UK Budget: Government warns Stormont to agree a budget or lose out on additional £131m cash on offer for salaries
The Secretary of State has warned Northern Ireland’s governing parties that if they don’t agree a budget, they will not be able to spend millions of pounds of extra funding available as a consequence of the Budget.
The UK government says £131m is available in the next financial as a result of Chancellor John Healey’s national spending plans, money which could go towards pay rises for public sector workers.
However, Stormont ministers won’t be able to spend the money if a budget is not agreed, as they will be limited to spending 95% of last year’s budget, Sir Chris Bryant says.
It comes as Torsten Bell, the Parliamentary Secretary for the Treasury, said the government is committed to the defence sector in Northern Ireland – and the province will be an “important part” of the government's plans to increase defence spending more widely.
In his budget on Wednesday, Chancellor John Healey said that as a result of decisions made at Budget 2026, the Northern Ireland Executive will receive an additional £270 million through the application of the Barnett formula.
He says this is on top of the record Spending Review 2025 settlements and an additional £740 million allocated at Budget 2025 and Spring Forecast 2026.
The latest warning by the government to Stormont parties comes after an offer of another £1.5 billion for Stormont departments – which the Executive parties say is not enough.
Speaking to journalists ahead of fresh meetings with the local parties, Northern Ireland Secretary Sir Chris Bryant said the law states that if no budget is set, the executive won't get that money.
“They don't get that at all if they don't set a budget” he said – adding “There isn't any more money”. The Labour minister said there is now no reason “why we can't get this settled” – and he would be “starting that process this afternoon”.
Sir Chris described it as “a bit of a no brainer for the Executive” – warning they could either “limp forward” or sign up to a resolution.
The DUP said the money “will help ease pressure on our public services” – but said workers, families and businesses “are being taxed to the hilt” and nothing in the budget would ease the tax burden.
Ulster Unionist MLA Diana Armstrong said the Chancellor’s Budget leaves farm families exactly where they were, with no change to the family farm tax and a cliff edge on red diesel coming next summer.
She added: “There is worse in the detail. The cut to red diesel runs only until the first of July next year. After that the duty returns to where it was before 2022 and rises with inflation. That is a cliff edge in front of every farm business that depends on it, and it should have been made permanent”.
SDLP Leader Claire Hanna MP has said any support announced by the Chancellor for NI households struggling with rising costs is welcome, but warned that Northern Ireland will remain trapped in a cycle of crisis management unless the Executive "starts governing effectively and agrees a Budget”. She said families and businesses need certainty, rather than continued political firefighting and annual rows over finances.