Public spending facing cutbacks of £2bn for Northern Ireland
Shock new prediction over scale of reductions on way
Stormont ministers have been warned that they face their biggest ever test in the months ahead, as a shocking new prediction on the “enormous” scale of public spending cuts is delivered.
The assessment is based on a series of top-level Government briefings, with fears of close to £2bn being slashed from funding here in just four years. Previous projections for the cutbacks have been in and around the £1bn mark.
Reflecting on what he has been told by officials, Seamus McAleavey — chief executive of voluntary sector organisation NICVA — expects up to 25% of public funds to go.
He also spoke of bleak consequences for new build programmes for hospitals, roads and schools, claiming a high-profile Stormont investment strategy is now “dead”.
And he flagged up the implications for businesses dependent on public sector funds, with the retail, construction and leisure sectors particularly vulnerable.
NICVA — the umbrella body for voluntary groups in the province — has been organising briefings with senior Government officials on the public spending squeeze.
Mr McAleavey told the Belfast Telegraph: “The biggest test of the Northern Ireland Executive will be the public expenditure crisis. I believe most people do not understand the scale of the problem, it is enormous.
“In four years time we will have 20 to 25% less to spend on public services than in the financial year 2010/2011.
“This will impact everyone in Northern Ireland, not just those who work in the public sector.”
The NICVA head called for blunt speaking from ministers. He also said the Executive's long-term investment strategy for modernising infrastructure will be one of the victims of the huge cutbacks.
“Capital expenditure on roads, sewerage, water, schools, hospitals and other public works will be cut by 40%. The current investment strategy for Northern Ireland is dead,” he said.
“Of what is left for capital expenditure, 80% is already committed under agreed, legally binding contracts.”
He continued: “It is essential that the Northern Ireland Executive is absolutely frank with the people and outlines the scale of the problem we face.
“Finance Minister Sammy |Wilson has tried to do that and I applaud him. He has pointed out that we need to consider everything — both income generation possibilities and areas of spending reduction.
“He is right, in the circumstances we cannot afford to discount or ignore anything without due consideration.
“If we don't take effective positive action then by default those who will suffer most and disproportionately will be those most in need, who can least afford it.”
Mr McAleavey called for a joined-up approach to the crisis from ministers.
“The Northern Ireland Executive will need to agree their |spending priorities collectively, collegiately across all departments, if they fail to do that the cuts will be even more damaging, more chaotic,” he said.
“NICVA has commissioned research from Oxford Economics that shows we will lose at least £1.2bn over four years. In all my discussions with a very wide range of people I believe that figure is conservative — it's actually likely to be closer to £2bn.
“We cannot escape the fact that over 60% of economic activity in Northern Ireland is funded by the Exchequer. Public funds and the transfer of £7bn to £9bn in subvention comes from London annually. Our private sector depends on that subvention.”
Mr McAleavey also voiced concern that funds provided to voluntary and community bodies could be hit disproportionately and unfairly.