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Average householder now £1,000 better off as dynamic final budget channels £90million to economic innovation and £280million extra for health, housing and highways

Tuesday, 22 January 2008

Northern Ireland’s most confident Budget for decades was laid before the Assembly today.

Finance Minister, Rt Hon Peter Robinson MP, MLA pointed to his record spending plans, agreed unanimously by Executive Ministers, as a sign that devolution is working and here to stay:

“It is almost 40 years since a Finance Minister elected by the people of Northern Ireland, presented a Budget in a stable political environment. Today, I am able to do that with a sense of optimism for the future.

“Though it is only eight months since power returned to Stormont, I believe that today’s announcement is yet another sign that devolution is working.”

Re-affirming the decision to freeze domestic Regional Rates for the next three years, he said that here was tangible evidence that devolution is making a difference:

“When contrasted with the Rate increases in recent years under Direct Rule, no householder in Northern Ireland will fail to recognise the benefit of the return of devolution.

“Let those who say that devolution makes no difference explain that logic to the average household which will be £1,000 better off than they would have been if Direct Rule had continued.”

Mr Robinson said that the Budget had been a very inclusive process with more than 9,500 written responses received from the voluntary and community sectors, the private sector and from members of the public during the 10-week consultation period. He thanked those who had contributed and detailed the response by government to the various issues raised.

An extra £50million is to be distributed among the Departments over the three year Budget period.

In addition, for the first time innovation projects designed to boost the economy, are to be supported to the tune of £90million.

The Minister said that the work of the Capital Realisation Taskforce had shown ways in which more effective management of the Executive’s assets might be used to raise additional funding – a potential £900million over the next 10 years.

The Taskforce had also identified ways in which the proceeds of up to £295million of asset disposals might be reinvested over the Budget period, although further analysis is still to be carried out.

Boost for Health

The chief beneficiary from overall funding remains the Health Service which now receives an extra £10million in each of the three years of the Budget period. This brings support for Health to its all-time highest level at almost £4.3billion.

Mr Robinson said that the conclusions of the recent Bamford Review into mental healthcare in Northern Ireland had also prompted him to allow greater freedom to the Health Minister in managing his Departmental resources in year. It would also be possible for the Health Minister to hold back savings over and above the 3% requirement:

“The needs of those with mental health problems or a learning disability are well recognised by society, but too often in the past have been ignored when it comes to the allocation of funding,” he said.

“In light of the findings of the Bamford Review and the responses from the consultation process, the Executive has agreed to increase the allocation to the Minister of Health by £10million in each year of the Budget period.

“We have agreed that the Health Service should have first call on the first £20million of resources that become available during annual in-year monitoring process. The Health Service will also be able to retain any further efficiencies it can deliver beyond the existing 3% target, for immediate reinvestment in frontline services to patients.”

Additional money has also been channelled to services for children, young people and youth. Following representations made during the consultation process a total of £13million has been allocated.

Funding for the Arts – a subject that aroused the passions of many consultees – has increased by a total of £4million over the next two years.

Meanwhile the level of funding for Victims in Northern Ireland has risen by a total of £6million over the three year term.

Building social housing

One of the biggest concerns expressed during the consultation was in regard to the provision of social and affordable housing. Mr Robinson said that addressing this matter remains a priority for the Executive announcing that a total of £205million is being provided to take this forward:

“This has also been a prominent issue during the consultation exercise reflecting concerns that insufficient funding had been earmarked to support our target of providing up to 10,000 new social and affordable houses over the next five years.

“The Executive has agreed to provide additional capital allocations of £70million, £75million and £60million over the next three years to the Minister for Social Development to support her in delivering 1,500, 1,750 and 2,000 new units across the Budget period.”

Mr Robinson said that concerns had also been expressed during the consultation about financial support for updating and improving fire stations and Fire Service equipment. In response the Executive has allocated an additional £14million over the three year period.

A further £40million has been earmarked for a series of Department for Regional Development roads schemes, including the A6 Randalstown to Castledawson route and other thoroughfares in the west of the province.

Promoting Innovation

The Finance Minister made it clear that improving the local economy is a prime focus of this administration and that the Executive is taking concrete action to stimulate regeneration.

He unveiled a sizeable package of support for projects aimed at stimulating innovation and entrepreneurship, supporting research and development and enhancing the ability of further education to match the needs of local business. The time was right to change direction, he told Assembly members:

“The dependence on the public sector that assisted us during the last 40 years of conflict is now an obstacle to our future development. That is why it is so important to use public spending in a way that will not simply deal with the challenges that we face today, but in a way that will help us build the economy that we want for the future.

“The reality in a global economic world is that any national government, never mind a regional devolved administration, has only a limited influence on the state of the economy.

“We should create an environment in which business can prosper and wealth can be generated for our whole society, but we must be careful that our interference does not threaten the prosperity that we all wish to see.

“There is no more important element of this than a stable political environment. This will encourage investment from abroad, development of business locally and will help keep many of our young people at home.”

The Minister said that the total Innovation Fund will amount to £90million overall, including an additional projected investment of Ä60million from the Irish Government to support collaborative innovation-supporting projects.

Notes to Editors:

The Minister’s Budget Statement and detailed information about Departmental allocations can be accessed at:

Media enquires only to DFP Press Office on 028 9052 7644 or 028 9052 7375. Out of office hours please contact the Duty Press Officer via pager number 07699 715 440 and your call will be returned.