NORTHERN IRELAND:THE STORMONT Executive meets tomorrow to discuss how best to cope with public expenditure cuts of about £4 billion (€4.54 billion) over the next four years.
First Minister Peter Robinson and Deputy First Minister Martin McGuinness, in Washington for an investment initiative, said the cuts were worse than they had feared and appeared to contravene earlier British government commitments.
Stormont Minister for Finance Sammy Wilson said the cuts present a “severe challenge” and there was further criticism from other parties and trade unions.
Key among their concerns are projected cuts of up to 40 per cent from the capital spending budget over the next four years.
Also causing alarm is the estimate that Northern Ireland could lose up to 30,000 public sector jobs – the region’s share of the estimated 500,000 job losses chancellor of the exchequer George Osborne’s cuts will entail.
Political tensions emerged last night following the chancellor’s statement, with strains showing between the Executive and Secretary of State for Northern Ireland Owen Paterson.
Mr Paterson said Mr Osborne’s spending review represented a “remarkably good deal for Northern Ireland” and warned it would have been worse under Labour. He claimed Stormont was being treated relatively leniently when compared to cuts imposed in Britain. Countering the First Minister and Deputy First Minister he said bluntly: “To suggest that this is worse than expected is simply wrong.” Mr Wilson, apart from dismissing trade union concerns as “cloud cuckoo land stuff”, concentrated on the Stormont response to the cuts. “On the current expenditure side the Northern Ireland departmental expenditure limit (DEL) budget will fall by 8 per cent in real terms by the end of the four-year period,” he said.
Department officials said this would translate into a figure of around £4 billion.
“Given the inflation and pay pressures we face this is going to be difficult to manage.” Referring to the capital investment programme, Mr Wilson admitted the outlook is “much more worrying”.
The Executive has been keen to invest heavily in infrastructure projects after many years of relative neglect during the Troubles.
“The capital DEL budget will fall by 40.1 per cent in real terms by 2014/15. In addition, the biggest reduction will be in 2011/12 where our capital DEL will reduce by £342.7 million in real terms. We are going to have to take some very difficult decisions in terms of what projects to fund going forward – the reality is that we have much less money available than was envisaged under the investment strategy that was published as part of the previous budget.”
On the positive side the chancellor did announce a £200 million package of support and loans to help the crisis stricken Presbyterian Mutual Society.
In a clear warning to Executive ministers, Mr Wilson added: “If we delay or fail to agree a budget, the losers will be the communities we represent. Our schools, colleges, hospitals, health centres, indeed all publicly funded services need certainty in their budgets as soon as possible. By working together, we can mitigate against the worst effects of the spending cuts.”
He added: “The coming years will be challenging enough. Let us show the leadership required to ensure they aren’t made more difficult than necessary.”