me that given the timing of business plan approvals it has incurred irregular spend of £8,471,000 in 2013–14. This is made up of £3,213,000 in relation to Waterways Ireland and £5,258,000 in relation to the North/South Language Body.

Conclusion

2.6 As Business Plans have not received the required approval, there was no authority for this expenditure. I have therefore concluded that the expenditure was not in conformity with the authorities which govern it and qualified my audit opinion on regularity in this respect.

2.7 The Department of Finance and Personnel also indicated that if a department pays a cash grant to a North/South Body without the prior approval of the Department of Finance and Personnel then the department will have breached the provisions of the legislation and the expenditure is thus unlawful. However, there is conflicting legal advice on whether Department of Finance and Personnel approval has been provided in this regard. This is an issue which affects a number of departments and I would encourage this Department and others affected to further engage with the Department of Finance and Personnel to recolve this matter. I intend to keep this matter under review.

The Accounting Officer’s response

Peter May, the department’s Permanent Secretary, is its Accounting Officer. In his report he wrote about Governance Divergences arising in the Current Year on pages 79 and 80:

N/S Bodies

On 23 May 2014 DFP alerted departments which sponsored North South Bodies of concerns it had around the regularity and legality of grant payments made to these Bodies.

Regularity of payments — The Department accepts that N/S Bodies business plans  must be approved by the North South Ministerial Council in order for expenditure to be regarded as regular.

During 2013–14 DCAL incurred irregular spend in respect of grants to Waterways Ireland and the Language Body as business plans for these respective periods  have not been approved. It should be noted that draft business plans were in place against which the performance and budget of the bodies was monitored, and an approved Corporate Plan was in place for the period 2011–13.

Legality of payments — DFP has also raised concerns about these grants because they insist there is no record of formal DFP approval for the amounts of these grants or the terms and conditions under which they were made.

On the basis of legal advice, the Department considers the Estimates process and the negotiations between Finance Ministers on the efficiency savings show approval for the amount of the grant, while the Financial Memorandum provides the terms and conditions, which have not changed since 2005. This approach has been followed in good faith by DCAL on the basis of advice provided by DFP in 2009.

Full details of this spend is given Note SOAS 8.

SOAS8, on page 90, adds no useful information.

Jim Allister follows up

Jim Allister has two Priority Written Questions down on the matter:

AQW 35466/11-15 Mr Jim Allister (TUV – North Antrim): To ask the Minister of Culture, Arts and Leisure, in light of the Comptroller and Auditor General qualifying her Department’s Resource Accounts for 2013/14, whether she accepts that grant payments of over £8m made by her Department’s North/South Bodies were irregular; and if she will seek approval from the Department of Finance and Personnel for all such payments in accordance with the statutory requirements of the North/South Co-operation (Implementation Bodies) (Northern Ireland) Order 1999. [Priority Written] [04/09/2014 Awaiting Answer]

AQW 35541/11-15 Mr Jim Allister (TUV – North Antrim): To ask the Minister of Culture, Arts and Leisure whether she will place into the Assembly Library, a copy of the documentation received from the Department of Finance and Personnel (DFP), or otherwise recording DFP approval, which verifies the claim by her Department’s Accounting Officer in the Resource Accounts 2013/14 that DFP approval of grants to North/South Bodies was given for the amount of the grant at estimates or efficiency stage negotiations. [Priority Written]  [05/09/2014 Awaiting Answer]

WTF?

If I have understood him correctly, Jim Allister is most interested in whether DCAL was engaged in illegality; the department is, I think, rather defensive about the matter, but they can fight it out between themselves.

What interests me, though, is why DCAL could not approve the business plans in good time. Had it done so, and pushed them through the remaining regulatory hoops, it would have had no problem with either regularity or legality. Neither Corporate Plans, which cover three-year periods, nor draft business plans are acceptable substitutes for having the annual business plans approved in good time.

I don’t see, in either the C&AG’s or the Accounting Officer’s coverage, any explanation for the inordinate delays; they don’t say whether the problem is within DCAL, between DCAL and DFP or between DCAL and its southern counterpart, the Department of Arts, Heritage and the Gaeltacht. Wherever it lies, it needs to be sorted out.

 

NSMC explained

I reported here on April’s meeting of the North-South Ministerial Council (inland waterways flavour). I wasn’t there, though, and Carál Ní Chuilín was. Here is her account of the meeting, as explained to the Northern Ireland Assembly yesterday. There is much of interest, including the prospect of new byelaws on the Erne.

Members of the free state parliament don’t, as far as I know, get similar briefings.

It is slightly disconcerting to note that Jim Allister, the Traditional Unionist Voice MLA, seems to be the only person on the island, apart from me, to worry about delays in approving Waterways Ireland’s budgets.

 

War over waterways: Sinn Féin -v- the Free State

I reported here that, in June 2013,the North South Ministerial Council (in inland waterways format) approved, on the same day, Waterways Ireland’s business plan and budget for 2012 as well as its annual report and draft accounts for that year. In other words, it approved the budget and plan eighteen months after the start of the year to which they applied; it approved the plans for 2012 and, on the same day, approved the outcomes.

Furthermore, by November 2013, 88% of the way through 2013, it had not approved the budget for that year (I don’t know whether it has yet done so). And, as of today (22 January 2014), WI’s annual report for 2012 has not yet been published.

I wrote:

Is it possible that one minister wants to spend very much more or less on waterways than the other does? As the total current expenditure is fixed at 85%/15%, it seems to me that one side might very well come up with a figure that the other didn’t like.

Is it possible that DCAL, run by Mr Adams’s party colleague Carál Ní Chuilín, is more keen on cross-border bodies than is DAHG, run by Fine Gael minister Jimmy Deenihan? Or are both of them struggling to find savings to pay for the Clones Sheugh, or at least as a deposit for the SEUPB?

Or could it simply be that WI is having great difficulty in cutting its expenditure to fit within the limits imposed by the RoI budget?

I then sent enquiries to Waterways Ireland, the (NI) Department of Culture, Arts and Leisure (DCAL), the (RoI) Department of Arts, Heritage and the Gaeltacht and the North South Ministerial Council. From the repsonses, and from yesterday’s statement to the NI Assembly by Carál Ní Chuilín MLA, NI Minister of Culture, Arts and Leisure, it is clear that I was right in my first para; it is possible that the first sentence of the second para is right too.

There is a major disagreement between the northern and southern departments about the level of cuts to be applied to Waterways Ireland’s budget and it is not clear what mechanism can be used to resolve it. DAHG, applying Irish government policy, wants bigger cuts than DCAL does.

NSMC

After each North South meeting, the secretariat issues a rather bland communiqué; the inland waterways ones are here. I suppose that the secretariat can’t be expected to write “There was a blazing row at yesterday’s meeting, skin and hair flying, and the ministers aren’t speaking to each other”. I mean, they wouldn’t write that even if it were true, which I’m sure it isn’t.

