Northern Ireland Finances 2023-24

Thursday 27th April 2023 Written Statements

[The Secretary of State for Northern Ireland (Chris Heaton-Harris)]

Despite the progress that has been made with the Windsor framework it is with considerable disappointment that I find it is necessary for me to once again step in and set a Budget for Northern Ireland for 2023-24. The challenging budget position means that Northern Ireland Departments need clarity on their budget allocations now to deliver a balanced budget. I will bring forward a Budget Bill in due course.

The context of setting the Northern Ireland Budget for 2023-24 has been very difficult.

With agreement from the Chief Secretary to the Treasury, flexibility has been granted on the repayment of the £297 million overspend from the 2022-23 Budget. This will provide some protection to frontline public services in Northern Ireland from having to take the most severe reductions. However, difficult decisions remain in order to live within the funding available.

To support this, I am committing any future in-year Barnett consequentials for 2023-24 to repaying the Reserve claim. Should this not amount to £297 million, I will work with HM Treasury to reallocate funding from previously announced Northern Ireland funding packages, with the residual to be repaid in 2024-25.

The UK Government have for many years recognised the unique challenges Northern Ireland faces. We have provided around £7 billion in additional funding to Northern Ireland since 2014, on top of the Barnett-based block grant. The Northern Ireland Budget per person is around 20% higher than equivalent UK Government spending in other parts of the UK. Yet the level of public services offered is still not affordable and outcomes are not improving. We need the Executive back so that they can progress much needed and long promised public service transformation.

2023-24 Budget allocations

I set out below the resource and capital allocations which I consider to be an appropriate settlement for Northern Ireland Departments.

In deciding these allocations I have engaged intensively with the Northern Ireland civil service. I am grateful to them for their engagement. I have also met with Sir Robert Chote, the chair of the Northern Ireland Fiscal Council, and I have received a range of representations from public groups and individuals.

Non-ringfenced resource funding

On the resource side, this Budget position delivers:

For health, this Budget provides £7.3 billion in funding. It also ringfences funding for abortion services, as ensuring availability of services is a statutory duty on me as the Secretary of State for Northern Ireland.

For education, this Budget provides £2.6 billion in funding.

For justice, this Budget provides £1.2 billion in funding.

For economy, this Budget provides £772 million in funding, including £1.1 million for the public service obligation route from City of Derry Airport to London.

Capital departmental expenditure limits

For capital, this Budget provides continuing investment and enables key projects to progress. It also ensures sufficient funding to meet departmental capital commitments that can progress in the absence of an Executive.

Revenue raising

My Department has continued to work closely with the Northern Ireland Department of Finance on a sustainable and strategic approach to public finances, which includes options for revenue raising in line with the rest of the UK. The lower levels of revenue generation but higher public service provision in Northern Ireland compared to the rest of the UK is unsustainable.

Governance

The Government must also ensure that Northern Ireland Departments can continue to operate. That is why the Government have today introduced the Northern Ireland (Interim Arrangements) Bill to ensure ongoing governance in the short term, should Northern Ireland remain without Ministers beyond 5 June.

The Bill continues the powers already afforded to permanent secretaries in Northern Ireland Departments in the absence of an Executive. It also grants powers that will allow the UK Government to explore, with the Northern Ireland civil service, options for increasing budget sustainability including further revenue raising in Northern Ireland.

The right way for Northern Ireland to be governed is through locally accountable and elected Government. But we have a duty to the people of Northern Ireland and in managing public funds to ensure Northern Ireland’s finances can be put on a sustainable path. That is why these powers are deliberately focused on official advice and public consultation. The final decisions for any implementation are best taken by Northern Ireland’s elected leaders. But we are taking these steps now to ensure that work progresses towards a more sustainable system in Northern Ireland that better reflects what is happening across the rest of the UK.

Attachments can be viewed online at: http://www.parliament.uk/business/publications/written-questions-answers-statements/written-statement/Commons/2023-04-27/HCWS748/.

[HCWS748]