Tag Archives: TUV

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.

 

The NI Assembly discusses waterways

The Minister of Culture, Arts and Leisure,  Carál Ní Chuilín [Sinn Féin], reported to the NI Assembly yesterday on the North/South Ministerial Council (NSMC) inland waterways meeting held in Enniskillen on 14 February 2012, which I reported on here. The minister’s statement didn’t add anything to what the NSMC minutes [PDF] said, but some interesting points came up in the discussion afterwards.

Disposals

[Karen] McKevitt [SDLP, South Down]: One of the four specific recommendations considered at the meeting was a change to the legislation for the disposal of a waterway or part of a waterway by Waterways Ireland. Why does Waterways Ireland need that power? Does it have any plans to make such disposals?

Ms Ní Chuilín: We want to give Waterways Ireland the authority to dispose of small areas of land without needing approval from both Departments. That provision will be de minimis and will cover the disposal of land that is worth less than £25,000. It will also allow for good practice and good governance, and will ensure that there is a clear understanding of what Waterways Ireland can and cannot do. The creation of such a provision has been raised before and we said that we would bring it forward. Therefore, this is progress and, through it, we are providing clarity.

This is sensible: WI shouldn’t have to bother ministers about such minor disposals.

The Clones Canal

Perhaps the penny is beginning to drop. Mr McCarthy [Kieran McCarthy, Alliance Party, Strangford] said:

I thank the Minister for her statement. The Minister said that the next NSMC waterways meeting will set out “options for advancing the Ulster Canal project.” Is there any hint that that project may be curtailed or that less will be done than was formerly envisaged?

The minister’s answer:

[…] Some time ago, the Irish Government made a statement that their budget for developing some of the capital works that they had committed to was under threat. The Ulster canal was mentioned in that statement.

At previous NSMC waterways meetings, we agreed to progress that project as much as possible. One of the first stages of the programme of work was to seek leave for planning permission, and that has happened. The project will be kept under constant review at each stage, and the Ulster canal project is firmly at the top of the agenda of NSMC waterways meetings and other meetings that I have with Minister Deenihan. Any progress on that project will be reported at the next NSMC waterways meeting in June.

The minister has shifted the focus to the planning application as the mark of progress. She did not tell Mr McCarthy that there is no money in Waterways Ireland’s budget for any substantive construction work before 2014.

Tom Elliott [Ulster Unionist Party, Fermanagh and South Tyrone] asked about costings for the whole of the Ulster Canal:

[…] She mentioned the Ulster canal and, in particular, the Clones to upper Lough Erne portion of that canal. Will she give us details of the costings of the entire Ulster canal project and, in particular, the Clones to upper Lough Erne portion, for which planning permission has now been sought? Have those costings been reviewed recently?

The minister confirmed the figure of €45 million, reported here on 16 December 2011, for the Clones Canal, but note her inclusion of the word “currently”: there might be more increases before construction could begin in 2014. She provided no information about updated figures for any canal from Clones to Lough Neagh:

The 2006 business case indicated a capital cost of £171·5 million for the restoration of the entire canal. That included site navigation, an environmental impact assessment and project management and construction costs. The estimated costs to restore the Clones to upper Lough Erne section is currently €45 million. The construction costs for that section will be entirely funded by the Irish Government, and, when it is built, my Department will contribute ongoing operational costs that are estimated at £37,000 per annum.

If the same 29% increase were applied to the rest of the canal, the total cost would be £220.5 million, just under €350 million.

Tha Boord o Watterweys Airlann

The other discussion of interest was about the proposal to have a board for Waterways Ireland. Robin Swann [Ulster Unionist Party, North Antrim] asked:

Can the Minister provide clarification on the option to set up a board that comprises fewer than 12 members to present proposals for consideration at a future NSMC meeting on inland waterways? Would that not be the establishment of a further North/South quango to advise the North/South Ministerial Council? If that board is established, what would it discuss, who would decide its remit, and who would be on it?

The minister replied:

[…] In my statement, I said that proposals are being brought forward on the board. Waterways Ireland is the largest of the North/South bodies, yet it does not have a board. Bringing forward proposals for a board does not suggest that there are any issues. However, for the largest body not to have a board is not in keeping with good practice in governance. To that end, it will have a board. Proposals for it will be brought forward at the next NSMC meeting. I am happy to share the outcome of that meeting with Mr Swann, other members of the Committee for Culture, Arts and Leisure and, indeed, other Members.

And Jim Allister [Traditional Unionist Voice, North Antrim] asked:

[…] Is that for an advisory board or a management board? Given that Waterways Ireland has been running for many years without a board, why is it now thought necessary, or is it just jobs for the boys that will add to the expense of Waterways Ireland?

The minister replied:

I am sure that the Member heard the answer that I gave to Robin Swann about setting up a board. One of the recommendations of the St Andrews review report was that a 12-person executive management board be appointed to direct Waterways Ireland’s affairs. Waterways Ireland is the biggest of the North/South bodies with no board; therefore, it is in keeping with good policy, practice and governance that options and proposals to establish a board will be brought to the next NSMC meeting.

The minister is quite right: there should be a board.