On 9 December 2013 I wrote to NSMC (I omit salutations and irrelevancies here):

Are you able to say anything about why the NSMC Inland Waterways did not approve the 2012 business plan and budget for Waterways Ireland until eighteen months after the start of the year in question? As far as I can see from the minutes for meetings since 2007, that is a highly unusual degree of lateness.

NSMC replied on 11 December (with a copy to the RoI Department of Foreign Affairs):

[…] this is an issue for both Sponsor Departments and they can be contacted directly.

On the same day I asked:

Have you any responsibility for seeing that the terms of the WI Financial Memorandum [PDF] are observed? It seems to me that they have been ignored in this case.

Despite a reminder, I have not yet received a reply.

DCAL

I wrote to DCAL on 10 December 2013:

I would be grateful if you could help me to understand why the North/South Ministerial Council did not approve the 2012 budget and business plan until 18 months after the start of the year to which it applied.

DCAL responded on 11 December 2013:

Waterways Ireland had submitted a draft 2012 Business Plan detailing the activities required to achieve goals set out in their 2011/2013 Corporate Plan. Recognising the challenges presented by the economic climate there were extended negotiations to agree the 2012 budget. The DCAL Minister raised concerns about going beyond the required savings advised by both Finance Departments. Minister Ní Chuilín therefore sought, and received, assurances from Waterways Ireland that frontline services would be maintained.

I sent follow-up queries on 16 December:

I am not entirely clear on the implications of your third sentence: “The DCAL Minister raised concerns about going beyond the required savings advised by both Finance Departments.”

Do you mean that Waterways Ireland proposed to cut its spending by more than the percentage cuts suggested by the Finance Departments? Or to spend less than it received (or expected to receive), in euro, from the two sponsor departments? If so, why did WI want to do that?

I would also be grateful if you could tell me what WI’s “frontline services” are and why they are deemed to be more important than other services.

And I would be grateful for more information on the reason for the extended delay in approving the busiess plan and budget: eighteen months after the start of the year, which was presumably even longer after the plan was drafted. I would be surprised to find that seeking and receiving assurances took eighteen months.

Did the delay result in a breach of the terms set out in the Financial Memorandum governing WI’s affairs?

I would also be grateful if you could tell me what delayed the approval of WI’s 2013 budget. I note from the NSMC minutes that it was not approved in June 2013; the matter is not mentioned in the minutes of the November 2013 meeting but, on 19 November 2013, the RoI Minister for Public Expenditure and Reform replied to a written question from Gerry Adams TD saying, inter alia, that “The 2013 Budget allocation to the Body are subject to on-going discussion by the two Sponsor Departments.”

That suggests that approval of the 2013 budget is at least eleven months late. I note too that the 2014 business plan and budget, and the Corporate Plan 2014-2016, were not approved at the November NSMC meeting. And I note that An Foras Teanga [Foras na Gaeilge + Tha Boord o Ulstèr-Scotch], the other North-South body sponsored by your department and the Department of Arts, Heritage and the Gaeltacht, was also, in November, awaiting approval of its 2013 budget.

There are two further items on which I would be grateful for information:

(a) is it proposed that the Hutton recommendations be applied to Waterways Ireland (and other bodies in the North-South pension scheme)? If so, what is the expected effect on WI’s budget and on staff take-home pay?

(b) WI’s accounts for 2011 (the latest I have seen) suggest that your department paid less than 15% of the money WI received from its sponsor departments. Did your department pay 15% in 2012 and 2013 and will it do so in 2014? And how do you take account of the effect of currency fluctuations on WI’s income denominated in its working currency, the euro?

Despite a reminder, I have as yet received no reply.

DAHG

I wrote to DAHG on 26 November 2013 with several questions; I include below only that relevant to this posting.

On 19 November 2013, in a written answer to Gerry Adams, Jimmy Deenihan said […]: “The 2013 and 2014 Budget allocations to the Bodies are subject to ongoing discussion by the two Sponsor Departments and will require, of course, formal approval by the NSMC.”

I would be grateful if you could tell me (a) why Waterways Ireland’s budget had not been finalised when 88% of the year had passed and (b) how that affected budgetary management in the Body.

The department replied on 3 December 2013:

As you are aware, Waterways Ireland is co funded by the Department of Arts, Heritage and the Gaeltacht and the Department of Culture, Arts and Leisure, Northern Ireland.   The 2013 Business Plan and budgets have been discussed by Ministers at NSMC Inland waterways meetings and key priorities for 2013 identified.  Indicative budgets have been provided by the Departments to Waterways Ireland as a pragmatic measure for business planning and operational purposes and the body is operating within these indicative allocations.

On 9 December I replied:

Thank you. That answers my question (b) pretty well. However, you haven’t answered (a): why Waterways Ireland’s budget had not been finalised when 88% of the year had passed.

I would be grateful for information on the causes of this extraordinary delay.

I have been wondering whether the problems of WI’s budget were very difficult to resolve or whether there was some major disagreement between the northern and southern ministers. If there was such a major disagreement, what was it about?

The department replied on 17 December 2013:

The Departments are still in discussions to agree the budgets.  The position is The Department of Culture, Arts and Leisure in Northern Ireland is not prepared to agree a 2013 budget for the Body in excess of a minimum efficiency saving of 3% set out in the two Departments of Finance Funding Framework for the North South Bodies. As you are aware from the Parliamentary Question Reply this Department’s REV provision for Waterways Ireland for 2013 is €25.463m, a 6% efficiency saving on 2012. Given the pressures on the public finances and on the Departments budget allocation, the Department is not in a position to provide any additional funding that would maintain the proportionality of funding. 85% of current funding is provided by Department of Arts, Heritage and the Gaeltacht and 15% by Department of Culture,  Arts and Leisure, Northern Ireland.

I responded on 18 December 2013:

[…] Just to make sure I understand you properly: when you say “a 2013 budget for the Body in excess of a minimum efficiency saving of 3%” am I right to presume that the phrase “in excess” applies to the savings or cuts rather than to the budget itself?

I also asked three questions about items of background information relevant to this topic:

1. I am less familiar with the NI Executive’s budgetary process than perhaps I should be. I gather that there are multi-year budgets, linked to a programme for government, with annual estimates and possibly supplementary estimates. The multi-year element seems to be stronger than in Irish budgets, but I wonder whether (aside altogether from the current economic situation) it is difficult to make decisions within the constraints of the different budgetary timescales.

2. I have not yet checked all Waterways Ireland annual reports, but reading that for 2011 suggests that DCAL paid slightly under 14%, rather than 15%, of WI’s current expenditure. Are minor deviations from the 85/15 ratio unavoidable? Do they balance over time?

