Public services facing further budget pressures: Foster

Date published: 25 November 2015

The Minister was speaking after the Chancellor George Osborne announced the UK Government’s Spending Review which sets out the government’s spending plans and the budget allocation for the Northern Ireland Executive.

The Minister said: “Today’s Spending Review announcement will represent a 5.3% real terms reduction in the Resource DEL budget for Northern Ireland.

“Northern Ireland’s budget has benefitted from the decision to protect health and education in England which shields our budget, through the Barnett formula, from the worst cuts.

“However if we want to protect health and education services in Northern Ireland, the Executive will face hard decisions as that protection will impact on other departmental budgets.”

The Northern Ireland resource budget will remain broadly flat in cash terms from £9.7 billion in 2016-17 to £9.9 billion in 2019-20.

Some of the measures announced in the Chancellor’s statement which have an impact on Northern Ireland, include:

• HS2 - Northern Ireland will receive additional Barnett consequentials for spend on the High Speed 2 rail line;
• Tax Credits – The Chancellor announced that the proposed tax credits cuts will not now go ahead; and
• State Pension – The basic state pension will rise by £3.35 to £119.30 a week.

The Minister said: “I have made it very clear that I expected fair application of the Barnett formula to ensure Northern Ireland received its fair share of investment being made in England relating to HS2. I am pleased to note the Treasury’s recognition today that this will indeed be the case.

“I also welcome that the Chancellor has decided not to proceed with the proposed changes to tax credits, which would have had a significant impact on Northern Ireland working families. This was opposed consistently by my party both in Stormont and Westminster.”

Turning to the capital side of the budget the Minister said: “I welcome the increase in our conventional capital budget which will rise by 12.4% in real terms from £1billion this year to over £1.2 billion in 2020-21. This will provide over £600 million above the 2015-16 baseline for capital across that period.

“Capital investment of this kind will generate long term economic returns and will assist the Executive in delivering key infrastructure projects.”

The Minister added: “The timing of the Spending Review announcement has left little time for our own budget process and presents significant operational challenges as well as the additional challenge of constructing a budget based on the new nine department structure.

“I have no doubt that there will be difficult decisions ahead, but these must be faced head on if we are to deliver the best possible public services for Northern Ireland, within an increasingly constrained budget.”