Hamilton: “When faced with tough choices, we have made the right choices and chosen the best interests of the people of Northern Ireland”

Two days ago Finance Minister, Simon Hamilton MLA presented his draft budget. Writing exclusively for Slugger, he argues that in this budget he has done what is right for Northern Ireland

Constructing a Budget at any time is always a challenge. There is never enough money to spend on public services to meet all of the demands placed on government. Agreeing a Budget in the circumstances we find ourselves in Northern Ireland is even more difficult.

Our Budget has not been keeping pace with inflation with the block grant available to the Executive reduced by 1.6%. Add to that the well-publicised pressures in Health, Justice, Enterprise and other Departments, and a difficult job is made almost impossible.

Yet, in spite of these seemingly insurmountable challenges, the Executive has agreed this Draft Budget for 2015/2016. It is by no means an ideal Budget. The range of pressures we confronted required £872 million worth of reductions to our resource budget. Adjustments of that degree necessitates tough choices and difficult decisions. But the Executive has faced up to the harsh reality of our financial position and prioritised key public services like health, job creation, education and policing through £659 million of resource allocations.

Stripping a total off £213 million out of our day-to-day public spending will not be easy. I know that it will change the shape and nature of our public sector. In some instances Departments will have to cease delivering some services in low priority areas. Some have suggested that the Executive should have plugged this gap with local taxation rises. I believe this would have been a mistake, imperilling economic recovery and sapping consumer confidence. Water charges or higher rates bills would have to be paid from the pockets of people who are still struggling.

In many respects, by having to cut our cloth, Northern Ireland’s Government is merely mirroring what many households and businesses have had to go through in the last few years. Families across Northern Ireland have had to respond to rising costs or redundancies. Businesses have seen their markets disappear, have reduced their workforces and in the worst cases, have had to close the doors.

The context for this Budget – and indeed the next number of Budgets – is the outworking of the Conservative led Coalition Government’s austerity policy. The NI Executive’s spending power is approximately £1.5 billion lower in real terms next year compared to 2010. Office of Budget Responsibility projections indicate further tightening in UK public spending over the next three years which could result in as much as £1.3 billion being removed from the Executive’s budget. So, as well as being a Draft Budget that allows us to live within our means next year, it is also a Draft Budget that focuses on reform and reorganisation in readiness for the remainder of this decade. The £30 million Change Fund that I have established will allow Departments to develop and fund the up-front costs of innovative projects that involve cross-Departmental collaboration and prevention. A workforce restructuring plan which will involve a voluntary exit scheme is an appropriate response to a situation where we have less money, are providing fewer services and therefore do not need as many as 212,000 public sector workers to deliver them.

On the capital side of our Budget, we will spend £1.2 billion on infrastructure projects next year. Importantly, I was able to announce the creation of a new Northern Ireland Investment Fund. This Fund will use Executive resources to leverage in outside investment from international investors which in turn will be used to support infrastructure projects in social and affordable housing, energy production, energy efficiency, renewables and urban regeneration.

This Draft Budget offers the best way through what was always going to be a difficult year and starts to prepare us for the testing times that lie ahead.

It deals with our difficult circumstances in a way that is right for Northern Ireland’s economy, for our public services and for our infrastructure.

No one in my position would want to have to implement a budget that reduces public spending so drastically. Some Executive parties obviously viewed abstaining or voting against the Draft Budget as the easy option. That, in my view, was the irresponsible choice. Not only do those parties that failed to support the Draft Budget have to explain why but they must also outline what their viable alternative is and indicate what they would have done when the £100 million loan facility to help us through our in-year financial problems disappeared.

This is not a Draft Budget that is narrow or partisan or party political. It is about dealing competently with the circumstances we are in. When faced with tough choices, we have made the right choices and chosen the best interests of the people of Northern Ireland.

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  • My biggest disappointment with the budget isn’t with the draft that’s out for consultation, nor the haste with which the parties had to be forced to agree with it, but instead I’m perturbed that in the last couple of years – as we stared into the tunnel and saw austerity coming towards us – no one shouted that we couldn’t dodge the cuts forever.

    Previous budgets and departmental money-shuffling didn’t proclaim that this was all part of a bigger and longer series of cuts. No department has been talking publicly about front loading cuts or planning strategically for them. Instead the messaging has been about salami slices, small diminutions of public service here and there, without laying out their plans as part of a larger roadmap …

    It was entirely predictable that there would be year on year decreases in budget that we could not ignore or work around. The exact size may not have been set, but the scale was apparent.

    What was Sammy Wilson doing? Why did none of the five Executive parties – they’ve all got at least one ministry with a budget and multi-year forecasts – flag this up in public? Why did no scrutinising Assembly committee raise the issue?

  • Dan

    What would any party take a tough decision when it would cost them votes?
    By putting it off year after year, it never mattered as there was never a price to be paid.
    If their useless minister failed, they simply replaced him with another idiot from their pool.
    No consequences for failure

    Hamilton is full of it, though it isn’t all his fault, nor the DUP. The whole useless shower have let the country down a bundle….some through incompetence, others by design, given their hatred for it’s very existence.

