…By Henry George for TDPel Media.
UK Northern Ireland Secretary Chris Heaton-Harris has outlined a funding plan for Northern Ireland’s 2023/24 budget in a written ministerial statement at Westminster.
Devolution is currently suspended as a result of the Democratic Unionist Party’s boycott of the institutions in protest at post-Brexit trading arrangements.
Civil servants who are currently running public services in Northern Ireland had been preparing for a potentially harsh settlement.
The Treasury needed to recover a £297m down-payment it offered to plug a financial hole in Stormont’s finances last year, and it had been expected that this would be deducted from this year’s budget.
However, Mr Heaton-Harris stated that the money would be drawn back in a different way, and there was the possibility that it could be repaid over two years.
The budget has broadly resulted in a flat cash allocation compared to last year, but the cuts to public services will be significant, given the rising inflation over the past 12 months and the increased costs of running services.
The overall budget for capital projects is slightly up to £2.24bn from £2.05bn in the last financial year.
As expected, the amount allocated to the Department of Health has been protected and is slightly up at £7.3bn, as is funding for the Department of Infrastructure.
Other departments have seen their budgets reduced in cash terms from between 0.5% to 4.2%.
The cuts are not as severe as some departments had been expecting since the £297m overspend has not been deducted from the baseline settlement.
However, Stormont’s departments will be impacted by the new arrangement to deal with the overspend.
Money that would ordinarily be distributed to Northern Ireland, as it is to other devolved regions, will be retained by the Treasury as a result of policy decisions resulting in funding increases in England.
Mr Heaton-Harris will not be taking spending decisions needed within individual departments to ensure they balance their books.
Stormont permanent secretaries have urged the Government to issue ministerial directions for any major cuts that are required and insist they should not be placed in the position of having to impose significant budget-balancing cuts, which could impact the most vulnerable in society.
Mr Heaton-Harris has made clear he does not intend to issue such directions, which means the decisions will fall on the civil service until such time as powersharing returns to Stormont.
Civil servants have already been given extra powers to make decisions that are usually reserved for ministers.
Mr Heaton-Harris also tabled legislation that seeks to extend those powers beyond their current expiration date of 5 June.
The Bill also gives civil servants fresh additional powers to undertake preparatory work on introducing new revenue-raising measures in Northern Ireland.
However, the Secretary of State would not be empowered to introduce such measures in Northern Ireland, as the Government at this stage has made clear that such decisions should be taken by a devolved executive.