Finance Minister announces "difficult" draft budget

  • Watch interview with Finance Minister Conor Murphy discussing the draft budget:

A "difficult" draft budget has been announced for Northern Ireland.

The Finance Minister says more than four hundred million pounds is set to be given to Health and Education next year, but warns he does not have enough funding to kick-start our economic recovery.

"It is difficult and effectively a standstill of our 2020-21 budget position," Conor Murphy said.

"With increased demands on public services and taking account of inflation, it will be a challenge merely to deliver existing services at their current levels.

"I recognise for most departments the draft budget outcome represents 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."

  • The Draft Budget can be viewed here.

Mr Murphy said the pandemic continues to present challenges.

"Over £380 million is being provided for the health service response," he said.

"We have prioritised the small amount of additional funding available to continue welfare reform mitigations, fund Agenda for Change pay, help pupils with special educational needs and to support low-income families through holiday hunger payments."

He said capital spending will also involve infrastructure, including the schools estate as well as delivering the New Decade, New Approach priority to increase investment in social housing.

He also announced that the regional rate would be frozen.

"While the Executive has the option to increase revenue through the regional rates, we recognise the impact Covid-19 has had on households and businesses," he said.

"This financial year we reduced business rates by 18% and froze domestic rates. Next year we intend to freeze the regional rates for both households and businesses.

"I would urge councils to play their part and do the same in respect of their district rates. I also intend to provide £150 million of additional business rates support in 2021-22."

Mr Murphy said Northern Ireland Secretary Brandon Lewis has not confirmed a number of previously agreed financial packages worth £254.4 million in the 2021/22 financial year.

These include funding from the confidence and supply deal, city deals and New Decade, New Approach money.

He said this meant they could not be formally allocated as part of the draft budget.

"I hope that the Secretary of State will confirm these important funds in time for them to be incorporated into a final budget in the coming weeks," he said.

However a UK Government spokesperson said: "The UK Government has provided unprecedented levels of funding to the Northern Ireland Executive this year.

This included an additional £2 billion in funding through the New Decade, New Approach (NDNA) financial package, £3 billion in additional funding to the Executive to help mitigate the impact of the coronavirus pandemic, and £216 million as part of the Budget.

"The spending review for 21/22 provides a further increase in funding for the Executive by more than £900 million."

Responses to the draft budget can be made until 25 February.