Executive agrees new budget for Northern Ireland

The Northern Ireland Executive has agreed a new “single-stage” budget for 2016-2017 that will deliver a £133 million (€183 million) spending boost for key health and social services across the North.

Although education will also receive an additional £40 million, Minister for Finance Arlene Foster has confirmed that the majority of government departments in Northern Ireland will face budget cuts of up to 5.7 per cent as part of the one-year spending programme.

Ms Foster set out details of the budget in a written statement to the Assembly yesterday, though it still has to be debated and voted on in January next year.

The Minister said she wanted to inform the Assembly as soon as agreement had been reached on a “balanced” budget, which she said “delivered on the commitment in the ‘Fresh Start’ agreement’” for the North. The agreement provided significant additional funding to the North of potentially more than £500 million over the next five years.

Mrs Foster said while the 2016-2017 budget demonstrated the Executive’s commitment to “put its finances on a sustainable footing”, she also said most government departments would face reductions in their spending power in the short term.

“The outcome of the spending review and the severely constrained timescale to deliver next year’s spending plans alongside structural changes from 12 to nine departments means I have had to construct a 2016-17 budget position in very challenging circumstances,” she said.

Health and education may be the top priorities in the next budget, but the spending plan also outlines that the Department of Justice will receive an additional allocation of £15 million while a further £20 million has been set aside for roads structural maintenance.

“Major flagship capital projects have been given the green light with funding beyond this one-year budget. This will deliver key infrastructure projects such as the A6 road and the New Buildings to Strabane section of the A5 road, Belfast Rapid Transit as well as the mother and children’s hospital,” Ms Foster said.

Other key features of the agreed budget include the Executive’s decision to continue to fund public sector reform in the North; some £117.6 million has been earmarked to finance further voluntary exit schemes across the public sector.

There is also a one-off allocation of £4.3 million to the Department of Finance to fund systems development to facilitate the devolution of corporation tax, while a further £5 million has been earmarked for the Department for the Economy for the skills agenda.

The Minister said the Executive had also agreed to a “real terms regional rate freeze for 2016-2017” which she said would help the North to “maintain the lowest household taxes in the UK”.

Balanced platform

Ms Foster said overall the Executive had created a “stable, balanced platform for Northern Ireland’s next incoming executive to construct a multiyear budget”.

However, the budget has not been universally welcomed particularly in light of the fact that the North’s new Department of the Economy is likely to face immediate cuts of 3 per cent to its overall budgets.

Stephen McCully, president of Northern Ireland Chamber of Commerce and Industry (NI Chamber), said: “We have spent a number of months emphasising the importance of investment in skills and our message has not been heard.

“It is also disappointing that the Department of the Economy is receiving a cut in the NI Executive’s 2016-17 budget and doesn’t seem to complement the need to prepare for a lower rate of corporation tax in 2018.”