  • Bryan Magee

    Just administering a budget cut that is imposed because of the Barnet Formula isn’t really a tough choice. As the Minister himself says above “The context for this Budget – and indeed the next number of Budgets – is the outworking of the Conservative led Coalition Government’s austerity policy. ”

    A real example of a “tough choice” would be revenue (tax) raising activity, such as prescription charges for middle class people (to help health budget) or university tuition fees for middle class people (to avoid cuts in uni places) or water charges, or selling some assets, etc. But the parties were *incapable* of any of these.

  • Alan N/Ards

    Bryan, How do you define middle class?

  • Bryan Magee

    Dunno but I should be included. I can afford to pay.

  • Comrade Stalin

    Indeed Alan.

    The SDLP leader claimed yesterday they have been complaining about the unsustainability of the budget for some time – I think Mike Nesbitt also made similar comments. In fact I think it was the UUP who said they knew the budget was wrong four years ago. Why, in the intervening four year period, have neither of these two parties published a shadow budget ?

    I find it hard to critique Simon Hamilton’s budget, mainly on the basis that I haven’t seen an alternative budget that looks like it would work better. Nobody has produced one. What do we pay all these MLAs, their committee staff and their advisers for ?

  • Croiteir

    We have been warned about this for years now, I remember being at a business seminar in Larne years ago and John Simpson of the tele warning us of the big financial hole at the heart of Stormont finances. It just seems no one was listening to him. I just cannot get over the sense of outrage and shock, the king has been wearing no clothes for a hell of a long time, I suppose it was ignorant to point and laugh.

  • Whenever the game is rigged …….. http://www.zerohedge.com/news/2014-11-05/we-have-just-witnessed-last-gasp-global-economy …… it is for fools to continue and maintain and retain the corrupt game.

    Don’t you know how things are made to happen without the introduction of conflict and austerity, Mr Hamilton? Do you not realise that is what you are pimping and pumping and dumping on everyone who would not think and think that you might know what you are doing rather than just doing as you have been told to do by master puppeteers to support their failing systems of maladministration and politically incorrect incompetence.

    Or do you not see that clearer transparent Big Picture and think everything is hunky dory and going remarkably well as things presently are, and according to a Future Successful Master Plan?

  • Niall Chapman

    Regarding: “… I was able to announce the creation of a new Northern Ireland Investment Fund. This Fund will use Executive resources to leverage in outside investment from international investors”
    The executive cannot continue to subsidise large companies in order to entice them to come or stay in the North, these companies and corporations would come anyway because they can make a profit, these subsidies need to be given to small business and local companies in order to sustain and create jobs, companies like Caterpillar and Coca-Cola Hellenic (which I have first hand experience of) don’t need government subsidy for growth and profit but local business’ do.

  • Alan N/Ards

    Bryan, Many working class people can also afford to pay and many middle class people cannot.

  • SeaanUiNeill

    Funny business, this class thing. Used to be so simple. Blue collar, working class, white collar and an old car, middle class, white collar, recognisable school tie and a new car, haut bourgeoise, and old torn clothes and enormous debts from having to up-keep land, gentry or nobility.

    Now its just money, it seems. I tend to think of the middle classes as getting about ten times my annual income as an artist, but that probably includes some of those on tax credits by now.

  • SeaanUiNeill

    My own judgement of those in the Larne business seminars, Croiteir, would be that as long as there was some possibility of even a sniff of the trough, they could not have cared less about where it came from. Decent breakfasts though……

    I’m reminded of Grandma in “Heimat” saying over and over about the new Nazi boom:

    “All on tick……”

  • streetlegal

    It is true at least that cutbacks are long overdue in the Ni Civil Service. That is the 28,000 people currently employed in government department administration could be reduced to 20,000 without anyone noticing much difference. But it seems that the Executive prefers to cut back front line services in health and social services rather than reduce the bureaucracy of the state.

    In Coleraine the plug was pulled on the vehicle tax office earlier this year. But the hundreds of staff involved are still on the NI Civil Service payroll – even though there is no real work for them to do. There are many departmental offices which have been allowed to continue in this position for years – decades even – with hundreds of staff of all pay grades carrying out work that is frankly unnecessary..

  • barnshee

    “By putting it off year after year, it never mattered as there was never a price to be paid.No consequences for failure”

    And there will be none— the tribes will vote as tribes in the next election

  • Not clear what choices have been made, or that those are bring made at DFP. This is a divvy up of what is in block grant. As to whether it is right or wrong, unless we have a clear idea of the out workings (not above) then right/hard/difficult whatever, we’ve yet to learn. Don’t feel that much the wiser on the nature and content of budget than last week.

  • Peter Moore

    “And there will be none— the tribes will vote as tribes in the next election”

    Indeed Barnshee, and for me that is just a poignant and sad. There are some of us that genuinely try to vote for a candidate who’s policies genuinely affect daily life (e.g., what will they do to replace the street lights that even DRD now can’t do etc) rather than whether they are ‘green’ or ‘orange’, but they are thin on the ground.

    However, when I go to my polling station, the ballot card is a depressing sight, matched only by the smug and fake smiles of people trying to shove leaflets in my face.

    My interest in politics here has turned to genuine anger when, it seems, every day there is a barrage of incompetence washed over by breathtaking arrogance.

  • WindsorRocker

    By definition by not raising revenue a choice has been made. To cut rather than to tax and spend.