Pay freeze chill reaches Northern Ireland

Northern Ireland's draft budget will seek to address the £4 billion of cuts to be imposed following the Comprehensive Spending Review, reports Ed Jacobs.

Northern Ireland’s finance minister, Sammy Wilson, has outlined the executive’s draft budget to MLAs after weeks of wrangling left Stormont as the only devolved government yet to publish its draft plans. The proposals, which come following final overnight negotiations between the parties, have sought to address the £4 billion of cuts imposed on Northern Ireland following the Comprehensive Spending Review.

Speaking to Assembly members, the minister outlined the key measures, including:

Current spending resources from the Treasury will fall by 8% in real terms as resources for capital investment allocated to the executive will be reduced by 40% over the next spending review period;

• A pay freeze for all public sector workers earning more than £21,000 for the next two years as well as a moratorium on civil service recruitment and a voluntary salary reduction among ministers in the executive;

• A new target of year-on-year reductions of 10% for consultancy spend with all proposed consultancy spends of £10,000 or more requiring the prior approval of the relevant minister;

• Domestic and non-domestic regional rates will rise only by inflation over the next four years;

• No separate water charges will be introduced during this budget period;

• A funding package to support employment opportunities worth £18.8 million over three years will be introduced, estimated to create around 4,000 new jobs in the same period;

• Spending allocations to the departments for Enterprise, Trade and Investment and Employment and Learning will increase by 3% and 1.9% respectively by the end of the 4 year period;

• £5 million will be allocated to supporting Northern Ireland’s film and production industries;

• The budget for the Department of Health, Social Services and Public Services will be ring fenced, with the health element protected;

• A Social Investment Fund worth £20 million will be established to take forward specific area-improvement projects in these communities. £20 million will also be made available to the Social Protection Fund to assist those in severe hardship;

• Revenue of £4 million is expected as a result of a new 15p levy on carrier bags; and

• £250 million of current spending is to be reclassified into capital investment.

Dubbing the proposals “first class”, first minister, Peter Robinson said:

“This is the Northern Ireland Executive doing what it was elected to do, taking decisions, no matter how hard, on behalf of the people of Northern Ireland.”

Likewise, his Sinn Fein deputy, Martin McGuinness, argued:

“The Executive has shown decisive leadership and has faced up to these very difficult challenges.”

However, whilst no ministers voted against the budget proposals, SDLP and UUP ministers did abstain, with the Ulster Unionist Party’s finance spokesman David McNarry explaining:

“The Ulster Unionist Party welcomes the fact that there is finally a draft budget for discussion. Agreeing a budget is necessary to give certainty to all Executive departments and associated bodies, to the economy and the general public.

“However, our party’s ministers on the Executive only received the paper last night – obviously it is right and proper to take time to study it in a constructive manner. Our ministers are supportive of the draft budget being put out for public consultation.

“We will be engaging with various sectors and stakeholders to examine the impact of the budget on the wider community.”

The budget will now go out to consultation, with a final version expected in February, just months before the Assembly elections.

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5 Responses to “Pay freeze chill reaches Northern Ireland”

  1. Newsaccess

    Pay freeze chill reaches Northern Ireland – Left Foot Forward

  2. Éoin Clarke

    I reside in Belfast, and followed this process reasonably closely. The most important thing to applaud, is that the DUP and Sinn Féin agreed revenue raising measures. Plastic Bag tax for example…

    In the Westminster budget… there is £30 bn tax cuts of National Insurance.. £15bn tax cuts of council taxes.. add to that corporation tax cuts, and future marriage and inheitance taxes it does not take a genius to spot that there is a gross imbalance in the UK economy…

    Counting Scotland, putting 1p on Income tax raises £4.8bn per year.. that’s £24bn over the life of the parliament…

    It was cost a couple of hundred pounds to commission a pol with one of our pollsters, but I have little doubt that we the people would readily vote for an income tax increase of 1p were it offered….

    the growth deniers out there need to at least recognise that there are other ways to cut the deficit…

  3. Ashleigh Gray

    Jesus: “@leftfootfwd: Pay freeze chill reaches Northern Ireland: reports @EdJacobs1985”

  4. Bethany W-Bradley

    RT @leftfootfwd: Pay freeze chill reaches Northern Ireland: reports @EdJacobs1985

  5. Liathain

    What’s interesting to note is that while the draft budget has been agreed it is of the level you’d expect from a second level student (Sammy Wilson’s time teaching economics to 14 years olds may have rubbed off onto the document). The headline figures as they stand in glorious unproven isolation still fall well short and the complete absence of detail and context in the document make it meaningless.

    As the journalist and economist John Simpson put it “It is not a budget, it is generalised in the extreme…. it is a vision that it is so abstract as to be an insult to the public of Northern Ireland.” To which Sinn Fein’s ‘economic guru’ Mitchell McLaughlin could only reply ‘Fair Enough’

    The plastic bag tax is a good idea (as it was 7 years ago when the SDLP proposed it) but it’s a good idea for the environment and not much else. Its a tax designed to change behaviour but not raise any serious revenue. It’s expected to raise a mere £16 million. To compare, £80 million is being diverted into a ill defined OFMdFM fund which appears to be little other then a pension plan for the paramilitaries (‘Removing Barriers to Community Prosperity’).

    The Tories mantra of asset stripping has been followed religiously and £540m of the £840m to be raised as new monies will come from dumping buildings and land on an already depressed property market. The accuracy of the Assembly’s Departments evaluations of their own assets was neatly summarised when last autumn the Dept. of Agriculture over valued its own land to the tune of £150 million. It was forced to crawl to the Dept of Finance for a bail out.

    Pork barrel projects are to go ahead (building sports stadium while abolishing healthy living projects) and civil servants are to be slapped with parking charges so the politicians don’t appear too close to them (more populist nonsense with zero economic effect).
    Talk of ‘ringfencing’ health spending is also a misnomer in that issues like homecare, occupational therapy etc are vulnerable and the executive of the Health and Social care board has said the budget will lead to 4,000 redundancies in health alone.

    Ever since the Hillsborough ‘Crisis’ was roundly condemned by a public exasperated by SF and the DUP’s posturing the Assembly has been notably quiet on traditional issues of division (recognition of Culture, educational selection etc). It has focused entirely on the service delivery aspect of politics (grass cutting measures, high hedges legislation etc). It’s a desperate attempt by the SF/DUP block to justify their position and for too little has come far too late.

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