Belfast Telegraph

Four years of cuts loom in 10% budget squeeze for Northern Ireland

BY NOEL McADAM

Finance Minister Simon Hamilton has issued a blunt warning on Government spending – budgets are set to be squeezed by up to a tenth.

In his first Budget-style announcement since taking over from Sammy Wilson, the DUP man predicted a further 10% cut to Stormont departmental spending in real terms by the 2017/18 financial year.

This will be contributed to by the current year-on-year so-called efficiency savings of around 3% which will go on for another four financial years at least.

With the Northern Ireland economy so heavily reliant on the public sector, any significant cuts are likely to have an impact on spending power.

Speaking yesterday, he warned ministers that their departments will "undoubtedly" have to stop doing things that they are doing at present – through a reprioritisation of services.

He said: "Spending on services that don't produce results is simply a waste of money that we don't have to squander."

Setting out his own stall in what he plans to become an annual stock take at the point of the October monitoring round, Mr Hamilton said: "The critical task will be to ensure that departments deliver only the core functions that the public need and the outcomes that people desire.

"That will automatically force departments to consider an efficiency agenda.

"To some, efficiency is the same as cuts, but not to me.

"Although that may involve reductions to low-priority services, for me efficiency is really about delivering key quality services with the minimum necessary level of inputs and obtaining outcomes."

The man who succeeded Mr Wilson, after shadowing him for around two years, also said the province's jobs recovery is "by no means secure" although there are some positive economic signs.

In a statement to the Assembly, he highlighted increased activity in the housing market, private sector activity "picking up" and a tourism boost with visitor numbers up by 4% and associated spending increased by 10%.

Questioned by Daithi McKay, who chairs the Stormont committee which monitors Mr Hamilton's department, the minister said: "The lesson of the past number of years is that departments are much better at managing their budgets as a result of the pressure that local ministers, committees and the Assembly are putting on them and the scrutiny that we get from outside this place puts on them.

"As a result, since 2010 we have not sent a single penny back to Treasury.

"That is something to be welcomed."

He said the Northern Ireland block grant is "relatively" protected but the resources side – current spending as opposed to capital spending – will continue to be constrained, with the latest Office for Budget Responsibility forecasts suggesting a decrease by 10.4% in real terms by 2017-18.

QUOTES

"Spending on services that do not produce results is a waste of money that we do not have to squander. That will force departments to consider an efficiency agenda. Although that may involve cuts to low-priority services, efficiency is about delivering key quality services with the minimum necessary level of inputs and obtaining outcomes."

Minister Simon Hamilton

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