Belfast Telegraph

Northern Ireland welfare spending 'set to soar to £6.3bn by 2019'

By Liam Clarke

Spending on welfare in Northern Ireland by 2019 will still be nearly 30% higher than it was at the start of the decade – even if controversial reforms are implemented, a Civil Service memo has claimed.

As politicians wrangle over bringing in new measures being introduced in Great Britain, a document seen by the Belfast Telegraph claims that more than a billion pounds a year will be poured into benefits, regardless of what happens.

The document notes that in 2010-11, spending on welfare here was £4.9bn.

If the new benefits system for England and Wales was introduced to Northern Ireland, spending here – paid for by London – would still rise to £6.3bn in 2018-19.

That represents a rise of 28.5%.

If the current system remains in place here, the rise would be greater, with spending reaching £6.7bn by 2019 – an increase of nearly 37% over 2011.

The difference between the two figures is considerable – £400m a year.

This is the amount which will be lost to Northern Ireland under Welfare Reform proposals. It would have to be found from cuts in other departments if Stormont broke parity with Britain.

Though considerable, this official estimate falls below the £750m a year cited by researchers at Sheffield Hallam University last year.

If £400m were removed from the economy, that would equate to just over £217 for every person living in Northern Ireland.

If the figure was £750m, it would equate to more than £407 per head.

Last night Simon Hamilton, the finance minister, backed the official estimate of £400m and argued that welfare reform would not mean cuts, just a slower rate of increase.

"We repeatedly hear figures like £750m quoted to us about how much welfare reform will cost the Northern Ireland economy. It is clear that, in actual fact, whilst social security spending will not rise by as much as was expected, the welfare budget will still be considerably higher by the end of this decade than it was at the beginning," he said.

"There will still be £1.4bn more spent on welfare in Northern Ireland, even with welfare reform. Therefore, it is not that there will be net less money, it is more that it will not rise by as much as it did in the past."

Mr Hamilton (below) hit out at rival politicians, mainly in Sinn Fein and the SDLP, who have refused to ratify a deal on welfare reform.

"A lack of progress on welfare reform is costing frontline public services in Northern Ireland. We have already lost £15m this year and will lose another £105m next year. The total financial penalty will rise to over £1bn in the next five years," he said.

Behind the scenes, contacts are continuing between the DUP and Sinn Fein to try and reach a deal which will end the impasse.

BACKGROUND

The UK is overhauling the welfare system to produce savings and ensure that working pays better than being on benefit. Researchers have claimed Northern Ireland would be the hardest hit region and Stormont has so far baulked at introducing the changes. But if changes are not implemented, the Treasury will only give Northern Ireland the amount payable under the new system, leaving us to make up the shortfall from cuts in other departments.

Belfast Telegraph

Popular

From Belfast Telegraph