Extra £150m in final Northern Ireland budget

The North's Minister for Finance Simon Hamilton has presented his final £10 billion 2015-2016 budget, which became possible because of the Christmas Stormont House Agreement.

The DUP minister also disclosed 20,000 jobs are to be shed over the next four years as part of public sector reform.

In November, Mr Hamilton published a draft budget which included reductions in allocations to the Northern Executive's departments of more than £200 million for the year 2015-2016.

The planned current expenditure for that year was down from £10.232 billion to £10.019 billion.

However, the Minister has now published his budget with a final current expenditure of £10.176 billion – up by £157 million from November’s draft budget.

This budget was presented after the Northern Executive agreed the final figures on Thursday.

The DUP and Sinn Féin, which have the majority on the Executive, supported the budget although the two Alliance ministers and the single SDLP and Ulster Unionist ministers opposed it.

Mr Hamilton, in presenting the budget in the Northern Assembly, said the Stormont House Agreement paved a "new way forward for the Executive and a fresh start for politics in Northern Ireland".

He added that publishing this budget meant the “Executive passed its first big test of this new era”.

“Its success or failure will depend upon the faithful implementation of what was agreed by the parties across a range of issues,” added Mr Hamilton.

The Minister made clear that Sinn Féin’s pre-Christmas decision to sign up to welfare reform created the conditions for the budget to be published.

“This budget and the agreement that has been reached on welfare reform put the Executive’s finances back on a long-term and sustainable basis,” he said.

Stormont’s previous refusal to sign up to welfare change has cost the Executive £100 million in fines imposed by Westminster over this and the last financial year.

The Executive must pay an additional £114 million penalty for this coming year, but if welfare change is implemented, as was agreed at the Stormont House Agreement talks, some will be refunded.

The £100 million already lost will not be repaid, but should welfare change be adopted midway through the financial year it is estimated about half, or £57 million, of this year’s fine will be paid back to the Executive from the British Treasury.

The budget also provides an “anticipated £26.9 million” to “mitigate against the worst impacts of welfare reform”.

Agreeing the budget allows the Northern Secretary to press ahead with plans to devolve corporation tax-setting powers to the Executive before the British general election in May.

The Stormont House Agreement allows for £150 million to support survivors and victims of the Troubles and to deal with conflict-related killings; £500 million to support cross community projects such as shared education; and £700 million to reform the public sector including reducing the number of public and civil servants by 20,000 from about 211,000 to 191,000.

Mr Hamilton has now started spending some of that money. He allocated up to £50 million for new shared and integrated education projects this year and allowed £200 million to be borrowed for redundancies.

He also allowed a further £100 million to be borrowed for capital projects and provided up to £30 million to fund new bodies yet to be created to help deal with the past.

Mr Hamilton said the public sector redundancies would happen through a “voluntary exit scheme” and recruitment freezes.

The two departments which fare best in the budget are health, run by the DUP, and education, run by Sinn Féin.

The health allocation is up by £204 million and the education budget is up by £64.6 million.

Mr Hamilton, while pointing to the benefits of the Stormont House Agreement in facilitating his budget, also warned that continuing cutbacks in financial allocations from Westminster will create major financial challenges for the Executive.

“Despite allocating an additional £150 million in this budget it would be a misjudgment to believe that we can take our foot off the pedal of reform,” he said.

“A better budget than we might have dared to imagine six months ago does not mean that difficult decisions can be avoided. Reform and restructuring remain as relevant now as they did before.”