'Stark reality' of Northern Ireland’s Public Finances highlighted in NI Fiscal Council report

A report by Northern's Ireland budget watchdog, the NI Fiscal Council, said departments face a 6.4% real cut next year and a 1.9% rise in 2024/25.

Its final budget creates a V-shaped funding profile in 2023-24 and 2024-25 that will not help reform or workforce planning, according to the council.

Sir Robert Chote, Chair of the NI Fiscal Council, said: “As 2022-23 draws to a close, NI departments face the coming financial year with no ministerial leadership, no agreed budget allocations to work from, and a tough financial environment as pay increases and inflation remains elevated and this year’s call on the Treasury Reserve has to be repaid.

"Whoever eventually undertakes the task of setting next year’s Budget – the Secretary of State or a restored Executive – will face some difficult decisions.

“Should NI raise more money for public services, and if so, how? Where can money be saved through greater efficiencies. And is there a need to reduce or completely stop delivering any services or other forms of support?”

Dr Steve Aiken, who is the finance spokesperson for the UUP, said: “The report from the Fiscal Commission today brings to the fore the stark reality of Northern Ireland’s public finances. That the budget can only be balanced by bringing forward a £297million claim on the Treasury reserve – that has to be paid back this year – is a matter of considerable concern.

“However, looking again at how we actually spend our money, for instance how we make use of RRI (Responsible Research and Innovation) and Financial Transaction Capital, coupled with delays in such projects as the City Deal, and major infrastructure programmes, shows that even with the monies we do have, we need a transformation on how we both budget, and effectively spend, the resource and capital that we have.

“Not having a functioning NI Executive helps no-one. Any further delay in re-establishing the Assembly and having our own ministers is only going to exacerbate our budget position.

"Abrogating that responsibility to the Secretary of State, as was the case for three years under the last hiatus, lets down all of the people of Northern Ireland.”

Northern Ireland Secretary of State Chris Heaton-Harris said: "[The] report demonstrates how years of financial mismanagement have left Northern Ireland’s finances on an unsustainable footing. The absence of a Northern Ireland Executive is exacerbating the systemic and long term challenges facing all public services.

"I am committed to doing all I can to support the people of Northern Ireland and my focus remains on restoring the devolved institutions in order for locally accountable leadership to address the issues that matter to the people of Northern Ireland.

“We have already made clear that the 2023-24 Budget will be extremely challenging. If the absence of an Executive continues, the UK Government will work at pace to deliver a balanced and affordable budget for the year ahead.”