NI Budget Announced

Matthew Morrison Blog

The long awaited budget for Northern Ireland was announced last week. The MCE Public Affairs team share their views on the main points from the announcement. 

The headline to come out of the announcement was the release of £410 million from the DUP confidence and supply agreement with the government, including £80 million for health and education pressures, £30 million to support programmes to address mental health and severe deprivation, £100 million for transformation of the health service and a £200 million boost to capital spending.

This means that there will be real term increases in health and education (though notably this is in comparison to the opening baseline position in 2017-18) with cash increases in most other departments.

This budget will see the first above inflation (4.5%) rise in the domestic Regional Rate since the restoration of devolution in 2007. The Non domestic Regional Rate will be increased by just 1.5% and significantly the Small Business Rate Relief Scheme will continue (though this is likely to require the passage of regulations at Westminster.)

Unlike last year it would appear that the UK government is taking responsibility for the decisions rather than leaving the responsibility to the Northern Ireland Civil Service. The Northern Ireland Office statement makes it clear that the prioritisation of resources within NI departments will need to be undertaken by Permanent Secretaries but that, “The UK Government shall continue to support the Northern Ireland administration and do whatever is necessary to meet our responsibilities to the people of Northern Ireland.” This would appear to rule out any early return of Direct Rule but also signals greater intervention from Westminster.

Whilst still challenging, this budget outcome appears to follow the pattern of recent years and is significantly better than the scenario planning that the civil service suggested before Christmas, largely due to the additional funding from the confidence and supply deal.

The Government does not appear to have included money anticipated from the Budget Exchange Scheme which could be up to £50 million resource DEL or be operating on the basis of an over commitment which could have eased pressures further. Interestingly and unusually it has provided for a switch from capital to resource spending of £100 million to ease day to day pressures.

Individual departmental spending plans are expected this week.

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