UK Government unveils £12 billion budget for Northern Ireland

By David Young8th March 2018News Northern IrelandBusiness / Funding / Finance, Finance, Government / Politics, News Northern Ireland

The UK Government has tabled a budget for Northern Ireland in the ongoing absence of devolved ministers due to the powersharing crisis.

Northern Ireland Secretary Karen Bradley unveiled the £12 billion Westminster spending plan for the region in a written statement to Parliament.

The budget includes £410 million of the £1 billion investment package secured by the DUP as part of its confidence and supply agreement with the minority Conservative administration.

It is the second time the Government has imposed a budget for the region’s rudderless public services since the devolved institutions imploded in January 2017.

This occasion is more politically significant however.

When Mrs Bradley’s predecessor James Brokenshire passed a delayed budget last November, he was merely enacting draft spending plans already formulated by devolved ministers before the Stormont executive crashed.

This time the Government is making its own policy decisions on where to allocate the region’s block grant in the coming financial year.

While the Government continues to insist that it does not want to see a return to full Westminster direct rule, the passage of the budget in London will be viewed by many as another step in that direction.

“During the course of the past 13 months, in the absence of an Executive and Assembly in Northern Ireland, the UK Government has worked tirelessly to facilitate the restoration of devolved government,” said Mrs Bradley.

“It had been my firm hope that a new Executive would be in place to set a budget.

“That will now not be possible in time for plans to be put in place for the forthcoming financial year.

“Yet there are acute pressures across public services to be addressed in 2018/19.

“And clarity is required now to enable planning to proceed for the year ahead. It is now imperative, therefore, that the UK Government provides clarity and certainty around Northern Ireland finances for 2018/19.”

She said it would not be appropriate to taken fundamental or transformative decisions, rather act to secure and protect public service delivery amid the ongoing impasse.

Mrs Bradley’s budget delivers real-term increases in health and education spending and cash terms increases, below the rate of inflation, for justice, infrastructure and agriculture.

All other departments will see their allocation maintained at the same level or decreased. Significant decreases are envisaged for the Department of Finance and the Executive Office.

Mrs Bradley has also moved to set the regional rate that provides for local government services in Northern Ireland. The domestic rate is set to increase by 4.5% and the non-domestic rate by 1.5%.

The budget only sets the overall allocations for Stormont departments. It is for the senior civil servants currently in charge of those departments to decide how to distribute the cash among the services they are responsible for.

The £410 million of confidence and supply money includes £200 million for key infrastructure projects; £100 million for a health service transformation initiative; £80 million for immediate health and education pressures; and £30 million for mental health and deprivation programmes.

The budget will also hand civil servants the flexibility to switch £100 million earmarked for capital initiatives into the resource side of their budget, to spend on under-pressure services.

Mrs Bradley said she had engaged intensively with the civil servants in formulating the spending plan and had also discussed the situation with the main Stormont parties.