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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