Back in January, Sinn Féin minister John O’Dowd put his proposed three-year budget out for consultation. His statement on the consultation highlighted what he saw as a key issue in terms of the contributions from the British government and finished with a warning to his Executive colleagues…
“There is no doubt the ongoing under investment in public services by the British Government means that both the Resource and Capital DEL funding position remain extremely constrained. Our public services are facing increased demand and increased pressures with increased costs to deliver the services people rely on. “In this context it is simply not possible to provide any department with the funding it has requested.”
Suffice to say disputes over the proposed budget have now come to the fore. As per the Belfast Telegraph
Mr O’Dowd published a draft budget in January for the 2026/27 financial year, but the Executive has not agreed on it – insisting they need more financial support from the Treasury to plug an estimated £1 billion hole in their balance sheet and deliver spending plans that avoid dramatic cuts to public services. All departments are currently operating within a contingency allocation. However in the absence of a budget, ministers can only draw down 95% of the money they had spent the previous year, which the Opposition said equates to a further £1 billion cut to public services across the year.
None of the parties in the Executive seem content with the proposal, with DUP, Alliance and UUP ministers all being critical. However, some of John O’Dowd’s Sinn Féin colleagues have also been critical of the proposal with Economy Minister Caoimhe Archibald objecting. As per the Irish News
Northern Ireland’s Department for the Economy is “now at breaking point”, a Stormont committee has heard. Economy Minister Caoimhe Archibald said she could not support the proposed draft budget due to the allocation for her department. Ms Archibald said her department needs to be fairly funded to ensure universities and further education colleges are adequately funded, as well as Invest NI to drive economic development…
She said while the resource budget for the Executive as a whole increased by 58% between the 2016/17 and 2024/25 financial years, her department’s share has increased by just 1%. “That reflects a priority that has been given to health and education by the Executive, but it has had an impact,” she told MLAs. “Invest NI’s resource budget has been reduced by 15%, funding to Tourism NI has remained largely static, and despite a 27% increase in funding for further education colleges, the sector has had to deliver significant operational efficiencies, including reducing staff numbers by 213 (5%) through a voluntary exit scheme in 2024.
SDLP opposition leader Matthew O’Toole has been scathing
With the final Assembly sitting days to take place next week, Opposition leader Matthew O’Toole said they are not on holiday yet, but Mr O’Dowd “appears to be in almost horizontal mode when it comes to the crisis”. He said there are public services at risk this summer, and asked whether the minister accepts some services to support vulnerable people may not be able to run due to the failure of the Executive to agree a budget.
For his own part, the Finance Minister has been putting forward a robust defence of his proposals.
Mr O’Dowd said public services in the region had been in “various states of crisis for well over a decade”. “Austerity has been biting and consuming our public services for well over a decade … the British Government have been treating this place with utter contempt and disrespect,” he added. “I have engaged with, and continue to engage with the British Government on a proper funding package.”
It is this engagement with the Treasury that the Executive as a whole seems to be pinning their hopes. John Manley, writing in the Irish News on the matter, highlights this almost certainly won’t be anywhere near enough.
Amidst ongoing public spending uncertainty we must now await the outcome of what the minister describes as “intensive negotiations” with the Treasury before a belated single year budget can be put in place. Mr O’Dowd’s effort to secure more funding for the Executive is broadly supported though his focus on acquiring central government funds while refusing to countenance any devolved revenue raising, less so. More money may well be on the way but it won’t be of the quantum hoped for, or required, to meet ministers’ expectations.
With the British government currently in a period of flux in the aftermath of Keir Starmer’s resignation and his likely successor Andy Burnham not yet in power, our ministers may find negotiations with the Treasury difficult for a few critical weeks to come.
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