‘Flexibility’ offered on €300m Stormont overspend as Northern Ireland braces for cuts in today’s budget

The UK government has offered “flexibility” on a £300 million Stormont overspend as it tabled a budget for Northern Ireland.

Northern Ireland Secretary Chris Heaton-Harris, who has responsibility for setting the Stormont budget in the absence of devolved ministers in Belfast, outlined the funding plan for 2023/24 in a written ministerial statement at Westminster.

Civil servants who are currently running public services in Northern Ireland had been bracing themselves for a potentially brutal settlement.

One of the main causes of concern surrounded the need for Treasury to recoup a £297 million advance down-payment it offered to help bridge the financial gap in Stormont’s finances last year.

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It had been anticipated this would have been deducted from this year’s block grant.

Mr Heaton-Harris said money would be drawn back in a different way, with the potential for it to be spread over two years.

He said it could be repaid using any future in-year funds allocated to Northern Ireland by the Government through the Barnett system process in 2023/24 and, if that was not enough to cover the cost, then the remainder could be recouped in the next financial year.

“With agreement from the Chief Secretary to the Treasury, flexibility has been granted on the repayment of the £297 million overspend from the 2022-23 Budget,” Mr Heaton-Harris said.

“This will provide some protection to frontline public services in Northern Ireland from having to take the most severe reductions. However, difficult decisions remain in order to live within the funding available.

“To support this, I am committing any future in-year Barnett consequentials for 2023-24 to repaying the reserve claim.

“Should this not amount to £297 million, I will work with HM Treasury to reallocate funding from previously announced Northern Ireland funding packages, with the residual to be repaid in 2024-25.”

As expected, the amounts allocated to the departments of health and education are broadly in line with the 2022/23 allocations.

Health will receive £7.3 billion and education will get £2.58 billion.

The departments of justice, finance and economy are among those facing reductions in their 2022/23 baselines.

The total non ring-fenced resource budget for day-to-day costs is 14.211 billion, down on the £14.269 billion baseline of 2022/23.

The overall budget for capital projects is up slightly to £2.24 billion from £2.05 billion in the last financial year.

Civil servants fear the allocations will result in swingeing cuts to public services given the settlement has not risen in line with high inflationary pressures.

Discussion

Mr Heaton-Harris is due to meet the main parties at Hillsborough Castle on Thursday to discuss the budgetary picture.

A member of the DUP, Emma Little Pengelly, MLA for Lagan has said that the Northern Ireland Secretary of State should not punish the people of Northern Ireland in an attempt to get the DUP to return to power sharing.

“Everybody wants to get back into Stormont, but has to be on the right foundations. That’s what the DUP wants. I think there’s a pathway to getting back, but it has to be right,” she told RTÉ radio’s News at One.

“He knows that that’ll take a bit of time to do that and therefore of course, any idea that putting in a punishing budget to Northern Ireland is going to bully the DUP to get back sooner is for the birds. Absolute nonsense”.

On Wednesday, Sinn Féin vice president Michelle O’Neill called on the UK Government to divert more money to Northern Ireland.

The DUP has urged reform of how the region is funded, arguing that the Barnett formula used to allocate Treasury money to the devolved regions is unfair.

Former Stormont finance minster Conor Murphy has said anticipated budget cuts for Northern Ireland are “devastating, immoral and indefensible”.

“The budget proposed by the British Secretary of State (Chris Heaton-Harris) will have a devastating impact on our public services, economy and workers and families,” said the Sinn Féin MLA.

“I will make it clear in today’s meeting at Hillsborough that it will hit the most vulnerable hardest and it is immoral and indefensible.

“By exacerbating social and economic problems, the cuts will create additional pressures on the public finances and undermine public services already struggling with the effects of austerity, the impact of Brexit and the pandemic.

“This unadulterated Tory budget is the direct consequence of the absence of the Executive.

“The boycott of the Executive by the DUP is itself an act of gross political negligence which must end.

“There is an urgent onus on the two governments, the parties and not least the DUP to get the Assembly and Executive up and moving.

“The public, including schoolchildren, losing vital services and patients on waiting lists for life-saving treatments are being punished, and there is no more time for delay.” - Press Association