Northern Ireland administration ‘£523m short’ after Budget

Stormont had sought an extra £1.4 billion to relieve pressure on the health service and increase the pay of nurses and teachers.

Ministers also want to compensate victims of historical institutional abuse and mitigate the effect of welfare reform on the vulnerable.

Following Chancellor Rishi Sunak’s Budget the Executive will receive £77 million in day-to-day resource funding and £138 million for capital spending like road projects.

Stormont finance minister Conor Murphy said: “This Budget fails to deliver the funding needed to provide first-class public services.”

Northern Ireland’s allocation is expected to be £523 million short of the £1.4 billion sought by departments which make up the devolved administration for day-to-day spending.

The country’s detailed budget is expected to be set at Stormont towards the end of this month for the next financial year.

Mr Murphy said: “Our public services are already under enormous financial pressure.

“Before this Budget was announced the gap between inescapable pressures identified by departments and the budget available to us was nearly £600 million.

“We are also dealing with the emerging challenges of coronavirus which will have a profound impact on people and the economy.”

It is too early to say whether Northern Ireland will follow England’s lead and give small businesses a rates holiday.

Mr Murphy said: “With finite resources and infinite demands, myself and ministerial colleagues will take a collective approach to prioritisation, making the best possible use of the available resources.”

The New Decade, New Approach deal which led to restoration of devolved powersharing envisaged billions of pounds of extra spending.

It could exceed £9 billion over a lengthy but time-bound period.

Mr Murphy said: “Over recent months I have been engaging with Treasury and making the case for the funding committed under the New Decade, New Approach document and for the reinstatement of outstanding confidence and supply money.

“If the British Government is serious about ending austerity then this summer’s spending review must release further funding to devolved administrations.”

East Antrim DUP MP Sammy Wilson said: “Far from turbo-charging the Northern Irish economy, this Budget represents a false dawn for our people. The Chancellor’s failure to acknowledge the damage being caused by Air Passenger Duty, on regional economies like Northern Ireland, is a clear indication that the Government are not serious about levelling-up across the United Kingdom. It is long past the time that this tax was abolished. The implementation of a Carbon Tax for gas, in a deliberate attempt to placate the insatiable green lobby, will increase our energy bills and put pressure on the poorest households. The additional £210m being provided to the Northern Ireland Executive, whilst welcome, will not come close to addressing the challenges and pressures facing Departments in Northern Ireland.

“Given past experiences, there will also be a fear amongst many small businesses that the rates relief guarantees being provided to those in England will not be extended to Northern Ireland. In previous years, £100m provided to businesses in England for this purpose was simply absorbed into overall spending in Northern Ireland.”

Ann McGregor, chief executive of the Northern Ireland Chamber of Commerce and Industry, said the Budget will not deliver the stimulus Northern Ireland’s economy needed.

She said: “No reference was made to recent calls for the suspension of Air Passenger Duty, which could prove vital for securing Northern Ireland’s connectivity with other major cities.

“And on Brexit, there was also no indication of measures to help businesses here prepare for the Northern Ireland protocol.

“It is now vital that local firms are supported in the forthcoming Northern Ireland Budget.”

Federation of Small Businesses NI policy chairwoman Tina McKenzie said the range of measures to support SMEs over coronavirus will bring some relief to firms in a difficult period.

“We are already seeing businesses impacted by reduced footfall and supply chain issues, so it is vital they get all the support possible.

“Focus now turns to Stormont, where the restored executive must now rise to the challenge to support small businesses when they need it most.”

Retail NI chief executive Glyn Roberts hoped the reduction of interest rates would help boost the economy and promote increased consumer spending from mortgage holders.