Northern Ireland news

Budget proposals 'lack strategy and fail to grasp opportunities for reform'

Chair of the NI Fiscal Council, Sir Robert Chote (left), alongside economist Esmond Birne. Picture by Michael Cooper.

THE draft budget proposed to run Stormont for the next three years lacks strategy and delivers very little in the way of reform, a spending watchdog has said.

The Northern Ireland Fiscal Council said while Finance Minister Conor Murphy’s proposals ‘balance’ the budget, they lack evidence of strategic priority-setting beyond health.

The body, which was set up last year by Mr Murphy to provide greater transparency and scrutiny of public finance in the north, has assessed his draft budget proposals on how Stormont will spend its block grant from London over the next three years.

While it has yet to be approved by all executive parties, the draft budget it is currently out for public consultation until March 7.

It proposes a two per cent cut from all departmental baseline budgets to help fund an extra 10 per cent health.

The £20.9 billion proposed to run the Department of Health over the next three years will see it take a 51 per cent share of Stormont’s day-to-day budget by 2024/25.

Additional block grant funding means some departments will see their baseline budget increase over the next three years.

But Fiscal Council chair, Sir Robert Chote, said the proposals “creates relative winners and losers”, with “little explanation of the choices made”.

The Department of Justice is identified as the only Stormont department to see a net reduction for its baseline budget over the next three years.

Sir Robert said the upcoming assembly election has made it more difficult to secure political agreement over the spending plans.

“The fact that you have an election coming up doesn’t make agreement around the more controversial polices any easier,” he said.

The budget proposals stay clear of the more controversial issues such as water charges and tuition fees, which Stormont subsidises.

The Fiscal Council said these so called ‘super-parity’ policies cost the executive around £600m a year to fund.

Its report points out that while the Department of Finance has asked for suggestions on revenue raising in the ongoing consultation, it has made no proposals of its own.

The watchdog also warned of potential risks around public sector pay claims and uncertainty over the UK Government’s plans to replace EU funding.

On the opportunities presented by a three-year budget to provide greater long-term thinking and policy action, the report states “very little” has been earmarked for ‘transformation’.

It identifies just £49m per year from the New Decade New Approach deal.

Economist and Fiscal Council member Esmond Birne said: “There was an opportunity here, given that it is a three-year settlement, to really build the foundations for a transformational budget.

“So far, that opportunity hasn’t been grasped.”

In response, a spokesperson for the Department of Finance said: “The department accepts there is more to do and will examine the report findings to identify where further improvements can be made to the budget process.

“The draft budget is currently out for consultation and the department would encourage people to make their voices heard and help shape public services for the next years.”

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