An extra £99 million Treasury funding from Wednesday’s Budget “won’t make a dent” in the financial challenges facing Stormont, the finance minister has said.
Caoimhe Archibald said Chancellor Jeremy Hunt’s Budget means the financial outlook for public services in the north remains extremely challenging.
The £99m Barnett consequential from the Spring Budget will leave the executive with around £13.9 billion to plan the day-to-day running of departments for the upcoming 2024/25 financial year, which commences next month.
That is slightly more than the £13.7bn the departments had in 2022/23, but significantly less than the current year budget of £14.8bn.
It’s understood the £14.8bn figure, which was published in Treasury documents on Wednesday, includes £846m from the financial package connected to the restoration of the executive.
The £13.9bn allocation could still increase during the year, with more cash potentially released from the £3.3bn package through the in-year estimates process.
But the executive is still facing a demand from London to raise £113m as a condition of that package.
Speaking on Wednesday afternoon, Caoimhe Archibald said it remained a matter of tension between her department and the Treasury.
But she said London had agreed to show some flexibility around the timescales to deliver a sustainability plan, which is also being demanded as a condition of the Treasury writing off a debt of £559m.
The finance minister said while the 2% cut in national insurance announced on Wednesday will provide some relief to households and families, she said freezing tax thresholds while also delivering tax cuts, “means the government is effectively giving with one hand and taking with the other”.
She also said it was “regretful” the Chancellor has chosen not to invest more in public spending.
“What we got won’t touch the sides of what we need to be able to deliver the high quality public services that people expect and deserve.
“At a time when our hospitals, schools, infrastructure and other public services need bolstered, the Chancellor has failed to provide adequate funding for devolved administrations.”
The finance minister said the latest allocation was more evidence that the Barnett formula should be updated to reflect the north’s level of need.
Ms Archibald also labelled the £1.8bn in capital funding allocated for Northern Ireland in 2024/25 as “shortsighted”
The capital allocation compares to £2.1bn in the current year and £1.9bn last year.
“Investment in infrastructure stimulates economic growth,” said Ms Archibald.
“It creates jobs, including in construction. It boosts innovation and improves how our public services are delivered.
“As we focus on economic recovery, it won’t help create the circumstances and conditions needed.” Mark Spence, chief executive of the Construction Employers Federation, said: “There is simply no way that this settlement – the same in cash terms as some 17 years ago – can go anywhere near the need that we have in order to deliver many of the key projects which are likely to form part of a Programme for Government.
