Committee for Regional Development has “No confidence” in the Department’s budgeting abilities

Having had a motion of no confidence in the DRD’s ability to budget passed in the Assembly last night (including recycling my own reference to Oliver Twist but not necessarily as cleverly), a relationship which has at best been difficult appears to have descended into outright hostility between the Committee for Regional Development on the one hand and the Minister, Danny Kennedy, and his Departmental officials on the other.

I have written before about the difficulties faced with the 2015-16 DRD budget, and I am currently preparing a piece on the Coleraine-Waterside railway Phase 2 project which points out that firstly, cancelling the project wouldn’t free any money up to fix potholes or cut train and bus fares, and secondly the contract award was signed off by both Danny Kennedy and his DUP counterpart in DFP – probably recently enough to have been Arlene Foster.

The documentation in the first link on this article is interesting, particularly the paper from Translink, and it sets out a lot of things which weren’t obvious to the public.  The first of those is the reason why Translink’s fares went up in February: while concessionary fares reimbursement for 2014-15 rose by £2 million, fuel duty rebate and rail subsidy were cut by £10 million mid-year.  A budgeted intention to use up £9 million of reserves built up in 2012-13 turned into a budgeted net loss over the three years 2012-15 of £4.7 million, and the documentation confirms that Translink’s funding will be further reduced in 2015-16, in actual fact by £13 million, a little more than my earlier estimate.

It also confirms that not only are we not suffering lower fare increases than GB, fares have gone up by rather less than inflation – including the February rise, it came to 12.5% since 2011 against inflation of 14% over the same period and an increase in GB rail fares of 22.6%.  CIE fares have risen by up to 40%, against an even more hostile political background.  Translink actually asked for an increase of 10%, which was refused to my considerable relief as a passenger – but the fare increase is estimated only to raise £4 million in additional income, a figure which may dangerously assume that passengers will simply pay up.

The risk outlined in the documentation is that net current assets will fall dangerously close to or below the safe working capital of at least £15 million in the next two years if income is not increased – taking into consideration that selling assets would firstly almost certainly see the income earmarked for capital schemes, and secondly, given that NITHCo intended to dispose of certain properties including car parks a couple of years ago but the sale didn’t proceed suggests that they could not realise what they considered the assets to be worth.

There will be more to look at with the papers on water and roads, but I’m expecting a similar pattern of funding that with the greatest efficiency savings in the world simply isn’t adequate to provide the service expected.

The question therefore comes down to this:  how can a department with inadequate baseline funding ever be expected to balance its books?  Or are Danny Kennedy and his DRD officials missing some really obvious way that could somehow address the concerns of the Committee?  Does anyone have a practical alternative?

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  • barnshee

    Welcome to the real world

  • T.E.Lawrence

    I think you have answered your question Andy. “How can a department with inadequate baseline funding ever be expected to balance its books?” It will never but its a question of wait and see what the blackhole of debt comes in at !

  • chrisjones2

    “How can a department with inadequate baseline funding ever be expected to balance its books?”

    As Danny Kennedy said, by setting priorities and stopping doing some things. That’s what we have to do. I would live to drink Petrus ’64 with a fillet steak at the weekend. I cannot afford to

  • AndyB

    It’s debatable whether there is enough cash to pay for a glass of tap water and a tesco everyday value ready meal…

  • Ernekid

    Are the decades of comparative under investment in Northern Ireland’s infrastructure factored into these spending decisions? Northern Ireland’s road and rail infrastructure is much worse shape compared to rest of the UK and Ireland. Wouldn’t increasing the DRD budget to upgrade infrastructure in underdeveloped areas such as the West of the Region do more for boosting the NI economy in the long term?

  • Ernekid

    For example look at this graphic produced by thedetail.tv. It clearly illustrates the gaps in Northern Ireland transport infrastructure. Shouldn’t extending the dual carriageways to Derry/Donegal and to Enniskillen/Omagh be a priority for the Executive to regenerate the North West economy?

    Even rebuilding the rail line to the International Airport or Armagh would much to help long term economic development.

