Northern Ireland

Stormont on trajectory for overspend of half a billion

Parliament Buildings at Stormont Estate, in Northern Ireland (Liam McBurney/PA)
Parliament Buildings at Stormont Estate, in Northern Ireland (Liam McBurney/PA)

Northern Ireland is on a trajectory to overspend by half a billion pounds excluding a public sector pay rise, a senior civil servant has said.

Neil Gibson, the permanent secretary at the Department of Finance, told a consultation on revenue-raising that the overspend would be over a billion including a pay award for public sector workers.

Public service workers including civil servants, teachers and healthcare professionals have been engaged in intermittent strike action to achieve pay parity with colleagues in the rest of the UK.

Northern Ireland budget
Department of Finance permanent secretary Neil Gibson, speaking to the media at the Department of Finance buildings in Belfast (Archive/PA)

In the absence of a Stormont executive the budget for 2023/24 was set by Northern Ireland Secretary Chris Heaton-Harris.

In that budget several departments have been left with shortfalls in the hundreds of millions, and Mr Heaton-Harris requested that civil servants investigate potential revenue raising measures to stabilise Northern Ireland’s finances.

Mr Gibson said the situation is “becoming beyond challenging”.

“We’re now in a situation where our public finances are on a trajectory for overspending to the tune of about half a billion pounds, if we exclude providing a fair and reasonable pay award to public servants,” he said.

“If we include a pay award that figure rises to over a billion pounds, so we’re urgently in need of making some decisions and choices about how to close that gap.”

There has not been a devolved government in Northern Ireland for nearly two years as a result of the DUP’s boycott of power-sharing institutions in protest against post-Brexit trading arrangements.

Without elected ministers in charge of departments, civil servants are having to make decisions on what cuts are taken.

With savings in the region of £980 million have already been made this year, Mr Gibson said that civil servants had gone as far as they legally could go, and that elected representatives would have to enact legislation to make further cuts.

“I think most viewers will recognise the sort of cuts that have been coming through and you will have seen that in your public services,” he said.

“We’ve had over, just close to a billion pounds of cuts taken by Permanent Secretary colleagues and myself to try and live within the numbers that we have.

“But there’s a limit to how far civil service powers go, and there are decisions that can only be taken by politicians in order to make some of the scale of choices that would be required to deliver that level of cuts.”

Mr Gibson said that people in Northern Ireland would need to “be very brave” in conversations surrounding the budgetary position, but that the department was engaged in discussions as to whether Northern Ireland was receiving sufficient funding from the UK government.

“We’re all going to have to think as citizens what services we need. Are there things we could stop doing, stop delivering? Would we be willing to pay more?,” he said.

“The purpose of the conversations today have been to look at some of the first in a series of consultations about what sort of tax raising powers might be needed.

“Can we deliver anything more efficiently and effectively?

“Lots of pressure on us as civil servants to come up with ideas of how to deliver services more effectively.

“But we should also be arguing for the sorts of funding that Northern Ireland needs and requires to deliver its services.

“There’s a lot of debate coming from Fiscal Council and others about whether we actually have a below-need level of funding.

“And that’s a very strong argument that we’re having at the moment with colleagues and friends in Treasury to argue for the level of funding that Northern Ireland should have in order to deliver services that are delivered elsewhere in the UK.

“And then we have to ask some local questions as well.

“But I think we need all to be brave enough to think about what services we need, who pays for them and how we deliver them.”