Belfast Telegraph

Saturday 19 April 2014

Further budget cuts in the pipeline, warns Finance Minister

The Executive will face "some very difficult decisions" as part of its next budget setting process following the Chancellor's Autumn Statement, the Finance Minister has warned.

While Sammy Wilson welcomed the decision taken by the Chancellor to channel more funding into capital investment, with additional capital investment resources of £131m for Northern Ireland over the next two years, he said that further budget cuts are in the pipeline.

Mr Wilson said that additional capital investment allocations were funded by cuts to Whitehall departments' resource budgets of 1% next year and 2% in 2014-15.

"However, because health and education were exempt from these cuts and some additional allocations were made ... the impact on Northern Ireland was much less severe," he said.

"I am pleased that the decision to protect health and education from the Whitehall resource expenditure reductions means that any negative impact on Northern Ireland is much mitigated.

"In fact, our resource DEL (Departmental Expenditure Limits) will increase by £2.4m next year, with a subsequent reduction of £34.3m in 2014-15.

"This is manageable without the Executive having to re-open its budget position."

The Office for Budget Responsibility (OBR) has published its latest projections for the UK economy and public finances.

These projections suggest that UK Total Managed Expenditure will fall by 0.7% per annum in real terms in the first years of the next spending review.

"The OBR projections for the UK economy and public finances suggest that further public expenditure reductions will be necessary beyond 2014-15," said Mr Wilson. "It is therefore critically important that all ministers deal responsibly with key policy areas to ensure that no unavoidable costs are imposed on us."

But he added that a 15% rise in electricity bills has been averted by the removal of the Carbon Price Floor for Northern Ireland.

"Enforcement of the Carbon Price Floor upon Northern Ireland would have a massive detrimental impact on the local energy sector," Mr Wilson said.

"I am therefore particularly pleased that HM Treasury have responded positively to our concerns."