Business

Murphy says budget leaves Stormont with £523m funding shortfall

Finance Murphy Conor Murphy has said Wednesday's budget falls short of what Stormont needs.
Finance Murphy Conor Murphy has said Wednesday's budget falls short of what Stormont needs. Finance Murphy Conor Murphy has said Wednesday's budget falls short of what Stormont needs.

STORMONT departments have been left with a £523 million shortfall despite UK Chancellor Rishi Sunak announcing an extra £215m for the Northern Ireland block grant on Wednesday.

Just £77m from Wednesday’s budget will address the £600m of pressures identified by Finance Minister Conor Murphy. Most of that shortfall has been flagged up by Health Minister Robin Swann.

The remaining £138m has been allocated for capital spending.

However, it’s understood the Treasury has said Northern Ireland will receive any extra funding it needs to cope with the impact of the coronavirus. The late inclusion of the Treasury’s response to the outbreak meant most of the measures did not factor into the allocation for the north’s block grant.

Department of Finance officials said they were confident that the Executive would get extra funding outside of the £216m announced yesterday. But It’s unclear how wide the definition will be for Covid-19 measures.

It also remains extremely unlikely that the rates holiday afforded to small businesses in England will be extended to Northern Ireland. Many small firms on the other side of the Irish Sea, particularly those hit by Covid-19, will have their rates bill abolished for one year.

But the higher ratio of small businesses in the north leaves such a measure unaffordable to the Department of Finance at present.

Meanwhile, the department has estimated that the spending commitments contained in the New Decade New Approach deal could amount to £9bn over the long term.

Reacting to Wednesday’s budget, Finance Minister, Conor Murphy said it had failed to deliver.

“Our public services are already under enormous financial pressure, he said.

“Before this Budget was announced the gap between inescapable pressures identified by departments and the budget available to us was nearly £600m.

“We are also dealing with the emerging challenges of coronavirus which will have a profound impact on people and the economy.”

Mr Murphy said his department would study the detail of the rates relief announced in England before deciding what support the Executive can afford.

“With finite resources and infinite demands, myself and Ministerial colleagues will take a collective approach to prioritisation, making the best possible use of the available resources. We will now move forward and put in place a Budget by the end of March.

“Over recent months I have been engaging with Treasury and making the case for the funding committed under the New Decade, New Approach document and for the reinstatement of outstanding confidence and supply money.

“If the British Government is serious about ending austerity then this summer’s Spending Review must release further funding to devolved administrations.”