Public spending cuts, the ticking time bomb that will jolt the Executive into reality.

For Northern Ireland, look beyond the small giveway in the budget statement to the public spending time bomb. The Financial Times spells out a UK position far worse than a few months ago.

This means a fierce and progressive squeeze on public spending is in prospect after 2010, with health and education – the government’s top two priorities – enjoying vastly lower rates of growth than in recent years, and other departments facing actual cuts….Alistair Darling, the chancellor, has cut allocations that would have seen public spending rise by around 2 per cent a year in real terms after 2010-11 to 1.2 per cent. This would start with a rise of 1.3 per cent rise in 2011-12 and of 1.1 per cent by 2013-14


This average 1.2% public spending growth is less than half what NI has been used to and will enjoy for a couple of years yet.. And that 1.2% average must pay for the fixed rates of the extra costs of higher unemployment, leaving precious little extra for much else. This creates an even bigger headache for the Executive caused by the rates freeze and postponement of water charges, however popular they may have been.

What on earth are they going to do? Put their fingers in their ears and scream? A gradual rates rise and an effort to take the water company off balance sheet are among the better choices. Economic commentator John Simpson is surely right,

The Executive needs to agree that direct water charges should, gradually, replace the £200m subsidy.

Messrs Robinson and Dodds must speak out soon. Wishing the problem away isn’t an option any longer.