  • chrisjones2

    I disagree. But then we must either stop spending and cut servcies or raise prices to economic levels and put the blame with those who have left us in this situation In practice it will be both

  • AndyB

    And if you cut those services and increase prices to economic levels, Northern Ireland will grind to a halt because nobody will be able to afford to use the train if they have to pay twice the amount they do now or more, and buses are already perceived as too expensive despite being cheaper than GB. That would be a fantastic way to make Translink bankrupt within weeks.

    I’ve been through this several times, demand for public transport in NI is too price elastic to get away with that.

    Services in other areas are being cut, like pothole and street lighting repairs – both false economies. The reality is that more money is needed to provide the most basic level of service.

    Of course, if by raising prices to economic levels you mean some form of road charging…!

  • AndyB

    So where do we find the money for that – and come to that, where do we find the revenue budgets to pay for the rail services once the lines are built? It’s also worth pointing out that much as better connections to the North West are needed, the A5 carries a lot less traffic than, for example, the A6.
    The A5 could have been almost complete by now if the Appropriate Assessment under the EU Habitats Directive had been carried out as it ought, of course.

  • Lorcán

    “buses are already perceived as too expensive despite being cheaper than GB.”

    That might be true on paper, but it certainly isn’t necessarily true in practice. I can travel anywhere in Greater Manchester for the cost of £4.10 a day ticket. Same thing for Northern Ireland? £9. That’s over twice as much, I can’t specifically comment for other areas in GB, but Greater Manchester isn’t exactly a small area to work from.

  • AndyB

    Actually, I’ll pick up on the International Airport link.

    I can say with absolute certainty that this will never be built because it cannot be economically viable.
    Supposing a spur were built from the Lisburn-Antrim railway line, it would still be quicker for anyone coming from Belfast or further east to take the bus from Belfast – regardless of whether the train went through Lisburn or through Antrim (probably requiring a change.)
    It’s debatable whether anyone coming from the west would be quicker driving to Belfast and taking the bus, but almost certainly quicker for them to to drive straight to the airport.

    Building a spur from the Bleach Green-Antrim line is a possibility, but with the amount of development around the Ballyrobin Road, it’s debatable whether the railway line could reach the airport, and the line would have to continue past the airport to reach either the NCC mainline or the Lisburn Branch to continue. Again, it’s debatable whether, given the capacity of the single line from Monkstown to Antrim, the train would save any time against taking the bus or driving straight to the airport.

  • AndyB

    Greater Manchester is a fraction of the size of Northern Ireland – 493 square miles against NI’s 5345 square miles, and it’s £5.60 according to their website for one day all day bus only. You have to compare similar distances with similar distances, like with like.

  • Nevin

    Lorcán, have you looked at ilink? Belfast folks get a better deal than other districts. Discrimination?

  • Lorcán

    Metro travel was always cheaper than Ulsterbus travel, in my experience. Thing is that with Metro travel, while it’s cheaper to get an Extended Zone day ticket with metro (£3.50 compared to the £4.20 from earlier), it’s cheaper to get a weekly ticket here (£14 compared to £5.50). The £5.60 charge relates to being able to get on any bus firm here with one ticket (and we’ve a few – First, Rosso, Stagecoach, MCT etc).

    If you look here as well, you’ll see you can also lose out when comparing ilink with the equivalent here: http://www.systemonetravelcards.co.uk/

    The basic point is that we have better competition, AND transport is better subsidised here. It makes all the difference, not only in fares, but in general public transport usage.

  • Lorcán

    Andy, see my post above 🙂

  • AndyB

    As I’ve also gone over several times, we’ll never get competition here. Too few profitable routes on Metro to attract other companies, and DRD have strongly hinted that they will go down the route of the London model, where all competition other than express routes (like Rooneys, AirCoach etc) is done at tender level – the customer ends up with little or no choice for their daily commute.

  • Lorcán

    I’m not saying “go out and get more competition”, just that it is damned useful. But it is hard to convince people to use public transport as it is, and from my own experience there was plenty still in the Translink fleet that could be doing with upgrading. The less people using public transport, the less money there is regardless of how much you hike your fares up. The problem isn’t the fares, it’s whether people will pay them.

