Peter Robinson and Martin McGuinness were hardly in the ideal place to respond the spending cuts, sending cries of betrayal down the line from the States that an agreement for £18 billion of funding struck with Gordon Brown had not been honoured. On that one, the dogs in the streets were barking doubts long ago. It all seemed too good to be true – at least in the version according to Peter and Martin. Investment promises just do not override crisis budget cuts.
In reply to their angry protests, the UK government will surely remind them that £9 billion has been paid already and the rest is due by 2017 – two years after this spending review period runs out. So any extra money is back loaded –and dependent on growth. In the meantime the locusts are in charge.
If they aren’t careful FM and DFM are in danger of seeming helpless spectators at their own game. They’d be better off making the best of a settlment which after all came as “no surprise” to economists and Finance Minister Sammy Wilson, normally no slouch when it a quick jab of criticism is needed.
Almost as unsatisfactory as this wrangle is the poor co-ordination between the Treasury and the devolved governments which puts local ministers at a real disadvantage in explaining the package to their people. The Institute for Fiscal Studies are explaining what the welfare cuts will mean UK wide, while Alex Attwood has to wait until next week before he gets clarification from a Work and Pensions minister in Whitehall.
Finally. it hardly helped get the story of the cuts straight to learn that Treasury and the NI Department of Finance and Personnel were working off different baselines. Couldn’t Stormont have sung off the same hymn sheet as the Treasury when it came to the announcements yesterday? What were their press officers doing ( don’t ask) – other perhaps than lining themselves up for the chop?
Last month, DFP officials were preparing themselves for a 10.7% cut in revenue – which is currently £9.2 billion per annum – and a 31.8% slice off capital – at present £1.7 billion a year.
The spending review has worked out somewhat differently, with the DFP claiming the Chancellor’s announcement amounts to an 8% reduction in revenue and 40.1% hit to the capital spend.
The figures provided by the Treasury are slightly lower – 6.9% and 37% respectively – but that is only because its officials used the funding baseline position as it stood after the Stormont Executive implemented a £122 million cut earlier this year.
Let’s hope we get a clearer line on the way ahead from the Executive at their Friday meeting – and go easy on the casting up.