Northern Ireland faces 'very severe' recession: Conor Murphy

Finance Minister Conor Murphy speaking in March Credit: PA

The Stormont finance minister has warned that Northern Ireland faces a "very severe" recession following the coronavirus crisis.

Some Northern Ireland departments could have run out of cash before the end of July due to the cost of battling the pandemic, Conor Murphy added.

Five Stormont departments were affected and one may have exhausted its funds as early as 19 June.

Mr Murphy introduced a technical mechanism at the Assembly in Belfastauthorising continued spending before more action by lawmakers next autumn.

The administration has been using millions of pounds to tackle the coronavirus outbreak.

He went on to describe the post-pandemic landscape as featuring "major challenges" including the UK's departure from the EU.

Business tax reliefs and special grants for under-pressure hoteliers andpublicans are among extra costs racked up in a bid to keep the economy on life support.

On Tuesday, Mr Murphy told the Northern Ireland Assembly: "Having examined the options the only viable solution is the Assembly's approval for a further Vote on Account.

Conor Murphy described the post-pandemic landscape as featuring "majorchallenges" including the UK's departure from the EU.

Northern Ireland has taken its initial steps out of the Covid-19 lockdown, withthe reopening of garden centres, churches for private prayer, and golf courses.

However many businesses will not be permitted to reopen until later in theyear.

READ MORE: More cash needed to help small firms deal with pandemic, councils say

The Executive has published a five-stage plan for recovery, but this does notgive indicative dates.

Mr Murphy said he recognises it is "inevitable we will have damage".

"We recognise inevitably businesses will suffer and jobs may go, but we'reobviously trying to mitigate against that as best we possibly can," he said

"I think it is going to be very severe (a post-pandemic recession), and whatwe have to take into account is the impact of Brexit - that was something thatwas always going to be very economically challenging for us.

"We recognise there are a number of very serious challenges ahead, challenges that will last for some time, and what we want to do is try and support business to meet those challenges.

"There are very real challenges ahead. The Executive, when it reformed inJanuary, was going to face a very challenging time politically, economically, in terms of support for public services because of the years of austerity budgets, but that's all been greatly increased because of the situation we are facing at the moment."

Mr Murphy said he is "bringing a process" to the Assembly on Tuesday toapprove additional funding for some departments, after four/five departments"spent more than we can them cover for".

However, he said, in other areas departments are spending less money thananticipated, such as on capital projects where building work has stopped.

"We have also asked departments to undertake a reprioritisation exercise tolet us know monies that they aren't spending so that we can collectively, as an Executive, have a look at that and make sure the recovery plan we intend to put in place, that we will be discussing this week, will have resource to go along with it," he said.

Watch an interview with Conor Murphy here: