Tough budget decisions despite political limbo
Efforts to manage the local economy are heavily dependent on the decisions of politicians who have responsibility for Government policy. Politics and economics are interdependent.
The local political parties have spent almost a year in a stand-off about the factors which might be mutually agreed to allow setting up a new Executive and the necessary preconditions. Somewhere agreement must be found on questions inherited from previous commitments but not implemented: the context for the use of the Irish language, and ensuring that institutional guarantees for citizens' equality are in place.
These are serious issues for which pragmatic answers are possible. However, successful devolution of the large range of critical decisions at Stormont brings a series of challenges which must be tackled. A new Executive needs to be ready to cope with a range of economic and social policies and, also, ready to prioritise a programme for Government where difficult choices must be made: not every demanding service need can be provided immediately.
Simply to list a selection of the up and coming policy and budget questions facing Stormont will quickly illustrate the tensions in making choices. A new Executive must have cross-party agreement on how to tackle these. High on the list is the need for agreement on the context for a Northern Ireland budget. Senior civil servants have taken an important first step, but only a first step, with the briefing on the Northern Ireland budgetary outlook. It sets out three versions of a possible recurrent spending budget for the three years, 2017-18 to 2019-20. Each scenario is presented with general policy assumptions. The main assumption is that, after allowing for inflation, public sector current spending will (at best) remain about static.
A new Executive, regardless of party political make-up, will know what to expect. Any ideas to vary the Budget arithmetic through extra taxes, charges or alternative sources of revenue and/or spending reductions, must find political support.
This budget challenge also needs to be examined by representatives of the business community, social partners and trade union representatives. Sitting on the sidelines would be easy but inadequate.
The incoming members of an Executive must set a working budget framework. That only sets the scene for a long social, environmental and economic agenda, including:
(1) As suggested last week, the two locally based universities face serious financial constraints and must re-plan their programmes or charge higher fees
(2) The size of the house building programme through the NI Housing Executive and housing associations is currently inadequate, as well as a reconsideration of NIHE finances and rent setting
(3) The delivery plan for public sector capital programmes should have considered priorities for delivery and a clear timetable
(4) The remit and agenda for Invest NI should be reconsidered so that it is prepared to respond to the impact of Brexit
(5) The provision of primary and non-primary schools awaits a rationalisation plan
(6) The health service and social services await the implementation of the proposed transformational measures
(7) The justice institutions and legacy demands await long delayed action.
The scale of the demands on public services and policies is so large that, ideally, the parties should develop an agreed cross-party mechanism to make critical decisions. Might the incoming ministers be asked to work 'in pairs' so that agreed cross-party proposals are tabled? Either way, the current logjam must be broken.