3. Do currency fluctuations affect the amounts actually paid by the two departments? If so, how are the effects taken into account?

I have not yet received a reply.

Waterways Ireland

On 6 January 2014 I wrote to WI:

I would be grateful if you could tell me the effect on Waterways Ireland of the continuing dispute between its sponsor departments over WI’s budgets and business plans.

On 8 January WI said:

Waterways Ireland enjoys a supportive and positive relationship with both departments.

On 14 January I said:

I am very glad to hear it, but I don’t recall asking a question about that.

I repeated my original question, to which I have not had a reply. As with NSMC, I don’t really expect WI to be able to say anything undiplomatic. However, I would have thought that there must be some inconvenience in working to “indicative allocations”. I wonder whether they are based on DCAL’s preferred level of cuts, DAHG’s preferred level or some compromise. And if compromise is possible on the indicative allocations, why can’t the main issue be sorted out?

Furthermore, the delay in publishing the 2012 accounts suggests that there has been some real difficulty in operating under the indicative allocations regime. Or perhaps there is some other row altogether.

NI Assembly

Reporting yesterday to the NI Assembly on the November NSMC meeting, the NI Minister confirmed that there was disagreement.

Karen McKevitt [SLDP, South Down]: […] The chief executive set out a strategic direction for Waterways Ireland for 2014-16. In that, she mentioned budget efficiencies. Can the Minister highlight to the House what those might be?

Carál Ní Chuilín [SF, Belfast North]: The Member is right: the new chief executive gave us a very good and detailed presentation. Indeed, the Member will be aware — if she is not, she will be when I finish my answer to her question — that there have been additional pressures on everybody across the board in achieving efficiencies. However, as I have repeated to the Member and to other Members, and despite the meetings that I have had with Minister Deenihan around any proposed additional efficiencies that the Irish Government are saying are required, I am totally reluctant to go above and beyond any efficiencies that we agreed previously, and I have stated that to the chief executive of Waterways Ireland. That is the position. Following that, the Finance Departments and, indeed, officials and Ministers will hopefully be submitting additional or new budget plans very soon. I think that issues relating to any agreement to additional efficiencies lie beneath the Member’s question, but I can categorically state that I have not agreed to those.

“Efficiencies”, by the way, means “cuts”.

The importance of waterways to Sinn Féin

I have remarked several times here that Sinn Féin asks many Dáil questions about waterways, notably the Clones Sheugh, with Maureen O’Sullivan providing recent competition. I wrote elsewhere recently:

Waterways Ireland is a political creation: its very existence reflects a nationalist and republican desire to show the benefits of all-Ireland institutions — and a unionist desire to confine such institutions to areas of minor importance. […]

In prosperous times, managing recreational waterways is a feelgood activity, combining opportunities for local and national politicians to get their photos in the papers with relatively low risk of political controversy. Nonetheless, WI had to tread warily, especially in its early years; it has almost (but not quite) entirely avoided such controversy.

Timing

I don’t know if there is ever a good time for disputes between your paymasters, but it’s not as if Waterways Ireland, and its new CEO, didn’t already have enough to worry about. To quote again from the same piece:

Compared with British Waterways and C&RT, Waterways Ireland has very little real property from which it might derive an income — and very few other sources of income. According to its accounts for 2011 (the latest available), its total income was over £38 million but it earned less than half a million pounds from licences, property, interest, operating income (including charges to waterways users) and other sources. The rest came from its two sponsor departments.

Charges to boaters have traditionally been low or non-existent: zero for a boat kept on the Erne or on one of the Shannon lakes, with modest charges for passing through Shannon or Shannon–Erne Waterway locks; on the Grand, Royal and Barrow, an annual charge of €128 covered lock passages and mooring. There was no licence fee. Waterways Ireland has begun to impose slightly higher larger charges but may meet resistance.

But there is no immediate prospect of imposing charges high enough to make a significant difference to Waterways Ireland’s budget. That budget is set by the North South Ministerial Council: each government pays for capital works (eg harbour improvements) carried out in its own jurisdiction, while the running costs are paid in a ratio intended to reflect the proportion of the waterways in each: 15% by the Northern Ireland Executive and 85% by the republic’s Government.

Some difficulty may be caused by different timings of the budgetary processes in the two jurisdictions, but a greater problem is that the fixed ratio can lead to deadlock. WI’s budget for 2012 was not set until July 2013, eighteen months late: its budget, business plan, annual report and draft accounts for 2012 were all set on the same day. Final accounts for 2012 had not been published and WI’s budget for 2013 had not been agreed by December 2013.

The cause of the delay was that the republic’s government wanted to cut the budget by more than the Northern Ireland Executive did. The Irish economy has had severe problems in recent years and the government was unable to honour its undertaking to pay for the restoration of the Ulster Canal from Lough Erne to Clones (a short stretch that crosses the border several times). Public expenditure has been cut for all government departments and public bodies but the scale of the cuts is larger than the Northern Ireland minister wants to see. If the republic’s government gets its way, by 2016 WI’s budget will be one third lower than it was in 2010.

That is not the only financial problem that WI faces. Staff transferred to it from Irish government departments carried with them their entitlements to pensions of half of final salary plus retirement lump sums of one and a half times final salary. And, as is the norm in the civil service, the pension system was unfunded. WI had quite a few staff in their fifties and, as they now retire, their pensions and lump sums have to be met out of WI’s normal income from its sponsor departments. The pace of retirement may even by accelerated by a desire to avoid charges arising from the Hutton pension proposals.

During the era of the Celtic Tiger, Waterways Ireland prospered: it acquired much new equipment, built new offices and developed and improved facilities for boaters and other users. It now faces a much more difficult financial future and it is hard to see how it can avoid reducing its level of service. At the same time, its new CEO is — rightly — determined to continue widening the appeal of the Irish waterways to more types of users: walkers, cyclists, anglers, canoeists and others.

Maybe the two ministers might get their act together.

I will report later on other items covered in Ms Ní Chuilín’s statement; the bad (if unsurprising) news is that she is still stuck on the sheugh, but perhaps she can persuade the Imperial Treasury to pay for it.

Waterways Ireland’s pensions burden

Let us suppose that you are an Irish civil service department, whose staff are employed on standard Irish civil service terms.

And let us suppose that your Secretary General’s 65th birthday was on 31 December 2013, by which time she had 40 years’ pensionable service. Her salary was €250,000 a year, so that’s the amount you (the department) paid to her in y/e 31 December 2013. Because of cutbacks, she is replaced, from 1 January 2014, by someone earning half that amount. So what is the cost of SecGens in 2014? Keep it simple: ignore employer’s PRSI and allowances and travel expenses and anything else.

Civil service pensions

In 2014, you will pay the new SecGen €125,000, half the old rate, but you will pay the retired SecGen €500,000, so your total expenditure on SecGens will rise from €250,000 to €625,000. [The timing may not be quite thus, but never mind.]

