“it’s up to the Executive whether to sell assets like Belfast harbour”

The Northern Ireland Executive met today [To decide what planet they’re living on? – Ed] to discuss the outcome of the 2010 Spending Review.  Apparently, they now want to meet with either the “Coalition Government” or the “London Government”.  In their statement they can’t decide which.

Perhaps the UK Government would do?  How about the Northern Ireland Secretary of State?  He is a member of that government, after all.

And as the NI Secretary of State, Owen Paterson, told the BBC

“This is a team game and today the executive has got to sit down and work within the budget, as has every council and department across the UK,” said Mr Paterson.

The Conservative minister said he was in favour of selling assets to raise money, but this was a decision for Stormont.

“The executive has some decisions to make today on the basis of a settlement which frankly is a lot, lot better than virtually every other department across the UK,” he said.

Mark Devenport records that he was even more specific than that

Mr Paterson pointed out this morning that Gordon Brown’s original pledge contained cash from several pots – not just grants from the treasury, but money loaned under [the] so called Reform and Reinvestment Initiative and cash from third parties. He also said that [whilst] it’s up to the Executive whether to sell assets like Belfast harbour he personally would favour such a course of action.

The Deputy First Minister retorted that it’s easy to urge the Executive to sell off the family silver, but this might not be a sensible course given the depressed state of the market.

That’s hardly the point, deputy First Minister.  The NI Executive [or just the NI Agriculture Minister? – Ed] went ahead with the sale of the site at Crossnacreevy in a similar situation.  And you could always indulge in some “blue-sky thinking”.

But Owen Paterson has a point.

From the Slugger archive, here’s the detail of the announcement by Gordon Brown of the St Andrews linked investment

3. The details of the package are as follows:

  • a four-year spending commitment rising in successive stages from £8 billion per year today to £9.2 billion per year in 2010-2011. This commitment totals £35 billion, including capital spending and is equivalent to over £50,000 per household; 
  • an updated strategic capital investment plan totalling £18 billion over the period 2005 to 2017 to underpin long term economic growth, and facilitate substantial capital spending on roads, health, schools, tertiary education and other priorities;
  • if devolution is restored the Government will work with the science councils to provide a long-term basis for research facilities in Northern Ireland.  An incoming Executive would therefore have the opportunity to promote world-class universities and research and development facilities in Northern Ireland with its own resources. To support R&D in business, the UK Government will work with the NIE to simplify the R&D tax credit rules and more actively promote take up of the R&D tax credit in Northern Ireland;
  • allowing the NIE flexibility to drawdown a further £0.4 billion under the End Year Flexibility (EYF) scheme over this period;
  • allowing the NIE to retain the receipts from planned public sector asset sales. These are estimated at over £1 billion between 2007-08 and 2010-11 to boost capital investment; [added emphasis]
  • allowing the NIE to retain all efficiency savings identified over the CSR period currently estimated as rising to at least £800 million by 2010-2011 to strengthen front line service delivery. Efficiency savings are from on-going Northern Ireland CSR zero based reviews, plus savings such as improved procurement and transformational change and the Review of Public Administration; and
  • the retention by the NIE of EU receipts for regeneration from the structural funds programme and under PEACE funds for community cooperation. This is additional to the above and estimated at some £0.5 billion in the period 2007-2013.

And as the Strategic Investment Board’s “Investment Strategy for NI 2008-2018” notes on the table on page 7 [pdf file]

(2) NI Executive Funds comprise Capital DEL, RRI borrowing, and receipts from value release from surplus assets. [added emphasis]

(3) Additional funds relates to anticipated contributory funding from third party sources (e.g. a planned contribution of £400m for Roads development from the Irish Government). These funds are indicative and are outside public expenditure.

Gordon Brown also mentioned “a retail consortium agreement”.  With John Lewis?

And how much has been retained by the NI Executive from those sales receipts to date?

