Budget 2024-25

Question for Urgent Oral Answer — Finance – in the Northern Ireland Assembly am 3:30 pm ar 29 Ebrill 2024.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Edwin Poots Edwin Poots DUP 3:30, 29 Ebrill 2024

Eóin Tennyson has given notice of a question for urgent oral answer to the Minister of Finance. I remind Members that, if they wish to ask a supplementary question, they should rise continually in their place. The Member who tabled the question will automatically be called to ask a supplementary.

Photo of Eóin Tennyson Eóin Tennyson Alliance

Mr Tennyson asked the Minister of Finance for an update on the Executive’s agreement on a Budget for 2024-25.

Photo of Caoimhe Archibald Caoimhe Archibald Sinn Féin

We have all been clear from the outset that this was going to be an incredibly challenging Budget. Demand far outstripped the funding available many times over. For every £1 that we had to spend on day-to-day funding for public services we had three times as many demands. Similarly, for every £1 that we had to spend on capital, including money for hospitals, schools and roads, we had one and a half times as many demands.

When the Executive were restored, it was clear that the funding available was not enough to undo the damage inflicted by the British Government's lack of investment in public services. With increased demands on services and rising costs, the Executive simply do not have the Budget to do everything that we want to do. Providing additional funding for one area means less funding for another. The reality is that, without a Budget, Departments and outside bodies cannot plan. That is not a sustainable or tenable position.

The Budget demonstrates the Executive's commitment, despite the severity of the financial challenges facing us, to work together, make tough choices and demonstrate the leadership that people rightly expect. That is why, last Thursday, the Executive agreed the 2024-25 Budget, which was the result of a series of engagements with Ministers. A written ministerial statement was laid in the Assembly on the same day, setting out the Budget outcome for each Department. Ministers will prioritise spending within the funding envelope provided to their Department. It will undoubtedly mean incredibly difficult decisions for Departments, including mine. My officials are working with Departments on the production of a Budget document. Once it is published, I will bring the Budget 2024-25 to the Assembly for a debate and vote. I anticipate that being at the end of May.

The scale of the challenges facing us will not be fixed by one Budget. We all recognise the need for transformation and reform. We need to look at options to deliver efficiencies, generate revenue, enhance borrowing powers and explore the potential for more fiscal powers. Working together, we will be better placed to meet the challenges ahead.

Photo of Eóin Tennyson Eóin Tennyson Alliance

I thank the Minister for her answer. The Minister has outlined the capital pressures in relation to the allocations in the Budget. I note that the Strule Shared Education Campus is one of the earmarked projects listed in the written ministerial statement. The cost of that project is ballooning and has been criticised by the independent review of education and the Audit Office. How can the Minister be sure that that is not an empty promise to those schools and how can she be confident that it is not a Public Accounts Committee inquiry in the making?

Photo of Caoimhe Archibald Caoimhe Archibald Sinn Féin

As the Member will be aware, the Executive approved the earmarking of funding for Strule a number of weeks ago. The project will still be subject to business case approval by the Department of Finance before any further funding is allocated to it. In the Budget, there is an allocation earmarked at £20 million. That requirement was identified by the Department of Education for 2024-25, and it reflects the Executive's previous commitment to £150 million of funding for Strule, which was an amount that was included in the repurposed funds in the financial package. Funding will, of course, not flow to that project until the appropriate approvals are in place.

Photo of Nicola Brogan Nicola Brogan Sinn Féin

Gbhaim buíochas leis an Aire.

[Translation: I thank the Minister.]

Minister, will you outline the timeline of how agreement on the 2024-25 Budget was reached and how you plan to take it forward?

Photo of Caoimhe Archibald Caoimhe Archibald Sinn Féin

The agreement of the 2024-25 Budget was the culmination of weeks of engagement with Ministers. The approach to the Budget was agreed by the Executive on 15 February, and that included recognising that the final Budget position for 2023-24 could not be used as the starting point for Budget 2024-25, as the funding available would not be sufficient as the opening position for this Budget. It is not possible within the funding available for 2024-25. It was also agreed that there would be a short delay until the end of April to allow individual Ministers to consider their Department's financial position. During that time, my officials have been working with officials across all Departments on their requirements, and I held one-to-one meetings with Ministers. On 11 April, I brought a paper to the Executive that set out the quantum of bids against the Budget available and the sheer scale of the challenge facing us, with demands far outweighing the funding available.

