NI to receive extra £134m for public services

BRITISH CHANCELLOR George Osborne delivered a reprieve for motorists, an additional £134 million (€157 million) of new money for public services and potential misery for 230,000 public-sector workers in Northern Ireland in his latest autumn statement.

Mr Osborne’s plan to cap public-sector pay increases and cut further public-sector jobs throughout the UK could have a significant impact in the North, economic experts warned last night.

But the North’s Minister for Finance, Sammy Wilson, said overall the impact of the autumn statement could deliver “the sort of boost our economy needs to help it recover during these difficult times”.

Mr Wilson said at least £134 million of additional capital would be made available to Northern Ireland over the next three years and he was hopeful this figure would increase. But Dr Esmond Birnie, chief economist with PricewaterhouseCoopers in the North, said that in light of forecasted lower economic growth in the UK, along with higher borrowing and the cap on public-sector wages, the Northern Executive may not get its hands on all the cash.

“This is better than it might have been,” he added, “and gives the Assembly a clear message as to how challenging the next few years will be.”

He said the deferral of a fuel duty increase planned for January 2012 and the cancellation of an increase planned for August next year was particularly welcome in a region with a heavy dependence on transport and road haulage.

Richard Ramsey, Northern Ireland economist with Ulster Bank, said the biggest positive was the additional capital investment,which he said would help the North’s “beleaguered construction industry”.

But he said the issue of public-sector pay also featured prominently. “The government will ask independent pay review bodies to consider how public-sector pay can be more responsive to local labour markets.

“This measure has added significance for Northern Ireland given that the current public/private wage differential is more marked in Northern Ireland than in any other UK region,” Mr Ramsey warned.