The investment plan, of course, also anticipated the privatisation of NI Water…

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  • lamhdearg

    Sell sell sell, but whos buying. if only i had won that 140 million euro draw Belfast castle would be mine.

  • Pete Baker

    There’d be buyers for Belfast harbour…

  • Drumlins Rock

    they never mention the £350K from the south will cost us twice if not three times that for a road we don’t need.

  • lamhdearg

    If Belfast harbour is worth buying then why sell, what would the buyer do with it to make it worth buying, why would its current owners (us the tax payers) not do what the buyer would do and make a profit for yourselves. i am confused, unless of course during its sale some money could be made by some people (not us the tax payers) on the fly.

  • Stool Pigeon

    Too right. There would be one hell of a competition for;

    – harbour
    – office sale and lease back
    – car parks
    – forrestry
    – housing

    The market for this type of stuff is well and truly alive and NI would be seen as a diverse market. I’m not sure our Executive and the Civil Service’s brand of extreme leftism could ever contemplate the repugnant private sector having anything like a strong position in NI – sorry but I think they’ll never do it and resort to blaming the coalition which unfortunatley our electorate would still swallow.

    We seem to forget that we have never put our hand in our own pocket and been far too busy picking the Brits pockets. The five Unionist parties in the Executive should start thinking about sorting themselves out.

  • Stool Pigeon

    Cos we’re broke. If you were about to go bankrupt and your kids were about to be homeless and you had a chain of buy-to-lets making you a small profit what would you do?

  • Pete Baker

    That’s missing the point, lamhdearg.

    Such sales were part of the ‘promised’ £18 billion investment strategy.

    There’s little point in the NI Executive/OFMDFM semi-detached polit-bureau complaining about the level of central government funds provided when the other elements are not forthcoming.

  • slappymcgroundout

    “Such sales were part of the ‘promised’ £18 billion investment strategy.”

    You are presumably referring to your description of the “package”, which includes your first instance of bolded material. Problem is that such material provides for “planned sales”. Do you have any evidence at all that there ever was a plan to sell Belfast Harbor? Next, the total anticipated revenue is expected to be 1 bil pounds over the described period. How much is Belfast Harbor worth? Certainly more than 1 bil pounds. And the end of the period is rather soon in coming, so going back to things planned, would seem to be the case that there never was a plan to sell Belfast Harbor (shouldn’t some have been soliciting offers by now?). Next, the second instance of bolded material refers to “surplus assets”. The Belfast Harbor simply cannot be classed as a “surplus asset’. So your above-related statement as it applies to Belfast Harbor is simply false.

  • Gareth

    Isn’t it part of being devolved that you blame the centre for bad things? I have a feeling it will probably work. Attrition and all that stuff.

  • Pete Baker

    Actually, Slappy, the quote is of “planned public sector asset sales”.

    Which public sector assets, in particular, was up to the NI Executive.

    The site at Crossnacreevy was one such asset.

    But, again, you’re missing the point.

    Such sales were part of the ‘promised’ £18 billion investment strategy.

    There’s little point in the NI Executive/OFMDFM semi-detached polit-bureau complaining about the level of central government funds provided when the other elements are not forthcoming.

  • DC

    I’ve a sneaky feeling NI and the other regions will have more pain to come next Spending Review – 2015.

    Looks like England is taking the hit first so the coalition can digest and fire fight as and when – once levelled out – NI and the rest will probably take another 5% or so top slice off block grant.

    Basically the coalition has to manage and then digest the biggest cuts first, obviously England is where the bigger spends are due to size – hence the 19% average departmental cut. NI only took a 7-8% cut. Exchequer doesn’t want to bite off more than it can chew let alone digest – so first things first – severe English cuts.

    Nick Clegg said recently that this is just the beginning of the cuts. It’s going to be a lean 5-10 years (I’m almost hankering after the property bubble – bring it back all is forgiven).