In 2015, the new SecGen will continue to get €125,000, but so will the old SecGen. So, even though your new SecGen gets half what the old one earned, the total cost to you remains the same.

And so on until the old SecGen dies. But if the new SecGen retires before that, you will have two retired SecGens drawing pensions and one even newer SecGen getting a salary ….

Under ordinary Irish civil service terms, someone who retires is entitled to a pension of one eightieth of final salary for every year of service, up to a maximum of forty years. So a SecGen who started, say, as a graduate entrant at the age of 25, stayed in the civil service and retired at age 65, would be entitled to a pension, for life, of half her final salary.

She would also be entitled to a lump sum of one and a half times her final salary. That’s why, on retiring, she gets an amount equal to twice her final salary: 1.5 times salary as a once-off lump sum plus 0.5 times as pension.

You could argue that that is an absurdly generous arrangement, but that’s not my point here: someone who started work 40 years ago under those conditions can’t be criticised for taking the money they’re entitled to, and it will be a long time before any revisions could take effect.

These pensions are defined benefit, non-contributory and unfunded: no money is put aside by either employees or the employer to meet pension payments in future years. It is assumed that the taxpayer will continue to meet the increasing costs.

Now, that’s all very well for the main-line civil service: it has been in existence for a long time; it’s very large, with a large pay bill; it has had SecGens retiring before and another retirement or two won’t greatly affect the overall cost.

But if you’re a relatively small organisation, dependent on the exchequer for most of your income but without any of getting extra money to pay for pensions, the retirement of one or two senior officials, or of larger numbers of lower-paid employees, could significantly increase your costs while doing nothing to improve your income or the amount of work you do.

That is happening to Waterways Ireland at the moment. I’ll give some details shortly, but first I want to get the pension scheme out of the way.

The woodchuck pension fund

Here is Wikipedia’s version of the tongue-twister about the woodchuck:

How much wood would a woodchuck chuck
if a woodchuck could chuck wood?
A woodchuck would chuck all the wood he could
if a woodchuck could chuck wood!

Coverage of the Waterways Ireland pension scheme in its annual reports reminds me of the woodchuck. I should say immediately that that is not a criticism of WI: it’s down to an accounting standard called FRS 17.

As far as I can make out, this standard requires WI to show in its accounts the entries that it would make for its pension fund, if it had a pension fund, even though it doesn’t have one. It does have a pension scheme, which I imagine sets out the rules about who is entitled to get what, but there is no pot of money put away, guarded by fierce trustees, to ensure that the pensioners of the future will get their money. Here is how I understand it; if I’m wrong (which wouldn’t be surprising), do please correct me in a Comment below.

WI’s balance sheet shows (for 2011) a liability of €66,432,000 and a balancing asset of the same amount; both of them are imaginary figures. Similarly, the income and expenditure account shows the amount that WI (in theory) should have paid in 2011 for the pension benefits that its staff accumulated in that year, along with an imaginary interest charge on its total liability. Those are then balanced by a figure called “Net deferred funding for pensions” which, at €4385000, is by far the largest component of WI’s “Other operating income”.

Obviously that lot would look better if it had corroborative detail to provide artistic verisimilitude, so the accountants or the pensions bods or someone did other calculations of currency translation charges and transfers in and out of the scheme and service costs and so on, all on a non-existent pension fund.

Now, as far as I can see, we can ignore all that. But there are two cash figures that are real and important:

  • one is that WI staff paid (was it under the public service pension levy? or something else?) €230,000 in contributions in 2011, for which they will receive benefits of €2,744,000, ie twelve times what they put in
  • the other is that in 2011 WI paid out €934,000 in actual pension
    benefits to people who had retired by then. That presumably includes
    any retirement lump sums.

Incidentally, WI’s 2011 accounts (the most recent available) make no mention of the North South Pension Scheme (see below), of which WI is a member. Perhaps the stuff in WI’s accounts is about its imaginary portion of a combined but equally imaginary fund under the North South Pension Scheme. The meetings of the NSPS CEO Pension Committee, which “exercises trustee-like functions” [seriously: see below], must be fun.

Not being an accountant (I feel I lack the necessary creativity), I am interested in the actual cost to WI of the benefits it pays out to folk who retire.

Retirements

I asked WI how many people retired in 2012 and 2013 and how many were expeected to retire in the next three years.

WI retirements 2012–2016

Figures for 2012 and 2013 are actual; those for later years are expected. Source: Waterways Ireland

Those who retired were:

  • 2012: 3 lockkeepers, 1 boatperson, 1 director of marketing, 1 mechanical fitter, 1 general operative [GO] plant operator B, 1 preserved pensioner
  • 2013: 1 chief executive, 1 clerical officer, 1 GO, 2 GO chargehands, 3 GO plant operator As, 1 GO plant operator B, 1 boatperson, 1 boatperson/skipper, 1 lockkeeper.

WI could not say what grades were expected to retire in 2014, 2015 and 2016. If they did, of course, I’d be able to guess which senior managers were about to retire; as it is, I have to rely on rumours. WI was able to predict the lump sum and pension payouts for 2014–2016, so I suspect it has a good idea who intends to retire.

The total number retiring in those five years is 81, which is about a quarter of the entire WI staff (currently 325). That’s a big proportion of the staff. No doubt it reflects the age profile of staff who transferred into the organisation but the figure may be boosted by the Hutton Push [see below].

Lump sums

Here is what WI expects to pay out in retirement lump sums in 2014, 2015 and 2016, and what it actually paid out in 2012 and 2013. Note the big increase in 2014. These sums are paid on retirement and are not recurring: in other words, they are made only to those who retire in the year in question.

Actual amounts for 2012–2013; predicted amounts for 2014–2016. Source: Waterways Ireland

Actual amounts for 2012–2013; predicted amounts for 2014–2016. Source: Waterways Ireland

If all lump sums are 1.5 times final salary [something of which I can’t be certain], then we can work out the total of the final salaries of the retiring employees.

Source: actual and forecast lump sum payments divided by 1.5

Source: actual and predicted lump sum payments divided by 1.5

And, as we know the number of people expected to retire in each year, we can work out the average final salary for each year.

Source:  estimated total final salaries divided by expected numbers of retirees

Source: actual and predicted total final salaries divided by numbers of retirees

It looks as if some senior staff may be expected to retire in 2014.

Annual pension payments

The lump sum amounts are paid only to those retiring in the year in question, whereas the annual pension payments include those to people who started drawing pensions in 2011 and earlier years. But the lump sums are once-off, whereas the annual payments will continue to increase as more people retire.

Source: Waterways Ireland figures for total pension pay-outs less lump sums

Source: Waterways Ireland figures for actual and predicted total pension pay-outs less lump sums

The effect on WI’s finances

The totals of the lump sums and annual pension payments show how much WI has to pay out in each of the five years.