My focus throughout, which will continue, has been in problem-solving mode. If we are to tackle the serious problems across our public services, how we are funded needs to change, and that position is endorsed by the independent Fiscal Council. I am determined to build on the positive engagement that I have had with Treasury to date and to find a way to put the Executive's finances on a more stable footing going forward. I will continue to press Treasury to ensure that our long-term funding reflects our needs.

Photo of Diane Forsythe Diane Forsythe DUP

There is no question that this is a difficult Budget, with all Departments facing extremely challenging decisions going forward. No Minister got everything that they bid for in the Budget. Will the Minister confirm that, looking back to the 2023-24 baseline, settlements in-year and increases and contrary to the Minister of Health's claim, the Department of Health has, in fact, received an additional £1·1 billion in funding on top of its baseline resource budget since 1 April 2023?

Photo of Caoimhe Archibald Caoimhe Archibald Sinn Féin

In relation to individual Departments, Health has increased its baseline by 6·3% since the beginning of the financial year 2023-24. As the Member will be aware, there are often in-year technical allocations added to a baseline, as well as in-year funding that would normally be allocated during monitoring rounds. This year, in particular, we had the financial package, and Health got over £500 million of that package. That is reflected in its out-turn for the last financial year.

Photo of Steve Aiken Steve Aiken UUP

I am just following on from my friend across the Chamber. Will the Minister explain her party's commitment to putting public health first, as evidenced by her party's manifesto and, indeed, other parties' manifestos to put an extra £1 billion into the Health budget, as well as the statements from the First Minister and her leader, Mary Lou McDonald, at Hillsborough Castle, now that she is cutting the Health budget by 2·3%, according to her own figures. They are not our figures; they are her figures.

Photo of Edwin Poots Edwin Poots DUP

Please get to the question, Dr Aiken.

Photo of Steve Aiken Steve Aiken UUP

Will she explain why, within the overall Budget of £15·6 billion, she is not in negotiation with the Health Minister and other Departments to significantly close the £300 million gap, as, she has already said in the media, she is doing with the Education Minister?

Photo of Edwin Poots Edwin Poots DUP

Question, please.

Photo of Steve Aiken Steve Aiken UUP

That was the question, Mr Speaker.

Photo of Edwin Poots Edwin Poots DUP

Good, good. Thank you.

Photo of Caoimhe Archibald Caoimhe Archibald Sinn Féin

Thank you, Mr Speaker. The Member will be well aware, as a long-time member of the Finance Committee, that you cannot compare the end-of-year position from one financial year with the start of another financial year. It is also true that the Department of Health has received an additional £2 billion since the beginning of the 2020 financial year. I am clear that Health is a priority for the Executive. It is a priority for my Department and for the Executive. It has received over 50% of the Budget allocation for this year, and it received 50% of the funding that I had available to me to allocate for this financial year.

Photo of Matthew O'Toole Matthew O'Toole Social Democratic and Labour Party

Minister, there are reports today that you have told Executive colleagues that the Treasury has told your Department that there will be no progress on an increased funding package. I presume that that means an improvement to the fiscal framework for the next two years. Is that true? Can you confirm exactly where negotiations are with the Treasury? Indeed, are there negotiations? You also mentioned revenue raising earlier in your remarks. Are you formally now committed to introducing new revenue-raising measures within this mandate?

Photo of Caoimhe Archibald Caoimhe Archibald Sinn Féin

Thank you. There was more than one question in there.