  • AndyB

    12.5 miles radius (roughly the size of Greater Manchester) is smaller than iLink zone 2, and zone 2 all modes on Translink is £10 for a day. The equivalent on System One is £8.60 and off-peak only.
    From a commuter point of view, which is probably more important, how do peak cash fares and multi-journey tickets compare? Can a regular traveller commute 4 miles to work and back for £2.50?

  • AndyB

    I think that competition is illusory in public transport, which tends to lend itself to monopolies local to each route, enforced by company-specific fares which are cheaper than multi-operator tickets.

    I think any fare rise is counter-productive, because of how critical the movement of commuters into public transport is to the interests of businesses and those commuters who have to drive. A 10% rise would have been dangerously close to diminishing returns, and I well remember NIR season tickets rising by 9% or more each year in the late 90s and early 2000s. People from Bangor like me were a captive audience, but I think it did force some passengers back into their cars, traffic jams or no traffic jams.

  • chrisjones2

    I dont accept your whole premise. People will pay more for the bus when they have to and they have to because as you say “buses are already perceived as too expensive despite being cheaper than GB.” Time to get real

  • chrisjones2

    The airport link isssue is all waffle boys. There is no more money.

  • AndyB

    That’s not reality. Reality is, and has long been proven, that people will refuse to use public transport if it is too expensive and they have a private car available.

    If people won’t use public transport because it is cheaper to drive in ever-lengthening traffic jams, in which buses will get stuck if they are longer than the bus lanes, Translink will go under very quickly due to lack of income.

  • Dan

    Height of the tourist season and the roadsides, footpaths and verges are an overgrown mess.
    He ought to be sacked on that issue alone.

  • AndyB

    Cuts have to be made somewhere. What would you like him to cut to pay for verge cutting?

  • chrisjones2

    Better for wildlife. Leave them as they are. Its a waste of money cutting them

  • chrisjones2

    Then let it cut back. Something has to go

  • Zig70

    A minority minister is always going to struggle in austere times. Just surprised he wasn’t knifed more. I suppose the election and packs staved it till now.

  • AndyB

    What about those who rely on it because they have no other way of getting about?

    What about commuters for whom the loss making services are the difference between making it worth using public transport rather than driving the whole way to work because either there isn’t a convenient Park&Ride that would make it worth driving part of the way then changing, or the revised service means they can take the bus one direction but not the other?

    Those are the real life scenarios. Of course there are services that could be axed because neither one direction nor the return journey carries more passengers than could fit into a taxi, but the cost to society of not operating it is far higher.

  • Croiteir

    When I was in England last year in September the roadsides were overgrown. That is not a big issue. The quality of the surface and safety is more important

  • Dan

    Roadsigns covered by overgrown hedges, weeds and tree branches , sight lines at roundabouts and junctions obscured…..that is a safety issue.

  • chrisjones2

    Yes ….but what do you suggest we do? Sort of electing a whole new Assembly with different attitudes this is what happens. Get used to it, I am afraid. I don’t welcome it but it seems the only option. Voters need to learn that choices have consequences. One man’s unwarranted free DLA car is no bus for perhaps 25 fellow
    citizens

  • Dan

    …what about the Eco car battery charge points which are rarely used. That bullshit should be scrapped forthwith.
    Never, not once, have I seen a car in the space at Farmley in Glengormley.
    No doubt that is repeated throughout the country

  • AndyB

    Once they’re in, how much do they cost? Besides, their installation comes out of the capital budget, and so would their removal. No impact on the ability to fund hedge cutting.

  • AndyB

    As I’ve said before, what we don’t do is try and make public transport “pay,” because, bluntly we cannot and we never will.

    Motability cars as far as I know are a red herring as they are funded from people’s own DLA or PIP together with the Motability charity, which is owned and funded by the big four banks. Because it’s linked to the higher rate mobility component of DLA and PIP the changeover to PIP isn’t going to have much of an impact on demand on the public purse. Check http://www.motability.co.uk for info.

  • chrisjones2

    Do wake up. There is no more money

  • chrisjones2

    Errrr ,…you miss the point. In some parts of NI 1 in 5 are on DLA. All these cars are paid for from the block grant. Millions are being wasted. The money tree is dead

  • AndyB

    Errrr… you are still factually incorrect. The element of the block grant which funds benefit payments is demand led and based on entitlement to the benefits available in GB rather than a fixed sum to be spent as we wish, being part of Annual Managed Expenditure.

