Welcome for budget plans despite tough choices ahead

Northern Ireland has no chance of escaping a bleak economic future unless decisive moves are made soon that will drive business forward and create growth.

By The Newsroom
Monday, 18th December 2017, 9:23 pm
Updated Monday, 18th December 2017, 9:26 pm
The time is now for a deal to be reached and an Executive formed at Stormont to deal with Budget issues
The time is now for a deal to be reached and an Executive formed at Stormont to deal with Budget issues

That’s the general view of business groups reacting to the Budget briefing produced on Monday by the Department of Finance.

Recognising the tough choices to be made and regreting the lack of a working administration, the groups sent out a clear message that action must now be taken one way or another to bring progress.

“The Secretary of State must now bring clarity,” said John Armstring of the Construction Employer’s Federation.

“Decisions need to be prioritised and taken and a clear and accountable way of government taking these decisions needs to be established.”

The preference would be, he said, for the the establishment of a Stormont Executive.

“However, failing that, we need to move to a position where the functions of government can be exercised in a way that any other part of these islands would expect as a matter of course.”

The briefing produced by the department sets out three scenarios designed to act as guidance to an incoming administration.

In each, health and education budgets are protected, but that raises the prospect of cuts of between 4% and 12%in other departments.

There are also proposals that would see the raising of domestic and business rates and a 10% increase hike is among the options.looked at in the briefing paper.

However, describing the current situation as “extraordinary,” CBI NI director Angela McGowan said the business community accepted the need for such a briefing but warned of the dangers of concentrating on health to the detriment of other issues.

“People often forget that economic prosperity is the key to solving many of our social issues,” she said.

“Only economic growth can deliver job opportunities, lift people out of poverty, allow for social mobility and reduce health inequalities – all of which will ease pressure on public expenditure in the longer term.

“It should be noted that there is a very real fear among the business community that if Northern Ireland continues to respond to our healthcare crisis by diverting funds from all other areas into health, then there will be no public money left to support the wider economy.

“For example, we currently require urgent investment in infrastructure, skills, higher education and wider economic development programmes.”

Noting that the capital budget is based on the capital money from the Conservative-DUP deal flowing as early as April, Mr Armstrong said any delay in that and consequent investment in flagship projects could present “huge challenges for the bulk of our industry given its predominately small and medium sized contractor base”.

“As we have said today in evidence we have submitted to a Northern Ireland Affairs Committee inquiry, neither the construction industry, nor the Government Clients, can afford to be in a position in March, never mind once the financial year has actually started, of still not having a legislatively approved budget.

“We are aware that Clients have now been asked to put forward how they would prioritise capital investment in 2018/19.

“So that this process can be done as efficiently and effectively as possible, it is vital that the 2018/19 budget be approved in January or, at worst, by mid-February and that, in the context of the ongoing impasse at Stormont, that Westminster must assume this responsibility will fall on them.”

FSB NI head of external affairs Roger Pollen said it remained disappointed at the lack on an Executive but said it welcomed the Civil Service making budget plans in advance of the next financial year.

“The fact that the 2017/2018 Budget only passed through Westminster a number of weeks ago, with two thirds of the financial year already completed, was regrettable and a situation which should be avoided in future.

“We look forward to engaging with the Department on this matter early in the New Year to outline the priorities of the small business sector in Northern Ireland, which is already feeling the squeeze with additional costs and an uncertain political climate.

“The significant financial decisions ahead, to which the briefing paper alludes, reinforce the point that we need Ministers in place as soon as possible to take strategic decisions.”