Department for the Economy to surrender millions from Covid recovery fund

Economy Minister Gordon Lyons.
Economy Minister Gordon Lyons. Economy Minister Gordon Lyons.

THE Department for the Economy (DfE) is to surrender £41 million in unspent funds to the executive, including £21m specifically allocated for the post Covid-19 recovery effort

The department was awarded £290m earlier this year for the Economic Recovery Action Plan (ERAP).

That pot included £145m for the £100 Spend Local card scheme.

Last month it emerged that DfE had set aside an extra £21m as a contingency due to higher costs in running the £100 scheme than originally anticipated, and an updated estimate on the number of potential applicants.

But with tens of thousands of people either failing to apply or secure verification for the £100, DfE said it will now hand £21m back to the executive.

The move followed a call from Finance Minister Conor Murphy on all executive ministers to surrender money they can’t spend with a view to establishing an energy payment scheme for households in response to surges in domestic electricity and gas bills.

Although news of the scheme was welcomed by MLAs, there were questions yesterday over the implication for the post-lockdown economic recovery efforts.

Discussing the update from the department, economy committee clerk Peter Hall told MLAs: “Money that has been allocated for ERAP is now going towards this energy scheme.”

Sinn Féin MLA John O’Dowd said the support fund will come as “great relief for those people who are feeling pressure with energy bills”.

But he claimed it exposed a lack of planning at DfE.

“They were given significant amounts of money to support businesses, and workers and families coming out of Covid.

“While I and other families were delighted to receive their £100, it’s not a sustainable economic model moving forward.

“And the handing over of £41m of unspent funds is further evidence that there is no other plan in place to support working families in the economy moving forward,” claimed the Upper Bann MLA.

In a statement, a DfE spokesperson said government interventions in the past 18 months had left the economy in a much stronger place today than was feared a year ago: “Therefore enabling the department to return some funding from the ERAP in order to support priorities identified by other ministers.”

He added: “The reallocation - which also included funding from reduced salary costs as a result of the resourcing issues across the NI Civil Service and from some schemes or programmes where demand was less than expected - will not impact DfE’s ability to meet its key objectives.”