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Sunak’s extra £1.6bn ‘won’t fix Northern Ireland’s broken public services’

More money needed to recover from years of austerity, warns Finance Minister Murphy

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Rishi Sunak. Credit: PA

Rishi Sunak. Credit: PA

PA

Rishi Sunak. Credit: PA

The extra £1.6n promised to the Executive in the Budget will not tackle the challenges faced by local public services, the Finance Minister has warned.

While business welcomed the funding as a “shot in the arm”, Conor Murphy said it created significant challenges.

The Chancellor said he was giving the Executive an extra £1.6bn a year on average over the next few years, on top of its annual £13.4bn spending settlement.

He said the total £8.7bn for Scotland, Northern Ireland and Wales was the largest annual funding settlement for the devolved governments since 1998.

But Mr Murphy said that instead of bringing an extra £1.6bn a year, it would mean an extra £450m, £670m and £866m over each of the next three years.

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That money would be set against “growing demand for public services”, he said, with the sums representing  a 0.9% increase to the Executive’s budget next year, which would turn to zero in real terms by 2024/25.

The Department of Finance will now work with departments to prepare the Executive’s budget for 2022 to 2025.

Mr Murphy said: “Years of austerity, and more recently the Covid pandemic, placed enormous strain on public services.

“Our health service, in particular, is under immense pressure, with waiting lists at an unprecedented level.

“Workers face an increase in National Insurance, and families are dealing with a cost-of-living crisis as a result of rising food and energy costs.

“This was an opportunity to deliver a Budget which would have enabled the Executive to rebuild public services and spur economic recovery.

“However, it provides a marginal real terms increase in funding which will be far outweighed by increased demands on public services, particularly in light of the pandemic.”

Business groups welcomed the 50% reduction in air passenger duty on domestic flights around the UK.

But Belfast City Airport said the cut to £6.50 was too small to enable Northern Ireland to compete for new routes.

The Budget also brought an extra £70m in lending that is to be made available to small and medium businesses through the British Business Bank. 

Northern Ireland is in line for a £49m share of a levelling up fund that will contribute to projects including the revamp of the Dundonald Ice Bowl. 

A separate community ownership fund, set up to protect “valuable community assets” will bring £300,000 to a digital hub in Cushendall.

The Institute of Directors’ Kirsty McManus said the additional £1.6bn brought with it “incredible potential”.  

“The additional expenditure that will now be available to the Northern Ireland Executive as a result of the Chancellor’s Budget announcement will be a shot in the arm for the local administration,” she added. 

“It is incumbent now on ministers to deliver on the incredible potential it presents through targeted investment in key services and infrastructure, on ensuring this region is fit to capitalise on the green recovery as we continue to emerge from the coronavirus pandemic.” 

Matthew Hall, the chief executive of George Best Belfast City Airport, said the 50% cut in air passenger duty was only a “halfway house”.  

He added that the tax, which has been abolished in the Republic, “placed the aviation sector in Northern Ireland at a competitive disadvantage with other regions in attracting new airlines and routes”.

Angela McGowan, CBI Northern Ireland director, said some steps, including levelling up investment, were welcome but more had to be done to transform the local economy for the post-Covid future.


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