The British government will invest nearly £2 billion in Northern Ireland's underfunded infrastructure over the next five years. Budget plans were outlined yesterday by Mr Ian Pearson, the direct rule minister in charge of the Department of Finance and Personnel.
He insisted the investment plans amounted to the largest expenditure to date, and would be the most significant step yet to eroding the North's estimated £6 billion infrastructure deficit. He outlined the investment plans in the revised Budget at the Odyssey Centre in Belfast's docklands. It was in the same hall last May that Mr Mark Durkan and Mr David Trimble unveiled the Executive's Reinvestment and Reform Initiative (RRI) alongside British Prime Minister Mr Tony Blair and Chancellor Mr Gordon Brown. It aims to halt the decline in infrastructure and help lay foundations for future economic development.
Mr Pearson, acting in the place of the now-suspended Executive, was at pains to tie in the Budget speech with policy commitments already announced by former finance minister Mr Sean Farren and the draft budget agreed in September.
Spending plans cover water, sewerage, public transport and roads, schools, universities and hospitals. He said they formed part of the Strategic Investment Programme which would be run by a new strategic investment board.
The programme comprises some £725 million sterling (€1.13 billion) of potential Public/Private Partnership plans, £400 million of low-interest Exchequer loans, £158 million from the Executive's own Programme Fund, and a further £635 million under the RRI. Some expenditure is programmed to run beyond the period for which detailed plans have been finalised and will require further decisions in future budgets.
The investment, part of measures hailed as "the most momentous budget in a generation", will be financed by low-cost loans from central government, by reform of the rating system and by the introduction of water charges which would make the water service self-financing.
Plans were announced last week whereby domestic rates would be calculated on the basis of property market value rather than on rental value. It is expected that vacant property will also be liable for rates and that annual 6 per cent rates rises over the next three years will be followed through. He hinted broadly that the difference between average rates bills in Northern Ireland and the equivalent in England would have to narrow. In addition to national taxation the average Council Tax bill in England this year is £804. The average household water bill is a further £228 per household. The average domestic rates bill in Northern Ireland is £445 and there is no water levy.
Water charges, Mr Pearson said, were made inevitable by the poor state of the water and waste systems funded to date from the Northern Ireland budget. It is estimated that £3 billion is needed for investment in this area alone over the next 20 years.
The minister announced extra spending programmes for health of more than £400 million. He also outlined plans for up to 20 schools projects and committed resources to university research and other infrastructure development. This follows sustained pressure from the North's two universities.
Transport will also be targeted with Mr Pearson highlighting £127 million additional investment on roads including the Newry-Dundalk Border crossing and the Belfast-Larne route.
The political parties generally welcomed the proposals but many questioned the commitment to Public/Private Partnerships involving private sector capital of around £725 million and the promised introduction of rating reform and water charges.
Business organisations queried the wisdom of levying extra charges on small businesses while political reaction centred on water charges and rating reform.
The Ulster Unionists said they would not feel bound by Mr Pearson's plans should devolution be restored.
The SDLP criticised the water charges plans, saying the underinvestment problem demanded more than just charges.
Sinn Féin queried whether the investment outlined was indeed "new" money.
