“this is significantly exacerbated by the political situation in Northern Ireland”

As well as those briefings by the Northern Ireland deputy First Minister, both he and the NI First Minister have been dismissing political criticism of the draft NI Executive spending plans as ‘electioneering’.  No doubt that’s a consideration for some, but it’s not a charge that can be levelled at the Assembly’s Finance Committee.

And as the Belfast Telegraph reports, PricewaterhouseCooper’s economic analysis of those draft plans is that “the [NI] Budget may not be deliverable in its current form”.

[Esmond Birnie, Chief Economist at PwC in Belfast] said it and the associated Departmental plans have ended up as a patchwork of unaligned spending proposals, unrelated to the Programme for Government or to cross-departmental economic and social objectives.

In the absence of information not currently available to consultees, there is a cumulative shortfall that could exceed £2bn by 2014-15,” he said. “We are deeply concerned at the almost complete absence of economic and social targets and outcomes underpinning the draft Budget and departmental plans for the period to 2014-15.” [added emphasis]

From the PwC press release

PwC tried to compare the spending plans of the 12 Departments and reconcile these with the draft Budget published on 15 December.

Their comparison formula (Departmental baseline spending, plus inescapable commitments, minus available resources, plus stated planned savings) could not be completed as a number of Departments had published insufficient information while there was no standard format for Departmental reporting.

Consequently, the PwC analysis concludes that the draft Budget (as defined by the published plans of the 12 Departments) does not balance. 

They also identified a number of areas where cross-departmental activities seemingly conflicted: 

  • Sufficient funds may be available from DOJ to complete the Desertcreat Training College  but, as DHSSPS cannot fund its share of recurring operational costs, the viability of the project may now be in doubt
  • DRD’s decision to further defer domestic water charging will, in effect, require other Departments to subsidise DRD to the extent of the tax forgone (around £800m over the period of the draft Budget)
  • Pressures on DEL funding may threaten targets in the Programme for Government 2008-11 relating to additional PhD places, deemed necessary by DETI to upscale innovation in the economy
  • DE’s commitment to compensate schools for the loss of access to End Year Flexibility may mean DE having a first call on money during in year bids (where previously DHSSPS had this advantage), thus increasing unplanned pressure on overall Executive funding resources.

Esmond Birnie says that Departments have seemingly not exercised opportunities to raise revenues and/or effect savings where opportunities exist to market-test a wide range of services currently provided within the public sector.

The press release adds

The PwC analysis tempers its overall criticism of the draft Budget and Departmental plans by acknowledging that the lack of holistic, cross-departmental cohesion in the plans is, at least in part, understandable given the multi party, ‘forced coalition’ model of government.

PwC managing partner, Hugh Crossey says: “A tight budget is difficult enough to deliver across Departments in a traditional model of democratic government and this is significantly exacerbated by the political situation in Northern Ireland.” [added emphasis]

Political reform, anyone?