The public sector in Northern Ireland could be at more risk from rising unemployment, crime levels and demand for social care than previously thought.
Business advisory firm Deloitte reported that the quality of key services could drop, as the economic downturn intensifies the impact of lower tax revenue and more demands are made by the public.
Jackie Henry, partner at Deloitte in Belfast, said the situation requires strategic reform.
“While economic uncertainty presents a threat to the public sector, it may also increase the pressure for reform of key services to citizens,” she said.
“Analysis has focused on economic indicators such as consumer spending, the property market and UK businesses. However, impact on the finances, operations and policymaking of public sector organisations may be equally significant.
“This is important because the health of public finances and ability of government to deliver services are highly relevant to the public interest and Northern Ireland’s economy.”
Deloitte noted that net taxes and National Insurance contributions are projected to fall by an equivalent of at least £17bn between 2009 and 2010. Stamp duty revenue is also expected to fall by over 40% in 2008-09, and business rates’ receipts are expected to be £300m below the 2008 Budget forecast.
It suggested strategic reforms that could ensure stability — including using strong credit ratings to obtain cheaper contracts and making long-term savings by sharing services.