  • Driftwood

    Why do they want to meet with the ‘London government’?
    I didn’t realise Boris Johnson had any remit in this part of the kingdom. Though he would do a lot better than the sandpit assembly if he did. But then, like Owen Paterson, he’s got real responsibilities, that’s the difference.

    Does anyone know when the NI assembly start back after their summer break? Surely it must be sometime soon?

  • lamhdearg

    Down size to one of my buy-to-lets and stop spending money on things i dont need, for new lcd tv see new football/rugby/gaa grounds for beer/wine/cigs see irish/ulster scots languages, savings can be made without selling the ranch.

  • mopphead

    Pete – the text you quote from the Brown “£50bn package” is not conclusive either way. It does not say that the planned sale of assets would go towards the £18bn investment strategy total. Maybe, it was left deliberately vague. Maybe, there was a misunderstanding. Maybe, Owen Paterson is talking keek. All three of these are possible. The talks on the “£50bn package” involved all the main parties, not just SF/DUP. So perhaps the erstwhile Paterson allies formerly known as UCUNF could clarify it for us. Also worth remembering that Gordon Brown wanted Belfast Harbour flogged off as part of the financial package linked to the Good Friday Agreement in 98.

  • lamhdearg

    My point would be Pete that if we have to sell to cover our spend sooner or later we will run out of things to sell, better to spend less. simplistic i know but still true.

  • Pete Baker

    Mopphead

    That’s why I included the SIB Investment Strategy quote.

    There the figures given clearly do include “Capital DEL, RRI borrowing, and receipts from value release from surplus assets”.

  • “The site at Crossnacreevy was one such asset.”

    P J Bradley: “I thank Mr Cobain for tabling the question, because the public have a right to know how a property worth £5 million could be valued at £200 million.”

    Perhaps some of the family silver isn’t worth much 🙁

  • ” surplus assets” ????

  • mopphead

    SIB extract still doesn’t prove anything. That could mean Executive had option to further increase capital funding – above the £18bn figure – through sell-offs

  • Pete Baker

    mopphead

    You’re not looking at the quote in the context of the figures given in the table.

  • “Such sales were part of the ‘promised’ £18 billion investment strategy.”

    That’s not how I read it. The planned asset sales and the £18 billion were two elements of the £35 billion package; one element is not conditional upon the other.

    £1 billion was the 2007 estimate. What has been earned so far and what is the current estimate for the remainder of the planned sales.

    SIB: “A Capital Realisations Taskforce was established in
    October 2007 to review existing government assets and to establish the potential for the Executive to realise better value from those assets no longer needed or fully utilised by the public sector going forward. The Taskforce has now reported to its commissioning Ministers, and identifies opportunities to realise significant additional value from surplus or underutilised assets for reinvestment in essential infrastructure.”

    Have the Ministers accepted the CRT recommendations?

  • Pete Baker

    “That’s not how I read it.”

    That’s why I included the SIB quote which is in reference to the actual figures in the Investment Strategy.

  • Pete, SIB AFAIK makes no reference to an £18 billion investment strategy. Perhaps this is a more appropriate quote:

    “Approaching £20bn will be invested in the next 10 years to deliver essential infrastructure – around £6bn of this in the next three years. This money comes mainly from NI Executive funds, supplemented by receipts from the planned disposal of surplus government assets, and complementary investment from third party sources.”

  • Lionel Hutz

    I’m sure you wont lose much sleep over this, but I can’t see how you have joined the dots their either Pete.

    Ofcourse GB always dealt in such ambiguities but the two extracts do not point in either direction. IN any case, if you were to look at Brown’s statement, that would indicate that NI was entitled to atleast 17 billion without taking into account asset sales

  • “The Conservative minister said he was in favour of selling assets to raise money, but this was a decision for Stormont.”

    As with almost everything that Paterson has said about the budget it is not entirely true. Treasury still needs agree that the Executive gets the full proceeds from any sale.