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Arlene Foster's draft budget is a considerable achievement in terms of complexity

By John Simpson

The finances of the Stormont administration have been reviewed and restated so that Northern Ireland is no longer threatened with the collapse of Stormont.

The (outgoing) Finance Minister, Arlene Foster, in possibly her last critical departmental decisions has persuaded the Executive to adopt a balanced sustainable budget for 2016-17

The draft budget publication by the Minister on behalf of the Executive is a considerable achievement in terms of complexity (adjusting to only nine departments), setting priorities and living within the block grant allocation.

The ministers and senior civil servants could have been forgiven if they had needed more time to complete the task. This draft budget will go to the Assembly for approval in January and, thereafter, there will be full detail of each allocation.

The draft budget for 2016-17 is no bonanza. Some departments will be asked to manage a departmental budget which is 5.7% lower than in the current year. Not an easy imposition, especially following other earlier reductions.

In total, Northern Ireland has done well compared to the experience of many departments in GB. In real terms the total budget is nearly the same as for 2015-16. Arguably, Northern Ireland might be said to have escaped from austerity. The outcome is uneven. Priority spending has edged upwards, but financial pain has not been abolished.

Some central features of the Budget stand out.

First, there is an effort to ease the budget problems in the provision of health and social care services. An extra £133m goes to this department. However, this is less than 3% of the current spending total in terms of hard cash. Even allowing for modest inflation, the Health and Social Care Trusts will see this as a continuing squeeze when allowance is made for demographic change, new technologies and improved techniques.

Second there are budget concessions for improved allocations to a difficult budget for legal aid and improved allocations for maintaining the roads infrastructure. Only a modest concession is earmarked for a much needed and currently inadequate skills agenda

To encourage reshaping of the delivery of public services, £117.6m is earmarked to pay for the voluntary exit schemes for employees from organisations such as the Housing Executive, Further Education colleges, schools and the PSNI. This adjustment in public sector employment is to be financed as part of extra borrowing of £200m by Stormont. Indirectly, this points to a significant labour force reduction.

To begin to answer the continuing criticisms of the quality of the infrastructure in Northern Ireland the Executive has prioritised seven major flagship projects. Each has been acknowledged for some time but now a firmer timetable is set for improving both the A5 and A6 roads (which are critical to regional development), and investing in Belfast Rapid Transport and in the proposed Belfast Transport Hub.

In addition funding is earmarked for the new hospital, the utility training facility at Desertcreat, and regional sports stadia.

The Stormont budget is now sustainable. Public services can be managed but with a continuing squeeze on staffing. Capital spending on the infrastructure will increase.

The implications for the economy are, on balance, positive but not without some key reservations.

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