April 21, 2024
Finance

Stormont budget: Little respite for NI public services despite £3.3bn


  • By John Campbell
  • BBC News NI economics and business editor

Image caption,

Stormont ministers will be called to “a vote on account” to authorise spending until a budget is in place

It is not an ideal situation but it is manageable.

An arrangement called “vote on account” means there is legal authority to continue spending until the budget is in place.

The manoeuvring ahead of that budget is now in full swing.

But a very clear message is emerging: Do not expect much respite for public services, despite the government’s £3.3bn financial package.

The finance director at the Department of Health set the tone as she appeared before MLAs this week.

“It is fair to say the financial position for health has never been so tough,” Brigitte Worth said.

She outlined a looming funding gap of up £1bn for the new financial year.

Part of this is down to inflation; she said the service needs an extra £400m a year just to stand still.

“We’re unlikely to receive all we need to maintain services at existing levels, recognising that these existing levels are frequently inadequate,” she told the health committee.

Spending gap

She acknowledged that efficiencies can be found in the department’s budget, which was about £8bn last year.

But added that those efficiencies will not bridge the entire spending gap and that some will only be achieved through upfront investment.

Image caption,

Robin Swann said it was a wrestle in the mud for a knife when describing budgeting for the health service

That echoed sentiments in a speech made by Health Minister Robin Swann earlier in the week.

“We need to push back against any notion that there is a magic reform fairy who can wave a wand, save us billions, transform services overnight and turn grey skies blue,” he told an audience of GPs.

“Reforming, reconfiguring, transforming healthcare is a slog, it’s a grind. To misquote Logan Roy in Succession, it’s a wrestle in the mud for a knife,” he added.

Things were no cheerier when officials from the Department of Justice spoke to MLAs.

Deborah Brown, a departmental director, said the justice department had suffered from a decade of budget squeezes.

She described how overall funding for Stormont departments has risen by 43% in the past 10 years with health spending up by more than 70%.

However, the increase for the justice department has been just 3% and efficiencies are “all maxed out”.

“We don’t have anywhere else to go on this,” she said.

“We are in a very critical situation and 2024/25 is the most challenging year we have ever had.”

She mentioned one area of financial pressure as the recurrent implication of the pay awards which are currently being considered by public sector unions.

Image caption,

Workers from 15 unions took part in one of the biggest strikes in Northern Ireland in January over pay

About £685m of the £3.3bn Stormont restoration financial package is earmarked to settle pay claims for 2023/24.

That then becomes a recurring cost which will have to be met from departmental budgets without further help from the government.

Stormont ministers are continuing to make the case that the key long-term element of the financial package, a needs-based funding formula, can and should be improved.

The finance minister met the chief secretary to the Treasury on Wednesday to press this issue but do not expect a breakthrough any time soon.



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