Stormont budget to fall by £2.3bn in real terms…

John Campbell over at the BBC does his best to depress us further. From the story:

Stormont’s budget between 2021 and 2024 will have fallen by over £2bn in real terms due to the impact of inflation, the Department of Finance has said.

The analysis is included in a “financial context” document published ahead of consultation on possible revenue raising measures.

The NI secretary ordered the exercise after departments overspent last year.

Consultations on specific measures, such as water charges, are expected to begin by the end of this month.

The Department of Finance has calculated what funding would have been required for day-to-day spending to keep up with the impact of inflation since 2021.

It said this shows that day-to-day spending in 2024 will be “some £2.3bn lower than these calculations would indicate is required to deliver the same level of services in 2021”.

It added that “sustained high inflation has fundamentally reshaped the price of what the public pound can buy”.

So basically public services will continue to deteriorate and they will try to get more money out of us.

Meanwhile, our friends in the south seem to be chockful of money and are setting up two investment funds. From RTÉ:

The Government is to establish two investment funds to use some of the windfall in corporation tax receipts of recent years and to save more into the future.

The larger of the two funds will be called The Future Ireland Fund and will be earmarked for expenditure on healthcare and pensions as the population ages and as other challenges arise from climate change.

Under legislation which will be published later this week, the government of the day will be compelled to save the equivalent of 0.8% of GDP every year from next year to 2035.

Next year, that contribution will be equal to €4.3 billion.

In addition, just over €4 billion which had invested in the National Reserve Fund (NRF) will be moved to the new fund. The NRF, or Rainy Day Fund, will then be dissolved.

The balance of the NRF, some €2 billion, will be invested in a second fund, which will be called the Infrastructure, Climate and Nature Fund.

This will receive no additional investment next year but it is planned that an additional €2 billion will be invested each year thereafter until it reaches a total fund of €14 billion.

The purpose of this fund is to ensure there is no reduction in capital investment when the economy goes into a downturn. It will be run on a more short-term basis than the Future Ireland Fund.

Up to 22.5% of the fund can be used for “climate and nature related capital projects” in any year from 2026 up to a cumulative maximum of €3.15 billion.

The fund can also be tapped for general investment in infrastructure which will take precedence during a downturn.

25% of the fund can be used in a year when there is what is deemed to be a significant deterioration in the public finances.

Both funds will be managed by the National Treasury Management Agency.

The Future Ireland Fund is planned to run on more long-term basis with the returns from investment used in the future, rather than the principal amount invested.

It is expected the fund could grow to €100 billion by 2035.

While the amounts set out do not come close to using up all of the estimated level of “windfall” corporation tax, which is thought to be around €11 billion this year, sources indicate any further surplus will be used to pay down the national debt.

This is projected to fall from approximately €225 billion today to €200 billion by 2030.

Mind you all that money and they still can’t seem to house people ¯_ (ツ)_/¯

We are reader supported. Donate to keep Slugger lit!

For over 20 years, Slugger has been an independent place for debate and new ideas. We have published over 40,000 posts and over one and a half million comments on the site. Each month we have over 70,000 readers. All this we have accomplished with only volunteers we have never had any paid staff.

Slugger does not receive any funding, and we respect our readers, so we will never run intrusive ads or sponsored posts. Instead, we are reader-supported. Help us keep Slugger independent by becoming a friend of Slugger. While we run a tight ship and no one gets paid to write, we need money to help us cover our costs.

If you like what we do, we are asking you to consider giving a monthly donation of any amount, or you can give a one-off donation. Any amount is appreciated.