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Plan to spend extra £1bn on health 'will lead to 20% cuts across departments'

By Noel McAdam

Published 24/05/2016

Stephen Farry
Stephen Farry

DUP and Sinn Fein proposals to pump £1bn into the health service will mean cuts of 20% to other departments, the Alliance Party has warned.

It urged the main parties to step back from a "populist spending commitment" and instead commit to reform.

The party also warned that departments were still reeling from the impact of a £500m increase in spending on health during the last Assembly.

There was no response to the criticism from the DUP or Sinn Fein ahead of the expected first Executive meeting of the new Assembly term later this week.

The main parties are still involved in a stare-out with Alliance over the Justice ministry, with the clock ticking down to the Wednesday deadline.

There were no reports of any meetings between the parties at Stormont yesterday.

While all sides said they were willing to negotiate, neither appeared ready to blink first.

One source said: "It's like a spaghetti western at the moment - they're staring each other down."

Both Sinn Fein and the DUP used the £1bn figure in their election campaigns, pledging the spending increase by the end of the next Assembly term in 2021.

But former Alliance minister Stephen Farry said: "The starting point for our health service should not be to simply pour more and more money into an already unsustainable system.

"(It should be) to accelerate the process of reform and agree on the outcomes to be achieved, while agreeing the level of funding required to assist that transformation.

"The notion of spending an additional £1bn by 2021 is superficially attractive in the context of rising demand and lengthening waiting lists."

Health care inflation is currently running at around 5% a year because of rising demand from people living longer and more expensive treatments and technology. The figure is well ahead of the inflation rate.

"Under the current health model, 5% extra every year is required to just stand still," former Employment and Learning Minister Mr Farry added.

"However, health spending, at around £4.8bn, is already just under half of the total NI Revenue budget of around £10bn.

"The implications of an additional £1bn for health over the next five years could be massive.

"This commitment comes on top of other commitments such as funding a lower rate of corporation tax and welfare reform mitigation measures, with additional revenue raising effectively ruled out.

"The DUP and Sinn Fein have been talking about doing this through under-spends and monitoring rounds, which don't have any lasting impact on long-term baselines, plus Barnett consequentials (the amount Stormont gets from Westminster). This doesn't compute."

Mr Farry argued that with the Block Grant flatlining, and bearing in mind all of the other existing commitments, an additional £1bn for health would mean almost a billion less for all other government spending areas.

"Cuts of this scale could amount to almost 20% in many areas," he warned.

"Over the past five years, in the midst of a multidimensional financial crisis, health spending nonetheless grew by around £500m.

"The knock-on implications for other departments from this alone were severe and are still being felt today.

"The DUP and Sinn Fein should step back from a populist spending commitment, and instead commit to a programme of reform, and instead commit to the necessary resources to fund that transformation process."

The DUP and Sinn Fein did not respond to a request for a comment.

Belfast Telegraph

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