Belfast Telegraph

Public spending cut by £78m

The public spending budget at Stormont has been cut by £78 million.

The Departments of Justice, Social Development and Employment and Learning were forced to sacrifice the most money as part of across the board 2.1% reductions in running costs. Health and education were exempted from the cuts.

A deal between Sinn Fein and the DUP on welfare reform was delayed to later this year, with a penalty of £87 million due to be imposed by Westminster for non-compliance with the so-called bedroom tax in January.

The Historical Institutional Abuse (HIA) inquiry has received the funding it requested.

The Department of Health was criticised for its budget management by finance minister Simon Hamilton and its extra payment worth £20 million from central coffers is conditional upon improvement.

Mr Hamilton said: "The reductions that departments face in October - and must begin to plan for now - will be every bit as harsh but they are completely avoidable.

"They are harsh because the impact they will have upon public service in Northern Ireland will be devastating because of the inability of some parties within the Executive to show the leadership required in welfare reform."

A meeting of the Executive was called to ratify the deal.

The budget reallocation between departments, known as the June monitoring round, had been delayed for four weeks. It moves unspent money from some departments to others where there is a shortfall. The £78 million cuts are necessary because of an over-commitment in spending

Sinn Fein and the DUP have been at loggerheads over how to deal with demands by the Chief Secretary to the Treasury Danny Alexander for £87 million in financial penalties because welfare reform has not been introduced. A penalty worth £29 million has already accrued but has not been addressed in this reallocation.

Mr Hamilton added the Executive had agreed that the £87 million reductions due to welfare should happen in October if no deal is struck.

He said: "This will cause further pain across departments and will undoubtedly have a detrimental impact on our public services.

"Those failing to proceed with welfare reform bear sole responsibility for the dire consequences that will follow."

The reductions introduced now to departments' spending on day to day services include the Department of Justice at £22 million, Employment and Learning at £16 million and Social Development at £14 million. Health and education account for most of Northern Ireland's public spending and are unaffected by the cuts.

The Department of Health bid for an extra £160 million but was allocated £20 million. It had exceeded its spending last year by £13 million.

Mr Hamilton said: "This was, in my view, due to poor budget management within the department.

"The Department of Health, Social Services and Public Safety (DHSSPS) had more than three years since the budget for 2014/15 was set to ensure it could live within its budget and in that context it was hugely disappointing that it then registered such a significant overspend."

The department was also criticised for failing to spend money on new health care centre projects.

Health minister Edwin Poots has warned of the prospect of: further cuts to already tight budgets for the five health trusts; t he potential for re-introducing prescription charges; i mposing pay constraints on healthcare workers; r educing the range and standard of services; t aking money away from other executive departments.

First Minister Peter Robinson said £13 million had already been taken from the budget because of welfare reform and a further £87 million had to be taken into account from October.

Sinn Fein MLA John O'Dowd has challenged that.

Mr Robinson added: "Denial is not an option and these issues have to be dealt with. More and more vulnerable people are going to be hurt by the failure of the SDLP and Sinn Fein to face up to the reality of welfare reform."

Justice minister David Ford accused Sinn Fein and the DUP of grossly mismanaging public finances.

"It's politically clever in the short term, but financially stupid in the long term.

"They have torn up the rule book for properly managing public finances. People need to know that today's political deal doesn't mean that the budget crisis has been resolved - it's made it worse."

A total of £90 million was reallocated for building projects.

Environment Minister Mark Durkan said finances to save the Exploris Aquarium in Portaferry, under threat of closure, were secure.

"It is excellent news for all the supporters of Exploris, both near and far, and particularly for the people of Portaferry.

"They have fought a valiant campaign, highlighting not just the regional importance of Exploris, but have also argued that it is vital to the social and economic well-being of the town."

Ulster Unionist Party minister Danny Kennedy abstained from the Executive's budget vote.

A party statement said: "The very harsh reality is that services are facing cuts. The Department of Regional Development will be forced to look at services such as road maintenance and street lighting.

"We are also totally disgusted that the Executive is not going to fully fund the concessionary fares scheme - one of their own priorities.

"This scheme is something the Ulster Unionist Party is passionate about and Danny Kennedy will fight to protect it."

Sinn Fein MLA Daithi McKay told the BBC his party had not agreed to welfare cuts.

"We have made an agreement and I am very confident that come October we can make an agreement," he said.

"What we agreed was to deal with welfare reform and issues around it at the time of the next monitoring round in October."

A spokesman for the Department of Health said: "The minister welcomes the Executive's decision to protect the DHSSPS baseline for 2014/15 from any reductions and the allocation of a further £20m to help address the pressures that have emerged across the Health and Social Care system along with £1.4m under the Delivering Social Change banner.

"While the allocation will go some way to addressing a range of pressures in front line services such as emergency care, very significant financial challenges still remain. The minister has highlighted to the Executive the implications of this increasingly challenging financial scenario."

Your Comments

COMMENT RULES: Comments that are judged to be defamatory, abusive or in bad taste are not acceptable and contributors who consistently fall below certain criteria will be permanently blacklisted. The moderator will not enter into debate with individual contributors and the moderator’s decision is final. It is Belfast Telegraph policy to close comments on court cases, tribunals and active legal investigations. We may also close comments on articles which are being targeted for abuse. Problems with commenting? customercare@belfasttelegraph.co.uk

Popular

From Belfast Telegraph