To be clear, I have had a number of engagements with Treasury. I have met the Chief Secretary to the Treasury on a number of occasions, and my officials have been working with Treasury officials on the application of the needs-based adjustment factor to be included in the financial package, on the need to fund the Executive at an agreed level of need and on the development of a wider fiscal framework. As the Member will be aware, we have a financial package for the next two years, but we also had agreement that there would be a new fiscal framework. I have set out to Treasury what, I think, should be included in that, and, likewise, on their restoration, the Executive set that out in their letter to the Prime Minister.

I am clear that we need an agreed level of need and a proper funding framework, but I will not stop challenging the Tory underfunding of our public services that, for the past decade, has starved them of much-needed money. As recently as the spring statement this year, the Tory Government have prioritised tax cuts over our public services and hard-pressed workers and families. With Executive colleagues, I will continue to make the case on behalf of the Executive and to relay the view of the Assembly, which, in passing the first motion of the mandate, called for us to be properly funded. I will continue to have the back of our public-sector workers and communities in making that case. I will not give up on that, and it is important to say that our position would be stronger if we were united in making that case.

Photo of Ciara Ferguson Ciara Ferguson Sinn Féin

Will the Minister provide further detail on the childcare funding that will be provided in the Budget?

Photo of Caoimhe Archibald Caoimhe Archibald Sinn Féin

I thank the Member for her question. Affordable childcare has been supported by every party in the Assembly, and it was one of the priorities that the Executive agreed. It is important to get childcare right. It will play a vital role in our economy, and it will help support childcare providers as well as workers and families. In the Budget allocation, we agreed to earmark £25 million for the childcare strategy to fund new actions above and beyond those undertaken by Departments within their remit, as part of the work that a cross-departmental working group agreed to by the Executive is undertaking. We will look again at that as proposals are brought forward and, if necessary, increase funding for it in-year, if funding becomes available. Obviously, the delivery of a childcare strategy is a cross-cutting issue that requires support across Departments in its development. It was important that, as an Executive, we considered how we could best facilitate that. My Department is contributing to the cross-departmental working group, but it was the Executive's priority that was reflected in the allocation.

Photo of Nick Mathison Nick Mathison Alliance

The Minister will be aware that the news that the money and resource required for the non-teaching staff pay and grading review were not in the Budget was met with widespread dismay among staff who work in that sector. Will the Minister outline how we arrived at a position where resource for that review was not found? What can be done to remedy that?

Photo of Caoimhe Archibald Caoimhe Archibald Sinn Féin

The Member will be aware that funding was made available as part of the financial package for pay awards for the previous financial year and that the business case for the pay and grading review was not complete at that time. I am absolutely committed to working with the Education Minister to find a resolution for education support workers. I recognise the importance of those workers, some of whom are among the lowest-paid in the sector while doing such vital work to support our children and young people. As part of the Budget, I proposed that the Executive seek agreement from Treasury to reprofile some of the money from the repurposed funds in the financial package to be used for that purpose. The Executive, thankfully, endorsed that position, so I will raise that as a priority in my discussions with Treasury, which, hopefully, will be in the next short while.

Photo of Jim Allister Jim Allister Traditional Unionist Voice

When the Minister goes back to the Treasury looking for more money, will it not have her measure as someone who is prepared to come back to this Government without one penny of extra money and has briefed her Executive colleagues that she has no expectation of that? Is that because the Sinn Féin strategy is to make demands so that it can blame the British Government? Is that really what this is all about?

Photo of Caoimhe Archibald Caoimhe Archibald Sinn Féin 3:45, 29 Ebrill 2024

My party and others were clear from the very start that the money that was available through the financial package was not enough to undo the damage caused by the underfunding of our public services. The first action of the Executive was to set that out in our letter to the Prime Minister, and the first motion that was passed in this Assembly was to endorse that position. I will continue to make the case to the British Government and to Treasury for proper funding for our public services.

Photo of Alan Chambers Alan Chambers UUP

Will the Minister explain how the impacts of the various departmental bids were taken into account? In particular, does she accept that, if relative risks for each were actually measured and fairly assessed, it is quite likely that different decisions would have been reached?

