Written Ministerial Statement

Published at 5.00 pm on 1 April 2021.

Mr Murphy (The Minister of Finance): This statement updates members on the Executive’s agreement to a final Budget for 2021-22.

Following the announcement of the draft Budget on 18 January there commenced a period of consultation that ended on 25 February 2021.

While such a short period of consultation was not ideal, it was necessary to ensure that a final Budget could be agreed in advance of the new financial year commencing on 01 April 2021.

Both the consultation responses and the departmental equality assessments informed the Executive’s decisions on the final Budget outcome.

Since the draft Budget was published there has been a small degree of funding released following reassessment of central items which will be now be used to ensure the continuation of schemes under the Shared Future umbrella and to meet the budget requirements of independent bodies.

Since the draft Budget; additional funding for the Executive was announced in the Chancellor’s Budget on 3 March, and there has also been a more recent announcement of further funding for Health in England that will provide Barnett consequentials.

In addition Treasury has agreed that some of the COVID funding provided in the later part of 2020-21 can be carried forward into 2021-22. This is on top of the usual Budget Exchange Scheme amounts.

Unfortunately, although this funding, like the anticipated funding mentioned in draft Budget, has been confirmed by Treasury, it has not been confirmed by the Secretary of State and therefore cannot be included in this final Budget.

However; it is imperative that decisions are made now on how this funding will be allocated to ensure there is no delay to the support that the Executive intends to provide.

As well as significant levels of Covid funding the Chancellor’s Budget provided an additional £4.2 million of Resource DEL from Non-Covid measures. While this funding cannot be included in department Budgets outcomes the Executive has agreed that it will be allocated to the Bright Start School Age Grant Scheme which provides much needed support in disadvantaged areas; rural communities and the schools estate, as well as the Holiday Grant scheme for disabled children, until such times as future scheme provision has been considered.

It will also provide funding for the continuation of Public Service Route between Derry and London and for the provision of language translation services for departments.

The Executive had previously committed to funding Teachers’ Pay and Safe Staffing through the in-year monitoring process. To provide certainty for these important issues it has been agreed that these costs will be met from the funding now confirmed for 2021-22.

For most departments the draft Budget outcome represents a flat cash settlement which will mean effective reductions once increased costs and demands on services are taken into account.

Choices will have to be made, public services will have to be prioritised.

 

COVID-19

Turning to COVID funding; the Executive had allocated the majority of COVID funding available at the draft Budget stage to the departments of Health, Education and the Economy, leaving some £126.9 million for allocation at final Budget stage.

In its final Budget the Executive has allocated all of that remaining funding to departments to address the pressures they have identified in relation to meeting the impacts of the pandemic. These allocations are set out in Table 3 in Annex A.

The Executive has also considered the allocation of funding made available since the draft Budget. Due to the requirement for written confirmation from the Secretary of State this cannot be included in final Budget. However; to allow departments to plan now, the Executive has agreed a number of allocations, which will be formalised in-year. These confirmed in-year allocations are shown in Table 4 in Annex A.

As set out in the draft Budget; in recognition of the impact that COVID-19 has had on jobs and households, we are freezing the regional rate for both domestic and non-domestic customers.

In addition; earlier this month, I announced a further rate relief package which will deliver additional support to almost 29,000 businesses here in the form of a rate free period for the next 12 months. This support will cost £230 million and will be funded for the additional Covid funding which has now been confirmed.

Other allocations from this funding include £9 million to tackle homelessness and £50 million to further support our Health Service which is at the forefront of our response. These allocations reflect the priority that the Executive place on protecting the vulnerable and supporting our frontline Health and Social Care staff who have been at the coalface of the fight against the virus.

To help with dealing with the economic damage wrought on our economy by COVID, we have allocated £275.8 million Resource and £11 million Capital to the Department for Economy to support the economic recovery strategy.

This is in addition to £12.5 million being made available for NI Water pressures and £6 million to DFC for supporting people costs. There is also £28.3 million of funding being made available for DE to meet pressures in relation to recovery and support and re-engagements for children and young people, and £12.3 million to DoJ for PSNI staffing.

The Executive has also set aside some £81 million for the extension of existing support schemes. Up to £4 million will also be provided to the Department for the Economy to extend the Large Tourism and Hospitality Scheme for the first two weeks of the financial year.

The remaining funding will be held for allocation early in the new financial year following a further assessment of health pressures.

 

Capital Budget

In terms of Capital funding, the draft Budget provided investment funding of £1.75 billion, including borrowing of £140 million.

The Executive has now agreed to borrow a further £30 million from its RRI borrowing facility to provide additional funding to NI Water due to the strategic nature of its pressures.

This brings the total departmental capital allocations to almost £1.8 billion. This will enable investment in our infrastructure whilst supporting the construction sector.

 

Conclusion

This Budget seeks to protect key public services in a very challenging financial context. I hope that this one-year Budget acts as a bridge to a multi-year budget which allows the Executive to properly reprioritise its spending and plan for the longer-term.

The confirmed in-year allocations; whilst not part of the formal Budget outcome, will allow departments to plan effectively and provide certainty to key priorities, vital public health services and schemes that will deliver economic and social recovery. 

The Final Budget will be subject to Assembly debate and vote following Easter Recess.

 

Annex A

Table 1: Departmental Budget Outcome

£million	Non Ring-fenced Resource DEL	Capital DEL (Net)	FT Capital
Agriculture, Environment and Rural Affairs	553.8	95.5
Communities	876.3	224.8	38.8
Economy	821.3	89.8	34.7
Education	2,345.1	158.3
Finance	172.1	45.0
Health	6,451.9	326.5
Infrastructure	429.9	722.5
Justice	1,125.3	96.4
The Executive Office	120.5	15.3
Food Standards Agency	11.7	0.1
NI Assembly Commission	45.8	1.7
NI Audit Office	8.6	4.5
NI Authority for Utility Regulation	0.2	0.0
NI Public Sector Ombudsman	3.6	0.1
Public Prosecution Service	35.3	0.6
Total Departmental Planned Spend	13,001.5	1,781.0	73.6

Totals may not add due to rounding

 

Table 2 - Reconciliation of Departmental Planned Spend to Northern Ireland Departmental Expenditure Limit (DEL) controls