Wilson's Assembly Budget Statement

The NI Finance Minister's Draft Budget Statement from Sammy Wilson to the Stormont Assembly has detailed NI's cut-backs.

He said: "Less than two months ago the UK Spending Review announcement left Northern Ireland facing its most difficult fiscal environment in decades.

"We will mirror the UK Government's arrangements for public sector pay and put a freeze on the annual inflationary increases for all those earning over £21,000 for the next two years. We are also putting in place a moratorium on civil service recruitment other than in exceptional circumstances.

"I also believe that there is a consensus among Ministers that in these current times all Ministers agree to an arrangement that equates to a voluntary salary reduction," he said.

"We are also taking action in the area of the use of consultants. In the last few years the annual spend on consultants has reduced from £42million in 2006-07 to £21million in 2009-10. But we want to go further. For the Budget period, the Executive has agreed a target of year on year reductions of 10% for consultancy spend and all proposed consultancy spend of £10,000 or above will require the specific prior approval of the relevant departmental Minister.

"In addition the Executive will take action on Arms Length Bodies or QUANGOs as they are also known. The Budget Review Group will review all Arms Length Bodies against agreed criteria and bring a final set of recommendations to Executive, in anticipation of a final decision before May, to facilitate a Bill to rationalise QUANGOs early in the next Assembly term."

He said that in the last Budget the Executive froze the domestic Regional Rate in cash terms for three years. We also deferred the introduction of water charges.

"As a result the average household in Northern Ireland is £1,600 better off over the Assembly term than would have been the case under Direct Rule.

"While a continued real terms cut in the domestic Regional Rate is unsustainable in the present fiscal environment I am committed to protecting household budgets. I therefore propose that domestic Regional Rates will only increase by inflation for the next four years. This modest increase is well below the trend for the last decade," said Mr Wilson.

"I can also announce that the Executive has no plans to introduce separate water charges during this budget period.

"I propose that non domestic Regional Rates should also be limited to inflation increases over the Budget period. In terms of industrial derating, I propose continuing, over the course of the Budget, with the 30% cap on the liability for manufacturing."

In response to the growing unemployment problem, the draft Budget agreed by the Executive includes funding for a package of measures to increase employment opportunities: "It is essential that we attempt to maximise job opportunities to reduce the amount of time that people are unemployed. For that reason the range of programmes and policies will focus on those sectors with the greatest scope to maximise the number of jobs created.

"The current proposals include a range of measures such as grants for business starts in Neighbourhood Renewal Areas, contact centres, food processing sector, social enterprise, knowledge process outsourcing, enhanced enterprise support to disadvantaged young people and a propel programme for export starts.

"The cost of the proposed package of measures is £18.8 million over the next three years and is estimated by Invest NI to result in the creation of around 4,000 additional jobs over that period growing to over 5,000 jobs over the longer term.

"This package demonstrates the Executive's commitment to helping the people of Northern Ireland through the current economic difficulties.

"In relation to corporation tax this is a key strategic issue and the Executive will have to take time to deliberate the outcome of the UK Government's paper on rebalancing the Northern Ireland economy," he said, also announcing that the draft Budget also contains provision for an assistance package for the Presbyterian Mutual Society savers.

"This is financed by an additional £175 million of borrowing under the Reinvestment and Reform Initiative in 2011-12 and a contribution from the Treasury of £25 million which is matched by an equal contribution from this Executive. When the proposals are implemented this will put an end to the long nightmare faced by many PMS savers.

"The most difficult decision that any Finance Minister has to address is that of resource allocation. What is a difficult task even in benign financial times has proved extremely challenging this year. Ministers have very many pressures on their departmental budgets and the bids advanced by them carried considerable merit. The key to constructing this draft Budget position was to determine the relative priorities of the Executive going forward.

"Current expenditure allocated to the key economy departments – DETI and DEL – will increase by 3 and 1.9% by the end of four year period. This will ensure that Northern Ireland is an attractive place for business to locate within and flourish.

"Other Departments will also have an important role to play in economic growth going forward. One cutting edge example of this is the growing contribution of NI Screen to the local economy.

"Northern Ireland has a wealth of creative talent and the Executive recognises the positive impact that major productions have on our economy. We are committed to ensuring that high quality production facilities are in place to foster this growth and we will therefore allocate some £5 million to this area.

"It is also essential that this Budget reflects the priorities of the people of Northern Ireland. And in this regard no service is more important than the Health Service. That is why, even in the most difficult financial situation the Executive has agreed to afford a degree of protection to the health budget.

"That is why we ringfenced and put in place full protection for the health element of the DHSSPS budget. Indeed, when factoring in the efficiency targets and service reductions that will apply in the other UK regions I would suggest that the Health Service in Northern Ireland has received the most beneficial settlement anywhere in the UK.

"It will now be for the Health Minister to determine how best to use those resources. I would expect him to put in place plans to take forward productivity and efficiency improvements in the sector. While we are determined to continue to invest in the Health Service it must be accompanied by the requirement to constantly improve its performance," he said.

This draft Budget also reflects the concern of Ministers to assist those most in need in the current difficult economic environment.

"The Executive will therefore set up a Social Investment Fund, administered from OFMDFM, that will provide some £20 million annually to take forward specific area-improvement projects in these communities.

"The Executive will also establish a £20 million Social Protection Fund to assist those in severe hardship as a result of the economic downturn. This Fund, with an initial allocation of £20 million 2011-12 will then draw upon the additional new revenue streams that Ministers are to take forward."

(BMcC/GK)