Photo of Caoimhe Archibald Caoimhe Archibald Sinn Féin

I had considerable engagement with each Minister during the development of this Budget, and my departmental officials had considerable engagement with officials from each of those Departments. Obviously, every Minister put forward a strong case for their own Department, and each Department set out its pressures and the impact that those pressures would have on our citizens. Unfortunately, the funding available simply does not allow us to do everything that we want to do, and tough decisions will have to be made.

As the Member will be aware, over half of the Executive's resource budget went to the Department of Health, but it cannot be exempt from these decisions. I would dearly like to be in a position where I am able to allocate more money to the Health Department to recognise its pressures and to give more money to Education, Justice and every Department, because every Minister can make the case as to why they should have more money.

Photo of Patsy McGlone Patsy McGlone Social Democratic and Labour Party

Will the Minister advise us what financial allocations are available to meet the just transition obligations of the Climate Change Act, please?

Photo of Caoimhe Archibald Caoimhe Archibald Sinn Féin

Each Minister will have received a funding envelope as part of the Budget, and it will now be for each Minister to prioritise according to their budget and the priorities in their Department.

Photo of Danny Donnelly Danny Donnelly Alliance

I agree completely with the Minister's comments about the need for transformation and reform, and I hope that, despite the limitations of the Budget, we can progress transformation and reform. Will the Minister give an indication of how transformation funding provided by the Secretary of State will be spent? Have any projects in Departments been identified to utilise that funding?

Photo of Caoimhe Archibald Caoimhe Archibald Sinn Féin

As the Member will be aware, £235 million was allocated and was ring-fenced for transformation in the financial package, and that was to be spent in the form of £47 million a year over five years. I will soon bring a paper to the Executive about the setting up of a transformation board that will allocate the funding, and Departments will bring forward bids to the transformation board for that transformation funding. I will not pre-empt what bids Departments might bring, but, obviously, they will each prioritise those based on what work they think can be done in this financial year.

Photo of Gerry Carroll Gerry Carroll People Before Profit Alliance

Minister, you and your party colleagues made a lot of noise about public-sector pay you came here and took up office. Given that the money that you promised to education workers as part of the pay and grading review is not in this Budget and, according to recent reports, will not be for at least another two years, what is your message to the workers who are likely to be on strike very soon because of an Executive rollback?

Photo of Caoimhe Archibald Caoimhe Archibald Sinn Féin

I do not accept the Member's analysis of its not being available for the next two financial years, but I am absolutely committed to working with the Education Minister to try to find a resolution for those workers. I have already said in the Chamber today that I very much recognise the importance of those workers, who do such vital work in supporting our children and young people. As part of this Budget, the Executive agreed to seek agreement from Treasury to re-profile some of the repurposed funds, and I will raise that as a priority with the Treasury in the coming days.

Photo of Sian Mulholland Sian Mulholland Alliance

There has been much debate over the past few days about recommended allocations, but can the Minister clarify whether any costed alternative proposals were made to her Department by any Minister in the Executive?

Photo of Caoimhe Archibald Caoimhe Archibald Sinn Féin

Back in February, the Executive agreed the approach that would be taken to the setting of the Budget. We agreed that there would be a short extension to the normal time frame to take us beyond the beginning of the financial year. No proposals were brought forward on any alternative approach to the setting of the Budget. In relation to the Budget that was proposed to the Executive last week, no alternative proposals were put forward.

Photo of Edwin Poots Edwin Poots DUP

That brings to a conclusion the question for urgent oral answer to the Minister of Finance.

Members, please take your ease before we move on to the next item of business.

(Mr Deputy Speaker [Dr Aiken] in the Chair)

Photo of Naomi Long Naomi Long Alliance

On a point of order, Mr Deputy Speaker. I was in the Chamber when the Finance Minister was answered her last question, which was from one of my colleagues. Whilst I do not want to raise in open Chamber those matters in the Executive that remain confidential, I ask the Minister to take an opportunity at the next point that she is in the Chamber to correct the answer that she just gave, because, in fact, at least one alternative Budget proposal was put to the Executive.

Photo of Steve Aiken Steve Aiken UUP

I will pass on that message on the Speaker's Office.