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Revealed: True cost of stopgap budget - how plans will hit public services

NI on brink of financial meltdown, warns expert

By Claire O'Boyle and Rachel Martin

Northern Ireland is a financial crisis waiting to happen, a top economist has claimed.

John Simpson's stark warning came after Secretary of State James Brokenshire published indicative figures for a budget he will impose if Stormont parties fail to reach a deal to restore power-sharing.

The proposed budget will spell dramatic cuts for education and agriculture, with schools losing out on more than £48m and the Department of Agriculture, Environment and Rural Affairs seeing more than £7m slashed from its budget.

In stark contrast, the Department for Communities is expected to see a huge boost of almost £80m - an increase of more than 9%.

Read more:

Sammy Wilson: Sinn Fein ever the victim as they play blame game over budget 

Mairtin O Muilleoir: Public will not tolerate DUP and Brokenshire's austerity agenda

Formerly run by the DUP's Paul Givan before the collapse of the Assembly in January, the department was created after the Fresh Start Agreement in May 2016, when a number of departments merged - including Social Development and Culture, Arts and Leisure, as well as employment and learning.

Its wide-ranging responsibilities include everything from housing and the voluntary sector to urban regeneration, and its ultimate aim is "tackling disadvantage and building sustainable communities."

One significant additional cost that will come if the proposed budget, debated at Westminster on Monday, goes through is the allocation of £4.3m to cover the RHI inquiry.

Other major changes include a substantial increase of £155.2m for the Department of Health, while coffers at the Department of Finance will swell by £3.8m.

Likely cuts elsewhere include the Department for Infrastructure losing out on almost £6m, the Department of Justice seeing a substantial cut of more than 2%, or £23.6m, and the Executive Office losing 1.2% of its spend, falling from £59.1m to £58.4m. The Department for the Economy would lose out on £23m.

The indicative figures published by Mr Brokenshire will come into force if politicians at Stormont fail to reach agreement by the end of June and the current stalemate continues.

Mr Brokenshire explained he had consulted with the head of the Northern Ireland Civil Service (NICS), as well as the NICS board before releasing the figures, adding: "These allocations seek to reflect, as far as possible, their assessment as to the priorities of the political parties prior to the dissolution of the Assembly and the further allocations they consider are required within the budget available.

"By doing so I intend to give clarity to Northern Ireland departments as to the basis for departmental allocations in the absence of an Executive, so that permanent secretaries can plan and prepare to take more detailed decisions in that light."

The Secretary of State explained the totals set out in his proposed budget would not limit the ability of any incoming Northern Ireland Executive to "adjust its priorities."

But Mr Simpson said the Executive had handed down a crisis waiting to happen, and Mr Brokenshire had done nothing to soften it.

"What he has done is cover the commitments made over welfare reform in the additional Communities budget, given health a little bit of a boost with a slightly protective allocation and divided the shortfall among all the other departments", Mr Simpson told this newspaper.

"His budget shows how far the Executive has over-committed. It's a crisis waiting to happen.

"This budget is an attempt to push the Executive into such an impossible position that they have to get talking, and that will do something to help focus their minds when they come back to discussions.

"The statement is silent on whether the Executive will borrow about £300m. Last year it was £357m.

"It is also silent on why he has allocated £74m of capital to the Department of Economy, probably for Invest NI.

"All in all, the Secretary of State has left the budget as a big piece of unfinished business."

Speaking in reaction to the proposed budget, DUP leader Arlene Foster said: "Our position has always been that we want to see an Executive as quickly after the election as possible.

"Unfortunately, others don't take that view and we're now in a situation where direct rule ministers are having to set the budget for Northern Ireland, and I think that's a real shame and a real pity."

However, Sinn Fein's Michelle O'Neill said: "Tory cuts didn't just happen because there's a talks process or that the talks process hasn't succeeded yet.

"The Tory cuts have been in place since 2010, whenever they came into power. So there's been difficult decisions for ministers to take and, let's be very assured, there's big, difficult decisions to come in the future because the Tory government has set their mind to attacking public services, the health services, education - right across the board."

Ulster Unionist finance spokesperson Steve Aiken claimed that had the Assembly not collapsed in January, it would have produced a similar budget.

"In fact, the parties were categorically told during the recent talks process that these budget lines were the work of civil servants simply continuing trends and reflecting the discussions that had already taken place in the ill-fated 2016 Executive", Mr Aiken added.

Meanwhile, Owen Reidy, Assistant general secretary of the ICTU, said the cut would push the education system "closer to tipping point".

"The education unions have made clear the already precarious position faced by schools," he added. "A further cut of 2.5%, even before inflation is factored in, will push the system closer to the tipping point. A further cut of this magnitude will lead to additional redundancies in education across the board. Class sizes will increase, choices will be curtailed. The horizons for our students will shrink."

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