WI totals of actual and predicted pension pay-outs

Totals of actual and predicted pension pay-outs. Source: Waterways Ireland

The figure shown in the 2011 accounts was €934000. By 2016, the total will be two and a half times that: €2377000.

Remember that this is an unfunded pension scheme, so the increase comes out of WI’s ordinary allocation of money from its sponsor departments. And that allocation will not be increased: both governments want to cut WI’s income, although one government wants to cut more than the other does. If the RoI government has its way, by 2016 WI’s income will be just under 66% of the 2010 figure: a cut of one third in six years.

According to the last available accounts, WI’s main cost is staff: €21,903,000 in 2011. But that figure includes €5769000 in pension costs, €934000 of which was benefits paid out while the rest was special magical imaginary payments to the pension fund; the real staff cost (excluding agency staff and employer PRSI/NIC contributions) was €14411000.

Between 2011 and 2016, the increase in pension costs means that an extra €1443000 has to be found and, as staff costs form the main element of WI’s expenditure, it is likely that the staff budget will bear much of the burden.

The Hutton push

One factor that may be prompting some WI staff to retire as soon as they can, thus pushing up the lump sum payments in 2014, is the possibility that some changes, recommended by the UK’s Independent Public Services Pensions Commission [the Hutton Commission], might be applied to the North South Pension Scheme that covers Waterways Ireland. On 30 April 2013 Martin McGuinness [SF, Mid-Ulster, Deputy First Minister] reported to the Northern Ireland Assembly on the North/South Ministerial Council [NSMC] institutional meeting held on the previous day.

Jim Allister [Traditional Unionist Voice, Antrim North] asked him about the pension scheme:

The pension scheme for those bodies entails lavish employer contributions. In one case, over 31% of salary is contributed by the employer and a mere 1·5% is contributed by the employee. When will that lavish squander be addressed by bringing the scheme into line with what exists in the Civil Service scheme? Is it good enough for it simply to be pushed back for another six months? Why not address it now instead of looking at it further down the road?

The ever-patient Martin McGuinness responded:

At the NSMC meeting on 28 March 2013, we noted that the NSMC approved an amendment to the North/South pension scheme, which means that increases to the scheme for benefits paid in the northern currency will be in line with the consumer price index. Prior to that, they were increased in line with the retail price index. The amendment ensures that the North/South pension scheme follows public sector pension policy, as agreed by the Executive.

We also noted that the two Finance Departments are in discussion about how to further amend the scheme. These amendments will ensure that northern members are not immune from pension reform. The first amendment will increase employee contributions on average from 1·5% by 3·2 percentage points. That will align with the employee rates payable from April 2014 in the principal Civil Service pension scheme here in the North. The second amendment will introduce, by April 2015, the wider Hutton reforms, such as the introduction of a career average revalued earnings scheme and a linkage between the North/South pension scheme age and the state pension age.

The scheme was raised in the Dáil on 17 December 2013 in a written question to the Department of Public Expenditure and Reform.

Dara Calleary [FF, Mayo] asked the minister:

[…] the discussions he has had in relation to the North/South pension scheme; if the proposed amendment rules as notified from officials in the Department of Finance and Personnel and his Department will apply to southern based employees of Waterways Ireland; and if he will make a statement on the matter.

The minister, Brendan Howlin [Labour, Wexford] replied:

Five of the six North/South Implementation Bodies, including Waterways Ireland, along with Tourism Ireland, operate the North/South Pension Scheme (NSPS). The Scheme is unique in covering public sector staff employed on both sides of the border; staff of the affiliated employers in this jurisdiction are automatically members of the Scheme. The Chief Executive Officers of the relevant NSPS bodies and Tourism Ireland meet as the NSPS CEO Pension Committee, which exercises trustee-like functions in relation to the Scheme.

As Minister for Public Expenditure and Reform, I am jointly responsible, along with the Northern Ireland Minister for Finance and Personnel, currently Mr Simon Hamilton, for the rules of the North/South Pension Scheme, and in particular for approving amendments which may be proposed to those rules. In exercise of my responsibilities in relation to the Scheme, I and my officials have engaged in correspondence and discussion about reforms to the NSPS rules with my counterpart Northern Ireland Minister and his officials.

Review and reform of existing pension arrangements, including public sector pension arrangements, has been an ongoing feature of the pensions landscape in Ireland and the UK over recent times. In this context it is natural that reforms to the North/South Pension Scheme would arise for consideration, and proposals in this regard have been discussed with the NSPS CEO Pension Committee.

Pending further development of these proposed reforms, and mindful that there is ongoing discussion with trade union interests on the proposed changes, I do not intend to elaborate at this juncture on the possible final specific content of the rule amendments which may arise. I can however confirm to the Deputy my intention that the changes will, to the extent that is consistent with legal norms in each jurisdiction, apply to southern and northern NSPS members alike, including staff of Waterways Ireland in this jurisdiction. This uniformity of application would reflect the fundamental all-Ireland character of the Scheme, to which successive Governments have been committed.

That doesn’t tell us much about the likely effects on the take-home pay of WI staff, or the pensions and lump sums of retired staff, and I have no inside information about what is proposed or likely. But you can see why WI staff who are near retirement age might be tempted to get out before their conditions are worsened.

 

Waterways budgets: cut by one third in six years

I wrote here and here about the RoI budgetary allocations to Waterways Ireland for 2014, here about the difficulty of establishing exactly what WI’s budget is and here about some questions I have put to the Department of Arts, Heritage and the Gaeltacht on the matter.

But, while a focus on the procedural woods is important, I may have been neglecting the implicational trees. I am recalled to a consideration of the details by two written Dáil questions asked by Gerry Adams [SF, Louth] on 19 November 2013, one of Brendan Howlin, Minister for Public Expenditure and Reform, and the other of Jimmy Deenihan, Minister for Arts, Heritage and the Gaeltacht. Reading the runes is reminiscent of Kremlinology, but it seems to be possible that Waterways Ireland will have to make significant cuts in its spending, cuts that will reduce the services it provides to waterways users.

The questions and the answers

This is what Gerry Adams asked Brendan Howlin:

To ask the Minister for Public Expenditure and Reform the total budget for each All Ireland Body established under the Good Friday Agreement for the years 2010 to date in 2013; and any proposed budget reductions to the these bodies currently being considered.

And this is what he asked Jimmy Deenihan:

To ask the Minister for Arts, Heritage and the Gaeltacht the total budget for each of Waterways Ireland, Fóras na Gaeilge and Ulster-Scots Agency for the years 2010 to date in 2013; and any proposed budget reductions to these bodies currently being considered.

Ignoring the details given for bodies other than Waterways Ireland, we learn that its allocations from its two “sponsor departments”, DCAL in NI and DAHG in RoI, were:

2010 €38.99 million
2011 €35.18 million
2012 €31.15 million

These figures appear to include capital and current expenditure.

