Northern Ireland analysts have offered a downbeat-sounding take on the chancellor’s latest budget.
Although a small amount of extra cash has been announced for the Province as part of George Osborne’s latest financial package it is not an especially hopeful sign, it has been claimed.
The additional boost unveiled for the Province amounts to £21.2m.
But it pales in comparison to previous funding allocations, and is also in keeping with low awards offered to other devolved regions of the UK.
Dr Esmond Birnie, chief economist with the Northern Ireland division of giant accounting firm PricewaterhouseCooper, said in a statement: “That’s around 15 per cent of the £136m the region was allocated in last year’s Autumn statement, so represents a significant decline.
“However, it does reflect the recent warning from finance minister Simon Hamilton that Northern Ireland is facing even greater austerity than has been felt up until now.
“It also echoes the comments from the chancellor that, despite clear evidence of recover, the recovery remains patchy and much more work needs to be done to eliminate the deficit.”
Angela McGowan, Danske Bank chief economist, pointed to plenty of positives for the Province in the budget – such as the freeze on spirits, which should bolster whiskey-makers.
However, she warned: “The cap on the welfare bill to £119bn in 2015/16 will however be negative for the local economy, which harbours a greater proportion of benefit claimants in its population.
“The pressure locally to push the Welfare Reform Bill through the Assembly will no doubt increase.”
Richard Ramsey, chief economist for the Province at Ulster Bank, struck some fairly pessimistic notes in his analysis of the figures too.
He said that “whilst the public finances are improving, it is from a horrendous state,” adding that talk of a falling deficit “should be treated with some caution as it means the rate of growth in debt is slowing but the overall stock of debt is set to rise”.
Public sector pay restraint looks set to continue until 2018/19, and a permanent cap on welfare will also hit home.
“This will act as a drag on the UK economy, and Northern Ireland in particular, for the rest of the decade,” said Mr Ramsey.
“Furthermore, the next parliament will be an era of interest rate rises and public expenditure cuts. This is something we haven’t yet experienced.
“Against this backdrop all of the measures announced today are relatively minor, though not unwelcome.”
However, he went on to pick out a handful of positive additions to the budget, including a new type of ISA (or NISA), with a £15,000 tax-free threshold.
The chancellor himself, although shying away from the word “austerity” (which was not used once in the entire speech), did acknowledge during his speech “that there will have to be more hard decisions; more cuts”; something he pledged will continue into the next parliament too.
Despite the fairly dour impression much of yesterday’s budget left for some, Stormont finance minister Simon Hamilton welcomed the £21.2m in extra funding, to be allocated over the next two years.
He added in a post-budget statement: “The chancellor’s budget continues to reflect increasing UK economic growth and that is to be welcomed, with Northern Ireland companies contributing to that growth.
“However the chancellor has made it clear that the UK Government must continue to curb its debt and that any fiscal gains from higher economic growth will be used to reduce our national deficit.
“Unfortunately that means that the public sector is facing a sustained period of budget constraint.
“My view is that this also provides an opportunity to begin a process of reform so that we actually improve services despite reducing budgets.
“The task will not be easy but it is one we must face up to and provide solutions for.”