John Simpson: Why confused picture of NI budget has to be explained
The budget for public services in Northern Ireland would normally be a central responsibility of the NI Executive and Assembly. This year, the Budget for 2018-19 has been subject to approval at Westminster.
Although the role of Westminster is unusual, there is no reason why the publicly available information on the NI budget should be less comprehensive than a fully articulated annual statement.
A simple review of the published information points to a confusing range of statistical statements which lack a clear comprehensive presentation to keep readers well informed.
This year there is a new Permanent Secretary, Sue Gray, who arrived in the post after the budget was already well advanced.
On July 5 the Department of Finance published the budget plans for 2018-19. This was later than the normal expected timetable.
That delay can be seen as mainly a problem of political timing, only marginally affecting the contents.
The budget plans should be tested by asking whether the information given offers a good understanding for a public audience.
The usual (oversimplified and therefore misleading) convenient description of the NI Budget quotes two figures: the approved current annual spending levels for NI departments of just under £11bn and the expected level of capital spending of £1.4bn.
This form of shorthand has, in recent years, led to references (now slightly outdated) to the NI Budget being about £10bn.
In the published NI budget plans for 2018-19 there is no attempt to offer an overview of the full Budget. Revenue and spending, current and capital, are not shown in aggregate totals and there is no supplementary table to show how supplementary funds allow the budget to balance.
There is an important omission from the NI budget plan. Nowhere in the plan is the scale of direct Treasury funding for social security and central pensions obligations identified.
To find this information, the advice is to go to the 300+ page volume of the Departmental Estimates.
Adding together these directly cash managed funds (known as annual managed expenditure) for all of the departments points to further spending of over £11.5bn.
The definitions used by the Department of Finance take account of a large number of revenue and spending definitions so that, on their definitions, the flow of public sector finance in NI is over £18.1bn.
Arguably, the published NI budget plans fall short of what might be expected. The budget plans do not bring together, in an omnibus presentation, information on:
1. A summary of all the main revenue and spending headings, reflecting how the budget is balanced.
2. Total revenue available for Stormont services, through the Block Grant, regional rate and other sources, as well as EU funds.
3. Total expenditure on Stormont services, showing current and capital commitments and directly financed spending on social security and official pensions.
4. Details of supplementary finance from exceptional changes (such as the Fresh Start and funds from the Confidence and Supply agreement).
5. The proposed amount of capital borrowing approved by the Treasury and the repayments bills.
To add to the value of the presentation, comparative figures for recent years would be an aid to understanding changes.
Also, an extract from the Treasury comparison of spending levels in the different UK regions, admittedly a year in arrears, would be useful.
There is no doubt that the department fulfils the technical and legal obligations from the Treasury, but the budget presentation is less orientated to illuminating local issues than might be expected.
The NI budget should be an opportunity to consider the sources and allocation of capital funds.
How is the borrowing of £114m under the Regional Reform initiative and borrowing of £86m as Financial Transactions capital allocated and justified?
Is the new management team in the Department of Finance ready to make improvements?