Dodds calls for informed debate on budget process

Finance Minister, Nigel Dodds, has updated the Assembly on the current budgetary position in Northern Ireland.

He addressed the Assembly during a debate on the Strategic Stocktake exercise carried out by his Department, which looked at the challenges facing the Executive over the coming years.

Speaking after the debate, he addressed claims made by some MLAs that there should be a review of the budget due to a ‘black hole’ existing in Government finances.

“There appears to be some confusion as regards the scale of the issues raised by departments in their Strategic Stocktake returns.

Those who made claims of a ‘black hole’ are simply wrong, and betray a complete lack of understanding as regards the nature of the Strategic Stocktake exercise. I would like to make it very clear that there is no black-hole in the Executive’s budget plans

In the first instance, a large number of the spending proposals put forward as part of the Strategic Stocktake process are discretionary or even speculative, whilst others may not materialise to the extent currently forecast by departments.

In addition, that spending proposals exceed available resources is in the very nature of budgetary exercises as shown by the 2007 Budget process where departments asked for almost double the amount of resources that were available for allocation.

Furthermore, in terms of available resources, the experience from previous years is that departments return significant amounts of the funding previously allocated whilst there is also scope for departments to reprioritise their substantial allocations from the 2007 Budget process to meet emerging pressures.

No one could disagree that there has been a significant change in economic circumstances since the Budget was approved by the Assembly. However, we must all remember that the Budget was established to support the key priority of driving economic growth – thus I firmly believe the Budget remains valid.

The simple fact is that any additional allocations to, for example, social housing, would require a corresponding reduction in existing allocations. For example we would need to reconsider some or all of:

£70 million for the Royal Group of Hospitals;
£22 million for the Ulster Hospital;
£100 million for the Belfast Schools PP project;
£50 million for the Down & Connor Schools PPP project;
£38 million for St Mary’s and St Cecillia’s Colleges in Londonderry; and
£250 million for the second DBFO package to improve roads throughout Northern Ireland.

I reiterate my call for those calling for increased allocations to set out in detail how this could be funded. In this context the simple approach of ‘ask the Treasury for more’ does not work.

It is clear from the discussions that I have had with my Executive colleagues on the Strategic Stocktake that none of them feel that the changes in economic conditions have resulted in any diminution in the need for the key services that their departments provide.”

“Looking ahead, I and my colleagues on the Executive realise that there will be some tough choices for the Executive to make in the coming years, reflecting the challenges across the industrialised world. However, that sense of reality must also extend to the scale of the issues presented by departments.

I firmly believe that through careful and robust management of the public expenditure position the Executive will be able to make significant progress as regards delivery on the Programme for Government agreed by the Executive last January.

I believe it is now time for the Assembly and Executive to work together to deliver rather than seeking to make new commitments we cannot afford.”

NOTES TO EDITORS

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