Pearson proposes rate hike to support NI spending round

Announcing details of Northern Ireland's proposed £7 billion budget round for the next year, Finance Minister Ian Pearson has outlined spending plans that will add an average of around £35 to the domestic rates bill.

Unveiling the government’s proposals for public services, investment, borrowing, and for the Regional Rate for Northern Ireland for the period 2004 to 2007, Mr Pearson said that health, education, and infrastructure were among the top priorities in a budget that has been based on a higher local contribution to fund increased spending.

Mr Pearson pointed out that the rates increase remained much lower than the comparable average annual Council Tax in England - £35 compared to £104, and alongside the rating of vacant non-domestic property, and the gradual introduction of rates to manufacturing premises, would ensure access to the borrowing needed to sustain "planned capital investment".

The Minister said: “The proposals I am making available for public consultation today reflect the Government’s view of how best to take forward the approach to public services and investment set by the Executive before the suspension of devolution last year.

"They provide for major programmes of investment and reform as well as providing a full range of public services. This will involve spending around £7 billion each year for the next three years.

"They include plans for the extension of the Strategic Investment Programme, announced in February, which will provide over £2.2 billion of investment over a five year period, as well as plans to cut electricity costs for businesses by around £30 million pounds each year."

The total available for services will be increased by an average of around 6.9% next year - health is to receive an 8.6% increase and education a 6.9% in the increase.

Infrastructure investment in public services, particularly in roads, water and sewerage will also be increased. The Department for Regional Development will benefit from a 12% increase in 2004-2005 over 2003-2004.

The proposals also include £30 million, allocated from the DETI budget to reduce the cost of electricity, focusing on the industrial sector this will help promote sustainable growth in the economy.

Mr Pearson said that while the government’s wish was to see the early restoration of a devolved administration in Northern Ireland, the plans needed to be finalised before Christmas.

(SP)