The Finance Minister has urged Executive colleagues to take “urgent action” to rein in spending after revealing a shortfall of £267m in public finances.
Caoimhe Archibald addressed the Assembly on Tuesday on the “grave consequences” as she warned that failure to balance the Stormont budget by the end of the financial year would see the British government withdraw a previous offer to write off £559 million worth of debt owed to the Treasury.
The warning came on the same day her department published a report following consultation on the possible removal of rate supports.
Commenting on the possible changes, which may see the removal of some support schemes and the domestic rates cap, Ms Archibald said: “Rates are an important source of funding in supporting public services bringing in some £1.5 billion of revenue each year. I will be bringing forward short, medium and long-term rating policy proposals including a more strategic longer-term policy approach in the coming weeks.
“I will be engaging with Executive colleagues on the next steps and will continue my engagement with business bodies, organisations and wider society to work together to build a progressive rates system which grows our tax base and stimulates our economy.” she said.
In the Assembly, Ms Archibald told MLAs that Stormont departments needed £767m above its current budget from the UK Treasury, with a further £500m expected to come as part of the October budget.
The details of the gap in Stormont finances were revealed a day after the Executive published what it said was an “ambitious” draft Programme for Government.
“Departments are currently reporting £767m of pressures above their budget,” the Finance Minister said.
“The greatest pressures are in health, education and justice, which together account for almost 90% of the total pressure.
“I will bring proposals to the Executive to increase departmental budgets by our latest assessment of what our Barnett share will be for the rest of the year.
“While this will fall short of the over-commitment departments are currently reporting, it will go a significant way to addressing the reported pressures.”
Last year, Stormont ministers were asked to launch public consultations by former Secretary of State Chris Heaton-Harris on revenue raising measures that could plug the finance gap here.
Ms Archibald’s department has proposed a number of ways of boosting rates revenue here, the only devolved taxation powers currently available to Stormont.
Among the proposals is scrapping a domestic rates cap on properties valued at over £400,000, meaning owners of high value homes could be set for a significant bump in their rates bill.
Also included among the revenue raising measures are the scrapping of rates relief for factories and manufacturing plants, a 10% rebate for landlords and early payment discounts.
The Finance Minister also issued a warning to fellow government ministers that any overspending within their departments could have “grave consequences”, as a result of a previous annual overspend of more than half a billion pounds.
“All ministers will have to play their part by living within their budget once this funding is provided. Not doing so would have grave consequences for future funding,” Ms Archibald added.
“Any overspend would come off next year’s budget, even more concerningly the Treasury has been explicit that not living within budget will result in the Executive having to repay the £559m the Treasury had agreed to write off, making a really difficult financial decision even worse.
“I remain hugely concerned that the ramifications of not living within budget this year would represent a potentially disastrous outcome for the Executive and our public services.”
