Even the civil service are up in arms about “undeliverable” cuts. But Heaton Harris shows no sign of budging

Once again the old game of slipping deadlines is being played. An NI budget was due – today? Soon?  Unprecedented pressure mounts but Chris Heaton Harris shows no sign of bending. Public servants rarely speak out publicly about their responsibilities but when they do it’s usually buried in Yes Ministerspeak. Not any more.   The tactic seems to have been to have a retired mandarin speak about the unique strain the absence of an Executive has imposed on them.  The former head of the NICS Sir David Sterling has obliged – no doubt insisting he spoke only for himself

.Some departments are expected to see cuts of up to 10%, but with inflation sitting around 10%, that will mean cuts “in real terms” are much higher.. The, situation is “the worst that it has been”.“The level of cuts that are being sought are just undeliverable.

My understanding is that the civil service are expecting that the Secretary of State will simply announce allocations at departmental level so he will not specify where any cuts are to fall,” said.

“We know that there is a measure of protection being afforded to the big budgets in health and education, but even they will be expected to absorb some cuts, but the other departments will probably be having to absorb cuts of more than 10%, and if you take into account we have 10% inflation, in real terms it’s significantly more than that.”

In an unprecedented move Nicole Lappin, Chair of the Northern Ireland Public Sector Chairs’ Forum of 50 public bodies…

“We are taking this unprecedented step of calling on the Secretary of State to take urgent action to:

  • Ensure that our public services are appropriately funded to address the significant need in our communities while enabling us to reform for the future
  • Avoid implementing counter-strategic cuts which may result in the potentially unnecessary, irreversible loss of staff and services and lead to increased need and poorer outcomes in the future
  • Ensure that spending is cost-effective and represents value for money.

“While we recognise the challenges of the current political environment, we have a public duty and a moral responsibility to do everything in our power to ensure the effective delivery of our vital public services. The current situation is clearly hindering our ability to do so.

“In addition to creating clear governance issues, our members are deeply concerned that the cuts will ultimately have a disproportionate impact on those who are in most need.”

These protests are made against recommendations made by the NIO in the absence of an Executive. They follow the prevailing government policy to restrict the levels of spending which soared during the pandemic. If they are resisting  raising public sector pay in the face of a  continuing wave of  strikes what chance is there of paying out extra  in the name of the supposed peace dividend?

.A leaked Northern Ireland Office briefing paper estimates the devolved executive is losing £700 million a year by failing to charge for services like domestic water supply, prescriptions, domiciliary care, transport for the over-60s and having significantly lower university tuition fees than England.

Civil servants were forced to make a range of in-year savings and the Treasury provided a £300 million advance down-payment on the current financial year’s block grant to help bridge the financial gap.

However, with that £300 million having to be recouped in this financial year, the picture looks even more bleak ahead of the 2023/24 budget.

The sensitive briefing paper, which has been seen by the PA news agency, estimates that £345 million could be generated by introducing domestic water charges, while raising tuition fees could bring in an additional £145 million a year.

The document says Northern Ireland is receiving 21% more per head of population than England for the period 2022-25.

The financial position has been endorsed by the watchdog the NI Fiscal Council

When Caretaker Ministers stepped down on 28 October 2022, the NIO inherited a £650 million prospective overspend against available funding this year. This has been reduced significantly. But, in the wake of the NI Budget Act and the finalising of the UK Government’s spending plans for this year, NI is still expected to need to draw £297 million from the Treasury Reserve to balance the books. This claim on the Reserve is in effect a short-term loan that has to be repaid next year rather than gradually over time. Together with front-loaded increases in the Block Grant, this results in a drop in funding for NI public services next year and a rebound in 2024-25. Adjusting for inflation as well, departments face a 6.4 per cent real cut next year and a 1.9 percent rise in 2024-25. Sir Robert Chote, Chair of the NI Fiscal Council, said: “As 2022-23 draws to a close, NI departments face the coming financial year with no ministerial leadership, no agreed budget allocations to work from, and a tough financial environment as pay increases and inflation remain elevated and this year’s call on the Treasury Reserve has to be repaid. Whoever eventually undertakes the task of setting next year’s Budget – the Secretary of State or a restored Executive – will face some difficult decisions. Should NI raise more money for public services, and if so, how? Where can money be saved through greater efficiencies. And is there a need to reduce or completely stop delivering any services or other forms of support?”

Will Heaton Harris produce the usual rabbit out of the hat whether or not the DUP return to the Assembly? The omens for a soft landing this time are not good. Civil servants have already complained that NI has been excluded from the latest tranche of the Levelling Up fund. And there has been no response to the impact of cuts on the most disadvantaged in education. During the present cycle of elections,a restored  Executive would be unlikely to respond to familiar demands to raise tuition fees and rates and impose water charges. They might however have been able to spread the load and assert less damaging priorities on the margin. NHS spending plans seem only designed to protect  the present levels of service.  The days of filling the begging bowl may be over – whatever the DUP decide.

Later  ..

Heaton Harris told the NI Committee of MPs that budget figures will emerge soon once Treasury consultations are complete . No deadlines! The NIO cut Executive  overspend from £600+ mn to £279mn by dropping  its unfunded wish list without a proper 3 year programme for government.  He hinted that repayment might be spread over a number years but promised no new money.

CHH bluntly dismissed DUP MP Jim Shannon’s long complaint about his DUP speech last week and was as forthright in rejecting 5 unionist legal opinions declaring that the Stormont brake ” wasn’t worth the paper it’s printed on.” He and his expert on the Windsor Framework assured the committee that the Framework would work smoothly once in operation. He confirmed that the UK government would have a veto on any new EU measures affecting NI after an application of the brake. Any disagreement goes  to arbitration  not to the European Court of Justice. The Assembly would be a virtual  full member of the joint UK – EU special committee  reviewing any such new EU measures. But to take part, the Assembly has to be back in business.

An uncompromising appearance by the secretary of state.. He will consult MLAs shortly about budget plans.

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