The public spending budget at Stormont has been cut by £78 million in a decision which has led to bitter public feuding between ministers.
In the long-delayed June budget-readjustment — known as the June monitoring round — finance minister Simon Hamilton levied a 2.1% reduction on all departments with the exception of health and education.
A deal between Sinn Fein and the DUP has yet again pushed back a decision on welfare reform to later this year, with a penalty of £87 million due to be imposed by Westminster for Stormont’s refusal to implement the benefit changes enacted elsewhere in the UK.
The Executive’s smaller parties were fiercely critical of the agreement. Alliance’s ministers voted against the deal and accused the DUP and Sinn Fein of “gross financial mismanagement”. Leader David Ford said that they had created an “inevitable crisis in public finances later this year”.
The UUP said that Danny Kennedy abstained and that with the next monitoring round just eight weeks away “all they have done is kick the can down the road”.
The SDLP said that “this cobbled together deal that is already falling apart”.
TUV leader Jim Allister said: “An executive which cannot take decisions which can be fully backed by its finance minister in public is an executive which needs to be put out of its misery.”
Mr Hamilton said: “The reductions that departments face in October - and must begin to plan for now - will be every bit as harsh but they are completely avoidable.
“They are harsh because the impact they will have upon public service in Northern Ireland will be devastating as a result of the inability of some parties within the Executive to show the leadership required in welfare reform.”
A meeting of the Executive was called today to ratify the deal.
The budget reallocation — which moves unspent money from some departments to others where there is a shortfall — had been delayed for weeks. The £78 million cuts are necessary because of an over-commitment in spending
Sinn Fein and the DUP have been at loggerheads over how to deal with demands by the Treasury for £87 million in financial penalties because welfare reform has not been introduced. A penalty worth £29 million has already accrued but has not been addressed in this reallocation.
Mr Hamilton added that the Executive had agreed that the £87 million reductions due to welfare should happen in October if no deal is struck.
He said: “This will cause further pain across departments and will undoubtedly have a detrimental impact on our public services.
“Those failing to proceed with welfare reform bear sole responsibility for the dire consequences that will follow.” The reductions introduced now to departments’ spending on day to day services include the Department of Justice at £22 million, employment and learning at £16 million and social development at £14 million.
First Minister Peter Robinson said £13 million had already been taken from the budget because of welfare reform and a further £87 million had to be taken into account from October.
Sinn Fein MLA John O’Dowd has challenged that.
Mr Robinson added: “Denial is not an option and these issues have to be dealt with. More and more vulnerable people are going to be hurt by the failure of the SDLP and Sinn Fein to face up to the reality of welfare reform.”
Justice minister David Ford accused Sinn Fein and the DUP of grossly mismanaging public finances.
“It’s politically clever in the short term, but financially stupid in the long term.
“They have torn up the rule book for properly managing public finances. People need to know that today’s political deal doesn’t mean that the budget crisis has been resolved - it’s made it worse.”
A total of £90 million was reallocated for building projects.
Environment Minister Mark Durkan said finances to save the Exploris Aquarium in Portaferry, under threat of closure, were secure.
“It is excellent news for all the supporters of Exploris, both near and far, and particularly for the people of Portaferry.
“They have fought a valiant campaign, highlighting not just the regional importance of Exploris, but have also argued that it is vital to the social and economic well-being of the town.”
Ulster Unionist Party minister Danny Kennedy abstained from the Executive’s budget vote.
A party statement said: “The very harsh reality is that services are facing cuts. The Department of Regional Development will be forced to look at services such as road maintenance and street lighting.
“We are also totally disgusted that the Executive is not going to fully fund the concessionary fares scheme - one of their own priorities.
“This scheme is something the Ulster Unionist Party is passionate about and Danny Kennedy will fight to protect it.”
Sinn Fein MLA Daithi McKay told the BBC his party had not agreed to welfare cuts.
“We have made an agreement and I am very confident that come October we can make an agreement,” he said.
“What we agreed was to deal with welfare reform and issues around it at the time of the next monitoring round in October.”
DUP minister criticises Poots’ department
In a highly unusual move, the finance minister has strongly criticised another DUP-led department.
Simon Hamilton, pictured, said that the Department of Health had exceeded its budget by more than £13 million and as a consequence of this bad management its extra payment of £20 million — far less than the £160 million it asked for — from central coffers is conditional upon improvement.
Mr Hamilton said: “This was, in my view, due to poor budget management within the department.
“The Department of Health, Social Services and Public Safety (DHSSPS) had more than three years since the budget for 2014/15 was set to ensure it could live within its budget and in that context it was hugely disappointing that it then registered such a significant overspend.”
The department, run by DUP minister Edwin Poots, was also criticised for failing to spend money on new health care centre projects.