For some reason,

The 2013 Budget allocation to the Body are subject to on-going discussion by the two Sponsor Departments.

But Jimmy Deenihan said

My Department’s REV provision for Waterways Ireland for 2013 is €25.463m, a 6% efficiency saving on 2012. My Department’s Estimates provision for 2014 is €24.183m, a 5% efficiency saving on 2013.

The extent of the cuts

I don’t know how to get from a REV provision, or indeed an Estimates provision, to WI’s total budget for 2013 or 2014. One possibility is that the figures include capital and current expenditure. In that case, the RoI contribution to WI’s 2013 budget would be €21.383 million current and €4.080 million capital [PDF; see p160]; adding the NI 15% contribution to current would bring that to about €25.156 million; the €4.080 million capital makes €29.236 million. Perhaps there might be a small amount extra for NI capital spending. By the same logic [and I repeat that I don’t know whether this is the way to do it], the 2014 Estimates provision gives €27.752 million plus NI’s capital spending. Without NI capital spending, the total is 71% of the 2010 figure, so WI will have had its total spending cut by 29% in four years.

Another crude calculation is that the 2012 figure of €31.15 million is 80% of the 2010 figure. Knock off Jimmy Deenihan’s 6% in 2013 and 5% in 2014; the 2014 total comes out again at 71% of the 2010 figure.

But that’s not all. Brendan Howlin said:

In common with other public sector bodies North and South, the North South Implementation Bodies are expected to deliver their objectives in a cost effective and efficient manner. In order to provide a framework for this, my Department and the Department of Finance and Personnel, have issued guidance to the North South Implementation Bodies requiring them to achieve a minimum of 4% efficiency savings per annum in 2014, 2015 and 2016.

So we have to cut another 4% in 2015 and 4% in 2016, by which stage the total will be just under 66% of the 2010 figure: a cut of one third in six years.

Coping

The brunt of the cuts has been borne by the capital budget; we have no figures for expected NI capital spending from 2013 onwards, but on the RoI figures capital spending by 2016 will have been cut by 70%. That seems to have been the general pattern in the Irish public service: cut capital spending first, cut staff costs last.

WI’s operating income is negligible: in 2011 it was €71,000 from licences, €120 from property and €193,000 from permits, lock charges etc, as well as a few other bits and pieces; it is almost entirely reliant on its sponsor departments. So if it is to cope with reduced departmental income, it must either devise new and significant earning opportunities quickly or make serious cuts to its services.

WI’s spending is categorised under five headings, one of which (currency gains or losses and interest) involves a tiny amount. The other four are depreciation, which can’t readily be cut, staff costs, “programme costs” and “other operating costs”.

The “other operating costs” are:

Travel
Recruitment costs
Training and conferences
Contracted in services
Compensation/provision for liability claims
Premises running costs including utilities
Health and safety
Communications
Other operating lease rental
Printing and stationery
Computer running costs
Rent
Audit fee
Marketing and promotions
Insurance and legal fees
Pension administrator costs
General expenditure.

The 2011 total was €5,026,000. None of the individual items looks as if it could provide huge savings, although I imagine each category is being shaved.

The programme costs are allocated to individual waterways; in 2011 (the latest available accounts) the total was €8,082,000, and 63% of those were incurred on the Grand, Royal and Barrow. The Royal’s programme costs were up in 2011, with the reopening, but the Grand’s were cut by 25% and the Barrow’s by 17%. You can’t keep cutting at that sort of rate every year, but I suspect that the Grand, Royal and Barrow will continue to be cut more than the Shannon, Erne and SEW (the Lower Bann cost is tiny).

WI’s main cost is staff: €21,903,000 in 2011, up very slightly on the previous year. I don’t know what cuts have been made in hours or rates (I have heard that there is an overtime ban) but I suspect we haven’t seen the last of them.

At this stage, I imagine that the easy cuts have been made; further cuts may require some combination of

  • reductions in services to users
  • major changes in work practices
  • cuts in staff costs.

There are interesting times ahead.

One small pointer

I noted that, when Jimmy Deenihan spoke in the Dáil on 16 October 2013, he said that WI’s “core activities and targets” included

… keeping the waterways open for navigation during the main boating season.

The last five words [emphasis mine] may be significant: Mr Deenihan may have been hinting that boating is no longer to be regarded as a year-round activity.

Modern management

I’ve just read the minutes (they call ’em joint communiqués, to be posh) of all the North South Ministerial Council Inland Waterways meetings since northsouthery got going again in 2007.

After a bit of catching up in the first couple of years, the NSMC has usually managed to “note” WI’s Annual Reports and Accounts about six months after the end of the year to which they refer: the accounts for 2008 were noted in 7 months, 2009 in 5, 2010 in 7, 2011 in 7 and 2012 in 6. But “noting” doesn’t mean approving: various other bods, including two Comptrollers and Auditors General, then have to look at them, so the citizenry doesn’t get to see the accounts for many months afterwards: the report and accounts for 2012 are still not available.

Nothing to see there, then: both WI and the NSMC appear to be doing their bit as fast as could reasonably be expected. But what is odd is the delay in noting or approving plans and budgets. Knowing litle of management science, I had the naive idea that managers would be working to approved plans and budgets from the start of the year, but WI usually doesn’t get approval until the year is almost over. I do not know why that is.

WI’s business plan for 2008 was approved in October 2007, which is reasonable, although it seems to have been revised in July 2008. But the plans for 2009 and 2010 were not approved until 11 months into the year, that for 2011 until 10 months and that for 2012 until June 2013, six months after the end of the year. I realise that forecasting is difficult, but retrospective planning is surely less than useful.

The same delays apply to the budgets for 2010, 2011 and 2012. So the June 2013 meeting of the NSMC approved or noted:

  • the business plan for 2012 (which had ended six months earlier)
  • the budget for 2012
  • the annual report for 2012
  • the draft accounts for 2012.

I do hope that someone checked to ensure that all the documents accorded with one another: it would be really embarrassing if they didn’t. But as a management exercise this seems to be somewhat less than useful.

The same meeting also

… noted progress on the development of the 2013 Business Plan and budget. Following approval by Sponsor Departments and Finance Ministers the plan will be brought forward for approval at a future NSMC meeting.

It is good to know that, six months into the year, there was progress on the business plan and budget for that year. The minutes of the November meeting don’t mention the 2013 business plan and budget (but do, I am pleased to note, mention the 2014 versions), but there was a disturbing item of information on the previous day, 19 November 2013. Brendan Howlin, Minister for Public Expenditure and Reform, replied to a written question from Gerry Adams [SF, Louth], saying inter alia

The 2013 Budget allocation to the Body are subject to on-going discussion by the two Sponsor Departments.

