So after scuppering UC plans Osborne shrinks the NI budget anyway…

It has to be a given that David Cameron knew that the special fund he allowed OFMdFM to accumulate from service budgets elsewhere would, by and large, not be needed. Inviting local parties to put their ladder up against the wrong wall.

CSR cuts over 5 yearsAnd yet, despite some euphoric headlines (from the Mirror that Labour forced a U-Turn, and the Daily Telegraph that austerity is over) there are real cuts are in core government budgets.

As Richard Ramsey notes Northern Ireland faces…

…a cumulative decline of 5% over the next four years in their resource budget. Remember this is the fiscal environment within which a corporation tax cut needs to be funded. In terms of capital spending, funding available for infrastructure investment via the block grant through to 2020-21 will rise by 12% in real terms, meaning over £600 million more than if it had been held at 2015-16 levels.

Even the capital budget is benchmarked against a very low level so the 12% rise is not quite so generous as it might seem at first glance.  No one is going to be building new bridges with it any time soon.

There will of course be benefits too. Increased spending in health is long overdue (largely in compensation for some major strategic mistakes earlier in the Coalition’s administration under Andrew Lansley’s hasty reforms. What that will translate as through Barnett is still less than clear.

Next on the agenda is an actual budget for 2016/17. John Campbell says we should expect another tug of war between the DUP and Sinn Fein over where that £240m set aside for mitigation of  the expected Tax Credits cuts goes: health or welfare?

He also points out another possible avenue….

Local councils in England will be allowed to increase council tax by up to 2% in order to fund adult social care.

That’s a sector that is under major pressure due to tight budgets, rising demand and the impact of the National Living Wage.

Those pressures also apply in Northern Ireland – so could the executive consider its own “social care precept” by increasing the long-frozen regional rate?

So far neither major player in Northern Ireland has been willing to risk enraging local ratepayers who have become well accustomed to making a falling  contribution to our public services.

As the cuts to frontline services begin to bite on local communities, that may be not remain the one ended politically beneficial solution it has been heretofore.

  • “enraging local ratepayers who have become well accustomed to making a falling contribution to our public services.” perhaps. But the issue isn’t just about money. It is also about services fit for purpose, efficient and effectively managed. Even before “cuts” our services seriously underperformed. The case for more would have to be made on the likelihood of improved services, and yet who would actually believe that would be the resultant outcome?

  • Sergiogiorgio

    Service improvement is long term and requires actual effort. A rate rise is short term and simple to implement. Guess which one they’ll go for. Simon Hamilton made an interesting point recently. NI Health could swallow the whole of the NI budget. Do you reckon it would perform much better with this investment?