Northern Ireland draft budget ‘avoids the worst of public spending crisis’

4 Nov 14
The Northern Ireland executive has been able to avoid the worst impacts of its public spending crisis, finance minister Simon Hamilton has said. But he warned that some departments still face ‘challenging’ reductions of more than 10%.

By Richard Johnstone | 4 November 2014

The Northern Ireland executive has been able to avoid the worst impacts of its public spending crisis, finance minister Simon Hamilton has said. But he warned that some departments still face ‘challenging’ reductions of more than 10%.

Publishing the draft budget for 2015/16, Hamilton said the dispute within the executive over welfare reforms, which led to an emergency £100m funding allocation from the UK Treasury, meant many services had faced 15% cuts in initial calculations.

However, ministers have ‘worked hard to stave off the worst’, he told members of the Northern Ireland Assembly.

‘We have found imaginative ways to deal with our financial difficulties and still make significant allocations to priority areas. We have produced a balanced budget with no over-commitment.’

Despite this, a number of departments still face large reductions in non ring-fenced spending, and Hamilton revealed that details for a planned recruitment freeze would be presented to the executive within the next two weeks.

Among the Stormont ministries, the Department of Environment, which has responsibility for local government, faces the largest cut ­– 11.1% in cash terms, to £103.7m.

The Department of Finance and Personnel budget will fall by 10.9% to £103.7m, while the Employment and Learning Department’s funding will be cut by 10.8% to £674.4m.

Spending in the Department of Education’s non ring-fenced items will fall by nearly 5% to £1.8bn, but the budget of the biggest spending ministry, the Department of Health, Social Services and Public Safety, will increase by 3.3% to nearly £4.7bn.

Hamilton said that this funding would help prepare services for the ‘undoubted challenges’ in the years ahead.

‘This draft budget is about dealing competently and compassionately with the circumstances we are in. It is about facing up to reality, being prepared to compromise for the greater good and protecting and prioritising what really matters to the people of Northern Ireland.’

He also announced the creation of a £30m ‘Change Fund’ to implement reforms to services that can improve efficiency.

‘Never has the need to renew, redesign, rethink, restructure and reform our government been clearer than in the financial circumstances we now find ourselves in,’ he added.

‘What we face isn't one year of serious budget pressures. This is the new landscape for the remainder of this decade and perhaps even beyond.’

The new funding would therefore provide up-front support for reforms to services that can increase collaboration between departments and agencies or focus on prevention.

The executive has also approached Chancellor George Osborne seek permission to use capital receipts raised by selling capital assets to repay the £100m loan in 2015/16, Hamilton told assembly members

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