UK Budget Day is always frustrating for regional analysts. It takes ages for the local Department of Finance and Personnel to come out with the local implications. Devolution aggravates the problem. It’s no more in the interests of NI than UK ministers to spell out the worst, so we may suffer from a double spin. My belief is that public spending levels are OK for another year and then are up for grabs, either from a Tory government or the present one. Those growth forecasts look even more dubious than usual. I claim a prize for spotting an obscure Budget point. Before Darling got to his feet, Gordon Brown at PMQs dismissed the DUP s David Simpson s fears of swingeing budget cuts for NI, declaring that Barnett levels were “based on need” (eh?) and quoting the block grant of £6oo million as if it were unaffected by what Darling was about to say and adding : you have made your representations for extra policing costs and can look forward to the Budget statement. Well, where was it? Did I miss it ? Brown though seems to be confirming that the J&P money will be on the way and why not? Its already in the NIO and Department of Justice budgets, so why is there any hesitation about transferring the funds over? Fumbling about like this was hardly the best way to encourage the Assembly to make the big leap of the final step of devolution. As usual, Finance and Personnel have gone to sleep on UK Budget Day and are as slow as ever in putting out an analysis of the local implications. Public spending to be cut from 1.1% next year to 0.7% in 2011-2012
This puts additional pressure on the Executive to revamp the NI Budget
Growth expected to pick up in 2010, expanding by 1.25%.
Economy to grow by 3.5% annually from 2011
These growth forecasts have been greeted by a big raspberry. The IMF joins the pack, forecasting instead an 0.4 % fall next year.
Borrowing levels to rise by £173bn, £140bn, £118bn and £97bn in years after, an eye-watering total of £606 billion.
This casts doubt on whether the UK Treasury can manage to sell its debt in the form of £260 billion of gilts ( government bonds). That would make the debt more expensive and could result in a lowering of the UK credit rating. Remind you of anybody?
We need to know NIs share of the modest increase in support of the long term and young unemployed and for housing and construction industry. Is there any new money here or has it all been pre-announced locally?
All long-term unemployed under 25s to be offered job or training
£1.7bn additional resources for Job Centre network
£250m funding to help people get work experience in growth industries
Funding to create 54,000 new places in sixth form education
Scheme to guarantee mortgage backed securities to boost lending
Stamp duty holiday for homes up to £175,000 to be extended to end of year
Extra £80m for shared equity mortgage scheme
£500m to kickstart stalled housing projects – including £100m for local authorities to build energy efficient homes
All this is small beer. The real meat is about whether you believe the growth forecasts and how long it will take to repay the highest public debt burden in history, 80% of GDP. The Big Picture remains in Washington. A US revival will create the tide in which other boats will rise, with growth reducing the debt burden We hope!