This is November; 88% of the year has passed and the Irish budget for 2013 was approved long ago — yet WI still hasn’t been told its budget for 2013. WTF is going on?

I note that the same applies to the other north-south body or bodies that share the [RoI] Department of Arts, Heritage and the Gaeltacht and the [NI] Department of Culture, Arts and Leisure as sponsors. An Foras Teanga, which includes Foras na Gaeilge and Tha Boord o Ulstèr-Scotch, likewise still has its 2013 budget under discussion by the two departments.

I have asked DAHG about this, and will no doubt receive a full and frank reply in due course. In the meantime, I can only speculate. Is it possible that one minister wants to spend very much more or less on waterways than the other does? As the total current expenditure is fixed at 85%/15%, it seems to me that one side might very well come up with a figure that the other didn’t like.

Is it possible that DCAL, run by Mr Adams’s party colleague Carál Ní Chuilín, is more keen on cross-border bodies than is DAHG, run by Fine Gael minister Jimmy Deenihan? Or are both of them struggling to find savings to pay for the Clones Sheugh, or at least as a deposit for the SEUPB?

Or could it simply be that WI is having great difficulty in cutting its expenditure to fit within the limits imposed by the RoI budget?

 

Northsouthery and sheughery

The North South Ministerial Council secretariat has been remarkably quick to publish the joint communiqué from today’s plenary meeting. They must have adopted the Quaker practice of agreeing the minutes before the meeting ends (as opposed to the diplomatic practice of agreeing them before the meeting starts). The short version is that nothing happened; the only excitement was another brainfart from Our Glorious Leader, which occurred before the NSMC meeting.

Cavan-Monaghan FF TD Brendan Smith has been wasting civil service time again, asking about the Clones Sheugh:

Brendan Smith [FF Cavan-Monaghan]: To ask the Minister for Arts, Heritage and the Gaeltacht if he will indicate the current stage of the proposed restoration of the Ulster Canal; and if he will make a statement on the matter.

Jimmy Deenihan [FG Kerry North/West Limerick]: As the Deputy will be aware, in July 2007 the North/South Ministerial Council (NSMC) agreed to proceed with the restoration of the section of the Ulster Canal between Clones and Upper Lough Erne. The then Government agreed to cover the full capital costs of the project, which were estimated at that time to be of the order of €35m.

It was always the intention that the Ulster Canal project would be funded from the Waterways Ireland annual allocations, as agreed through the annual estimates processes in this jurisdiction, as well as the deliberations of NSMC in relation to annual budgets. It was a key consideration throughout the process that the Ulster Canal project would be supported by a significant level of projected income from the commercialisation of certain Waterways Ireland assets. However, the economic downturn has had a negative impact on those plans.

In the meantime, the Ulster Canal project is progressing on an incremental basis. Planning approvals have now been secured for the project in both jurisdictions. I welcome these developments, which, I am sure the Deputy will agree, are a significant milestone for the project.

I am continuing to explore all possible options to advance this project within the current fiscal constraints. In this regard, an Inter-Agency Group on the Ulster Canal has been established to explore and examine ways to advance the project and to examine possible funding options for it, including existing funding streams and the leveraging of funding from other sources, including EU funding options.

What news of the Inter-Agency Group? Has it found a rainbow with a pot of gold buried beneath it?

I do not find the minister’s statement that …

It was always the intention that the Ulster Canal project would be funded from the Waterways Ireland annual allocations, as agreed through the annual estimates processes in this jurisdiction […].

… to be entirely consistent with the historical record or even with his further statement that …

It was a key consideration throughout the process that the Ulster Canal project would be supported by a significant level of projected income from the commercialisation of certain Waterways Ireland assets. However, the economic downturn has had a negative impact on those plans.

The plan seemed to be to sell the WI assets, thus using capital to fund what might laughingly be described as a capital asset (as opposed to a millstone around WI’s neck), rather than to rely on income from the use of its surplus assets. Maybe allowing the Corpo to run the Dublin “docklands” [Irish Times report, which will disappear behind a paywall at some stage; the Corpo’s website doesn’t yet cover this] will restore the overvaluations of the recent bubble and allow WI to flog off its three sites and splurge on the Clones Sheugh.

That seems to be what ThemUns in the Northern Ireland Assembly are expecting, if we are to judge by the discussion held on 21 October 2013, when several shinners, and a few others too, enthused about the “potential” of canals:

Phil Flanagan [SF] asked the Minister of Culture, Arts and Leisure [SF] for an update on the current funding position on the re-opening of the Ulster canal.

Carál Ní Chuilín [SF]: I thank the Member for his question. Work by Waterways Ireland on the restoration of the Ulster Canal has been solely focused on the section from Upper Lough Erne to Clones. The project will be advanced in line with available resources. The Ulster canal interagency group has been tasked to examine all possible options for financing the project. DCAL economists are reviewing the business case to update the estimated costs and identify social as well as economic benefits for the first section of the canal. The Ulster canal interagency group is exploring funding options with the Special EU Programmes Body.

Phil Flanagan [SF]: Go raibh maith agat, a LeasCheann Comhairle. Gabhaim buíochas leis an Aire as ucht a fhreagra. I thank the Minister for her answer. I welcome the Minister’s continuing commitment to the Ulster canal, particularly the section from Upper Lough Erne to Clones. However, one of the difficulties that it faces is an absence of funding. Will the Minister provide more information on potential funding options for completing the work on that section of the canal?

Carál Ní Chuilín [SF]: The work of the interagency group is focused not just on funding options but on what we can do with current available funding. It is really important that we look at the Ulster canal with a view to how we can open up waterways to improve tourism and the local economy. It is important that we get started on the restoration of the Ulster canal in that area because it has experienced a lack of investment for decades.

We are looking not just towards the Irish Government, within DCAL and towards Europe but at other opportunities, possibly through the Lottery Heritage Fund and many others to see whether we can get this started by looking at options to bring the work forward, rather than waiting until all the money is in. We can do that only on the basis of secured funding. Once that happens, I will be happy to make a statement to the House that will be a bit of good news that the Member and other Members for that area have been waiting to hear for a long time.

I suspect that “what we can do with current available funding” is “buy a shovel”, there being no large amounts available from the Free State. But perhaps the reason that the Clones area “has experienced a lack of investment for decades” is that it is not possible to make any adequate (legal) return on investment there; a policy of assisted emigration might be best. But it is gratifying to learn that SF is trying to get the Free State government off the hook of its rash promise to pay for the sheugh and is hoping to raise the money from within HM Realm.

There was a hint of a sensible question from the UUP.

Tom Elliott [UUP]: I thank the Minister for that update. Will she tell us how much the overall project was estimated to cost, based on the business case, and what income it projected?

