NI departments ‘spending money they don’t even have’, committee hears

There is a danger Northern Ireland’s government departments are spending money that they don’t have, a Stormont committee has heard.

The Public Accounts Committee (PAC) has been scrutinising a decision by the Department of Health to fund a £209m pay deal for healthcare workers, which exceeded its own budget.

Last May, Health Minister Mike Nesbitt signed off on the pay award, but said it was inevitable he would be told the Department of Health (DoH) could not afford it.

He then issued a ministerial direction to the department’s permanent secretary Mike Farrar to make the award to healthcare staff.

The Northern Ireland Executive subsequently announced it would fund £100m of the pay award, with the DoH finding the remainder from within its budget.

At Thursday’s PAC meeting, Northern Ireland’s Auditor General Dorinnia Carville said the move was “slightly unusual” because such directions were normally given when a minister did not agree with a permanent secretary.

However, in this case Nesbitt and Farrar were in agreement that the pay award should be made.

Carville told MLAs (assembly members) that she would be keeping the move under review, and there was a concern about how the overspend would be “managed going forward” and its potential impact on the overall Northern Ireland budget.

The Auditor General told the committee that she may also be examining two further potential overspends by other executive departments, and would be bringing details in the next few weeks.

She said she could not disagree with Democratic Unionist Party (DUP) MLA Tom Buchanan’s belief that such ministerial directions gave ministers “a licence to overspend”, but she said the process was “compliant”.

PAC chair Daniel McCrossan said: “The dangerous precedent that has been set here is that if all other departments and permanent secretaries took a similar approach, there is a very serious problem that is going to emerge next year.

“All departments have the same challenges and pressures… The pay issue is a major issue across the entire public service and if permanent secretaries follow in this vein, with the department, there’s going to be a big problem.

“Our role here is to scrutinise public expenditure, and basically what we are seeing right now, they are spending money they don’t even have,” said the Social Democratic and Labour Party (SDLP) MLA.