“Clearly something has got to give…”

Unsurprising economic illiteracy aside, the political posturing in the draft Northern Ireland budget re-allocation comes at a cost.  As Liam Clarke points out in the News Letter

In October 2007 it was hoped, not unreasonably, that the shortfall could be met by selling government land and buildings into the booming property market. Stormont was like a family funding an extension by remortgaging its house, but unfortunately the bottom fell out of the property market almost as soon as the plan was formed. As a result the giveaways had to be funded through cuts and we have been cutting to pay for them for the last three years.

The cutbacks were referred to as efficiencies, paring a bit here or there and identifying waste, but we are nearing the end of the road with that process. Health alone lost £700 million in nip and tuck savings. Now we are down to jobs and services.

It is all very well to talk about the cost of art in hospitals, but that is a pittance compared to what is needed. Cuts in consultants’ pay is also touted as an easy saving but many of these specialists operate in an international market. Hospital consultants’ wages across the border in the republic are twice as high as they are here, according to an Irish Times survey.

So unless David Cameron matches Gordon Brown’s generosity avoiding water rates is likely to cost us around £900 million a year from now on. Even if Cameron stumps up we will be left with a bill of £500 million. So far the Executive has been unable to agree to cut whole programmes and quangos, so savings will have to come piecemeal through job losses and reductions in services.

The disabled may not get their home care packages or have to pay for them and 3-4,000 health workers could lose their jobs. Our capital budget has been reduced by 40 per cent and the executive is contemplating further cuts in current spending to make up the shortfall. It also proposes reductions in corporation tax, which carry a potential surcharge from the Treasury.

Clearly something has got to give. With an election coming most politicians are reluctant to raise such questions, so it is up to journalists and voters to do it for them.

What’s the ‘plan’ to make up the shortfall this time?

Do read the whole thing.

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  • Although charging for domestic water and sewerage services remains a highly contentious political issue it is also a growing financial burden for the Executive. Since there is no equivalent expenditure programme in England, Northern Ireland receives nothing for these services through the Barnett formula. ..

    However, it is interesting that the largest expenditure pressure comes from the deferral of water and sewerage charges (about 55 per cent of the cuts in other services are due to this decision). This is almost certainly a regressive subsidy benefiting the well-off much more than those with lower incomes Victor Hewitt, ERINI, February 2010 [pdf file].

  • “Clearly something has got to give…”

    The Maritime Search and Rescue Control Centre in Bangor is under threat of closure. I’ve provided links to a Facebook Causes webpage and to a petition.