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Osborne condemns budget overspend

Published 16/06/2015

Arlene Foster is responsible for Stormont's budget
Arlene Foster is responsible for Stormont's budget

George Osborne has condemned a budget plan that commits the Stormont Executive to a £600 million overspend as "unacceptable".

The Chancellor was responding to DUP MP Sammy Wilson, who raised the issue in Treasury questions today.

He told the House: "Yesterday as a consequence of the refusal by Sinn Fein and the SDLP to implement welfare reform, the Northern Ireland Assembly gave authority to the departments to breach spending limits and increase spending by 6% over the block grant.

"What steps are you going to take to ensure that assemblies and parliaments across the UK do not recklessly breach spending limits?"

Mr Osborne replied: "You raise a very serious question, which I suspect this House is going to have to come back to on a number of occasions.

"We have a clear agreement in the Stormont House Agreement, which we now expect all parties in Northern Ireland to implement, including Sinn Fein.

"It is not acceptable for any one devolved administration to simply breach the limits that have been agreed with the UK government.

"That is something we are going to have to address.

"But as you know, the key is implementing the welfare reforms, but not only to deliver value for money to the taxpayer but to also make sure more people in Northern Ireland are released from the poverty trap and enabled to work."

The budget plan cleared a crucial Assembly hurdle yesterday as Finance Minister Arlene Foster secured backing to draw down Treasury funds for a spending plan some have dubbed a "fantasy" budget.

The backing of Sinn Fein was crucial to passing the unusual legislative move.

The Executive struck a budget in January but the Assembly must vote twice a year to secure the legal authority to spend the money.

The first vote, in January, released 45% of the budget and Mrs Foster is currently seeking Assembly backing for the remaining 55%.

But since the start of the year the Executive's financial health has deteriorated markedly, leaving its resources sitting around £600 million short of what was anticipated at this point in the year.

The black hole is in large part due to the failure to implement the landmark Stormont House Agreement and the financial commitments made within it.

Mrs Foster yesterday secured a "supply resolution" to enable money to continue to be drawn down from the Northern Ireland Consolidated Fund, which is essentially the Executive's Treasury-funded bank account.

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