I take ( some of ) it back

Well to be fair, the BBC had this analysis and reaction posted by 5 .45 pm. Well done Executive, this is the quickest local response ever to the UK Budget. But more details and consequences needed soon please. Speculation arises now on whether a local emergency Budget is now needed.

“The executive will have to find efficiency savings of £122m by 2011,” says Nigel Dodds. £116m will be made available over the next two years. The government is also to provide an extra £28m for policing and an extra £27m following social security changes, the BBC reports.

If this was all, it would mean Northern Ireland would be just about budget neutral over the next three years, given around 1% inflation. Can this be true?

The Belfast Telegraph reaction roundup includes this from the IoD: “Business bosses in the Institute of Directors (IoD) said the Chancellor’s growth assumptions were “overly optimistic” and Northern Ireland, given its dependence on the public purse, would bear a disproportionate burden as a result of the slowdown in public spending which will have to be introduced in the coming years.”

But given that we benefit from the public purse disproportionately on the basis of need compared to some other regions, Northern Ireland will have done pretty well under the circumstances. The outlook could darken again quickly though, whoever wins power at Westminster next year. But despite Owen Patterson’s musings as noted by Mick, a recession is not the time for a quick reform of Barnett. Given today’s breathing space the Executive needs to consider whether to reorder its priorities along the lines of Declan O’Loan’s reaction in the BBC round up. The thorny issues of domestic rates rises and water charges won’t go away, you know.

  • From Brian Walker’s original post:

    … it would mean Northern Ireland would be just about budget neutral over the next three years, given around 1% inflation. Can this be true?

    Why not?

    NI should still be living off the proceeds of a “peace dividend” in both intra-government and private-sector economies, an over-generous settlement in the St Andrews settlements (i.e. bribe), and a degree of winding-down the grossly-inflated public-sector that was a way of burnishing employment in NI over many years (i.e. jobs for both sets of boys).

    The really hard brick-wall is still to be encountered. Expect continuing restraints from Westminster, no matter which party has power there, together with a long-overdue recognition of the limits of the EU budget (suggestions on a post-card to Frau A. Merkel and/or M. J-C Trichet — doesn’t matter which, they largely sing from the same song-sheet).