    It’s very much a debatable question how many of those currently on the higher rate of the mobility component of DLA will not be entitled to the enhanced rate of the mobilty component of PIP. I suspect that the changeover from DLA to PIP is going to have very little effect on the number of people entitled to motability cars, because the main impact will be on people who would never have been entitled under DLA rules.

  • Ernekid

    Now Chris, you know as well as I, there’s plenty of money out there. What’s lacking is the will to spend it or allocate it to areas where’s it’s actually needed.

    Allocating more spending to Northern Ireland to bring its regional infrastructure to the levels of the rest of the UK would probably do more to develop the economy and encourage investment more than anything else.

    It’s funny that they never say there’s no money whenever they are planning a military adventure in the Middle East or when the banks need bailing out.

  • AndyB

    It would certainly have zero impact in year, as the first priority will be new claims, followed by fixed term awards, and finally life awards for those between 16 and 65. All on the Motability website.

  • hugh mccloy

    What about OFDFM pulling tourism innovation fund halfway through that stopped several big projects in its tracks, does that no merit a sacking? or not having an actual tourism strategy did any heads roll ? Considering this country only promotes causeway and titanic those road systems are not to bad.

  • hugh mccloy

    Its the same in most departments, look at the DHSSPS, it does not even commission enough operations or consultant appointments to meet demand not counting the backlog.

  • scepticacademic

    DRD is the ultimate non-department, part of the ridiculously large n=10 departments created under GFA to ensure d’Hondt system of allocation of ministries could fit the 4 party system (as it was then). Prime candidate for a merger/abolition if the folks on the hill every get round to a rationalisation. Maybe the ongoing budget crisis and looming future cuts, end of Barnett will concentrate minds. However, OFMDFM will take some beating when it comes to wasting public money on ineffective bureacracy and ‘special advisors’. What a shower of….

  • scepticacademic

    Have they put any in Fermanagh yet, for those all those electric tractors? 😉

  • scepticacademic

    Whatever happened to the Strategic Investment Board? Seriously, does anyone know? As I recall, it was a quango and had specific budget allocated as one of the peace process sops. Wasn’t SIB supposed to be addressing this? Did it achieve anything? I wonder if they were ever audited by the NIAO.

  • scepticacademic

    It does make one wonder where the £2bn+ of EU Objective 1 structural funding went. Certainly the Portuguese and Spanish spent their on roads and airports (although the economic development benefits are questionable).

  • scepticacademic

    On the subject of “there’s no money”, isn’t it time for the NI exec to think about revenue raising powers and re-thinking past decisions made in economically healthier times?

    1. The case for universal pensioner subsidies on public transport is surely worth debating in this context; esp when the poorest groups in society are now young adults.
    2. Let’s bring back prescription charges while we’re at it.
    3. And why should NI students get away with low uni fees when English students are getting clobbered for £9k pa, especially when its only the grammar school middle class types that benefit and they don’t actually pay up-front in the English system.
    4. Anyone remember the exec can adjust the regional rate component?
    Well, that’s a starter.

  • scepticacademic

    Chris, you can have your first ever ‘like’ from me on this one. DLA cars are an unbelievable scam. If the English taxpayers knew about this one…

  • AndyB

    1. Guaranteed vote loser, as well as the problem that to vary from GB benefit rates would involve software we’d have to pay for as pointed out by a DUP MLA in connection with Welfare Reform and what happens when the old benefits are done away with in GB if NI is still using the old systems.
    2. My wife and others with large scripts might have something to say about going back to the old system, but that’s not to say we shouldn’t
    3. It’s worth making the point that tuition fees still need to be found from current budgets. If increased to £9,000 (very few universities don’t demand the maximum) the extra £6,000 would have to come out of current expenditure, being paid back at a later date with the student loan.
    4. I certainly do – and I’ve made the point that going knocking on the Treasury’s door while refusing to use existing local revenue raising powers is not too likely to go down very well.

  • chrisjones2

    Yes bit they still burn witches in Glengormley dont they

  • Croiteir

    It is.