Carál Ní Chuilín [SF]: Overall, it goes into tens of millions of pounds. I believe that the business case needs to be updated, and that will be part of discussions involving me, Minister Deenihan, and Minister McGinley. Some of the work that is being done by DCAL economists is bringing a fresh approach to the economic appraisal. We are sharing that with our Irish Government colleagues and the interagency group. That is because I believe that, rather than waiting for all the money to be secured at once, we need to look at the potential for phased approaches. It is good news that we now have full planning permission across all the councils and from our Planning Service here.

We now need to look at what capital moneys are available, what we can do and our plan to secure additional funds for that area. As I said to Phil Flanagan, it is really important — I am sure that the Member is more aware of this than I am — that we get parts of that canal opened and try to get some construction work done on it.

Unfortunately Mr Elliott did not insist on getting an answer to his question about the projected income, which I expect to be nil.

Joe Byrne [SDLP]: Can this issue be raised at the next meeting of the North/South Ministerial Council? What potential does she expect could accrue to the areas of Fermanagh and Tyrone in future tourism?

Carál Ní Chuilín [SF]: The Member should take comfort in knowing that this is always raised at the North/South Ministerial Council. Certainly, within the waterways sectoral aspect of DCAL’s North/South arrangements, it is constantly brought up. The key here is to look at what we can do now for rural communities and what moneys are available. I appreciate that, when the Irish Government said that they would fully fund the project, they were in different economic circumstances. However, they still remain committed to doing something.

In DCAL, I am looking at a new economic appraisal to see what the real costs are and what parts of the work I could try to start, possibly in conjunction with Ministers Deenihan and McGinley. There is a lot of expectation around the project, and rightly so, no more so than among the people who live and work in the surrounding area and those who are waiting for work on the restoration of the canal.

Anna Lo [Alliance]: Parts of the UK and many other countries have reinvented canals as tourist facilities and attractions. What lessons does the Minister intend to adopt from other people’s experiences?

Carál Ní Chuilín [SF]: Certainly, we regularly receive reports from Waterways Ireland about tourist potential. The royal canal has brought great potential. There are festivals across all the canals and waterways the length and breadth of this island. Unfortunately, those are some of the very few opportunities that people who live in rural communities near waterways have of generating a local economy. So the tourist potential is absolutely huge. Not only is it huge for people who live on this island; it is huge for those who want to visit here and travel. There is big interest, particularly in Europe, in canals and waterways. It is incumbent on us to do what we can to get the project financed. We need to make a start on it. We do not have all the funds yet, but it is time to make a start on it rather than sit and wait on free money coming. People who are looking for tourists and have a tourist product to offer and people who are willing and able to work look to us for opportunities to get this moving. I think that is what it could do.

Ms Lo’s question should be enough to deter people from voting Alliance. Note that Ms Ní Chuilín’s answer was all about potential: we have no cost-benefit analysis of the restoration of the Royal Canal and indeed no idea what the restoration cost, but I do not believe that the economic benefits will be significant. And while it may be that …

There is big interest, particularly in Europe, in canals and waterways.

… the prospect of travelling to Clones by water is not significantly more enticing than that of travelling there by road.

 

 

 

WI budget

In 2014 the Department of Arts, Heritage and the Gaeltacht [.pdf: go to page 51] is to cut its current expenditure on North–South Co-operation by €2.1 million:

Savings, in excess of the agreed 3% per annum efficiency savings, for the North-South Implementation Bodies will require the approval of the North-South Ministerial Council.

The 85% of Waterways Ireland’s current budget that comes from the [Republic of] Ireland government is in there somewhere; the NI executive pays the other 15% and, in theory, the North–South Ministerial Council will have to give its blessing, but in practice the NI ministers can hardly force the RoI ministers to pay up.

There’s a list of 14 High Level Programme Activities [mustn’t hurt anyone’s feelings by leaving out their favourite fodder] of which No 13 is

Development of inland waterways within the context of the implementation of the Good Friday and St. Andrews Agreements.

Translation: Ulster Canal, even if there’s no money for it. But there is half a million for a

20-Year Strategy for Irish with a range of concrete measures, including supportive actions to roll out the language planning process on the ground, in line with the Gaeltacht Act 2012. These actions will include direct support to community organisations to enable them to prepare and implement practical and deliverable Irish language plans – not only in the Gaeltacht itself but also in selected towns and areas in other parts of the country.

Do they ever give up? They’d be better off supporting Ulster Scots, which has at least some chance of showing a growth in the number of speakers. But page 51 has a long list of imaginary measures to allow the department to claim that it will save €15 million in 2014: more efficient working, review, examining the scope for achieving further efficiencies … waffle.

On the capital expenditure side, RoI and NI each pays for works within its own jurisdiction. The RoI spending will be down from €4071000 in 2003 to €3858000 for 2014: a cut of just over 5%.

Maybe the money is being put aside to pay for the Clones Sheugh, although it’s not specifically mentioned in the document.

 

News from the NSMC

The communiqué from the North South Ministerial Council inland waterways meeting held on 19 June 2013 is here. This is my selection of the interesting bits.

The NSMC got reports on WI’s additional moorings (368m during some unspecified period), sponsorship programme, maintenance (“with 99.8% of waterways remaining open during the month of April”), publications (food guide and What’s On 2013) and website.

The WI business plan for 2012 was approved, which seems a bit pointless in the middle of 2013. A budget of €31.15m (£27.10m) was approved for an unspecified year. Then there’s this oddity:

5. They also noted progress on the development of the 2013 Business Plan and budget. Following approval by Sponsor Departments and Finance Ministers the plan will be brought forward for approval at a future NSMC meeting.

This is the middle of 2013. The next NSMC inland waterways meeting will be held in September 2013. What is the point of approving the budget and business plan for 2013 three quarters of the way through the year?

And another point: why is it taking so long? My guess is that, if things were running smoothly, and allocations were easy, the work would have been finished by now, so I deduce that WI’s budget is under pressure, with consequences for its future activity and thus its business plan.

The NSMC “noted” WI’s annual report and draft accounts for 2012; they’re not on its website, so presumably someone else has to note them as well before they can be published.

The unfortunate Bastables seeking treasure to pay for the Clones Sheugh had their second meeting in May 2013 (their first was in September 2012). In the absence of any GB, and with half-sovereigns rather scarce, the Bastables have adopted the “Lo! the poor Indian” strategy:

[…] sponsor departments have agreed to examine the potential social benefits and leveraged funding opportunities in that context.

The NSMC decided that Waterways Ireland won’t have a Board but will think about governance again some time. And it appointed Dawn Livingstone as WI CEO.

Dawn Livingstone …

… is to be the new CEO of Waterways Ireland:

Ministers appointed Dawn Livingstone to the post of Chief Executive of Waterways Ireland for a seven year contract, with effect from 29 July 2013 or the earliest possible date thereafter.

It will be interesting to have a non-engineer running the shop.